<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 16, 1999
REGISTRATION NO. 333-
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- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
------------------------
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
THE GOLDMAN SACHS GROUP, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
DELAWARE 6211 13-4019460
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
</TABLE>
------------------------
85 BROAD STREET
NEW YORK, NEW YORK 10004
(212) 902-1000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
ROBERT J. KATZ
GREGORY K. PALM
GOLDMAN, SACHS & CO.
85 BROAD STREET
NEW YORK, NEW YORK 10004
(212) 902-1000
(NAMES, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENTS FOR SERVICE)
------------------------
COPIES TO:
<TABLE>
<S> <C>
RICARDO A. MESTRES, JR. ALAN L. BELLER
JOHN P. MEAD CHRISTOPHER E. AUSTIN
DAVID B. HARMS CHRISTOPHER J. WALTON
ROBERT W. REEDER III CLEARY, GOTTLIEB, STEEN & HAMILTON
SULLIVAN & CROMWELL ONE LIBERTY PLAZA
125 BROAD STREET NEW YORK, NEW YORK 10006
NEW YORK, NEW YORK 10004 (212) 225-2000
(212) 558-4000
</TABLE>
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this Registration Statement.
------------------------
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If the delivery of the prospectus is expected to be made pursuant to Rule
434 under the Securities Act, check the following box. [ ]
------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
OF SECURITIES TO BE REGISTERED REGISTERED(1) PER UNIT(2) OFFERING PRICE(2) REGISTRATION FEE
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $.01 per
share Rights(3).................... 69,000,000 $50.00 $3,450,000,000 $959,100
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) A portion of the shares to be registered represents shares that are to be
offered outside of the United States but that may be resold from time to
time in the United States. Such shares are not being registered for the
purpose of sales outside the United States. Includes 9,000,000 shares
issuable upon exercise of the Underwriters' options to purchase additional
shares of Common Stock.
(2) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(a) under the Securities Act of 1933.
(3) Each share of Common Stock includes one Shareholder Protection Right as
described under "Description of Capital Stock".
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
The information in this preliminary prospectus is not complete and may be
changed. These securities may not be sold until the registration statement filed
with the Securities and Exchange Commission is effective. This preliminary
prospectus is not an offer to sell nor does it seek an offer to buy these
securities in any jurisdiction where the offer or sale is not permitted.
Subject to Completion. Dated March 16, 1999.
60,000,000 Shares
THE GOLDMAN SACHS GROUP, INC.
[GOLDMAN SACHS LOGO]
Common Stock
------------------------
This is an initial public offering of shares of Common Stock of The Goldman
Sachs Group, Inc. This prospectus relates to an offering of shares in
the United States. In addition, shares are being offered outside
the United States and the Asia/Pacific region and shares are being
offered in the Asia/Pacific region.
Goldman Sachs is offering 42,000,000 of the shares to be sold in the
offerings. The selling shareholders identified in this prospectus are offering
an additional 18,000,000 shares.
Prior to this offering, there has been no public market for the Common
Stock. It is currently estimated that the initial public offering price per
share will be between $40 and $50. Goldman Sachs intends to list the Common
Stock on the New York Stock Exchange under the symbol "GS".
See "Risk Factors" beginning on page 13 to read about certain factors you
should consider before buying shares of the Common Stock.
------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER REGULATORY BODY
HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR
ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
------------------------
<TABLE>
<CAPTION>
Per Share Total
--------- -----
<S> <C> <C>
Initial public offering price............................... $ $
Underwriting discount....................................... $ $
Proceeds, before expenses, to Goldman Sachs................. $ $
Proceeds, before expenses, to the selling shareholders...... $ $
</TABLE>
The underwriters may, under certain circumstances, purchase up to an
additional shares from Goldman Sachs at the initial public
offering price less the underwriting discount. The international underwriters
and the Asia/Pacific underwriters may similarly purchase up to an aggregate of
an additional shares.
------------------------
The underwriters expect to deliver the shares against payment in New York,
New York on , 1999.
GOLDMAN, SACHS & CO.
------------------------
Prospectus dated , 1999.
<PAGE> 3
The inside cover of this Prospectus will be
a series of photographs of
Goldman Sachs employees participating in
the Firm's Community TeamWorks initiative.
2
<PAGE> 4
OUR BUSINESS PRINCIPLES
1. Our clients' interests always come first. Our experience shows that if we
serve our clients well, our own success will follow.
2. Our assets are our people, capital and reputation. If any of these is ever
diminished, the last is the most difficult to restore. We are dedicated to
complying fully with the letter and spirit of the laws, rules and ethical
principles that govern us. Our continued success depends upon unswerving
adherence to this standard.
3. Our goal is to provide superior returns to our shareholders. Profitability
is critical to achieving superior returns, building our capital and attracting
and keeping our best people. Significant employee stock ownership aligns the
interests of our employees and our shareholders.
4. We take great pride in the professional quality of our work. We have an
uncompromising determination to achieve excellence in everything we undertake.
Though we may be involved in a wide variety and heavy volume of activity, we
would, if it came to a choice, rather be best than biggest.
5. We stress creativity and imagination in everything we do. While recognizing
that the old way may still be the best way, we constantly strive to find a
better solution to a client's problems. We pride ourselves on having pioneered
many of the practices and techniques that have become standard in the industry.
6. We make an unusual effort to identify and recruit the very best person for
every job. Although our activities are measured in billions of dollars, we
select our people one by one. In a service business, we know that without the
best people, we cannot be the best firm.
7. We offer our people the opportunity to move ahead more rapidly than is
possible at most other places. We have yet to find the limits to the
responsibility that our best people are able to assume. Advancement depends
solely on ability, performance and contribution to the Firm's success, without
regard to race, color, religion, sex, age, national origin, disability, sexual
orientation, or any other impermissible criterion or circumstance.
8. We stress teamwork in everything we do. While individual creativity is
always encouraged, we have found that team effort often produces the best
results. We have no room for those who put their personal interests ahead of the
interests of the Firm and its clients.
9. The dedication of our people to the Firm and the intense effort they give
their jobs are greater than one finds in most other organizations. We think that
this is an important part of our success.
10. We consider our size an asset that we try hard to preserve. We want to be
big enough to undertake the largest project that any of our clients could
contemplate, yet small enough to maintain the loyalty, the intimacy and the
esprit de corps that we all treasure and that contribute greatly to our success.
11. We constantly strive to anticipate the rapidly changing needs of our
clients and to develop new services to meet those needs. We know that the world
of finance will not stand still and that complacency can lead to extinction.
12. We regularly receive confidential information as part of our normal client
relationships. To breach a confidence or to use confidential information
improperly or carelessly would be unthinkable.
13. Our business is highly competitive, and we aggressively seek to expand our
client relationships. However, we must always be fair competitors and must never
denigrate other firms.
14. Integrity and honesty are at the heart of our business. We expect our
people to maintain high ethical standards in everything they do, both in their
work for the Firm and in their personal lives.
3
<PAGE> 5
PROSPECTUS SUMMARY
This summary highlights information contained elsewhere in this Prospectus.
This summary is not complete and does not contain all of the information that
you should consider before investing in the Common Stock. You should read the
entire Prospectus carefully, especially the risks of investing in the Common
Stock discussed under "Risk Factors" on pages 13-24.
THE GOLDMAN SACHS GROUP, INC.
Goldman Sachs is a leading global investment banking and securities firm
with three principal business lines:
- Investment Banking;
- Trading and Principal Investments; and
- Asset Management and Securities Services.
Our goal is to be the advisor of choice for our clients and a leading
participant in global financial markets. We provide services worldwide to a
substantial and diversified client base, which includes corporations, financial
institutions, governments and high net worth individuals.
For our fiscal year ended November 27, 1998, our net revenues were $8.5
billion and our pre-tax earnings were $2.9 billion. As of the end of fiscal
1998, our total assets were $217.4 billion and our partners' capital was $6.3
billion.
We have over time produced strong earnings growth and attractive returns on
partners' capital through different economic and market conditions. Over the
last 15 years, our pre-tax earnings have grown from $462 million in 1983 to $2.9
billion in 1998, representing a compound annual growth rate of 13%. Economic and
market conditions can, however, significantly affect our performance. For
example, in the second half of fiscal 1998, the Firm's performance was adversely
affected by turbulence in global financial markets.
We have achieved this growth, which has been generated without the benefit
of a large acquisition, by maintaining an intense commitment to our clients,
focusing on our core businesses and key opportunities and operating as an
integrated franchise.
Because we believe that the needs of our clients are global and that
international markets have high growth potential, we have built upon our
strength in the United States to achieve leading positions in other parts of the
world. Today, the Firm has a strong global presence as evidenced by the
geographic breadth of our transactions, leadership in our core products and the
size of our international operations. As of the end of fiscal 1998, we operated
offices in 23 countries and 36% of our 13,000 employees were based outside the
United States.
We are committed to a distinctive culture and set of core values. These
values are reflected in our Business Principles, which emphasize placing our
clients' interests first, integrity, commitment to excellence and innovation,
and teamwork.
The Firm is managed by its principal owners. Simultaneously with the
offerings, we will make equity-based awards to substantially all of our
employees. Following the offerings, our employees, including former partners,
will own approximately 66% of the Company. None of our employees are selling
shares in the offerings.
WHY WE ARE GOING PUBLIC
We have decided to become a public company for three principal reasons:
- to secure permanent capital to grow;
- to share ownership broadly among our employees now and through future
compensation; and
- to permit us to use publicly traded securities to finance strategic
acquisitions that we may elect to make in the future.
4
<PAGE> 6
SUMMARY FINANCIAL DATA
($ in millions)
<TABLE>
<CAPTION>
AS OF OR FOR
YEAR ENDED NOVEMBER
--------------------------------
1996 1997 1998
---- ---- ----
<S> <C> <C> <C>
Net revenues:
Investment Banking.................................... $ 2,113 $ 2,587 $ 3,368
Trading and Principal Investments..................... 2,693 2,926 2,379
Asset Management and Securities Services.............. 1,323 1,934 2,773
-------- -------- --------
Total net revenues...................................... $ 6,129 $ 7,447 $ 8,520
======== ======== ========
Pre-tax earnings(1)..................................... $ 2,606 $ 3,014 $ 2,921
Total assets............................................ 152,046 178,401 217,380
Adjusted assets(2)...................................... 93,279 119,883 144,906
Partners' capital....................................... 5,309 6,107 6,310
Pre-tax return on average partners' capital(1).......... 51% 53% 47%
</TABLE>
- ---------------
Read the table above in conjunction with the footnotes to "Selected Consolidated
Financial Data" as well as the following footnotes:
(1) Since the Firm has been a partnership, payments to the Firm's profit
participating limited partners have been accounted for as distributions of
partners' capital rather than as compensation expense. As a result, the
Firm's pre-tax earnings and compensation and benefits expense have not
reflected any payments for services rendered by its profit participating
limited partners. Accordingly, pre-tax earnings understate the expected
operating costs to be incurred by the Firm after the offerings. As a
corporation, the Firm will include payments for services rendered by its
former profit participating limited partners in compensation and benefits
expense. For financial information that reflects pro forma compensation and
benefits expense as if we had been a corporation, see "Pro Forma
Consolidated Financial Information".
(2) Adjusted assets represent total assets less securities purchased under
agreements to resell, certain securities borrowed transactions and, with
respect to November 27, 1998, an increase of $11.64 billion in total assets
related to the adoption of the provisions of Statement of Financial
Accounting Standards ("SFAS") No. 125 that were deferred by SFAS No. 127.
------------------------
STRATEGY AND PRINCIPAL BUSINESS LINES
Our strategy is to grow our three core businesses -- Investment Banking,
Trading and Principal Investments, and Asset Management and Securities
Services -- in markets throughout the world. Our leadership position in
investment banking provides us with access to governments, financial
institutions and corporate clients globally. Trading and principal investing has
been an important part of our culture and earnings, and we remain committed to
these businesses irrespective of their volatility. Managing wealth is one of the
fastest growing segments of the financial services industry and we are
positioning our asset management and securities services businesses to take
advantage of that growth. Our assets under supervision, for example, have grown
from $92.7 billion as of the end of fiscal 1994 to $336.8 billion as of the end
of fiscal 1998, representing a compound annual growth rate of 38%.
INVESTMENT BANKING
Investment Banking represented 39% of fiscal 1998 net revenues and 35% of
fiscal 1997 net revenues. We are a market leader in both the financial advisory
and underwriting businesses, serving over 3,000 clients worldwide. For the
period January 1, 1994 to December 31, 1998, we had the industry-leading market
share of 25.3% in worldwide mergers and acquisitions advisory services, having
advised on over $1.7 trillion of transactions. Over the same period, we also
achieved number one market shares of 15.2% in underwriting worldwide initial
public offerings and 14.4% in underwriting worldwide
5
<PAGE> 7
common stock issues. The source for this market share information is Securities
Data Company.
TRADING AND PRINCIPAL INVESTMENTS
Trading and Principal Investments represented 28% of fiscal 1998 net
revenues and 39% of fiscal 1997 net revenues. We make markets in equity and
fixed income products, currencies and commodities; enter into swaps and other
derivative transactions; engage in proprietary trading and arbitrage; and make
principal investments. In trading, we focus on building lasting relationships
with our most active clients while maintaining leadership positions in our key
markets. We believe our research, market-making and proprietary activities
enhance our understanding of markets and ability to serve our clients.
ASSET MANAGEMENT AND SECURITIES SERVICES
Asset Management and Securities Services represented 33% of fiscal 1998 net
revenues and 26% of fiscal 1997 net revenues. We provide global investment
management and advisory services; earn commissions on agency transactions; earn
management fees and derive overrides from our merchant banking funds; and
provide prime brokerage, securities lending and financing services. As of the
end of fiscal 1998, the Firm had $336.8 billion of assets under supervision, of
which $194.8 billion represented assets under management. Our asset management
business is rapidly growing, with net asset inflows that averaged over $125
million per business day during fiscal 1998. We manage merchant banking funds
that had $15.5 billion of capital commitments as of the end of fiscal 1998.
Assets under supervision are comprised of assets under management and other
client assets. Assets under management typically generate fees based on a
percentage of their value. Other client assets are comprised of assets in
brokerage accounts of primarily high net worth individuals, on which the Firm
earns commissions.
We pursue our strategy to grow our three core businesses through an
emphasis on:
EXPANDING HIGH VALUE-ADDED BUSINESSES
To achieve strong growth and high returns, we seek to build leadership
positions in high value-added services for our clients. For example, we have
substantially increased the number of professionals in investment banking to
improve and expand our ability to execute mergers and acquisitions, initial
public offerings and high-yield financings. In trading, we structure and execute
large and complex transactions for institutional investors, pension funds and
corporate clients around the world. In asset management, we emphasize equity and
alternative investment products and use our established international presence
to build a global asset management franchise.
INCREASING THE STABILITY OF OUR EARNINGS
We seek to balance the stability of our earnings with return on equity and
long-term earnings growth. We believe our trading businesses are key ingredients
to our success. While we plan to continue to grow our trading businesses, the
financial market shocks of the past year underscored the importance of our
strategy to emphasize growth in our investment banking, asset management and
securities services businesses. Through a greater relative emphasis on these
businesses, we plan to gradually increase the stability of our earnings.
PURSUING INTERNATIONAL OPPORTUNITIES
We believe that our global reach will allow us to take advantage of growth
in international markets. In Europe, for example, the recent establishment of
the Economic and Monetary Union is expected, over time, to create a large
pan-European market rivaling the U.S. capital markets in size and liquidity. We
believe this will generate increased activity across our businesses in the
region. In Asia, we expect increased mergers and acquisitions advisory
opportunities as a result of corporate restructurings and increased trading
opportunities as we meet the liquidity needs of our clients. In the longer term,
we
6
<PAGE> 8
anticipate additional opportunities in asset management activities due to an
expected shift towards privatization of pension systems and changing
demographics.
LEVERAGING THE FRANCHISE
We believe our various businesses are generally stronger and more
successful because they are part of the Goldman Sachs franchise. Our culture of
teamwork fosters cooperation among our businesses, which allows us to provide
our clients with a full range of products and services on a coordinated basis.
Our investment bankers, for example, refer clients who are selling their
businesses to those in the Firm who manage wealth. In addition, our merchant
banking investments in companies lead to future clients for investment banking.
COMPETITIVE STRENGTHS
STRONG CLIENT RELATIONSHIPS
We focus on building long-term client relationships. In fiscal 1998, over
75% of our Investment Banking revenues represented business from existing
clients of the Firm. We also aggressively pursue new client relationships as
evidenced by the over 400 investment banking transactions we completed for
first-time clients in fiscal 1998. In our trading businesses, we structure and
execute transactions across a wide array of markets and countries to meet our
clients' needs. In our asset management business, we managed assets for three of
the five largest pension pools in the United States as ranked as of September
30, 1998 by Pensions & Investments and maintain accounts for 41% of the 1998
"Forbes 400 List of the Richest Americans".
DISTINCTIVE PEOPLE AND CULTURE
Our most important asset is our people. We seek to reinforce our employees'
commitment to our culture and values through recruiting, training, a
comprehensive review system and a compensation philosophy that rewards teamwork.
We were ranked number seven in Fortune magazine's "The 100 Best Companies to
Work for in America" in January 1999 and were ranked number three in Fortune
magazine's 1999 "The Top 50 MBA Dream Companies", the highest-ranked investment
banking and securities firm in each case.
GLOBAL REACH
Over the past decade, we have made a significant commitment to building a
worldwide business. We have achieved leading positions in major international
markets by capitalizing on our product knowledge and global research, as well as
by building a local presence where appropriate. In doing so, we have become one
of the few truly global investment banking and securities firms with the ability
to execute large and complex cross-border transactions. We had the number one
market share of 23.2% in cross-border mergers and acquisitions for the period
from January 1, 1994 to December 31, 1998, according to Securities Data Company.
In addition, in Japan, we were the largest non-Japanese mutual fund manager as
of January 31, 1999, according to The Investment Trusts Association.
OUR HEADQUARTERS
Our headquarters are located at 85 Broad Street, New York, New York 10004,
telephone (212) 902-1000.
7
<PAGE> 9
INDUSTRY AND ECONOMIC OUTLOOK
We believe that significant growth and profit opportunities exist in the
financial services industry over the long term. These opportunities derive from
long-term trends, including financial market deregulation, the globalization of
the world economy, the increasing focus of companies on shareholder value,
consolidations in various industries, growth in investable funds and
accelerating technology and financial product innovation. We believe that over
the last 15 years these trends, coupled with generally declining interest rates
and favorable market conditions, have contributed to a substantially higher rate
of growth in activity in the financial services industry than the growth in
overall economic activity. While the future economic environment may not be as
favorable as that experienced in the last 15 years and there may be periods of
adverse economic and market conditions, we believe that these trends should
continue to affect the financial services industry positively over the long
term.
The following table sets forth selected key industry indicators:
KEY INDUSTRY INDICATORS
($ in billions, except GDP)
(volume in millions of shares)
<TABLE>
<CAPTION>
AS OF OR FOR
YEAR ENDED DECEMBER 31,
----------------------------------- CAGR(6)
1983 1988 1993 1998 '83-'98
---- ---- ---- ---- -------
<S> <C> <C> <C> <C> <C>
Worldwide GDP ($ in trillions)(1)....... $ 10 $ 18 $ 24 $ 29(7) 8%(7)
Worldwide mergers and acquisitions(2)... 96 527 460 2,522 24
Worldwide equity issued(2).............. 50 51 172 269 12
Worldwide debt issued(2)................ 146 631 1,546 2,932 22
Worldwide equity market
capitalization(3)..................... 3,384 9,728 14,016 23,541(7) 15(7)
NYSE average daily volume............... 85 162 265 674 15
Worldwide pension assets(4)............. $1,900 $3,752 $ 6,560 $ 9,694(7) 12(7)
U.S. mutual fund assets(5).............. 293 810 2,075 5,530 22
</TABLE>
- ---------------
(1) Gross domestic product. Source: The Economist Intelligence Unit, January
1999.
(2) Source: Securities Data Company.
(3) Source: International Finance Corporation.
(4) Source: InterSec Research Corp.
(5) Source: Investment Company Institute.
(6) Compound annual growth rate.
(7) Data as of December 31, 1997; compound annual growth rate 1983-1997.
8
<PAGE> 10
THE OFFERINGS
<TABLE>
<S> <C> <C>
Common Stock:
Offered by the Company.................................... 42,000,000 shares
Offered by the Selling Shareholders(1).................... 18,000,000 shares
-----------
Total.................................................. 60,000,000 shares
===========
U.S. Offering............................................. shares
International Offering.................................... shares
Asia/Pacific Offering..................................... shares
-----------
Total(2)............................................... 60,000,000 shares
===========
Common Shares to be outstanding after the Offerings(3)...... 467,709,041 shares
</TABLE>
- ---------------
(1) Each of Sumitomo Bank Capital Markets, Inc. and Kamehameha Activities
Association is selling 9,000,000 shares of Common Stock.
(2) The offerings of Common Stock are collectively referred to as the
"Offerings".
(3) Includes 31,306,667 shares of Common Stock underlying the restricted stock
units awarded to employees on a formula basis, 13,644,204 shares of Common
Stock irrevocably contributed to a nonqualified defined contribution plan
and 6,238,094 shares of Nonvoting Common Stock that upon transfer, and in
certain other circumstances, convert into shares of Common Stock on a
one-for-one basis. Excludes 9,000,000 shares of Common Stock issuable upon
exercise of the Underwriters' options to purchase additional shares, which
are described under "Underwriting", and 70,605,085 shares of Common Stock
deliverable pursuant to the restricted stock units and stock options awarded
to employees on a discretionary basis. The nonqualified defined contribution
plan, restricted stock units and employee stock options are described under
"Management -- The Employee IPO Awards".
------------------------
Voting Rights..........
The holders of Common Stock will have one vote per share.
Dividend Policy........
The holders of Common Stock, as well as the holders of
Nonvoting Common Stock, will share ratably on a per share
basis in all dividends and other distributions declared by
our Board of Directors. Our Board of Directors currently
intends to declare quarterly dividends on all outstanding
shares of Common Stock and Nonvoting Common Stock and
expects that the first quarterly dividend will be $
per share, and that it will be declared during the third
quarter of fiscal 1999. For a discussion of the factors
that affect the determination by the Board of Directors to
declare dividends, as well as certain other matters
concerning our dividend policy, see "Dividend Policy" and
"Business -- Regulation".
Use of Proceeds........
We will receive net proceeds from our sales of Common
Stock in the Offerings of approximately $1.8 billion. We
expect to use the net proceeds to provide additional funds
for our operations and for other general corporate
purposes, including the purchase of short-term marketable
securities.
We will not receive any of the proceeds from sales of
Common Stock by the Selling Shareholders in the Offerings.
Risk Factors...........
For a discussion of certain factors you should consider
before buying shares of Common Stock, see "Risk Factors".
Proposed New York Stock
Exchange Symbol......
GS
9
<PAGE> 11
INCORPORATION AND RELATED TRANSACTIONS
Simultaneously with the consummation of the Offerings, we will complete a
number of transactions in order to convert from partnership to corporate form.
We will also make equity-based awards to substantially all of our employees.
The principal incorporation transactions and the related transactions are
summarized below:
INCORPORATION TRANSACTIONS
- - The profit participating limited partners who are active in the Firm's
businesses will exchange their interests for 264,680,458 shares of Common
Stock;
- - The Firm's retired partners will exchange their interests for an aggregate of
approximately $892 million in cash, $295 million principal amount of 12%
junior subordinated debentures of the Company and 47,264,592 shares of Common
Stock;
- - Sumitomo Bank Capital Markets, Inc. will exchange its interests for 31,612,076
shares of Common Stock and 6,238,094 shares of Nonvoting Common Stock; and
- - Kamehameha Activities Association will exchange its interests for 30,962,950
shares of Common Stock.
RELATED TRANSACTIONS
- - Equity-based awards will be granted to employees, other than the profit
participating limited partners who are active in the Firm's businesses, in the
form of:
1. 31,306,667 restricted stock units awarded on a formula basis;
2. an initial irrevocable contribution of 13,644,204 shares of Common Stock
to a nonqualified defined contribution plan;
3. 30,604,685 restricted stock units awarded on a discretionary basis; and
4. options awarded on a discretionary basis to purchase 40,000,400 shares of
Common Stock at the initial public offering price for the Offerings; and
- - After the closing of the Offerings, we will make a $200 million contribution
to a Goldman Sachs charitable foundation.
For a more detailed description of these and other transactions, see "Certain
Relationships and Related Transactions -- Incorporation and Related
Transactions", "Management -- The Employee IPO Awards" and "Pro Forma
Consolidated Financial Information".
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<PAGE> 12
SUMMARY CONSOLIDATED FINANCIAL DATA
The summary historical consolidated income statement and balance sheet data
set forth below have been derived from the Firm's consolidated financial
statements and the notes thereto. The Firm's consolidated financial statements
have been audited by PricewaterhouseCoopers LLP, independent public accountants,
as of November 28, 1997 and November 27, 1998 and for the years ended November
29, 1996, November 28, 1997 and November 27, 1998. These financial statements
are included elsewhere in this Prospectus, together with the report thereon of
PricewaterhouseCoopers LLP.
The summary historical consolidated income statement and balance sheet data
set forth below as of November 25, 1994, November 24, 1995 and November 29, 1996
and for the years ended November 25, 1994 and November 24, 1995 have been
derived from audited consolidated financial statements of the Firm not included
in this Prospectus.
The pro forma data set forth below as of and for the year ended November
27, 1998 have been derived from the pro forma data set forth in "Pro Forma
Consolidated Financial Information" included elsewhere in this Prospectus. The
pro forma data set forth in "Pro Forma Consolidated Financial Information" have
been examined by PricewaterhouseCoopers LLP.
The summary consolidated financial data should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations", "Pro Forma Consolidated Financial Information" and the consolidated
financial statements and the notes thereto.
<TABLE>
<CAPTION>
AS OF OR FOR YEAR ENDED NOVEMBER
-------------------------------------------------------
1994 1995 1996 1997 1998
---- ---- ---- ---- ----
(in millions, except per share amounts)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net revenues.................................. $ 3,537 $ 4,483 $ 6,129 $ 7,447 $ 8,520
Pre-tax earnings(1)........................... 508 1,368 2,606 3,014 2,921
BALANCE SHEET DATA:
Total assets(2)............................... $95,296 $100,066 $152,046 $178,401 $217,380
Adjusted assets (unaudited)(3)................ 75,772 73,552 93,279 119,883 144,906
Long-term borrowings.......................... 14,418 13,358 12,376 15,667 19,906
Partners' capital............................. 4,771 4,905 5,309 6,107 6,310
PRO FORMA DATA(4):
Pro forma net earnings........................ -- -- -- -- $ 1,316
Pro forma diluted earnings per share(5)....... -- -- -- -- 3.06
Pro forma diluted earnings per share as
adjusted for the Offerings(6)............... -- -- -- -- 2.79
Pro forma diluted Common Shares as adjusted
for the Offerings(6)........................ -- -- -- -- 472
Pro forma stockholders' equity as adjusted for
the Offerings............................... -- -- -- -- $ 6,291
Pro forma book value per share as adjusted for
the Offerings(6)............................ -- -- -- -- 13.45
SELECTED DATA AND RATIOS (UNAUDITED):
Pre-tax return on average partners'
capital(1).................................. 10% 28% 51% 53% 47%
Ratio of compensation and benefits to net
revenues(1)................................. 51 45 40 42 45
Assets under supervision:
Assets under management..................... $43,671 $ 52,358 $ 94,599 $135,929 $194,821
Other client assets......................... 49,061 57,716 76,892 102,033 142,018
------- -------- -------- -------- --------
Total assets under supervision................ $92,732 $110,074 $171,491 $237,962 $336,839
======= ======== ======== ======== ========
</TABLE>
11
<PAGE> 13
(1) Since the Firm has been a partnership, payments to the Firm's profit
participating limited partners have been accounted for as distributions of
partners' capital rather than as compensation expense. As a result, the
Firm's pre-tax earnings and compensation and benefits expense have not
reflected any payments for services rendered by its profit participating
limited partners. Accordingly, pre-tax earnings understate the expected
operating costs to be incurred by the Firm after the Offerings. As a
corporation, the Firm will include payments for services rendered by its
former profit participating limited partners in compensation and benefits
expense. For financial information that reflects pro forma compensation and
benefits expense as if we had been a corporation, see "Pro Forma
Consolidated Financial Information".
(2) Total assets and liabilities as of November 27, 1998 were increased by
$11.64 billion due to the adoption of the provisions of SFAS No. 125 that
were deferred by SFAS No. 127. For a discussion of SFAS Nos. 125 and 127,
see "Accounting Developments" in Note 2 to the consolidated financial
statements.
(3) Adjusted assets represent total assets less securities purchased under
agreements to resell, certain securities borrowed transactions and, with
respect to November 27, 1998, an increase of $11.64 billion in total assets
related to the adoption of the provisions of SFAS No. 125 that were
deferred by SFAS No. 127.
(4) Reflects such adjustments as are necessary, in the opinion of management,
for a fair presentation of the results of operations and stockholders'
equity of the Firm on a pro forma basis. See "Pro Forma Consolidated
Financial Information" for more detailed information concerning these
adjustments.
(5) Calculated based on 429,704,653 diluted Common Shares outstanding after
giving effect to the Pro Forma Adjustments. See "Pro Forma Consolidated
Financial Information" for more detailed information concerning these
adjustments and the calculation of pro forma earnings per share.
(6) Calculated based on 471,704,653 diluted Common Shares outstanding after
giving effect to the Pro Forma Adjustments and as adjusted to reflect the
issuance of 42,000,000 shares of Common Stock offered by the Firm at the
midpoint of the range of initial public offering prices set forth on the
cover page of this Prospectus, after deduction of underwriting discounts
and estimated expenses payable by the Firm. See "Pro Forma Consolidated
Financial Information" for more detailed information concerning these
adjustments and the calculation of pro forma earnings per share.
12
<PAGE> 14
RISK FACTORS
An investment in the Common Stock involves a number of risks, some of
which, including market, liquidity, credit, operational, legal and regulatory
risks, could be substantial and are inherent in the businesses of the Firm. You
should carefully consider the following information about these risks, together
with the other information in this Prospectus, before buying shares of Common
Stock.
MARKET FLUCTUATIONS COULD ADVERSELY AFFECT
OUR BUSINESSES IN MANY WAYS
As an investment banking and securities firm, our businesses are materially
affected by conditions in the financial markets and economic conditions
generally, both in the United States and elsewhere around the world. The equity
and debt markets in the United States and elsewhere have achieved record or near
record levels, and this favorable business environment will not continue
indefinitely. In the event of a market downturn, our businesses could be
adversely affected in many ways, including those described below. Our revenues
are likely to decline in such circumstances and, if we were unable to reduce
expenses at the same pace, our profit margins would erode. For example, in the
second half of fiscal 1998, we recorded negative net revenues from our Trading
and Principal Investments business and from mid-August to mid-October the number
of equity underwritings and announced mergers and acquisitions transactions in
which we participated declined substantially due to adverse economic and market
conditions. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Business Environment" for a discussion of the market
environment in which we operated during that period. Even in the absence of a
market downturn, the Firm is exposed to substantial risk of loss due to market
volatility.
Losses from Trading and Investment Activity
The Firm generally maintains large trading and investment positions in the
fixed income, currency, commodity and equity markets. To the extent that the
Firm owns assets, i.e., has long positions, in any of those markets, a downturn
in those markets could result in losses from a decline in the value of those
long positions. Conversely, to the extent that the Firm has sold assets it does
not own, i.e., has short positions, in any of those markets, an upturn in those
markets could expose the Firm to potentially unlimited losses as it attempts to
cover its short positions by acquiring assets in a rising market. The Firm may
from time to time have a trading strategy consisting of holding a long position
in one asset and a short position in another, from which the Firm expects to
earn revenues based on changes in the relative value of the two assets. If,
however, the relative value of the two assets changes in a direction or manner
that the Firm does not anticipate or against which it is not hedged, the Firm
might realize a loss in those paired positions. We incurred significant losses
in our Trading and Principal Investments business in the second half of fiscal
1998 from this type of "relative value" trade. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations -- Business
Environment" for a discussion of those losses and the market environment in
which we operated during that period. In addition, the Firm maintains
substantial trading positions that can be adversely affected by the level of
volatility in the financial markets, i.e., the degree to which trading prices
fluctuate over a particular period, in a particular market, regardless of market
levels.
Lower Revenues from Investment Banking Activity
Unfavorable financial or economic conditions would likely reduce the number
and size of transactions in which we provide underwriting, mergers and
acquisitions advisory and other services. Our Investment Banking revenues, in
the form of financial advisory and underwriting fees, are directly related to
the number and size of the transactions in which we participate and would
therefore be adversely affected by a sustained market downturn. In particular,
our results of operations would be adversely affected by a significant reduction
in the number or size of mergers and acquisitions transactions.
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<PAGE> 15
Lower Revenues from Commissions and Asset Management Fees
A market downturn could lead to a decline in the volume of transactions
that we execute for our customers and, therefore, to a decline in the revenues
we receive from commissions and spreads. In addition, because the fees that we
charge for managing our clients' portfolios are in many cases based on the value
of those portfolios, a market downturn that reduces the value of our clients'
portfolios or increases the amount of withdrawals would reduce the revenue we
receive from our asset management business.
Concentration of Risk
The Firm has committed substantial amounts of capital to its arbitrage,
market-making, block trading, underwriting and lending businesses. These
activities often require the Firm to take large positions in the securities of a
particular issuer or issuers in a particular industry, country or region. In the
past, concentration of risk has increased the losses that we have incurred in
these activities. Moreover, the trend in all major capital markets is towards
larger and more frequent commitments of capital in many of these activities. For
example, as described under "Business -- Trading and Principal
Investments -- Equities", we are experiencing an increase in the number and size
of block trades that we execute, and we expect this trend to continue.
Ineffectiveness of Hedges
We utilize a variety of instruments and strategies to hedge our exposure to
various types of risk. Many of these strategies are based on historical trading
patterns and correlations. For example, if we hold a long position in an asset,
we may hedge this position by taking a short position in an asset where the
short position has, historically, moved in a direction that would offset a
change in value in the long position. However, these strategies may not be fully
effective in mitigating our risk exposure in all market environments or against
all types of risk. We have often hedged our exposure to corporate fixed income
securities by taking a short position in U.S. Treasury securities, since
historically the value of U.S. Treasury securities has changed in a manner
similar to changes in the value of corporate fixed income securities. Due to the
"flight to quality" in mid-August to mid-October 1998, however, the prices for
corporate fixed income securities declined while the prices for U.S. Treasury
securities increased and, as a result, we incurred losses on both positions.
Unexpected market developments also affected other hedging strategies during
this time, and unanticipated developments could impact these or different
hedging strategies in the future. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Risk Management" for a
discussion of the policies and procedures we use to identify, monitor and manage
the risks we assume in conducting our businesses and of refinements we have made
to our risk management policies and procedures as a result of our recent
experience.
Prolonged Market Downturn
While the Firm encountered extremely difficult market conditions in
mid-August to mid-October 1998, the financial markets rebounded late in the
fourth quarter of fiscal 1998. At some time in the future, there may be a more
sustained period of market decline or weakness that will leave us operating in a
difficult market environment and subject us to the risks that we describe in
this section for a longer period of time.
Other Risks Increased by Market Risk
In addition to the potentially adverse effects on our businesses described
above, market risk could exacerbate other risks that we face. For example, if we
incur substantial trading losses, our need for liquidity could rise sharply
while our access to liquidity could be impaired. In addition, in conjunction
with a market downturn, our customers and counterparties could incur substantial
losses of their own, thereby weakening their financial condition and increasing
our credit risk to them. Our liquidity risk and credit risk are described below.
14
<PAGE> 16
OUR RISK MANAGEMENT POLICIES AND
PROCEDURES MAY LEAVE US EXPOSED TO
UNIDENTIFIED OR UNANTICIPATED RISK
We have devoted significant resources to develop our risk management
policies and procedures and expect to continue to do so in the future.
Nonetheless, our policies and procedures to identify, monitor and manage risks
may not be fully effective. Certain of our methods of managing risk are based
upon our use of observed historical market behavior. As a result, these methods
may not predict future risk exposures, which could be significantly greater than
the historical measures indicate. For example, the market movements of the late
third and early fourth quarters of fiscal 1998 were larger and involved greater
divergences in relative asset values than we anticipated. This caused us to
experience trading losses that were greater and recurred more frequently than
certain of our risk measures indicated were likely to occur. See "Management's
Discussion and Analysis of Financial Condition and Results of
Operations -- Business Environment" for a discussion of the market environment
in which we operated during the second half of fiscal 1998 and "-- Risk
Management" for a discussion of the policies and procedures we use to identify,
monitor and manage the risks we assume in conducting our businesses and of
refinements we have made to our risk management policies and procedures as a
result of our recent experience.
Other risk management methods depend upon evaluation of information
regarding markets, clients or other matters that is publicly available or
otherwise accessible by the Firm. This information may not in all cases be
accurate, complete, up-to-date or properly evaluated. Management of operational,
legal and regulatory risk requires, among other things, policies and procedures
to record properly and verify a large number of transactions and events, and
these policies and procedures may not be fully effective.
LIQUIDITY RISK COULD IMPAIR OUR ABILITY
TO FUND OPERATIONS AND JEOPARDIZE OUR
FINANCIAL CONDITION
Liquidity, i.e., ready access to funds, is essential to our businesses. In
addition to maintaining a cash position, we rely on three principal sources of
liquidity: borrowing in the debt markets; access to certain other funding
sources, such as the repurchase and securities lending markets; and selling
securities and other assets. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Liquidity" for a discussion of
our sources of liquidity.
Continuous Borrowing Needs
We depend on continuous access to the debt capital markets to finance our
day-to-day operations. An inability to raise money in the long-term or
short-term debt markets, or to engage in repurchase agreements or securities
lending, could have a substantial negative effect on our liquidity. Our access
to debt in amounts adequate to finance our activities could be impaired by
factors that affect the Firm in particular or the financial services industry in
general. For example, lenders could develop a negative perception of our
long-term or short-term financial prospects if we incurred large trading losses,
if the level of our business activity decreased due to a market downturn, if
regulatory authorities took significant action against the Firm or if we
discovered that one of our employees had engaged in serious unauthorized or
illegal activity. Our ability to borrow in the debt markets also could be
impaired by factors that are not specific to the Firm, such as a severe
disruption of the financial markets or negative views about the prospects for
the investment banking, securities or financial services industries generally.
We also depend on banks to finance our day-to-day operations. As a result
of the recent consolidation in the banking industry,
15
<PAGE> 17
certain of our lenders have merged or consolidated with other banks and
financial institutions. While we have not been materially adversely affected to
date, it is possible that further consolidation could lead to a loss of a number
of our key banking relationships and a reduction in the amount of credit
extended to us.
Dependence on Access to Short-Term Debt Markets
The Firm depends on the issuance of commercial paper and promissory notes
as a principal source of unsecured short-term funding for its operations. As of
the end of fiscal 1998, the Firm had $20.8 billion of outstanding commercial
paper and promissory notes with a weighted average maturity of approximately 63
days. The Firm's liquidity depends to an important degree on its ability to
refinance these borrowings on a continuous basis. Investors who hold the Firm's
outstanding commercial paper and promissory notes have no obligation to purchase
new instruments when the outstanding instruments mature.
Dependence on Ability to Sell Assets
If we were unable to borrow in the debt capital markets, we would need to
liquidate assets in order to meet our maturing liabilities. In certain market
environments, such as times of market volatility or uncertainty, overall market
liquidity may decline. In a time of reduced liquidity, we may be unable to sell
certain assets, or we may have to sell assets at depressed prices, which could
adversely affect our results of operations and financial condition.
Our ability to sell our assets may be impaired by other market participants
seeking to sell similar assets into the market at the same time. In the late
third and early fourth quarters of fiscal 1998, for example, the markets for
certain assets were adversely affected by simultaneous attempts by a number of
institutions to sell similar assets.
Dependence on Credit Ratings
Our borrowing costs and our access to the debt capital markets depend
significantly on our credit ratings. These ratings are assigned by rating
agencies, which may reduce or withdraw their ratings or place the Firm on
"credit watch" with negative implications at any time. Credit ratings are also
important to the Firm when competing in certain markets and when seeking to
engage in longer-term transactions, including over-the-counter derivatives. A
reduction in our credit ratings could increase our borrowing costs and limit our
access to the capital markets. This, in turn, could reduce our earnings and
adversely affect our liquidity. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Liquidity -- Credit Ratings"
for additional information concerning our credit ratings.
CREDIT RISK EXPOSES US TO LOSSES CAUSED
BY FINANCIAL OR OTHER PROBLEMS
EXPERIENCED BY THIRD PARTIES
We are exposed to the risk that third parties that owe us money, securities
or other assets will not perform their obligations. These parties include our
trading counterparties, customers, clearing agents, exchanges, clearing houses
and other financial intermediaries as well as issuers whose securities we hold.
These parties may default on their obligations to us due to bankruptcy, lack of
liquidity, operational failure or other reasons. This risk may arise, for
example, from holding securities of third parties; entering into swap or other
derivative contracts under which counterparties have long-term obligations to
make payments to us; executing securities, futures, currency or commodity trades
that fail to settle at the required time due to non-delivery by the counterparty
or systems failure by clearing agents, exchanges, clearing houses or other
financial intermediaries; and extending credit to our clients through bridge or
margin loans or other arrangements. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Risk Management -- Credit Risk"
for a further discussion of the credit risks to which we are exposed.
Increased Credit Exposure in Recent Years
In recent years, we have significantly expanded our swaps and other
derivatives
16
<PAGE> 18
businesses and placed a greater emphasis on providing credit and liquidity to
our clients. As a result, our credit exposures have increased in amount and in
duration. In addition, as competition in the financial services industry has
increased, we have experienced pressure to assume longer-term credit risk,
extend credit against less liquid collateral and price more aggressively the
credit risks that we take.
Country Risk
Country, regional and political risks are components of credit risk, as
well as market risk. Economic or political pressures in a country or region,
including those arising from local market disruptions or currency crises, may
adversely affect the ability of clients or counterparties located in that
country or region to obtain foreign exchange or credit and, therefore, to
perform their obligations to us. See "-- We Are Exposed to Risks in Emerging and
Other Markets" for a further discussion of our exposure to these risks.
Systemic Risk
The commercial soundness of many financial institutions may be closely
interrelated as a result of credit, trading, clearing or other relationships
between the institutions. As a result, concerns about, or a default by, one
institution could lead to significant liquidity problems or losses in, or
defaults by, other institutions. This is sometimes referred to as "systemic
risk" and may adversely affect financial intermediaries, such as clearing
agencies, clearing houses, banks, securities firms and exchanges, with which we
interact on a daily basis.
The possibility of default by a major market participant in the second half
of fiscal 1998 and concerns throughout the financial industry regarding the
resulting impact on markets led us to participate in an industry-wide consortium
that invested in Long-Term Capital Portfolio, L.P., which is described under
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity -- The Balance Sheet". Actual defaults, increases in
perceived default risk and other similar events could arise in the future and
could have an adverse effect on the financial markets and on the Firm.
Uncertainty in Managing Credit Risk
Although we regularly review our credit exposure to specific clients and
counterparties and to specific industries, countries and regions that we believe
may present credit concerns, default risk may arise from events or circumstances
that are difficult to detect, such as fraud. We may also fail to receive full
information with respect to the trading risks of a counterparty. In addition, in
cases where we have extended credit against collateral, we may find that we are
undersecured, for example, as a result of sudden declines in market values that
reduce the value of collateral.
FIRM AND THIRD-PARTY COMPUTER SYSTEMS
MAY NOT ACHIEVE YEAR 2000 READINESS --
YEAR 2000 READINESS DISCLOSURE
With the year 2000 approaching, many institutions around the world are
reviewing and modifying their computer systems to ensure that they are Year 2000
compliant. The issue, in general terms, is that many existing computer systems
and microprocessors (including those in non-information technology equipment and
systems) use only two digits to identify a year in the date field with the
assumption that the first two digits of the year are always "19". Consequently,
on January 1, 2000, computers that are not Year 2000 compliant may read the year
as 1900. Systems that calculate, compare or sort using the incorrect date may
malfunction.
Because the Firm is dependent, to a very substantial degree, upon the
proper functioning of its computer systems, a failure of its systems to be Year
2000 compliant would have a material adverse effect on the Firm. Failure of this
kind could, for example, cause settlement of trades to fail, lead to incomplete
or inaccurate accounting, recording or processing of trades in securities,
currencies, commodities and other assets, result in generation of erroneous
results or give rise to uncertainty about our exposure to trading risks and our
need for liquidity. If not remedied, potential risks include business interrup-
17
<PAGE> 19
tion or shutdown, financial loss, regulatory actions, reputational harm and
legal liability.
In addition, the Firm depends upon the proper functioning of third-party
computer and non-information technology systems. These parties include trading
counterparties, financial intermediaries such as securities and commodities
exchanges, depositories, clearing agencies, clearing houses and commercial banks
and vendors such as providers of telecommunication services and other utilities.
We are in the process of assessing counterparties, intermediaries and vendors
with whom we have important financial or operational relationships to determine
the extent of their Year 2000 preparedness. We have not yet received sufficient
information from all parties about their remediation plans to assess the
effectiveness of their efforts. Moreover, in many cases, we are not in a
position to verify the accuracy or completeness of the information we receive
from third parties and as a result are dependent on their willingness and
ability to disclose, and to address, their Year 2000 problems. In addition, in
some international markets in which we do business, the level of awareness and
remediation efforts relating to the Year 2000 issue may be less advanced than in
the United States.
If third parties with whom we interact have Year 2000 problems that are not
remedied, problems could include the following:
- - in the case of vendors, disruption of important services upon which the Firm
depends, such as telecommunications and electrical power;
- - in the case of third-party data providers, receipt of inaccurate or
out-of-date information that would impair our ability to perform critical data
functions, such as pricing our securities or other assets;
- - in the case of financial intermediaries, such as exchanges and clearing
agents, failed trade settlements, inability to trade in certain markets and
disruption of funding flows;
- - in the case of banks and other lenders, disruption of capital flows
potentially resulting in liquidity stress; and
- - in the case of counterparties and customers, financial and accounting
difficulties for those parties that expose the Firm to increased credit risk
and lost business.
Disruption or suspension of activity in the world's financial markets is also
possible.
In addition, we believe that uncertainty about the success of remediation
efforts generally may cause many market participants to reduce the level of
their market activities temporarily as they assess the effectiveness of these
efforts during a "phase-in" period beginning in late 1999. We believe that
lenders are likely to take similar steps, which will result in a reduction in
available funding sources. Consequently, there may be a downturn in customer and
general market activity for a short period of time before and after January 1,
2000. If this occurs, our net revenues may be adversely affected, possibly
materially, depending on how long the reduction in activity continues and how
broadly it affects the markets. In addition, we expect to reduce our own trading
activities and the size of our balance sheet in order to manage the number and
type of our transactions that settle during this period and our related funding
needs. This also could reduce our net revenues. We cannot predict the magnitude
of the impact that these kinds of reductions would have on our businesses.
We may also be exposed to litigation with our customers and counterparties
as a result of Year 2000 problems. For example, litigation could arise from
problems relating to our internal systems or to external systems on which we
depend, as well as from problems involving companies in which our clients or the
funds we manage hold investments.
The Firm is implementing a worldwide program to prepare its computer
systems to be Year 2000 compliant. We have substantially completed most phases
of this process with respect to our mission-critical systems, and we expect to
complete this process with respect to our remaining systems during 1999. We also
plan to participate in numerous industry-sponsored and other tests of both our
mission-critical and non-mission-critical systems during the first half of 1999.
We currently estimate that the total cost of imple-
18
<PAGE> 20
menting our Year 2000 program will be between $140 million and $150 million,
which includes the costs of technology personnel but does not include the costs
of most non-technology personnel. Over half of this amount has been spent to
date. We expect most of the remaining expenditures to cover remediation, testing
and contingency planning during 1999. The Firm's Year 2000 program may not be
effective and our estimates about the timing and cost of completing our program
may not be accurate. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Risk Management -- Operational and Year
2000 Risks -- Year 2000 Readiness Disclosure" for more detailed information
concerning our current state of readiness.
OTHER OPERATIONAL RISKS MAY DISRUPT OUR
BUSINESSES, RESULT IN REGULATORY ACTION
AGAINST US OR LIMIT OUR GROWTH
We face operational risk arising from mistakes made in the confirmation or
settlement of transactions or from transactions not being properly recorded,
evaluated or accounted for. Our businesses are highly dependent on our ability
to process, on a daily basis, a large number of transactions across numerous and
diverse markets in many currencies, and the transactions we process have become
increasingly complex. Consequently, we rely heavily on our financial, accounting
and other data processing systems. If any of these systems do not operate
properly or are disabled, we could suffer financial loss, a disruption of our
businesses, liability to clients, regulatory intervention or reputational
damage. The inability of our systems to accommodate an increasing volume of
transactions could also constrain our ability to expand our businesses. In
recent years, we have substantially upgraded and expanded the capabilities of
our data processing systems and other operating technology, and we expect that
we will need to continue to upgrade and expand in the future to avoid disruption
of, or constraints on, our operations.
LEGAL AND REGULATORY RISKS ARE INHERENT AND
SUBSTANTIAL IN OUR BUSINESSES
Substantial legal liability or a significant regulatory action against the
Firm could have a material financial effect on the Firm or cause significant
reputational harm to the Firm, which in turn could seriously harm our business
prospects.
Exposure to Legal Liability; Rising Litigation Costs
We face significant legal risk in our businesses and the volume and amount
of damages claimed in litigation against financial intermediaries are
increasing. These risks include potential liability under securities or other
laws for materially false or misleading statements made in connection with
securities and other transactions, potential liability for the "fairness
opinions" and other advice we provide to participants in corporate transactions
and disputes over the terms and conditions of complex trading arrangements. We
also face the possibility that counterparties in complex or risky trading
transactions will claim that we improperly failed to tell them of the risks or
that they were not authorized or permitted to enter into these transactions with
us and that their obligations to the Firm are not enforceable. Particularly in
our rapidly growing business focused on high net worth individuals, we are
increasingly exposed to claims against the Firm for recommending investments
that are not consistent with a client's investment objectives or engaging in
unauthorized or excessive trading. During a prolonged market downturn, we would
expect these types of claims to increase. We are also subject to claims arising
from disputes with employees for alleged discrimination or harassment, among
other things. These risks often may be difficult to assess or quantify and their
existence and magnitude often remain unknown for substantial periods of time. We
incur significant legal expenses every year in defending against litigation, and
we expect to continue to do so in the future. See "Business -- Legal Matters"
for a discussion of certain legal matters in which we are currently involved.
19
<PAGE> 21
Extensive Regulation of the Firm
The financial services industry is subject to extensive regulation. In the
United States alone, our businesses are regulated by the Securities and Exchange
Commission, the Commodity Futures Trading Commission and various other federal
and state governmental authorities. In addition, the Firm is subject to
regulation by various self-regulatory organizations such as the National
Association of Securities Dealers, Inc., the NYSE and other exchanges. The Firm
is also subject to regulation by governmental and self-regulatory organizations
in virtually all other jurisdictions in which it operates around the world.
The requirements imposed by our regulators are designed to ensure the
integrity of the financial markets and to protect customers and other third
parties who deal with the Firm and are not designed to protect shareholders of
the Firm. Consequently, these regulations often serve to limit the Firm's
activities, including through net capital, customer protection and market
conduct requirements. We face the risk of significant intervention by regulatory
authorities, including extended investigation and surveillance activity,
adoption of costly or restrictive new regulations and judicial or administrative
proceedings that may result in substantial penalties to the Firm. Among other
things, the Firm could be fined or prohibited from engaging in certain business
activities. See "Business -- Regulation" for a further discussion of the
regulatory environment in which we conduct our businesses.
Legal Restrictions on Our Clients
New laws or regulations or changes in enforcement of existing laws or
regulations applicable to the Firm's clients may also adversely affect our
businesses. For example, changes in antitrust enforcement could affect the level
of mergers and acquisitions activity and changes in regulation could restrict
the activities of the Firm's clients and, therefore, the Firm's services on
their behalf.
EMPLOYEE MISCONDUCT COULD HARM THE FIRM
AND IS DIFFICULT TO DETECT AND DETER
There have been a number of highly publicized cases involving fraud or
other misconduct by employees in the financial services industry in recent
years, and we run the risk that employee misconduct could occur. Misconduct by
employees could include binding the Firm to transactions that exceed authorized
limits or present unacceptable risks, or hiding from the Firm unauthorized or
unsuccessful activities, which, in either case, may result in unknown and
unmanaged risks or losses. Employee misconduct could also involve the improper
use or disclosure of confidential information, which could result in regulatory
sanctions and serious reputational or financial harm. It is not always possible
to deter employee misconduct and the precautions we take to prevent and detect
this activity may not be effective in all cases.
THE FINANCIAL SERVICES INDUSTRY IS INTENSELY
COMPETITIVE AND RAPIDLY CONSOLIDATING
The financial services industry -- and all of our businesses -- are
intensely competitive, and we expect them to remain so. We compete on the basis
of a number of factors, including transaction execution, our products and
services, innovation, reputation and price. We have experienced intense price
competition in certain businesses in recent years, such as underwriting fees on
investment grade debt offerings and privatizations. We believe we may experience
pricing pressures in these and other areas in the future as some of our
competitors seek to obtain market share by reducing prices.
Trend Toward Consolidation and Increasing Competition
In recent years, there has been substantial consolidation and convergence
among companies in the financial services industry. In particular, a number of
large commercial banks, insurance companies and other broad-based financial
services firms have established or acquired broker-dealers or have merged with
other financial institutions. Many of these firms have the ability to offer a
wide range of products, from loans, deposit-taking and insurance to brokerage,
asset management and investment banking services, which may enhance their
competitive position. They also have the ability to support investment banking
and securities products with commercial banking, insurance and other financial
20
<PAGE> 22
services revenues in an effort to gain market share, which could result in
pricing pressure in our businesses.
Increased Need for Capital
This trend toward consolidation and convergence has significantly increased
the capital base and geographic reach of our competitors. This trend has also
hastened the globalization of the securities and other financial services
markets. As a result, we have had to commit capital to support our international
operations and to execute large global transactions.
Competition in Non-U.S. Markets
We believe that some of our most significant challenges and opportunities
will arise outside the United States, as described under "Industry and Economic
Outlook". In order to take advantage of these opportunities, we will have to
compete successfully with financial institutions based in important non-U.S.
markets, particularly in Europe. Certain of these institutions are larger,
better capitalized and have a stronger local presence and a longer operating
history in these markets.
Competition from Alternative Trading Systems
Securities and futures transactions are now being conducted through the
Internet and other alternative, non-traditional trading systems, and it appears
that the trend toward alternative trading systems will continue and probably
accelerate. A dramatic increase in computer-based or other electronic trading
may adversely affect the Firm's commission and trading revenues, reduce the
Firm's participation in the trading markets and associated access to market
information and lead to the creation of new and stronger competitors.
WE ARE EXPOSED TO RISKS IN
EMERGING AND OTHER MARKETS
We conduct our businesses in major markets around the world, including many
developing markets in Asia, Latin America and Eastern Europe. We are subject to
political, economic, legal, operational and other risks that are inherent in
operating in other countries, which range from difficulties in settling
transactions in emerging markets to possible nationalization, expropriation,
price controls and other restrictive governmental actions. We also face the risk
that exchange controls or similar restrictions imposed by foreign governmental
authorities may restrict our ability to convert local currency received or held
by us in their countries into U.S. dollars or other currencies, or to take those
dollars or other currencies out of those countries.
To date, a relatively small part of our business has been conducted in
emerging and other markets. As we expand our businesses in these areas, our
exposure to these risks will increase.
In the last several years, various emerging market countries have
experienced severe economic and financial disruptions, including significant
devaluations of their currencies and low or negative growth rates in their
economies. The possible effects of these conditions include an adverse impact on
our businesses and increased volatility in financial markets generally.
Moreover, economic or market problems in a single country or region are
increasingly affecting other markets generally. For example, the economic crisis
in Russia in August 1998 adversely affected other emerging markets and led to
turmoil in financial markets worldwide. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations -- Business
Environment" for a discussion of the business environment in which we operated
during the second half of fiscal 1998. A continuation of these situations could
adversely affect global economic conditions and world markets and, in turn,
could adversely affect the Firm's businesses. Among the risks are regional or
global market downturns and, as noted above, increasing liquidity and credit
risks, particularly in Japan where the economy continues to be weak and we have
significant exposure.
Moreover, in many countries, the laws and regulations applicable to the
securities and financial services industries are uncertain and evolving, and it
may be difficult for us to determine the exact requirements of local laws in
every market. Our inability to remain in compliance with local laws in a
particular foreign market could have a significant and negative effect not only
on our businesses in
21
<PAGE> 23
that market but also on the Firm's reputation generally. These uncertainties may
also make it difficult for us to structure our transactions in such a way that
the results we expect to achieve are legally enforceable in all cases. See
"-- Legal and Regulatory Risks Are Inherent and Substantial in Our Businesses --
Exposure to Legal Liability; Rising Litigation Costs" for additional information
concerning these matters and "Business -- Regulation" for a discussion of the
regulatory environment in which we conduct our businesses.
OUR CONVERSION TO CORPORATE FORM
MAY ADVERSELY AFFECT OUR ABILITY TO RECRUIT,
RETAIN AND MOTIVATE KEY EMPLOYEES
The Firm's performance is largely dependent on the talents and efforts of
highly skilled individuals. Competition in the financial services industry for
qualified employees is intense. Our continued ability to compete effectively in
our businesses depends on our ability to attract new employees and to retain and
motivate our existing employees.
In connection with the Offerings and the Firm's conversion from partnership
to corporate form, the profit participating limited partners who are active in
the Firm's businesses will receive substantial amounts of Common Stock in
exchange for their interests in the Firm. Because these shares of Common Stock
will be received in exchange for partnership interests, ownership of these
shares will not be dependent upon these partners' continued employment. However,
these shares will be subject to certain restrictions on transfer under a
shareholders' agreement and a portion may be pledged to support these partners'
obligations under noncompetition agreements. The transfer restrictions under the
shareholders' agreement may, however, be waived, as described under "Certain
Relationships and Related Transactions -- Shareholders' Agreement -- Transfer
Restrictions" and "-- Waivers". The steps taken by the Firm to encourage the
continued service of these individuals in the Firm's businesses after the
Offerings may not be effective. For a description of the compensation plan for
our senior professionals to be implemented after the Offerings, see
"Management -- The Partner Compensation Plan".
In connection with the Offerings and the Firm's conversion from partnership
to corporate form, employees other than the profit participating limited
partners who are active in the Firm's businesses will receive equity-based
awards. The incentives to attract, retain and motivate employees provided by
these awards or by future arrangements, including equity-based arrangements, may
not be as effective as the opportunity, which existed prior to conversion, to
become a partner of the Firm. See "Management -- The Employee IPO Awards" for a
description of these equity-based awards.
THE FIRM WILL BE CONTROLLED BY ITS PRINCIPAL SHAREHOLDERS AND WILL BE SUBJECT TO
ANTI-TAKEOVER PROVISIONS
Upon consummation of the Offerings, the Firm's Managing Directors will
collectively own shares of Common Stock, or % of the total
shares of Common Stock outstanding, which includes the shares of Common Stock
underlying the restricted stock units to be awarded on a formula basis. These
shares will be subject to a shareholders' agreement, which will provide for
coordinated voting by the parties. Further, both Sumitomo Bank Capital Markets,
Inc. and Kamehameha Activities Association, which together will own 44,575,026
shares of Common Stock, or 9.7% of the total shares of Common Stock outstanding
after completion of the Offerings, have agreed to vote their shares of Common
Stock in the same manner as a majority of the shares held by the Managing
Directors of the Firm are voted. See "Certain Relationships and Related
Transactions -- Shareholders' Agreement -- Voting" and "-- Voting Agreement" for
a discussion of these voting arrangements.
As a result of these arrangements, the Managing Directors initially will be
able to elect the entire Board of Directors, control the management and policies
of the Company and, in general, determine, without the consent of the Company's
other shareholders, the outcome of any corporate transaction or other matter
submitted to the shareholders for approval, including mergers, consolidations
and the sale of all or substantially all of the Company's assets. The Managing
Direc-
22
<PAGE> 24
tors initially will be able to prevent or cause a change in control of the
Company.
Our organizational documents contain provisions, and our Board of Directors
has adopted a "poison pill" rights plan, that will impede the removal of
directors and may discourage a third party from making a proposal to acquire us.
See "Description of Capital Stock -- Certain Anti-Takeover Matters" for a
discussion of these anti-takeover provisions.
OUR SHARE PRICE MAY DECLINE DUE TO SHARES
ELIGIBLE FOR FUTURE SALE
Upon completion of the Offerings, there will be 461,470,947 shares of
Common Stock outstanding, including 31,306,667 shares of Common Stock underlying
the restricted stock units to be awarded on a formula basis but excluding
6,238,094 shares of Nonvoting Common Stock. Of these shares, the 60,000,000
shares of Common Stock expected to be sold in the Offerings will be freely
transferable without restriction or further registration under the Securities
Act of 1933.
Of the remaining 401,470,947 shares of Common Stock to be outstanding after
the Offerings:
- - 264,680,458 shares will be held by the former profit participating limited
partners who are active in the Firm's businesses and will be subject to
restrictions on transfer, as described under "Certain Relationships and
Related Transactions -- Shareholders' Agreement -- Transfer Restrictions", and
also will be subject to the 180-day Underwriters' lock-up arrangement
described under "Underwriting";
- - 47,264,592 shares will be held by retired limited partners, all of which will
be subject to restrictions on transfer for one year after completion of the
Offerings and of which will be subject to restrictions on transfer
for three years after completion of the Offerings, as described under "Shares
Eligible for Future Sale". All of these shares also will be subject to the
180-day Underwriters' lock-up arrangement described under "Underwriting";
- - 22,612,076 shares will be held by Sumitomo Bank Capital Markets, Inc. and,
along with the 6,238,094 shares of Nonvoting Common Stock that it will hold,
will be subject to restrictions on transfer, as described under "Shares
Eligible for Future Sale -- SBCM and KAA Registration Rights", and also will
be subject to the 180-day Underwriters' lock-up arrangement described under
"Underwriting";
- - 21,962,950 shares will be held by Kamehameha Activities Association and will
be subject to restrictions on transfer, as described under "Shares Eligible
for Future Sale -- SBCM and KAA Registration Rights", and also will be subject
to the 180-day Underwriters' lock-up arrangement described under
"Underwriting";
- - 13,644,204 shares will be held in the nonqualified defined contribution plan
and will be deliverable to plan participants beginning on or about the third
anniversary of the date of initial contribution, assuming the relevant
conditions are satisfied, as described under "Management -- The Employee IPO
Awards -- The Defined Contribution Plan"; and
- - 31,306,667 shares of Common Stock underlying the restricted stock units to be
awarded on a formula basis generally will be deliverable beginning on or about
the first anniversary of the date of the consummation of the Offerings,
assuming the relevant conditions are satisfied, as described under
"Management -- The Employee IPO Awards -- Formula Awards".
Shares of Common Stock underlying the restricted stock units to be awarded
on a discretionary basis will be deliverable beginning on or about the third
anniversary of the date of the consummation of the Offerings; and discretionary
employee stock options awarded in connection with the Offerings will be
exercisable beginning on or about the third anniversary of the date of the
consummation of the Offerings, in each case if relevant conditions are
satisfied, as described under "Management -- The Employee IPO Awards". We expect
to register the shares of Common Stock deliverable under these awards and under
the restricted stock units to be awarded
23
<PAGE> 25
on a formula basis under the Securities Act of 1933.
We have also entered into agreements with Sumitomo Bank Capital Markets,
Inc. and Kamehameha Activities Association that allow them, under certain
circumstances, to require us to register for public offering certain of their
shares of Common Stock. See "Shares Eligible for Future Sale -- SBCM and KAA
Registration Rights" for a further discussion of these agreements. Further, our
Board of Directors may grant registration rights to the former profit
participating limited partners who are active in the Firm's businesses. See
"Shares Eligible for Future Sale -- Other Registration Rights" for a further
discussion of these possible registration rights.
The transfer restrictions described above may be waived, as discussed under
"Certain Relationships and Related Transactions" and "Underwriting".
Sales of substantial amounts of Common Stock, or the possibility of such
sales, may adversely affect the price of the Common Stock and impede the Firm's
ability to raise capital through the issuance of equity securities. See "Shares
Eligible for Future Sale" for a discussion of possible future sales of Common
Stock.
THERE HAS BEEN NO PRIOR MARKET FOR THE
COMMON STOCK AND THE MARKET PRICE OF
THE SHARES WILL FLUCTUATE
Prior to the Offerings, there has been no market for our Common Stock. The
initial public offering price of the Common Stock will be determined by
negotiations among the Firm and the representatives of the Underwriters. Because
of the relationship between Goldman, Sachs & Co. and the issuer of the Common
Stock, the National Association of Securities Dealers, Inc. requires that a
third party or "qualified independent underwriter" determine that the initial
public offering price is not too high. are acting as these third-party
underwriters. See "Underwriting" for a discussion of these matters.
The price of the Common Stock after the Offerings may fluctuate widely,
depending upon many factors, including the perceived prospects of the Firm and
the securities and financial services industries in general, differences between
our actual financial and operating results and those expected by investors and
analysts, changes in analysts' recommendations or projections, changes in
general economic or market conditions and broad market fluctuations. The Common
Stock may trade at prices significantly below the initial public offering price.
We will apply to list the Common Stock on the NYSE. The NYSE listing does
not, however, guarantee that a trading market for the Common Stock will develop
or, if a market does develop, the liquidity of the market for the Common Stock.
After the Offerings, because Goldman, Sachs & Co. is a member of the NYSE
and because of Goldman, Sachs & Co.'s relationship to the Firm, it will not be
permitted under the rules of the NYSE to make markets in, or recommendations
regarding the purchase or sale of, the Common Stock. This may adversely affect
the trading market for the Common Stock.
INVESTORS IN THE OFFERINGS WILL EXPERIENCE
IMMEDIATE AND SUBSTANTIAL DILUTION
Investors in the Offerings will experience immediate and substantial
dilution in the net tangible book value of $31.85 per share based on an assumed
initial public offering price of $45.00 per share, as discussed under
"Dilution".
24
<PAGE> 26
USE OF PROCEEDS
Based upon an initial public offering price of $45.00 per share (the
midpoint of the range of initial public offering prices set forth on the cover
page of this Prospectus), the Company estimates that it will receive net
proceeds from the Offerings of $1.8 billion (or $2.2 billion if the
Underwriters' options to purchase additional shares are exercised in full),
after deducting the underwriting discounts and estimated expenses that are
payable by the Company in the Offerings. The above amounts do not include
underwriting discounts that will be realized by Goldman, Sachs & Co. ("GS&Co."),
Goldman Sachs International ("GSI") and Goldman Sachs (Asia) L.L.C. as
Underwriters in the Offerings. The Company intends to use the net proceeds from
the Offerings to provide additional funds for its operations and for other
general corporate purposes, including the purchase of short-term marketable
securities.
The Company will not receive any of the proceeds from the sale of shares of
Common Stock by the Selling Shareholders.
DIVIDEND POLICY
The holders of Common Stock and Nonvoting Common Stock (together, the
"Common Shares") of the Company will share ratably on a per share basis in all
dividends and other distributions declared by our Board of Directors. Our Board
of Directors currently intends to declare quarterly dividends on all outstanding
Common Shares and expects that the first quarterly dividend will be $ per
share, and that it will be declared during the third quarter of fiscal 1999.
The declaration of dividends by the Company is subject to the discretion of
the Board of Directors. The Board of Directors will take into account such
matters as general business conditions, the Firm's financial results, capital
requirements, contractual, legal and regulatory restrictions on the payment of
dividends by the Company to its shareholders or by the Company's subsidiaries to
the Company, the effect on debt ratings of the Company and such other factors as
the Board of Directors may deem relevant. See "Business -- Regulation" for a
discussion of potential regulatory limitations on our receipt of funds from our
regulated subsidiaries.
25
<PAGE> 27
REPORT OF INDEPENDENT ACCOUNTANTS ON
PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
To the Partners,
The Goldman Sachs Group, L.P.:
We have examined the pro forma adjustments reflecting (i) the incorporation
transactions and the related transactions described under "Certain Relationships
and Related Transactions -- Incorporation and Related Transactions"; (ii)
compensation to Managing Directors who were profit participating limited
partners active in the Firm's businesses; (iii) equity-based compensation; (iv)
the provision for corporate income taxes; (v) the redemption of the Firm's
senior limited partnership interests; (vi) certain cash distributions by The
Goldman Sachs Group, L.P. to its partners in the first and second quarters of
fiscal 1999 in accordance with the Firm's partnership agreement, including
distributions for partner income taxes related to the Firm's earnings in fiscal
1998; and (vii) the recognition of certain net tax assets (collectively, the
"Pro Forma Adjustments"), and the Offerings, all as described in Note 2 to the
Pro Forma Consolidated Financial Information (included on pages 27 to 30 of this
Prospectus) and the application of those adjustments to the historical amounts
in the Pro Forma Consolidated Balance Sheet Information as of November 27, 1998
and the Pro Forma Consolidated Income Statement Information for the fiscal year
then ended. The historical consolidated financial statement information is
derived from the historical consolidated financial statements of the Firm, which
were audited by us and which are included elsewhere in this Prospectus. The Pro
Forma Adjustments are based upon management's assumptions described in Note 2 to
the Pro Forma Consolidated Financial Information. Our examination was made in
accordance with standards established by the American Institute of Certified
Public Accountants and, accordingly, included such procedures as we considered
necessary in the circumstances.
The objective of this pro forma consolidated financial information is to
show what the significant effects on the historical financial information of the
Firm might have been had the Pro Forma Adjustments and the Offerings occurred at
an earlier date. However, the Pro Forma Consolidated Income Statement
Information and the Pro Forma Consolidated Balance Sheet Information are not
necessarily indicative of the results of operations or related effects on
financial position that would have been attained had the above-mentioned Pro
Forma Adjustments and the Offerings actually occurred earlier.
In our opinion, management's assumptions provide a reasonable basis for
presenting the significant effects directly attributable to the above-mentioned
Pro Forma Adjustments and the Offerings, all as described in Note 2 to the Pro
Forma Consolidated Financial Information, the related pro forma adjustments give
appropriate effect to those assumptions, and the "Pro Forma" and "Pro Forma as
Adjusted for Offerings" columns reflect the proper application of those
adjustments to the historical consolidated financial statement amounts in the
Pro Forma Consolidated Balance Sheet Information as of November 27, 1998 and the
Pro Forma Consolidated Income Statement Information for the fiscal year then
ended.
PricewaterhouseCoopers LLP
New York, New York
March 15, 1999.
26
<PAGE> 28
PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
The following Pro Forma Consolidated Financial Information is based upon
the historical consolidated financial statements of the Firm. In addition to the
Offerings of Common Stock, this information reflects the pro forma effects of
the following items:
- - the incorporation transactions (the "Incorporation Transactions") and the
related transactions described under "Certain Relationships and Related
Transactions -- Incorporation and Related Transactions";
- - compensation to Managing Directors who were profit participating limited
partners active in the Firm's businesses (the "PLPs");
- - equity-based compensation;
- - the provision for corporate income taxes;
- - the redemption of the Firm's senior limited partnership interests (the
"SLPs");
- - certain cash distributions by The Goldman Sachs Group, L.P. ("Group L.P.") to
its partners in the first and second quarters of fiscal 1999 in accordance
with the Firm's partnership agreement, including distributions for partner
income taxes related to the Firm's earnings in fiscal 1998; and
- - the recognition of certain net tax assets.
These items are collectively referred to as the "Pro Forma Adjustments".
The Pro Forma Consolidated Income Statement Information does not give
effect to certain of these items because of their non-recurring nature. These
are:
- - the restricted stock units awarded to employees on a formula basis (the
"Formula RSUs");
- - the initial irrevocable contribution of shares of Common Stock to a
nonqualified defined contribution plan (the "DCP");
- - the recognition of certain net tax assets; and
- - a cash contribution to a Goldman Sachs charitable foundation (the "Charitable
Contribution").
The Pro Forma Consolidated Balance Sheet Information, however, does give effect
to these non-recurring items.
The Pro Forma Adjustments are based upon available information and certain
assumptions that management believes are reasonable. The Pro Forma Consolidated
Financial Information and accompanying notes should be read in conjunction with
the consolidated financial statements and notes thereto.
THE PRO FORMA CONSOLIDATED FINANCIAL INFORMATION PRESENTED IS NOT
NECESSARILY INDICATIVE OF THE RESULTS OF OPERATIONS OR FINANCIAL CONDITION THAT
MIGHT HAVE OCCURRED HAD THE PRO FORMA ADJUSTMENTS ACTUALLY TAKEN PLACE AS OF THE
DATES SPECIFIED, OR THAT MAY BE EXPECTED TO OCCUR IN THE FUTURE.
27
<PAGE> 29
PRO FORMA CONSOLIDATED INCOME STATEMENT INFORMATION
(in millions, except per share data)
<TABLE>
<CAPTION>
YEAR ENDED NOVEMBER 27, 1998
---------------------------------------------------------------------------
PRO FORMA
PRO FORMA ADJUSTMENT AS ADJUSTED
HISTORICAL ADJUSTMENTS PRO FORMA FOR OFFERINGS FOR OFFERINGS
---------- ----------- ------------ ------------- -------------
<S> <C> <C> <C> <C> <C>
Total revenues............................. $22,478 $ -- $22,478 $ -- $22,478
Interest expense, principally on short-term
funding.................................. 13,958 28(a) 13,986 -- 13,986
------- ------- ------- ----- -------
Revenues, net of interest expense.......... 8,520 (28) 8,492 -- 8,492
Compensation and benefits, excluding
Employee IPO Awards...................... 3,838 303(b) 4,141 -- 4,141
Employee IPO Awards........................ -- 360(c) 360 -- 360
Other operating expenses................... 1,761 -- 1,761 -- 1,761
------- ------- ------- ----- -------
Total operating expenses................... 5,599 663 6,262 -- 6,262
Pre-tax earnings........................... 2,921 (691) 2,230 -- 2,230
Provision for taxes........................ 493 421(d) 914 -- 914
------- ------- ------- ----- -------
Net earnings............................... $ 2,428 $(1,112) $ 1,316 $ -- $ 1,316
======= ======= ======= ===== =======
Common Shares outstanding:
Basic.................................... 426(e) 42(f) 468
Diluted.................................. 430(e) 42(f) 472
Earnings per Share:
Basic.................................... $ 3.09 $ 2.81
Diluted.................................. 3.06 2.79
</TABLE>
PRO FORMA CONSOLIDATED BALANCE SHEET INFORMATION
(in millions, except per share data)
<TABLE>
<CAPTION>
AS OF NOVEMBER 27, 1998
------------------------------------------------------------------------------------
PRO FORMA
PRO FORMA ADJUSTMENT AS ADJUSTED
HISTORICAL ADJUSTMENTS PRO FORMA FOR OFFERINGS FOR OFFERINGS
---------- ----------- ------------ ------------- -------------
<S> <C> <C> <C> <C> <C>
Total assets.............. $217,380 $(1,510)(g)(h)(i)(k)(l) $215,870 $1,788(f) $217,658
Long-term borrowings...... 19,906 371(a) 20,277 -- 20,277
Total liabilities......... 210,996 371(a) 211,367 -- 211,367
Partners' capital......... 6,384 (6,384)(a)(h)(i)(j)(k) -- -- --
Stockholders' equity...... -- 4,503 (g)(j)(l) 4,503 1,788(f) 6,291
Book value per share...... $ 10.58 $ 13.45
</TABLE>
The accompanying notes are an integral part of the Pro Forma Consolidated
Financial Information.
28
<PAGE> 30
NOTES TO PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
NOTE 1: BASIS OF PRESENTATION
As permitted by the rules and regulations of the Securities and Exchange
Commission (the "SEC"), the Pro Forma Consolidated Financial Information is
presented on a condensed basis. The Pro Forma Consolidated Balance Sheet
Information was prepared as if the Pro Forma Adjustments had occurred as of
November 27, 1998. Historical partners' capital includes partners' capital
allocated for income taxes and potential withdrawals. Book value per share
equals stockholders' equity divided by Common Shares outstanding of 425,709,041
prior to the Offerings and 467,709,041 as adjusted for the Offerings. These
amounts include the Nonvoting Common Stock, shares of Common Stock irrevocably
contributed to the DCP and shares of Common Stock underlying the Formula RSUs.
The Pro Forma Consolidated Income Statement Information for the fiscal year
ended November 27, 1998 was prepared as if the Pro Forma Adjustments had taken
place at the beginning of fiscal 1998.
For pro forma purposes, the Offerings and, where applicable, the related
transactions reflect an assumed price of $45.00 per share, the midpoint of the
range of initial public offering prices set forth on the cover page of this
Prospectus.
NOTE 2: PRO FORMA ADJUSTMENTS
(a) THE RETIRED LIMITED PARTNERS OF THE FIRM (THE "RLPS") EXCHANGE FOR
DEBENTURES. Adjustment to reflect the issuance of junior subordinated
debentures (the "Junior Subordinated Debentures") to the RLPs in exchange for
their interests in Group L.P. and certain affiliates. These Junior Subordinated
Debentures will have a principal amount of $295 million, an initial carrying
value of $371 million and an effective interest rate of 7.5%.
(b) COMPENSATION AND BENEFITS, EXCLUDING EMPLOYEE IPO AWARDS. Adjustment
to reflect (i) total compensation and benefits related to services rendered by
the former PLPs of the Firm offset by (ii) the effect of equity-based
compensation, issued in lieu of cash compensation, 50% of which will be expensed
over the four-year period following the year of grant. The estimated total
compensation attributable to the former PLPs of the Firm is based upon measures
of financial performance described under "Management -- The Partner Compensation
Plan -- Determination of Salary and Bonus".
(c) EMPLOYEE IPO AWARDS. Adjustment to reflect the amortization of the
30,604,685 restricted stock units awarded to employees on a discretionary basis
(the "Discretionary RSUs"). These Discretionary RSUs will have a value of $1.4
billion, approximately 26% of which will be amortized as a non-cash expense in
the year of grant. The remaining Discretionary RSUs will be amortized over the
four years following the year of grant.
The stock options to purchase 40,000,400 shares of Common Stock awarded to
employees on a discretionary basis (the "Discretionary Options") will be
accounted for pursuant to Accounting Principles Board Opinion ("APB") No. 25, as
permitted by paragraph 5 of SFAS No. 123. Since these options will have no
intrinsic value on the date of grant, no compensation expense will be recognized
pursuant to APB No. 25. The estimated fair value of these Discretionary Options
on the date of grant is $600 million using a Black-Scholes option pricing model.
If SFAS No. 123 had been applied, compensation expense of $157 million would
have been included in the Pro Forma Consolidated Income Statement Information.
See "Management -- The Employee IPO Awards" for a description of these awards.
(d) PRO FORMA PROVISION FOR INCOME TAXES. Adjustment to reflect a pro
forma provision for income taxes for the Company in corporate form at an
effective tax rate of 41%.
(e) PRO FORMA COMMON SHARES. Common Shares outstanding after giving effect
to the Pro Forma Adjustments. Basic Common Shares outstanding of 425,709,041
prior to the Offerings includes the Nonvoting Common Stock, shares of Common
Stock irrevocably contributed to the DCP and shares of Com-
29
<PAGE> 31
NOTES TO PRO FORMA CONSOLIDATED FINANCIAL INFORMATION -- (CONTINUED)
mon Stock underlying the Formula RSUs.
Diluted Common Shares outstanding of 429,704,653 prior to the Offerings reflects
the dilutive effect of the Common Stock deliverable pursuant to the
Discretionary RSUs.
(f) ADJUSTMENT FOR THE OFFERINGS. Common Shares as adjusted to reflect the
issuance of 42,000,000 shares of Common Stock offered by the Firm. Net proceeds
to the Firm from the Offerings reflect the deduction of underwriting discounts
and estimated expenses payable by the Firm in connection with the Offerings. The
adjustment for the Offerings excludes 9,000,000 shares of Common Stock issuable
upon exercise of the Underwriters' options to purchase additional shares, which
are described under "Underwriting".
(g) CHARITABLE CONTRIBUTION. Adjustment to reflect the Charitable
Contribution of $200 million.
(h) RLPS EXCHANGE FOR CASH. Adjustment to reflect the payment of $892
million in cash to the RLPs in exchange for their interests in Group L.P. and
certain affiliates.
(i) SLPS REDEMPTION FOR CASH. Adjustment to reflect the redemption of the
SLPs for cash of $904 million by Group L.P. prior to the Incorporation
Transactions.
(j) PLP, RLP, SUMITOMO BANK CAPITAL MARKETS, INC. ("SBCM") AND KAMEHAMEHA
ACTIVITIES ASSOCIATION ("KAA") EXCHANGE FOR COMMON SHARES. Adjustment of $3,530
million to reflect the issuance of 264,680,458 shares of Common Stock to PLPs,
47,264,592 shares of Common Stock to RLPs, 31,612,076 shares of Common Stock and
6,238,094 shares of Nonvoting Common Stock to SBCM and 30,962,950 shares of
Common Stock to KAA, in exchange for their respective interests in Group L.P.
and certain affiliates.
(k) CASH DISTRIBUTIONS. Adjustment to reflect certain cash distributions
by Group L.P. to its partners, including SBCM and KAA, in the first and second
quarters of fiscal 1999 in accordance with the Firm's partnership agreement,
including distributions for partner income taxes related to the Firm's earnings
in fiscal 1998.
The Firm expects that cash distributions for partner income taxes in the
first and second quarters of fiscal 1999 related to the Firm's earnings in
fiscal 1999 will be significant due, in part, to certain expenses that are not
deductible to the partners in these periods. The Company expects to record a
substantial tax asset on the consummation of the Offerings related to these
expenses. These cash distributions and the related tax asset are not reflected
in the Pro Forma Consolidated Balance Sheet Information.
(l) NET TAX ASSETS. Adjustment to reflect the addition to equity
associated with the recognition of $1,173 million in net tax assets under SFAS
No. 109. These net tax assets relate to (i) the conversion of Group L.P. to
corporate form, (ii) the 31,306,667 Formula RSUs and the initial irrevocable
contribution of 13,644,204 shares of Common Stock contributed to the DCP and
(iii) the Charitable Contribution. As discussed in Note 2(k) above, the Company
expects to record a substantial tax asset on the consummation of the Offerings
related to certain expenses that are not deductible to the partners in fiscal
1999. This additional tax asset is not reflected in the Pro Forma Consolidated
Balance Sheet Information.
30
<PAGE> 32
DILUTION
As of November 27, 1998, the pro forma net tangible book value of the Firm
was approximately $4.36 billion, or approximately $10.24 per Common Share (which
includes the shares of Nonvoting Common Stock, the shares of Common Stock
irrevocably contributed to the DCP and the shares of Common Stock underlying the
Formula RSUs). "Pro forma net tangible book value" per Common Share represents
the amount of the Company's total consolidated tangible assets minus total
consolidated liabilities, divided by the 425,709,041 Common Shares outstanding
on a pro forma basis after giving effect to the Pro Forma Adjustments. After
giving effect to the sale by the Company of 42,000,000 shares of Common Stock in
the Offerings at an assumed initial public offering price of
$45.00 per share (the midpoint of the range of initial public offering prices
set forth on the cover page of this Prospectus) and after deducting the
underwriting discounts and estimated expenses payable by the Company in the
Offerings, the pro forma net tangible book value of the Company as of November
27, 1998 would have been approximately $6.15 billion, or approximately $13.15
per Common Share. This represents an immediate increase in net tangible book
value of $2.91 per Common Share to existing shareholders and an immediate
dilution in net tangible book value of $31.85 per share to new investors
purchasing shares of Common Stock at the assumed initial public offering price.
The following table illustrates this dilution on a per share basis:
<TABLE>
<S> <C> <C>
Assumed initial public offering price per share of Common
Stock..................................................... $45.00
Pro forma net tangible book value per Common Share before
giving effect to the Offerings(1)...................... $10.24
Increase in net tangible book value per Common Share
attributable to the sale of Common Stock in the
Offerings(2)........................................... 2.91
------
Pro forma net tangible book value per Common Share after
giving effect to the Offerings(1)......................... 13.15
------
Dilution in net tangible book value per Common Share to new
investors(3).............................................. $31.85
======
</TABLE>
- ---------------
(1) The Firm's intangible assets as of November 27, 1998 were $142 million,
comprised primarily of goodwill, equivalent to $0.33 per Common Share, after
giving effect to the Pro Forma Adjustments, and $0.30 per Common Share after
giving effect to the Offerings.
(2) After deducting the underwriting discounts and estimated expenses payable by
the Company in the Offerings.
(3) Dilution is determined by subtracting pro forma net tangible book value per
share after giving effect to the Offerings from the assumed initial public
offering price per share paid by a new investor.
------------------------
The foregoing table assumes no exercise of the Underwriters' options to
purchase 9,000,000 additional shares of Common Stock that are described under
"Underwriting". Common Shares outstanding does not include 70,605,085 shares of
Common Stock deliverable pursuant to the Discretionary RSUs and the
Discretionary Options and shares of Common Stock that may be awarded
under the Company's 1999 Stock Incentive Plan. See "Management -- The Employee
IPO Awards" for a description of these equity-based awards and the 1999 Stock
Incentive Plan.
31
<PAGE> 33
CAPITALIZATION
The following table sets forth the consolidated capitalization of the Firm
as of November 27, 1998:
- - on a pro forma basis after giving effect to the Pro Forma Adjustments; and
- - as adjusted for the sale of 42,000,000 shares of Common Stock by the Company
in the Offerings at an assumed initial public offering price of $45.00 per
share, the midpoint of the range of initial public offering prices set forth
on the cover page of this Prospectus, and after deduction of the underwriting
discounts and estimated expenses payable by the Company in the Offerings.
This table should be read in conjunction with the consolidated financial
statements and the notes thereto and the Pro Forma Consolidated Financial
Information and the notes thereto, and assumes no exercise of the Underwriters'
options to purchase additional shares that are described under "Underwriting".
<TABLE>
<CAPTION>
AS OF NOVEMBER 27, 1998
-----------------------------
PRO FORMA
AS ADJUSTED
PRO FORMA FOR OFFERINGS
--------- -------------
($ in millions)
<S> <C> <C>
Short-term borrowings (including commercial paper)(1)....... $27,430 $27,430
======= =======
Long-term borrowings(2):
Senior debt(3)............................................ $19,906 $19,906
Junior Subordinated Debentures(4)......................... 371 371
------- -------
Total long-term borrowings......................... 20,277 20,277
Stockholders' equity:
Preferred Stock, par value $.01 per share; shares
authorized, no shares issued and outstanding............ -- --
Common Stock, par value $.01 per share; 2,000,000,000
shares authorized, 388,164,280 shares issued and
outstanding
(430,164,280 shares issued and outstanding as
adjusted)(5)............................................ 4 4
Restricted stock units; 61,911,352 units issued and
outstanding(6).......................................... 2,786 2,786
Nonvoting Common Stock, par value $.01 per share;
shares authorized and 6,238,094 shares issued and
outstanding............................................. 0 0
Additional paid-in capital................................ 4,139 5,927
Retained earnings......................................... (1,049) (1,049)
Unearned compensation(7).................................. (1,377) (1,377)
------- -------
Total stockholders' equity......................... 4,503 6,291
------- -------
Total capitalization............................. $24,780 $26,568
======= =======
</TABLE>
- ---------------
(1) Includes current portion of long-term borrowings of $2,955 million. See Note
4 to the consolidated financial statements for further information regarding
the Firm's short-term borrowings.
(2) See Note 5 to the consolidated financial statements for further information
regarding the Firm's long-term borrowings. The Company anticipates that at
the time of or shortly after the Offerings it may effect one or more
offerings of long-term debt securities.
(3) Includes subordinated debt of GS&Co. of $275 million.
(4) Consists of Junior Subordinated Debentures issued to the RLPs as part of the
Incorporation Transactions. See "Certain Relationships and Related
Transactions -- Incorporation and Related Transactions" for further
information regarding the Incorporation Transactions.
(5) Common Stock outstanding includes 13,644,204 shares of Common Stock
irrevocably contributed to the DCP. Common Stock outstanding does not
include 40,000,400 shares of Common Stock deliverable pursuant to the
Discretionary Options. See "Management -- The Employee IPO Awards" for more
detailed information regarding these awards.
(6) Restricted stock units includes 31,306,667 shares of Common Stock underlying
the Formula RSUs and 30,604,685 shares of Common Stock underlying the
Discretionary RSUs.
(7) Unearned compensation relates to the award of the Discretionary RSUs.
32
<PAGE> 34
SELECTED CONSOLIDATED FINANCIAL DATA
The selected historical consolidated income statement and balance sheet
data set forth below have been derived from the Firm's consolidated financial
statements and the notes thereto. The Firm's consolidated financial statements
have been audited by PricewaterhouseCoopers LLP, independent public accountants,
as of November 28, 1997 and November 27, 1998 and for the years ended November
29, 1996, November 28, 1997 and November 27, 1998. These financial statements
are included elsewhere in this Prospectus, together with the report thereon of
PricewaterhouseCoopers LLP.
The selected historical consolidated income statement and balance sheet
data set forth below as of November 25, 1994, November 24, 1995 and November 29,
1996 and for the years ended November 25, 1994 and November 24, 1995 have been
derived from audited consolidated financial statements of the Firm not included
in this Prospectus.
The pro forma data set forth below as of and for the year ended November
27, 1998 have been derived from the pro forma data set forth in "Pro Forma
Consolidated Financial Information" included elsewhere in this Prospectus. The
pro forma data set forth in "Pro Forma Consolidated Financial Information" have
been examined by PricewaterhouseCoopers LLP.
The selected consolidated financial data should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations", "Pro Forma Consolidated Financial Information" and the consolidated
financial statements and the notes thereto.
<TABLE>
<CAPTION>
AS OF OR FOR YEAR ENDED NOVEMBER
--------------------------------------------------------
1994 1995 1996 1997 1998
---- ---- ---- ---- ----
($ and shares in millions, except per share amounts)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Total revenues......................................... $12,452 $ 14,324 $ 17,289 $ 20,433 $ 22,478
Interest expense....................................... 8,915 9,841 11,160 12,986 13,958
------- -------- -------- -------- --------
Net revenues........................................... 3,537 4,483 6,129 7,447 8,520
Compensation and benefits(1)........................... 1,789 2,005 2,421 3,097 3,838
Other operating expenses............................... 1,240 1,110 1,102 1,336 1,761
------- -------- -------- -------- --------
Pre-tax earnings(1).................................... $ 508 $ 1,368 $ 2,606 $ 3,014 $ 2,921
======= ======== ======== ======== ========
BALANCE SHEET DATA:
Total assets(2)........................................ $95,296 $100,066 $152,046 $178,401 $217,380
Adjusted assets (unaudited)(3)......................... 75,772 73,552 93,279 119,883 144,906
Long-term borrowings................................... 14,418 13,358 12,376 15,667 19,906
Total liabilities(2)................................... 89,981 94,686 145,753 171,864 210,996
Partners' capital...................................... 4,771 4,905 5,309 6,107 6,310
PRO FORMA DATA:(4)
Pro forma net earnings................................. -- -- -- -- $ 1,316
Pro forma diluted earnings per share(5)................ -- -- -- -- 3.06
Pro forma diluted earnings per share as adjusted for
the Offerings(6)..................................... -- -- -- -- 2.79
Pro forma diluted Common Shares as adjusted for the
Offerings(6)......................................... -- -- -- -- 472
Pro forma stockholders' equity as adjusted for the
Offerings............................................ -- -- -- -- $ 6,291
Pro forma book value per share as adjusted for the
Offerings(6)......................................... -- -- -- -- 13.45
SELECTED DATA AND RATIOS (UNAUDITED):
Pre-tax return on average partners' capital(1)......... 10% 28% 51% 53% 47%
Ratio of compensation and benefits to net
revenues(1).......................................... 51 45 40 42 45
Employees:
United States........................................ 5,822 5,356 5,818 6,879 8,349
International........................................ 3,176 2,803 3,159 3,743 4,684
------- -------- -------- -------- --------
Total employees(7)..................................... 8,998 8,159 8,977 10,622 13,033
======= ======== ======== ======== ========
Assets under supervision:
Assets under management.............................. $43,671 $ 52,358 $ 94,599 $135,929 $194,821
Other client assets.................................. 49,061 57,716 76,892 102,033 142,018
------- -------- -------- -------- --------
Total assets under supervision......................... $92,732 $110,074 $171,491 $237,962 $336,839
======= ======== ======== ======== ========
</TABLE>
33
<PAGE> 35
(1) Since the Firm has been a partnership, payments to the Firm's profit
participating limited partners have been accounted for as distributions of
partners' capital rather than as compensation expense. As a result, the
Firm's pre-tax earnings and compensation and benefits expense have not
reflected any payments for services rendered by its profit participating
limited partners. Accordingly, pre-tax earnings understate the expected
operating costs to be incurred by the Firm after the Offerings. As a
corporation, the Firm will include payments for services rendered by its
former profit participating limited partners in compensation and benefits
expense. For financial information that reflects pro forma compensation and
benefits expense as if we had been a corporation, see "Pro Forma
Consolidated Financial Information".
(2) Total assets and liabilities as of November 27, 1998 were increased by
$11.64 billion due to the adoption of the provisions of SFAS No. 125 that
were deferred by SFAS No. 127. For a discussion of SFAS Nos. 125 and 127,
see "Accounting Developments" in Note 2 to the consolidated financial
statements.
(3) Adjusted assets represent total assets less securities purchased under
agreements to resell, certain securities borrowed transactions and, with
respect to November 27, 1998, an increase of $11.64 billion in total assets
related to the adoption of the provisions of SFAS No. 125 that were deferred
by SFAS No. 127.
(4) Reflects such adjustments as are necessary, in the opinion of management,
for a fair presentation of the results of operations and stockholders'
equity of the Firm on a pro forma basis. See "Pro Forma Consolidated
Financial Information" for more detailed information concerning these
adjustments.
(5) Calculated based on 429,704,653 diluted Common Shares outstanding after
giving effect to the Pro Forma Adjustments. See "Pro Forma Consolidated
Financial Information" for more detailed information concerning these
adjustments and the calculation of pro forma earnings per share.
(6) Calculated based on 471,704,653 diluted Common Shares outstanding after
giving effect to the Pro Forma Adjustments and as adjusted to reflect the
issuance of 42,000,000 shares of Common Stock offered by the Firm at the
midpoint of the range of initial public offering prices set forth on the
cover page of this Prospectus, after deduction of underwriting discounts and
estimated expenses payable by the Firm. See "Pro Forma Consolidated
Financial Information" for more detailed information concerning these
adjustments and the calculation of pro forma earnings per share.
(7) Excludes employees of the Firm's two property management subsidiaries, The
Archon Group, L.P. ("Archon") and Archon Group (France) S.C.A. ("Archon
France"). Substantially all of the costs of these employees are reimbursed
to the Firm by the real estate investment funds to which the two companies
provide property management services. In addition, as of November 27, 1998,
the Firm had 3,400 temporary staff and consultants. For more detailed
information regarding the Firm's employees, see "Business -- Employees".
34
<PAGE> 36
RECENT DEVELOPMENTS
Goldman Sachs' pre-tax earnings were $1.19 billion in the first quarter
ended February 26, 1999, compared to $1.02 billion in the first quarter of last
year. Net revenues for the quarter were $2.99 billion and operating expenses
were $1.80 billion. In the first quarter of 1998, net revenues were $2.47
billion and operating expenses were $1.45 billion.
The Firm's investment banking business performed well during the quarter,
particularly in financial advisory and debt underwriting, and assets under
management continued to increase. The Firm's trading business achieved a strong
performance, recovering significantly in the first quarter of 1999 from the
difficult conditions experienced in the second half of 1998.
Partners' capital increased to approximately $6.6 billion as of February
26, 1999 from $6.3 billion as of November 27, 1998.
35
<PAGE> 37
REPORT OF INDEPENDENT ACCOUNTANTS ON MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
To the Partners,
The Goldman Sachs Group, L.P.:
We have examined Management's Discussion and Analysis of Financial
Condition and Results of Operations, except as discussed in the third paragraph
below ("MD&A"), taken as a whole, of The Goldman Sachs Group, L.P. and
Subsidiaries (the "Firm") for the three-year fiscal period ended November 27,
1998, included on pages 37 to 59 of this Prospectus. Management is responsible
for the preparation of the Firm's MD&A pursuant to the rules and regulations
adopted by the Securities and Exchange Commission. Our responsibility is to
express an opinion on the presentation based on our examination. We have
audited, in accordance with generally accepted auditing standards, the
consolidated financial statements of the Firm as of November 27, 1998 and
November 28, 1997, and for the three fiscal years in the period ended November
27, 1998, and in our report dated January 22, 1999, we expressed an unqualified
opinion on those financial statements.
Our examination of MD&A was made in accordance with attestation standards
established by the American Institute of Certified Public Accountants and,
accordingly, included examining, on a test basis, evidence supporting the
historical amounts and disclosures in the presentation. An examination also
includes assessing the significant determinations made by management as to the
relevance of information to be included and the estimates and assumptions that
affect reported information. We believe that our examination provides a
reasonable basis for our opinion.
The preparation of MD&A requires management to interpret the criteria, make
determinations as to the relevance of information to be included, and make
estimates and assumptions that affect reported information. MD&A includes
information regarding the estimated future impact of transactions and events
that have occurred or are expected to occur, expected sources of liquidity and
capital resources, operating trends, commitments, and uncertainties, including
those related to the Year 2000 readiness issue. Actual results in the future may
differ materially from management's present assessment of this information
because events and circumstances frequently do not occur as expected.
Our examination of MD&A of the Firm did not include the voluntary
information presented under the headings "VaR" or "VaR Methodology, Assumptions
and Limitations". Accordingly, we express no opinion on such information.
In our opinion, the Firm's presentation of MD&A for the three-year fiscal
period ended November 27, 1998 includes, in all material respects, the required
elements of the rules and regulations adopted by the Securities and Exchange
Commission; the historical financial amounts included therein have been
accurately derived, in all material respects, from the Firm's financial
statements; and the underlying information, determinations, estimates, and
assumptions of the Firm provide a reasonable basis for the disclosures contained
therein.
PricewaterhouseCoopers LLP
New York, New York
March 15, 1999.
36
<PAGE> 38
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The Firm is a global investment banking and securities firm that provides a
wide range of services worldwide to a substantial and diversified client base.
The Firm's activities are divided into three principal business lines:
- - Investment Banking, which includes financial advisory services and
underwriting;
- - Trading and Principal Investments, which includes fixed income, currency and
commodities ("FICC"), equities and principal investments (principal
investments reflect primarily the Firm's investments in its merchant banking
funds); and
- - Asset Management and Securities Services, which includes asset management,
securities services and commissions.
All references to 1996, 1997 and 1998 refer to the Firm's fiscal year
ended, or the date, as the context requires, November 29, 1996, November 28,
1997 and November 27, 1998, respectively.
The "Company", the "Firm", "Goldman Sachs", "we" and "our" mean, prior to
the principal incorporation transactions that are described under "Certain
Relationships and Related Transactions -- Incorporation and Related
Transactions -- Incorporation Transactions" (the "Incorporation Transactions"),
The Goldman Sachs Group, L.P., a Delaware limited partnership ("Group L.P."),
and its consolidated subsidiaries and, after the Incorporation Transactions, The
Goldman Sachs Group, Inc., a Delaware corporation ("GS Inc."), and its
consolidated subsidiaries.
BUSINESS ENVIRONMENT
Economic and market conditions can significantly affect the Firm's
performance. For a number of years leading up to the second half of 1998, the
Firm operated in a generally favorable macroeconomic environment characterized
by low inflation, low interest rates and strong equity markets in the United
States and many international markets. This favorable economic environment
provided a positive climate for the Firm's investment banking activities, as
well as for the Firm's customer-driven and proprietary trading activities.
Economic conditions were also favorable for wealth creation which contributed
positively to growth in the Firm's asset management businesses.
From mid-August to mid-October 1998, the Russian economic crisis, the
turmoil in Asian and Latin American emerging markets and the resulting "flight
to quality" by many investors led to substantial declines in global financial
markets. Investors broadly sold credit-sensitive products, such as corporate and
high-yield debt, and bought higher-rated instruments, such as U.S. Treasury
securities, which caused credit spreads to widen dramatically. This market
turmoil also caused a widespread decline in global equity markets.
As a major dealer in fixed income securities, the Firm maintains
substantial inventories of corporate and high-yield debt. In the second half of
1998, the Firm sought to hedge the interest rate risk on these positions through
short positions in U.S. Treasury securities. As a result, the Firm suffered
losses from both the decline in the prices of corporate and high-yield debt
instruments that it owned and the increase in the prices of the U.S. Treasury
securities in which the Firm had short positions.
These market shocks also led to trading losses in the Firm's fixed income
relative value trading positions. Relative value trading positions are intended
to profit from a perceived temporary dislocation in the relationship between the
values of different financial instruments. From mid-August to mid-October 1998,
the components of these relative value positions moved in directions that the
Firm did not anticipate and the volatilities of certain positions increased to
three times prior levels. When the Firm and other market participants with
similar positions simultaneously sought to reduce positions and exposures, this
caused a substantial reduction in market liquidity and a continuing decline in
prices.
37
<PAGE> 39
In the second half of 1998, the Firm also experienced losses in equity
arbitrage and in the value of certain merchant banking investments.
Later in the fourth quarter of 1998, market conditions improved as the U.S.
Federal Reserve cut interest rates, the International Monetary Fund finalized a
credit agreement with Brazil and a consortium of 14 financial institutions,
including Goldman Sachs, recapitalized Long-Term Capital Portfolio, L.P.
("LTCP"). For a further discussion of LTCP, see "-- Liquidity -- The Balance
Sheet" below.
The Firm's earnings in the second half of 1998 were adversely affected by
market conditions from mid-August to mid-October. In this difficult business
environment, Trading and Principal Investments recorded net revenues of $464
million in the third quarter of 1998 and net revenues of negative $663 million
in the fourth quarter of 1998. As a result, Trading and Principal Investments
did not make a significant contribution to pre-tax earnings in 1998.
RESULTS OF OPERATIONS
Management believes that the best measure by which to assess the Firm's
historical profitability is pre-tax earnings because, as a partnership, the Firm
generally has not been subject to U.S. federal or state income taxes. See
"-- Provision for Taxes" below and Note 2 to the consolidated financial
statements for a further discussion of the Firm's provision for taxes.
Since the Firm has been a partnership, payments to the Firm's profit
participating limited partners have been accounted for as distributions of
partners' capital rather than as compensation expense. As a result, the Firm's
compensation and benefits expense has not reflected any payments for services
rendered by its profit participating limited partners and has therefore
understated the expected operating costs to be incurred by the Firm after the
Offerings. As a corporation, the Firm will include these payments to its former
profit participating limited partners in compensation and benefits expense, as
discussed in "Pro Forma Consolidated Financial Information". Moreover, in
connection with the Offerings, the Firm will record the effect of certain
non-recurring items in the second quarter of 1999. These non-recurring items
are:
- - the award of the Formula RSUs;
- - the initial irrevocable contribution of shares of Common Stock to the DCP;
- - the recognition of certain net tax assets; and
- - the Charitable Contribution.
As a result, the Firm expects to record a substantial pre-tax loss in the second
quarter of 1999.
The composition of the Firm's historical net revenues has varied over time
as financial markets and the scope of the Firm's operations have changed. The
composition of net revenues can also vary over the shorter term due to
fluctuations in economic and market conditions. As a result, period-to-period
comparisons may not be meaningful. See "Risk Factors" for a discussion of
various factors that could affect the Firm's future performance.
OVERVIEW
The following table sets forth the Firm's net revenues and pre-tax
earnings:
FINANCIAL OVERVIEW
(in millions)
<TABLE>
<CAPTION>
YEAR ENDED NOVEMBER
--------------------------
1996 1997 1998
---- ---- ----
<S> <C> <C> <C>
Net revenues........................................... $6,129 $7,447 $8,520
Pre-tax earnings....................................... 2,606 3,014 2,921
</TABLE>
38
<PAGE> 40
1998 VERSUS 1997. The Firm's net revenues were $8.52 billion in 1998, an
increase of 14% compared to 1997. Net revenue growth was strong in Investment
Banking, which increased 30%, due to higher levels of mergers and acquisitions
activity, and in Asset Management and Securities Services, which increased 43%,
due to increased commissions, higher customer balances in securities services
and increased asset management fees. Net revenues in Trading and Principal
Investments decreased 19% compared to the prior year, due primarily to a 30%
reduction of net revenues in FICC. Pre-tax earnings in 1998 were $2.92 billion
compared to $3.01 billion in the prior year.
1997 VERSUS 1996. The Firm's net revenues were $7.45 billion in 1997, an
increase of 22% compared to 1996. Net revenue growth was strong in Asset
Management and Securities Services, which increased 46%, due to increased
commissions and asset management fees and higher customer balances in securities
services. Net revenues in Investment Banking increased 22%, due to increased
levels of mergers and acquisitions and debt underwriting activity. Net revenues
in Trading and Principal Investments increased 9% over the prior year, due to
higher net revenues in FICC and principal investments. Pre-tax earnings were
$3.01 billion in 1997, an increase of 16% over the prior year.
The following table sets forth the net revenues of the Firm's principal
business lines:
NET REVENUES BY PRINCIPAL BUSINESS LINE
(in millions)
<TABLE>
<CAPTION>
YEAR ENDED NOVEMBER
--------------------------
1996 1997 1998
---- ---- ----
<S> <C> <C> <C>
Investment Banking..................................... $2,113 $2,587 $3,368
Trading and Principal Investments...................... 2,693 2,926 2,379
Asset Management and Securities Services............... 1,323 1,934 2,773
------ ------ ------
Total net revenues..................................... $6,129 $7,447 $8,520
====== ====== ======
</TABLE>
------------------------
Net revenues in the Firm's principal business lines represent total
revenues less allocations of interest expense to specific securities,
commodities and other positions in relation to the level of financing incurred
by each position. Interest expense is allocated to Trading and Principal
Investments and the securities services component of Asset Management and
Securities Services. Net revenues may not be indicative of the relative
profitability of any principal business line.
INVESTMENT BANKING
The Firm provides a broad range of investment banking services to a diverse
group of corporations, financial institutions, governments and individuals. The
Firm's investment banking activities are divided into two categories:
- - FINANCIAL ADVISORY. Financial advisory includes advisory assignments with
respect to mergers and acquisitions, divestitures, corporate defense
activities, restructurings and spin-offs; and
- - UNDERWRITING. Underwriting includes public offerings and private placements of
equity and debt securities.
39
<PAGE> 41
The following table sets forth the net revenues of the Firm's Investment
Banking business:
INVESTMENT BANKING NET REVENUES
(in millions)
<TABLE>
<CAPTION>
YEAR ENDED NOVEMBER
--------------------------
1996 1997 1998
---- ---- ----
<S> <C> <C> <C>
Financial advisory..................................... $ 931 $1,184 $1,774
Underwriting........................................... 1,182 1,403 1,594
------ ------ ------
Total Investment Banking............................... $2,113 $2,587 $3,368
====== ====== ======
</TABLE>
------------------------
1998 VERSUS 1997. The Investment Banking business achieved net revenues of
$3.37 billion in 1998, an increase of 30% compared to 1997. Net revenue growth
was strong in financial advisory and, to a lesser extent, in underwriting as the
Firm's global presence and strong client base enabled it to capitalize on higher
levels of activity in many industry groups, including communications, media and
entertainment, financial institutions, general industrials and retail. Net
revenue growth in the Firm's Investment Banking business was strong in all major
regions in 1998 compared to the prior year.
Financial advisory revenues increased 50% compared to 1997 due to increased
revenues from mergers and acquisitions advisory assignments, which principally
resulted from consolidation within certain industries and generally favorable
U.S. and European stock markets. Despite a substantial decrease in the number of
industry-wide underwriting transactions in August and September of 1998,
underwriting revenues increased 14% for the year, primarily due to increased
revenues from equity and high-yield corporate debt underwriting activities.
1997 VERSUS 1996. The Investment Banking business achieved net revenues of
$2.59 billion in 1997, an increase of 22% compared to 1996. Net revenue growth
was strong in both financial advisory and underwriting, particularly in the
financial institution, general industrial and real estate groups.
Financial advisory revenues increased 27% compared to 1996 primarily due to
increased revenues from mergers and acquisitions activity in the market as a
whole. Underwriting revenues increased 19% primarily due to increased revenues
from investment grade and high-yield debt underwriting, which resulted from
lower interest rates. Revenues from equity underwriting activities increased
modestly over 1996 levels.
TRADING AND PRINCIPAL INVESTMENTS
The Firm's Trading and Principal Investments business facilitates customer
transactions and takes proprietary positions through market making in and
trading of fixed income and equity products, currencies, commodities, and swaps
and other derivatives. The Trading and Principal Investments business includes
the following:
- - FICC. The Firm makes markets in and trades fixed income products, currencies
and commodities, structures and enters into a wide variety of derivative
transactions and engages in proprietary trading and arbitrage activities;
- - EQUITIES. The Firm makes markets in and trades equities and equity-related
products, structures and enters into equity derivative transactions and
engages in proprietary trading and equity arbitrage; and
- - PRINCIPAL INVESTMENTS. Principal investments primarily represents the Firm's
net revenues from its investments in its merchant banking funds.
Net revenues from principal investments do not include management fees and
over-
40
<PAGE> 42
rides from the Firm's merchant banking funds. Overrides represent an increased
share of a fund's income and gains to the Firm when the return on investments
exceeds certain threshold returns to fund investors. These management fees and
overrides are included in the net revenues of Asset Management and Securities
Services.
Substantially all of the Firm's inventory is marked-to-market daily and,
therefore, its value and the Firm's net revenues are subject to fluctuations
based on market movements. In addition, net revenues derived from the Firm's
principal investments in privately held concerns and in real estate may
fluctuate significantly depending on the revaluation or sale of these
investments in any given period.
The following table sets forth the net revenues of the Firm's Trading and
Principal Investments business:
TRADING AND PRINCIPAL INVESTMENTS NET REVENUES
(in millions)
<TABLE>
<CAPTION>
YEAR ENDED NOVEMBER
--------------------------
1996 1997 1998
---- ---- ----
<S> <C> <C> <C>
FICC................................................... $1,749 $2,055 $1,438
Equities............................................... 730 573 795
Principal investments.................................. 214 298 146
------ ------ ------
Total Trading and Principal Investments................ $2,693 $2,926 $2,379
====== ====== ======
</TABLE>
------------------------
1998 VERSUS 1997. Net revenues in Trading and Principal Investments were
$2.38 billion in 1998, a decrease of 19% compared to 1997. This decrease in net
revenues was concentrated in the second half of the year. See "-- Business
Environment" above for a discussion of the losses suffered in Trading and
Principal Investments in the second half of 1998. For the full year, significant
net revenue reductions in FICC and principal investments were partially offset
by increased net revenues in equities.
Net revenues in FICC decreased 30% compared to 1997 due to an
extraordinarily difficult environment in the second half of 1998. The net
revenue reduction in FICC was concentrated in fixed income arbitrage and
high-yield debt trading, which experienced losses in 1998 due to a reduction in
liquidity and widening credit spreads in the second half of the year. An
increase in net revenues from market making and trading in fixed income
derivatives, currencies and commodities partially offset this decline.
Net revenues in equities increased 39% compared to 1997 as higher net
revenues in derivatives and European shares were partially offset by losses in
equity arbitrage. The derivatives business generated significantly higher net
revenues due, in part, to strong customer demand for over-the-counter ("OTC")
products, particularly in Europe. Net revenues from European shares increased as
the Firm benefited from generally favorable equity markets and increased
customer demand. The equity arbitrage losses were due principally to the
underperformance of various equity positions versus their benchmark hedges, to
widening of spreads in a variety of relative value trades and to lower prices
for event-oriented securities resulting from a reduction in announced mergers
and acquisitions and other corporate activity in the second half of 1998.
Net revenues from principal investments declined 51% compared to 1997 as
investments in certain publicly held companies decreased in value during the
second half of 1998. This decrease was partially offset by an increase in gains
on the disposition of certain investments.
1997 VERSUS 1996. The Trading and Principal Investments business achieved
net revenues of $2.93 billion in 1997, an increase of 9% compared to 1996.
Strong performances in FICC and principal investments more
41
<PAGE> 43
than offset a net revenue reduction in equities.
Net revenues in FICC increased 17% compared to 1996 due principally to
higher net revenues from market making and trading in currencies, fixed income
derivatives and commodities. Fixed income arbitrage activities also contributed
to net revenue growth in FICC. Net revenues from market making in and trading of
emerging market debt securities and corporate bonds declined in 1997 compared to
1996.
Net revenues in equities decreased 22% in 1997 compared to 1996 due
principally to reductions in net revenues from derivatives and convertibles
resulting from volatility in the global equity markets in October and November
1997 and declining asset values in Japan in late November 1997. This reduction
was partially offset by increased net revenues from higher customer trading
volume in certain European OTC markets.
Net revenues from principal investments increased 39% in 1997 compared to
1996 as certain companies in which the Firm invested through its merchant
banking funds completed initial public offerings and the Firm's positions in
other publicly held companies increased in value.
ASSET MANAGEMENT AND SECURITIES SERVICES
Asset Management and Securities Services is comprised of the following:
- - ASSET MANAGEMENT. Asset management generates management fees by providing
investment advisory services to a diverse and rapidly growing client base of
institutions and individuals;
- - SECURITIES SERVICES. Securities services includes prime brokerage, financing
services and securities lending and the Firm's matched book businesses, all of
which generate revenue primarily in the form of fees or interest rate spreads;
and
- - COMMISSIONS. Commission-based businesses include agency transactions for
clients on major stock and futures exchanges. Overrides derived from the
Firm's merchant banking funds are also included in commissions.
The following table sets forth the net revenues of the Firm's Asset
Management and Securities Services business:
ASSET MANAGEMENT AND SECURITIES SERVICES NET REVENUES
(in millions)
<TABLE>
<CAPTION>
YEAR ENDED NOVEMBER
--------------------------
1996 1997 1998
---- ---- ----
<S> <C> <C> <C>
Asset management....................................... $ 242 $ 458 $ 675
Securities services.................................... 354 487 730
Commissions............................................ 727 989 1,368
------ ------ ------
Total Asset Management and Securities Services......... $1,323 $1,934 $2,773
====== ====== ======
</TABLE>
------------------------
The Firm's assets under supervision are comprised of assets under
management and other client assets. Assets under management typically generate
fees based on a percentage of their value and include the Firm's mutual funds,
separate accounts managed for institutional and individual investors, the Firm's
merchant banking funds and other alternative investment funds. Other client
assets are comprised of assets in brokerage accounts of primarily high net worth
individuals, on which the Firm earns commissions.
42
<PAGE> 44
The following table sets forth the Firm's assets under supervision:
ASSETS UNDER SUPERVISION
(in millions)
<TABLE>
<CAPTION>
YEAR ENDED NOVEMBER
--------------------------------
1996 1997 1998
---- ---- ----
<S> <C> <C> <C>
Assets under management......................... $ 94,599 $135,929 $194,821
Other client assets............................. 76,892 102,033 142,018
-------- -------- --------
Total assets under supervision.................. $171,491 $237,962 $336,839
======== ======== ========
</TABLE>
------------------------
1998 VERSUS 1997. The Asset Management and Securities Services business
achieved net revenues of $2.77 billion in 1998, an increase of 43% compared to
1997. All major components of the business line exhibited strong net revenue
growth.
Asset management revenues increased 47% during this period, reflecting a
41% increase in average assets under management over 1997. In 1998,
approximately 80% of the increase in assets under management was attributable to
net asset inflows, with the remaining 20% reflecting market appreciation. Net
revenues from securities services increased 50% primarily due to growth in the
Firm's securities borrowing and lending businesses. Commission revenues
increased 38% as generally strong and highly volatile equity markets resulted in
increased transaction volumes in listed equity securities. Merchant banking
overrides also contributed significantly to the increase in commission revenues.
1997 VERSUS 1996. The Asset Management and Securities Services business
achieved net revenues of $1.93 billion in 1997, an increase of 46% compared to
1996. All major components of the business line exhibited strong net revenue
growth.
Asset management revenues increased 89% during this period, reflecting a
73% increase in average assets under management due to strong net asset inflows,
market appreciation and assets added through the acquisitions of Liberty
Investment Management in January 1997 and Commodities Corporation in June 1997.
Net revenue growth in securities services was 38%, principally reflecting growth
in the Firm's securities borrowing and lending businesses. Commission revenues
increased 36% as customer trading volumes increased significantly on many of the
world's principal stock exchanges, including those in the United States where
industry-wide volumes increased substantially in the third and fourth quarters
of 1997. Merchant banking overrides also contributed significantly to the
increase in commission revenues.
OPERATING EXPENSES
In recent years, the Firm's operating expenses have increased as a result
of numerous factors, including higher levels of compensation, expansion of the
Firm's asset management business, expansion of the Firm's global operations,
greater levels of business activity and complexity and additional systems and
consulting costs relating to various technology initiatives.
Since the Firm has been a partnership, payments to the Firm's profit
participating limited partners have been accounted for as distributions of
partners' capital rather than as compensation expense. As a result, the Firm's
compensation and benefits expense has not reflected any payments for services
rendered by its profit participating limited partners. Accordingly, the Firm's
compensation and benefits, the principal component of its operating expenses,
will increase significantly after the Offerings since, as a corporation, the
Firm will include these payments to its former profit participating limited
partners
43
<PAGE> 45
in compensation and benefits expense. For financial information that reflects
pro forma compensation and benefits expense as if the Firm had been a
corporation, see "Pro Forma Consolidated Financial Information".
The following table sets forth the Firm's operating expenses and number of
employees:
OPERATING EXPENSES AND EMPLOYEES
($ in millions)
<TABLE>
<CAPTION>
YEAR ENDED NOVEMBER
----------------------------
1996 1997 1998
---- ---- ----
<S> <C> <C> <C>
Compensation and benefits............................ $2,421 $ 3,097 $ 3,838
Brokerage, clearing and exchange fees................ 278 357 424
Market development................................... 137 206 287
Communications and technology........................ 173 208 265
Depreciation and amortization........................ 172 178 242
Occupancy............................................ 154 168 207
Professional services and other...................... 188 219 336
------ ------- -------
Total operating expenses............................. $3,523 $ 4,433 $ 5,599
====== ======= =======
Employees at fiscal year-end(1)...................... 8,977 10,622 13,033
</TABLE>
- ---------------
(1) Excludes employees of the Firm's two property management subsidiaries,
Archon and Archon France. Substantially all of the costs of these employees
are reimbursed to the Firm by the real estate investment funds to which the
two companies provide property management services. In addition, as of
November 1998, the Firm had approximately 3,400 temporary staff and
consultants. For more detailed information regarding the Firm's employees,
see "Business -- Employees".
------------------------
1998 VERSUS 1997. Operating expenses were $5.60 billion in 1998, an
increase of 26% over 1997, primarily due to increased compensation and benefits
expense.
Compensation and benefits increased as a percentage of net revenues to 45%
from 42% in 1997, principally as a result of increases in employment levels and
in expenses associated with temporary staff and consultants. Employment levels
increased 23% during the year, with particularly strong growth in asset
management. Expenses associated with the Firm's temporary staff and consultant
populations were $330 million in 1998, an increase of 85% compared to 1997,
reflecting greater business activity, the Firm's global expansion and consulting
costs associated with various technology initiatives, including preparations for
the Year 2000 and the establishment of the European Economic and Monetary Union
(the "EMU").
Brokerage, clearing and exchange fees increased 19%, primarily due to
higher transaction volumes in European and U.S. equities and futures contracts.
Market development expenses increased 39% and professional services and other
expenses increased 53%, due to higher levels of business activity and the Firm's
global expansion. Communications and technology expenses increased 27%,
reflecting higher telecommunications and market data costs associated with
higher employment levels and additional spending on technology initiatives.
Depreciation and amortization increased 36%, principally due to capital
expenditures on telecommunications and technology-related equipment and
leasehold improvements. Occupancy expenses increased 23%, reflecting additional
office space needed to accommodate higher employment levels.
1997 VERSUS 1996. Operating expenses were $4.43 billion in 1997, an
increase of 26% over 1996, primarily due to increased compensation and benefits
expense.
44
<PAGE> 46
Compensation and benefits increased as a percentage of net revenues to 42%
from 40% in 1996. This increase primarily reflected higher compensation due to
higher profit levels and an 18% increase in employment levels across the Firm
due to higher levels of market activity and the Firm's global expansion into new
businesses and markets. Expenses associated with the Firm's temporary staff and
consultant populations also contributed to the increase in compensation and
benefits as a percentage of net revenues. These expenses were $178 million in
1997, an increase of 55% compared to 1996, reflecting greater business activity,
the Firm's global expansion and consulting costs associated with various
technology initiatives.
Brokerage, clearing and exchange fees increased 28%, primarily due to
higher transaction volumes in global equities, derivatives and currencies.
Market development expenses increased 50% and professional services and other
expenses increased 16%, due to higher levels of business activity and the Firm's
global expansion. Communications and technology expenses increased 20%,
reflecting higher telecommunications and market data costs associated with
higher employment levels and additional spending on technology initiatives.
Depreciation and amortization increased 3%. Occupancy expenses increased 9%,
reflecting additional office space needed to accommodate higher employment
levels.
PROVISION FOR TAXES
Group L.P., as a partnership, generally has not been subject to U.S.
federal and state income taxes. The earnings of Group L.P. and certain of its
subsidiaries have been subject to the 4% New York City unincorporated business
tax. In addition, certain of the Firm's non-U.S. subsidiaries have been subject
to income taxes in their local jurisdictions. The amount of the Firm's provision
for income and unincorporated business taxes has varied significantly from year
to year depending on the mix of earnings among the Firm's subsidiaries. For
information on the pro forma effective tax rate of the Firm under corporate
form, see "Pro Forma Consolidated Financial Information".
GEOGRAPHIC DATA
For a summary of the total revenues, net revenues, pre-tax earnings and
identifiable assets of the Firm by geographic region, see Note 9 to the
consolidated financial statements.
CASH FLOWS
The Firm's cash flows are primarily related to the operating and financing
activities undertaken in connection with its trading and market-making
transactions.
YEAR ENDED NOVEMBER 1998
Cash and cash equivalents increased to $2.84 billion in 1998. Cash of $62
million was provided by operating activities. Cash of $656 million was used for
investing activities, primarily for leasehold improvements and the purchase of
telecommunications and technology-related equipment and certain financial
instruments. Financing activities provided $2.10 billion of cash, reflecting an
increase in the net issuance of long-term and short-term borrowings, partially
offset by a decrease in net repurchase agreements, distributions to partners,
cash outflows related to partners' capital allocated for income taxes and
potential withdrawals and the termination of the Firm's Profit Participation
Plans. See Note 8 to the consolidated financial statements for a discussion of
the termination of the Profit Participation Plans.
YEAR ENDED NOVEMBER 1997
Cash and cash equivalents decreased to $1.33 billion in 1997. Operating
activities provided cash of $70 million. Cash of $693 million was used for
investing activities, primarily for the purchase of certain financial
instruments and technology-related equipment. Cash of $258 million was used for
financing activities, principally due to a decrease in net repurchase
agreements, distributions to partners and cash outflows related to partners'
capital allocated for income taxes and potential withdrawals, partially offset
by the net issuance of long-term and short-term borrowings.
45
<PAGE> 47
YEAR ENDED NOVEMBER 1996
Cash and cash equivalents increased to $2.21 billion in 1996. Cash of
$14.63 billion was used for operating activities, primarily to fund higher net
trading assets due to increased levels of business activity. Cash of $218
million was used for investing activities, primarily for the purchase of
technology-related equipment and leasehold improvements. Financing activities
provided $16.10 billion of cash, reflecting an increase in net repurchase
agreements and the net issuance of long-term borrowings, partially offset by
distributions to partners and cash outflows related to partners' capital
allocated for income taxes and potential withdrawals.
LIQUIDITY
MANAGEMENT OVERSIGHT OF LIQUIDITY
Management believes that one of the most important issues for a company in
the financial services sector is access to liquidity. Accordingly, the Firm has
established a comprehensive structure to oversee its liquidity and funding
policies.
The Finance Committee has responsibility for establishing and assuring
compliance with the Firm's asset and liability management policies and has
oversight responsibility for managing liquidity risk, the size and composition
of the balance sheet and the credit ratings of the Firm. See "-- Risk
Management -- Risk Management Structure" below for a further description of the
Firm's committees that participate in the risk management process. The Finance
Committee meets monthly, and more often when necessary, to evaluate the Firm's
liquidity position and funding requirements.
The Firm's Treasury Department manages the capital structure, funding,
liquidity and relationships with creditors and rating agencies on a global
basis. The Treasury Department works jointly with the Firm's global funding desk
in managing the Firm's borrowings. The global funding desk is primarily
responsible for the transactional short-term funding activity of the Firm.
LIQUIDITY POLICIES
In order to maintain an appropriate level of liquidity, management has
implemented several liquidity policies as outlined below.
DIVERSIFICATION OF FUNDING SOURCES AND LIQUIDITY PLANNING. The Firm
maintains diversified funding sources with both banks and non-bank lenders
globally. Management believes that the Firm's relationships with its lenders are
critical to its liquidity. The Firm maintains close contact with its primary
lenders to keep them advised of significant developments affecting the Firm.
The Firm also has access to diversified funding sources with over 800
creditors, including banks, insurance companies, mutual funds, bank trust
departments and other asset managers. The Firm monitors its creditors to
maintain broad and diversified credit, and no single creditor represented more
than 5% of the Firm's uncollateralized funding sources as of November 1998.
Uncollateralized funding sources principally include the Firm's short-term and
long-term borrowings and letters of credit.
The Firm accesses liquidity in a variety of markets in the United States as
well as in Europe and Asia. In addition, the Firm makes extensive use of the
repurchase agreement market and has raised debt in the private placement, Rule
144A and commercial paper markets, as well as through Eurobonds, moneybroker
loans, commodity-based financings, letters of credit and promissory notes. The
Firm seeks to structure its liabilities to avoid significant amounts of debt
coming due on any one day or during any single week or year. In addition, the
Firm maintains and updates annually a liquidity crisis plan that provides
guidance in the event of a liquidity crisis. The annual update of this plan is
reviewed and approved by the Finance Committee.
ASSET LIQUIDITY. The Firm maintains a highly liquid balance sheet. Many of
the Firm's assets are readily funded in the repurchase agreement markets, which
generally have proven to be a consistent source of funding, even in periods of
market stress. Substantially all of the Firm's inventory turns
46
<PAGE> 48
over rapidly and is marked-to-market daily. The Firm maintains long-term
borrowings and partners' capital substantially in excess of its less liquid
assets.
DYNAMIC LIQUIDITY MANAGEMENT. The Firm seeks to manage the composition of
its asset base and the maturity profile of its funding to ensure that it can
liquidate its assets prior to its liabilities coming due, even in times of
liquidity stress. The Firm has traditionally been able to fund its liquidity
needs through collateralized funding, such as repurchase transactions and
securities lending, as well as short-term and long-term borrowings and partners'
capital. To further evaluate the adequacy of its liquidity management policies
and guidelines, the Firm performs weekly "stress funding" simulations of
disruptions to the Firm's access to unsecured credit.
EXCESS LIQUIDITY. In addition to maintaining a highly liquid balance sheet
and a significant portion of longer-term liabilities to assure liquidity even
during adverse conditions, the Firm seeks to maintain a liquidity cushion that
consists principally of unencumbered U.S. government and agency obligations to
ensure the availability of immediate liquidity. This pool of highly liquid
assets averaged $14.17 billion during 1998 and $12.54 billion during 1997.
LIQUIDITY RATIO MAINTENANCE. It is the Firm's policy to further manage its
liquidity by maintaining a "liquidity ratio" of at least 100%. This ratio
measures the relationship between the loan value of the Firm's unencumbered
assets and its short-term unsecured liabilities. The maintenance of this
liquidity ratio is intended to ensure that the Firm could fund its positions on
a fully secured basis in the event that the Firm were unable to replace its
unsecured debt maturing within one year. Under this policy, the Firm seeks to
maintain unencumbered assets in an amount that, if pledged or sold, would
provide the funds necessary to replace unsecured obligations that are scheduled
to mature (or where holders have the option to redeem) within the coming year.
INTERCOMPANY FUNDING. Most of the liquidity of the Firm is raised by Group
L.P., which then lends the necessary funds to its subsidiaries and affiliates.
The Firm carefully manages its intercompany exposure by generally requiring
intercompany loans to have maturities equal to or shorter than the maturities of
the aggregate borrowings of Group L.P. This policy ensures that the
subsidiaries' obligations to Group L.P. will generally mature in advance of
Group L.P.'s third-party long-term borrowings. In addition, many of the advances
made to the Firm's subsidiaries and affiliates are secured by marketable
securities or other liquid collateral. The Firm generally funds its equity
investments in subsidiaries with partners' capital.
THE BALANCE SHEET
The Firm maintains a highly liquid balance sheet that fluctuates
significantly between financial statement dates. In the fourth quarter of 1998,
the Firm temporarily decreased its total assets to reduce risk and increase
liquidity in response to difficult conditions in the global financial markets.
The Firm's total assets were $217.38 billion as of November 1998 and
$178.40 billion as of November 1997. Adjusted assets were $144.91 billion as of
November 1998 and $119.88 billion as of November 1997.
The Firm's balance sheet size as of November 1998 increased by $11.64
billion due to the adoption of the provisions of SFAS No. 125 that were deferred
by SFAS No. 127. For a discussion of SFAS Nos. 125 and 127, see "-- Accounting
Developments" below and Note 2 to the consolidated financial statements.
As of November 1998, the Firm held approximately $1.04 billion in
high-yield debt securities and $1.49 billion in bank loans, all of which are
valued on a mark-to-market basis. These assets may be relatively illiquid during
times of market stress. The Firm seeks to diversify its holdings of these assets
by industry and by geographic location.
As of November 1998, the Firm held approximately $1.17 billion of emerging
market securities and $109 million in loans to emerging market countries, all of
which are valued on a mark-to-market basis. Of the $1.28 billion in emerging
market securities
47
<PAGE> 49
and loans, approximately $968 million were
sovereign obligations, many of which are collateralized as to principal at
stated maturity.
In September 1998, a consortium of 14 banks and brokerage firms, including
Goldman Sachs, made an equity investment in LTCP, a major market participant.
The objectives of this investment were to provide sufficient capital to permit
LTCP to continue active management of its positions and, over time, to reduce
risk exposures and leverage, to return capital to the participants in the
consortium and ultimately to realize the potential value of the portfolio. The
Firm invested $300 million in LTCP.
CREDIT RATINGS
The Firm relies upon the debt capital markets to fund a significant portion
of its day-to-day operations. The cost and availability of debt financing is
influenced by the Firm's credit ratings. Credit ratings are also important to
the Firm when competing in certain markets and when seeking to engage in
longer-term transactions, including OTC derivatives. A reduction in the Firm's
credit ratings could increase its borrowing costs and limit its access to the
capital markets. This, in turn, could reduce the Firm's earnings and adversely
affect its liquidity.
The following table sets forth the Firm's credit ratings as of November
1998:
<TABLE>
<CAPTION>
SHORT-TERM DEBT LONG-TERM DEBT
--------------- --------------
<S> <C> <C>
Moody's Investors Service..................... P-1 A1
Standard & Poor's Ratings Services(1)......... A-1+ A+
Fitch IBCA, Inc. ............................. F1+ AA-
CBRS Inc. .................................... A-1 (High) A+
</TABLE>
- ---------------
(1) On September 25, 1998, Standard & Poor's Ratings Services affirmed the
Firm's credit ratings but revised its outlook to "negative", indicating that
continued adverse market conditions could have an adverse effect on the
Firm's ratings over a one- to three-year time period.
------------------------
LONG-TERM DEBT
As of November 1998, the Firm's consolidated long-term borrowings were
$19.91 billion. Substantially all of these borrowings were unsecured and
consisted principally of senior borrowings with maturities extending to 2024.
The weighted average maturity of the Firm's long-term borrowings as of November
1998 was approximately four years. Substantially all of the Firm's long-term
borrowings are swapped into short-term floating-rate U.S. dollar obligations in
order to minimize the Firm's exposure to interest rates and foreign exchange
movements. See Note 5 to the consolidated financial statements for further
information regarding the Firm's long-term borrowings.
REGULATED SUBSIDIARIES
Many of the Firm's principal subsidiaries are subject to extensive
regulation in the United States and elsewhere. GS&Co., a registered U.S.
broker-dealer, is regulated by the Securities and Exchange Commission, the
Commodity Futures Trading Commission ("CFTC"), the Chicago Board of Trade, the
New York Stock Exchange, Inc. ("NYSE") and the National Association of
Securities Dealers, Inc. ("NASD"). GSI, a registered U.K. broker-dealer, is
subject to regulation by the Securities and Futures Authority Limited ("SFA")
and the Financial Services Authority ("FSA"). Goldman Sachs (Japan) Ltd., a
Tokyo-based broker-dealer, is subject to regulation by the Japanese Ministry of
Finance, the Financial Supervisory Agency, the Tokyo Stock Exchange, the Tokyo
International Financial Futures Exchange and the Japan Securities Dealers
Association. Several other subsidiaries of the Firm are regulated by securities,
investment advisory, banking and other regulators and authorities around the
world. Compliance with the rules of these regulators may prevent the Firm from
receiving distributions, advances or repayment of liabilities from these
subsidiaries. See Note 8 to the consolidated financial statements for
48
<PAGE> 50
further information regarding the Firm's regulated subsidiaries.
RISK MANAGEMENT
The Firm has a comprehensive risk management process to monitor, evaluate
and manage the principal risks assumed in conducting its activities. These risks
include market, credit, liquidity, operational, legal and reputational
exposures.
RISK MANAGEMENT STRUCTURE
The Firm seeks to monitor and control its risk exposure through a variety
of separate but complementary financial, credit, operational and legal reporting
systems. The Firm believes that it has effective procedures for evaluating and
managing the market, credit and other risks to which it is exposed. Nonetheless,
the effectiveness of the Firm's policies and procedures for managing risk
exposure can never be completely or accurately predicted or fully assured. For
example, unexpectedly large or rapid movements or disruptions in one or more
markets or other unforeseen developments can have a material adverse effect on
the Firm's results of operations and financial condition. The consequences of
these developments can include losses due to adverse changes in inventory
values, decreases in the liquidity of trading positions, higher volatility in
the Firm's earnings, increases in the Firm's credit risk to customers and
counterparties and increases in general systemic risk. See "Risk Factors --
Market Fluctuations Could Adversely Affect Our Businesses in Many Ways" for a
discussion of the effect that market fluctuations can have on the Firm's
businesses.
The Firm has established risk control procedures at several levels
throughout the organization. Trading desk managers have the first line of
responsibility for managing risk within prescribed limits. These managers have
in-depth knowledge of the primary sources of risk in their individual markets
and the instruments available to hedge the Firm's exposures. In addition, a
number of committees described in the following table are responsible for
establishing trading limits, monitoring adherence to these limits and for
general oversight of the Firm's risk management process.
49
<PAGE> 51
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
COMMITTEE FUNCTION
- ---------------------------------------------------------------------------------------------------
<S> <C>
Management Committee All risk control functions ultimately report to the
Management Committee. Through both direct and delegated
authority, the Management Committee approves all of the
Firm's:
- operating activities;
- trading risk parameters; and
- customer review guidelines.
- ---------------------------------------------------------------------------------------------------
Risk Committees The Firmwide Risk Committee:
- periodically reviews the activities of existing
businesses;
- approves new businesses and products;
- approves divisional market risk limits and reviews
business unit market risk limits;
- approves inventory position limits for selected country
exposures and business units;
- approves sovereign credit risk limits and credit risk
limits by ratings group; and
- reviews scenario analyses based on abnormal or
"catastrophic" market movements.
The FICC Risk Committee sets market risk limits for
individual business units and sets issuer-specific net
inventory position limits.
The Equities Risk Committee sets market risk limits for
individual business units that consist of gross and net
inventory position limits and, for equity derivatives,
limits based on market move scenario analysis.
The Asset Management Control, Oversight and Risk
Committees oversee various operational, credit, pricing
and business practices issues.
- ---------------------------------------------------------------------------------------------------
Global Compliance and Control The Global Compliance and Control Committee provides
Committee oversight of the Firm's compliance and control functions,
including internal audit, reviews the Firm's legal,
reputational, operational and control risks, and
periodically reviews the activities of existing
businesses.
- ---------------------------------------------------------------------------------------------------
Commitments Committee The Commitments Committee approves:
- equity and non-investment grade debt underwriting
commitments;
- loans extended by the Firm; and
- unusual financing structures and transactions that
involve significant capital exposure.
The Commitments Committee has delegated to the Credit
Department the authority to approve underwriting
commitments for investment grade debt and certain other
products.
- ---------------------------------------------------------------------------------------------------
Credit Policy Committee The Credit Policy Committee establishes and reviews broad
credit policies and parameters that are implemented by the
Credit Department.
- ---------------------------------------------------------------------------------------------------
Finance Committee The Finance Committee is responsible for oversight of the
Firm's capital, liquidity and funding needs and for
setting certain inventory position limits.
- ---------------------------------------------------------------------------------------------------
</TABLE>
50
<PAGE> 52
Segregation of duties and management oversight are fundamental elements of
the Firm's risk management process. Accordingly, departments that are
independent of the revenue producing units, such as the Firmwide Risk, Credit,
Controllers, Global Operations, Central Compliance, Management Controls and
Legal Departments, in part perform risk management functions, which include
monitoring, analyzing and evaluating risk.
MARKET RISK
The potential for changes in the market value of the Firm's trading
positions is referred to as "market risk". The Firm's trading positions result
from underwriting, market making and proprietary trading activities.
The broadly defined categories of market risk include exposures to interest
rates, currency rates, equity prices and commodity prices.
- - Interest rate risks primarily result from exposures to changes in the level,
slope and curvature of the yield curve, the volatility of interest rates,
mortgage prepayment speeds and credit spreads.
- - Currency rate risks result from exposures to changes in spot prices, forward
prices and volatilities of currency rates.
- - Equity price risks result from exposures to changes in prices and volatilities
of individual equities, equity baskets and equity indices.
- - Commodity price risks result from exposures to changes in spot prices, forward
prices and volatilities of commodities, such as electricity, natural gas,
crude oil, petroleum products and precious and base metals.
The Firm seeks to manage these risk exposures through diversifying
exposures, controlling position sizes and establishing hedges in related
securities or derivatives. For example, the Firm may hedge a portfolio of common
stock by taking an offsetting position in a related equity-index futures
contract. The ability to manage an exposure may, however, be limited by adverse
changes in the liquidity of the security or the related hedge instrument and in
the correlation of price movements between the security and related hedge
instrument.
In addition to applying business judgment, senior management uses a number
of quantitative tools to manage the Firm's exposure to market risk. These tools
include:
- - risk limits based on a summary measure of market risk exposure referred to as
Value-at-Risk or "VaR";
- - risk limits based on a scenario analysis that measures the potential effect of
a significant widening of credit spreads on the Firm's trading net revenues;
- - inventory position limits for selected business units and country exposures;
and
- - scenario analyses which measure the potential effect on the Firm's trading net
revenues of abnormal market movements.
The Firm also estimates the broader potential impact of a sustained market
downturn on its investment banking and merchant banking activities.
VaR. VaR is the potential loss in value of the Firm's trading positions
due to adverse movements in markets over a defined time horizon with a specified
confidence level.
For the VaR numbers reported below, a one-day time horizon and a 95%
confidence level were used. This means that there is a one in 20 chance that
daily trading net revenues will fall below the expected daily trading net
revenues by an amount at least as large as the reported VaR. Thus, shortfalls
from expected trading net revenues on a single trading day greater than the
reported VaR would be anticipated to occur, on average, about once a month.
Shortfalls on a single day can exceed reported VaR by significant amounts.
Shortfalls can also accumulate over a longer time horizon such as a number of
consecutive trading days. For a discussion of the limitations of the Firm's risk
measures, see "Risk Factors -- Our Risk Management Policies and Procedures May
Leave Us Exposed to Unidentified or Unanticipated Risk".
The VaR numbers below are shown separately for interest rate, currency,
equity and commodity products, as well as for the Firm's overall trading
positions.
51
<PAGE> 53
These VaR numbers include the underlying product positions and related
hedges, which may include positions in other product areas. For example, the
hedge of a foreign exchange forward may include an interest rate futures
position and the hedge of a long corporate bond position may include a short
position in the related equity.
VaR METHODOLOGY, ASSUMPTIONS AND LIMITATIONS. The modeling of the risk
characteristics of the Firm's trading positions involves a number of assumptions
and approximations. While management believes that these assumptions and
approximations are reasonable, there is no uniform industry methodology for
estimating VaR, and different assumptions and/or approximations could produce
materially different VaR estimates.
The Firm uses historical data to estimate its VaR and, to better reflect
asset volatilities and correlations, these historical data are weighted to give
greater importance to more recent observations. Given its reliance on historical
data, VaR is most effective in estimating risk exposures in markets in which
there are no sudden fundamental changes or shifts in market conditions. An
inherent limitation of VaR is that past changes in market risk factors, even
when weighted toward more recent observations, may not produce accurate
predictions of future market risk. For example, the asset volatilities to which
the Firm was exposed in the second half of 1998 were substantially larger than
those reflected in the historical data used during that time period to estimate
the Firm's VaR. Moreover, VaR calculated for a one-day time horizon does not
fully capture the market risk of positions that cannot be liquidated or offset
with hedges within one day.
VaR also should be evaluated in light of the methodology's other
limitations. For example, when calculating the VaR numbers shown below, the Firm
assumes that asset returns are normally distributed. Non-linear risk exposures
on options and the potentially mitigating impact of intra-day changes in related
hedges would likely produce non-normal asset returns. Different distributional
assumptions could produce a materially different VaR.
The following table sets forth the Firm's daily VaR for substantially all
of its trading positions:
DAILY VaR
(in millions)
<TABLE>
<CAPTION>
AS OF
NOVEMBER
RISK CATEGORIES 1998
--------------- --------
<S> <C>
Interest rates............................................ $ 27.3
Currency rates............................................ 9.0
Equity prices............................................. 25.3
Commodity prices.......................................... 7.0
Diversification effect(1)................................. (25.7)
------
Firmwide.................................................. $ 42.9
======
</TABLE>
- ---------------
(1) Equals the difference between Firmwide daily VaR and the sum of the daily
VaRs for the four risk categories. This effect arises because the four
market risk categories are not perfectly correlated.
------------------------
For a discussion of what the Firm's daily VaR would have been as of
November 1998 had the Firm used its volatility and correlation data as of May
29, 1998, see "Business -- Trading and Principal Investments -- Trading Risk
Management -- Risk Reduction".
NON-TRADING RISK
The market risk associated with the Firm's non-trading financial
instruments, including its investments in its merchant banking funds, is
measured using a sensitivity analysis that estimates the potential reduction
52
<PAGE> 54
in the Firm's net revenues associated with hypothetical market movements. As of
November 1998, non-trading market risk was not material.
RECENT ENHANCEMENTS TO RISK MANAGEMENT
While VaR continues to be a core tool in the Firm's risk management
process, management has increased its emphasis on the supplemental measures
described below:
- - CREDIT SPREAD LIMITS. In addition to VaR, the Firmwide Risk Committee now
sets market risk limits based on a scenario analysis of widening credit
spreads similar to those experienced in the second half of 1998; and
- - SCENARIO ANALYSES. Management is using scenario analyses that reflect more
extreme market conditions, such as large increases in market volatility as
well as substantial and sustained adverse movements in the volatility and
correlation of the Firm's relative value positions.
Notwithstanding these measures, the Firm continues to hold trading
positions that are substantial in both number and size, and is subject to
significant market risk. In addition, management may choose to increase the
Firm's risk levels in the future. See "Risk Factors -- Market Fluctuations Could
Adversely Affect Our Businesses in Many Ways" and "-- Our Risk Management
Policies and Procedures May Leave Us Exposed to Unidentified or Unanticipated
Risk" for a discussion of the risks associated with the Firm's trading
positions.
VALUATION OF TRADING INVENTORY
Substantially all of the Firm's inventory positions are marked-to-market on
a daily basis and changes are recorded in net revenues. The individual business
units are responsible for pricing the positions they manage. The Controllers
Department, in conjunction with the Firmwide Risk Department, regularly performs
pricing reviews.
TRADING NET REVENUES DISTRIBUTION
The following chart sets forth the frequency distribution for substantially
all of the Firm's daily trading net revenues for the year ended November 1998:
DAILY TRADING NET REVENUES
<TABLE>
<S> <C>
Daily Trading Net Revenues
in Millions of Dollars Number of Days
- ------------------------------------------------------------
less than(60).................................... 9
(60)-(40)........................................ 5
(40)-(20)........................................ 22
(20)-0........................................... 31
0-20............................................. 87
20-40............................................ 67
40-60............................................ 24
greater than 60.................................. 6
</TABLE>
53
<PAGE> 55
CREDIT RISK
Credit risk represents the loss that the Firm would incur if a counterparty
or issuer of securities or other instruments it holds fails to perform its
contractual obligations to the Firm. To reduce its credit exposures, the Firm
seeks to enter into netting agreements with counterparties that permit the Firm
to offset receivables and payables with such counterparties. The Firm does not
take into account any such agreements when calculating credit risk, however,
unless management believes a legal right of setoff exists under an enforceable
master netting agreement.
For most businesses, counterparty credit limits are established by the
Credit Department, which is independent of the revenue-producing departments,
based on guidelines set by the Firmwide Risk and Credit Policy Committees. The
Firm's global credit management systems monitor current and potential credit
exposure to individual counterparties and on an aggregate basis to
counterparties and their affiliates. The systems also provide the Firm's
management with information regarding overall credit risk by product, industry
sector, country and region.
RISK LIMITS
Business unit risk limits are established by the risk committees and may be
further segmented by the business unit managers to individual trading desks.
Market risk limits are monitored on a daily basis by the Firmwide Risk
Department and are reviewed regularly by the appropriate risk committee. Limit
violations are reported to the appropriate risk committee and the appropriate
business unit managers.
Inventory position limits are monitored by the Controllers Department and
position limit violations are reported to the appropriate business unit managers
and the Finance Committee. When inventory position limits are used to monitor
market risk, they are also monitored by the Firmwide Risk Department and
violations are reported to the appropriate risk committee.
DERIVATIVE CONTRACTS
Derivative contracts are financial instruments, such as futures, forwards,
swaps or option contracts, that derive their value from underlying assets,
indices, reference rates or a combination of these factors. Derivative
instruments may be entered into by the Firm in privately negotiated contracts
("OTC derivatives"), or they may be listed and traded on an exchange.
Most of the Firm's derivative transactions are entered into for trading
purposes. The Firm uses derivatives in its trading activities to facilitate
customer transactions, to take proprietary positions and as a means of risk
management. The Firm also enters into non-trading derivative contracts to manage
the interest rate and currency exposure on its long-term borrowings.
Derivatives are used in many of the Firm's businesses, and the Firm
believes that the associated market risk can only be understood relative to the
underlying assets or risks being hedged, or as part of a broader trading
strategy. Accordingly, the market risk of derivative positions is managed with
all of the Firm's other non-derivative risk.
Derivative contracts are reported on a net-by-counterparty basis on the
Firm's consolidated statements of financial condition where management believes
a legal right of setoff exists under an enforceable master netting agreement.
For an OTC derivative, the Firm's credit exposure is directly with its
counterparty and continues until the maturity or termination of such contract.
The following table sets forth the distribution, by credit rating, of
substantially all of the Firm's exposure with respect to OTC derivatives as of
November 1998, after taking into consideration the effect of netting agreements.
The categories shown reflect the internally determined public rating agency
equivalents used by the Firm.
54
<PAGE> 56
OTC DERIVATIVES CREDIT EXPOSURE
($ in millions)
<TABLE>
<CAPTION>
CREDIT RATING EQUIVALENT AMOUNT PERCENTAGE
- ------------------------ ------ ----------
<S> <C> <C>
AAA/Aaa..................................... $ 2,170 12%
AA/Aa2...................................... 5,571 30
A/A2........................................ 4,876 26
BBB/Baa2.................................... 3,133 17
BB/Ba2 or lower............................. 1,970 11
Unrated(1).................................. 730 4
------- ---
$18,450 100%
======= ===
</TABLE>
- ---------------
(1) In lieu of making an individual assessment of such counterparties' credit,
the Firm makes a determination that the collateral held in respect of such
obligations is sufficient to cover the Firm's exposure. In making this
determination, the Firm takes into account various factors, including legal
uncertainties and market volatility.
------------------------
As of November 1998, the Firm held approximately $2.97 billion in
collateral against these OTC derivatives exposures. This collateral consists
predominantly of cash and U.S. government and agency securities and is usually
received by the Firm pursuant to agreements entitling the Firm to require
additional collateral upon certain increases in exposure or the occurrence of
negative credit events.
In addition to obtaining collateral and seeking netting agreements, the
Firm attempts to mitigate default risk on derivatives by entering into
agreements that enable the Firm to terminate or reset the terms of transactions
after certain time periods or upon the occurrence of credit-related events, and
by seeking third-party guarantees of the obligations of some counterparties.
Derivatives transactions may also involve the legal risk that they are not
authorized or appropriate for a counterparty, that documentation has not been
properly executed or that executed agreements may not be enforceable against the
counterparty. The Firm attempts to minimize these risks by obtaining advice of
counsel on the enforceability of agreements as well as on the authority of a
counterparty to effect the derivative transaction.
OPERATIONAL AND YEAR 2000 RISKS
OPERATIONAL RISK. The Firm may face reputational damage, financial loss or
regulatory risk in the event of an operational failure or error. A systems
failure or failure to enter a trade properly into the Firm's records may result
in an inability to settle transactions in a timely manner or a breach of
regulatory requirements. Settlement errors or delays may cause losses due to
damages owed to counterparties or movements in prices. These operational and
systems risks may arise in connection with the Firm's own systems or as a result
of the failure of an agent acting on the Firm's behalf.
The Global Operations Department is responsible for establishing,
maintaining and approving policies and controls with respect to the accurate
inputting and processing of transactions, clearance and settlement of
transactions, the custody of securities and other instruments and the detection
and prevention of employee errors or improper or fraudulent activities. Its
personnel work closely with the Information Technology Department in creating
systems to enable appropriate supervision and management of its policies. The
Global Operations Department is also responsible, together with other areas of
the Firm, including the Legal and Compliance Departments, for ensuring
compliance with applicable regulations with respect to the clearance and
settlement of transactions and the margining of positions. The Network
Management Department oversees the Firm's relationships with its clearance and
settlement agents, regularly reviews agents' performance
55
<PAGE> 57
and meets with these agents to review operational issues.
YEAR 2000 READINESS DISCLOSURE. The Firm has determined that it will be
required to modify or replace portions of its information technology systems,
both hardware and software, and its non-information technology systems so that
they will properly recognize and utilize dates beyond December 31, 1999. The
Firm presently believes that with modifications to existing software,
conversions to new software and replacement of some hardware, the Year 2000
issue will be satisfactorily resolved in its own systems worldwide. However, if
such modifications and conversions are not made or are not completed on a timely
basis, the Year 2000 issue would have a material adverse effect on the Firm.
Moreover, even if these changes are successful, failure of third parties to
which the Firm is financially or operationally linked to address their own Year
2000 problems would also have a material adverse effect on the Firm. For a
description of the Year 2000 issue and some of the related risks, including
possible "worst-case" scenarios, see "Risk Factors -- Firm and Third-Party
Computer Systems May Not Achieve Year 2000 Readiness -- Year 2000 Readiness
Disclosure".
Recognizing the broad scope and complexity of the Year 2000 problem, the
Firm established a Year 2000 Oversight Committee to promote awareness and ensure
the active participation of senior management. This Committee, together with
numerous sub-committees chaired by senior managers throughout the Firm and the
Firm's Global Year 2000 Project Office, is responsible for planning, managing
and monitoring the Firm's Year 2000 efforts on a global basis. The Firm's
Management Controls Department assesses the scope and sufficiency of the Firm's
Year 2000 Program and verifies that the principal aspects of the Firm's Year
2000 program are being implemented according to plan.
The Firm's Year 2000 plans are based on a five phase approach, which
includes awareness; inventory, assessment and planning; remediation; testing;
and implementation. The awareness phase (in which the Firm defined the scope and
components of the problem, its methodology and approach and obtained senior
management support and funding) was completed in September 1997. The Firm also
completed the inventory, assessment and planning phase for its systems in
September 1997. By the end of December 1998, the Firm had completed the
remediation phase for approximately 99% of its mission-critical systems and had
completed the application testing and implementation phases for approximately
95% of its mission-critical systems. The Firm plans to complete all three of
these phases for approximately 99% of its mission-critical systems by the end of
March 1999 and for the remaining 1% by the end of June 1999. During the first
half of calendar 1999, the Firm is scheduled to conduct internal integration
testing with respect to critical securities and transaction flows in order to
validate that its systems can successfully perform critical business functions
beginning in January 2000. With respect to its non-mission-critical systems, the
Firm expects to complete its Year 2000 efforts during calendar 1999.
For technology products that are supplied by third-party vendors, the Firm
has completed an inventory, ranked products according to their importance, and
developed a strategy for achieving Year 2000 readiness for substantially all
non-compliant versions of software and hardware. While this process included
collecting information from vendors, the Firm is not relying solely on vendors'
verifications that their products are Year 2000 compliant or ready. The Firm is
also testing vendor-supplied products that it considers mission-critical to help
determine whether they will perform properly and support the Firm's systems
beginning in January 2000. As of December 31, 1998, the Firm's mission-critical
mainframe computers and products had been tested and substantial progress had
been made in testing the Firm's telecommunications and non-mainframe technology
infrastructure. Since telecommunications carriers have indicated that they will
not test with individual companies, the Firm is relying on information provided
by these vendors as to whether they are Year 2000 compliant.
56
<PAGE> 58
The Firm is also addressing Year 2000 issues that may exist outside its own
technology activities, including its facilities, external service providers and
other third parties with which it interfaces. The Firm has inventoried and
ranked its customers, business and trading partners, utilities, exchanges,
depositories, clearing and custodial banks and other third parties with which
the Firm has important financial and operational relationships.
By the end of December 1998, the Firm had participated in approximately 50
"external", i.e., industry-wide or point-to-point, tests with exchanges and
clearing houses as well as the "Beta" test sponsored by the Securities Industry
Association ("SIA") for its U.S. members in July 1998, which the Firm
successfully completed. By the end of June 1999, the Firm expects to have
participated in approximately 110 additional external tests, including the SIA
"Streetwide" test occurring in March and April 1999 and other major industry
tests in those global markets where the Firm conducts significant business.
Acknowledging that a Year 2000 failure, whether internal or external, could
have an adverse effect on the ability to conduct day-to-day business, the Firm
is employing a comprehensive and global approach to contingency planning. The
Firm's contingency planning objective is to identify potential system failure
points that support processes that are critical to the Firm's mission and to
develop contingency plans for those failures that may reasonably be expected to
occur, with the general goal of ensuring, to the maximum extent practical, that
minimum acceptable levels of service can be maintained by the Firm. In the event
of system failures, the Firm's contingency plans will not guarantee that
existing levels of service will be fully maintained, especially if these
failures involve external systems or processes over which the Firm has little or
no direct control or involve multiple failures across a variety of systems.
The Firm anticipates that contingency plans for its core business units
will be completed during June 1999, and by September 30, 1999 for the rest of
the Firm. In addition, the Firm is developing contingency plans for funding and
balance sheet management and other related activities. The Firm expects its
contingency plans to include establishing additional sources of liquidity that
could be drawn upon in the event of systems disruption. The Firm is also
developing a crisis management group to guide it through the transition period.
The Firm expects to reduce trading activity in the period leading up to January
2000 to minimize the impact of potential Year 2000-related failures. A reduction
in trading activity by the Firm or by other market participants in anticipation
of possible Year 2000 problems could adversely affect the Firm's results of
operations, as discussed under "Risk Factors -- Firm and Third-Party Computer
Systems May Not Achieve Year 2000 Readiness -- Year 2000 Readiness Disclosure".
The Firm has incurred and expects to continue to incur expenses allocable
to internal staff, as well as costs for outside consultants, to complete the
remediation and testing of internally-developed systems and the replacement and
testing of third-party products and services, including non-technology products
and services, in order to achieve Year 2000 compliance. These costs are also
attributable to the Firm's Year 2000 contingency planning efforts. The Firm
currently estimates that these costs will total between $140 million and $150
million, over half of which has been spent to date. These estimates include the
cost of technology personnel but do not include the cost of most non-technology
personnel involved in the Firm's Year 2000 effort. The remaining cost of the
Firm's Year 2000 program is expected to be incurred in 1999 and early 2000. The
Year 2000 program costs will continue to be funded through operating cash flow.
These costs are expensed as incurred. The Firm does not expect that the costs
associated with implementing its Year 2000 program will have a material adverse
effect on its results of operations, financial condition, liquidity or capital
resources.
The costs of the Year 2000 program and the date on which the Firm plans to
complete the Year 2000 modifications are based on current estimates, which
reflect numerous assumptions about future events, including the continued
availability of certain resources,
57
<PAGE> 59
the timing and effectiveness of third-party remediation plans and other factors.
The Firm can give no assurance that these estimates will be achieved, and actual
results could differ materially from the Firm's plans. Specific factors that
might cause material differences include, but are not limited to, the
availability and cost of personnel trained in this area, the ability to locate
and correct relevant computer source codes and embedded chip technology, the
results of internal and external testing and the timeliness and effectiveness of
remediation efforts of third parties.
In order to focus attention on the Year 2000 problem, management has
deferred several technology projects that address other issues. However, the
Firm does not believe that this deferral will have a material adverse effect on
its results of operations or financial condition.
ACCOUNTING DEVELOPMENTS
In June 1996, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 125, "Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities", effective for transactions occurring after
December 31, 1996. SFAS No. 125 establishes standards for distinguishing
transfers of financial assets that are accounted for as sales from transfers
that are accounted for as secured borrowings.
The provisions of SFAS No. 125 relating to repurchase agreements,
securities lending transactions and other similar transactions were deferred by
the provisions of SFAS No. 127, "Deferral of the Effective Date of Certain
Provisions of FASB Statement No. 125", and became effective for transactions
entered into after December 31, 1997. This Statement requires that the
collateral obtained in certain types of secured lending transactions be recorded
on the balance sheet with a corresponding liability reflecting the obligation to
return such collateral to its owner. Effective January 1, 1998, the Firm adopted
the provisions of SFAS No. 125 that were deferred by SFAS No. 127. The adoption
of this standard increased the Firm's total assets and liabilities by $11.64
billion as of November 1998.
In February 1997, the FASB issued SFAS No. 128, "Earnings Per Share"
("EPS"), effective for periods ending after December 15, 1997, with restatement
required for all prior periods. SFAS No. 128 establishes new standards for
computing and presenting EPS. This Statement replaces primary and fully diluted
EPS with "basic EPS", which excludes dilution, and "diluted EPS", which includes
the effect of all potentially dilutive common shares and other dilutive
securities. Because the Firm has not historically reported EPS, this Statement
will have no impact on the Firm's historical financial statements. This
Statement will, however, apply to financial statements of the Firm prepared
after the Offerings. See "Pro Forma Consolidated Financial Information" for a
calculation of pro forma EPS.
In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive
Income", effective for fiscal years beginning after December 15, 1997, with
reclassification of earlier periods required for comparative purposes. SFAS No.
130 establishes standards for the reporting and presentation of comprehensive
income and its components in the financial statements. The Firm intends to adopt
this standard in the first quarter of fiscal 1999. This Statement is limited to
issues of reporting and presentation and, therefore, will not affect the Firm's
results of operations or financial condition.
In June 1997, the FASB issued SFAS No. 131, "Disclosures about Segments of
an Enterprise and Related Information", effective for fiscal years beginning
after December 15, 1997, with reclassification of earlier periods required for
comparative purposes. SFAS No. 131 establishes the criteria for determining an
operating segment and establishes the disclosure requirements for reporting
information about operating segments. The Firm intends to adopt this standard at
the end of fiscal 1999. This Statement is limited to issues of reporting and
presentation and, therefore, will not affect the Firm's results of operations or
financial condition.
58
<PAGE> 60
In February 1998, the FASB issued SFAS No. 132, "Employers' Disclosures
about Pensions and Other Postretirement Benefits", effective for fiscal years
beginning after December 15, 1997, with restatement of disclosures for earlier
periods required for comparative purposes. SFAS No. 132 revises certain
employers' disclosures about pension and other post-retirement benefit plans.
The Firm intends to adopt this standard at the end of fiscal 1999. This
Statement is limited to issues of reporting and presentation and, therefore,
will not affect the Firm's results of operations or financial condition.
In March 1998, the Accounting Standards Executive Committee of the American
Institute of Certified Public Accountants issued Statement of Position ("SOP")
No. 98-1, "Accounting for the Costs of Computer Software Developed or Obtained
for Internal Use", effective for fiscal years beginning after December 15, 1998.
SOP No. 98-1 requires that certain costs of computer software developed or
obtained for internal use be capitalized and amortized over the useful life of
the related software. The Firm currently expenses the cost of all software
development in the period in which it is incurred. The Firm intends to adopt
this Statement in fiscal 2000 and is currently assessing its effect.
In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities", effective for fiscal years beginning after
June 15, 1999. SFAS No. 133 establishes accounting and reporting standards for
derivative instruments, including certain derivative instruments embedded in
other contracts (collectively referred to as derivatives), and for hedging
activities. This Statement requires that an entity recognize all derivatives as
either assets or liabilities in the statement of financial condition and measure
those instruments at fair value. The accounting for changes in the fair value of
a derivative instrument depends on its intended use and the resulting
designation. The Firm intends to adopt this standard in fiscal 2000 and is
currently assessing its effect.
59
<PAGE> 61
INDUSTRY AND ECONOMIC OUTLOOK
As a global provider of financial services, the Firm is affected by overall
macroeconomic and market conditions in various regions around the world. For a
number of years, we have operated in a generally favorable macroeconomic
environment characterized by low inflation, low and declining interest rates and
strong equity markets. In particular, the U.S. economy, the largest in the world
and an important influence on overall world economic activity, has been
undergoing one of the longest periods of post-war economic expansion. As of
December 1998, the current U.S. expansion had lasted 93 months compared to a
post-war average period of expansion of 46 months.
Recognizing that the favorable macroeconomic and market environments will
be subject to periodic reversals, which may significantly and adversely affect
our businesses, we believe that significant growth and profit opportunities
exist for financial intermediaries in the United States and abroad. These
opportunities derive from several long-term trends, including the following:
- - DEREGULATION. Financial market deregulation, including the elimination of
bank deposit interest rate ceilings and the expansion of commercial banks and
other financial institutions into securities underwriting activities, has
resulted in the creation of new and broader sources of credit, which have
reduced the variability and the cyclicality in the supply of credit. This, in
turn, has in the past reduced volatility in economic activity, leading to
longer economic expansions with increased investment spending, thereby
resulting in higher levels of capital raising;
- - GLOBALIZATION. Heightened global competition has created a need for
cross-border capabilities and economies of scale, resulting in increased joint
venture and mergers and acquisitions activity;
- - FOCUS ON SHAREHOLDER VALUE. Increasing focus on shareholder value has fueled
an increase in restructuring and strategic initiatives, thereby yielding
additional financial advisory and capital-raising opportunities;
- - CONSOLIDATION. Moderate growth, limited pricing flexibility and the need for
economies of scale have substantially increased consolidation opportunities in
certain industries, and record levels of profit have provided companies with
the resources to pursue strategic combinations, thereby creating substantial
demand for mergers and acquisitions advisory services and subsequent capital
raising;
- - DEMOGRAPHICS. Changing demographics in the United States and other developed
economies have increased the pool of savings available for private investment
and the need for increased funding of pension plans due to the aging of the
population, creating substantial demand for investment products and services;
and
- - FINANCIAL PRODUCT INNOVATION. Technology and financial expertise have led to
the development of new financial products better tailored to the risk/reward
requirements of investors, thereby increasing trading flows and proprietary
investment opportunities.
We believe that over the last 15 years these trends, coupled with generally
declining interest rates and favorable market conditions, have contributed to a
substantially higher rate of growth in activity in the financial services
industry than the growth in overall economic activity. The future economic
environment may not be as favorable as that experienced in the last 15 years
and, in particular, the period of declining interest rates in the United States
may not continue. There may also be periods of adverse economic and market
conditions. Nonetheless, we believe that these trends should continue to affect
the financial services industry positively over the long term. However, see
"Risk Factors -- Market Fluctuations Could Adversely Affect Our Businesses in
Many Ways" for a discussion of the effect that adverse economic conditions and
market fluctuations can have on the Firm's businesses.
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<PAGE> 62
The following table sets forth selected key industry indicators:
KEY INDUSTRY INDICATORS
($ in billions, except GDP)
(volume in millions of shares)
<TABLE>
<CAPTION>
AS OF OR FOR YEAR ENDED DECEMBER 31,
-------------------------------------- CAGR
1983 1988 1993 1998 '83-'98
---- ---- ---- ---- -------
<S> <C> <C> <C> <C> <C>
GENERAL ECONOMIC ACTIVITY:
($ in trillions)
Worldwide GDP(1).......................... $ 10 $ 18 $ 24 $ 29(8) 8%(8)
U.S. GDP(2)............................... 4 5 7 9 6
ADVISORY ACTIVITIES/FINANCING:
Worldwide mergers and acquisitions(3)..... 96 527 460 2,522 24
Worldwide equity issued(3)................ 50 51 172 269 12
Worldwide debt issued(3).................. 146 631 1,546 2,932 22
WORLD EQUITY MARKETS:
Worldwide equity market
capitalization(4)....................... 3,384 9,728 14,016 23,541(8) 15(8)
U.S. market capitalization(4)............. 1,898 2,794 5,136 11,309(8) 14(8)
FT/S&P Actuaries World Indices(TM) -- The
World Index(5).......................... NA 129 178 359 11
Dow Jones Industrial Average.............. 1,259 2,169 3,754 9,181 14
S&P 500................................... 165 278 466 1,229 14
NYSE average daily volume................. 85 162 265 674 15
INVESTED FUNDS:
Worldwide pension assets(6)............... $1,900 $3,752 $ 6,560 $ 9,694(8) 12(8)
Number of U.S. mutual funds(7)............ 1,026 2,715 4,558 7,343 14
U.S. mutual fund assets(7)................ $ 293 $ 810 $ 2,075 $ 5,530 22
</TABLE>
- ---------------
(1) Gross domestic product. Source: The Economist Intelligence Unit, January
1999.
(2) Source: U.S. Department of Commerce, Bureau of Economic Analysis.
(3) Source: Securities Data Company.
(4) Source: International Finance Corporation.
(5) Index is calculated on a local currency basis based on total returns. CAGR
is based on 1988-1998 data. The FT/S&P Actuaries World Indices are owned by
FTSE International Limited, GS&Co. and Standard & Poor's Ratings Services.
The Indices are compiled by FTSE International and Standard & Poor's Ratings
Services in conjunction with the Faculty of Actuaries and the Institute of
Actuaries.
(6) Source: InterSec Research Corp.
(7) Source: Investment Company Institute.
(8) Data as of December 31, 1997; CAGR 1983-1997.
-------------------------
We believe scale, global resources and leading market positions are
important competitive advantages for financial intermediaries in this
environment. In addition, we believe that circumstances in certain regions
should provide opportunities for financial intermediaries.
EUROPE
The EMU commenced on January 1, 1999 and created a monetary union in Europe
with a single currency. As a result, we believe that over time a pan-European
capital market will develop that is likely to rival that of the United States in
size and liquidity. Financial intermediaries generally are expected to ben-
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<PAGE> 63
efit from a number of anticipated developments including:
- - pan-European consolidation and financial restructuring yielding an increase in
mergers and acquisitions activity;
- - an increase in third-party assets under management and a major shift towards
investments in equity securities due to an expected move to private pension
fund systems, changing demographics and the elimination of intra-EMU currency
risk;
- - a reallocation of equity portfolios to reflect pan-European indices;
- - the establishment of a European high-yield market to fund the growth of
emerging high-growth industries and to satisfy investors' demands for higher
yield; and
- - increased equity issuance and higher equity trading volumes.
ASIA
Since 1997, the currency weakness and disruptions, the deterioration in
certain of the region's banking systems, the weakness in the property sector in
many of the region's countries, as well as slowing consumer income growth, have
led to a significant and continuing weakening of these economies and their stock
markets. These developments have adversely affected the economic and market
conditions in the region and at times have affected economic and market
conditions elsewhere. We believe, however, that financial intermediaries could
have significant opportunities in this region if stability improves and the
economies, which represent approximately 60% of the world's population, resume
their growth. In the near term, these potential opportunities could include:
- - an increase in mergers and acquisitions and other financial advisory services
in connection with corporate restructurings;
- - an increase in trading opportunities as financial intermediaries meet the
liquidity needs of their clients; and
- - an increase in capital raising as Asian corporations and governments access
the international capital markets rather than the regional banking system to
refinance and to fund future growth.
In the longer term, these potential opportunities could include:
- - the emergence of corporate and real estate principal investment opportunities
as a result of corporate and government restructurings; and
- - an increase in third-party assets under management and a major shift towards
investments in equity securities due to an anticipated move to private
pension fund systems, changing demographics and the relaxation of foreign
exchange restrictions.
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<PAGE> 64
BUSINESS
OVERVIEW
Goldman Sachs is a leading global investment banking and securities firm
with three principal business lines:
- - Investment Banking;
- - Trading and Principal Investments; and
- - Asset Management and Securities Services.
Our goal is to be the advisor of choice for our clients and a leading
participant in global financial markets. We provide services worldwide to a
substantial and diversified client base, which includes corporations, financial
institutions, governments and high net worth individuals.
For 1998, our net revenues were $8.5 billion and our pre-tax earnings were
$2.9 billion. As of November 1998, our total assets were $217.4 billion and our
partners' capital was $6.3 billion.
We have over time produced strong earnings growth and attractive returns on
partners' capital through different economic and market conditions. Over the
last 15 years, our pre-tax earnings have grown from $462 million in 1983 to $2.9
billion in 1998, representing a CAGR of 13%. Economic and market conditions can,
however, significantly affect our performance. For example, in the second half
of 1998, the Firm's performance was adversely affected by turbulence in global
financial markets.
We have achieved this growth, which has been generated without the benefit
of a large acquisition, by maintaining an intense commitment to our clients,
focusing on our core businesses and key opportunities and operating as an
integrated franchise.
Because we believe that the needs of our clients are global and that
international markets have high growth potential, we have built upon our
strength in the United States to achieve leading positions in other parts of the
world. Today, the Firm has a strong global presence as evidenced by the
geographic breadth of our transactions, leadership in our core products and the
size of our international operations. As of November 1998, we operated offices
in 23 countries and 36% of our 13,000 employees were based outside the United
States.
We are committed to a distinctive culture and set of core values. These
values are reflected in our Business Principles, which emphasize placing our
clients' interests first, integrity, commitment to excellence and innovation,
and teamwork.
The Firm is managed by its principal owners. Simultaneously with the
Offerings, we will make equity-based awards to substantially all of our
employees. Following the Offerings, our employees, including former partners,
will own approximately 66% of the Company. None of our employees are selling
shares in the Offerings.
The Firm is the successor to a commercial paper business founded in 1869 by
Marcus Goldman. Since then, we have grown our business as a participant and
intermediary in securities and other financial activities to become one of the
leading firms in the industry.
In 1989, Group L.P. was formed to serve as the parent company of the
Goldman Sachs organization. As of November 30, 1996, Group L.P. was
restructured. On that date, the non-retiring former general partners of Group
L.P. converted their general partner interests into limited partner interests
and became profit participating limited partners of Group L.P. Concurrently, The
Goldman Sachs Corporation was admitted as Group L.P.'s sole general partner. The
common stock of The Goldman Sachs Corporation is owned by the profit
participating limited partners, all of whom are active in the Firm's businesses.
GS Inc. was formed to succeed to the business of Group L.P. Simultaneously
with the Offerings, we will complete a number of transactions in order to
convert from partnership to corporate form. See "Certain Relationships and
Related Transactions -- Incorporation and Related Transactions" for additional
information concerning these transactions.
63
<PAGE> 65
WHY WE ARE GOING PUBLIC
We have decided to become a public company for three principal reasons:
- - to secure permanent capital to grow;
- - to share ownership broadly among our employees now and through future
compensation; and
- - to permit us to use publicly traded securities to finance strategic
acquisitions that we may elect to make in the future.
MARKET SHARE DATA
Except as otherwise indicated, all amounts with respect to the volume,
number and market share of mergers and acquisitions and underwriting
transactions and related ranking information have been derived from information
compiled and classified by Securities Data Company ("SDC"). SDC obtains and
gathers its information from sources it considers reliable, but SDC does not
guarantee the accuracy or completeness of the information. In the case of
mergers and acquisitions, data are based upon the dollar value of announced
transactions for the period indicated, taken as a whole, with full credit to
each of the advisors to each party in a transaction. In the case of
underwritings, data are based upon the dollar value of total proceeds raised
(exclusive of any option to purchase additional shares) with equal credit to
each bookrunner for the period indicated, taken as a whole. As a result of this
method of compiling data, percentages may add to more than 100%.
STRATEGY AND PRINCIPAL BUSINESS LINES
Our strategy is to grow our three core businesses -- Investment Banking,
Trading and Principal Investments, and Asset Management and Securities
Services -- in markets throughout the world. Our leadership position in
investment banking provides us with access to governments, financial
institutions and corporate clients globally. Trading and principal investing has
been an important part of our culture and earnings, and we remain committed to
these businesses irrespective of their volatility. Managing wealth is one of the
fastest growing segments of the financial services industry and we are
positioning our asset management and securities services businesses to take
advantage of that growth. Our assets under supervision, for example, have grown
from $92.7 billion as of November 1994 to $336.8 billion as of November 1998,
representing a compound annual growth rate of 38%.
Our business lines are comprised of various product and service offerings
that are set forth in the following chart:
PRIMARY PRODUCTS AND ACTIVITIES BY BUSINESS LINE
<TABLE>
<CAPTION>
TRADING AND PRINCIPAL ASSET MANAGEMENT AND
INVESTMENT BANKING INVESTMENTS SECURITIES SERVICES
------------------ --------------------- --------------------
<S> <C> <C>
- -- Equity and debt -- Bank loans -- Commissions
underwriting -- Commodities -- Institutional and high
- -- Financial restructuring -- Currencies net worth asset management
advisory services -- Equity and fixed income -- Margin lending
- -- Mergers and acquisitions derivatives -- Matched book
advisory services -- Equity and fixed income -- Merchant banking fees
- -- Real estate advisory securities and overrides
services -- Principal investments -- Mutual funds
-- Proprietary arbitrage -- Prime brokerage
-- Securities lending
</TABLE>
------------------------
INVESTMENT BANKING
Investment Banking represented 39% of 1998 net revenues and 35% of 1997 net
revenues. We are a market leader in both the financial advisory and underwriting
businesses, serving over 3,000 clients worldwide. For the period January 1, 1994
to December 31, 1998, we had the industry-leading market share of 25.3% in
worldwide mergers and acquisitions advisory services, having advised on over
$1.7 trillion of transactions. Over the same period, we also achieved
64
<PAGE> 66
number one market shares of 15.2% in underwriting worldwide initial public
offerings and 14.4% in underwriting worldwide common stock issues.
TRADING AND PRINCIPAL INVESTMENTS
Trading and Principal Investments represented 28% of 1998 net revenues and
39% of 1997 net revenues. We make markets in equity and fixed income products,
currencies and commodities; enter into swaps and other derivative transactions;
engage in proprietary trading and arbitrage; and make principal investments. In
trading, we focus on building lasting relationships with our most active clients
while maintaining leadership positions in our key markets. We believe our
research, market-making and proprietary activities enhance our understanding of
markets and ability to serve our clients.
ASSET MANAGEMENT AND SECURITIES SERVICES
Asset Management and Securities Services represented 33% of 1998 net
revenues and 26% of 1997 net revenues. We provide global investment management
and advisory services; earn commissions on agency transactions; earn management
fees and derive overrides from our merchant banking funds; and provide prime
brokerage, securities lending and financing services. As of November 1998, the
Firm had $336.8 billion of assets under supervision, of which $194.8 billion
represented assets under management. Our asset management business is rapidly
growing, with net asset inflows that averaged over $125 million per business day
during 1998. We manage merchant banking funds that had $15.5 billion of capital
commitments as of November 1998.
We pursue our strategy to grow our three core businesses through an
emphasis on:
EXPANDING HIGH VALUE-ADDED BUSINESSES
To achieve strong growth and high returns, we seek to build leadership
positions in high value-added services for our clients. For example, we have
substantially increased the number of professionals in investment banking to
improve and expand our ability to execute mergers and acquisitions, initial
public offerings and high-yield financings. In trading, we structure and execute
large and complex transactions for institutional investors, pension funds and
corporate clients around the world. In asset management, we emphasize equity and
alternative investment products and use our established international presence
to build a global asset management franchise.
INCREASING THE STABILITY OF OUR EARNINGS
We seek to balance the stability of our earnings with return on equity and
long-term earnings growth. We believe our trading businesses are key ingredients
to our success. While we plan to continue to grow our trading businesses, the
financial market shocks of the past year underscored the importance of our
strategy to emphasize growth in our investment banking, asset management and
securities services businesses. Through a greater relative emphasis on these
businesses, we plan to gradually increase the stability of our earnings.
PURSUING INTERNATIONAL OPPORTUNITIES
We believe that our global reach will allow us to take advantage of growth
in international markets. In Europe, for example, the recent establishment of
the EMU is expected, over time, to create a large pan-European market rivaling
the U.S. capital markets in size and liquidity. We believe this will generate
increased activity across our businesses in the region. In Asia, we expect
increased mergers and acquisitions advisory opportunities as a result of
corporate restructurings and increased trading opportunities as we meet the
liquidity needs of our clients. In the longer term, we anticipate additional
opportunities in asset management activities due to an expected shift towards
privatization of pension systems and changing demographics.
LEVERAGING THE FRANCHISE
We believe our various businesses are generally stronger and more
successful because they are part of the Goldman Sachs franchise. Our culture of
teamwork fosters cooperation among our businesses, which allows us to provide
our clients with a full
65
<PAGE> 67
range of products and services on a coordinated basis. Our investment bankers,
for example, refer clients who are selling their businesses to those in the Firm
who manage wealth. In addition, our merchant banking investments in companies
lead to future clients for investment banking.
COMPETITIVE STRENGTHS
STRONG CLIENT RELATIONSHIPS
We focus on building long-term client relationships. In 1998, over 75% of
our Investment Banking revenues represented business from existing clients of
the Firm. We also aggressively pursue new client relationships as evidenced by
the over 400 investment banking transactions we completed for first-time clients
in 1998. In our trading businesses, we structure and execute transactions across
a wide array of markets and countries to meet our clients' needs. In our asset
management business, we managed assets for three of the five largest pension
pools in the United States as ranked as of September 30, 1998 by Pensions &
Investments and maintain accounts for 41% of the 1998 "Forbes 400 List of the
Richest Americans".
DISTINCTIVE PEOPLE AND CULTURE
Our most important asset is our people. We seek to reinforce our employees'
commitment to our culture and values through recruiting, training, a
comprehensive 360-degree review system and a compensation philosophy that
rewards teamwork. We were ranked number seven in Fortune magazine's "The 100
Best Companies to Work for in America" in January 1999 and were ranked number
three in Fortune magazine's 1999 "The Top 50 MBA Dream Companies", the
highest-ranked investment banking and securities firm in each case.
GLOBAL REACH
Over the past decade, we have made a significant commitment to building a
worldwide business. We have achieved leading positions in major international
markets by capitalizing on our product knowledge and global research, as well as
by building a local presence where appropriate. In doing so, we have become one
of the few truly global investment banking and securities firms with the ability
to execute large and complex cross-border transactions. We had the number one
market share of 23.2% in cross-border mergers and acquisitions for the period
from January 1, 1994 to December 31, 1998. In addition, in Japan, we were the
largest non-Japanese mutual fund manager as of January 31, 1999, according to
The Investment Trusts Association.
------------------------
SUMMARY FINANCIAL DATA
(in millions)
<TABLE>
<CAPTION>
YEAR ENDED NOVEMBER
--------------------------
1996 1997 1998
---- ---- ----
<S> <C> <C> <C>
Net revenues:
Investment Banking........................................ $2,113 $2,587 $3,368
Trading and Principal Investments......................... 2,693 2,926 2,379
Asset Management and Securities Services.................. 1,323 1,934 2,773
------ ------ ------
Total net revenues.......................................... $6,129 $7,447 $8,520
====== ====== ======
</TABLE>
------------------------
INVESTMENT BANKING
The Firm provides a broad range of investment banking services to a diverse
group of over 3,000 clients worldwide, including corporations, financial
institutions, governments and individuals. Our investment
66
<PAGE> 68
banking activities are divided into two categories:
- - FINANCIAL ADVISORY. Financial advisory includes advisory assignments with
respect to mergers and acquisitions, divestitures, corporate defense
activities, restructurings and spin-offs; and
- - UNDERWRITING. Underwriting includes public offerings and private placements
of equity and debt securities.
The following table sets forth the net revenues of the Firm's Investment
Banking business:
INVESTMENT BANKING NET REVENUES
(in millions)
<TABLE>
<CAPTION>
YEAR ENDED NOVEMBER
------------------------
1996 1997 1998
---- ---- ----
<S> <C> <C> <C>
Financial advisory.......................................... $ 931 $1,184 $1,774
Underwriting................................................ 1,182 1,403 1,594
------ ------ ------
Total Investment Banking.................................... $2,113 $2,587 $3,368
====== ====== ======
</TABLE>
------------------------
In Investment Banking, we provide our clients with quality advice and
execution as part of our effort to develop and maintain long-term relationships
as their lead investment bank.
ORGANIZATION
We have continuously adapted our organizational structure to meet changing
market dynamics and our clients' needs. Our current structure, which is
organized along regional, execution and industry groups, seeks to combine
client-focused investment bankers with execution and industry expertise. Because
our businesses are global, we have adapted our organization to meet the demands
of our clients in each geographic region. Through our commitment to teamwork, we
believe that we provide services in an integrated fashion for the benefit of our
clients.
We believe an important competitive advantage in our marketing effort is
Investment Banking Services ("IBS"), a core group of professionals who focus on
developing and maintaining strong client relationships. These bankers, who are
organized regionally and/or by industry group, work with senior executives of
our clients to identify areas where Goldman Sachs can provide capital-raising,
financial advisory or other products and services. The broad base of experience
and knowledge of our IBS professionals enables them to analyze our clients'
objectives efficiently and to bring to bear the appropriate resources of the
Firm to satisfy those objectives.
The Firm's Corporate Finance, Debt and Equity Capital Markets, Leveraged
Finance and Mergers and Acquisitions groups bring product expertise and
innovation to clients in a variety of industries. These groups are responsible
for the execution of specific client transactions as well as the building of
strong client relationships.
In an effort to serve our clients' needs in targeted industries, we have
established several industry focus groups. These include: Chemicals;
Communications, Media and Entertainment; Energy and Power; Financial
Institutions; Healthcare; High Technology; Hotels and Gaming; Real Estate;
Retailing; and Transportation. Drawing on specialized knowledge of
industry-specific trends, these groups provide the full range of investment
banking products and services to our clients.
Reflecting our commitment to innovation, Investment Banking has established
a New Products group whose professionals focus on creating new financial
products. These professionals have particular expertise in integrating finance
with accounting, tax and securities laws and work closely with other investment
banking teams to provide innovative solutions to difficult client problems. Our
structuring expertise has proven to be partic-
67
<PAGE> 69
ularly valuable in addressing client needs in areas such as complex cross-border
mergers and acquisitions and convertible and other hybrid equity financings.
FINANCIAL ADVISORY
Financial advisory includes a broad range of advisory assignments with
respect to mergers and acquisitions, divestitures, corporate defense activities,
restructurings and spin-offs. Goldman Sachs is a leading investment bank in
worldwide mergers and acquisitions. During calendar 1998, we advised on 340
mergers and acquisitions transactions with a combined value of $957 billion.
The Firm's mergers and acquisitions capabilities are evidenced by its
significant share of assignments in large, complex transactions where it
provides multiple services, including "one-stop" acquisition financing, currency
hedging and cross-border structuring expertise. Goldman Sachs advised on seven
of the ten largest mergers and acquisitions transactions through December 31,
1998. We have also been successful in Europe, including in intra-country
transactions, and we are a leading mergers and acquisitions advisor in France,
Germany and Spain.
The following table illustrates the Firm's leadership in the mergers and
acquisitions advisory market for the indicated period taken as a whole:
GOLDMAN SACHS' MERGERS AND ACQUISITIONS MARKET DATA
For the period January 1, 1994 through December 31, 1998
($ in billions)
<TABLE>
<CAPTION>
MARKET NUMBER OF
CATEGORY RANK(1) SHARE VOLUME TRANSACTIONS
-------- ------- ------ ------ ------------
<S> <C> <C> <C> <C>
Worldwide......................................... 1 25.3% $1,715 1,334
Worldwide, transactions over $500 million......... 1 34.8 1,593 470
Worldwide, transactions over $1 billion........... 1 38.4 1,470 297
United States..................................... 1 32.8 1,316 907
United States, transactions over $500 million..... 1 41.3 1,228 339
United States, transactions over $1 billion....... 1 44.3 1,142 221
</TABLE>
- ---------------
(1) Rank in any one year during the period presented may vary from the rank for
the period taken as a whole.
------------------------
Mergers and acquisitions is an example of how one activity can generate
cross-selling opportunities for other areas of the Firm. For example, a client
we are advising in a purchase transaction may seek our assistance in obtaining
financing and in hedging interest rate or foreign currency risks associated with
the acquisition. In the case of dispositions, owners and senior executives of
the acquired company often will seek asset management services. In these cases,
our high net worth relationship managers provide comprehensive advice on
investment alternatives and execute the client's desired strategy.
UNDERWRITING
Since January 1, 1994, Goldman Sachs has served as lead manager in
transactions that have raised more than $900 billion of capital for clients
worldwide. The Firm underwrites a wide range of securities and other
instruments, including common and preferred stock, convertible securities,
investment grade debt, high-yield debt, sovereign and emerging markets debt,
municipal debt, bank loans, asset-backed securities and real estate-related
securities, such as mortgage-backed securities and the securities of real estate
investment trusts.
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<PAGE> 70
EQUITY UNDERWRITING. Equity underwriting has been a long-term core
strength of the Firm. The following table illustrates the Firm's leadership
position in equity underwriting for the indicated period taken as a whole:
GOLDMAN SACHS' EQUITY UNDERWRITING MARKET DATA
For the period January 1, 1994 through December 31, 1998
($ in billions)
<TABLE>
<CAPTION>
TOTAL
MARKET PROCEEDS NUMBER OF
CATEGORY RANK(1) SHARE RAISED ISSUES(2)
-------- ------- ------ -------- ---------
<S> <C> <C> <C> <C>
Worldwide Initial Public Offerings ("IPOs").............. 1 15.2% $ 44 300
Worldwide IPOs, proceeds over $500 million............... 1 23.3 25 59
Worldwide public common stock offerings.................. 1 14.4 101 634
U.S. IPOs................................................ 1 15.3 31 179
U.S. IPOs, proceeds over $500 million.................... 1 30.1 16 29
U.S. public common stock offerings....................... 2 14.3 71 381
</TABLE>
- ---------------
(1) Rank in any one year during the period presented may vary from the rank for
the period taken as a whole.
(2) The number of issues reflects the number of tranches; an offering by a
single issuer could have multiple tranches.
------------------------
As with mergers and acquisitions, we have been particularly successful in
winning mandates for large, complex equity underwritings. As evidenced in the
chart above, our market share of IPOs with total proceeds over $500 million is
substantially higher than our market share of all IPOs. We believe our
leadership in large IPOs reflects our expertise in complex transactions,
research strengths, track record and distribution capabilities. In the
international arena, we have also acted as lead manager on many of the largest
IPOs. We were named the Asian Equity House of the Year by International
Financing Review in 1998.
We believe that a key factor in our equity underwriting success is the
close working relationship between the investment bankers, research analysts and
sales force as coordinated by our Equity Capital Markets group. Goldman Sachs'
equities sales force is one of the most experienced and effective sales
organizations in the industry. With 350 institutional sales professionals and
420 high net worth relationship managers located in every major market around
the world, Goldman
Sachs has relationships with a large and diverse group of investors.
Global Investment Research is critical to our ability to succeed in the
equity underwriting business. We believe that high quality equity research is a
significant competitive advantage in the market for new equity issues. In this
regard, Goldman Sachs' research has been consistently ranked among the
industry's global leaders. See "-- Global Investment Research" for detailed
information regarding our Global Investment Research Department.
DEBT UNDERWRITING. We engage in the underwriting and origination of
various types of debt instruments that we broadly categorize as follows:
investment grade debt for corporations, governments, municipalities and
agencies; leveraged finance, which includes high-yield debt and bank loans for
non-investment grade issuers; emerging market debt, which includes corporate and
sovereign issues; and asset-backed securities. We have employed a focused
approach in debt underwriting, emphasizing high value-added areas in servicing
our clients.
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<PAGE> 71
We believe that the leveraged finance market is a key growth opportunity
for our debt underwriting business. Over the last three years, we have more than
doubled the number of debt underwriting professionals dedicated to this area.
The table below sets forth our rank, market position, our total proceeds
raised and the number of debt transactions in which we have acted as underwriter
in the following areas for the indicated period taken as a whole:
GOLDMAN SACHS' DEBT UNDERWRITING MARKET DATA
For the period January 1, 1994 through December 31, 1998
($ in billions)
<TABLE>
<CAPTION>
TOTAL
MARKET PROCEEDS NUMBER OF
CATEGORY(1) RANK(5) SHARE RAISED ISSUES(6)
----------- ------- ------ -------- ---------
<S> <C> <C> <C> <C>
Worldwide debt(2).................................. 3 8.4% $695 4,684
Worldwide straight debt(3)......................... 3 8.9 559 4,165
U.S. investment grade straight debt(3)............. 3 12.0 419 3,590
U.S. investment grade industrial straight
debt(3).......................................... 1 19.5 81 517
U.S. high-yield debt(4)............................ 5 8.0 33 184
</TABLE>
- ---------------
(1) All categories include publicly registered and Rule 144A issues.
(2) Includes non-convertible preferred stock, mortgage-backed securities,
asset-backed securities and taxable municipal debt.
(3) "Straight debt" excludes non-convertible preferred stock, mortgage-backed
securities, asset-backed securities and municipal debt.
(4) Excludes issues with both investment grade and non-investment grade ratings,
often referred to as "split-rated issues".
(5) Rank in any one year during the period presented may vary from the rank for
the period taken as a whole.
(6) The number of issues reflects the number of tranches; an offering by a
single issuer could have multiple tranches.
------------------------
TRADING AND PRINCIPAL INVESTMENTS
The Firm's Trading and Principal Investments business facilitates customer
transactions and takes proprietary positions through market making in and
trading of fixed income and equity products, currencies, commodities, and swaps
and other derivatives. In order to meet the needs of our clients, our Trading
and Principal Investments business is diversified across a wide range of
products. For example, we make markets in traditional investment grade debt
securities, structure complex derivatives and securitize mortgages and insurance
risk. A fundamental tenet of our approach is that we believe our willingness and
ability to take risk distinguishes us and substantially enhances our client
relationships. Our Trading and Principal Investments business includes the
following:
- - FIXED INCOME, CURRENCY AND COMMODITIES. The Firm makes markets in and trades
fixed income products, currencies and commodities, structures and enters into
a wide variety of derivative transactions and engages in proprietary trading
and arbitrage activities;
- - EQUITIES. The Firm makes markets in and trades equities and equity-related
products, structures and enters into equity derivative transactions and
engages in proprietary trading and equity arbitrage; and
- - PRINCIPAL INVESTMENTS. Principal investments primarily represents the Firm's
net revenues from its investments in its merchant banking funds.
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<PAGE> 72
The following table sets forth the net revenues of the Firm's Trading and
Principal Investments business:
TRADING AND PRINCIPAL INVESTMENTS NET REVENUES
(in millions)
<TABLE>
<CAPTION>
YEAR ENDED NOVEMBER
------------------------
1996 1997 1998
---- ---- ----
<S> <C> <C> <C>
FICC........................................................ $1,749 $2,055 $1,438
Equities.................................................... 730 573 795
Principal investments....................................... 214 298 146
------ ------ ------
Total Trading and Principal Investments..................... $2,693 $2,926 $2,379
====== ====== ======
</TABLE>
------------------------
FIXED INCOME, CURRENCY AND COMMODITIES
FICC is a large and diversified operation through which we engage in a
variety of customer-driven market making and proprietary trading and arbitrage
activities. FICC's principal products are:
- - Bank loans
- - Commodities
- - Currencies
- - Derivatives
- - Emerging market debt
- - Global government securities
- - High-yield securities
- - Investment grade corporate securities
- - Money market instruments
- - Mortgage securities and loans
- - Municipal securities
We generate trading net revenues from our customer-driven business in three
ways. First, in large, highly liquid markets we undertake a high volume of
transactions for modest spreads. Second, by capitalizing on our strong market
relationships and capital position, we also undertake transactions in less
liquid markets where spreads are generally larger. Finally, we generate net
revenues from structuring and executing transactions that address complex client
needs.
In our proprietary activities, we assume a variety of risks and devote
substantial resources to identify, analyze and benefit from these exposures. We
leverage our strong research capabilities and capitalize on our proprietary
analytical models to analyze information and make informed trading judgments. We
seek to benefit from perceived disparities in the value of assets in the trading
markets and from macroeconomic and company-specific trends.
FICC has established itself as a leading market participant by using a
three-part approach to deliver high quality service to its clients. First, we
offer broad market making, research and market knowledge to our clients on a
global basis. Second, we create innovative solutions to complex client problems
by drawing upon our structuring and trading expertise. Third, we use our
expertise to take positions in markets when we believe the return is at least
commensurate with the risk.
A core activity in FICC is market making in a broad array of securities and
products. For example, we are a primary dealer in many of the largest government
bond markets around the world, including the United States, Japan, the United
Kingdom and Canada; we are a member of the major futures exchanges; and we have
interbank dealer status in the currency markets in New York, London, Tokyo and
Hong Kong. The Firm's willingness to make markets in a broad range of fixed
income, currency and commodity products and their derivatives is crucial both to
the Firm's client relationships and to support its underwriting business by
providing secondary market liquidity. Our clients value counterparties that are
active in the marketplace and are willing to provide liquidity and
research-based points of view. In addition, we believe that our significant
investment in research capabilities and proprietary analytical models are
critical to our ability to provide advice to our clients.
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Our research capabilities include quantitative and qualitative analyses of
global economic, currency and financial market trends, as well as credit
analyses of corporate and sovereign fixed income securities.
Our clients often confront complex problems that require creative
approaches. We assist our clients who seek to hedge or reallocate their risks
and profit from expected price movements. To do this we bring to bear the
ability of our experienced professionals to understand the needs of our clients
and our ability to manage the risks associated with complex solutions to
problems. In recognition of our ability to meet these client needs, we were
ranked by Institutional Investor in February 1999 as the number two derivatives
dealer for the second straight year. In addition, we were named by Euroweek in
January 1999 as the "Best provider of swaps and other derivatives".
EQUITIES
The Firm engages in a variety of market-making, proprietary trading and
arbitrage activities in equity securities and equity-related products (such as
convertible securities and equity derivative instruments) on a global basis.
Goldman Sachs makes markets and positions blocks of stock to facilitate
customers' transactions and to provide liquidity in the marketplace. The Firm is
a member of most of the major stock exchanges, including New York, London,
Frankfurt, Tokyo and Hong Kong.
As agent, the Firm executes brokerage transactions in equity securities for
institutional and individual customers that generate commission revenues.
Commissions earned on agency transactions are recorded in Asset Management and
Securities Services.
In equity trading, as in FICC, the Firm generates net revenues from our
customer-driven business in three ways. First, in large, highly liquid principal
markets, such as the OTC market for equity securities, we undertake a high
volume of transactions for modest spreads. In the Nasdaq National Market, we
were the second largest market maker by aggregate volume in the top 100 most
actively traded stocks in calendar 1998. Second, by capitalizing on our strong
market relationships and capital position, we also undertake large transactions,
such as block trades and positions in securities, in which we benefit from
spreads that are generally larger. Finally, the Firm also benefits from
structuring complex transactions.
Goldman Sachs was a pioneer and is a leader in the execution of large block
trades (trades of 50,000 or more shares) in the United States and abroad. In
calendar 1998, we executed over 50 block trades of at least $100 million each.
The Firm has been able to capitalize on its expertise in block trading, its
global distribution network and its willingness to commit capital to effect
increasingly large and complex customer transactions. We expect corporate
consolidation and restructuring and increased demand for certainty and speed of
execution by sellers and issuers of securities to increase both the frequency
and size of sales of large blocks of equity securities. We believe that we are
well positioned to benefit from this trend. Block transactions, however, expose
the Firm to increased risks, including those arising from holding large and
concentrated positions and decreasing spreads. See "Risk Factors -- Market
Fluctuations Could Adversely Affect Our Businesses in Many Ways -- Concentration
of Risk" for a discussion of the risks associated with holding a large position
in a single issuer and "-- The Financial Services Industry Is Intensely
Competitive and Rapidly Consolidating" for a discussion of the competitive risks
that we face.
The Firm is active in the listed options and futures markets and
structures, distributes and executes OTC derivatives on market indices, industry
groups and individual company stocks to facilitate customer transactions and its
proprietary activities. We develop quantitative strategies and render advice
with respect to portfolio hedging and restructuring and asset allocation
transactions. The Firm also creates specially tailored instruments to enable
sophisticated investors to undertake hedging strategies and establish or
liquidate investment positions. The Firm is one of the leading participants in
the trading and development of equity derivative instruments. The Firm is an
active participant in the trading of
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futures and options on most of the major exchanges in the United States, Europe
and Asia.
Equity arbitrage has long been an important part of our equity franchise.
Our strategy is based on making investments on a global basis through a
diversified portfolio across different markets and event categories. This
business focuses on event-oriented special situations where the Firm is not
acting as an advisor and relative value trades. These special situations include
mergers and acquisitions, corporate restructurings, recapitalizations and legal
and regulatory events. Equity arbitrage leverages the Firm's global
infrastructure and network of research analysts to analyze carefully a broad
range of trading and investment strategies across a wide variety of markets.
Investment decisions are the product of rigorous fundamental, situational and,
frequently, regulatory and legal analysis. Although market conditions led us to
decrease the number and size of positions maintained by our equity arbitrage
business during 1998, we believe that over time, as opportunities present
themselves, our equity arbitrage business will likely increase its activity.
TRADING RISK MANAGEMENT
We believe that our trading and market making capabilities are key
ingredients to our success. While these businesses have generally earned
attractive returns, we have in the past incurred significant trading losses in
periods of market turbulence such as in 1994 and 1998. Our trading risk
management process seeks to balance our ability to profit from trading positions
with our exposure to potential losses. Risk management includes input from all
levels of the Firm, from the trading desks to the Firmwide Risk Committee. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Risk Management" for a further discussion of our risk management
policies and procedures.
1998 EXPERIENCE. From mid-August to mid-October 1998, the Russian economic
crisis, the turmoil in Asian and Latin American emerging markets and the
resulting "flight to quality" by many investors led to substantial declines in
global financial markets. Investors broadly sold credit-sensitive products, such
as corporate and high-yield debt, and bought higher-rated instruments, such as
U.S. Treasury securities, which caused credit spreads to widen dramatically.
This market turmoil also caused a widespread decline in global equity markets.
As a major dealer in fixed income securities, we maintain substantial
inventories of corporate and high-yield debt. In the second half of 1998, we
sought to hedge the interest rate risk on these positions through short
positions in U.S. Treasury securities. As a result, we suffered losses from both
the decline in the prices of corporate and high-yield debt instruments that we
owned and the increase in the prices of the U.S. Treasury securities in which we
had short positions.
These market shocks also led to trading losses in our fixed income relative
value trading positions. Relative value trading positions are intended to profit
from a perceived temporary dislocation in the relationship between the values of
different financial instruments. From mid-August to mid-October 1998, the
components of these relative value positions moved in directions that we did not
anticipate and the volatilities of certain positions increased to three times
prior levels. When we and other market participants with similar positions
simultaneously sought to reduce positions and exposures, this caused a
substantial reduction in market liquidity and a continuing decline in prices.
In the second half of 1998, we also experienced losses in equity arbitrage
and in the value of certain merchant banking investments.
RISK REDUCTION. Over the course of this period, we actively reduced our
positions and exposure to severe market disruptions of the type described above.
Our current scenario models estimate our exposure to a substantial widening in
credit spreads and adverse movements in relative value trades of the type
experienced in mid-August to mid-October 1998. These models indicate that, as of
November 1998, our exposure to a potential reduction in net trading revenues as
a result
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of these events was over 40% lower than in August 1998. In addition, the daily
VaR of substantially all of our trading positions declined from $47 million as
of May 29, 1998 to $43 million as of November 1998. The November 1998 daily VaR
reflects the reduction in positions discussed above, offset by the higher market
volatility, changes in correlation and other market conditions experienced in
the second half of 1998. If the daily VaR as of November 1998 had been
determined using the volatility and correlation data as of May 29, 1998, the
daily VaR would have been $31 million. See "Management's Discussion and Analysis
of Financial Condition and Results of Operations -- Risk Management" for a
discussion of VaR and its limitations.
As part of the continuous effort to refine our risk management policies and
procedures, we have recently made a number of adjustments to the way that we
evaluate risk and set risk limits. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Risk Management -- Market Risk"
for a further discussion of our policies and procedures for evaluating market
risk and setting related limits.
Notwithstanding these actions, the Firm continues to hold trading positions
that are substantial in both number and size, and is subject to significant
market risk. In addition, management may choose to increase the Firm's risk
levels in the future. See "Risk Factors -- Market Fluctuations Could Adversely
Affect Our Businesses in Many Ways" and "-- Our Risk Management Policies and
Procedures May Leave Us Exposed to Unidentified or Unanticipated Risk" for a
discussion of the risks associated with the Firm's trading positions.
PRINCIPAL INVESTMENTS
In connection with its merchant banking activities, the Firm invests with
its clients by making principal investments in funds that it raises and manages.
As of November 1998, the Firm had committed $2.8 billion, of which $1.7 billion
had been funded, of the $15.5 billion total equity capital committed for its
merchant banking funds. The funds' investments generate capital appreciation or
depreciation and, upon disposition, realized gains or losses. See "-- Asset
Management and Securities Services -- Merchant Banking" for a discussion of our
merchant banking funds. As of November 1998, the Firm's aggregate carrying value
of its principal investments held directly or through its merchant banking funds
was approximately $1.4 billion, which was comprised of corporate principal
investments with an aggregate carrying value of approximately $609 million and
real estate investments with an aggregate carrying value of approximately $753
million.
ASSET MANAGEMENT AND SECURITIES SERVICES
Asset Management and Securities Services is comprised of the following:
- - ASSET MANAGEMENT. Asset management generates management fees by providing
investment advisory services to a diverse and rapidly growing client base of
institutions and individuals;
- - SECURITIES SERVICES. Securities services includes prime brokerage, financing
services and securities lending and the Firm's matched book businesses, all of
which generate revenue primarily in the form of fees or interest rate spreads;
and
- - COMMISSIONS. Commission-based businesses include agency transactions for
clients on major stock and futures exchanges. Overrides derived from the
Firm's merchant banking funds are also included in commissions.
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The following table sets forth the net revenues of the Firm's Asset
Management and Securities Services business:
ASSET MANAGEMENT AND SECURITIES SERVICES NET REVENUES
(in millions)
<TABLE>
<CAPTION>
YEAR ENDED NOVEMBER
--------------------------
1996 1997 1998
---- ---- ----
<S> <C> <C> <C>
Asset management............................................ $ 242 $ 458 $ 675
Securities services......................................... 354 487 730
Commissions................................................. 727 989 1,368
------ ------ ------
Total Asset Management and Securities Services.............. $1,323 $1,934 $2,773
====== ====== ======
</TABLE>
------------------------
ASSET MANAGEMENT
The Firm is seeking to build a premier global asset management business. We
offer a broad array of investment strategies and advice across all major asset
classes: global equity, fixed income (including money markets), currency and
alternative investment products (i.e., investment vehicles with non-traditional
investment objectives and/or strategies). Assets under supervision are comprised
of assets under management and other client assets. Assets under management
typically generate fees based on a percentage of their value and include our
mutual funds, separate accounts managed for institutional and individual
investors, our merchant banking funds and other alternative investment funds.
Other client assets are comprised of assets in brokerage accounts of primarily
high net worth individuals, on which we earn commissions.
Over the last five years, the Firm has rapidly grown its assets under
supervision, as set forth in the graph below:
ASSETS UNDER SUPERVISION
(in billions)
<TABLE>
<CAPTION>
Assets under
management Other client assets Totals
<S> <C> <C> <C>
'1994' 44 49 $ 93
'1995' 52 58 110
'1996' 94 77 171
'1997' 136 102 238
'1998' 195 142 337
</TABLE>
------------------------
As of November 1998, equities and alternative investments represented 51%
of our total assets under management. Since 1996, these two asset classes have
been the primary drivers of our growth in assets under management. The Firm had
net asset inflows that averaged over $125 million per business day during 1998,
excluding market appreciation. In 1998, approximately 80% of the increase in
assets under management was
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attributable to net asset inflows, with the remaining 20% reflecting market
appreciation.
The following table sets forth the amount of assets under management by
asset class:
ASSETS UNDER MANAGEMENT BY ASSET CLASS
(in billions)
<TABLE>
<CAPTION>
AS OF NOVEMBER
------------------------------------
1994 1995 1996 1997 1998
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
ASSET CLASS
Equity.............................................. $ 6 $ 9 $ 34 $ 52 $ 69
Fixed income and currency........................... 17 19 26 36 50
Money markets....................................... 18 20 27 31 46
Alternative investment(1)........................... 3 4 8 17 30
--- ---- ---- ---- ----
Total............................................... $44 $ 52 $ 95 $136 $195
=== ==== ==== ==== ====
</TABLE>
- ---------------
(1) Includes private equity, real estate, quantitative asset allocation and
other funds that are managed by the Firm.
------------------------
Since the beginning of 1996, we have increased the resources devoted to the
asset management business, including adding over 850 employees. In addition,
over the past three years, the Firm has made three asset management acquisitions
in order to expand its geographic reach and broaden its global equity and
alternative investment portfolio management capabilities.
The Firm's global reach has been important in growing assets under
management. From November 1996 to November 1998, our assets under management,
excluding our merchant banking funds, sourced from outside the United States
grew by over $30 billion. As of November 1998, we managed approximately $40
billion sourced from Europe.
In Japan, deregulation, high individual savings rates and low local rates
of return have been important drivers of growth for our asset management
business during the 1990s. Over the last three years, we have built a
significant asset management business in Japan, and, as of January 31, 1999, we
managed $24 billion of assets sourced from Japan. In Japan, as of January 31,
1999, we were the largest non-Japanese investment trust manager, according to
The Investment Trusts Association, and we managed four of the top 15 open-ended
mutual funds ranked by mutual fund assets, according to IFIS Inc. We believe
that substantial opportunities exist to grow our asset management business in
Japan, by increasing our institutional client base and expanding the third-party
distribution network through which we offer our mutual funds.
CLIENTS. Our primary clients are institutions, high net worth individuals
and retail investors. We access clients through both direct and third-party
channels.
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The table below sets forth the amount of assets under supervision by
distribution channel and client category as of November 1998:
ASSETS UNDER SUPERVISION BY DISTRIBUTION CHANNEL
(in billions)
<TABLE>
<CAPTION>
ASSETS UNDER
SUPERVISION(1) PRIMARY INVESTMENT VEHICLES
-------------- ---------------------------
<S> <C> <C>
- - Directly distributed
-- Institutional.............. $ 121 Separate managed accounts
Commingled vehicles
-- High net worth
individuals................ 156 Brokerage accounts
Limited partnerships
Separate managed accounts
- - Third-party distributed
-- Institutional and retail... 48 Mutual funds
------
Total........................... $ 325
======
</TABLE>
- ---------------
(1) Excludes $12 billion in our merchant banking funds.
------------------------
Our institutional clients include corporations, insurance companies,
pension funds, foundations and endowments. We managed assets for three of the
five largest pension pools in the United States as ranked as of September 30,
1998 by Pensions & Investments and we have 17 clients for whom we manage at
least $1 billion each.
In the individual high net worth area, we have established approximately
10,000 high net worth accounts worldwide, including accounts with 41% of the
1998 "Forbes 400 List of the Richest Americans". We believe this is a high
growth opportunity because this market (defined as the market for individual
investors with a net worth in excess of $5 million) is highly fragmented,
growing rapidly and accounts for approximately $10 trillion of investable assets
according to a study by McKinsey & Co. At the center of our effort is a team of
over 420 relationship managers, located in 12 U.S. and six international
offices. These professionals have an average of over seven years of experience
at the Firm and have exhibited low turnover and superior productivity relative
to the industry average.
In the third-party distribution channel, we distribute our mutual funds on
a worldwide basis through banks, brokerage firms, insurance companies and other
financial intermediaries. As of December 31, 1998, we were the third largest
manager in the U.S. institutional money market sector according to information
compiled by Strategic Insight. In Japan, we also utilize a third-party
distribution network consisting principally of the largest Japanese brokerage
firms.
MERCHANT BANKING
The Firm has an established successful record in the corporate and real
estate merchant banking business, having raised $15.5 billion of committed
capital for 15 private investment funds, as of November 1998, of which $9.0
billion had been funded. The Firm has committed $2.8 billion and funded $1.7
billion of these amounts; clients of the Firm, including pension plans,
endowments, charitable institutions and high net worth individuals, have
provided the remainder. Some of these investment funds pursue, on a global
basis, long-term investments in equity and debt securities in privately
negotiated transactions, leveraged buyouts and acquisitions. As of November
1998, these funds had total committed capital of $7.7 billion, which includes
two funds with $1.0 billion of committed capital that are in the process of
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being wound down. Other funds, with total committed capital of $7.8 billion as
of November 1998, invest in real estate operating companies and debt and equity
interests in real estate assets.
Our strategy with respect to each merchant banking fund is to invest
opportunistically to build a portfolio of investments that is diversified by
industry, product type, geographic region and transaction structure and type.
Our merchant banking funds leverage the Firm's long-standing relationships with
companies, investors, entrepreneurs and financial intermediaries around the
world to source potential investment opportunities. In addition, our merchant
banking funds and their portfolio companies have generated business for other
areas of the Firm, including equity underwriting, leveraged and other financing
fees and merger advisory fees.
Located in eight offices around the world, our investment professionals
identify, manage and sell investments on behalf of our merchant banking funds.
The Firm has two subsidiaries that manage real estate assets, Archon and Archon
France. In addition, our merchant banking professionals work closely with other
areas of the Firm and benefit from the expertise of specialists in debt and
equity research, investment banking, leveraged and mortgage finance and equity
capital markets.
Merchant banking activities generate three revenue streams. First, the Firm
receives a management fee that is generally a percentage of a fund's committed
capital, invested capital, total gross acquisition cost or asset value. These
annual management fees, which are included in our asset management revenues,
have historically been a recurring source of revenue. Second, the Firm receives
from each fund, after that fund has achieved a minimum return for fund
investors, an increased share of the fund's income and gains ("override") which
is a percentage, typically 20%, of the capital appreciation and gains from the
fund's investments. Revenues from overrides are included in commissions. Third,
the Firm, as a substantial investor in these funds, is allocated its
proportionate share of the funds' unrealized appreciation or depreciation
arising from changes in fair value as well as gains and losses upon realization.
These items are included in Trading and Principal Investments.
SECURITIES SERVICES
Securities services consists predominantly of Global Securities Services,
which provides prime brokerage, financing services and securities lending to a
diversified U.S. and international customer base, including hedge funds, pension
funds and high net worth individuals. Securities services also includes the
Firm's matched book businesses.
We offer prime brokerage services to our clients, allowing them the
flexibility to trade with most brokers while maintaining a single source for
financing and portfolio reports. Our prime brokerage activities provide
multi-product clearing and custody in 50 markets, consolidated multi-currency
accounting and reporting and offshore fund administration and servicing for our
most active clients. Additionally, we provide financing to our clients through
margin loans collateralized by securities held in the client's account. In
recent years, the Firm has significantly increased its prime brokerage client
base.
Securities lending activities principally involve the borrowing and lending
of equity securities to cover customer and Firm short sales and to finance the
Firm's long positions. In addition, we are an active participant in the
securities lending broker-to-broker business and the third-party agency lending
business. Trading desks in New York, Boston, London, Tokyo and Hong Kong provide
24-hour coverage in equity markets worldwide. We believe the rapidly developing
international stock lending market presents a significant growth opportunity for
us.
Lenders of securities include pension plan sponsors, mutual funds,
insurance companies, investment advisors, endowments, bank trust departments and
individuals. We have entered into exclusive relationships with certain lenders
that have given us access to large pools of securities, certain of which are
often hard to locate in the general lender market, thereby providing us with a
competitive advantage. The Firm believes that a significant cause of the growth
in short sales,
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which require the borrowing of securities, has been the rapid increase in
complex trading strategies such as index arbitrage, convertible bond and warrant
arbitrage, option strategies, and sector and market neutral strategies where
shares are sold short to hedge exposure from derivative instruments.
COMMISSIONS
The Firm generates commissions by executing agency transactions on major
stock and futures exchanges worldwide. The Firm effects agency transactions for
clients located throughout the world. In recent years, aggregate commissions
have increased as a result of growth in transaction volume on the major
exchanges. As discussed above, commissions also include overrides from merchant
banking funds and commissions earned from brokerage transactions for high net
worth individuals. For a discussion regarding overrides, see "-- Merchant
Banking" above, and for a discussion regarding high net worth individuals, see
"-- Asset Management -- Clients" above.
In anticipation of continued growth in electronic connectivity and online
trading, the Firm has made strategic investments in alternative trading systems
to gain experience and participate in the development of this market. See "Risk
Factors -- The Financial Services Industry Is Intensely Competitive and Rapidly
Consolidating -- Competition from Alternative Trading Systems" for a discussion
of the competitive risks posed by these alternative trading systems.
GLOBAL INVESTMENT RESEARCH
The Global Investment Research Department provides fundamental research on
economies, debt and equity markets, commodities markets, industries and
companies on a worldwide basis. For over two decades, the Firm has committed the
resources on a global scale to develop an industry-leading position for its
investment research products. We believe that investment research is a
significant factor in the Firm's strong competitive position in debt and equity
underwritings and in its generation of commission revenues.
Major investors worldwide recognize the Firm for its value-added research
products, which are highly rated in client polls across the Americas, Europe and
Asia. The Firm's Research Department is the only one to rank in the top three in
each of the last 15 calendar years in Institutional Investor's "All-America
Research Team" survey. In December 1998, the Research Department also achieved
top honors for global investment research from Institutional Investor. In
Europe, based on the Institutional Investor "1999 All-Europe Research Team"
survey, the Research Department ranked number one for coverage of pan-European
sectors and number three in European Strategy and Economics.
Global Investment Research employs a team approach that provides equity
research coverage of approximately 2,300 companies worldwide, 53 economies and
26 stock markets. This is accomplished through four groups:
- - the Economic Research group, which formulates macroeconomic forecasts for
economic activity, foreign exchange, and interest rates based on the globally
coordinated views of its regional economists;
- - the Portfolio Strategy group, which forecasts equity market returns and
provides recommendations on both asset allocation and industry representation;
- - the Company/Industry group, which provides fundamental analysis, forecasts and
investment recommendations for companies and industries worldwide. Equity
research analysts are organized regionally by sector and globally into more
than 20 industry teams, which allows for extensive collaboration and knowledge
sharing on important investment themes; and
- - the Commodities Research group, which provides research on the global
commodity markets.
INFORMATION TECHNOLOGY
Technology is fundamental to our overall business strategy. The Firm is
committed to the ongoing development, maintenance and use of technology
throughout the organization, with expenditures, including employee
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costs, of approximately $970 million in 1998 and a budget of $1.2 billion in
1999. The Firm has developed significant software and systems over the past
several years. Our technology initiatives can be broadly categorized into three
efforts:
- - enhancing client service through increased connectivity and the provision of
high value-added, tailored services;
- - risk management; and
- - overall efficiency and control.
We have tailored our services to our clients by providing them with
electronic access to our products and services. For example, we developed the GS
Financial Workbench(SM), an Internet web site that clients and employees can use
to download research reports, access earnings and valuation models, submit
trades, monitor accounts, build and view presentations, calculate derivative
prices and view market data. First made available in early 1995, the GS
Financial Workbench(SM) represents a joint effort among all of our business
areas to create one comprehensive site for clients and employees to access the
Firm's products and services.
We have also developed software that enables us to monitor and analyze our
market and credit risks. This risk management software not only analyzes market
risk on Firmwide, divisional and trading desk levels, but also breaks down the
Firm's risk into its underlying exposures, thereby permitting management to
evaluate exposures on the basis of specific interest rate, currency rate, equity
price or commodity price changes. To assist further in the management of the
Firm's credit exposures, data from many sources are aggregated daily into credit
management systems that give senior management and professionals in the Credit
and Controllers Departments the ability to receive timely information with
respect to credit exposures worldwide, including netting information, and the
ability to analyze complex risk situations effectively. Our software accesses
these data, allows for quick analysis at the level of individual trades and
interacts with other systems in the Firm.
Technology has been a significant factor in improving the overall
efficiency of many areas of the Firm. By automating many trading procedures, we
have substantially increased our efficiency and accuracy.
The Firm currently has projects under way to ensure that the Firm's
technology is Year 2000 compliant. See "Risk Factors -- Firm and Third-Party
Computer Systems May Not Achieve Year 2000 Readiness -- Year 2000 Readiness
Disclosure" and "Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Risk Management -- Operational and Year 2000
Risks -- Year 2000 Readiness Disclosure" for a further discussion of the risks
we face in achieving Year 2000 readiness and our progress to date.
EMPLOYEES
Management believes that one of the strengths and principal reasons for the
success of Goldman Sachs is the quality and dedication of its people and the
shared sense of being part of a team. The Firm was ranked number seven in
Fortune magazine's "The 100 Best Companies to Work for in America" in January
1999 and was ranked number three in Fortune magazine's 1999 "The Top 50 MBA
Dream Companies", the highest ranking investment banking and securities firm in
each case. The Firm strives to maintain a work environment that fosters
professionalism, excellence, diversity and cooperation among its employees
worldwide.
Instilling the Goldman Sachs culture in all employees is a continuous
process, of which training is an essential part. The Firm recently opened a
34,000 square foot training center in New York City, near its world
headquarters. All employees are offered the opportunity to participate in
Firm-sponsored education and periodic seminars that are held at various
locations throughout the world. The Firm also sponsors off-site meetings for the
various business units that are designed to promote collaboration among
co-workers.
Another important part of instilling the Goldman Sachs culture in all
employees is the Firm's employee review process. Employees are reviewed by
supervisors, co-workers and
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employees they supervise in a 360-degree review process that is integral to the
Firm's team approach. In 1998, over 140,000 reviews were completed, evidencing
the comprehensive nature of this process.
The Firm also believes that good citizenship is an important part of being
a member of the Goldman Sachs team. To that end, the Firm established its
Community TeamWorks initiative in 1997. As part of Community TeamWorks, all
employees are offered the opportunity to spend a day working at a charitable
organization of their choice while continuing to receive their full salary for
that day. In 1998, approximately two-thirds of the Firm's employees participated
in Community TeamWorks. The commitment of the Firm's partners to the community
is also demonstrated by their having given over $90 million in each of the last
two years to charities, including private foundations.
As of November 1998, we had approximately 13,000 employees. In addition,
Archon and Archon France, subsidiaries of the Firm that provide real estate
services for the Firm's real estate investment funds, had approximately 1,000
and 170 employees, respectively, as of November 1998. The Firm is reimbursed for
substantially all of the costs of these employees by these funds.
See "Management -- The Employee IPO Awards" for a discussion of the steps
taken by the Firm to encourage the continued service of its employees after the
Offerings and see "Risk Factors -- Our Conversion to Corporate Form May
Adversely Affect Our Ability to Recruit, Retain and Motivate Key Employees" for
a discussion of the factors that may have an adverse impact on the effectiveness
of these efforts.
COMPETITION
The financial services industry -- and all of our businesses -- are
intensely competitive, and we expect them to remain so. Our competitors are
other brokers and dealers, investment banking firms, insurance companies,
investment advisors, mutual funds, hedge funds, commercial banks and merchant
banks. We compete with some of our competitors globally and with some others on
a regional, product or niche basis. We compete on the basis of a number of
factors, including transaction execution, our products and services, innovation,
reputation and price.
Competition is also intense for the attraction and retention of qualified
employees. Our ability to continue to compete effectively in our businesses will
depend upon our ability to attract new employees and retain and motivate our
existing employees. See "-- Employees" for a discussion of our efforts in this
regard.
In recent years there has been substantial consolidation and convergence
among companies in the financial services industry. In particular, a number of
large commercial banks, insurance companies and other broad-based financial
services firms have established or acquired broker-dealers or have merged with
other financial institutions. Many of these firms have the ability to offer a
wide range of products, from loans, deposit-taking and insurance to brokerage,
asset management and investment banking services, which may enhance their
competitive position. They also have the ability to support investment banking
and securities products with commercial banking, insurance and other financial
services revenues in an effort to gain market share, which could result in
pricing pressure in our businesses.
This trend toward consolidation and convergence has significantly increased
the capital base and geographic reach of our competitors. This trend has also
hastened the globalization of the securities and other financial services
markets. As a result, we have had to commit capital to support our international
operations and to execute large global transactions.
We believe that some of our most significant challenges and opportunities
will arise outside the United States. See "Industry and Economic Outlook" for a
discussion of these challenges and opportunities. In order to take advantage of
these opportunities, we will have to compete successfully with financial
institutions based in important non-U.S. markets, particularly in Europe.
Certain of these institutions are larger, better capitalized and
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have a stronger local presence and a longer operating history in these markets.
We have experienced intense price competition in certain businesses in
recent years. For example, equity and debt underwriting discounts have been
under pressure for a number of years and the ability to execute trades
electronically, through the Internet and other alternative trading systems may
increase the pressure on trading commissions. It appears that this trend toward
alternative trading systems will continue and perhaps accelerate. Similarly,
underwriting spreads in Latin American and other privatizations have been
subject to considerable pressure in the last year. We believe that we may
experience pricing pressures in these and other areas in the future as some of
our competitors seek to obtain market share by reducing prices.
See "Risk Factors -- The Financial Services Industry Is Intensely
Competitive and Rapidly Consolidating" for a discussion of the competitive risks
we face in our businesses.
REGULATION
Goldman Sachs' business is, and the securities and commodity futures and
options industries generally are, subject to extensive regulation in the United
States and elsewhere. As a matter of public policy, regulatory bodies in the
United States and the rest of the world are charged with safeguarding the
integrity of the securities and other financial markets and with protecting the
interests of customers participating in those markets, not with protecting the
interests of Goldman Sachs' shareholders or creditors. In the United States, the
SEC is the federal agency responsible for the administration of the federal
securities laws. GS&Co. is registered as a broker-dealer and as an investment
adviser with the SEC and as a broker-dealer in all 50 states and the District of
Columbia. Certain self-regulatory organizations, such as the NYSE, adopt rules
and examine broker-dealers, such as GS&Co. In addition, state securities and
certain other regulators also have regulatory or oversight authority over GS&Co.
Similarly, Goldman Sachs' business is also subject to regulation by various
non-U.S. governmental and regulatory bodies and self-regulatory authorities in
virtually all countries where the Firm has offices.
Broker-dealers are subject to regulations that cover all aspects of the
securities business, including sales methods, trade practices among
broker-dealers, use and safekeeping of customers' funds and securities, capital
structure, record-keeping, the financing of customers' purchases and the conduct
of directors, officers and employees. Additional legislation, changes in rules
promulgated by self-regulatory organizations or changes in the interpretation or
enforcement of existing laws and rules, either in the United States or
elsewhere, may directly affect the mode of operation and profitability of
Goldman Sachs.
The U.S. and non-U.S. government agencies and self-regulatory
organizations, as well as state securities commissions in the United States, are
empowered to conduct administrative proceedings that can result in censure,
fine, the issuance of cease-and-desist orders or the suspension or expulsion of
a broker-dealer or its directors, officers or employees. Occasionally, the
Firm's subsidiaries have been subject to investigations and proceedings, and
sanctions have been imposed for infractions of various regulations relating to
the Firm's activities, none of which has had a material adverse effect on
Goldman Sachs or its business.
The commodity futures and options industry in the United States is subject
to regulation under the Commodity Exchange Act, as amended ("CEA"). The CFTC is
the federal agency charged with the administration of the CEA and the
regulations thereunder. GS&Co. is registered with the CFTC as a futures
commission merchant, commodity pool operator and commodity trading advisor.
As a registered broker-dealer and member of various self-regulatory
organizations, GS&Co. is subject to the SEC's Rule 15c3-1 (the "Uniform Net
Capital Rule"). The Uniform Net Capital Rule specifies the minimum level of net
capital a broker-dealer must maintain and also requires that at least a minimum
part of its assets be kept in relatively liquid form. GS&Co. is also subject to
the net capital requirements of the CFTC and various securities and commodity
exchanges.
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See Note 8 to the consolidated financial statements for a discussion of the
Firm's net capital.
The SEC and various self-regulatory organizations impose rules that require
notification when net capital falls below certain predefined criteria, dictate
the ratio of subordinated debt to equity in the regulatory capital composition
of a broker-dealer and constrain the ability of a broker-dealer to expand its
business under certain circumstances. Additionally, the Uniform Net Capital Rule
imposes certain requirements that may have the effect of prohibiting a
broker-dealer from distributing or withdrawing capital and requiring prior
notice to the SEC for certain withdrawals of capital.
In January 1999, the SEC adopted revisions to the Uniform Net Capital Rule
and related regulations that permit the registration of OTC derivatives dealers
as broker-dealers. An OTC derivatives dealer can, upon adoption of a risk
management framework in accordance with the new rules, utilize a capital
requirement based upon proprietary models for estimating market risk exposures.
The Firm has established Goldman Sachs Financial Markets, L.P. and is in the
process of registering this company with the SEC as an OTC derivatives dealer to
conduct in a more capital efficient manner certain OTC derivative businesses now
conducted in other affiliates.
Goldman Sachs is an active participant in the international fixed income
and equity markets. Many of the Firm's affiliates that participate in those
markets are subject to comprehensive regulations that include some form of
capital adequacy rule and other customer protection rules. For example, Goldman
Sachs provides investment services in and from the United Kingdom under a
regulatory regime that is undergoing comprehensive restructuring aimed at
implementing the FSA as the United Kingdom's unified regulator. The relevant
Goldman Sachs entities in London are at present regulated by the SFA in respect
of their investment banking, individual asset management, brokerage and
principal trading activities, and the Investment Management Regulatory
Organization ("IMRO") in respect of their institutional asset management and
fund management activities. Certain of these Goldman Sachs entities are also
regulated by the London Stock Exchange and other U.K. securities and commodities
exchanges of which they are members. It is expected, however, that commencing in
2000 the responsibilities of the SFA and IMRO will be taken over by the FSA. The
investment services that are subject to oversight by U.K. regulators are
regulated in accordance with European Union directives requiring, among other
things, compliance with certain capital adequacy standards, customer protection
requirements and conduct of business rules. These standards, requirements and
rules are similarly implemented, under the same directives, throughout the
European Union and are broadly comparable in scope and purpose to the regulatory
capital and customer protection requirements imposed under the SEC and CFTC
rules. European Union directives also permit local regulation in each
jurisdiction, including those in which the Firm operates, to be more restrictive
than the requirements of such directives and these local requirements can result
in certain competitive disadvantages to the Firm. In addition, the Japanese
Ministry of Finance and the Financial Supervisory Agency in Japan as well as
German, French and Swiss banking authorities, among others, regulate various of
the Firm's subsidiaries and also have capital standards and other requirements
comparable to the rules of the SEC.
Compliance with net capital requirements of these and other regulators
could limit those operations of the Firm's subsidiaries that require the
intensive use of capital, such as underwriting and trading activities and the
financing of customer account balances, and also could restrict the Firm's
ability to withdraw capital from its regulated subsidiaries, which in turn could
limit the Firm's ability to repay debt or pay dividends on the Common Stock.
LEGAL MATTERS
We are involved in a number of judicial, regulatory and arbitration
proceedings (including those described below) concerning matters arising in
connection with the conduct of our businesses. We believe, based on
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currently available information, that the results of such proceedings, in the
aggregate, will not have a material adverse effect on our financial condition,
but might be material to our operating results for any particular period,
depending, in part, upon the operating results for such period.
MOBILEMEDIA SECURITIES LITIGATION
GS&Co. has been named as a defendant in a purported class action lawsuit
commenced in December 1996 and pending in federal court in New Jersey. This
lawsuit was brought on behalf of purchasers of common stock of MobileMedia
Corporation ("MobileMedia") in an underwritten offering in 1995 and purchasers
of senior subordinated notes of MobileMedia Communications Inc. in a concurrent
underwritten offering. Defendants are MobileMedia, certain of its officers and
directors, and the lead underwriters, including GS&Co. MobileMedia is currently
reorganizing in bankruptcy.
GS&Co. underwrote 2,242,500 shares of common stock, for a total price of
approximately $53 million, and GSI underwrote 718,750 shares, for a total price
of approximately $17 million. GS&Co. underwrote approximately $38 million in
principal amount of the senior subordinated notes.
The consolidated class action complaint alleges violations of the
disclosure requirements of the federal securities laws and seeks compensatory
and/or rescissory damages. In light of MobileMedia's bankruptcy, the action
against it has been stayed. Defendants' motion to dismiss was denied in October
1998.
UNDERWRITERS ANTITRUST LITIGATION
GS&Co. is one of numerous financial services companies that have been named
as defendants in certain purported class actions brought in New York federal
court by purchasers of securities in public offerings, who claim that the
defendants engaged in conspiracies in violation of federal antitrust laws in
connection with these offerings. The plaintiffs in each instance seek treble
damages as well as injunctive relief. One of the actions, which was commenced in
August 1998, alleges that the defendants have conspired to discourage or
restrict the resale of securities for a period after the offerings, including by
imposing "penalty bids." Defendants moved to dismiss the complaint in November
1998. The plaintiffs amended their complaint in February 1999, modifying their
claims in various ways, including limiting the proposed class to retail
purchasers of public offerings. Several other actions, commenced in November and
December 1998, allege that the defendants, many of whom are also named in the
other action discussed above, have conspired to fix at 7% the discount that
underwriting syndicates receive from issuers of shares in certain offerings.
ROCKEFELLER CENTER PROPERTIES, INC. LITIGATION
Several former shareholders of Rockefeller Center Properties, Inc. ("RCPI")
brought purported class actions in the federal and state courts in Delaware
arising from the acquisition of RCPI by an investor group in July 1996. The
defendants in the actions include, among others, GS&Co., Whitehall Real Estate
Partnership V, a fund advised by GS&Co., a GS&Co. Managing Director and other
members of the investor group. The federal court actions, which have since been
consolidated, were filed beginning in November 1996, and the state court action
was filed in June 1998.
The complaints generally allege that the proxy statement disseminated to
former RCPI stockholders in connection with the transaction was deficient, in
violation of the disclosure requirements of the federal securities laws. The
plaintiffs are seeking, among other things, unspecified damages, rescission of
the acquisition, and/or disgorgement.
In a series of decisions, the federal court has granted summary judgment
dismissing all the claims in the federal action. The plaintiffs have appealed
those rulings.
The state action has been stayed pending disposition of the federal action.
REICHHOLD CHEMICALS LITIGATION
Reichhold Chemicals, Inc. and Reichhold Norway ASA (collectively,
"Reichhold")
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brought a claim in March 1998 in the Commercial Court in London against GSI in
relation to Reichhold's 1997 purchase of the polymer division of one of GSI's
Norwegian clients, Jotun A/S. Reichhold claims that it overpaid by $40 million
based upon misrepresentations concerning the financial performance of the
polymer division.
In November 1998, the Commercial Court granted GSI's application for a stay
of the action pending the outcome of arbitration proceedings between Reichhold
and Jotun A/S in Norway. The stay order is currently being reviewed by an
appellate court.
MATTERS RELATING TO MUNICIPAL SECURITIES
GS&Co., together with a number of other firms active in the municipal
securities area, has received requests beginning in June 1995 for information
from the SEC and certain other federal and state agencies and authorities with
respect to the pricing of escrow securities sold by GS&Co. to certain municipal
bond issuers in connection with the advanced refunding of municipal securities.
GS&Co. understands that certain municipal bond issuers to which GS&Co. sold
escrow securities have also received such inquiries.
There have been published reports that an action under the Federal False
Claims Act was filed in February 1995 alleging unlawful and undisclosed
overcharges in certain advance refunding transactions by a private plaintiff on
behalf of the United States and that GS&Co., together with a number of other
firms, is a named defendant in that action. The complaint was reportedly filed
under seal while the government determines whether it will pursue the claims
directly.
GS&Co. is also one of many municipal underwriting firms that have been
named as defendants in a purported class action brought in Florida federal court
by the Clerk of Collier County, Florida on behalf of municipal issuers which
purchased escrow securities since October 1986 in connection with advance
refundings. The complaint alleges that the securities were excessively "marked
up" in violation of the Investment Advisers Act and Florida law, and seeks to
recover the difference between the actual and alleged "fair" prices. The
plaintiff has undertaken to file an amended complaint before the defendants
respond.
PROPERTIES
Our principal executive offices are located at 85 Broad Street, New York,
New York, and comprise approximately 969,000 square feet of leased space,
pursuant to a lease agreement expiring in June 2008 (with an option to renew for
up to 20 additional years). We also occupy over 500,000 square feet at each of 1
New York Plaza and 10 Hanover Square in New York, New York, pursuant to lease
agreements expiring in September 2004 (with an option to renew for ten years)
and June 2018, respectively. We also have a 15-year lease for approximately
590,000 square feet at 180 Maiden Lane in New York, New York, that expires in
March 2014. In total, the Firm leases over 3.1 million square feet in the New
York area, having more than doubled its space since November 1996. We have
additional offices in the United States and elsewhere in the Americas. Together,
these offices comprise approximately 560,000 square feet of leased space.
Consistent with the Firm's global approach to its business, we also have
offices in Europe, Asia, Africa and Australia. In Europe, we have offices that
total approximately 685,000 square feet. The Firm's largest presence in Europe
is in London, where we lease approximately 536,000 square feet through various
leases, with the principal one, for Peterborough Court, expiring in 2016. An
additional 396,000 square feet of leased space in London is expected to be
occupied during 2001.
In Asia, we have offices that total approximately 360,000 square feet. Our
largest offices in these regions are in Tokyo and Hong Kong. In Tokyo, we
currently lease approximately 175,000 square feet under a lease that expires in
June 2005. In Hong Kong, we currently lease approximately 103,000 square feet
under a lease that expires in May 2000. We recently entered into a new 12-year
lease in Hong Kong for approximately 190,000 square feet. There are also
significant expan-
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sion efforts underway in Tokyo and Singapore.
The Firm's space requirements have increased significantly over the last
several years. Currently, the Firm is at or near capacity at most of its
locations. As a result, the Firm has been actively leasing additional space to
support its anticipated growth. Based on the Firm's progress to date, the Firm
believes that it will be able to acquire additional space to meet its
anticipated needs.
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MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
Set forth below is information concerning the persons who will be the
directors and executive officers of the Company as of the date of the Offerings.
The Company anticipates appointing additional directors who are not employees of
the Company or affiliated with management after completion of the Offerings.
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Henry M. Paulson, Jr. 52 Director, Chairman and Chief Executive Officer
Robert J. Hurst 53 Director and Vice Chairman
John A. Thain 43 Director, President and Co-Chief Operating Officer
John L. Thornton 45 Director, President and Co-Chief Operating Officer
John L. Weinberg 74 Director
Robert J. Katz 51 General Counsel
Gregory K. Palm 50 General Counsel
Robin Neustein 45 Chief of Staff
Leslie M. Tortora 42 Chief Information Officer
David A. Viniar 43 Chief Financial Officer
Barry L. Zubrow 46 Chief Administrative Officer
</TABLE>
------------------------
Executive officers are appointed by and serve at the pleasure of the Board
of Directors. A brief biography of each director and executive officer follows.
Mr. Paulson has been Co-Chairman and Chief Executive Officer or Co-Chief
Executive Officer of Group L.P. since June 1998 and served as Chief Operating
Officer from December 1994 to June 1998. From 1990 to November 1994, he was
Co-Head of Investment Banking.
Mr. Hurst has been Vice Chairman of Group L.P. since February 1997 and has
served as Head or Co-Head of Investment Banking since 1990. He is also a
director of VF Corporation and IDB Holding Corporation Ltd.
Mr. Thain has been President of Group L.P. since March 1999 and Co-Chief
Operating Officer since January 1999. From December 1994 to March 1999, he
served as Chief Financial Officer and Head of Operations, Technology and
Finance. From July 1995 to September 1997, he was also Co-Chief Executive
Officer for European Operations. In 1990, Mr. Thain transferred from FICC to
Operations, Technology and Finance to assume responsibility for Controllers and
Treasury. From 1985 to 1990, Mr. Thain was in FICC where he established and
served as Co-Head of the Mortgage Securities Department. Mr. Thain is a director
of The Depository Trust Company.
Mr. Thornton has been President of Group L.P. since March 1999 and Co-Chief
Operating Officer of Group L.P. since January 1999. From August 1998 until
January 1999, he had oversight responsibility for International Operations. From
September 1996 until August 1998, he was Chairman, Goldman Sachs -- Asia, in
addition to his senior strategic responsibilities in Europe. From July 1995 to
September 1997, he was Co-Chief Executive Officer for European Operations. From
1994 to 1995, he was Co-Head of Investment Banking in Europe and from 1992 to
1994 was Head of European Investment Banking Services. Mr. Thornton is also a
director of the Ford Motor Company, BSkyB PLC, Laura Ashley PLC and the Pacific
Century Group.
Mr. Weinberg has been Senior Chairman of Group L.P. since 1990. From 1984
to 1990, he was Senior Partner and Chairman and, from 1976 to 1984, he served
both as Senior Partner and Co-Chairman. Mr. Weinberg is a director of
Knight-Ridder, Inc., Providian Financial Corp. and Tricon Global Restaurants,
Inc.
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Mr. Katz has been General Counsel of Group L.P. since 1988. From 1980 to
1988, Mr. Katz was a partner in Sullivan & Cromwell.
Mr. Palm has been General Counsel of Group L.P. since 1992. He also has
senior oversight responsibility for Compliance and Management Controls, and is
Co-Chairman of the Global Compliance and Control Committee. From 1982 to 1992,
Mr. Palm was a partner in Sullivan & Cromwell.
Ms. Neustein has been Chief of Staff to the senior partners of Group L.P.
since 1992. From 1991 to 1992, Ms. Neustein managed strategic projects for the
senior partners. Prior to then, she was in Investment Banking.
Ms. Tortora has been Chief Information Officer of Group L.P. and the Head
of Information Technology since March 1999. She has headed the Firm's global
technology efforts since 1994.
Mr. Viniar has been Chief Financial Officer of Group L.P. and Co-Head of
Operations, Finance and Resources since March 1999. From July 1998 until then,
he was the Firm's Deputy Chief Financial Officer and from 1994 until then, he
was Head of Finance, with responsibility for Controllers and Treasury. From 1992
to 1994, Mr. Viniar was Head of Treasury and immediately prior to then was in
the Structured Finance Department of Investment Banking.
Mr. Zubrow has been Chief Administrative Officer of Group L.P. and Co-Head
of Operations, Finance and Resources since March 1999. From 1994 until then he
was the Firm's chief credit officer and Head of the Credit Department. From 1992
to 1994, Mr. Zubrow was Head of the Midwest Group in the Corporate Finance
Department of Investment Banking.
In addition, Mr. Corzine, 52, currently is a Director and Co-Chairman of
the Company, but will resign both positions immediately prior to the date of the
Offerings. Mr. Corzine has been Co-Chairman of Group L.P. since June 1998 and
served as Chairman and Chief Executive Officer of Group L.P. from December 1994
to June 1998 and Co-Chief Executive Officer from June 1998 to January 1999. Mr.
Corzine is a member of the NASD's Board of Governors.
There are no family relationships between any of the executive officers or
directors of the Company.
THE MANAGEMENT AND PARTNERSHIP
COMMITTEES
In January 1999, the Management and Partnership Committees were constituted
as part of the Firm's overall governance structure. The Management Committee,
which is chaired by Mr. Paulson, has responsibility for policy, strategy and
management of the Firm's businesses. In addition to Messrs. Paulson, Thain,
Thornton and Hurst, Ms. Neustein and Ms. Tortora, the members of this Committee
and their principal positions within the Firm are: Lloyd C. Blankfein (Co-Head,
FICC), Richard A. Friedman (Co-Head, Merchant Banking), Steven "Mac" M. Heller
(Co-Chief Operating Officer, Investment Banking), Robert S. Kaplan (Co-Chief
Operating Officer, Investment Banking), John P. McNulty (Co-Head, Asset
Management), Michael P. Mortara (Co-Head, FICC), Daniel M. Neidich (Co-Head,
Merchant Banking), Mark Schwartz (President, Goldman Sachs -- Japan), Robert K.
Steel (Co-Head, Equities), and Patrick J. Ward (Co-Head, Equities and Deputy
Chairman -- Europe). Mr. Katz is counsel to the Management Committee.
The Partnership Committee, which is chaired by Messrs. Thain and Thornton,
oversees personnel development and career management issues. It focuses on such
matters as recruiting, training, performance evaluation, diversity, mobility and
succession planning and, together with the Management Committee, is expected to
become integral in the process of selecting and compensating Managing Directors.
In addition to Messrs. Thain and Thornton and Ms. Neustein, the members of this
Committee and their principal positions within the Firm are: David W. Blood
(Head, Asset Management -- Europe), Gary D. Cohn (Head, FICC Commodities and
Emerging Markets), W. Mark Evans (Co-Head, Investment Research), Jacob D.
Goldfield (Head, FICC -- Europe),
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David B. Heller (Head, Equities Derivatives Trading), Philip D. Murphy
(President, Goldman Sachs -- Asia), Simon M. Robertson (President, Goldman
Sachs -- Europe), Esta E. Stecher (Head, Tax), John S. Weinberg (Co-Head,
Investment Banking Services), Peter A. Weinberg (Co-Chief Operating Officer,
Investment Banking and Deputy Chairman -- Europe), and Jon Winkelried (Head,
Leveraged Finance). Mr. Palm is counsel to the Partnership Committee.
INFORMATION REGARDING THE BOARD OF DIRECTORS
The Company's Amended and Restated Certificate of Incorporation will
provide for a classified Board of Directors consisting of three classes. The
term of the initial Class I directors will terminate on the date of the 2000
annual meeting of shareholders, the term of the initial Class II directors will
terminate on the date of the 2001 annual meeting of shareholders and the term of
the initial Class III directors will terminate on the date of the 2002 annual
meeting of shareholders. Messrs. Thain and Thornton will be members of Class I,
Mr. Weinberg will be a member of Class II and Messrs. Hurst and Paulson will be
members of Class III. Beginning in 2000, at each annual meeting of shareholders,
successors to the class of directors whose term expires at that annual meeting
will be elected for a three-year term and until their respective successors have
been elected and qualified. A director may be removed only for cause by the
affirmative vote of the holders of not less than 80% of the outstanding shares
of capital stock entitled to vote in the election of directors.
It is anticipated that the Board of Directors will meet at least quarterly.
Members of the Board of Directors who are employees of the Company or any of its
subsidiaries will not be compensated for service on the Board of Directors or
any committee thereof.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors will have an Audit Committee, composed of directors
who are not employed by the Company or affiliated with management. The Audit
Committee will review the results and scope of the audit and other services
provided by the Company's independent auditors as well as review the Company's
accounting and control procedures and policies.
The Board of Directors will also have a Compensation Committee. The
Compensation Committee will oversee the compensation and benefits of the
management and employees of the Company and will consist entirely of
non-employee directors.
The Board of Directors may from time to time establish other committees to
facilitate the management of the Company.
EXECUTIVE COMPENSATION
Prior to the Offerings, our business was carried on in partnership form. As
a result, meaningful individual compensation information for directors and
executive officers of the Company based on operating in corporate form is not
available for periods prior to the Offerings.
The following table sets forth the annual salaries that the Company intends
to pay the Company's Chief Executive Officer and four of the executive officers
named under "-- Directors and Executive Officers" (the "Named Executive
Officers") during fiscal 1999. The Named Executive Officers will also be
entitled to participate in the Partner Compensation Plan and are eligible to
receive awards under the 1999 Stock Incentive Plan, which are described below.
The amounts payable under the Partner Compensation Plan will be dependent
upon the Company's operating results, and awards under the 1999 Stock Incentive
Plan (other than the awards described under "-- The Employee IPO Awards") will
be determined after the Offerings. As a result, it is currently not possible for
the Company to estimate the amount of such payments or awards. However, the
amounts payable under the Partner Compensation Plan are expected substantially
to exceed the base salaries indicated. For a discussion of this Plan, see
"-- The Partner Compensation Plan" below. None of the Named Executive Officers
will receive any of the awards described under "-- The Employee IPO Awards" or
initially participate in the DCP.
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SUMMARY SALARY TABLE
<TABLE>
<CAPTION>
ANNUAL
NAME AND PRINCIPAL POSITION YEAR SALARY(1)
--------------------------- ---- ---------
<S> <C> <C>
Henry M. Paulson, Jr.,...................................... 1999 $600,000
Director, Chairman and Chief Executive Officer
Robert J. Hurst,............................................ 1999 600,000
Director and Vice Chairman
John A. Thain,.............................................. 1999 600,000
Director, President and Co-Chief Operating Officer
John L. Thornton,........................................... 1999 600,000
Director, President and Co-Chief Operating Officer
David A. Viniar,............................................ 1999 600,000
Chief Financial Officer
</TABLE>
- ---------------
(1) The actual salary paid to the Named Executive Officers will be a prorated
portion of these amounts for fiscal 1999.
----------------------
Aggregate compensation paid to key employees who are not Named Executive
Officers may exceed that paid to the Named Executive Officers. Each of Messrs.
Paulson, Hurst, Thain, Thornton and Viniar have accrued benefits under The
Goldman, Sachs & Co. Employees' Pension Plan (the "Pension Plan") entitling them
to receive annual benefits upon retirement at age 65 of $10,533, $10,533,
$7,074, $11,801 and $6,906, respectively. These benefits had accrued prior to
November 1992 and none of the Named Executive Officers has earned additional
benefits under the Pension Plan since November 1992.
EMPLOYMENT, NONCOMPETITION AND
PLEDGE AGREEMENTS
The Company is entering into employment agreements ("Employment
Agreements") with each PLP who continues as a Managing Director and pledge
agreements ("Pledge Agreements") and agreements relating to noncompetition and
other matters ("Noncompetition Agreements") with all of the PLPs, whether or not
they retire, including, in both cases, each PLP who is a director or an
executive officer.
The following descriptions of the agreements with the PLPs are not
necessarily complete. You should refer to the exhibits that are a part of the
Registration Statement for a copy of the form of each agreement. See "Available
Information".
EMPLOYMENT AGREEMENTS
Each Employment Agreement has an initial term extending through November
24, 2000 (thereafter no set term), requires the continuing PLP to devote his or
her entire working time to the business and affairs of the Firm and generally
may be terminated at any time by either the continuing PLP or the Firm on 90
days' prior written notice.
The Firm has entered into similar employment agreements with all other
Managing Directors, except that they have no set term.
NONCOMPETITION AGREEMENTS
Each Noncompetition Agreement provides as follows:
CONFIDENTIALITY. Each PLP is required to protect and use "confidential
information" in accordance with the restrictions placed by the Firm on its use
and disclosure.
NONCOMPETITION. During the period ending 12 months after the date the PLP
ceases to be employed by the Firm, the PLP may not:
- - form, or acquire a 5% or greater ownership, voting or profit participation
interest in, any Competitive Enterprise; or
- - associate with any Competitive Enterprise and in connection with such
association engage in, or directly or indirectly manage or supervise personnel
engaged in, any activity that had a relationship to the PLP's activities at
the Firm.
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"Competitive Enterprise" is any business enterprise that engages in any
activity, or owns a significant interest in any entity that engages in any
activity, that competes with any activity in which the Firm is engaged.
NONSOLICITATION. During the period ending 18 months after the date the PLP
ceases to be employed by the Firm, the PLP may not, directly or indirectly, in
any manner:
- - solicit any client with whom the PLP worked, or whose identity became known to
the PLP in connection with his or her employment with the Firm, to transact
business with a Competitive Enterprise or reduce or refrain from doing any
business with the Firm;
- - interfere with or damage any relationship between the Firm and any client or
prospective client; or
- - solicit any employee of the Firm to apply for, or accept employment with, any
Competitive Enterprise.
TRANSFER OF CLIENT RELATIONSHIPS. Each PLP is required, upon termination
of the PLP's employment, to take all actions and do all things reasonably
requested by the Firm during a 90-day cooperation period to maintain for the
Firm the business, goodwill and business relationships with the Firm's clients
with which the PLP worked.
LIQUIDATED DAMAGES. In the case of any breach of the noncompetition or
nonsolicitation provisions by the PLP prior to the fifth anniversary of the date
of the consummation of the Offerings (the "IPO Date"), the PLP will be liable
for liquidated damages. The amount of liquidated damages for each PLP who
initially serves on the Board of Directors, the Management Committee or the
Partnership Committee of the Firm is $15 million, and the amount of liquidated
damages for each other PLP is $10 million. These liquidated damages are in
addition to the forfeiture of any future equity-based awards that may occur as a
result of the breach of any noncompetition or nonsolicitation provisions
contained in those awards.
PLEDGE AGREEMENT
The liquidated damage provisions of each Noncompetition Agreement will be
secured by a pledge of stock or other assets with an initial value equal to 100%
of each PLP's liquidated damages amount.
Each Pledge Agreement will terminate on the earliest to occur of:
- - the PLP's death;
- - the expiration of the 24-month period following the termination of the PLP's
employment; or
- - the fifth anniversary of the IPO Date.
NONEXCLUSIVITY AND ARBITRATION
The liquidated damages and pledge arrangements discussed above are not
exclusive of any injunctive relief that the Firm may be entitled to for a breach
of a Noncompetition Agreement and, after the termination of the Pledge
Agreement, the Firm will be entitled to all available remedies for a breach of a
Noncompetition Agreement.
The Employment, Noncompetition and Pledge Agreements generally provide that
any disputes thereunder will be resolved by binding arbitration.
THE EMPLOYEE IPO AWARDS
On the IPO Date, the Company intends to provide equity-based awards to
employees of the Firm and a limited number of consultants and advisors other
than PLPs in one or more of the following forms:
- - substantially all employees will receive a grant of Formula RSUs, with respect
to which up to an aggregate of 31,306,667 shares of Common Stock will be
deliverable;
- - certain senior employees, principally non-PLP Managing Directors, will be
selected to participate in the DCP described below, to which the Company will
make an initial irrevocable contribution of 13,644,204 shares of Common Stock;
- - certain employees will receive a grant of Discretionary RSUs, with respect to
which
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up to an aggregate of 30,604,685 shares of Common Stock will be deliverable;
and
- - certain employees will receive a grant of Discretionary Options, with respect
to which up to an aggregate of 40,000,400 shares of Common Stock will be
deliverable.
The Formula RSUs, the Discretionary RSUs and the Discretionary Options will
be granted under the 1999 Stock Incentive Plan described below. The award of
Formula RSUs and Discretionary RSUs described below will confer only the rights
of a general unsecured creditor of the Firm and no rights as a shareholder of
the Company until the Common Stock underlying such award is delivered. Any
shares of Common Stock acquired by a Managing Director pursuant to the awards
will be subject to the Shareholders' Agreement described in "Certain
Relationships and Related Transactions -- Shareholders' Agreement".
FORMULA AWARDS
The Common Stock underlying the Formula RSUs generally will be deliverable
in equal installments on or about the first, second and third anniversaries of
the IPO Date, although the Common Stock may be deliverable earlier in the event
of certain terminations of employment following a change in control. While no
additional service will be required to obtain delivery of the underlying Common
Stock (i.e., the award is "vested"), delivery of the Common Stock will be
conditioned on the grantee's satisfying certain requirements, including not
being terminated under the circumstances described in the award agreement prior
to delivery of the Common Stock and not violating any Firm policy (including in
respect of confidentiality and hedging) or otherwise acting in a manner
detrimental to the Firm (including violating noncompetition or nonsolicitation
provisions of the award). While the RSUs are outstanding, amounts equal to
regular cash dividends that would be paid on the Common Stock underlying the
Formula RSUs, as if the Common Stock had been actually issued, will be paid in
cash at the same time that the dividends are paid generally to the shareholders.
DISCRETIONARY AWARDS
DISCRETIONARY RSUS. The Discretionary RSUs will vest, and the underlying
Common Stock will be delivered, in equal installments on or about the third,
fourth and fifth anniversaries of the IPO Date if the grantee has satisfied
certain conditions and the grantee's employment with the Firm has not been
terminated, with certain exceptions for terminations of employment due to death,
retirement, extended absence or following a change in control. While the RSUs
are outstanding, amounts equal to regular cash dividends that would be paid on
the Common Stock underlying the Discretionary RSUs, as if the Common Stock had
been actually issued, will be paid in cash at the same time that the dividends
are paid generally to the shareholders.
DISCRETIONARY OPTIONS. The Discretionary Options will be granted with an
exercise price generally equal to the initial public offering price set forth on
the cover page of this Prospectus, although in certain non-U.S. jurisdictions
certain employees may be granted Discretionary Options with a lower exercise
price. The Discretionary Options will generally be exercisable in equal
installments commencing on or about the third, fourth and fifth anniversaries of
the IPO Date if the grantee has satisfied certain conditions and the grantee's
employment with the Firm has not been terminated, with certain exceptions for
terminations of employment due to death, retirement, extended absence or
following a change in control. Discretionary Options will thereafter generally
remain exercisable, subject to satisfaction of certain conditions, until the
tenth anniversary of the IPO Date or, if earlier, upon expiration of a period,
as specified in the award agreement, following termination of employment.
CONTRIBUTION TO DCP. On the IPO Date, GS Inc. will make an initial
irrevocable contribution of 13,644,204 shares of Common Stock to the DCP.
Certain senior employees, principally Managing Directors who are not
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PLPs, will be selected to participate in the DCP. The right to receive shares
will vest, and the underlying Common Stock will be distributed to participants
in the DCP, in equal installments on or about the third, fourth and fifth
anniversaries of the initial contribution if the participant has satisfied
certain conditions and the participant's employment with the Firm has not been
terminated, with certain exceptions for terminations of employment due to death
or following a change in control. Dividends paid on shares allocated to
participants will be distributed currently.
CHANGE IN CONTROL
The Formula RSUs, the Discretionary RSUs, the Discretionary Options and the
DCP provide that (i) if a change in control occurs and (ii) within 18 months
thereafter a grantee's or participant's employment is terminated by the Firm
other than for cause or the grantee or participant terminates employment for
good reason, in each case, as determined by the Firm:
- - the Common Stock underlying any outstanding Formula RSUs will be delivered;
- - any outstanding Discretionary RSUs will vest and the Common Stock underlying
the Discretionary RSUs will be delivered;
- - any outstanding unexercised Discretionary Options will become exercisable and
will be exercisable for a period of one year following such termination of
employment (but in no event later than the tenth anniversary of the IPO Date)
and thereafter terminate; and
- - under the DCP, any unvested portion of the Common Stock attributable to the
initial contribution by the Company to the DCP will vest and be distributed.
"Change in control" means the consummation of a merger, consolidation,
statutory share exchange or similar form of corporate transaction involving GS
Inc. or sale or other disposition of all or substantially all of the assets of
GS Inc. to an entity that is not an affiliate of GS Inc. that, in each case,
requires shareholder approval under the law of GS Inc.'s jurisdiction of
organization, unless immediately following such transaction, either:
- - at least 50% of the total voting power of the surviving entity or its parent
entity is represented by GS Inc.'s securities that were outstanding
immediately prior to the transaction; or
- - at least 50% of the members of the board of directors of the surviving entity,
or its parent entity, if applicable, following the transaction were incumbent
directors (including directors whose election or nomination was approved by
the incumbent directors) at the time of the Board of Directors' approval of
the execution of the initial agreement providing for the transaction.
"Cause" includes, among other things, the grantee's or participant's
conviction of certain misdemeanors or felonies, violation of applicable laws,
and violation of any Firm policy, including policies with respect to hedging and
confidentiality.
"Good reason" means a materially adverse alteration in the grantee's or
participant's position or in the nature or status of the grantee's or
participant's responsibilities from those in effect immediately prior to the
change in control, as determined by the Firm, or certain relocations by the Firm
of a grantee's or participant's principal place of employment.
THE 1999 STOCK INCENTIVE PLAN
The following description of The Goldman Sachs 1999 Stock Incentive Plan
(the "SIP") is not necessarily complete. You should refer to the exhibits that
are a part of the Registration Statement for a copy of the SIP. See "Available
Information".
TYPES OF AWARDS. The SIP provides for grants of incentive stock options
("ISOs") (within the meaning of Section 422 of the Internal Revenue Code of
1986, as amended (the "Code")), nonqualified stock options, stock appreciation
rights ("SARs"), dividend equivalent rights, restricted stock, restricted stock
units ("RSUs") and other equity-based awards (collectively, "Awards"). The SIP
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<PAGE> 95
also permits the making of loans to purchase shares of Common Stock.
SHARES SUBJECT TO THE SIP; OTHER LIMITATIONS ON AWARDS. The total number
of shares of Common Stock of the Company that may be issued under the SIP may
not exceed shares. These shares may be authorized but unissued Common
Stock or authorized and issued Common Stock held in the Company's treasury. If
any Award is forfeited or otherwise terminates or is canceled without the
delivery of shares of Common Stock, if shares of Common Stock are surrendered or
withheld from any Award to satisfy a grantee's income tax withholding
obligations or, if shares of Common Stock owned by a grantee are tendered to pay
the exercise price of Awards, then such shares will again become available under
the SIP.
The SIP Committee (as defined below) has the authority to adjust the terms
of any outstanding Awards and the number of shares of Common Stock issuable
under the SIP for any increase or decrease in the number of issued shares of
Common Stock resulting from a stock split, reverse stock split, stock dividend,
spin-off, combination or reclassification of the Common Stock, or any other
event that the SIP Committee determines affects the Firm's capitalization.
ELIGIBILITY. Awards may be made to any director, officer or employee of
the Firm, including any prospective employee, and to any consultant or advisor
to the Firm selected by the SIP Committee.
ADMINISTRATION. The SIP will be administered by the Board of Directors or
a committee appointed by the Board of Directors (the "SIP Committee").
The SIP Committee will have the authority to construe, interpret and
implement the SIP, and prescribe, amend and rescind rules and regulations
relating to the SIP. The determination of the SIP Committee on all matters
relating to the SIP or any Award agreement will be final and binding.
STOCK OPTIONS AND SARS. The SIP Committee may grant ISOs and nonqualified
stock options (collectively, "options") to purchase shares of Common Stock from
the Company (at the price set forth in the Award agreement), and SARs in such
amounts, and subject to such terms and conditions, as the SIP Committee may
determine. No grantee of an option or SAR will have any of the rights of a
shareholder of GS Inc. with respect to shares subject to their Award until the
issuance of the shares.
RESTRICTED STOCK. The SIP Committee may grant restricted shares of Common
Stock in amounts, and subject to terms and conditions, as the SIP Committee may
determine. The grantee will have the rights of a shareholder with respect to the
restricted stock, subject to any restrictions and conditions as the SIP
Committee may include in the Award agreement.
RESTRICTED STOCK UNITS. The SIP Committee may grant RSUs in amounts, and
subject to terms and conditions, as the SIP Committee may determine. Recipients
of RSUs have only the rights of a general unsecured creditor of the Firm and no
rights as a shareholder of GS Inc. until the Common Stock underlying the RSUs is
delivered.
OTHER EQUITY-BASED AWARDS. The SIP Committee may grant other types of
equity-based Awards, including the grant of unrestricted shares, in amounts, and
subject to terms and conditions, as the SIP Committee may determine. These
Awards may involve the transfer of actual shares of Common Stock, or the payment
in cash or otherwise of amounts based on the value of shares of Common Stock,
and may include Awards designed to comply with, or take advantage of certain
benefits of, the local laws of non-U.S. jurisdictions.
CHANGE IN CONTROL. The SIP Committee may provide in any Award agreement
for provisions relating to a "change in control" of the Company or any of its
subsidiaries or affiliates, including, without limitation, the acceleration of
the exercisability of, or the lapse of restrictions with respect to, the Award.
DIVIDEND EQUIVALENT RIGHTS. The SIP Committee may in its discretion
include in the Award agreement a dividend equivalent right entitling the grantee
to receive amounts equal to the dividends that would be paid, during
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the time such Award is outstanding, on the shares of Common Stock covered by
such Award as if such shares were then outstanding.
NONASSIGNABILITY. Except to the extent otherwise provided in the Award
agreement or approved by the SIP Committee, no Award or right granted to any
person under the SIP will be assignable or transferable other than by will or by
the laws of descent and distribution, and all Awards and rights will be
exercisable during the life of the grantee only by the grantee or the grantee's
legal representative.
AMENDMENT AND TERMINATION. Except as otherwise provided in an Award
agreement, the Board of Directors may from time to time suspend, discontinue,
revise or amend the SIP and the SIP Committee may amend the terms of any Award
in any respect.
U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE SIP. The following is a brief
description of the material U.S. federal income tax consequences generally
arising with respect to Awards.
The grant of an option or SAR will create no tax consequences for the
participant or the Company. Upon exercising an option, other than an ISO, the
participant will generally recognize ordinary income equal to the difference
between the exercise price and the fair market value of the shares acquired on
the date of exercise and the Company generally will be entitled to a tax
deduction in the same amount. A participant generally will not recognize taxable
income upon exercising an ISO and the Company will not be entitled to any tax
deduction with respect to an ISO if the participant holds the shares for the
applicable periods specified in the Code.
With respect to other Awards, upon the payment of cash or the issuance of
shares or other property that is either not restricted as to transferability or
not subject to a substantial risk of forfeiture (e.g., delivery under the RSUs),
the participant will generally recognize ordinary income equal to the cash or
the fair market value of shares or other property delivered. The Company
generally will be entitled to a deduction in an amount equal to the ordinary
income recognized by the participant.
THE DEFINED CONTRIBUTION PLAN
The Goldman Sachs Defined Contribution Plan (the "DCP") is not intended to
be qualified under Section 401(a) of the Code and is not subject to the Employee
Retirement Income Security Act of 1974, as amended.
The following description of the DCP is not necessarily complete. You
should refer to the exhibits that are a part of the Registration Statement for a
copy of the DCP. See "Available Information".
ELIGIBILITY AND PARTICIPATION. The Board of Directors or a committee
appointed by the Board of Directors (the "DCP Committee") will select the
employees to participate in the DCP.
CONTRIBUTIONS. The Company will make an initial irrevocable contribution
to the trust underlying the DCP (the "Trust") of 13,644,204 shares of Common
Stock simultaneously with the completion of the Offerings. The Company may
contribute additional shares of Common Stock or cash to the Trust from time to
time in its sole discretion. The Company currently intends to make ongoing
contributions to the DCP and to reallocate forfeitures under the DCP to
participants.
ALLOCATION OF CONTRIBUTIONS. There will be established an account in the
name of each participant (the "Account") and a separate account (the
"Unallocated Account") to which any forfeitures of Common Stock will be credited
pending reallocation to participants. The DCP Committee will designate the
number of shares of Common Stock allocable to the Account of each participant.
Any Common Stock remaining in the Unallocated Account as of the last day of each
plan year due to forfeitures and any distributions received on Common Stock
credited to the Unallocated Account, will be reallocated among the Accounts of
participants who are employed by the Company on the last day of each plan year
pro rata to each such participant's share of the Company contributions for that
plan
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year, or on such other formulaic basis as the DCP Committee may determine.
VOTING AND TENDERING OF COMMON STOCK. Shares of Common Stock allocated to
participants who are parties to the Shareholders' Agreement will be voted in
accordance with the Shareholders' Agreement and will be tendered by the trustee
of the Trust in accordance with confidential instructions provided by the
participants if the transfer restrictions under the Shareholders' Agreement are
waived (and will not be tendered if the transfer restrictions are not waived).
See "Certain Relationships and Related Transactions -- Shareholders' Agreement"
for a discussion of those provisions. Any shares of Common Stock allocated to
Accounts of participants who are not subject to the Shareholders' Agreement will
be voted and tendered by the trustee of the Trust in accordance with
confidential instructions provided by the participant. Shares held in Accounts
with respect to which the trustee of the Trust does not receive voting or
tendering directions will not be voted or tendered.
Shares of Common Stock held in the Unallocated Account will be voted by the
trustee in the same proportion as the shares of Common Stock allocated to
participants' Accounts with respect to which voting instructions are received.
DIVIDENDS. Any cash dividends on shares of Common Stock allocated to a
participant's Account will be distributed to each participant after the end of
the calendar quarter in which such dividend is received.
VESTING AND DISTRIBUTION. With respect to the initial contribution of
Common Stock to the DCP, the right to receive shares of Common Stock allocated
to a participant's Account generally will become vested, and the Common Stock
generally will be distributable, in equal installments on or about the third,
fourth and fifth anniversaries of the date of such contribution if the
participant satisfies certain conditions and the participant's employment with
the Firm has not been terminated, with certain exceptions for termination due to
death or following a change in control. With respect to contributions to
the DCP (other than the initial contribution), the DCP Committee may determine
the dates on which the right to receive Common Stock (or cash) allocated to a
participant's Account will vest and be distributed.
ADMINISTRATION OF THE DCP. The DCP will be administered by the DCP
Committee. The Board of Directors may, however, determine allocations of
contributions or resolve to otherwise administer the DCP.
AMENDMENTS. Subject to limitations with respect to contributions
previously made to the DCP, the Board of Directors reserves the right to modify,
alter, amend or terminate the DCP or the Trust. No modification or amendment of
the DCP may be made which would cause or permit any part of the assets of the
Trust to be used for, or diverted to, purposes other than for the exclusive
benefit of participants or their beneficiaries, or which would cause any part of
the assets of the Trust to revert to or become the property of the Firm.
LIMIT ON LIABILITY. All distributions under the DCP will be paid or
provided solely from the assets of the Trust and the Company will have no
responsibility or liability to any participant or beneficiary relating to the
Common Stock or other assets of the Trust. The agreement establishing the Trust
will provide that no creditor of the Company will have any rights to the assets
of the Trust.
U.S. FEDERAL INCOME TAX CONSEQUENCES. The following is a brief description
of the material U.S. federal income tax consequences generally arising with
respect to participation in the DCP. A participant in the DCP will recognize
ordinary income upon the vesting of shares of Common Stock allocated to such
participant's Account in an amount equal to the fair market value of the vested
shares. The Company will generally be entitled to a deduction equal to the fair
market value of the shares at the time of the contribution in the taxable year
in which the participant recognizes income under the DCP in respect of the
vesting of shares of Common Stock.
THE PARTNER COMPENSATION PLAN
OVERVIEW
To perpetuate the sense of partnership and teamwork that exists among the
Firm's senior professionals, and to reinforce the
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alignment of employee and shareholder interests, the Board of Directors has
adopted The Goldman Sachs Partner Compensation Plan (the "Partner Compensation
Plan") for the purpose of compensating senior professionals. The Partner
Compensation Plan will be administered by the Board of Directors or a committee
appointed by the Board of Directors (the "Partner Compensation Plan Committee").
Individuals will be selected to participate in the Partner Compensation
Plan for a one-or two-fiscal year cycle ("Contract Period"). Upon selection to
the Partner Compensation Plan, participants will be allocated a percentage
interest in a pool for annual bonus payments in addition to base salaries. The
size of the pool will be established by the Partner Compensation Plan Committee
annually, taking into account the Firm's results of operations and other
measures of financial performance. The Partner Compensation Plan Committee may
also retain an unallocated percentage of the pool that it may allocate among
participants at fiscal year end in its sole discretion. By linking the Partner
Compensation Plan participant's annual bonus payments to the Firm's results as a
whole, as opposed to the results of any participant's individual business unit,
the Firm believes it will provide additional incentives for teamwork. Further,
the Firm believes that the tying of the bonus payments to overall financial
results will more closely align the interests of the participants with the
Firm's shareholders. Finally, the Firm believes that the retention of a
percentage of the pool for allocation among participants at fiscal year end in
amounts determined at the sole discretion of the Partner Compensation Plan
Committee will provide appropriate compensation flexibility.
The following description of the Partner Compensation Plan is not
necessarily complete. You should refer to the exhibits that are a part of the
Registration Statement for a copy of the Partner Compensation Plan. See
"Available Information".
ELIGIBILITY AND PARTICIPATION
Consistent with the Firm's historical practice of partnership elections,
the initial Contract Period will be through the end of fiscal 2000. Although the
employees who will participate in the initial Contract Period have not yet been
designated, it is expected that the participants will consist of the continuing
PLPs. Prior to the Contract Period commencing with fiscal 2001, and on or before
each succeeding Contract Period, the Partner Compensation Plan Committee will
determine the participants in the Partner Compensation Plan. Individual
participants may also be added from time to time outside the biennial selection
process.
DETERMINATION OF SALARY AND BONUS
The aggregate amount of compensation to be included in the Partner
Compensation Plan for each fiscal year will be determined by the Partner
Compensation Plan Committee, taking into account measures of the Company's
financial performance it deems appropriate, including, but not limited to,
earnings per share, return on average common equity, pre-tax income, pre-tax
operating income, net revenues, net income, profits before taxes, book value per
share, stock price, earnings available to common shareholders and ratio of
compensation to net revenues.
Prior to the commencement of the first fiscal year in any Contract Period,
and prior to the completion of the Offerings in the case of the initial Contract
Period, the Partner Compensation Plan Committee will determine both the salaries
of and the percentage of the Partner Compensation Plan pool that may be
allocable to any particular participant (the "Allocation Percentage"). The
Allocation Percentage so determined is expected to be applicable for each fiscal
year within a Contract Period. Any remaining portion of the Partner Compensation
Plan pool not so allocated will be allocated to individual participants at the
end of the fiscal year in amounts determined by the Partner Compensation Plan
Committee.
Amounts payable under the Partner Compensation Plan will be satisfied in
cash or as equity-based Awards under the SIP, as determined by the Partner
Compensation Plan Committee and recommended to the SIP Committee.
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PRINCIPAL AND SELLING SHAREHOLDERS
The following table sets forth as of the date of this Prospectus certain
information regarding the beneficial ownership of the Company's Common Stock:
- - immediately prior to the consummation of the Offerings, but after giving
effect to the Incorporation Transactions and the Related Transactions that
are described and defined under "Certain Relationships and Related
Transactions -- Incorporation and Related Transactions"; and
- - as adjusted to reflect the sale of the shares of Common Stock pursuant to the
Offerings by:
1. each person who is known to the Company to be the beneficial owner of
more than 5% of the Company's Common Stock after the Offerings;
2. each director and Named Executive Officer of the Company; and
3. all directors and executive officers of the Company as a group.
Except as otherwise indicated, the persons or entities listed below have
sole voting and investment power with respect to Common Shares beneficially
owned by them. None of our employees are selling shares in the Offerings.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY SHARES BENEFICIALLY
OWNED PRIOR OWNED AFTER
TO OFFERINGS(5) NUMBER OF OFFERINGS(5)
------------------- SHARES -------------------
NAME NUMBER PERCENT(6) OFFERED NUMBER PERCENT(6)
- ---- ------ ---------- ---------- ------ ----------
<S> <C> <C> <C> <C> <C>
5% Shareholders:
Sumitomo Bank Capital Markets,
Inc.(1)......................... 31,612,076 7.5% 9,000,000 22,612,076 4.9%
Kamehameha Activities
Association(2).................. 30,962,950 7.4 9,000,000 21,962,950 4.8
Directors and Named Executive
Officers:
Henry M. Paulson, Jr.(3)........... * 0 *
Robert J. Hurst(3)................. * 0 *
John A. Thain(3)................... * 0 *
John L. Thornton(3)................ * 0 *
John L. Weinberg(3)................ * 0 *
David A. Viniar(3)................. * 0 *
All directors and executive officers
as a group (11 persons)(4)......... 0
</TABLE>
- ---------------
* Less than 1% of the outstanding shares of Common Stock.
(1) 277 Park Avenue, New York, New York 10172. For purposes of calculating the
number of shares of Common Stock beneficially owned prior to the Offerings,
includes 9,000,000 shares of Common Stock beneficially owned by Sumitomo
Bank Capital Markets, Inc. that will be sold in the Offerings. Excludes
6,238,094 shares of Common Stock that Sumitomo Bank Capital Markets, Inc.
would receive upon the conversion of its 6,238,094 shares of Nonvoting
Common Stock. The shares of Nonvoting Common Stock are not convertible until
the 185th day after completion of the Offerings. See Note (5) and, for a
description of the Nonvoting Common Stock, see "Description of Capital
Stock -- Nonvoting Common Stock".
(2) 567 South King Street, Suite 150, Honolulu, Hawaii 96813.
(3) c/o The Goldman Sachs Group, Inc., 85 Broad Street, New York, New York
10004. Excludes any shares of Common Stock subject to the Shareholders'
Agreement that are owned by other parties to the Shareholders' Agreement.
While each of Messrs. Paulson, Hurst, Thain, Thornton and Viniar is a party
to the Shareholders' Agreement and, other than Mr. Viniar, is a member of
the Shareholders' Committee, each disclaims beneficial ownership of the
shares of Common Stock subject to the Shareholders' Agreement other than
those specified above for each such person individually. See "Certain
Relationships and Related Transactions -- Shareholders' Agreement" for a
discussion of the Shareholders' Agreement.
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(4) Each executive officer is a party to the Shareholders' Agreement and each
disclaims beneficial ownership of the shares of Common Stock subject to the
Shareholders' Agreement other than those specified above. See "Certain
Relationships and Related Transactions -- Shareholders' Agreement" for a
discussion of the Shareholders' Agreement.
(5) For purposes of this table, information as to the shares of Common Stock
assumes that the Underwriters' options to purchase additional shares are not
exercised. For purposes of this table, "beneficial ownership" is determined
in accordance with Rule 13d-3 under the Securities Exchange Act of 1934,
pursuant to which a person or group of persons is deemed to have "beneficial
ownership" of any shares of Common Stock that such person has the right to
acquire within 60 days after the date of this Prospectus. For purposes of
computing the percentage of outstanding shares of Common Stock held by each
person or group of persons named above, any shares which such person or
persons has the right to acquire within 60 days after the date of this
Prospectus are deemed to be outstanding but are not deemed to be outstanding
for the purpose of computing the percentage ownership of any other person.
(6) Based on 419,470,947 shares of Common Stock outstanding prior to the
consummation of the Offerings and 461,470,947 shares of Common Stock
outstanding after the consummation of the Offerings. These amounts include
31,306,667 shares of Common Stock underlying the Formula RSUs.
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The following descriptions of certain provisions of agreements and other
documents discussed below are not necessarily complete. You should refer to the
exhibits that are a part of the Registration Statement for a copy of each
agreement and document. See "Available Information".
INCORPORATION AND RELATED TRANSACTIONS
Simultaneously with the consummation of the Offerings, we will complete a
number of transactions in order to have the Company succeed to the business of
Group L.P.
The principal incorporation transactions (the "Incorporation Transactions")
and related transactions (the "Related Transactions") are summarized below.
INCORPORATION TRANSACTIONS
Pursuant to a plan of incorporation (the "Plan of Incorporation"):
- - The Goldman Sachs Corporation ("GS Corp."), which is the general partner of
Group L.P., will merge into GS Inc. In this transaction, the PLPs who are
shareholders of GS Corp. will receive Common Stock and the other shareholders
of GS Corp. will receive Common Stock, Junior Subordinated Debentures or cash
(or a combination thereof);
- - The PLPs will exchange their interests in Group L.P. and certain affiliates
for 264,680,458 shares of Common Stock (these amounts include shares issuable
to PLPs in the merger of GS Corp. into GS Inc.);
- - The RLPs will exchange their interests in Group L.P. and certain affiliates
for cash, Junior Subordinated Debentures or Common Stock (or a combination
thereof). It is expected that these transactions will result in the payment of
approximately $892 million in cash and the issuance of $295 million principal
amount of Junior Subordinated Debentures and of 47,264,592 shares of Common
Stock (these amounts include the securities and cash issuable to the RLPs in
the merger of GS Corp. into GS Inc.);
- - SBCM will exchange its interests in Group L.P. and GS&Co. for 31,612,076
shares of Common Stock and 6,238,094 shares of Nonvoting Common Stock;
- - KAA will exchange its interests in Group L.P. for 30,962,950 shares of Common
Stock; and
- - After all the interests of Group L.P. have been transferred to GS Inc., Group
L.P. will be merged into GS Inc.
RELATED TRANSACTIONS
- - The Formula RSUs, Discretionary RSUs and Discretionary Options will be
granted, the initial irrevocable contribution of shares of Common Stock to the
DCP will be made and certain senior employees, principally Managing Directors
who are not PLPs, will be selected to participate in the DCP; and
- - After the closing of the Offerings, we will make a $200 million cash
contribution to a Goldman Sachs charitable foundation.
SHAREHOLDERS' AGREEMENT
PERSONS AND SHARES COVERED
Each PLP and each other person who is or becomes a Managing Director on the
IPO Date or thereafter will be a party to the Shareholders' Agreement
(collectively, the "Covered Persons"). After completion of the Offerings,
approximately shares of Common Stock will be subject to the Shareholders'
Agreement.
The shares covered by the Shareholders' Agreement (the "Covered Shares")
will include generally all shares of Common Stock acquired from the Company by a
Covered Person. Covered Shares will include:
- - any shares of Common Stock received by the PLPs pursuant to the Incorporation
Transactions (except for certain shares that aggregate less than
shares);
- - any shares of Common Stock received by Covered Persons from the DCP;
- - any shares of Common Stock received by Covered Persons pursuant to the Formula
or Discretionary RSUs or the Discretionary Options; and
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- - unless otherwise determined by the Board of Directors, any shares of Common
Stock received by the Covered Persons from the Company through any other
employee compensation, benefit or similar plan.
Covered Shares will not include any shares of Common Stock purchased by a
Covered Person in the open market or in a subsequent underwritten public
offering.
TRANSFER RESTRICTIONS
Each Covered Person will agree in the Shareholders' Agreement, among other
things, to:
- - have beneficial ownership of Covered Shares at least equal to 25% of the
cumulative number of Covered Shares beneficially owned by him or her at the
time he or she became a Covered Person or acquired by him or her thereafter
and with no credit for dispositions (the "General Transfer Restrictions") for
so long as he or she is a Covered Person and an employee of the Company (an
"Employee Covered Person"); and
- - comply with the Underwriters' 180-day lockup arrangement described under
"Underwriting".
The PLPs will also be subject to limitations on their ability to transfer
Covered Shares received in connection with the Incorporation Transactions. Under
these restrictions, each PLP has agreed that he or she will not transfer the
Covered Shares received pursuant to the Plan of Incorporation until the third
anniversary of the IPO Date (the "PLP Transfer Restrictions" and, together with
the General Transfer Restrictions, the "Transfer Restrictions"). The PLP
Transfer Restrictions will lapse as to such Covered Shares in equal installments
on each of the third, fourth and fifth anniversaries of the IPO Date. The
Transfer Restrictions applicable to a Covered Person terminate upon the death of
the Covered Person.
WAIVERS
Except in the case of a third-party tender or exchange offer, the PLP
Transfer Restrictions may be waived or terminated at any time by the
Shareholders' Committee. The Shareholders' Committee also has the power to waive
the General Transfer Restrictions to permit Covered Persons to:
- - participate as sellers in underwritten public offerings of Common Stock and
tender and exchange offers and share repurchase programs by the Company;
- - transfer Covered Shares to charities, including charitable foundations;
- - transfer Covered Shares held in employee benefit plans; and
- - transfer Covered Shares in specific transactions (for example, to immediate
family members and trusts) or circumstances.
In the case of a third-party tender or exchange offer, the Transfer
Restrictions may be waived or terminated:
- - if the Board of Directors is recommending acceptance or is not making any
recommendation with respect to acceptance of the tender or exchange offer, by
a majority of the Voting Interests (as defined below under "-- Voting"); or
- - if the Board of Directors is recommending rejection of the tender or exchange
offer, by 66 2/3% of the outstanding Voting Interests.
In the case of a tender or exchange offer by the Firm, a majority of the
outstanding Voting Interests may also elect to waive or terminate the Transfer
Restrictions.
VOTING
Prior to any vote of the shareholders of the Company, the Shareholders'
Agreement requires a separate, preliminary vote of the Voting Interests on each
matter upon which a vote of the shareholders is proposed to be taken (the
"Preliminary Vote"). Each Covered Share held by an Employee Covered Person and
each other Covered Share subject to the PLP Transfer Restrictions ("Voted
Covered Shares") will be voted in accordance with the majority of the votes cast
by the Voting Interests in the Preliminary Vote. In elections of directors, each
Voted Covered Share will be voted in favor of the election of those persons
receiving the highest numbers of votes cast by the Voting Interests in the
Preliminary Vote. "Voting Interests" are Cov-
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ered Shares beneficially owned by all Covered Persons through December 31, 2000
and thereafter are Covered Shares beneficially owned by all Employee Covered
Persons.
OTHER RESTRICTIONS
The Shareholders' Agreement also prevents the Covered Persons from engaging
in certain activities relating to any securities of the Company with any person
who is not a Covered Person or a director, officer or employee of the Company
("Restricted Persons"). Among other things, a Covered Person may not:
- - participate in a proxy solicitation to or with a Restricted Person;
- - deposit any Covered Shares in a voting trust or subject any Covered Shares to
any voting agreement or arrangement that includes any Restricted Person;
- - form, join or in any way participate in a "group" with any Restricted Person;
or
- - together with any Restricted Person, propose certain transactions with the
Company or seek the removal of any directors of the Company or any change in
the composition of the Board of Directors of the Company.
TERM, AMENDMENT AND CONTINUATION
The Shareholders' Agreement is to continue in effect until the earlier of
January 1, 2050, and the time it is terminated by the vote of 66 2/3% of the
outstanding Voting Interests. The PLP Transfer Restrictions will not terminate
upon the expiration or termination of the Shareholders' Agreement unless
previously waived or terminated or unless subsequently waived or terminated by
the Board of Directors. The Shareholders' Agreement may generally be amended at
any time by a majority of the outstanding Voting Interests.
Unless otherwise terminated, in the event of any transaction in which a
third party succeeds to the business of the Company and in which Covered Persons
hold securities of the third party, the Shareholders' Agreement will remain in
full force and effect as to the securities of the third party, and the third
party shall succeed to the rights and obligations of the Company under the
Shareholders' Agreement.
INFORMATION REGARDING THE SHAREHOLDERS' COMMITTEE
The terms and provisions of the Shareholders' Agreement will be
administered by the Shareholders' Committee. The Shareholders' Committee will
initially consist of those Covered Persons who are both employees of the Firm
and members of the Board of Directors of the Company. It is possible that over
time all or a majority of the members of the Shareholders' Committee will not be
members of the Board of Directors of the Company.
Members of the Shareholders' Committee are entitled to indemnification from
the Company in their capacities as members of the Shareholders' Committee as
described under "Description of Capital Stock -- Limitation of Liability and
Indemnification Matters".
VOTING AGREEMENT
Both SBCM and KAA have agreed to vote their shares of Common Stock in the
same manner as a majority of the shares of Common Stock held by the Managing
Directors of the Company are voted. The obligations of SBCM and KAA under the
Voting Agreement are enforceable by the Company. The Managing Directors will
have no right to enforce the SBCM and KAA voting agreements.
INSTRUMENT OF INDEMNIFICATION
In connection with the Offerings, the Company will enter into an Instrument
of Indemnification (the "Instrument of Indemnification"). The Instrument of
Indemnification will cover certain former partners of the Firm, including the
PLPs, each current director and executive officer of GS Inc., the RLPs, SBCM and
KAA (each an "Indemnitee"). Under the Instrument of Indemnification, in the
event any Indemnitee is, or is threatened to be, made a party to any action,
suit or proceeding by reason of the fact that such Indemnitee was a general or
limited partner, shareholder, member, director, officer, employee or agent
(each, a "Designated Capacity") of Group L.P. or certain of its affiliates or
subsidiaries or is serving or served, at the request of Group L.P. or certain of
its affiliates or subsidiaries, in a Designated Capacity in
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another enterprise, the Company is, subject to certain exceptions, obligated to
indemnify and hold such Indemnitee harmless from any losses, damages or expenses
incurred by such Indemnitee in the action, suit or proceeding. The Instrument of
Indemnification does not duplicate the obligations of the Company under the Tax
Indemnification Agreement described below. The indemnification obligation of the
Company under the Instrument of Indemnification also extends to the
indemnification obligations that certain Indemnitees, including each current
director and executive officer of GS Inc., may have to other Indemnitees.
The Instrument of Indemnification also provides that the Company will,
subject to certain exceptions, release each Indemnitee from all actions, suits
or other claims that Group L.P. may have had or which the Company, as a
successor to Group L.P., may have arising out of an Indemnitee's partnership or
other interest in Group L.P. or certain of its affiliates or subsidiaries or
arising out of the conduct of such Indemnitee engaged in the conduct of the
business of Group L.P. or its affiliates or subsidiaries.
DIRECTOR AND OFFICER INDEMNIFICATION
The Company will enter into agreements that provide indemnification to the
Company's directors and certain officers. These agreements are in addition to
the Company's indemnification obligations under its By-Laws as described under
"Description of Capital Stock -- Limitation of Liability and Indemnification
Matters". The agreements, among other things, will indemnify the Company's
directors and certain officers to the fullest extent permitted by law for
certain expenses (including attorneys' fees) and all losses, claims,
liabilities, judgments, fines and settlement amounts incurred by such person
arising out of or in connection with such person's service as a director or
officer of the Company with respect to the Incorporation Transactions and the
Offerings.
TAX INDEMNIFICATION AGREEMENT AND
RELATED MATTERS
An entity that has historically operated in corporate form generally is
liable for any adjustments to the corporation's taxes for periods prior to its
initial public offering. In contrast, the partners of Group L.P., rather than
the Company, will be liable for any adjustments to many taxes (including U.S.
federal and state income taxes) attributable to the operations of Group L.P. and
its affiliates prior to the Offerings. In connection with the Offerings, the
Company will enter into an agreement (the "Tax Indemnification Agreement") to
indemnify certain former limited partners of Group L.P., including the PLPs,
each current director and executive officer of GS Inc., the RLPs, SBCM and KAA
(collectively, the "Tax Indemnitees"), against certain increases in each Tax
Indemnitee's taxes that relate to activities of Group L.P. or certain of its
affiliates in respect of periods prior to the Offerings ("Increased Taxes"). The
Company will be required to make additional payments to offset any taxes payable
by a Tax Indemnitee in respect of payments made pursuant to the Tax
Indemnification Agreement only to the extent the payments made to that Tax
Indemnitee exceed a fixed amount. Any payment of Increased Taxes by the Company
will be offset by any tax benefit received by the Tax Indemnitee.
The Tax Indemnification Agreement includes provisions that permit the
Company to control any tax proceeding or contest which might result in the
Company being required to make a payment under the Tax Indemnification
Agreement.
The Incorporation Transactions are structured in a manner that is not
expected to result in a significantly disproportionate tax or other burden to
any partner of Group L.P. If the Incorporation Transactions were to have a
disproportionate effect on any partner, the Company may, but is not required to,
make special payments and arrangements with any person who incurs a
disproportionate tax or other burden.
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DESCRIPTION OF CAPITAL STOCK
Pursuant to the Company's Amended and Restated Certificate of Incorporation
(the "Charter"), the Company's authorized capital stock consists of
shares, each with a par value of $.01 per share, of which:
- - shares are designated as preferred stock ("Preferred Stock");
- - 2,000,000,000 shares are designated as common stock ("Common Stock"),
461,470,947 shares of which will be outstanding as of the completion of the
Offerings, including 31,306,667 shares of Common Stock underlying the Formula
RSUs; and
- - shares are designated as nonvoting common stock ("Nonvoting
Common Stock" and, together with the shares of Common Stock, the "Common
Shares"), 6,238,094 shares of which will be outstanding as of the completion
of the Offerings.
All outstanding Common Shares are, and the shares of Common Stock offered hereby
will be, when issued and sold, validly issued, fully paid and nonassessable.
The Shareholders' Agreement contains provisions relating to the voting and
disposition of certain shares of Common Stock. See "Certain Relationships and
Related Transactions -- Shareholders' Agreement" for a discussion of those
provisions.
PREFERRED STOCK
The authorized capital stock of the Company includes shares of
Preferred Stock, of which shares have been designated as Series A
Participating Preferred Stock and reserved for issuance upon exercise of the
Shareholder Protection Rights relating to Common Stock and shares have
been designated as Series B Participating Preferred Stock and reserved for
issuance upon exercise of the Shareholder Protection Rights relating to the
Nonvoting Common Stock. See "-- Shareholder Protection Rights" below for a
description of the Series A Participating Preferred Stock and the Series B
Participating Preferred Stock. The Company's Board of Directors is authorized to
divide the Preferred Stock into series and, with respect to each series, to
determine the designations and the powers, preferences and rights, and the
qualifications, limitations and restrictions thereof, including the dividend
rights, conversion or exchange rights, voting rights, redemption rights and
terms, liquidation preferences, sinking fund provisions and the number of shares
constituting the series. The Board of Directors could, without shareholder
approval, issue Preferred Stock with voting and other rights that could
adversely affect the voting power of the holders of Common Stock and which could
have certain anti-takeover effects.
Subject to the rights of the holders of any series of Preferred Stock, the
number of authorized shares of any series of Preferred Stock may be increased or
decreased (but not below the number of shares thereof then outstanding) by
resolution adopted by the Board of Directors and approved by the affirmative
vote of the holders of a majority of the voting power of all outstanding shares
of capital stock entitled to vote on the matter, voting together as a single
class.
COMMON STOCK
Each holder of Common Stock is entitled to one vote for each share owned of
record on all matters submitted to a vote of shareholders. There are no
cumulative voting rights. Accordingly, the holders of a majority of the shares
of Common Stock voting for the election of directors can elect all the directors
if they choose to do so, subject to any voting rights of holders of Preferred
Stock to elect directors. For a discussion of the ability of the parties to the
Shareholders' Agreement initially to elect all of the Company's directors, see
"Risk Factors -- The Firm Will Be Controlled by Its Principal Shareholders and
Will Be Subject to Anti-Takeover Provisions".
Subject to the preferential rights of any holders of any outstanding series
of Preferred Stock, the holders of Common Stock, together with the holders of
the Nonvoting Common Stock, will be entitled to such dividends and
distributions, whether payable in
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cash or otherwise, as may be declared from time to time by the Board of
Directors from legally available funds. Subject to the preferential rights of
holders of any outstanding series of Preferred Stock, upon the liquidation,
dissolution or winding-up of the Company (with the shares of the Common Stock
and the Nonvoting Common Stock being considered as a single class for this
purpose) and after payment of all prior claims, the holders of Common Stock will
be entitled to receive pro rata all assets of the Company. Any dividend in
shares of Common Stock paid on or with respect to shares of Common Stock may be
paid only with shares of Common Stock. Other than the Shareholder Protection
Rights discussed below, holders of Common Stock have no redemption or conversion
rights or preemptive rights to purchase or subscribe for securities of the
Company.
NONVOTING COMMON STOCK
The Nonvoting Common Stock will have the same rights and privileges as, and
will rank equally and share ratably with, and be identical in all respects as to
all matters to, the Common Stock, except that the Nonvoting Common Stock will
have no voting rights other than those voting rights required by law. All of the
outstanding shares of Nonvoting Common Stock will be beneficially owned by SBCM.
The Board of Directors will not declare or pay dividends, and no dividend
will be paid, with respect to any outstanding share of Common Stock or Nonvoting
Common Stock, unless, simultaneously, the same dividend is paid with respect to
each share of Common Stock and Nonvoting Common Stock, except that in the case
of any dividend in the form of capital stock of a subsidiary of the Company, the
capital stock of the subsidiary distributed to holders of Common Stock may
differ from the capital stock of the subsidiary distributed to holders of the
Nonvoting Common Stock to the extent and only to the extent that the Common
Stock and the Nonvoting Common Stock differ. Any dividend paid on or with
respect to Nonvoting Common Stock may be paid only with shares of Nonvoting
Common Stock.
The shares of Nonvoting Common Stock may not be converted into Common Stock
until the 185th day after the IPO Date. Beginning on the 185th day the Nonvoting
Common Stock will, upon transfer by SBCM to a third party, and in certain other
circumstances, convert into shares of Common Stock on a one-for-one basis. The
Nonvoting Common Stock has standard anti-dilution provisions.
SHAREHOLDER PROTECTION RIGHTS
Each Common Share has attached to it a Shareholder Protection Right (a
"Right"). The Rights initially are represented only by the certificates for the
Common Shares and will not trade separately from the Common Shares unless and
until:
- - it is announced by the Company that a person or group has become the
beneficial owner of % or more of the outstanding Common Stock (other than
persons deemed to beneficially own Common Stock solely because they are
parties to the Shareholders' Agreement, members of the Shareholders' Committee
or certain other persons)(an "Acquiring Person"); or
- - ten business days (or such later date as the Board of Directors may fix by
resolution) after the date a person or group commences a tender or exchange
offer that would result in such person or group becoming an Acquiring Person.
If and when the Rights separate and prior to the Flip-in Date occurring (as
described below), each Right will entitle the holder to purchase, in the case of
Rights relating to the Common Stock, 1/100 of a share of Series A Participating
Preferred Stock or, in the case of Rights relating to the Nonvoting Common
Stock, 1/100 of a share of Series B Participating Preferred Stock, in each case,
for an exercise price of $ . Each 1/100 of a share of Series A
Participating Preferred Stock and Series B Participating Preferred Stock has
economic and voting terms equivalent to one share of Common Stock and Nonvoting
Common Stock, respectively.
Upon the date of the announcement by the Company that any person or group
has become an Acquiring Person (the "Flip-in
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Date"), each Right (other than Rights beneficially owned by the Acquiring Person
or transferees thereof, which Rights become void) will entitle its holder to
purchase, for the exercise price, a number of shares of Common Stock, or, in the
case of Rights relating to Nonvoting Common Stock, a number of shares of
Nonvoting Common Stock, having a market value of twice the exercise price. Also,
if, after the Flip-in Date, the Acquiring Person controls the Company's Board of
Directors and:
- - the Company is involved in a merger or similar form of business combination
and (i) any term of the transaction provides for different treatment of the
shares of capital stock held by the Acquiring Person as compared to the shares
of capital stock held by all other shareholders or (ii) the person with whom
such transaction occurs is the Acquiring Person or an affiliate thereof; or
- - the Company sells or transfers assets representing more than 50% of its assets
or generating more than 50% of its operating income or cash flow to any person
other than the Company or its wholly owned subsidiaries,
then each Right will entitle its holder to purchase, for the exercise price, a
number of shares (A) with respect to Rights relating to the Common Stock, of
capital stock with the greatest voting power in respect of the election of
directors and (B) with respect to Rights relating to the Nonvoting Common Stock,
of capital stock identical to the stock described in clause (A) except with
voting provisions identical to that of the Nonvoting Common Stock, of either the
Acquiring Person or the other party to such transaction, depending on the
circumstances of the transaction, having a market value of twice the exercise
price. If any person or group acquires between % and 50% of the Common Stock,
the Company's Board of Directors may, at its option, exchange each outstanding
Right, except for those held by an Acquiring Person, for one share of Common
Stock or, in the case of Rights relating to Nonvoting Common Stock, one share of
Nonvoting Common Stock.
The Rights may be redeemed by the Board of Directors for $ per Right
prior to the Flip-in Date. The Company's Charter permits this redemption right
to be exercised by the Board of Directors (or certain directors specified or
qualified by the terms of the instrument governing the Rights).
The Rights will not prevent a takeover of the Company. However, the Rights
may cause substantial dilution to a person or group that acquires % or more of
the Common Stock unless the Rights are first redeemed by the Board of Directors
of the Company.
LIMITATION OF LIABILITY AND
INDEMNIFICATION MATTERS
The Company's Charter provides that a director of the Company will not be
liable to the Company or its shareholders for monetary damages for breach of
fiduciary duty as a director, except in certain cases where liability is
mandated by the Delaware General Corporation Law (the "DGCL"). The By-Laws of
the Company provide for indemnification, to the fullest extent permitted by law,
of any person made or threatened to be made a party to any action, suit or
proceeding by reason of the fact that such person is or was a director or
officer of the Company, or is or was a director of a subsidiary of the Company,
or is or was a member of the Shareholders' Committee acting pursuant to the
Shareholders' Agreement or, at the request of the Company, serves or served as a
director or officer of or in any other capacity for, or in relation to, any
other enterprise, against all expenses, liabilities, losses and claims actually
incurred or suffered by such person in connection with the action, suit or
proceeding. The By-Laws of the Company also provide that, to the extent
authorized from time to time by the Board of Directors, the Company may provide
to any one or more employees and other agents of the Company or any subsidiary
or other enterprise, rights of indemnification and to receive payment or
reimbursement of expenses, including attorneys' fees, that are similar to the
rights conferred by the By-Laws on directors and officers of the Company or any
subsidiary or other enterprise.
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CHARTER PROVISIONS APPROVING CERTAIN ACTIONS
Our Charter provides that the Board of Directors may determine to take the
following actions, in its sole discretion, and the Company and each shareholder
of the Company will, to the fullest extent permitted by law, be deemed to have
approved and ratified, and waived any claim relating to, the taking of any of
these actions:
- - causing the Firm to register with the SEC for resale shares of Common Stock
held by the PLPs as discussed under "Shares Eligible for Future Sale -- Other
Registration Rights";
- - making payments to, and other arrangements with, certain former limited
partners of the Firm, including PLPs, in order to compensate them for, or to
prevent, significantly disproportionate adverse tax or other consequences as
discussed under "Certain Relationships and Related Transactions -- Tax
Indemnification Agreement and Related Matters"; and
- - making a $200 million contribution to a Goldman Sachs charitable foundation.
SECTION 203 OF THE DGCL
Upon completion of the Offerings, the Company will be subject to the
provisions of Section 203 of the DGCL ("Section 203"). In general, Section 203
prohibits a publicly held Delaware corporation from engaging in a "business
combination" with an "interested stockholder" for a period of three years after
the date of the transaction in which the person became an interested
stockholder, unless the business combination is approved in a prescribed manner.
A "business combination" includes a merger, asset sale or other transaction
resulting in a financial benefit to the interested stockholder. An "interested
stockholder" is a person who, together with affiliates and associates, owns (or,
in certain cases, within three years prior, did own) 15% or more of the
corporation's outstanding voting stock. Under Section 203, a business
combination between the Company and an interested stockholder is prohibited
unless it satisfies one of the following conditions:
- - prior to the time the stockholder became an interested stockholder, the
Company's Board of Directors must have previously approved either the business
combination or the transaction that resulted in the stockholder becoming an
interested stockholder;
- - on consummation of the transaction that resulted in the stockholder becoming
an interested stockholder, the interested stockholder owned at least 85% of
the voting stock of the Company outstanding at the time the transaction
commenced (excluding, for purposes of determining the number of shares
outstanding, shares owned by persons who are directors and officers); or
- - the business combination is approved by the Company's Board of Directors and
authorized at an annual or special meeting of the stockholders by the
affirmative vote of at least 66 2/3% of the outstanding voting stock which is
not owned by the interested stockholder.
The Company's Board of Directors has adopted a resolution providing that
the Shareholders' Agreement will not create an "interested stockholder".
CERTAIN ANTI-TAKEOVER MATTERS
The Charter and By-Laws of the Company will, upon consummation of the
Offerings, include a number of provisions that may have the effect of
encouraging persons considering unsolicited tender offers or other unilateral
takeover proposals to negotiate with the Board of Directors rather than pursue
non-negotiated takeover attempts. These provisions include:
CLASSIFIED BOARD OF DIRECTORS
The Charter of the Company will provide for a Board of Directors divided
into three classes, with one class to be elected each year to serve for a
three-year term. The terms of the initial classes of directors will terminate on
the date of the annual meetings of shareholders in 2000, 2001 and 2002. As a
result, at least two annual meetings of shareholders
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may be required for the shareholders to change a majority of the Board of
Directors. In addition, the shareholders of the Company can only remove
directors for cause by the affirmative vote of the holders of not less than 80%
of the outstanding shares of capital stock of the Company entitled to vote in
the election of directors. Vacancies on the Board of Directors may be filled
only by the Board of Directors. The classification of directors and the
inability of shareholders to remove directors without cause and to fill
vacancies on the Board of Directors will make it more difficult to change the
composition of the Board of Directors, but will promote a continuity of existing
management.
CONSTITUENCY PROVISION
Pursuant to the Company's Charter, a director of the Company may (but is
not required to) in taking any action (including an action that may involve or
relate to a change or potential change in control of the Company) consider,
among other things, the effects that the Company's actions may have on other
interests or persons (including its employees, former partners of Group L.P. and
the community) in addition to the shareholders of the Company.
ADVANCE NOTICE REQUIREMENTS
The By-Laws establish advance notice procedures with regard to shareholder
proposals relating to the nomination of candidates for election as directors or
new business to be brought before meetings of shareholders of the Company. These
procedures provide that notice of such shareholder proposals must be timely
given in writing to the Secretary of the Company prior to the meeting at which
the action is to be taken. Generally, to be timely, notice must be received at
the principal executive offices of the Company not less than 90 days nor more
than 120 days prior to the first anniversary date of the annual meeting for the
preceding year. The notice must contain certain information specified in the
By-Laws. The Company anticipates that its 2000 annual meeting will be held in
April 2000.
SPECIAL MEETINGS OF SHAREHOLDERS
The Charter and By-Laws of the Company deny shareholders the right to call
a special meeting of shareholders. The Charter and By-Laws provide that special
meetings of the shareholders may be called only by a majority of the Company's
Board of Directors.
NO WRITTEN CONSENT OF SHAREHOLDERS
The Charter of the Company requires all shareholder actions to be taken by
a vote of the shareholders at an annual or special meeting, and does not permit
shareholders of the Company to act by written consent, without a meeting.
MAJORITY VOTE NEEDED FOR SHAREHOLDER PROPOSALS
The By-Laws of the Company require that any shareholder proposal be
approved by a majority of all of the outstanding shares of Common Stock and not
by only a majority of the shares present at the meeting and entitled to vote.
This requirement may make it more difficult to approve shareholder resolutions.
AMENDMENT OF BY-LAWS AND CHARTER
The Charter of the Company requires the approval of not less than 80% of
the voting power of all outstanding shares of the Company's capital stock
entitled to vote to amend any By-Law by shareholder action or the Charter
provisions described in this section. Those provisions will make it more
difficult to dilute the anti-takeover effects of the By-Laws and the Charter.
BLANK CHECK PREFERRED STOCK
The Charter of the Company provides for authorized shares of
Preferred Stock, of which none has been issued or is outstanding and
shares of which have been designated as the Series A
Participating Preferred Stock for delivery upon exercise of the Rights relating
to the shares of Common Stock and shares of which have been designated as
the Series B Participating Preferred Stock for delivery upon exercise of the
Rights relating to the shares of Nonvoting Common Stock. The existence of
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authorized but unissued shares of Preferred Stock may enable the Board of
Directors to render more difficult or to discourage an attempt to obtain control
of the Company by means of a merger, tender offer, proxy contest or otherwise.
For example, if in the due exercise of its fiduciary obligations, the Board of
Directors were to determine that a takeover proposal is not in the Company's
best interests, the Board of Directors could cause shares of Preferred Stock to
be issued without shareholder approval in one or more private offerings or other
transactions that might dilute the voting or other rights of the proposed
acquiror or insurgent shareholder or shareholder group. In this regard, the
Charter grants the Board of Directors broad power to establish the rights and
preferences of authorized and unissued shares of Preferred Stock. The issuance
of shares of Preferred Stock could decrease the amount of earnings and assets
available for distribution to holders of Common Shares. The issuance may also
adversely affect the rights and powers, including voting rights, of such holders
and may have the effect of delaying, deterring or preventing a change in control
of the Company. The Board of Directors currently does not intend to seek
shareholder approval prior to any issuance of shares of Preferred Stock, unless
otherwise required by law.
LISTING
The Company intends to list the Common Stock on the NYSE.
TRANSFER AGENT
The transfer agent for the Common Stock will be ChaseMellon Shareholder
Services, L.L.C.
109
<PAGE> 111
SHARES ELIGIBLE FOR FUTURE SALE
Prior to the Offerings, there has been no public market for the Common
Stock. Future sales of substantial amounts of Common Stock in the public market,
or the perception that such sales may occur, could adversely affect the
prevailing market price of the Common Stock. Upon completion of the Offerings,
there will be 461,470,947 shares of Common Stock outstanding, including
31,306,667 shares of Common Stock underlying the Formula RSUs but excluding
6,238,094 shares of Nonvoting Common Stock. Of these shares, 60,000,000 shares
of Common Stock expected to be sold in the Offerings will be freely transferable
without restriction or further registration under the Securities Act of 1933. Of
the remaining 401,470,947 shares of Common Stock outstanding:
- - 264,680,458 shares held by the PLPs will not be transferable until the third
anniversary of the IPO Date, unless these restrictions are waived and will
also be subject to the Underwriters' lock-up described below. See "Certain
Relationships and Related Transactions -- Shareholders' Agreement";
- - 22,612,076 shares will be held by Sumitomo Bank Capital Markets, Inc. ("SBCM")
and, along with the 6,238,094 shares of Nonvoting Common Stock that it will
hold, will be transferable only as described under "-- SBCM and KAA
Registration Rights", unless these restrictions are waived by the Board of
Directors. All of these shares will also be subject to the Underwriters'
lock-up described below;
- - 21,962,950 shares will be held by Kamehameha Activities Association ("KAA")
and will be transferable only as described under "-- SBCM and KAA Registration
Rights", unless these restrictions are waived by the Board of Directors. All
of these shares will also be subject to the Underwriters' lock-up described
below;
- - 47,264,592 shares will be held by the RLPs, of which shares will be
transferable beginning one year after the IPO Date, and the remainder of which
will be transferrable beginning three years after the IPO Date, unless these
restrictions are waived by the Board of Directors. All of these shares are
also subject to the Underwriters' lock-up described below;
- - 13,644,204 shares held by the DCP will not be deliverable to the plan
participants until on or about the third, fourth and fifth anniversaries of
the date of the initial contribution, assuming the relevant conditions have
been satisfied. See "Management -- The Employee IPO Awards" for a description
of the DCP; and
- - 31,306,667 shares of Common Stock underlying the Formula RSUs generally will
be deliverable beginning on or about the first anniversary of the IPO Date,
assuming the relevant conditions are satisfied, as described in
"Management -- The Employee IPO Awards -- Formula Awards".
Shares of Common Stock underlying the Discretionary RSUs will be
deliverable beginning on or about the third anniversary of the IPO Date,
assuming the relevant conditions have been satisfied. The Discretionary Options
will be exercisable beginning on or about the third anniversary of the IPO Date,
assuming the relevant conditions have been satisfied. See "Management--The
Employee IPO Awards" for a discussion of the terms of the Formula and
Discretionary RSUs and the Discretionary Options.
The Firm, SBCM, KAA, the parties to the Shareholders' Agreement, including
all of the directors and executive officers of GS Inc., and the RLPs have agreed
with the Underwriters not to dispose of or hedge any of their Common Stock or
securities convertible into or exchangeable for shares of Common Stock during
the period from the date of this Prospectus continuing through the date 180 days
after the date of this Prospectus, except with the prior written consent of
GS&Co.
The Company intends to file a registration statement with the SEC in order
to register the reoffer and resale of the shares of Common Stock issued pursuant
to the DCP, Formula and Discretionary RSUs and Discretionary Options. As a
result, any shares of
110
<PAGE> 112
Common Stock delivered pursuant to these awards will, subject to any
restrictions under the Shareholders' Agreement, be freely transferable to the
public unless the shares of Common Stock are acquired by an "affiliate" of the
Firm. Any shares of Common Stock acquired by an "affiliate" of the Firm will be
transferable to the public pursuant to Rule 144.
The shares of Common Stock received by the PLPs, SBCM and KAA will
constitute "restricted securities" for purposes of the Securities Act of 1933.
As a result, absent registration under the Securities Act of 1933 or compliance
with Rule 144 thereunder or an exemption therefrom, these shares of Common Stock
will not be freely transferable to the public. For a description of the
registration rights granted to SBCM and KAA and the restrictions on the transfer
of their shares of Common Stock, see "-- SBCM and KAA Registration Rights" below
and for a description of the registration rights that may be granted to the
PLPs, see "-- Other Registration Rights" below.
In general, under Rule 144 as currently in effect, a person (or persons
whose shares are aggregated), including an affiliate, who beneficially owns
"restricted securities" may not sell those securities until they have been
beneficially owned for at least one year. Thereafter, the person would be
entitled to sell within any three-month period a number of shares that does not
exceed the greater of:
- - 1% of the number of shares of Common Stock then outstanding (which will equal
approximately 4,301,642 shares immediately after the Offerings); or
- - the average weekly trading volume of the Common Stock on the NYSE during the
four calendar weeks preceding the filing of a notice of Form 144 with respect
to such sale with the SEC.
Sales under Rule 144 are also subject to certain other requirements
regarding the manner of sale, notice and availability of current public
information about the Company.
Under Rule 144(k), a person who is not, and has not been at any time during
the 90 days preceding a sale, an affiliate of the Company and who has
beneficially owned the shares proposed to be sold for at least two years
(including the holding period of any prior owner except an affiliate), is
entitled to sell such shares without complying with the manner of sale, public
information, volume limitation or notice provisions of Rule 144. While the
shares of Common Stock received by the RLPs will constitute "restricted
securities", these shares will be freely transferable by the RLPs pursuant to
Rule 144(k) upon the lapse or waiver of the transfer restrictions described
above.
SBCM AND KAA REGISTRATION RIGHTS
The Company is a party to agreements with SBCM and Sumitomo Bank, Limited
("SBL", and together with SBCM, the "SBCM Group") (the "SBCM Registration Rights
Agreement") pursuant to which the SBCM Group may require the Company to register
under the Securities Act of 1933 certain of SBCM's shares of Common Stock, which
includes shares of Common Stock receivable upon the conversion of the Nonvoting
Common Stock. The Company is a party to similar agreements with KAA (the "KAA
Registration Rights Agreement" and, together with the SBCM Registration Rights
Agreement, the "Registration Rights Agreements"). The SBCM Group and KAA and its
affiliates are referred to herein as "Registration Rights Holders".
Except for certain transfers to wholly owned subsidiaries, each
Registration Rights Holder has agreed that it will only dispose of Common Stock
(x) by means of a widely dispersed underwritten public offering and (y) pursuant
to the exercise of the registration rights set forth below.
Each Registration Rights Holder has the right on up to ten occasions (but
not more than twice every 12 months) to require the Company to register shares
of Common Stock under the Securities Act of 1933 ("demand rights"). Each
Registration Rights Holder also has the right to include its shares of Common
Stock in any registered public offering in which the Managing Directors
participate ("piggy-back rights").
111
<PAGE> 113
Prior to the first anniversary of the IPO Date, the Registration Rights
Holders are not permitted to transfer shares of Common Stock or Nonvoting Common
Stock. Between the first and third anniversaries of the IPO Date, each
Registration Rights Holder may use its available demand rights and piggy-back
rights to sell:
- - In each 12-month period following the first and second anniversary of the IPO
Date, up to 20% of the shares of Common Stock received by such Registration
Rights Holder in the Incorporation Transactions (such holder's "Original
Block"); and
- - With the Company's consent, Common Stock constituting up to an additional
13 1/3% of such holder's Original Block.
In each 12-month period following the third anniversary of the IPO Date,
each Registration Rights Holder may use its available demand rights and
piggy-back rights to sell Common Stock constituting up to 33 1/3% of its
Original Block.
The demand and piggy-back rights are not available for Nonvoting Common
Stock.
In addition to the rights described above, each Registration Rights Holder
will also be entitled to sell additional shares of Common Stock to the extent
that PLPs who are Managing Directors in the Firm immediately following the
Offerings sell shares of Common Stock in an amount which in any one year period
following the Offerings represents, in the aggregate, a greater percentage of
the number of shares of Common Stock issued to such PLPs in the Incorporation
Transactions than the percentages specified above (i.e., 0% during year one, 20%
during years two and three, and 33 1/3% thereafter). The exercise by the
Registration Rights Holders of their respective rights under the Registration
Rights Agreement may, if the Company determines that such exercise would
interfere with a public offering by the Company, be delayed by the Company for
up to 90 days.
The Company has agreed to bear certain customary expenses associated with
SBCM's and KAA's offering of Common Stock in the Offerings. Thereafter, the
Registration Rights Agreements provide that the expenses of an offering of
Common Stock are generally the responsibility of each participating Registration
Rights Holder selling Common Stock, apportioned on a pro rata basis. Pursuant to
the Registration Rights Agreements, the Company has agreed to indemnify each
participating Registration Rights Holder against certain liabilities, including
those arising under the Securities Act of 1933.
The Registration Rights Agreements also provide that if the Company makes a
general offer to purchase shares of Common Stock held by the PLPs, then a
Registration Rights Holder will be permitted to participate in such transaction
on a pro rata basis with the former PLPs. In addition, a Registration Rights
Holder may tender its shares of Common Stock in any tender or exchange offer
recommended for approval by the Company's Board of Directors (or as to which the
Company's Board of Directors makes no recommendation).
OTHER REGISTRATION RIGHTS
The PLPs are not being granted the right to require the Company to register
the shares of Common Stock that they received in connection with the
Incorporation Transactions under the Securities Act of 1933. However, the Plan
of Incorporation and the Company's Charter permit the Board of Directors to
grant registration rights to the PLPs. As a result, the Board of Directors may
at any time and from time to time grant registration rights to the PLPs.
The ability of the Board of Directors to grant registration rights to the
PLPs, together with the ability of the Shareholders' Committee under the
Shareholders' Agreement to waive the PLP Transfer Restrictions thereunder and
under the Plan of Incorporation, could, if exercised, permit the PLPs to sell
significant amounts of Common Stock at any time following the expiration of the
Underwriters' lock-up. See "Risk Factors -- Our Share Price May Decline Due to
Shares Eligible for Future Sale" for a further discussion of the risks
associated with these actions.
112
<PAGE> 114
VALIDITY OF COMMON STOCK
The validity of the Common Stock offered hereby will be passed upon for the
Company by Sullivan & Cromwell, New York, New York, and for the Underwriters by
Cleary, Gottlieb, Steen & Hamilton, New York, New York. Certain legal matters
will be passed upon for the Company by one of the Company's General Counsel,
Robert J. Katz or Gregory K. Palm. Sullivan & Cromwell has in the past
represented, and continues to represent, one or more of the Underwriters and
their affiliates in a variety of matters. Cleary, Gottlieb, Steen & Hamilton has
in the past represented, and continues to represent, the Company in a variety of
matters.
EXPERTS
The financial statements of the Firm as of November 28, 1997 and November
27, 1998 and for each of the three fiscal years in the fiscal period ended
November 27, 1998 included in this Prospectus have been so included in reliance
on the report of PricewaterhouseCoopers LLP, independent accountants, given on
the authority of said firm as experts in auditing and accounting.
The income statement data and balance sheet data (other than adjusted
assets) set forth in "Selected Consolidated Financial Data" for each of the five
fiscal years ended November 27, 1998 included in this Prospectus have been so
included in reliance on the report of PricewaterhouseCoopers LLP, independent
accountants, given on the authority of said firm as experts in auditing and
accounting.
The Pro Forma Consolidated Balance Sheet Information as of November 27,
1998 and the Pro Forma Consolidated Income Statement Information for the fiscal
year then ended included in this Prospectus have been so included in reliance on
the report of PricewaterhouseCoopers LLP, independent public accountants, on
their examination of the Pro Forma Adjustments and the Offerings all as
described in Note 2 to the Pro Forma Consolidated Financial Information, and the
application of those adjustments to the historical amounts in the Pro Forma
Consolidated Balance Sheet Information as of November 27, 1998 and the Pro Forma
Consolidated Income Statement Information for the fiscal year then ended, given
on the authority of said firm as experts in performing examinations of Pro Forma
Financial Information in accordance with standards established by the American
Institute of Certified Public Accountants.
The information under the caption "Management's Discussion and Analysis of
Financial Condition and Results of Operations", except for the voluntary
information presented under the headings "VaR" or "VaR Methodology, Assumptions
and Limitations", taken as a whole, of the Firm for the three-year fiscal period
ended November 27, 1998 included in this Prospectus has been so included in
reliance on the report of PricewaterhouseCoopers LLP, independent public
accountants, given on the authority of said firm as experts in performing
examinations of management's discussion and analysis of financial condition and
results of operations in accordance with standards established by the American
Institute of Certified Public Accountants.
Except as otherwise indicated, all amounts with respect to the volume,
number and market share of mergers and acquisitions and underwriting
transactions and related ranking information included in this Prospectus have
been derived from information compiled and classified by Securities Data Company
and have been so included in reliance on Securities Data Company's authority as
experts in compiling and classifying information as to securities transactions.
113
<PAGE> 115
AVAILABLE INFORMATION
Upon completion of the Offerings, the Company will be required to file
annual, quarterly and current reports, proxy statements and other information
with the SEC. You may read and copy any documents filed by the Company at the
SEC's public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549.
Please call the SEC at 1-800-SEC-0330 for further information on the public
reference room. The Company's filings with the SEC are also available to the
public through the SEC's Internet site at http://www. sec.gov and through the
New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005, on
which the Common Stock is listed. After the Offerings, we expect to provide
annual reports to our shareholders
that include financial information reported on by our independent public
accountants.
We have filed a Registration Statement on Form S-1 with the SEC. This
Prospectus is a part of the Registration Statement and does not contain all of
the information in the Registration Statement. Whenever a reference is made in
this Prospectus to a contract or other document of the Company, please be aware
that such reference is not necessarily complete and that you should refer to the
exhibits that are a part of the Registration Statement for a copy of the
contract or other document. You may review a copy of the Registration Statement
at the SEC's public reference room in Washington, D.C. as well as through the
SEC's Internet site.
114
<PAGE> 116
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Report of Independent Accountants........................... F-2
Consolidated Statements of Earnings......................... F-3
Consolidated Statements of Financial Condition.............. F-4
Consolidated Statements of Changes in Partners' Capital..... F-5
Consolidated Statements of Cash Flows....................... F-6
Notes to Consolidated Financial Statements.................. F-7
</TABLE>
F-1
<PAGE> 117
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners,
The Goldman Sachs Group, L.P.:
In our opinion, the accompanying consolidated statements of financial condition
and the related consolidated statements of earnings, changes in partners'
capital and cash flows (included on pages F-3 to F-23 of this Prospectus)
present fairly, in all material respects, the consolidated financial position of
The Goldman Sachs Group, L.P. and Subsidiaries (the "Firm") as of November 27,
1998 and November 28, 1997, and the results of their consolidated operations and
their consolidated cash flows for the three fiscal years in the period ended
November 27, 1998, in conformity with generally accepted accounting principles.
These financial statements are the responsibility of the Firm's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these statements in accordance with
generally accepted auditing standards, which require that we plan and perform
the audits to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
We have also previously audited, in accordance with generally accepted auditing
standards, the consolidated statements of financial condition as of November 29,
1996, November 24, 1995 and November 25, 1994, and the related consolidated
statements of earnings, changes in partners' capital and cash flows for the
fiscal years ended November 24, 1995 and November 25, 1994 (none of which are
presented herein); and we expressed unqualified opinions on those consolidated
financial statements. In our opinion, the information set forth in the selected
historical consolidated income statement and balance sheet data (other than
adjusted assets) for each of the five fiscal years in the period ended November
27, 1998 (included on pages 33 and 34 of this Prospectus) is fairly stated, in
all material respects, in relation to the consolidated financial statements from
which it has been derived.
PricewaterhouseCoopers LLP
New York, New York
January 22, 1999.
F-2
<PAGE> 118
THE GOLDMAN SACHS GROUP, L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
<TABLE>
<CAPTION>
YEAR ENDED NOVEMBER
-----------------------------------
1996 1997 1998
---- ---- ----
(in millions)
<S> <C> <C> <C>
REVENUES:
Investment banking........................................ $ 2,113 $ 2,587 $ 3,368
Trading and principal investments......................... 2,496 2,303 2,015
Asset management and securities services.................. 981 1,456 2,085
Interest income........................................... 11,699 14,087 15,010
------- ------- -------
Total revenues.................................. 17,289 20,433 22,478
Interest expense, principally on short-term funding....... 11,160 12,986 13,958
------- ------- -------
Revenues, net of interest expense............... 6,129 7,447 8,520
OPERATING EXPENSES:
Compensation and benefits................................. 2,421 3,097 3,838
Brokerage, clearing and exchange fees..................... 278 357 424
Market development........................................ 137 206 287
Communications and technology............................. 173 208 265
Depreciation and amortization............................. 172 178 242
Occupancy................................................. 154 168 207
Professional services and other........................... 188 219 336
------- ------- -------
Total operating expenses........................ 3,523 4,433 5,599
Pre-tax earnings.......................................... 2,606 3,014 2,921
Provision for taxes....................................... 207 268 493
------- ------- -------
Net earnings.............................................. $ 2,399 $ 2,746 $ 2,428
======= ======= =======
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-3
<PAGE> 119
THE GOLDMAN SACHS GROUP, L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
<TABLE>
<CAPTION>
AS OF NOVEMBER
--------------------
1997 1998
---- ----
(in millions)
<S> <C> <C>
ASSETS:
Cash and cash equivalents................................... $ 1,328 $ 2,836
Cash and securities segregated in compliance with U.S.
federal and other regulations (principally U.S. government
obligations).............................................. 4,903 7,887
Receivables from brokers, dealers and clearing
organizations............................................. 3,754 4,321
Receivables from customers and counterparties............... 10,060 14,953
Securities borrowed......................................... 51,058 69,158
Securities purchased under agreements to resell............. 39,376 37,484
Right to receive securities................................. -- 7,564
Financial instruments owned, at fair value:
Commercial paper, certificates of deposit and time
deposits............................................... 1,477 1,382
U.S. government, federal agency and sovereign
obligations............................................ 25,736 24,789
Corporate debt............................................ 11,321 10,744
Equities and convertible debentures....................... 11,870 11,066
State, municipal and provincial obligations............... 1,105 918
Derivative contracts...................................... 13,788 21,299
Physical commodities...................................... 1,092 481
Other assets................................................ 1,533 2,498
-------- --------
$178,401 $217,380
======== ========
LIABILITIES AND NET WORTH:
Short-term borrowings, including commercial paper........... $ 21,008 $ 27,430
Payables to brokers, dealers and clearing organizations..... 952 730
Payables to customers and counterparties.................... 22,995 36,179
Securities loaned........................................... 17,627 21,117
Securities sold under agreements to repurchase.............. 44,057 36,257
Obligation to return securities............................. -- 9,783
Financial instruments sold, but not yet purchased, at fair
value:
U.S. government, federal agency and sovereign
obligations............................................ 22,371 22,360
Corporate debt............................................ 1,708 1,441
Equities and convertible debentures....................... 6,357 6,406
Derivative contracts...................................... 15,964 24,722
Physical commodities...................................... 78 966
Other liabilities and accrued expenses...................... 3,080 3,699
Long-term borrowings........................................ 15,667 19,906
-------- --------
171,864 210,996
Commitments and contingencies
Partners' capital allocated for income taxes and potential
withdrawals............................................... 430 74
Partners' capital........................................... 6,107 6,310
-------- --------
$178,401 $217,380
======== ========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-4
<PAGE> 120
THE GOLDMAN SACHS GROUP, L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
<TABLE>
<CAPTION>
YEAR ENDED NOVEMBER
-----------------------------
1996 1997 1998
---- ---- ----
(in millions)
<S> <C> <C> <C>
Partners' capital, beginning of year........................ $ 4,905 $ 5,309 $ 6,107
Additions:
Net earnings.............................................. 2,399 2,746 2,428
Capital contributions..................................... 4 89 9
------- ------- -------
Total additions................................... 2,403 2,835 2,437
Deductions:
Returns on capital and certain distributions to
partners............................................... (473) (557) (619)
Termination of the Profit Participation Plans............. -- -- (368)
Transfers to partners' capital allocated for income taxes
and potential withdrawals, net......................... (1,526) (1,480) (1,247)
------- ------- -------
Total deductions.................................. (1,999) (2,037) (2,234)
------- ------- -------
Partners' capital, end of year.............................. $ 5,309 $ 6,107 $ 6,310
======= ======= =======
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-5
<PAGE> 121
THE GOLDMAN SACHS GROUP, L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
YEAR ENDED NOVEMBER
-------------------------------
1996 1997 1998
---- ---- ----
(in millions)
<S> <C> <C> <C>
Cash flows from operating activities:
Net earnings.............................................. $ 2,399 $ 2,746 $ 2,428
Non-cash items included in net earnings:
Depreciation and amortization........................... 172 178 242
Deferred income taxes................................... 85 32 23
Changes in operating assets and liabilities:
Cash and securities segregated in compliance with U.S.
federal and other regulations.......................... (1,445) (670) (2,984)
Net receivables from brokers, dealers and clearing
organizations.......................................... 169 (1,599) (789)
Net payables to customers and counterparties............ 4,279 2,339 8,116
Securities borrowed, net................................ (17,075) (8,124) (14,610)
Financial instruments owned, at fair value.............. (9,415) (7,439) 148
Financial instruments sold, but not yet purchased, at
fair value............................................. 5,276 11,702 7,559
Other, net.............................................. 926 905 (71)
-------- ------- --------
Net cash (used for)/provided by operating
activities........................................... (14,629) 70 62
-------- ------- --------
Cash flows from investing activities:
Property, leasehold improvements and equipment............ (258) (259) (476)
Financial instruments owned, at fair value................ 115 (360) (180)
Acquisitions, net of cash acquired........................ (75) (74) --
-------- ------- --------
Net cash used for investing activities................ (218) (693) (656)
-------- ------- --------
Cash flows from financing activities:
Short-term borrowings, net................................ 391 1,082 2,193
Securities sold under agreements to repurchase, net....... 16,012 (4,717) (5,909)
Issuance of long-term borrowings.......................... 5,172 7,734 10,527
Repayment of long-term borrowings......................... (3,986) (1,855) (2,058)
Capital contributions..................................... 4 89 9
Returns on capital and certain distributions to
partners................................................ (473) (557) (619)
Termination of the Profit Participation Plans............. -- -- (368)
Partners' capital allocated for income taxes and potential
withdrawals............................................. (1,017) (2,034) (1,673)
-------- ------- --------
Net cash provided by/(used for) financing
activities........................................... 16,103 (258) 2,102
-------- ------- --------
Net increase/(decrease) in cash and cash equivalents...... 1,256 (881) 1,508
Cash and cash equivalents, beginning of year................ 953 2,209 1,328
-------- ------- --------
Cash and cash equivalents, end of year...................... $ 2,209 $ 1,328 $ 2,836
======== ======= ========
</TABLE>
SUPPLEMENTAL DISCLOSURES:
Cash payments for interest approximated the related expense for each of the
fiscal periods presented. Payments of income taxes were not material.
A zero coupon bond of $32 million representing a portion of the acquisition
price of CIN Management Limited was recorded on the consolidated statement of
financial condition as of November 1996 and was excluded from the consolidated
statement of cash flows as it represented a non-cash item.
An increase in total assets and liabilities of $11.64 billion related to the
provisions of SFAS No. 125 that were deferred under SFAS No. 127 was excluded
from the consolidated statement of cash flows for the year ended November 1998
as it represented a non-cash item.
The accompanying notes are an integral part of these consolidated financial
statements.
F-6
<PAGE> 122
THE GOLDMAN SACHS GROUP, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. DESCRIPTION OF BUSINESS
The Goldman Sachs Group, L.P., a Delaware limited partnership ("Group
L.P."), together with its consolidated subsidiaries (collectively, the "Firm"),
is a global investment banking and securities firm that provides a wide range of
services worldwide to a substantial and diversified client base.
The Firm's activities are divided into three principal business lines:
- Investment Banking, which includes financial advisory services and
underwriting;
- Trading and Principal Investments, which includes fixed income, currency
and commodities ("FICC"), equities and principal investments (principal
investments reflect primarily the Firm's investments in its merchant
banking funds); and
- Asset Management and Securities Services, which includes asset
management, securities services and commissions.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The consolidated financial statements include the accounts of Group L.P.
and its U.S. and international subsidiaries including Goldman, Sachs & Co.
("GS&Co.") and J. Aron & Company in New York, Goldman Sachs International
("GSI") in London and Goldman Sachs (Japan) Ltd. ("GSJL") in Tokyo. Certain
reclassifications have been made to prior year amounts to conform to the current
presentation.
These consolidated financial statements have been prepared in accordance
with generally accepted accounting principles that require management to make
estimates and assumptions regarding trading inventory valuations, partner
retirements, the outcome of pending litigation and other matters that affect the
consolidated financial statements and related disclosures. These estimates and
assumptions are based on judgment and available information and, consequently,
actual results could be materially different from these estimates.
Unless otherwise stated herein, all references to 1996, 1997 and 1998 refer
to the Firm's fiscal year ended, or the date, as the context requires, November
29, 1996, November 28, 1997 and November 27, 1998, respectively.
CASH AND CASH EQUIVALENTS
The Firm defines cash equivalents as highly liquid overnight deposits held
in the ordinary course of business.
REPURCHASE AGREEMENTS AND COLLATERALIZED FINANCING ARRANGEMENTS
Securities purchased under agreements to resell and securities sold under
agreements to repurchase, principally U.S. government, federal agency and
investment-grade foreign sovereign obligations, represent short-term
collateralized financing transactions and are carried at their contractual
amounts plus accrued interest. These amounts are presented on a net-by-
counterparty basis, where management believes a legal right of setoff exists
under an enforceable master netting agreement. The Firm takes possession of
securities purchased under agreements to resell, monitors the market value of
the underlying securities on a daily basis and obtains additional collateral as
appropriate.
F-7
<PAGE> 123
THE GOLDMAN SACHS GROUP, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Securities borrowed and loaned are recorded on the statements of financial
condition based on the amount of cash collateral advanced or received. These
transactions are generally collateralized by either cash, securities or letters
of credit. The Firm takes possession of securities borrowed, monitors the market
value of securities loaned and obtains additional collateral as appropriate.
Income or expense is recognized as interest over the life of the transaction.
FINANCIAL INSTRUMENTS
Gains and losses on financial instruments and commission income and related
expenses are recorded on a trade date basis in the consolidated statements of
earnings. For purposes of the consolidated statements of financial condition
only, purchases and sales of financial instruments, including agency
transactions, are generally recorded on a settlement date basis. Recording such
transactions on a trade date basis would not result in a material adjustment to
the consolidated statements of financial condition.
Substantially all financial instruments used in the Firm's trading and
non-trading activities are carried at fair value or amounts that approximate
fair value and unrealized gains and losses are recognized in earnings. Fair
value is based generally on listed market prices or broker or dealer price
quotations. To the extent that prices are not readily available, fair value is
based on either internal valuation models or management's estimate of amounts
that could be realized under current market conditions, assuming an orderly
liquidation over a reasonable period of time. Certain over-the-counter ("OTC")
derivative instruments are valued using pricing models that consider, among
other factors, current and contractual market prices, time value, and yield
curve and/or volatility factors of the underlying positions. The fair value of
the Firm's trading and non-trading assets and liabilities is discussed further
in Notes 3, 4 and 5.
PRINCIPAL INVESTMENTS
Principal investments are carried at fair value, generally as evidenced by
quoted market prices or by comparable substantial third-party transactions.
Where fair value is not readily ascertainable, principal investments are
recorded at cost or management's estimate of the realizable value.
The Firm is entitled to receive merchant banking overrides (i.e., an
increased share of a fund's income and gains) when the return on the fund's
investments exceeds certain threshold returns. Overrides are based on investment
performance over the life of each merchant banking fund, and future investment
underperformance may require amounts previously distributed to the Firm to be
returned to the funds. Accordingly, overrides are recognized in earnings only
when management determines that the probability of return is remote. Overrides
are included in "Asset Management and Securities Services" on the consolidated
statements of earnings.
DERIVATIVE CONTRACTS
Derivatives used for trading purposes are reported at fair value and are
included in "Derivative contracts" on the consolidated statements of financial
condition. Gains and losses on derivatives used for trading purposes are
included in "Trading and Principal Investments" on the consolidated statements
of earnings.
Derivatives used for non-trading purposes include interest rate futures
contracts and interest rate and currency swap agreements, which are primarily
utilized to convert a substantial portion of the Firm's fixed rate debt into
U.S. dollar-based floating rate obligations. Gains and losses on
F-8
<PAGE> 124
THE GOLDMAN SACHS GROUP, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
these transactions are generally deferred and recognized as adjustments to
interest expense over the life of the derivative contract. Gains and losses
resulting from the early termination of derivatives used for non-trading
purposes are generally deferred and recognized over the remaining life of the
underlying debt. If the underlying debt is terminated prior to its stated
maturity, gains and losses on these transactions, including the associated
hedges, are recognized in earnings immediately.
Derivatives are reported on a net-by-counterparty basis on the consolidated
statements of financial condition where management believes a legal right of
setoff exists under an enforceable master netting agreement.
PROPERTY, LEASEHOLD IMPROVEMENTS AND EQUIPMENT
Depreciation and amortization generally are computed using accelerated cost
recovery methods for all property and equipment and for leasehold improvements
where the term of the lease is greater than the economic useful life of the
asset. All other leasehold improvements are amortized on a straight-line basis
over the term of the lease.
GOODWILL
The cost of acquired companies in excess of the fair value of net assets
acquired at acquisition date is recorded as goodwill and amortized over periods
of 15 to 25 years on a straight-line basis.
PROVISION FOR TAXES
The Firm accounts for income taxes incurred by its corporate subsidiaries
in accordance with Statement of Financial Accounting Standards ("SFAS") No. 109,
"Accounting for Income Taxes". The consolidated statements of earnings for the
periods presented include a provision for, or benefit from, income taxes on
income earned, or losses incurred, by Group L.P. and its subsidiaries including
a provision for, or benefit from, unincorporated business tax on income earned,
or losses incurred, by Group L.P. and its subsidiaries conducting business in
New York City. No additional income tax provision is required in the
consolidated statements of earnings because Group L.P. is a partnership and the
remaining tax effects accrue directly to its partners.
FOREIGN CURRENCY TRANSLATION
Assets and liabilities of subsidiaries whose functional currency is other
than the U.S. dollar are translated using currency exchange rates prevailing at
the end of the period presented, while revenues and expenses are translated
using average exchange rates during the period. Gains or losses resulting from
the translation of foreign currency financial statements are recorded as
cumulative translation adjustments, and are included as a component of
"Partners' capital allocated for income taxes and potential withdrawals" on the
consolidated statements of financial condition. Gains or losses resulting from
foreign exchange transactions are recorded in earnings.
INVESTMENT BANKING
Underwriting revenues and fees from mergers and acquisitions and other
corporate finance advisory assignments are recorded when the underlying
transaction is completed under the terms of the engagement. Syndicate expenses
related to securities offerings in which the Firm acts as an underwriter or
agent are deferred until the related revenue is recognized.
F-9
<PAGE> 125
THE GOLDMAN SACHS GROUP, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
ACCOUNTING DEVELOPMENTS
In June 1996, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 125, "Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities", effective for transactions occurring after
December 31, 1996. SFAS No. 125 establishes standards for distinguishing
transfers of financial assets that are accounted for as sales from transfers
that are accounted for as secured borrowings.
The provisions of SFAS No. 125 relating to repurchase agreements,
securities lending transactions and other similar transactions were deferred by
the provisions of SFAS No. 127, "Deferral of the Effective Date of Certain
Provisions of FASB Statement No. 125", and became effective for transactions
entered into after December 31, 1997. This Statement requires that the
collateral obtained in certain types of secured lending transactions be recorded
on the balance sheet with a corresponding liability reflecting the obligation to
return such collateral to its owner. Effective January 1, 1998, the Firm adopted
the provisions of SFAS No. 125 that were deferred by SFAS No. 127. The adoption
of this standard increased the Firm's total assets and liabilities by $11.64
billion as of November 1998.
In February 1997, the FASB issued SFAS No. 128, "Earnings Per Share"
("EPS"), effective for periods ending after December 15, 1997, with restatement
required for all prior periods. SFAS No. 128 establishes new standards for
computing and presenting EPS. This Statement replaces primary and fully diluted
EPS with "basic EPS", which excludes dilution, and "diluted EPS", which includes
the effect of all potentially dilutive common shares and other dilutive
securities. Because the Firm has not historically reported EPS, this Statement
will have no impact on the Firm's historical financial statements. This
Statement will, however, apply to financial statements of the Firm prepared
after the Offerings.
In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive
Income", effective for fiscal years beginning after December 15, 1997, with
reclassification of earlier periods required for comparative purposes. SFAS No.
130 establishes standards for the reporting and presentation of comprehensive
income and its components in the financial statements. The Firm intends to adopt
this standard in the first quarter of fiscal 1999. This Statement is limited to
issues of reporting and presentation and, therefore, will not affect the Firm's
results of operations or financial condition.
In June 1997, the FASB issued SFAS No. 131, "Disclosures about Segments of
an Enterprise and Related Information", effective for fiscal years beginning
after December 15, 1997, with reclassification of earlier periods required for
comparative purposes. SFAS No. 131 establishes the criteria for determining an
operating segment and establishes the disclosure requirements for reporting
information about operating segments. The Firm intends to adopt this standard at
the end of fiscal 1999. This Statement is limited to issues of reporting and
presentation and, therefore, will not affect the Firm's results of operations or
financial condition.
In February 1998, the FASB issued SFAS No. 132, "Employers' Disclosures
about Pensions and Other Postretirement Benefits", effective for fiscal years
beginning after December 15, 1997, with restatement of disclosures for earlier
periods required for comparative purposes. SFAS No. 132 revises certain
employers' disclosures about pension and other post-retirement benefit plans.
The Firm intends to adopt this standard at the end of fiscal 1999. This
Statement is limited to issues of reporting and presentation and, therefore,
will not affect the Firm's results of operations or financial condition.
F-10
<PAGE> 126
THE GOLDMAN SACHS GROUP, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
In March 1998, the Accounting Standards Executive Committee of the American
Institute of Certified Public Accountants issued Statement of Position ("SOP")
No. 98-1, "Accounting for the Costs of Computer Software Developed or Obtained
for Internal Use", effective for fiscal years beginning after December 15, 1998.
SOP No. 98-1 requires that certain costs of computer software developed or
obtained for internal use be capitalized and amortized over the useful life of
the related software. The Firm currently expenses the cost of all software
development in the period in which it is incurred. The Firm intends to adopt
this Statement in fiscal 2000 and is currently assessing its effect.
In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities", effective for fiscal years beginning after
June 15, 1999. SFAS No. 133 establishes accounting and reporting standards for
derivative instruments, including certain derivative instruments embedded in
other contracts (collectively referred to as derivatives), and for hedging
activities. This Statement requires that an entity recognize all derivatives as
either assets or liabilities in the statement of financial condition and measure
those instruments at fair value. The accounting for changes in the fair value of
a derivative instrument depends on its intended use and the resulting
designation. The Firm intends to adopt this standard in fiscal 2000 and is
currently assessing its effect.
NOTE 3. FINANCIAL INSTRUMENTS
Financial instruments, including both cash instruments and derivatives, are
used to manage market risk, facilitate customer transactions, engage in trading
transactions and meet financing objectives. These instruments can be either
executed on an exchange or negotiated in the OTC market.
Transactions involving financial instruments sold, but not yet purchased,
entail an obligation to purchase a financial instrument at a future date. The
Firm may incur a loss if the market value of the financial instrument
subsequently increases prior to the purchase of the instrument.
FAIR VALUE OF FINANCIAL INSTRUMENTS
Substantially all of the Firm's assets and liabilities are carried at fair
value or amounts that approximate fair value.
Trading assets and liabilities, including derivative contracts used for
trading purposes, are carried at fair value and reported as financial
instruments owned and financial instruments sold, but not yet purchased on the
consolidated statements of financial condition. Non-trading assets and
liabilities are carried at fair value or amounts that approximate fair value.
Non-trading assets include cash and cash equivalents, cash and securities
segregated in compliance with U.S. federal and other regulations, receivables
from brokers, dealers and clearing organizations, receivables from customers and
counterparties, securities borrowed, securities purchased under agreements to
resell, right to receive securities and certain investments, primarily those
made in connection with the Firm's merchant banking activities.
Non-trading liabilities include short-term borrowings, payables to brokers,
dealers and clearing organizations, payables to customers and counterparties,
securities loaned, securities sold under agreements to repurchase, obligation to
return securities, other liabilities and accrued expenses and long-term
borrowings. Fair value of the Firm's long-term borrowings and associated hedges
is discussed in Note 5.
F-11
<PAGE> 127
THE GOLDMAN SACHS GROUP, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
TRADING AND PRINCIPAL INVESTMENTS
The Firm's Trading and Principal Investments business facilitates customer
transactions and takes proprietary positions through market making in and
trading of securities, currencies, commodities and swaps and other derivatives.
Derivative financial instruments are often used to hedge cash instruments or
other derivative financial instruments as an integral part of the Firm's
strategies. As a result, it is necessary to view the results of any activity on
a fully-integrated basis, including cash positions, the effect of related
derivatives and the financing of the underlying positions.
Net revenues represent total revenues less allocations of interest expense
to specific securities, commodities and other positions in relation to the level
of financing incurred by each. The following table sets forth the net revenues
of the Firm's Trading and Principal Investments business:
<TABLE>
<CAPTION>
YEAR ENDED NOVEMBER
--------------------------
1996 1997 1998
---- ---- ----
(in millions)
<S> <C> <C> <C>
FICC................................................... $1,749 $2,055 $1,438
Equities............................................... 730 573 795
Principal investments.................................. 214 298 146
------ ------ ------
Total Trading and Principal Investments................ $2,693 $2,926 $2,379
====== ====== ======
</TABLE>
RISK MANAGEMENT
The Firm seeks to monitor and control its risk exposure through a variety
of separate but complementary financial, credit, operational and legal reporting
systems for individual entities and the Firm as a whole. Management believes
that it has effective procedures for evaluating and managing the market, credit
and other risks to which it is exposed. The Management Committee, the Firm's
primary decision-making body, determines (both directly and through delegated
authority) the types of business in which the Firm engages, approves guidelines
for accepting customers for all product lines, outlines the terms under which
customer business is conducted and establishes the parameters for the risks that
the Firm is willing to undertake in its business.
MARKET RISK. The Firmwide Risk Committee, which reports to senior
management and meets weekly, is responsible for managing and monitoring all of
the Firm's risk exposures. In addition, the Firm maintains segregation of
duties, with credit review and risk-monitoring functions performed by groups
that are independent from revenue-producing departments.
The potential for changes in the market value of the Firm's trading
positions is referred to as "market risk". The Firm's trading positions result
from underwriting, market making and proprietary trading activities.
The broadly defined categories of market risk include exposures to interest
rates, currency rates, equity prices and commodity prices.
- - Interest rate risks primarily result from exposures to changes in the level,
slope and curvature of the yield curve, the volatility of interest rates,
mortgage prepayment speeds and credit spreads.
- - Currency rate risks result from exposures to changes in spot prices, forward
prices and volatilities of currency rates.
F-12
<PAGE> 128
THE GOLDMAN SACHS GROUP, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
- - Equity price risks result from exposures to changes in prices and volatilities
of individual equities, equity baskets and equity indices.
- - Commodity price risks result from exposures to changes in spot prices, forward
prices and volatilities of commodities, such as electricity, natural gas,
crude oil, petroleum products and precious and base metals.
These risk exposures are managed through diversification, by controlling
position sizes and by establishing offsetting hedges in related securities or
derivatives. For example, the Firm may hedge a portfolio of common stock by
taking an offsetting position in a related equity-index futures contract. The
ability to manage these exposures may, however, be limited by adverse changes in
the liquidity of the security or the related hedge instrument and in the
correlation of price movements between the security and the related hedge
instrument.
CREDIT RISK. Credit risk represents the loss that the Firm would incur if
a counterparty or issuer of securities or other instruments it holds fails to
perform its contractual obligations to the Firm. To reduce its credit exposures,
the Firm seeks to enter into netting agreements with counterparties that permit
the Firm to offset receivables and payables with such counterparties. The Firm
does not take into account any such agreements when calculating credit risk,
however, unless management believes a legal right of setoff exists under an
enforceable master netting agreement.
Credit concentrations may arise from trading, underwriting and securities
borrowing activities and may be impacted by changes in economic, industry or
political factors. The Firm's concentration of credit risk is monitored actively
by the Credit Policy Committee. As of November 1998, U.S. government and federal
agency obligations represented 7% of the Firm's total assets. In addition, most
of the Firm's securities purchased under agreements to resell are collateralized
by U.S. government, federal agency and sovereign obligations.
DERIVATIVE ACTIVITIES
Most of the Firm's derivative transactions are entered into for trading
purposes. The Firm uses derivatives in its trading activities to facilitate
customer transactions, to take proprietary positions and as a means of risk
management. The Firm also enters into non-trading derivative contracts to manage
the interest rate and currency exposure on its long-term borrowings. Non-
trading derivatives related to the Firm's long-term borrowings are discussed in
Note 5.
Derivative contracts are financial instruments, such as futures, forwards,
swaps or option contracts, that derive their value from underlying assets,
indices, reference rates or a combination of these factors. Derivatives may
involve future commitments to purchase or sell financial instruments or
commodities, or to exchange currency or interest payment streams. The amounts
exchanged are based on the specific terms of the contract with reference to
specified rates, securities, commodities or indices.
Derivative contracts exclude certain cash instruments, such as
mortgage-backed securities, interest-only and principal-only obligations and
indexed debt instruments, that derive their values or contractually required
cash flows from the price of some other security or index. Derivatives also
exclude option features that are embedded in cash instruments, such as the
conversion features and call provisions embedded in bonds. The Firm has elected
to include commodity-related contracts in its derivative disclosure, although
not required to do so, as these contracts may be settled in cash or are readily
convertible into cash.
F-13
<PAGE> 129
THE GOLDMAN SACHS GROUP, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The gross notional (or contractual) amounts of derivative financial
instruments represent the volume of these transactions and not the amounts
potentially subject to market risk. In addition, measurement of market risk is
meaningful only when all related and offsetting transactions are taken into
consideration. Gross notional (or contractual) amounts of derivative financial
instruments used for trading purposes with off-balance-sheet market risk are set
forth below:
<TABLE>
<CAPTION>
AS OF NOVEMBER
----------------------
1997 1998
---- ----
(in millions)
<S> <C> <C>
INTEREST RATE RISK:
Financial futures and forward settlement contracts......... $334,916 $ 406,302
Swap agreements............................................ 918,067 1,848,977
Written option contracts................................... 351,359 423,561
EQUITY PRICE RISK:
Financial futures and forward settlement contracts......... 7,457 7,405
Swap agreements............................................ 1,993 2,752
Written option contracts................................... 51,916 54,856
CURRENCY AND COMMODITY PRICE RISK:
Financial futures and forward settlement contracts......... 355,882 420,138
Swap agreements............................................ 32,355 51,502
Written option contracts................................... 179,481 183,929
</TABLE>
Market risk on purchased option contracts is limited to the market value of
the option; therefore, purchased option contracts have no off-balance-sheet
market risk. The gross notional (or contractual) amounts of purchased option
contracts used for trading purposes are set forth below:
<TABLE>
<CAPTION>
AS OF NOVEMBER
--------------------
1997 1998
---- ----
(in millions)
<S> <C> <C>
PURCHASED OPTION CONTRACTS:
Interest rate............................................... $301,685 $509,770
Equity...................................................... 24,021 59,571
Currency and commodity...................................... 180,859 186,748
</TABLE>
The Firm utilizes replacement cost as its measure of derivative credit
risk. Replacement cost, as reported in financial instruments owned, at fair
value on the consolidated statements of financial condition, represents amounts
receivable from various counterparties, net of any unrealized losses owed where
management believes a legal right of setoff exists under an enforceable master
netting agreement. Replacement cost for purchased option contracts is the market
value of the contract. The Firm controls its credit risk through an established
credit approval process, by monitoring counterparty limits, obtaining collateral
where appropriate and, in some cases, using legally enforceable master netting
agreements.
F-14
<PAGE> 130
THE GOLDMAN SACHS GROUP, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The fair value of derivative financial instruments used for trading
purposes, computed in accordance with the Firm's netting policy, is set forth
below:
<TABLE>
<CAPTION>
AS OF NOVEMBER
------------------------------------------------
1997 1998
---------------------- ----------------------
ASSETS LIABILITIES ASSETS LIABILITIES
------- ----------- ------- -----------
(in millions)
<S> <C> <C> <C> <C>
PERIOD END:
Forward settlement contracts............................. $ 3,634 $ 3,436 $ 4,061 $ 4,201
Swap agreements.......................................... 4,269 5,358 10,000 11,475
Option contracts......................................... 5,787 7,166 7,140 9,038
------- ------- ------- -------
Total.................................................... $13,690 $15,960 $21,201 $24,714
======= ======= ======= =======
MONTHLY AVERAGE:
Forward settlement contacts.............................. $ 3,351 $ 3,162 $ 4,326 $ 3,979
Swap agreements.......................................... 3,397 4,020 7,340 8,158
Option contracts......................................... 4,511 5,059 6,696 8,958
------- ------- ------- -------
Total.................................................... $11,259 $12,241 $18,362 $21,095
======= ======= ======= =======
</TABLE>
NOTE 4. SHORT-TERM BORROWINGS
The Firm obtains secured short-term financing principally through the use
of repurchase agreements and securities lending agreements, collateralized
mainly by U.S. government, federal agency, investment grade foreign sovereign
obligations and equity securities. The Firm obtains unsecured short-term
borrowings through issuance of commercial paper, promissory notes and bank
loans. The carrying value of these short-term obligations approximates fair
value due to their short-term nature.
Short-term borrowings are set forth below:
<TABLE>
<CAPTION>
AS OF NOVEMBER
------------------
1997 1998
---- ----
(in millions)
<S> <C> <C>
Commercial paper....................................... $ 4,468 $10,008
Promissory notes(1).................................... 10,411 10,763
Bank loans and other(1)................................ 6,129 6,659
------- -------
Total(2)............................................... $21,008 $27,430
======= =======
</TABLE>
- ---------------
(1) As of November 1997 and November 1998, short-term borrowings included $2,454
million and $2,955 million of long-term borrowings maturing within one year,
respectively.
(2) Weighted average interest rates for total short-term borrowings, including
commercial paper, were 5.43 % as of November 1997 and 5.19% as of November
1998.
The Firm maintains unencumbered securities with a market value in excess of
all uncollateralized short-term borrowings.
F-15
<PAGE> 131
THE GOLDMAN SACHS GROUP, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
NOTE 5. LONG-TERM BORROWINGS
The Firm's long-term borrowings are set forth below:
<TABLE>
<CAPTION>
AS OF NOVEMBER
-------------------
1997 1998
---- ----
(in millions)
<S> <C> <C>
Fixed-rate obligations(1)
U.S. dollar denominated.............................. $ 5,217 $ 5,260
Non-U.S. dollar denominated.......................... 1,556 2,066
Floating-rate obligations(2)
U.S. dollar denominated.............................. 8,342 11,858
Non-U.S. dollar denominated.......................... 552 722
------- -------
Total long-term borrowings(3).......................... $15,667 $19,906
======= =======
</TABLE>
- ---------------
(1) Interest rate ranges for U.S. dollar and non-U.S. dollar fixed rate
obligations are set forth below:
<TABLE>
<CAPTION>
AS OF
NOVEMBER
---------------
1997 1998
---- ----
<S> <C> <C>
U.S. dollar denominated
High...................................................... 10.10% 10.10%
Low....................................................... 5.82 5.74
Non-U.S. dollar denominated
High...................................................... 9.51 9.51
Low....................................................... 1.90 1.90
</TABLE>
(2) Floating interest rates generally are based on LIBOR, the U.S. treasury bill
rate or the federal funds rate. Certain equity-linked and indexed
instruments are included in floating rate obligations.
(3) Long-term borrowings bear fixed or floating interest rates and have
maturities that range from 1 to 30 years from the date of issue.
Long-term borrowings by maturity date are set forth below:
<TABLE>
<CAPTION>
AS OF NOVEMBER 1997 AS OF NOVEMBER 1998
------------------------------ ------------------------------
U.S. NON-U.S. U.S. NON-U.S.
DOLLAR DOLLAR TOTAL DOLLAR DOLLAR TOTAL
------ -------- ----- ------ -------- -----
(in millions)
<S> <C> <C> <C> <C> <C> <C>
MATURITY DATES:
1998................. $ 1,159 $ 135 $ 1,294 $ -- $ -- $ --
1999................. 2,436 451 2,887 2,443 199 2,642
2000................. 2,544 263 2,807 4,293 272 4,565
2001................. 971 142 1,113 2,261 148 2,409
2002................. 1,376 281 1,657 1,669 265 1,934
2003................. 941 109 1,050 1,409 412 1,821
2004-24.............. 4,132 727 4,859 5,043 1,492 6,535
------- ------ ------- ------- ------ -------
Total................ $13,559 $2,108 $15,667 $17,118 $2,788 $19,906
======= ====== ======= ======= ====== =======
</TABLE>
F-16
<PAGE> 132
THE GOLDMAN SACHS GROUP, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The Firm enters into non-trading derivative contracts, such as interest
rate and currency swap agreements, to effectively convert a substantial portion
of its fixed rate long-term borrowings into U.S. dollar-based floating rate
obligations. Accordingly, the aggregate carrying value of these long-term
borrowings and related hedges approximates fair value. The effective weighted
average interest rates for long-term borrowings, after hedging activities, are
set forth below:
<TABLE>
<CAPTION>
AS OF AS OF
NOVEMBER 1997 NOVEMBER 1998
--------------- ----------------
AMOUNT RATE AMOUNT RATE
------ ---- ------ ----
($ in millions)
<S> <C> <C> <C> <C>
Long-term borrowings:
Fixed-rate obligations................ $ 291 7.76% $ 222 8.09%
Floating-rate obligations............. 15,376 5.84 19,684 5.63
------- -------
Total long-term
borrowings................ $15,667 5.88 $19,906 5.66
======= =======
</TABLE>
The notional amounts, fair value and carrying value of the related swap
agreements used for non-trading purposes are set forth below:
<TABLE>
<CAPTION>
AS OF NOVEMBER
--------------
1997 1998
---- ----
(in millions)
<S> <C> <C>
Notional amount........................................ $8,708 $10,206
</TABLE>
<TABLE>
<CAPTION>
AS OF NOVEMBER
-----------------------------------------------
1997 1998
---------------------- ---------------------
ASSETS LIABILITIES ASSETS LIABILITIES
------ ----------- ------ -----------
(in millions)
<S> <C> <C> <C> <C>
Fair value.......................... $212 $4 $519 $7
Carrying value...................... 98 4 98 8
</TABLE>
NOTE 6. COMMITMENTS AND CONTINGENCIES
LITIGATION
The Firm is involved in a number of judicial, regulatory and arbitration
proceedings concerning matters arising in connection with the conduct of its
businesses. Management believes, based on currently available information, that
the results of such proceedings, in the aggregate, will not have a material
adverse effect on the Firm's financial condition, but might be material to the
Firm's operating results for any particular period, depending, in part, upon the
operating results for such period.
LEASES
The Firm has obligations under long-term non-cancelable lease agreements,
principally for office space, expiring on various dates through 2016. Certain
agreements are subject to periodic escalation charges for increases in real
estate taxes and other charges. Minimum rental
F-17
<PAGE> 133
THE GOLDMAN SACHS GROUP, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
commitments, net of minimum sublease rentals, under non-cancelable leases for
1999 and the succeeding four years and rent charged to operating expense for the
last three years are set forth below:
<TABLE>
<CAPTION>
(in millions)
<S> <C>
MINIMUM RENTAL COMMITMENTS:
1999.......................................... $ 142
2000.......................................... 139
2001.......................................... 139
2002.......................................... 136
2003.......................................... 128
Thereafter.................................... 860
------
Total............................... $1,544
======
NET RENT EXPENSE:
1996.......................................... $ 83
1997.......................................... 87
1998.......................................... 104
</TABLE>
OTHER COMMITMENTS
The Firm acts as an investor in merchant banking transactions which
includes making long-term investments in equity and debt securities in privately
negotiated transactions, corporate acquisitions and real estate transactions,
and in connection with a bridge loan fund. In connection with these activities,
the Firm had commitments to invest up to $670 million and $1.39 billion in
corporate and real estate merchant banking investment and bridge loan funds as
of November 1997 and November 1998, respectively.
In connection with loan origination and participation, the Firm had loan
commitments of $5.23 billion and $1.51 billion as of November 1997 and November
1998, respectively. These commitments are agreements to lend to counterparties,
have fixed termination dates and are contingent on all conditions to borrowing
set forth in the contract having been met. Since these commitments may expire
unused, the total commitment amount does not necessarily reflect the actual
future cash flow requirements.
The Firm also had outstanding guarantees of $786 million and $790 million
relating to its fund management activities as of November 1997 and November
1998, respectively.
The Firm had pledged securities of $23.60 billion and $22.88 billion as
collateral for securities borrowed of approximately equivalent value as of
November 1997 and November 1998, respectively.
The Firm obtains letters of credit issued to counterparties by various
banks that are used in lieu of securities or cash to satisfy various collateral
and margin deposit requirements. Letters of credit outstanding were $10.13
billion and $8.81 billion as of November 1997 and November 1998, respectively.
NOTE 7. EMPLOYEE BENEFIT PLANS
The Firm sponsors various pension plans and certain other post-retirement
benefit plans, primarily health care and life insurance, which cover most
employees worldwide. The Firm also provides certain benefits to former or
inactive employees prior to retirement. Plan benefits are
F-18
<PAGE> 134
THE GOLDMAN SACHS GROUP, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
primarily based on the employee's compensation and years of service. Pension
costs are determined actuarially and are funded in accordance with the Internal
Revenue Code. Plan assets are held in a trust and consist primarily of listed
stocks and U.S. bonds. A summary of these plans is set forth below:
DEFINED BENEFIT PENSION PLANS
The components of pension expense/(income) are set forth below:
<TABLE>
<CAPTION>
YEAR ENDED NOVEMBER
--------------------
1996 1997 1998
---- ---- ----
(in millions)
<S> <C> <C> <C>
Service cost, benefits earned during the period............. $ 15 $ 15 $ 14
Interest cost on projected benefit obligation............... 8 10 11
Return on plan assets....................................... (24) (18) (14)
Net amortization............................................ 14 4 (1)
---- ---- ----
Total pension expense............................. $ 13 $ 11 $ 10
==== ==== ====
U.S. plans.................................................. $ (1) $ (3) $ (3)
International plans......................................... 14 14 13
---- ---- ----
Total pension expense............................. $ 13 $ 11 $ 10
==== ==== ====
</TABLE>
The weighted average assumptions used to develop net periodic pension cost
and the actuarial present value of the projected benefit obligation are set
forth below. The assumptions represent a weighted average of the assumptions
used for the U.S. and international plans and are based on the economic
environment of each applicable country.
<TABLE>
<CAPTION>
YEAR ENDED NOVEMBER
--------------------
1996 1997 1998
---- ---- ----
<S> <C> <C> <C>
U.S. PLANS:
Discount rate............................................... 7.50% 7.50% 7.00%
Rate of increase in future compensation levels.............. 5.00 5.00 5.00
Expected long-term rate of return on plan assets............ 7.50 7.50 7.50
INTERNATIONAL PLANS:
Discount rate............................................... 5.70 5.70 5.00
Rate of increase in future compensation levels.............. 5.30 5.30 4.75
Expected long-term rate of return on plan assets............ 7.00 7.00 6.00
</TABLE>
F-19
<PAGE> 135
THE GOLDMAN SACHS GROUP, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The funded status of the qualified plans is set forth below:
<TABLE>
<CAPTION>
YEAR ENDED
NOVEMBER
--------------
1997 1998
---- ----
(in millions)
<S> <C> <C>
Actuarial present value of vested benefit obligation........ $(149) $(203)
----- -----
Accumulated benefit obligation.............................. (151) (207)
Effect of future salary increases........................... (16) (21)
----- -----
Projected benefit obligation................................ (167) (228)
Plan assets at fair market value............................ 187 208
----- -----
Projected benefit obligation less than/(greater than) plan
assets.................................................... 20 (20)
Unrecognized net loss....................................... 2 43
Unrecognized net transition gain............................ (20) (18)
----- -----
Prepaid pension cost, end of year........................... $ 2 $ 5
===== =====
PREPAID PENSION COST:
U.S. plans.................................................. $ 2 $ 5
International plans......................................... -- --
----- -----
Prepaid pension cost, end of year........................... $ 2 $ 5
===== =====
</TABLE>
POST-RETIREMENT PLANS
The Firm has unfunded post-retirement benefit plans that provide medical
and life insurance for eligible retirees, employees and dependents. The Firm's
accrued post-retirement benefit liability was $50 million and $53 million as of
November 1997 and November 1998, respectively. The Firm's expense for these
plans was $6 million, $7 million and $6 million in the years ended 1996, 1997
and 1998, respectively.
POST-EMPLOYMENT PLANS
Post-employment benefits include, but are not limited to, salary
continuation, supplemental unemployment benefits, severance benefits,
disability-related benefits, and continuation of health care and life insurance
coverage provided to former or inactive employees after employment but before
retirement. The accrued but unfunded liability under the plans was $12 million
and $10 million as of November 1997 and November 1998, respectively. The Firm's
expense for these plans was $2 million in each of the fiscal years ended 1996,
1997 and 1998.
DEFINED CONTRIBUTION PLANS
The Firm contributes to employer sponsored U.S. and international defined
contribution plans. The Firm's contribution to the U.S. plans was $39 million,
$44 million and $48 million for the years ended 1996, 1997 and 1998,
respectively. The Firm's contribution to the international plans was $7 million,
$14 million and $10 million for the years ended 1996, 1997 and 1998,
respectively.
F-20
<PAGE> 136
THE GOLDMAN SACHS GROUP, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
NOTE 8. CAPITAL
PARTNERS' CAPITAL
Partners' capital includes both the general partner's and limited partners'
capital and is subject to certain withdrawal restrictions. As of November 1998,
the Firm had $6.31 billion in partners' capital. Managing directors that are
participating limited partners in Group L.P. ("PLPs") who elect to retire are
entitled to redeem their capital over a period of not less than five years
following retirement, but often reinvest a significant portion of their capital
as limited partners for longer periods. Partners' capital was reduced by $368
million in 1998 due to the termination of the Profit Participation Plans under
which certain employees received payments based on the earnings of the Firm.
Partners' capital allocated for income taxes and potential withdrawals
represents management's estimate of net amounts currently distributable,
primarily to the PLPs, under the Partnership Agreement, for items including,
among other things, income taxes and capital withdrawals.
Sumitomo Bank Capital Markets, Inc. ("SBCM"), a limited partner that had
capital invested of approximately $834 million as of November 1998, may require
Group L.P. to redeem its capital over a five-year period beginning no earlier
than 2007. Kamehameha Activities Association ("KAA"), a limited partner that had
capital invested of approximately $757 million as of November 1998, may require
Group L.P. to redeem $391 million of its capital over a five-year period
beginning no earlier than 2010 and $366 million of its capital over a five-year
period beginning no earlier than 2013.
Institutional Limited Partners (other than SBCM and KAA) had aggregate
capital invested of $755 million as of November 1998. Group L.P. must repay
these Institutional Limited Partners' capital as follows: $270 million in six
equal annual installments commencing in December 2001, $257 million in March
2005, $146 million in November 2013 and $82 million in November 2023.
Group L.P. may defer any required redemption of capital if the redemption
would cause a subsidiary subject to regulatory authority to be in violation of
the rules of such authority or if the withdrawal of funds to satisfy the
redemption from an unregulated subsidiary would have a material effect on such
subsidiary.
REGULATED SUBSIDIARIES
GS&Co. is a registered U.S. broker-dealer subsidiary, which is subject to
the Securities and Exchange Commission's "Uniform Net Capital Rule", and has
elected to compute its net capital in accordance with the "Alternative Net
Capital Requirement" of that rule. As of November 1997 and November 1998, GS&Co.
had regulatory net capital, as defined, of $1.77 billion and $3.25 billion,
respectively, which exceeded the amounts required by $1.37 billion and $2.70
billion, respectively.
GSI, a registered U.K. broker-dealer and subsidiary of Group L.P., is
subject to the capital requirements of the Securities and Futures Authority
Limited and GSJL, a Tokyo-based broker-dealer, is subject to the capital
requirements of the Japanese Ministry of Finance and the Financial Supervisory
Agency. As of November 1997 and November 1998, GSI and GSJL were in compliance
with their local capital adequacy requirements.
Certain other subsidiaries of the Firm are also subject to capital adequacy
requirements promulgated by authorities of the countries in which they operate.
As of November 1997 and November 1998, these subsidiaries were in compliance
with their local capital adequacy requirements.
F-21
<PAGE> 137
THE GOLDMAN SACHS GROUP, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
NOTE 9. GEOGRAPHIC DATA
The Firm's activities as an investment banking and securities firm
constitute a single business segment pursuant to SFAS No. 14 "Financial
Reporting for Segments of a Business Enterprise".
Due to the highly integrated nature of international financial markets, the
Firm manages its business based on the profitability of the enterprise as a
whole, not by geographic region. Accordingly, management believes that
profitability by geographic region is not necessarily meaningful.
The total revenues, net revenues, pre-tax earnings and identifiable assets
of Group L.P. and its consolidated subsidiaries by geographic region are
summarized below:
<TABLE>
<CAPTION>
YEAR ENDED NOVEMBER
-----------------------------
1996 1997 1998
---- ---- ----
(in millions)
<S> <C> <C> <C>
TOTAL REVENUES:
Americas(1)......................................... $12,864 $15,091 $15,972
Europe.............................................. 3,762 4,463 5,156
Asia................................................ 663 879 1,350
------- ------- -------
Total............................................... $17,289 $20,433 $22,478
======= ======= =======
NET REVENUES:
Americas(1)......................................... $ 4,397 $ 5,104 $ 5,436
Europe.............................................. 1,355 1,739 2,180
Asia................................................ 377 604 904
------- ------- -------
Total............................................... $ 6,129 $ 7,447 $ 8,520
======= ======= =======
PRE-TAX EARNINGS:
Americas(1)......................................... $ 1,963 $ 2,061 $ 1,527
Europe.............................................. 536 683 913
Asia................................................ 107 270 481
------- ------- -------
Total............................................... $ 2,606 $ 3,014 $ 2,921
======= ======= =======
</TABLE>
F-22
<PAGE> 138
THE GOLDMAN SACHS GROUP, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
<TABLE>
<CAPTION>
AS OF NOVEMBER
-----------------------------------
1996 1997 1998
---- ---- ----
(in millions)
<S> <C> <C> <C>
IDENTIFIABLE ASSETS:
Americas(1).......................................... $ 171,345 $ 206,312 $ 229,412
Europe............................................... 62,172 80,551 106,721
Asia................................................. 6,894 13,240 19,883
Eliminations......................................... (88,365) (121,702) (138,636)
--------- --------- ---------
Total................................................ $ 152,046 $ 178,401 $ 217,380
========= ========= =========
</TABLE>
- ---------------
(1) Americas principally represents the United States.
NOTE 10. QUARTERLY RESULTS (UNAUDITED)
<TABLE>
<CAPTION>
YEAR ENDED NOVEMBER 1996
------------------------------------
1ST 2ND 3RD 4TH
--- --- --- ---
(in millions)
<S> <C> <C> <C> <C>
Total revenues....................................... $4,030 $4,656 $4,313 $4,290
Interest expense, principally on short-term
funding............................................ 2,566 2,986 2,845 2,763
------ ------ ------ ------
Revenues, net of interest expense.................... 1,464 1,670 1,468 1,527
Operating expenses................................... 899 961 879 784
------ ------ ------ ------
Pre-tax earnings..................................... 565 709 589 743
Provision for taxes.................................. 21 23 31 132
------ ------ ------ ------
Net earnings.................................... $ 544 $ 686 $ 558 $ 611
====== ====== ====== ======
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED NOVEMBER 1997
------------------------------------
1ST 2ND 3RD 4TH
--- --- --- ---
(in millions)
<S> <C> <C> <C> <C>
Total revenues....................................... $4,932 $4,608 $5,957 $4,936
Interest expense, principally on short-term
funding............................................ 2,975 2,934 3,727 3,350
------ ------ ------ ------
Revenues, net of interest expense.................... 1,957 1,674 2,230 1,586
Operating expenses................................... 1,052 1,064 1,298 1,019
------ ------ ------ ------
Pre-tax earnings..................................... 905 610 932 567
Provision for taxes.................................. 44 99 60 65
------ ------ ------ ------
Net earnings.................................... $ 861 $ 511 $ 872 $ 502
====== ====== ====== ======
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED NOVEMBER 1998
------------------------------------
1ST 2ND 3RD 4TH
--- --- --- ---
(in millions)
<S> <C> <C> <C> <C>
Total revenues....................................... $5,903 $6,563 $5,735 $4,277
Interest expense, principally on short-term
funding............................................ 3,431 3,574 3,591 3,362
------ ------ ------ ------
Revenues, net of interest expense.................... 2,472 2,989 2,144 915
Operating expenses................................... 1,450 1,952 1,389 808
------ ------ ------ ------
Pre-tax earnings..................................... 1,022 1,037 755 107
Provision for taxes.................................. 138 190 102 63
------ ------ ------ ------
Net earnings.................................... $ 884 $ 847 $ 653 $ 44
====== ====== ====== ======
</TABLE>
F-23
<PAGE> 139
UNDERWRITING
The Firm, the Selling Shareholders and the underwriters for the U.S.
offering (the "U.S. Underwriters") named below have entered into an underwriting
agreement with respect to the shares being offered in the United States. Subject
to certain conditions,each U.S. Underwriter has severally agreed to purchase
the number of shares indicated in the following table. Goldman, Sachs & Co. and
are the representatives of the U.S. Underwriters.
<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITERS SHARES
------------ ---------
<S> <C>
Goldman, Sachs & Co. .......................................
-------
Total.......................................................
=======
</TABLE>
---------------
If the U.S. Underwriters sell more shares than the total number set forth
in the table above, the U.S. Underwriters have an option to buy up to an
additional shares from the Firm to cover such sales. They may
exercise that option for 30 days. If any shares are purchased pursuant to this
option, the U.S. Underwriters will severally purchase shares in approximately
the same proportion as set forth in the table above.
The following table shows the per share and total underwriting discounts
and commissions to be paid to the U.S. Underwriters by the Firm. Such amounts
are shown assuming both no exercise and full exercise of the U.S. Underwriters'
option to purchase additional shares.
Paid by the Firm
-------------------
<TABLE>
<CAPTION>
No Full
Exercise Exercise
----------- -------------
<S> <C> <C>
Per Share............ $ $
Total................ $ $
</TABLE>
Shares sold by the Underwriters to the public will initially be offered at
the initial public offering price set forth on the cover page of this
Prospectus. Any shares sold by the Underwriters to securities dealers may be
sold at a discount of up to $ per share from the initial public offering
price. Any such securities dealers may resell any shares purchased from the
Underwriters to certain other brokers or dealers at a discount of up to $
per share from the initial public offering price. If all of the shares are not
sold at the initial offering price, the representatives may change the offering
price and the other selling terms.
The Firm and the Selling Shareholders have entered into underwriting
agreements with Underwriters for the sale of shares outside of
the United States and the Asia/Pacific region and shares in the
Asia/Pacific region. The terms and conditions of all three Offerings are the
same and the sale of shares in all three Offerings are conditioned on each
other. Goldman Sachs International and are representatives of the
underwriters for the international offering outside the United States and the
Asia/Pacific region (the "International Underwriters") and Goldman Sachs (Asia)
L.L.C. and are representatives of the underwriters for the
Asia/Pacific region offering (the "Asia/Pacific Underwriters"). The Firm has
granted the International and Asia/Pacific Underwriters options similar to that
described above to purchase up to an aggregate of an additional
shares.
The Underwriters for each of the three Offerings have entered into an
agreement in which they have agreed to restrictions on where and to whom they
and any dealer purchasing from them may offer shares as a part of the
distribution of the shares. The Underwriters have also agreed that they may sell
shares among each of the underwriting groups.
The Firm, the Selling Shareholders, the parties to the Shareholders'
Agreement,
U-1
<PAGE> 140
including all of the directors and executive
officers of GS Inc., and the RLPs have agreed not to dispose of or hedge any of
their Common Stock or securities convertible into or exchangeable for shares of
Common Stock during the period from the date of this Prospectus continuing
through the date 180 days after the date of this Prospectus, except with the
prior written consent of Goldman, Sachs & Co. This agreement does not apply to
any of the Firm's existing employee benefit plans. See "Shares Eligible for
Future Sale" for a discussion of certain transfer restrictions.
Prior to the Offerings, there has been no public market for the shares. The
initial public offering price will be negotiated among the Firm and the
representatives. Among the factors to be considered in determining the initial
public offering price of the shares, in addition to prevailing market
conditions, will be the Firm's historical performance, estimates of the business
potential and earnings prospects of the Firm, an assessment of the Firm's
management and the consideration of the above factors in relation to market
valuation of companies in related businesses.
The Common Stock will be listed on the New York Stock Exchange under the
symbol "GS". In order to meet one of the requirements for listing the Common
Stock on the NYSE, the underwriters have undertaken to sell lots of 100 or more
shares to a minimum of 2,000 beneficial holders.
In connection with the Offerings, the Underwriters may purchase and sell
shares of Common Stock in the open market. These transactions may include short
sales, stabilizing transactions and purchases to cover positions created by
short sales. Short sales involve the sale by the Underwriters of a greater
number of shares than they are required to purchase in the Offerings.
Stabilizing transactions consist of certain bids or purchases made for the
purpose of preventing or retarding a decline in the market price of the Common
Stock while the Offerings are in progress.
The Underwriters also may impose a penalty bid. This occurs when a
particular Underwriter repays to the Underwriters a portion of the underwriting
discount received by it because the representatives have repurchased shares sold
by or for the account of such Underwriter in stabilizing or short covering
transactions.
These activities by the Underwriters may stabilize, maintain or otherwise
affect the market price of the Common Stock. As a result, the price of the
Common Stock may be higher than the price that otherwise might exist in the open
market. If these activities are commenced, they may be discontinued by the
Underwriters at any time. These transactions may be effected on the NYSE, in the
over-the-counter market or otherwise.
After the Offerings, because Goldman, Sachs & Co. is a member of the NYSE
and because of its relationship to the Firm, it will not be permitted under the
rules of the NYSE to make markets in or recommendations regarding the purchase
or sale of the Common Stock. This may adversely affect the trading market for
the Common Stock.
Also because of the relationship between Goldman, Sachs & Co. and the Firm,
the Offerings are being conducted in accordance with Rule 2720 of the NASD. That
rule requires that the initial public offering price can be no higher than that
recommended by a "qualified independent underwriter", as defined by the NASD.
and have served in that capacity and performed due
diligence investigations and reviewed and participated in the preparation of the
Registration Statement of which this Prospectus forms a part. Each of
and has received $10,000 from the Firm as
compensation for such role.
The Underwriters may not confirm sales to discretionary accounts without
the prior written approval of the customer.
Goldman, Sachs & Co., Goldman Sachs International and Goldman Sachs (Asia)
L.L.C. are subsidiaries of the Firm. In aggregate, these three affiliated
Underwriters have severally agreed to purchase % of the shares being
offered in the three Offerings. If any of the shares underwritten by
U-2
<PAGE> 141
these three affiliates are sold by them at a price less than the initial public
offering price, the net proceeds from the Offerings to the Firm on a
consolidated basis will be reduced because such affiliates and the Firm are
accounted for on a consolidated basis.
The Firm and the Selling Shareholders estimate that their shares of the
total expenses of the Offerings, excluding underwriting discounts and
commissions, will be approximately $ and $ , respectively.
The Firm and the Selling Shareholders have agreed to indemnify the several
Underwriters against certain liabilities, including liabilities under the
Securities Act.
This Prospectus may be used by the Underwriters and other dealers in
connection with offers and sales of the shares, including sales of shares
initially sold by the Underwriters in the Offerings being made outside of the
United States, to persons located in the United States.
U-3
<PAGE> 142
- -------------------------------------------------------
- -------------------------------------------------------
No dealer, salesperson or other person is authorized to give any information
or to represent anything not contained in this prospectus. You must not rely on
any unauthorized information or representations. This prospectus is an offer to
sell or to buy only the shares offered hereby, but only under circumstances and
in jurisdictions where it is lawful to do so. The information contained in this
prospectus is current only as of its date.
------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Our Business Principles................ 3
Prospectus Summary..................... 4
Risk Factors........................... 13
Use of Proceeds........................ 25
Dividend Policy........................ 25
Report of Independent Accountants on
Pro Forma Consolidated Financial
Information.......................... 26
Pro Forma Consolidated Financial
Information.......................... 27
Dilution............................... 31
Capitalization......................... 32
Selected Consolidated Financial Data... 33
Recent Developments.................... 35
Report of Independent Accountants on
Management's Discussion and Analysis
of Financial Condition and Results of
Operations........................... 36
Management's Discussion and Analysis of
Financial Condition and Results of
Operations........................... 37
Industry and Economic Outlook.......... 60
Business............................... 63
Management............................. 87
Principal and Selling Shareholders..... 98
Certain Relationships and Related
Transactions......................... 100
Description of Capital Stock........... 104
Shares Eligible for Future Sale........ 110
Validity of Common Stock............... 113
Experts................................ 113
Available Information.................. 114
Index to Consolidated Financial
Statements........................... F-1
Underwriting........................... U-1
</TABLE>
------------------
Through and including , 1999 (the 25th day after the date of
this prospectus), all dealers effecting transactions in these securities,
whether or not participating in this offering, may be required to deliver a
prospectus. This is in addition to the dealers' obligation to deliver a
prospectus when acting as underwriters and with respect to their unsold
allotments or subscriptions.
- -------------------------------------------------------
- -------------------------------------------------------
- -------------------------------------------------------
- -------------------------------------------------------
60,000,000 Shares
THE GOLDMAN SACHS
GROUP, INC.
Common Stock
------------------
[GOLDMAN SACHS LOGO]
------------------
GOLDMAN, SACHS & CO.
Representatives of the Underwriters
-------------------------------------------------------
-------------------------------------------------------
<PAGE> 143
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following is a statement of the estimated expenses, other than
underwriting discounts and commissions, to be incurred in connection with the
distribution of the securities registered under this Registration Statement:
<TABLE>
<CAPTION>
AMOUNT
TO BE PAID
----------
<S> <C>
Securities and Exchange Commission registration fee......... $959,100
NASD fees and expenses...................................... 30,500
Legal fees and expenses..................................... *
Fees and expenses of qualification under state securities
laws (including legal fees)............................... 20,000
NYSE listing fees and expenses.............................. *
Accounting fees and expenses................................ *
Printing and engraving fees................................. *
Registrar and transfer agent's fees......................... *
Miscellaneous............................................... *
--------
Total............................................. $ *
========
</TABLE>
- ---------------
* To be completed by amendment.
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law provides that a
corporation may indemnify directors and officers as well as other employees and
individuals against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by such person in
connection with any threatened, pending or completed actions, suits or
proceedings in which such person is made a party by reason of such person being
or having been a director, officer, employee of or agent to the Registrant. The
statute provides that it is not exclusive of other rights to which those seeking
indemnification may be entitled under any by-law, agreement, vote of
stockholders or disinterested directors or otherwise. Section 6.4 of the
Registrant's By-Laws provides for indemnification by the Registrant of any
director or officer (as such term is defined in the By-Laws) of the Registrant
who is or was a director of any of its Subsidiaries, is or was a member of the
Shareholders' Committee (as defined in the Prospectus included in this
Registration Statement) acting pursuant to the Shareholders' Agreement (as
defined in the Prospectus included in this Registration Statement) or, at the
request of the Registrant, is or was serving as a director or officer of, or in
any other capacity for, any other enterprise, to the fullest extent permitted by
law. The By-Laws also provide that the Registrant shall advance expenses to a
director or officer and, if reimbursement of such expenses is demanded in
advance of the final disposition of the matter with respect to which such demand
is being made, upon receipt of an undertaking by or on behalf of such director
or officer to repay such amount if it is ultimately determined that the director
or officer is not entitled to be indemnified by the Registrant. To the extent
authorized from time to time by the Board of Directors of the Registrant, the
Registrant may provide to any one or more employees of the Registrant, one or
more officers, employees and other agents of any subsidiary or one or more
directors, officers, employees and other agents of any other enterprise, rights
of indemnification and to receive payment or reimbursement of expenses,
including attorneys' fees, that are similar to the rights conferred in the
By-Laws of the Registrant on directors and officers
II-1
<PAGE> 144
of the Registrant or any subsidiary or other enterprise. The By-Laws do not
limit the power of the Registrant or its Board of Directors to provide other
indemnification and expense reimbursement rights to directors, officers,
employees, agents and other persons otherwise than pursuant to the By-laws. The
Registrant intends to enter into agreements with certain directors, officers and
employees who are asked to serve in specified capacities at subsidiaries and
other entities.
The Registrant will enter into agreements to provide indemnification to its
directors and certain officers. These agreements are in addition to the
Registrant's indemnification obligations under its By-Laws. These agreements,
among other things, will indemnify the Registrant's directors and certain
officers to the fullest extent permitted by law for certain expenses (including
attorneys' fees) and all losses, claims, liabilities, judgments, fines and
settlement amounts incurred by such person arising out of or in connection with
such person's service as a director or officer of the Registrant with respect to
the Incorporation Transactions (as defined in the Prospectus included in this
Registration Statement) and the Offerings (as defined in the Prospectus included
in this Registration Statement).
Section 102(b)(7) of the Delaware General Corporation Law permits a
corporation to provide in its certificate of incorporation that a director of
the corporation shall not be personally liable to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) for
payments of unlawful dividends or unlawful stock repurchases or redemptions, or
(iv) for any transaction from which the director derived an improper personal
benefit. The Registrant's Amended and Restated Certificate of Incorporation
provides for such limitation of liability.
Policies of insurance are maintained by the Registrant under which its
directors and officers are insured, within the limits and subject to the
limitations of the policies, against certain expenses in connection with the
defense of, and certain liabilities which might be imposed as a result of,
actions, suits or proceedings to which they are parties by reason of being or
having been such directors or officers.
Reference is also made to Section 9 of the Underwriting Agreement filed as
Exhibit 1.1 to the Registration Statement for information concerning the
Underwriters' obligation to indemnify the Registrant and its officers and
directors in certain circumstances.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
As part of the Incorporation Transactions, the Registrant will enter into
definitive binding agreements to issue: (i) shares of the Registrant's common
stock, par value $.01 per share (the "Common Stock"), to certain profit
participating limited partners (the "PLPs") of The Goldman Sachs Group, L.P.
("Group L.P.") in exchange for all of the PLPs' interests in Group L.P. and
certain other entities; (ii) shares of Common Stock and 12% junior subordinated
debentures (the "Junior Subordinated Debentures") of the Registrant to certain
retired limited partners (the "RLPs") of Group L.P. in exchange for all of such
limited partners' interests in Group L.P. and certain other entities; (iii)
shares of Common Stock and shares of the Registrant's nonvoting common stock,
par value $.01 per share ("Nonvoting Common Stock") to Sumitomo Bank Capital
Markets, Inc. ("SBCM"); and (iv) shares of Common Stock to Kamehameha Activities
Association ("KAA"). Also simultaneously with the Offerings, the Registrant will
make awards of restricted stock units and/or stock options to substantially all
of its employees and will make an irrevocable contribution of Common Stock to a
nonqualified defined contribution plan. The offering and sale of the shares of
Common Stock, Junior Subordinated Debentures and Nonvoting Common Stock to the
PLPs, RLPs, SBCM and KAA will not be registered under the Securities Act of
1933, as amended (the "Securities Act"), because they will have been offered and
sold in transactions either exempt from registration under the Securities Act
pursuant to
II-2
<PAGE> 145
Section 4(2) and Rule 506 thereunder or outside the United States to persons who
are not citizens or residents of the United States in reliance upon Regulation S
under the Securities Act. The foregoing employee awards and contribution of
Common Stock will not be registered under the Securities Act because the awards
and contribution either will not involve an offer or sale for purposes of
Section 2(a)(3) of the Securities Act or will be offered and sold in
transactions exempt from registration under the Securities Act pursuant to
Section 4(2) and Rule 506 thereunder.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) EXHIBITS
<TABLE>
<C> <S>
1.1 Form of Underwriting Agreement.*
2.1 Plan of Incorporation.*
3.1 Form of Amended and Restated Certificate of Incorporation of
the Company.*
3.2 By-Laws of the Company.*
4.1 Specimen of certificate representing the Company's Common
Stock, par value $.01 per share.
4.2 Rights Agreement, dated as of , 1999, between
The Goldman Sachs Group, Inc. ("GS Inc.") and ChaseMellon
Shareholder Services, L.L.C., as Rights Agent.*
5.1 Opinion of Sullivan & Cromwell, counsel to the Company.*
10.1 Lease, dated June 11, 1985, between Metropolitan Life
Insurance Company and Goldman, Sachs & Co.
10.2 Lease, dated April 5, 1994, between The Chase Manhattan Bank
(National Association) and The Goldman Sachs Group, L.P.
("Group L.P."), as amended.
10.3 Lease, dated as of August 22, 1997, between Ten Hanover LLC
and Group L.P.
10.4 Lease, dated as of July 16, 1998, between TCC Acquisition
Corp. and Group L.P.
10.5 Agreement for Lease, dated April 2, 1998, among (i) JC No. 3
(UK) Limited and Fleet Street Square Management Limited
trading as Fleet Street Partnership, (ii) Goldman Sachs
International ("GSI"), (iii) Restamove Limited, (iv) Group
L.P. and (v) Itochu Corporation.
10.6 Annexure 1 to Agreement for Lease, dated April 2, 1998,
among (i) JC No. 3 (UK) Limited and Fleet Street Square
Management Limited trading as Fleet Street Partnership, (ii)
GSI, (iii) Restamove Limited, (iv) Group L.P. and (v) Itochu
Corporation (Form of Occupational Lease among (i) JC No. 3
(UK) Limited and Fleet Street Square Management Limited
trading as Fleet Street Partnership, (ii) GSI and (iii)
Group L.P.).
10.7 Agreement relating to Developer's Fit Out Works to be
carried out at 120 Fleet Street, London, dated April 2,
1998, among (i) JC No. 3 (UK) Limited and Fleet Street
Square Management Limited, (ii) Goldman Sachs Property
Management, (iii) Itochu Corporation and (iv) Group L.P.
10.8 Agreement relating to One Carter Lane, London EC4, dated
March 25, 1998, among Britel Fund Trustees Limited, GSI,
Group L.P., English Property Corporation plc and MEPC plc.
10.9 Fit Out Works Agreement relating to One Carter Lane, London
EC4, dated March 25, 1998, among Britel Fund Trustees
Limited, GSI, Goldman Sachs Property Management, Group L.P.,
English Property Corporation plc and MEPC plc.
10.10 Underlease of premises known as One Carter Lane, London EC4,
dated September 9, 1998, among Britel Fund Trustees Limited,
GSI and Group L.P.
</TABLE>
II-3
<PAGE> 146
<TABLE>
<C> <S>
10.11 Lease, dated March 5, 1994, among Shine Hill Development
Limited, Shine Belt Limited, Fair Page Limited, Panhy
Limited, Maple Court Limited and Goldman Sachs (Asia)
Finance, as amended.
10.12 Guarantee, dated November 17, 1993, between Shine Hill
Development Limited and Group L.P.
10.13 Agreement for Lease, dated November 29, 1998, between Turbo
Top Limited and Goldman Sachs (Asia) Finance.
10.14 Summary of Tokyo Leases.*
10.15 The Goldman Sachs 1999 Stock Incentive Plan.*
10.16 The Goldman Sachs Defined Contribution Plan.*
10.17 Trust Agreement.*
10.18 The Goldman Sachs Partner Compensation Plan.*
10.19 Form of Employment Agreement.*
10.20 Form of Agreement Relating to Noncompetition and Other
Covenants.*
10.21 Form of Pledge Agreement.*
10.22 Award Agreement (Formula RSUs).*
10.23 Award Agreement (Discretionary RSUs).*
10.24 Form of Option Agreement (Discretionary Options).*
10.25 Form of Tax Indemnification Agreement, dated as of
, 1999, by and among GS Inc. and various
parties.*
10.26 Shareholders' Agreement, dated as of , 1999,
among GS Inc. and various parties.*
10.27 Instrument of Indemnification.*
10.28 Form of Indemnification Agreement.*
11.1 Statement re computation of per share earnings.*
21.1 List of subsidiaries of Group L.P.
23.1 Consent of PricewaterhouseCoopers LLP.
23.2 Consent of Sullivan & Cromwell (included in Exhibit 5.1
above).*
23.3 Consent of Securities Data Company.
24.1 Powers of Attorney (included on signature page).
27.1 Financial Data Schedule.
</TABLE>
- ---------------
*To be filed by amendment.
(b) FINANCIAL STATEMENT SCHEDULES
Condensed financial information of Group L.P. and report of
PricewaterhouseCoopers LLP thereon.
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(a) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim for
II-4
<PAGE> 147
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted against the Registrant by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Securities Act of 1933 and will be governed by the final
adjudication of such issue.
(b) To provide to the underwriters at the closing specified in the
underwriting agreements certificates in such denominations and registered in
such names as required by the underwriters to permit prompt delivery to each
purchaser.
(c) (1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as
part of this registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the registrant pursuant to
Rule 424(b)(1) or (4) or 497(h) under the Securities Act of 1933 shall
be deemed to be part of this registration statement as of the time it
was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
II-5
<PAGE> 148
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, New York on the
tenth day of March, 1999.
THE GOLDMAN SACHS GROUP, INC.
By: /s/ HENRY M. PAULSON, JR.
------------------------------------
Name: Henry M. Paulson, Jr.
Title: Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints John A. Thain, Robert J. Katz, Gregory K.
Palm and David A. Viniar and each of them severally, his or her true and lawful
attorney-in-fact with power of substitution and resubstitution to sign in his
name, place and stead, in any and all capacities, to do any and all things and
execute any and all instruments that such attorney may deem necessary or
advisable under the Securities Act of 1933 (the "Securities Act"), and any
rules, regulations and requirements of the U.S. Securities and Exchange
Commission (the "Commission") in connection with the registration under the
Securities Act of the Common Stock of the Registrant, including specifically,
but without limiting the generality of the foregoing, the power and authority to
sign his name in his respective capacity as a member of the Board of Directors
or officer of the Registrant, this Registration Statement and/or such other form
or forms as may be appropriate to be filed with the Commission as any of them
may deem appropriate in respect of the Common Stock of the Registrant, to any
and all amendments thereto (including post-effective amendments) to this
Registration Statement, to any related Rule 462(b) Registration Statement and to
any other documents filed with the Commission, as fully for all intents and
purposes as he or she might or could do in person, and hereby ratifies and
confirms all said attorneys-in-fact and agents, each acting alone, and his or
her substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on March 10, 1999:
<TABLE>
<CAPTION>
TITLE SIGNATURE
----- ---------
<S> <C>
Director and Co-Chairman of the Board /s/ JON S. CORZINE
----------------------------------------------
Jon S. Corzine
Director, Co-Chairman of the Board and
Chief Executive Officer (Principal Executive
Officer) /s/ HENRY M. PAULSON, JR.
----------------------------------------------
Henry M. Paulson, Jr.
Director and Vice Chairman /s/ ROBERT J. HURST
----------------------------------------------
Robert J. Hurst
Director, President and Co-Chief Operating Officer /s/ JOHN A. THAIN
----------------------------------------------
John A. Thain
</TABLE>
II-6
<PAGE> 149
<TABLE>
<CAPTION>
TITLE SIGNATURE
----- ---------
<S> <C>
Director, President and Co-Chief Operating Officer /s/ JOHN L. THORNTON
----------------------------------------------
John L. Thornton
Director /s/ JOHN L. WEINBERG
----------------------------------------------
John L. Weinberg
Chief Financial Officer (Principal Financial Officer) /s/ DAVID A. VINIAR
----------------------------------------------
David A. Viniar
Managing Director (Principal Accounting Officer) /s/ SARAH G. SMITH
----------------------------------------------
Sarah G. Smith
</TABLE>
II-7
<PAGE> 150
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners,
The Goldman Sachs Group, L.P.:
In connection with our audits of the consolidated financial statements of The
Goldman Sachs Group, L.P. and Subsidiaries as of November 27, 1998 and November
28, 1997, and the three fiscal years in the period ended November 27, 1998,
which financial statements are included on pages F-3 to F-23 of this Form S-1,
we have also audited the financial statement schedule listed in Item 16(b)
herein.
In our opinion, the financial statement schedule, when considered in relation to
the basic financial statements taken as a whole, presents fairly, in all
material respects, the information required to be included therein.
PricewaterhouseCoopers LLP
New York, New York
January 22, 1999.
S-1
<PAGE> 151
SCHEDULE IV
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
THE GOLDMAN SACHS GROUP, L.P.
CONDENSED STATEMENTS OF EARNINGS (PARENT COMPANY ONLY)
<TABLE>
<CAPTION>
YEAR ENDED NOVEMBER
-----------------------------
1996 1997 1998
---- ---- ----
(in millions)
<S> <C> <C> <C>
REVENUES:
Equity earnings of subsidiaries............................. $ 2,184 $ 2,378 $ 1,780
Principal investments....................................... 208 339 540
Interest income, principally from affiliates................ 2,602 2,943 4,369
------- ------- -------
Total revenues......................................... 4,994 5,660 6,689
Interest expense, principally on short-term funding......... 2,547 2,858 4,201
------- ------- -------
Revenues, net of interest expense...................... 2,447 2,802 2,488
OPERATING EXPENSES:
Compensation and benefits................................... 13 12 9
Other....................................................... 33 29 43
------- ------- -------
Total operating expenses............................... 46 41 52
Pre-tax earnings............................................ 2,401 2,761 2,436
Provision for unincorporated business taxes................. 2 15 8
------- ------- -------
Net earnings................................................ $ 2,399 $ 2,746 $ 2,428
======= ======= =======
</TABLE>
See note to condensed financial statements.
S-2
<PAGE> 152
SCHEDULE IV
THE GOLDMAN SACHS GROUP, L.P.
CONDENSED STATEMENTS OF FINANCIAL CONDITION (PARENT COMPANY ONLY)
<TABLE>
<CAPTION>
AS OF NOVEMBER
------------------
1997 1998
---- ----
(in millions)
<S> <C> <C>
ASSETS:
Cash and cash equivalents................................... $ 4 $ 11
Financial instruments owned, at fair value.................. 1,896 2,147
Receivables from affiliates................................. 23,767 33,562
Subordinated loan receivables from affiliates............... 6,889 8,668
Investment in subsidiaries.................................. 5,005 5,077
Other....................................................... 434 1,123
------- -------
$37,995 $50,588
======= =======
LIABILITIES AND NET WORTH:
Short-term borrowings, including commercial paper........... $16,597 $23,364
Payables to affiliates...................................... 119 1,679
Other....................................................... 137 147
Long-term borrowings:
With third parties........................................ 14,290 18,584
With affiliates........................................... 315 430
------- -------
31,458 44,204
Partners' capital allocated for income taxes and potential
withdrawals............................................... 430 74
Partners' capital........................................... 6,107 6,310
------- -------
$37,995 $50,588
======= =======
</TABLE>
See note to condensed financial statements.
S-3
<PAGE> 153
SCHEDULE IV
THE GOLDMAN SACHS GROUP, L.P.
CONDENSED STATEMENTS OF CASH FLOWS (PARENT COMPANY ONLY)
<TABLE>
<CAPTION>
YEAR ENDED NOVEMBER
-----------------------------
1996 1997 1998
---- ---- ----
(in millions)
<S> <C> <C> <C>
Cash flows from operating activities:
Net earnings.............................................. $ 2,399 $ 2,746 $ 2,428
Non-cash items included in net earnings:
Equity in earnings of subsidiaries...................... (2,184) (2,378) (1,780)
Depreciation and amortization........................... 25 19 35
Changes in operating assets and liabilities:
Financial instruments owned, at fair value................ (110) (395) (8)
Other, net................................................ (43) (98) (501)
------- ------- -------
Net cash provided by/(used for) operating activities.... 87 (106) 174
------- ------- -------
Cash flows from investing activities:
Financial instruments owned, at fair value................ 126 (331) (243)
Receivables from affiliates, net.......................... (1,476) (4,320) (8,235)
Subordinated loan receivables from affiliates............. (480) (1,528) (1,779)
Investment in subsidiaries................................ 2,031 2,147 1,362
Property, leasehold improvements and equipment............ (1) (4) (145)
------- ------- -------
Net cash provided by/(used for) investing activities.... 200 (4,036) (9,040)
------- ------- -------
Cash flows from financing activities:
Short-term borrowings, net................................ 496 39 2,586
Issuance of long-term borrowings.......................... 4,636 7,498 10,289
Repayment of long-term borrowings......................... (3,886) (1,005) (1,698)
Capital contributions..................................... 4 89 9
Returns on capital and certain distributions to
partners................................................ (473) (557) (619)
Termination of the Profit Participation Plan.............. -- -- (21)
Partners' capital allocated for income taxes and potential
withdrawals, net........................................ (1,017) (2,034) (1,673)
------- ------- -------
Net cash (used for)/provided by financing activities.... (240) 4,030 8,873
------- ------- -------
Net increase/(decrease) in cash and cash equivalents...... 47 (112) 7
Cash and cash equivalents, beginning of year................ 69 116 4
------- ------- -------
Cash and cash equivalents, end of year...................... $ 116 $ 4 $ 11
======= ======= =======
</TABLE>
SUPPLEMENTAL DISCLOSURES:
Cash payments for interest approximated the related expense for each of the
fiscal periods presented. Payments of unincorporated business taxes were not
material.
Cash payments of $347 million related to the termination of the Profit
Participation Plans in 1998 were paid by Group L.P.'s subsidiaries and were
excluded from the condensed statement of cash flows above as these payments
represented non-cash items to Group L.P.
See note to condensed financial statements.
S-4
<PAGE> 154
SCHEDULE IV
THE GOLDMAN SACHS GROUP, L.P.
NOTE TO CONDENSED FINANCIAL STATEMENTS (PARENT COMPANY ONLY)
NOTE 1. SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The condensed unconsolidated financial statements of The Goldman Sachs
Group, L.P. ("Group L.P.") should be read in conjunction with the consolidated
financial statements of The Goldman Sachs Group, L.P. and Subsidiaries and the
footnotes thereto. Certain reclassifications have been made to prior year
amounts to conform to the current presentation.
Investment in subsidiaries is accounted for using the equity method.
The condensed unconsolidated financial statements have been prepared in
accordance with generally accepted accounting principles that require management
to make estimates and assumptions regarding investment valuations, partner
retirements, the outcome of pending litigation and other matters that affect the
condensed unconsolidated financial statements and related disclosures. These
estimates and assumptions are based on judgment and available information and,
consequently, actual results could be materially different from these estimates.
S-5
<PAGE> 155
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NO. DESCRIPTION PAGE
- ------- ------------------------------------------------------------ ------------
<C> <S> <C>
1.1 Form of Underwriting Agreement.*
2.1 Plan of Incorporation.*
3.1 Form of Amended and Restated Certificate of Incorporation of
the Company.*
3.2 By-Laws of the Company.*
4.1 Specimen of certificate representing the Company's Common
Stock, par value $.01 per share.
4.2 Rights Agreement, dated as of , 1999, between
The Goldman Sachs Group, Inc. ("GS Inc.") and ChaseMellon
Shareholder Services, L.L.C., as Rights Agent.*
5.1 Opinion of Sullivan & Cromwell, counsel to the Company.*
10.1 Lease, dated June 11, 1985, between Metropolitan Life
Insurance Company and Goldman, Sachs & Co.
10.2 Lease, dated April 5, 1994, between The Chase Manhattan Bank
(National Association) and The Goldman Sachs Group, L.P.
("Group L.P."), as amended.
10.3 Lease, dated as of August 22, 1997, between Ten Hanover LLC
and Group L.P.
10.4 Lease, dated as of July 16, 1998, between TCC Acquisition
Corp. and Group L.P.
10.5 Agreement for Lease, dated April 2, 1998, among (i) JC No. 3
(UK) Limited and Fleet Street Square Management Limited
trading as Fleet Street Partnership, (ii) Goldman Sachs
International ("GSI"), (iii) Restamove Limited, (iv) Group
L.P. and (v) Itochu Corporation.
10.6 Annexure 1 to Agreement for Lease, dated April 2, 1998,
among (i) JC No. 3 (UK) Limited and Fleet Street Square
Management Limited trading as Fleet Street Partnership, (ii)
GSI, (iii) Restamove Limited, (iv) Group L.P. and (v) Itochu
Corporation (Form of Occupational Lease among (i) JC No. 3
(UK) Limited and Fleet Street Square Management Limited
trading as Fleet Street Partnership, (ii) GSI and (iii)
Group L.P.).
10.7 Agreement relating to Developer's Fit Out Works to be
carried out at 120 Fleet Street, London, dated April 2,
1998, among (i) JC No. 3 (UK) Limited and Fleet Street
Square Management Limited, (ii) Goldman Sachs Property
Management, (iii) Itochu Corporation and (iv) Group L.P.
10.8 Agreement relating to One Carter Lane, London EC4, dated
March 25, 1998, among Britel Fund Trustees Limited, GSI,
Group L.P., English Property Corporation plc and MEPC plc.
10.9 Fit Out Works Agreement relating to One Carter Lane, London
EC4, dated March 25, 1998, among Britel Fund Trustees
Limited, GSI, Goldman Sachs Property Management, Group L.P.,
English Property Corporation plc and MEPC plc.
10.10 Underlease of premises known as One Carter Lane, London EC4,
dated September 9, 1998, among Britel Fund Trustees Limited,
GSI and Group L.P.
10.11 Lease, dated March 5, 1994, among Shine Hill Development
Limited, Shine Belt Limited, Fair Page Limited, Panhy
Limited, Maple Court Limited and Goldman Sachs (Asia)
Finance, as amended.
10.12 Guarantee, dated November 17, 1993, between Shine Hill
Development Limited and Group L.P.
10.13 Agreement for Lease, dated November 29, 1998, between Turbo
Top Limited and Goldman Sachs (Asia) Finance.
10.14 Summary of Tokyo Leases.*
10.15 The Goldman Sachs 1999 Stock Incentive Plan.*
</TABLE>
<PAGE> 156
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NO. DESCRIPTION PAGE
- ------- ------------------------------------------------------------ ------------
<C> <S> <C>
10.16 The Goldman Sachs Defined Contribution Plan.*
10.17 Trust Agreement.*
10.18 The Goldman Sachs Partner Compensation Plan.*
10.19 Form of Employment Agreement.*
10.20 Form of Agreement Relating to Noncompetition and Other
Covenants.*
10.21 Form of Pledge Agreement.*
10.22 Award Agreement (Formula RSUs).*
10.23 Award Agreement (Discretionary RSUs).*
10.24 Form of Option Agreement (Discretionary Options).*
10.25 Form of Tax Indemnification Agreement, dated as of
, 1999, by and among GS Inc. and various
parties.*
10.26 Shareholders' Agreement, dated as of , 1999, among GS
Inc. and various parties.*
10.27 Instrument of Indemnification.*
10.28 Form of Indemnification Agreement.*
11.1 Statement re computation of per share earnings.*
21.1 List of subsidiaries of Group L.P.
23.1 Consent of PricewaterhouseCoopers LLP.
23.2 Consent of Sullivan & Cromwell (included in Exhibit 5.1
above).*
23.3 Consent of Securities Data Company.
24.1 Powers of Attorney (included on signature page).
27.1 Financial Data Schedule.
</TABLE>
- ---------------
* To be filed by amendment.
<PAGE> 1
EXHIBIT 4.1
SHARES
NUMBER
[GOLDMAN CUSIP
SACHS LOGO] SEE REVERSE FOR CERTAIN DEFINITIONS
[PHOTO] COMMON STOCK
par value of $.01
This certificate is transferable in
New York, NY and Ridgefield Park, NJ
Incorporated under the laws of
the State of Delaware
THE GOLDMAN SACHS GROUP, INC.
This is to certify that
Treasurer
is the owner of Chairman and Chief Executive Officer
FULLY-PAID AND NON-ASSESSABLE SHARES OF THE COMMON STOCK OF
The Goldman Sachs Group, Inc. transferable on the books of the Corporation or
the holder hereof in person, or by duly authorized attorney, upon surrender of
this certificate properly endorsed. This certificate is not valid unless
countersigned and registered by the Transfer Agent and Registrar. Witness the
facsimile seal of the Corporation and the facsimile signatures of its duly
authorized officers.
[THE GOLDMAN SACHS SEAL] Countersigned and Registered:
ChaseMellon
Shareholder Services, L.L.C.
Transfer Agent and Registrar
Authorized Signature
Dated
<PAGE> 2
THE GOLDMAN SACHS GROUP, INC.
The Corporation will furnish without charge to each stockholder who so
requests a statement of the designations, powers, preferences and relative
participating, optional or other special rights of each class of stock or series
thereof of the Corporation and the qualifications, limitations or restrictions
of such preferences and/or rights. Such request may be made to the Corporation
or the Transfer Agent.
The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of
survivorship and not as tenants
in common
UNIF GIFT MIN ACT - Custodian
------------- -------------
(Cust) (Minor)
under Uniform Gifts to Minors
Act
-------------
(State)
Additional abbreviations may also be used though not in the above list.
For Value Received, the undersigned hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- ---------------------------------------
- ---------------------------------------
- --------------------------------------------------------------------------------
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------- Shares
of the capital stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint
- ----------------------------------------------------------------------- Attorney
to transfer the said stock on the books of the within named Corporation with
full power of substitution in the premises.
Dated
----------------
---------------------------------------------------------------
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME
AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY
PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE
WHATEVER.
Signature(s) Guaranteed:
- -------------------------------------------
THE SIGNATURE(S) SHOULD BE GUARANTEED BY
AN ELIGIBLE GUARANTOR INSTITUTION (BANKS,
STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS
AND CREDIT UNIONS WITH MEMBERSHIP IN AN
APPROVED SIGNATURE GUARANTEE MEDALLION
PROGRAM), PURSUANT TO S.E.C. RULE 17Ad-15.
<PAGE> 1
EXHIBIT 10.1
GS LEASE
LEASE
dated June 11, 1985
METROPOLITAN LIFE INSURANCE COMPANY
and
GOLDMAN, SACHS & CO.
<PAGE> 2
TABLE OF CONTENTS
Page
----
1. Leased Premises; Term of Lease ............................. 1
1.1 Leased Premises ............................................ 1
1.2 Original Term .............................................. 2
1.3 Extended Terms ............................................. 2
2. Basic Rent, etc. ........................................... 4
2.1 Basic Rent ................................................. 4
2.2 Determination of Basic Rent ................................ 5
3. Manner of Payment .......................................... 8
4. Net Lease; No Counterclaim, Abatement ...................... 8
5. Condition and Use of Combined Premises ..................... 9
6. Maintenance; Alterations; Certain
Reimbursements; Etc. ..................................... 10
7. Removal and Replacement of Initial.
Tenant Improvements; Lessee's
Equipment ................................................ 37
8. Utility Services ........................................... 39
9. Indemnification by Lessee .................................. 40
10. Entry by Lessor ............................................ 42
11. Payment of Taxes, Impositions, etc. ........................ 43
11.1 General .................................................... 43
11.2 Exclusions from Impositions ................................ 45
11.3 Permitted Contests ......................................... 46
11.4 Tax Deposits ............................................... 48
12. Compliance with Legal and Insurance
Requirements, Permitted Encumbrances,
Leases ................................................... 50
13. Liens ...................................................... 50
14. Insurance .................................................. 51
14.1 Risks to be Insured ........................................ 51
14.2 Policy Provisions .......................................... 55
14.3 Delivery of Insurance Certificates;
Payment of Premium ........................................ 56
14.4 No Limitation of Damages ................................... 57
15. Damage to or Destruction of Property ....................... 57
15.1 Waiver of ss.227; Lessee to Give Notice .................... 57
15.2 Restoration ................................................ 58
15.3 Application of Insurance Proceeds .......................... 58
15.4 Termination in Lieu of Restoration ......................... 60
16. Taking of Property ......................................... 66
16.1 Notice ..................................................... 66
16.2 Total Taking ............................................... 66
<PAGE> 3
-ii-
16.3 Partial Taking ............................................. 67
16.4 Application of Awards ...................................... 68
16.5 Temporary Taking ........................................... 71
17. Disbursement of Deposited Sums ............................. 72
18. Certificate as to No Default, etc. ......................... 78
19. Right of Lessor to Perform
Lessee's Covenants, etc. ................................. 78
20. Assignments; Subleases ..................................... 82
20.1 Generally .................................................. 82
20.2 Non-disturbance ............................................ 84
20.3 Leasehold Mortgages ........................................ 86
21. Vaults ..................................................... 93
22. Events of Default; Termination ............................. 93
23. Repossession ............................................... 98
24. Reletting .................................................. 99
25. Survival of Lessee's Obligations;
Damages .................................................. 99
25.1 Termination of Lease Not to Relieve
Lessee of Obligations .................................... 99
25.2 Current Damages ............................................ 99
25.3 Final Damages .............................................. 101
26. No Waiver .................................................. 102
27. Remedies Cumulative ........................................ 102
28. Acceptance of Early Termination or Surrender ............... 103
29. No Merger of Title ......................................... 103
30. Exculpation ................................................ 104
31. Definitions ................................................ 106
32. End of Lease Term .......................................... 113
33. Notices .................................................... 113
34. Annual Reports ............................................. 115
35. Miscellaneous .............................................. 115
36. Structural Work ............................................ 117
37. Limitation on Interest ..................................... 120
Signatures ................................................. 120
Acknowledgments
Schedule A - Legal Description of the Land
Schedule B - Permitted Encumbrances;
Existing Leases
Schedule C - Form of non-disturbance agreement
Schedule D - Major Building Equipment
Schedule E - The Deed
Schedule F - Section 10.8 of Contract of Sale
<PAGE> 4
LEASE
THIS LEASE, dated June 11, 1985, between METROPOLITAN LIFE INSURANCE
COMPANY ("Lessor"), a New York corporation having its principal office at One
Madison Avenue, New York, New York 10010, and GOLDMAN, SACHS & CO. ("Lessee"), a
New York limited partnership having its principal office at 85 Broad Street, New
York, New York 10004.
W I T N E S S E T H:
That in consideration of the mutual agreements herein contained,
Lessor and Lessee hereby agree and covenant to and with each other as follows:
1. Leased Premises; Term of Lease.
1.1 Leased Premises. Lessor leases to Lessee, and Lessee rents from
Lessor, the land located in the City, County and State of New York more
particularly described in Schedule A hereto (the "Land"),
TOGETHER WITH the buildings, structures and improvements now or
hereafter appurtenant thereto or located thereon (the "Building"), and all
fixtures and personal property owned by Lessor now or hereafter attached thereto
or used in connection therewith,
TOGETHER WITH all the right, title and interest, if any, of Lessor
in and to:
<PAGE> 5
2
1. Any strips and gores of land adjoining the Land on any side
thereof;
2. Any land lying in the bed of any street or avenue abutting the
Land, to the center line thereof; and
3. Any easements or other rights in adjoining property enuring to
Lessor by reason of ownership of the Land;
EXCLUDING all Lessee's Equipment (as hereinafter defined) and the
Initial Tenant Improvements (as hereinafter defined).
All of the foregoing being herein called the "Leased Premises".
SUBJECT TO the Permitted Encumbrances and the Existing Leases, as
hereinafter defined.
1.2 Original Term. This Lease shall commence on the date hereof (the
"commencement date") and, unless sooner terminated pursuant to law or pursuant
to any of the terms hereof, shall expire at 11:59 p.m. on June 30, 2008.
1.3 Extended Terms. (a) Lessee shall have the right, exercisable as
hereinafter provided, to extend the term of this Lease for four successive
periods of five years each. Each such extended term shall be (except for the
amount of Basic Rent per annum and that there shall be no right to extend the
term of this Lease beyond the expiration of the fourth extended term) upon the
same covenants, terms and conditions as those provided in this Lease for the
<PAGE> 6
3
original term. If Lessee desires to preserve the right to extend the term of
this Lease for any extended term, it shall give Lessor a notice (the
"preservation notice") no earlier than the day 30 months prior to, and no later
than the day 20 months prior to, the expiration of the original term or the then
current extended term (the "then current term"), as the case may be (the "then
current scheduled expiration date"). If Lessee shall fail timely to give the
preservation notice, it shall have no right to extend the term of this Lease.
The Basic Rent per annum applicable to any extended term shall be determined in
accordance with section 2.2, but shall in no event be less than $35,862,435 per
annum. After the determination thereof pursuant to section 2.2, Lessee may, by
notice (the "exercise notice") to Lessor given no later than 30 days after the
date of such determination, exercise its right to extend the term of this Lease
at the Basic Rent so determined, but in no event less than $35,862,435 per
annum.
(b) If the term of this Lease is not extended for any of the four
extended terms, Lessee shall have no right to extend the term hereof for any of
the subsequent extended terms.
(c) Notwithstanding the foregoing provisions of this section 1.3, no
preservation notice shall be effective to preserve, and no exercise notice shall
be effective to exercise, Lessee's right to extend the term of this Lease
<PAGE> 7
4
for any extended term if an Event of Default under section 22(a), (b), (c) or
(d) shall have occurred and be continuing on the date on which Lessee gives such
notice with respect to such extended term.
2. Basic Rent, etc.
2.1 Basic Rent. Lessee shall pay to Lessor during the term of this
Lease a net annual basic rental for the Leased Premises (the "Basic Rent"), in
advance, in equal monthly installments, on the first day of each month computed
at the rate of
(a) $26,169,885 per annum for the period from the commencement date
to and including June 30, 1988;
(b) $31,016,160 per annum for the period from July 1, 1988 to and
including June 30, 1993;
(c) $35,862,435 per annum for the period from July 1, 1993 to and
including June 30, 1998;
(d) for the period from July 1, 1998 to and including June 30, 2003,
the amount per annum determined in accordance with section 2.2, but in no
event less than $35,862,435 per annum;
(e) for the period from July 1, 2003 to and including June 30, 2008,
the amount per annum determined in accordance with section 2.2, but in no
event less than $35,862,435 per annum; and
(f) if Lessee shall exercise its option to extend this Lease as
provided in section 1.3 for one or more
<PAGE> 8
5
extended terms, for such extended term, the amount per annum determined in
accordance with section 2.2.
If this Lease shall commence other than on the first day of a month, rent for
the period from the commencement date to and including the last day of the month
in which the commencement date occurs shall be due on the commencement date.
2.2 Determination of Basic Rent. (a) Each determination of Basic
Rent for the purposes of sections 1.3 and 2.1(d), (e) and (f) shall be made, to
the extent not inconsistent with this section, in accordance with the rules from
time to time in effect of the American Arbitration Association or, if the
American Arbitration Association shall have ceased to function as an arbitration
association, of a successor or comparable organization (the "Rules"). There
shall be three arbitrators: one designated by Lessor; one designated by Lessee;
and one designated in the manner hereinafter described. Each arbitrator shall,
as of the date of his designation, be a real estate broker licensed in the State
of New York doing business in the Borough of Manhattan and having at least 15
years experience in first-class Manhattan office building leases. Lessor shall,
by notice ("Lessor's Designation Notice") to Lessee given not later than the
applicable date indicated below, designate the name and address of its
arbitrator.
<PAGE> 9
6
<TABLE>
<CAPTION>
Arbitration Pursuant to Applicable Date
----------------------- ---------------
<S> <C>
Section 2.1(d) June 15, 1997
Section 2.1(e) June 15, 2002
Section 1.3 30 days after the
day on which Lessor
receives the
preservation notice
</TABLE>
Lessee shall, by notice to Lessor given not later than the applicable date
indicated below, designate the name and address of its arbitrator.
<TABLE>
<CAPTION>
Arbitration Pursuant to Applicable Date
----------------------- ---------------
<S> <C>
Section 2.1(d) July 1, 1997
Section 2.1(e) July 1, 2002
Section 1.3 30 days after the
day on which Lessee
receives Lessor's
Designation Notice
</TABLE>
If either party shall fail timely to designate its arbitrator, and such failure
shall continue for 10 days after receipt by the failing party of notice of such
failure; such other party may designate an arbitrator on behalf of the failing
party. Promptly after the designation of the second of the two arbitrators to be
designated, such two arbitrators shall meet and attempt to mediate between
Lessor and Lessee an agreement upon the Basic Rent in question. If, within 15
days after the designation of the second of the two arbitrators to be
designated, Lessor and Lessee have not agreed upon the Basic Rent in question,
such two arbitrators shall jointly designate a third arbitrator. If, within 30
days after the designation of the second of the two arbitrators to be
designated, no third arbitrator
<PAGE> 10
7
shall have been so jointly designated, such third arbitrator shall be designated
pursuant to the Rules. The arbitrators shall render their decision within 60
days after the designation of the third arbitrator to be designated. Lessor and
Lessee shall each pay the fees and disbursements of the arbitrator designated by
or on behalf of it, and Lessor and Lessee shall share equally the fees and
disbursements of the third arbitrator, if any; provided, however, that with
respect to any arbitration pursuant to section 1.3, if Lessee does not give the
exercise notice, Lessee shall pay (or reimburse Lessor for) all reasonable
out-of-pocket expenses incurred by Lessor in connection with such arbitration,
including attorneys' fees and disbursements and expert witness fees and
disbursements.
(b) The arbitrators shall determine the Basic Rent in question by
establishing the fair market amount thereof as of the date six months prior to
the date as of which such Basic Rent will take effect (in the case of
arbitration pursuant to section 2.1(d) or (e)) or the date six months prior to
the then current scheduled expiration date (in the case of arbitration pursuant
to section 1.3) that would be payable for the Leased Premises by a lessee having
the then creditworthiness of Lessee under a lease on all of the terms and
conditions of this Lease. Each arbitrator shall render as his determination of
the Basic Rent a fixed dollar amount per annum, and shall give a notice to the
other arbitrators
<PAGE> 11
8
and Lessor and Lessee thereof. All notices pursuant to the preceding sentence
shall be given simultaneously at a meeting (called by the third arbitrator on at
least five business days' notice to Lessor and Lessee and the other arbitrators)
at which all three arbitrators and Lessor and Lessee are present. The arithmetic
average of the two determinations closest to one another shall be and constitute
the determination of the arbitration; provided, however, if the highest and
lowest determinations are equidistant from the middle determination, then the
middle determination shall be and constitute the determination of the
arbitration.
3. Manner of Payment. The Basic Rent and all other sums payable by
Lessee to Lessor hereunder shall be payable in lawful money of the United States
of America and shall be paid to Lessor at Lessor's address set forth above or at
such other address of Lessor within the United States as Lessor from time to
time may designate or to such agent or person or persons resident or having an
office at such other address within the United States as Lessor from time to
time may designate.
4. Net Lease; No Counterclaim, Abatement. Lessor shall not be
required to provide any services to the Combined Premises or any part thereof.
Subject to the last sentence of this section 4, this Lease is a net lease, and
Lessee shall pay all costs, charges, taxes, assessments and
<PAGE> 12
9
other expenses of every character, foreseen or unforeseen, ordinary or
extraordinary, for the payment of which Lessor or Lessee is or shall become
liable by reason of its respective estate, right, title or interest in the
Combined Premises or any part thereof, or which are connected with or arise out
of the possession, use, occupancy, maintenance, addition to, repair or
rebuilding of the Combined Premises or any part thereof, including, without
limitation, those specifically referred to in this Lease. Except as provided in
sections 16 and 20.1(a), the Basic Rent and all other sums payable by Lessee
hereunder shall be paid without notice, demand, counterclaim, setoff, deduction
or defense and without abatement, suspension, deferment, diminution or
reduction. The foregoing provisions of this section 4 shall not obligate Lessee
to pay any taxes which are not Impositions or relieve Lessor of its obligation
to make reimbursements to Lessee in accordance with section 6(e).
5. Condition and Use of Combined Premises. LESSOR DOES NOT MAKE, AND
LESSEE ACKNOWLEDGES THAT LESSOR HAS NOT MADE, ANY REPRESENTATION OR WARRANTY,
EXPRESS OR IMPLIED, WITH RESPECT TO THIS LEASE, OR THE PRESENT OR FUTURE
MERCHANTABILITY, HABITABILITY, CONDITION, QUALITY, DURABILITY, FITNESS OR
SUITABILITY OF THE COMBINED PREMISES OR ANY PART THEREOF IN ANY RESPECT OR IN
CONNECTION WITH OR FOR THE PURPOSES AND USES OF LESSEE, OR ANY OTHER
<PAGE> 13
10
REPRESENTATION OR WARRANTY OF ANY KIND OR CHARACTER, EXPRESS OR IMPLIED, WITH
RESPECT THERETO. Lessee accepts the Leased Premises "as-is". Lessee may use the
Leased Premises only as an office building which may include retail facilities
and for purposes reasonably ancillary thereto. Lessee shall not suffer or permit
the Leased Premises or any part thereof to be used by the public in such a
manner as would subject the Leased Premises or any part thereof to a claim of
adverse possession by the public.
6. Maintenance; Alterations; Certain Reimbursements; Etc.
(a) Generally.
(i) Maintenance; Alterations. Subject to the provisions of this
Lease, Lessee:
(x) shall, in accordance with first-class office building
maintenance and operating standards (collectively, the "First-Class
Standard"), keep the Combined Premises in overall first-class order,
condition and repair;
(y) shall promptly make all replacements in and to the
Combined Premises or any part thereof (whether interior or exterior,
structural or nonstructural, ordinary or extraordinary, foreseen or
unforeseen) which are necessary or appropriate in a first-class
office building (collectively, "Required Replacements"); and
<PAGE> 14
11
(z) may make additions, alterations, improvements and
replacements (other than Required Replacements) in and to and
removals from the Combined Premises or any part thereof
(collectively, "Voluntary Alterations"; Required Replacements,
Structural Work [as defined in section 36] and Voluntary Alterations
being collectively called "Alterations").
(ii) Requirements for All Alterations. No Alteration may be
undertaken if such Alteration would (a) result in the Building's not being a
first-class office building or (b) materially and adversely affect any
structural element of the Building or any item of Major Building Equipment (as
defined in section 31). Each Alteration shall be effected with due diligence, in
a good and workmanlike manner, and in compliance with all Legal Requirements,
Insurance Requirements and Permitted Encumbrances. All Structural Work and all
replacements of items of Major Building Equipment shall be of a quality at least
equal to the original installation. Lessor shall not be liable to any
contractors, subcontractors, laborers, materialmen, suppliers or vendors for
services performed or material provided on or in connection with the Combined
Premises or any part thereof. Lessor shall not be required to maintain, alter,
repair, rebuild or replace the Combined Premises or any part thereof. Lessee
waives all rights to
<PAGE> 15
12
make Alterations at Lessor's expense, except that Lessor shall in accordance
with section 6(e) make reimbursements to Lessee on account of Reimbursable
Replacements, Reimbursable Structural Work and Reimbursable Legal Requirement
Alterations (each as defined in section 6(c)). All Alterations shall immediately
become the property of Lessor, shall be a part of the Leased Premises and shall
be subject to this Lease, and Lessee shall, upon demand of Lessor, execute and
deliver an appropriate instrument confirming Lessor's title thereto.
(b) Maintenance Programs.
(i) Initial Maintenance Program. On or before June 30, 1985, Lessee
shall submit to Lessor for its approval a maintenance program (the "Initial
Maintenance Program") for the period ending on May 31, 1986 with respect to the
following (collectively, the "Programmed Maintenance Items"): caulking and
acrylic treatment of the curtain wall and maintenance of the HVAC system, the
life safety system, the roof, the elevators, the escalators and the emergency
generators. Lessee's submission of the Initial Maintenance Program shall be
accompanied by an estimated budget for Reimbursable Replacements and
Reimbursable Structural Work for the period covered by such Program. Lessor
shall give notice to Lessee of Lessor's approval or disapproval of the Initial
Maintenance Program within 20 business days after such Program is received by
Lessor (which notice shall, in
<PAGE> 16
13
the case of a disapproval, be accompanied by a reasonably complete and specific
statement of the reasons for disapproval). Lessor may disapprove any part or
parts of the Initial Maintenance Program only if the same shall not be in
accordance with the First-Class Standard. If Lessee disputes Lessor's right to
disapprove, the part or parts of the Initial Maintenance Program affected by
such dispute shall be determined by the Appropriate Engineer (as defined in
section 6(i)) in accordance with the First-Class Standard.
(ii) Annual Maintenance Programs. On or before April 1, 1986 and on
or before April 1st of each year thereafter during the term of this Lease,
Lessee shall submit to Lessor for its approval a maintenance program with
respect to the Programmed Maintenance Items for the 12-month period commencing
on the next June 1st (an "Annual Maintenance Program"), together with an
estimated budget for Reimbursable Replacements and Reimbursable Structural Work
for the period covered thereby. Lessor shall give notice to Lessee of Lessor's
approval or disapproval of each Annual Maintenance Program within 20 business
days after such Program is received by Lessor (which notice shall, in the case
of a disapproval, be accompanied by a reasonably complete and specific statement
of the reasons for disapproval). Lessor may disapprove any part or parts of an
Annual Maintenance Program only if the same shall not be in
<PAGE> 17
14
accordance with the First-Class Standard. If Lessee disputes Lessor's right to
disapprove, the part or parts of the Annual Maintenance Program affected by such
dispute shall be determined by the Appropriate Engineer in accordance with the
First-Class Standard. Lessee shall not be in default under this Lease if any
estimated budget for Reimbursable Replacements and Reimbursable Structural Work
submitted pursuant to section 6(b)(i) or this section 6(b)(ii) proves to be
inaccurate, and no such budget shall be considered a part of the Initial
Maintenance Program or Annual Maintenance Program with which such budget was
submitted to Lessor.
(iii) Compliance by Lessee. Until the approval of the Initial
Maintenance Program by Lessor or the determination thereof by the Appropriate
Engineer, Lessee shall conduct a maintenance program with respect to the
Programmed Maintenance Items in accordance with the First-Class Standard. Lessee
shall comply with the Initial Maintenance Program for the period covered thereby
and each Annual Maintenance Program (as approved by Lessor or as determined by
the Appropriate Engineer) for the period covered thereby; provided, however,
that if any dispute as to an Annual Maintenance Program shall not be resolved
before the period intended to be covered thereby, Lessee shall be in compliance
with this section 6(b)(iii) if Lessee shall, pending the resolution of such
dispute, comply with
<PAGE> 18
15
the Initial Maintenance Program (if the dispute involves the first Annual
Maintenance Program) or the most recent Annual Maintenance Program in effect (if
the dispute involves any other Annual Maintenance Program).
(c) Certain Definitions. As used herein:
(i) "Legal Requirement Alteration" means any Alteration undertaken
in order to comply with a Legal Requirement.
(ii) "Reimbursable Replacement" means the replacement of an item of
Major Building Equipment in its entirety; provided, however, that:
(x) a replacement of any such item in its entirety shall be a
"Reimbursable Replacement" only if (a) such replacement (solely in light
of the physical condition of the item in question, and without regard to
whether or not such replacement may be necessitated by any Legal
Requirement) is consistent with the First-Class Standard and (b) the
repair of the item in question is inconsistent with the First-Class
Standard; and
(y) no replacement of an item of Major Building Equipment in its
entirety shall be a "Reimbursable Replacement" if such replacement is
necessitated by (a) fire, other casualty or a Taking or (b) the failure by
Lessee to comply with section 6(b)(iii).
(iii) "Reimbursable Legal Requirement Alteration" means any
Alteration undertaken solely in order to comply
<PAGE> 19
16
with a Legal Requirement enacted after the date hereof, other than:
(v) an Alteration (a) in any area designed for tenant occupancy
outside the Building's core (any restroom to be deemed such an area), (b)
to the paving, curbs or sidewalks within the Building's lobby or (c) in
the plaza area surrounding the Building (located outside of the Building's
curtain wall), including the paving and other parts thereof which serve as
the roof for the basement area of the Building;
(w) a Reimbursable Replacement;
(x) Reimbursable Structural Work;
(y) a replacement of an item whose replacement (solely in light of
the physical condition of the item in question, and without regard to
whether or not such replacement may be necessitated by any Legal
Requirement) is consistent with the First-Class Standard and whose repair
is inconsistent with the First-Class Standard; or
(z) an Alteration necessitated by fire, other casualty or a Taking,
or by Lessee's failure to comply with section 6(b)(iii).
(iv) "Reimbursable Structural Work" means any Structural Work which
(solely in light of a physical condition, and without regard to whether or not
such Structural Work may be necessitated by any Legal
<PAGE> 20
17
Requirement) is consistent with the First-Class Standard; provided, however,
that:
(w) Structural Work which is a replacement shall be "Reimbursable
Structural Work" only if (a) such replacement (solely in light of the
physical condition of the item in question, and without regard to whether
or not such replacement may be necessitated by any Legal Requirement) is
consistent with the First-Class Standard and (b) the repair of the item in
question is inconsistent with the First-Class Standard;
(x) no Structural Work shall be Reimbursable Structural Work if
necessitated by (a) fire, other casualty or a Taking or (b) the failure by
Lessee to comply with section 6(b)(iii);
(y) no Structural Work of the type described in clause (a) of
section 36 shall be "Reimbursable Structural Work" unless the Costs
thereof exceed $50,000 in any 12-month period; and
(z) no Structural Work of the type described in clause (b), (c), (d)
or (e) of section 36 shall be "Reimbursable Structural Work" unless the
work under the clause in question involves 5% or more of the curtain wall
windows above the ground floor in any 12-month period.
(v) "Qualified Alteration" means (x) any Alteration (other than the
replacement of an item of Major
<PAGE> 21
18
Building Equipment, any Structural Work or any Legal Requirement Alteration)
which affects any structural element of the Building or any item of Major
Building Equipment and (y) any Restoration (as defined in section 15.2).
If Lessor and Lessee shall disagree as to whether any item is an
item of Major Building Equipment, or as to whether the replacement of any item
of Major Building Equipment is a Reimbursable Replacement, or as to whether any
work is Structural Work, or as to whether any Structural Work is Reimbursable
Structural Work, or as to whether a Legal Requirement requires an Alteration, or
as to whether an Alteration is a Legal Requirement Alteration, or as to whether
any Legal Requirement Alteration is a Reimbursable Legal Requirement Alteration,
or as to whether any Alteration is a Qualified Alteration, the matter shall be
determined by the Appropriate Engineer.
(d) Submission and Approval of Plans and Specifications in Certain
Instances.
(i) Required Submissions. Prior to:
(x) making any Alteration constituting the replacement of any item
of Major Building Equipment (whether or not such replacement is a
Reimbursable Replacement); or
(y) undertaking any Structural Work (whether or not Reimbursable
Structural Work), any Legal Requirement
<PAGE> 22
19
Alteration (whether or not a Reimbursable Legal Requirement Alteration) or
any Qualified Alteration,
Lessee shall (subject to section 6(d)(vi)) submit all of the Plans and
Specifications therefor to Lessor for Lessor's approval, together with, in case
Lessee contends that the work in question is a Reimbursable Replacement,
Reimbursable Structural Work or a Reimbursable Legal Requirement Alteration, a
good faith estimate of the Costs thereof prepared by a reputable architect,
engineer or contractor and a reasonable estimate of the date of substantial
completion of the work in question (the "Estimated Substantial Completion
Date"). Lessor shall give notice (the "Plans and Specifications Notice") to
Lessee of Lessor's approval or disapproval of any Plans and Specifications
within 20 business days after the date upon which the same are received by
Lessor (which Plans and Specifications Notice shall, in the case of a
disapproval, be accompanied by a reasonably complete and specific statement of
the reasons for disapproval); provided, however, that if (a) at least 10
business days before the date upon which Lessee submits all of the Plans and
Specifications for the work in question to Lessor, Lessee gives notice to Lessor
that Lessee intends to make any replacement of an item of Major Building
Equipment or to undertake any Structural Work, Legal Requirement Alteration or
Qualified Alteration (which notice shall specify the
<PAGE> 23
20
general nature of the work and an estimated date for the submission of all of
the Plans and Specifications therefor to Lessor) and (b) Lessee delivers all of
the Plans and Specifications for the work in question to Lessor within 2
business days of the estimated submission date set forth in Lessee's notice,
then Lessor shall give the Plans and Specifications Notice to Lessee within 10
business days after the date upon which all of the Plans and Specifications for
the work in question are received by Lessor.
(ii) Disapproval Only Under Certain Circumstances. Lessor shall not
disapprove any Plans and Specifications unless the work contemplated thereby
would (a) result in the Building's not being a first-class office building or
(b) materially and adversely affect any structural element of the Building or
any item of Major Building Equipment. If Lessee disputes Lessor's right to
disapprove, the matter shall be determined by the Appropriate Engineer.
(iii) Certain Conditions. Subject to sections 6(d)(iv) and (vi), Lessee
shall not make any replacement of an item of Major Building Equipment or
undertake any Structural Work, Legal Requirement Alteration or Qualified
Alteration unless and until (x) Lessor shall approve the Plans and
Specifications therefor in a Plans and Specifications Notice or (y) the
Appropriate Engineer shall
<PAGE> 24
21
determine that Lessor did not have the right to disapprove such Plans and
Specifications pursuant to this Lease.
(iv) Failure to Give Timely Notice. If Lessor shall fail timely to give
Lessee a Plans and Specifications Notice, Lessee may proceed with the work in
question, and if Lessor thereafter disapproves the Plans and Specifications
therefor Lessee may continue such work unless the Appropriate Engineer
determines that Lessor had the right to disapprove pursuant to this Lease. If
the Appropriate Engineer so determines, Lessee shall cease such work, but the
work done by Lessee to the date of the Appropriate Engineer's determination
shall not constitute a default hereunder if Lessee thereupon commences and
thereafter diligently prosecutes to completion such remedial work (including,
without limitation, the removal of the work theretofore done by Lessee and the
restoration of the affected area of the Combined Premises) as Lessor may
reasonably determine to be appropriate in the circumstances (unless Lessee shall
dispute Lessor's determination, in which case the remedial work, if any, to be
done by Lessee shall be determined by the Appropriate Engineer).
(v) Submission of Certain Plans and Specifications Not Requiring Approval.
At the request of Lessor (made not more frequently than once in any 12-month
period), Lessee shall submit to Lessor Plans and Specifications for all
Alterations (other than Plans and Specifications required to
<PAGE> 25
22
be submitted to Lessor pursuant to section 6(d)(i)) to the extent that such
Plans and Specifications have been prepared and have not theretofore been
submitted to Lessor. Lessor shall have no right to approve any Plans and
Specifications submitted by Lessee pursuant to this section 6(d)(v).
(vi) Emergencies. Provided that Lessee shall have given Lessor
prompt telephonic notice (confirmed in writing as soon as reasonably
practicable) of an emergency, Lessee may (without first complying with the
applicable provisions of sections 6(d)(i), (ii), (iii) and (v)) proceed with
such aspects of any Alteration as Lessee may reasonably deem necessary in light
of the emergency, but as promptly as reasonably practicable thereafter Lessee
shall comply with the applicable provisions of said sections. Any dispute as to
Lessee's right to avail itself of this section 6(d)(vi) shall be determined by
the Appropriate Engineer.
(e) Certain Reimbursements.
(i) Submission of Bids. In the case of any Reimbursable Replacement,
Reimbursable Structural Work or Reimbursable Legal Requirement Alteration,
Lessee shall (subject to section 6(e)(vi)), simultaneously with the submission
of all of the Plans and Specifications therefor to Lessor (or as soon thereafter
as reasonably practicable, but in no event later than the date which is 5
business days prior to the date upon which Lessor is required to give the Plans
and Specifications Notice), deliver to Lessor a list
<PAGE> 26
23
of at least 3 reputable contractors (collectively, the "Original Bidders") from
whom Lessee proposes to obtain bids for the work. Lessor shall have the right,
exercisable by notice to Lessee delivered not later than 10 business days after
receipt by Lessor of the list of the Original Bidders, to designate no more than
3 additional reputable contractors (collectively, the "Additional Bidders") from
whom Lessor desires Lessee to obtain bids. Lessee shall, as promptly as
reasonably practicable, obtain bids from at least 2 of the Original Bidders and
solicit bids from all of the Additional Bidders (if any) on a competitive basis
and submit all bids obtained (together with the proposed contracts relating
thereto) to Lessor, and within 5 business days after receipt thereof Lessor
shall give notice to Lessee designating the Original Bidder or the Additional
Bidder (in either case being a Bidder from whom Lessee has obtained a bid) which
in Lessor's judgment should perform the work in question (the Bidder so
designated by Lessor being called "Lessor's Preferred Bidder"). Lessee shall
have the right, exercisable by notice (the "Dispute Notice") given to Lessor
within 5 business days after the date upon which Lessee receives notice of the
identity of Lessor's Preferred Bidder (which Dispute Notice shall specify the
Original Bidder or the Additional Bidder ["Lessee's Selected Bidder"] which
Lessee proposes to select to do the work in question), to dispute Lessor's
designation of Lessor's Preferred Bidder,
<PAGE> 27
24
and if the Dispute Notice shall be timely given, the Appropriate Engineer shall
select either Lessor's Preferred Bidder or Lessee's Selected Bidder as the
Bidder which (in light of the bid, contract terms, reputation and experience of
such Bidder) is most appropriate to do the work in question. Notwithstanding
Lessor's designation of, or the Appropriate Engineer's selection of, Lessor's
Preferred Bidder, Lessee may retain any Original Bidder or Additional Bidder
from whom Lessee has obtained a bid in accordance with this section 6(e)(i) to
do the work in question (the Bidder so retained being called the "Retained
Bidder").
(ii) Reimbursement Amount. Lessor shall, in accordance with section
6(e)(iv) or 6(e)(v), reimburse Lessee on account of any Reimbursable
Replacement, Reimbursable Structural Work or Reimbursable Legal Requirement
Alteration in an amount (the "Reimbursement Amount") equal to:
(x) in the case of any Reimbursable Replacement or Reimbursable
Structural Work, the sum of the following:
(a) the lesser of (i) all Costs reasonably incurred by Lessee
in connection with the work in question (exclusive, however, of the
fees and disbursements of any architect or engineer retained by
Lessee) or (ii) the original contract price of Lessor's Preferred
Bidder or, if Lessee shall have timely given the Dispute Notice and
the Appropriate
<PAGE> 28
25
Engineer shall have selected Lessee's Selected Bidder, the original
contract price of Lessee's Selected Bidder (the amount determined
pursuant to this clause (a) being called the "Base Amount" for the
work in question; the amount determined by subclause (ii) of this
clause (a) being called the "Determined Amount"); plus
(b) the reasonable fees and disbursements of any architect or
engineer retained by Lessee in connection with the work in question;
plus
(c) any Qualified Overruns (as hereinafter defined); or
(y) in the case of any Reimbursable Legal Requirement Alteration,
the sum of the following:
(a) the product of the Measuring Fraction (as hereinafter
defined) multiplied by the sum of (i) the Base Amount for the work
in question, plus (ii) any Qualified Overruns; plus
(b) the reasonable fees and disbursements of any architect or
engineer retained by Lessee in connection with the work in question.
Any dispute as to the reasonableness of the incurrence by Lessee of
any Cost in connection with the work in question, or as to the reasonableness of
the amount of any such Cost, shall be determined by the Appropriate Engineer.
<PAGE> 29
26
"Measuring Fraction" means, in respect of any Reimbursable Legal
Requirement Alteration, the fraction whose numerator is the number of months in
the period from the expiration of the then current term of this Lease to the end
of the expected useful life of such Alteration and whose denominator is the
number of months in the period from the Estimated Substantial Completion Date of
such Alteration to the end of the expected useful life thereof. Any dispute as
to the reasonableness of any Estimated Substantial Completion Date, or as to the
expected useful life of any Reimbursable Legal Requirement Alteration, shall be
determined by the Appropriate Engineer.
(iii) Overruns; Qualified Overruns. At any time during the
performance of any Reimbursable Replacement, Reimbursable Structural Work or
Reimbursable Legal Requirement Alteration, Lessee may give notice (an "Overrun
Notice") to Lessor specifying any cost (an "Overrun") in excess of the original
contract price of Lessee's Selected Bidder which Lessee expects to incur and
which Lessee contends was unforeseeable by Lessee at the time of commencement of
the work (each Overrun Notice to specify the nature of and reasons for the
Overrun in question in reasonably complete and specific detail). Within 10
business days after receipt of an Overrun Notice, Lessor shall notify Lessee as
to whether or not in Lessor's judgment the Overrun in question is reasonable in
amount in
<PAGE> 30
27
the circumstances and was unforeseeable by Lessee at the time of commencement of
the work. If Lessee shall dispute Lessor's judgment, the reasonableness of the
amount of, and the foreseeability by Lessee of, the Overrun in question shall be
determined by the Appropriate Engineer. Any Overrun determined by Lessor or the
Appropriate Engineer to be reasonable in amount in the circumstances and
unforeseeable by Lessee at the time of commencement of the work shall be a
"Qualified Overrun". Lessee shall not be chargeable with the failure by any
Contractor (as defined in section 6(e)(iv)(w)) to foresee any Overrun.
(iv) Reimbursement Upon Full Completion. Except in the case of a
Reimbursable Replacement, Reimbursable Structural Work or a Reimbursable Legal
Requirement Alteration in respect of which an Extended Completion Notice (as
defined in section 6(e)(v)) has been given, Lessor shall upon the full
completion of the work in question and within 10 business days after Lessor's
receipt of Lessee's request therefor remit the Reimbursement Amount to Lessee;
provided, however, that Lessor shall not be obligated to make such remittance
unless:
(w) Lessee's request for remittance shall be accompanied by (a) a
certificate of Lessee (in form reasonably satisfactory to Lessor) stating
that an amount at least equal to the Reimbursement Amount has been paid to
contractors, subcontractors, materialmen,
<PAGE> 31
28
engineers, architects or other persons (whose names and addresses and a
description of the work involved shall be stated) who have furnished
labor, materials, supplies, permits or services for the work in question
(collectively, "Contractors") and that to Lessee's best knowledge (after
due inquiry) there is no outstanding indebtedness due for labor,
materials, supplies, permits or services in any manner connected with the
work in question which if unpaid might be the basis for any type of lien
on the Combined Premises or any part thereof, and (b) a certificate of the
architect or engineer who prepared the related Plans and Specifications
(in form reasonably satisfactory to Lessor) stating that such work has
been fully completed in a good and workmanlike manner and in accordance
with the Plans and Specifications (as approved by Lessor or as determined
by the Appropriate Engineer to have been required to be approved by Lessor
pursuant to this Lease);
(x) Lessor shall have received (a) true copies of all bills paid by
Lessee to Contractors in connection with the work in question, (b) an
instrument in writing from any title company insuring Lessor's estate in
the Leased Premises certifying that there are no undischarged mechanics',
laborers' or materialmen's liens affecting any part of the Combined
Premises (other than liens, if any, in respect of which Lessor has
<PAGE> 32
29
consented to take security pursuant to section 13(a)(ii)) and (c) evidence
reasonably satisfactory to Lessor that Lessee has obtained waivers of
mechanics', laborers' or materialmen's liens or releases of such liens
from all Contractors engaged in the work in question;
(y) no certificate delivered to Lessor by Lessee or any architect or
engineer in connection with the work in question shall have been
materially incorrect at the time of delivery (any dispute pursuant to this
clause (y) to be determined by the Appropriate Engineer); and
(z) no Event of Default (including, without limitation, any Event of
Default specified in section 22(d)) shall have occurred and be continuing.
(v) Reimbursement as Work Proceeds. If at any time prior to or
during the performance of any Reimbursable Replacement, Reimbursable Structural
Work or Reimbursable Legal Requirement Alteration Lessee determines that the
full completion thereof will not occur within six months of its commencement,
Lessee shall give Lessor notice of such determination (an "Extended Completion
Notice") and thereafter Lessor shall from time to time within 10 business days
after Lessor's receipt of Lessee's request therefor (but in no event more
frequently than once during any 30-day period) make advances to Lessee on
account of the
<PAGE> 33
30
Reimbursement Amount for the work in question (collectively, "Reimbursement
Advances"); provided, however, that:
(x) no Reimbursement Advance shall be made until Lessee shall have
delivered to Lessor evidence reasonably acceptable to Lessor that Lessee
has paid Contractors engaged in the work in question an aggregate amount
(the "Benchmark Amount") equal to the positive remainder, if any, obtained
by subtracting the Determined Amount for the work in question from the
original contract price of the Retained Bidder, and Reimbursement Advances
shall be made only for amounts paid by Lessee to such Contractors which
are in excess of the Benchmark Amount;
(y) no Reimbursement Advance (other than the final Reimbursement
Advance) shall be due unless:
(a) Lessee's request for such Reimbursement Advance shall be
accompanied by (i) a certificate of Lessee (in form reasonably
satisfactory to Lessor) stating that the amount of the Reimbursement
Advance then requested has been paid by Lessee to Contractors (whose
names and addresses and a description of the work involved shall be
stated) engaged in the work in question, that the amount of the
Reimbursement Advance then requested (when taken together with the
aggregate amount of all Reimbursement Advances theretofore made by
<PAGE> 34
31
Lessor) exceeds neither 90% of the Reimbursement Amount nor the
product of the Determined Amount multiplied by the percentage (the
"Completed Percentage") of the work called for in the contract of
the Retained Bidder which has actually been installed in the Leased
Premises, and that no part of cost of the work described in any
previous or then pending request for a Reimbursement Advance has
been or is being made the basis for the Reimbursement Advance then
being requested, and (ii) a certificate of the architect or engineer
who prepared the related Plans and Specifications (in form
reasonably satisfactory to Lessor) stating in substance that the
Completed Percentage has been reached and that the work has been
performed in a good and workmanlike manner and in accordance with
the Plans and Specifications (as approved by Lessor or as determined
by the Appropriate Engineer to have been required to be approved by
Lessor pursuant to this Lease);
(b) Lessor shall have received true copies of all bills paid
or payable by Lessee to Contractors which form the basis for the
Reimbursement Advance in question; and
(c) the conditions specified in clauses (y) and (z) of section
6(e)(iv) shall have been
<PAGE> 35
32
fulfilled in respect of such Reimbursement Advance;
and
(z) the final Reimbursement Advance shall not be due unless all of
the conditions specified in clauses (w) through (z) of section 6(e)(iv)
shall have been fulfilled in respect of such Advance.
(vi) Emergencies. Provided that Lessee shall have given Lessor
prompt telephonic notice (confirmed in writing as soon as reasonably
practicable) of an emergency, Lessee may proceed with any Reimbursable
Replacement, Reimbursable Structural Work or Reimbursable Legal Requirement
Alteration without first complying with the applicable provisions of this
section 6(e), and Lessor shall, following full completion of the emergency work
in question and within 10 business days after Lessor's receipt of Lessee's
request therefor, remit the Emergency Reimbursement Amount (as hereinafter
defined) to Lessee; provided, however, that Lessor shall not be obligated to
make such remittance unless all of the conditions specified in clauses (w)
through (z) of section 6(e)(iv) shall have been fulfilled in respect of the work
in question (provided that (a) if no architect or engineer was retained for the
emergency work in question, subclause (b) of section 6(e)(iv)(w) shall be deemed
fulfilled if (x) Lessee shall deliver a certificate to Lessor stating that such
emergency work has been fully completed in a good and workmanlike manner and (y)
such emergency work
<PAGE> 36
33
has been fully completed in a manner consistent with the character of the
Building as a first-class office building [with due regard to the character of
the work as emergency work], and (b) if an architect or engineer was retained
for the emergency work in question but [due to the nature of the emergency] no
Plans and Specifications therefor were prepared, subclause (b) of section
6(e)(iv)(w) shall be deemed fulfilled if (x) Lessee shall deliver to Lessor a
certificate of such architect or engineer stating that such emergency work has
been fully completed in a good and workmanlike manner and (y) such emergency
work has been fully completed in a manner consistent with the character of the
Building as a first-class office building (with due regard to the character of
the work as emergency work]).
"Emergency Reimbursement Amount" means (a) in respect of any
Reimbursable Replacement or Reimbursable Structural Work undertaken in an
emergency, all Costs reasonably incurred by Lessee in connection with the
emergency work in question and (b) in the case of a Reimbursable Legal
Requirement Alteration undertaken in an emergency, the product of the Measuring
Fraction multiplied by an amount equal to all Costs reasonably incurred by
Lessee in connection with the emergency work in question.
Any dispute as to Lessee's right to avail itself of this section
6(d)(vi), or as to the reasonableness of the incurrence by Lessee of any Cost in
connection with the
<PAGE> 37
34
emergency work in question, or as to the reasonableness of the amount of any
such Cost, shall be determined by the Appropriate Engineer.
(f) Overdue Reimbursements. If any sum reimbursable by Lessor to Lessee
pursuant to section 6(e)(iv), 6(e)(v) or 6(e)(vi) shall not be paid to Lessee
within 10 business days after the same becomes due Lessee may give Lessor a
notice (a "Delinquency Notice") of the delinquency and if such sum remains
unpaid for a period of 10 business days after the date Lessor receives the
Delinquency Notice, such sum shall bear interest from the date Lessor receives
the Delinquency Notice until the date of payment at a rate per annum equal to
the prime rate of Morgan Guaranty Trust Company of New York (the "Delinquency
Rate") announced to be in effect as of the date of Lessor's receipt of the
Delinquency Notice.
(g) Inspection by Lessor; Cooperation by Lessee.
(i) Lessor and its representatives shall at all reasonable times and
(except in an emergency) upon reasonable notice have access to the Combined
Premises for the purposes of (x) inspecting the progress of construction of any
Alteration and (y) reviewing the implementation of, and Lessee's compliance
with, the Initial Maintenance Program and each Annual Maintenance Program.
(ii) Upon demand of Lessor, Lessee shall comply in all respects with any
reasonable and timely suggestions made
<PAGE> 38
35
by Lessor with respect to construction matters relating to any Reimbursable
Replacement, Reimbursable Structural Work or Reimbursable Legal Requirement
Alteration, and shall correct any defect in the work in question or any material
departure from the Plans and Specifications for the work in question. Any
dispute pursuant to this clause (ii) shall be determined by the Appropriate
Engineer.
(iii) Lessee shall, within 10 business days after receipt of a
statement therefor (accompanied by true copies of the bills paid by Lessor),
reimburse Lessor for all reasonable out-of-pocket expenses incurred for the
services of an architect or engineer making inspections of any Restoration. If
any sum reimbursable by Lessee to Lessor pursuant to section 2.2(a), section
6(h), section 7(b), section 11.1(c), section 11.3, section 20.2 or this clause
(iii) shall not be paid within 10 business days after the same becomes due,
Lessor may give Lessee a Delinquency Notice and if such sum remains unpaid for a
period of 10 business days after the date Lessee receives the Delinquency
Notice, such sum shall bear interest from the date Lessee receives the
Delinquency Notice to the date of payment at the Delinquency Rate announced to
be in effect as of the date of Lessee's receipt of the Delinquency Notice.
(h) Removal of Special Alterations. If Lessee makes any opening
through the slab of any floor of the Leased Premises or reduces the floor area
of, or lowers the
<PAGE> 39
36
ceiling height of, any part of the Leased Premises designed for tenant occupancy
(any of the foregoing being called a "Special Alteration"), Lessee shall (within
10 business days after request therefor) reimburse Lessor the reasonable
out-of-pocket expenses incurred by Lessor after the expiration or sooner
termination of this Lease in restoring the area affected by such Special
Alteration to its prior condition; provided, however, that Lessee shall not be
required to reimburse Lessor in respect of any Special Alteration unless Lessor
shall notify Lessee of Lessor's desire for reimbursement in respect thereof at
least 6 months prior to the expiration of this Lease or within 30 days following
any earlier termination of this Lease.
(i) Engineer; Appropriate Engineer.
(i) "Engineer" means each of the following:
(t) Syska & Hennessy Inc.;
(u) Meyer Strong & Jones P.C.,
(v) Jaros Baum & Bolles;
(w) Weidlinger Associates;
(x) Purdy & Henderson Associates Inc.;
(y) Weiskopf & Pickworth; and
(z) such other independent engineering firm or firms having at
least 15 years' experience in first-class Manhattan office buildings
as shall from time to time be designated by Lessor or Lessee and
approved by the other party (which approval
<PAGE> 40
37
shall not be unreasonably withheld or delayed; any dispute as to
whether either Lessor or Lessee has unreasonably withheld or delayed
such approval to be determined by arbitration).
(ii) "Appropriate Engineer" means, in respect of any matter required
by this Lease to be determined by an Appropriate Engineer, such Engineer as
Lessee may designate by notice (a "Lessee's Designation Notice") to Lessor;
provided, however, that if Lessee shall fail to give a Lessee's Designation
Notice within 7 business days after Lessee receives Lessor's request for the
same, the "Appropriate Engineer" for the matter in question shall be such
Engineer as Lessor may designate in a notice to Lessee delivered at any time
prior to receipt by Lessor of such Lessee's Designation Notice.
(iii) Each Appropriate Engineer shall make its determination as
promptly as reasonably practicable, but in any event within 30 days after
request therefor by Lessor or Lessee. Each determination made by an Appropriate
Engineer pursuant to this Lease shall be final and binding on Lessor and Lessee.
Lessor and Lessee shall each pay one-half of the fees and expenses of each
Appropriate Engineer which is called upon to act hereunder.
7. Removal and Replacement of Initial Tenant Improvements; Lessee's
Equipment. (a) Lessor acknowledges that Lessee owns the Initial Tenant
Improvements and that
<PAGE> 41
38
the Initial Tenant Improvements are of a quality superior to tenant improvements
ordinarily found in first-class office buildings. Lessee (subject to the
applicable provisions of section 6) may at any time during the term hereof
remove all or any of the Initial Tenant Improvements provided that promptly
following such removal Lessee shall replace the removed Initial Tenant
Improvements with items of a similar general nature to the extent necessary to
maintain the general character of the Combined Premises as that of a first-class
office building. Upon the expiration or sooner termination of this Lease, Lessee
shall be deemed to have abandoned the Initial Tenant Improvements, except to the
extent that Lessee shall have removed the same. At the request of Lessor at any
time after the expiration or earlier termination of this Lease, Lessee shall
execute, acknowledge and deliver to Lessor a quitclaim deed conveying to Lessor
all Initial Tenant Improvements remaining on the Land or in the Building, and if
Lessee shall default in the performance of the foregoing covenant for a period
of 10 days after Lessee's receipt of Lessor's request for the quitclaim deed,
Lessor is hereby appointed Lessee's attorney-in-fact for the purpose of
executing, acknowledging and delivering such deed. The foregoing appointment is
coupled with an interest and is irrevocable.
(b) Lessor shall have no ownership interest in Lessee's Equipment.
Lessee may remove all or any of
<PAGE> 42
39
Lessee's Equipment from the Combined Premises at any time. Any Lessee's
Equipment not removed within five days after the expiration of this Lease or 30
days after the sooner termination of this Lease shall be deemed abandoned and
may be disposed of by Lessor without notice and without obligation to account
therefor, and Lessee shall reimburse Lessor, upon demand, for all costs and
expenses incurred by Lessor in disposing thereof. After the expiration or sooner
termination of this Lease, Lessor may, without awaiting the lapse of the periods
referred to in the previous sentence, relocate and store in the Leased Premises
any Lessee's Equipment not removed. In case of the termination of this Lease
prior to its expiration, Lessee's liability for Basic Rent with respect to any
portion of the Leased Premises in which any Lessee's Equipment remains shall
continue for the period (not in excess of 30 days) ending on the date of the
removal of the same.
(c) Lessee shall immediately repair all damage to the Combined
Premises or any part thereof caused by its removal of any Lessee's Equipment,
Initial Tenant Improvements or Alterations.
8. Utility Services. Lessee shall pay all charges for all public or
private electrical, steam, gas, fuel, power and other utility services at any
time rendered to or in connection with the Combined Premises or any part
thereof.
<PAGE> 43
40
9. Indemnification by Lessee. (a) Lessee shall protect, indemnify and
save harmless Lessor from and against all liabilities, obligations, claims,
damages, penalties, causes of action, costs and expenses (including, without
limitation, attorneys' fees and expenses) imposed upon or incurred by or
asserted against Lessor or against the Combined Premises or any part thereof by
reason of the occurrence or existence of any of the following during the term
hereof: (1) the conduct, management or possession of the Combined Premises or
any part thereof, (2) any accident, injury to or death of persons or loss of or
damage to property occurring in, on or about the Combined Premises or any part
thereof or the adjoining sidewalks, curbs, vaults and vault space, if any,
streets or ways, (3) any use, non-use or condition of the Combined Premises or
any part thereof or the adjoining sidewalks, curbs, vaults and vault space, if
any, streets or ways, (4) any failure on the part of Lessee to perform or comply
with any of the terms, provisions or conditions of this Lease or with the terms,
provisions or conditions of this Lease or with the terms, provisions and
conditions of the Contract Section (as defined in section 36), (5) performance
of any labor or services or the furnishing of any materials or other property in
respect of the Combined Premises or any part thereof, (6) any negligence or
tortious act or omission on the part of Lessee or any of its partners, agents,
contractors, servants, employees, licensees or invitees, (7)
<PAGE> 44
41
any negligence or tortious act or omission on the part of any sublessee of
Lessee, or of any partners, agents, contractors, servants, employees, licensees
or invitees of any sublessee of Lessee, (8) any contest of any Imposition, Legal
Requirement, Permitted Encumbrance or any provision of an Existing Lease
conducted by Lessee pursuant to section 11.3, (9) any Existing Lease or other
sublease of all or any part of the Combined Premises or (10) any action taken by
Lessor at the request of Lessee pursuant to section 11.1(c) or 11.3.
(b) In case any claim is made against Lessor or in case any action,
suit or proceeding (a "proceeding") is brought against Lessor or the Combined
Premises or any part thereof by reason of any of the foregoing, Lessor shall
give prompt notice to Lessee and Lessee shall cause such claim or proceeding to
be defended by counsel ("Lessee's Counsel") designated by Lessee and approved by
Lessor (which approval shall not be unreasonably withheld). Lessee shall have
the right to control the defense and settlement of any such claim or proceeding
and shall not be required to indemnify Lessor from the costs and expenses of any
settlement agreed to without Lessee's consent; provided, however, that Lessor
shall have the right (a) to require Lessee and Lessee's Counsel to consult with
Lessor and counsel retained and paid by Lessor, (b) to assume control of the
defense and settlement of any such claim or proceeding at any time if
<PAGE> 45
42
Lessor waives its right to be indemnified by Lessee on account thereof and (c)
to make any settlement without Lessee's consent if Lessor pays the amount of
such settlement and waives its right to be indemnified by Lessee on account of
the claim or proceeding to which such settlement relates. Lessor shall cooperate
with Lessee, at Lessee's expense, in the defense of any such claim or
proceeding in such manner as Lessee may from time to time reasonably request.
10. Entry by Lessor. Lessee shall permit Lessor to enter the
Combined Premises or any part thereof at all reasonable times upon reasonable
notice (except in case of emergency) for the purpose of inspecting the same or
doing any work under section 19, and to keep and store all such materials
therein as may be reasonably necessary or appropriate for any such purpose
without the same constituting a partial or complete, constructive or actual
eviction (but nothing contained herein shall create or imply any duty on the
part of Lessor to do any work under section 19). Lessor shall not have any duty
to make any such inspection and shall not incur any liability or obligation by
making or for not making any such inspection. Lessee shall also permit Lessor to
enter the Combined Premises or any part thereof at all reasonable times upon
reasonable notice for the purposes of exhibiting the Leased Premises for sale or
mortgage or, during the last 24 months
<PAGE> 46
43
of the term or any extended term of this Lease, lease. Any entry pursuant to
this section shall be subject to the condition that, except in case of
emergency, if Lessee so desires, any representative of Lessor shall be
accompanied at all times by a representative of Lessee.
11. Payment of Taxes, Impositions, etc.
11.1 General. (a) Subject to the provisions of sections 11.2, 11.3
and 11.4, Lessee shall pay, before any fine, penalty, interest or cost may be
added for non-payment, all real estate taxes, personal property taxes, transit
taxes, occupancy taxes, assessments for public improvements or benefits, whether
or not commenced or completed prior to the date hereof and whether or not to be
completed within the term hereof, water, sewer or other rents, rates and
charges, excises, license fees, permit fees, inspection fees and other
authorization fees and charges, in each case whether general or special,
ordinary or extraordinary, or foreseen or unforeseen, of every character
(including all interest and penalties thereon) ("Impositions"), which at any
time during or in respect of the term hereof may be assessed, levied, confirmed
or imposed on or grow or become due and payable out of or in respect of or
become a lien on (a) the Combined Premises or any part thereof, (b) occupancy,
use or possession of or activity conducted in the Combined Premises or any part
thereof by Lessee or anybody else, and/or (c) this Lease or
<PAGE> 47
44
any other document to which Lessee is a party, creating or transferring an
interest or estate in the Combined Premises or any part thereof, provided that
(i) if any Imposition, by law, may at the option of the taxpayer be paid in
installments, Lessee may elect to pay the same in the maximum number of
installments permitted by law and Lessee shall be required to pay only those
installments (together with interest thereon) coming due during the term hereof
(each such installment and interest thereon to be paid by Lessee before any
fine, penalty, interest or cost may be added thereto for non-payment) and (ii)
all Impositions for the fiscal or tax year in which the term shall end shall be
apportioned.
(b) Lessee shall deliver to Lessor upon request an Officer's Certificate
certifying to the payment of all Impositions and shall furnish to Lessor upon
request copies of official receipts or other proof satisfactory to Lessor
evidencing such payment.
(c) Lessor, at Lessee's expense, shall promptly execute such reports,
certificates, instruments, applications and other documents which can be
executed only by the owner of the Leased Premises as Lessee may reasonably
request and shall take such other actions which can be taken only by the owner
of the Leased Premises as Lessee may reasonably request in connection with the
Impositions, any payment thereof or any exemption therefrom now or hereafter
<PAGE> 48
45
in effect or to be applied for. If in connection with any such request Lessor
consults with an engineer, an attorney or another professional, Lessee shall,
within 10 days of Lessee's receipt of demand therefor accompanied by copies of
the bills paid by Lessor, reimburse Lessor for the reasonable out-of-pocket
expenses incurred by Lessor for the services of such professionals. If such
professional advises Lessor in writing that Lessor's executing such document or
taking such action might result in Lessor's becoming criminally liable and
furnishes a reasonably detailed explanation of the liability in question and the
reasons therefor, Lessor shall promptly advise Lessee and furnish Lessee with a
copy of such professional's advice and explanation and Lessor need not execute
such document or take such action.
(d) The certificate or receipt of the department, officer or bureau
charged with the collection of any Imposition, showing that such Imposition is
due and payable or has been paid, shall be prima facie evidence that such
Imposition was due and payable or that it has been paid.
11.2 Exclusions from Impositions. The term "Impositions" shall not
include, and nothing herein contained shall require Lessee to pay, municipal,
state or federal income taxes assessed against Lessor, or municipal, state or
federal capital levy, gift, estate, succession, inheritance or transfer taxes of
Lessor, or corporation
<PAGE> 49
46
excess profits or franchise taxes imposed upon any corporate owner of the Leased
Premises, or any income, profits or revenue tax, assessment or charge imposed
upon Lessor; provided, however, that if, due to a future change in the method of
taxation, a franchise, income, transit, profit or other tax or governmental
imposition shall be levied against Lessor in substitution for any Imposition,
then such franchise, income, transit, profit or other tax or governmental
imposition levied against Lessor shall be deemed to be an Imposition.
11.3 Permitted Contests. Lessee without Lessor's consent may contest, by
appropriate legal proceedings conducted in good faith and with due diligence,
the amount or validity or application, in whole or in part, of any Imposition,
Legal Requirement, Permitted Encumbrance or any provision of any Existing Lease,
and may withhold payment or performance of the same pending such contest,
provided that (a) such proceedings shall suspend the collection thereof from
Lessor and the Leased Premises or any part thereof, (b) neither the Leased
Premises nor any part thereof, (b) neither the Leased Premises nor any part
thereof or interest therein would be in any danger of being sold, forfeited or
lost, (c) Lessor shall not be in any danger of any criminal liability by reason
thereof and (d) in the case of a contest involving any Legal Requirement, any
Permitted Encumbrance or any provision of any Existing Lease, if at any time
Lessor determines that Lessor is in danger of any civil
<PAGE> 50
47
liability in an amount in excess of one year's Basic Rent, Lessee shall (within
5 business days after Lessee receives Lessor's request therefor) furnish to
Lessor such security against such civil liability as Lessor may reasonably
request. Lessee shall give prompt notice to Lessor of the commencement of or of
Lessee's desire to commence any contest permitted by the preceding sentence and
Lessor shall, at Lessee's expense, cooperate with Lessee with respect to any
such contest and, if in connection with the commencement, prosecution or
settlement of such contest only Lessor can execute any report, certificate,
instrument, application or other document or take any other action, then, upon
Lessee's request, Lessor shall execute or take the same. If in connection with
any such request Lessor consults with an engineer, an attorney or other
professional, Lessee shall, within 10 days of Lessee's receipt of demand
therefor accompanied by copies of the bills paid by Lessor, reimburse Lessor
for the reasonable out-of-pocket expenses incurred by Lessor for the services
of such professionals. If such professional advises Lessor in writing that
Lessor's executing such document or taking such action might result in Lessor's
becoming criminally liable and furnishes a reasonably detailed explanation of
such liability and the reasons therefor, Lessor shall promptly advise Lessee
and furnish Lessee with a copy of such professional's advice and explanation
and Lessor need
<PAGE> 51
48
not execute such document or take such action. If, while contesting any
Imposition, Lessee withholds payment of the same, Lessee shall maintain the
amount withheld (together with penalties and interest from time to time accruing
thereon) on deposit in a separate interest-bearing account in Lessor's name with
a bank or trust company selected by Lessee having an office in the Borough of
Manhattan and a combined shareholders equity of at least $200 million (or, if
Lessee and Lessor so agree, with Lessor). If any of the conditions set forth in
the proviso to the first sentence of this section 11.3 are violated, Lessor
shall be entitled to withdraw the funds on deposit in said account in order to
make payment of the Imposition being contested. All interest earned on funds in
such an account shall be credited to such account and Lessee shall pay all taxes
thereon. Upon termination or settlement of such contest, any required payment of
the Imposition contested shall be made from such account and the balance
remaining in such account shall be paid to Lessee. If the amount in the account
is insufficient, Lessee shall pay the amount of the deficiency.
11.4 Tax Deposits. Notwithstanding the foregoing provisions of this
section 11, if at any time any Event of Default specified in section 22(d) shall
have occurred due to Lessee's failure to perform its obligations under section
11.1(a), Lessor may at any time thereafter give a notice to
<PAGE> 52
49
Lessee referring to this section 11.4 and if such notice shall be given Lessee
shall be obligated from and after the date which is 10 days after Lessee's
receipt of such notice to pay to Lessor in equal monthly installments, on the
first day of each month during the balance of the term and any extended term of
this Lease, an amount equal to one-twelfth of the annual real estate taxes
imposed upon the Combined Premises for each fiscal tax year (collectively, "Tax
Deposits"). Tax Deposits shall in the first instance be based on the real estate
taxes for the prior fiscal tax year, and when such real estate taxes shall be
ascertained for the current tax year, appropriate adjustments shall be made.
Lessor shall keep all Tax Deposits in a separate interest bearing escrow account
in a New York Clearing House member bank, and the interest thereon shall be
credited to Lessee (Lessee to pay all taxes on such interest). Lessor shall
apply Tax Deposits to the payment of the annual real estate taxes imposed upon
the Combined Premises as they become due and payable. From time to time upon
notice to Lessee by Lessor, Tax Deposits shall be increased to such amounts as
may be necessary from time to time to provide a fund sufficient to meet the
payment of the annual real estate taxes imposed upon the Combined Premises (or
any installment thereof) as and when due and payable, whether on the present
dates of payment or on such other dates as may be fixed by law.
<PAGE> 53
50
12. Compliance with Legal and Insurance Requirements, Permitted
Encumbrances, Leases. Subject to the provisions of sections 6 and 11.3, Lessee
shall promptly comply with all Legal Requirements, Insurance Requirements and
Permitted Encumbrances, whether or not compliance therewith shall require
Alterations or interefere with the use and enjoyment of the Combined Premises or
any part thereof. Subject to the provisions of section 11.3, Lessee shall
observe and perform all of the covenants and obligations, if any, on the part of
Lessor to be observed and performed under the Existing Leases.
13. Liens. (a) Within 60 days after the date on which Lessor gives
Lessee notice, referring to this section 13 and section 19(e), of the existence
of any mechanic's, laborer's or materialman's lien, any lien arising under any
Permitted Encumbrance or any security interest which might be or become a lien,
encumbrance or charge upon the Combined Premises or any part thereof (other than
any such lien, encumbrance or charge caused by Lessor) and directs Lessee to
remove or discharge the same, Lessee shall either (i) remove or discharge the
same, by bonding or otherwise, or (ii) if Lessor shall consent thereto, provide
Lessor with an unconditional and irrevocable letter of credit (issued by a New
York Clearing House member bank satisfactory to Lessor and in form satisfactory
to Lessor) or other security
<PAGE> 54
51
satisfactory to Lessor indemnifying Lessor against such lien or security
interest.
(b) Nothing contained in this Lease shall be deemed or construed in
any way as constituting the consent or request of Lessor, express or implied by
inference or otherwise, to any contractor, sub-contractor, laborer or
materialman for the performance of any labor or the furnishing of any materials
for any specific improvement, alteration to or repair of the Combined Premises
or any part thereof.
14. Insurance.
14.1 Risks to be Insured. (a) Lessee shall maintain or cause to be
maintained with insurers and pursuant to insuring agreements approved by Lessor:
(i) insurance with respect to all buildings, improvements, equipment
and machinery constituting a part of the Combined Premises against loss or
damage by perils customarily included under standard "all-risk" policies
(including specifically damage by water), in amounts sufficient to prevent
Lessor or Lessee from becoming a co-insurer of any partial loss under the
applicable policies, and in any event in amounts not less than 90% of the
then full replacement cost (without deducting depreciation) of such
buildings, improvements, equipment and machinery (exclusive of the costs
of foundations, excavations and footings) (the "full
<PAGE> 55
52
replacement cost") as determined at the request of Lessor, made not sooner
than one year after the previous determination, and at Lessee's expense by
the insurer or insurers or by an expert selected by Lessee and approved by
Lessor;
(ii) boiler and machinery coverage, either, as Lessee shall elect,
as part of the policy referred to in clause (i) of this section 14.1(a)
or, if by a separate policy, in an amount not less than $5,000,000 or such
greater amount as Lessor may reasonably require by notice to Lessee;
(iii) comprehensive general liability insurance, including broad
form bodily injury, personal injury, property damage and blanket
contractual insurance, against claims arising out of or connected with the
possession, use, operation or condition of the Combined Premises with a
combined single limit of not less than $100,000,000 (or, such greater
amount as Lessor may reasonably require by notice to Lessee) for all
claims with respect to bodily injury, property damage and personal injury
with respect to any one occurrence;
(iv) appropriate builder's risk insurance with respect to any
Alterations (including, without limitation, any Restoration) or other work
on or about the Combined Premises or any part thereof;
<PAGE> 56
53
(v) appropriate worker's compensation and employer's liability
insurance with respect to any Alteration (including, without limitation,
any Restoration) or other work on or about the Combined Premises or any
part thereof;
(vi) such other insurance with respect to the Combined Premises or any
part thereof in such amounts and against such insurable casualties as
Lessor from time to time may reasonably require by notice to Lessee; and
(vii) rental value or rental continuation insurance to take effect
upon 50% Untenantability (as defined in section 15.4(a)) ("Rent Insurance")
in an amount sufficient to prevent Lessor and Lessee from becoming
co-insurers, and in any event, in respect of each Required Item (as
hereinafter defined), in an amount not less than the amount of such
Required Item for the Required Period (as hereinafter defined) for such
Required Item.
All insurance required to be maintained under clause (i), (ii) or (iii) of this
section 14.1(a) may be subject to a deductible of not more than the Deductible
Amount. Lessor shall not unreasonably withhold any of the approvals referred to
in this section 14.1(a). Any dispute whether Lessor has unreasonably withheld
such an approval and any dispute regarding the dollar amounts of the limits of
<PAGE> 57
54
coverage under clause (ii) or (iii) of this section 14.1(a) and any dispute
under clause (iv), (v), (vi) or (vii) above shall be resolved by arbitration.
Pending the outcome of such arbitration, Lessee may act as if the dispute had
been resolved in its favor.
(b) "Required Item" means each of (i) Basic Rent, (ii) all
Impositions and (iii) all premiums on insurance required to be carried pursuant
to section 14.1(a); provided, however, that none of the foregoing shall be a
Required Item unless Rent Insurance therefor shall be available at a reasonable
cost. Rent Insurance shall be deemed available at a reasonable cost in respect
of any Required Item if the annualized premium per $1,000,000 of coverage does
not exceed the product of $1,000 multiplied by a fraction whose numerator is the
Index for the third month immediately preceding the month in which the
determination is made as to whether the item in question is a "Required Item"
and whose denominator is the Index for February, 1985.
(c) "Required Period" means, in respect of any Required Item, the
period following the date of 50% Untenantability for which Rent Insurance for
such Required Item is available at a reasonable cost (provided that in no event
shall the Required Period for any Required Item exceed an 18-month period).
(d) The determination as to whether any item is a "Required Item",
and the determination as to the Required
<PAGE> 58
55
Period, if any, for the item in question, shall be made at the request of Lessor
by Marsh & McLennan (or such other independent insurance firm as may be
reasonably acceptable to Lessor) and at the expense of Lessee, provided that no
such determination shall be required to be made more frequently than once every
6 months; provided, however, that Lessor and Lessee acknowledge that, as of the
date of this Lease, Basic Rent is the only Required Item and that the Required
Period therefor is a 12-month period.
14.2 Policy Provisions. All insurance maintained by Lessee pursuant to
section 14.1(a) shall: (a) except for any worker's compensation insurance and
employer's liability insurance, name as insureds, as their respective interests
may appear, Lessor and Lessee; (b) include a stipulation that premiums will be
paid by and are the responsibility of Lessee; (c) except for any comprehensive
general liability, worker's compensation insurance or employer's liability
insurance, provide that no act or omission of Lessee shall impair or affect the
rights of the insureds to receive and collect the proceeds under the relevant
policy; and (d) provide that no cancellation, reduction in amount or material
change in coverage thereof shall be effective until at least 30 days after
receipt by Lessor of written notice thereof. Lessee shall have the sole
authority to settle claims under insurance policies; provided, however, that,
in case of any damage or destruction affording Lessee the right
<PAGE> 59
56
to terminate this Lease pursuant to section 15.4(a), Lessee may not settle all
or any of the claims under the policies referred to in clauses (i), (ii), (iv)
or (vi) of section 14.1(a) arising from any damage or destruction unless it
shall waive such right with respect to such damage or destruction. Lessee may
obtain any of the insurance required hereby under blanket or umbrella policies;
provided, however, that any such policy of insurance provided for under clauses
(i), (ii), (iv), (vi) or (vii) of section 14.1(a): (i) shall permit recovery in
the amount required by the clause in question to be carried without regard to
other insured events with respect to other properties, and (ii) shall not
contain any clause which would result in the insured thereunder being required
to carry insurance with respect to the property covered thereby in an amount
equal to a minimum specific percentage of the full insurable value of such
property in order to prevent the insured therein named from becoming a
co-insurer of any loss with the insurer under such policy.
14.3 Delivery of Insurance Certificates; Payment of Premium. On the
date hereof and not less than 7 days prior to each policy expiration Lessee
shall deliver to Lessor certificates of all insurance policies required by this
Lease to be maintained. Lessee shall pay all premiums on each such insurance
policy within the time required under
<PAGE> 60
57
such policy and furnish Lessor with evidence of payment thereof within 10
business days after payment.
14.4 No Limitation of Damages. Lessor shall not be limited in the
proof of any damages which Lessor may claim against Lessee arising out of or by
reason of Lessee's failure during the term or any extended term of this Lease to
provide and keep in force the insurance required under this Lease to the amount
of the insurance premium or premiums not paid or incurred by Lessee and which
would have been payable upon such insurance, but Lessor shall also be entitled
to recover as damages for such breach the uninsured amount of any loss to the
extent of any deficiency between the insurance required by the provisions of
this Lease and the insurance carried by Lessee, together with all costs and
expenses incurred by Lessor which Lessor would not have incurred if the required
insurance had been maintained by Lessee. However, any such damages so recovered
by Lessor shall be subject to and limited by the provisions of section 25.
15. Damage to or Destruction of Property.
15.1 Waiver of ss.227; Lessee to Give Notice. Lessee hereby waives
the provisions of Section 227 of the Real Property Law and confirms that the
provisions of this section shall govern and control in lieu thereof. In case of
any damage to or destruction of the Combined Premises or any part thereof, if,
in Lessee's reasonable opinion, the
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58
cost to repair or rebuild the same will exceed $1,000,000, Lessee shall promptly
give notice thereof to Lessor, generally describing the nature and extent of
such damage or destruction.
15.2 Restoration. Subject to section 15.4, in case of any damage to
or destruction of the Combined Premises or any part thereof, this Lease shall
continue in full force and effect without abatement of any Basic Rent or other
amounts payable by Lessee hereunder. Lessee, whether or not the insurance
proceeds, if any, on account of such damage or destruction shall be sufficient
for the purpose, shall (subject to the applicable provisions of section 6)
promptly commence and proceed with due diligence to complete the restoration,
replacement or rebuilding of the Combined Premises (which may include demolition
of the remaining portions of the Combined Premises prior to rebuilding) as
nearly as possible to its condition immediately prior to such damage or
destruction with such Voluntary Alterations as Lessee shall (subject to the
applicable provisions of section 6) elect (such restoration, replacement and
rebuilding, together with any temporary repairs and property protection pending
completion of the work, being herein called "Restoration").
15.3 Application of Insurance Proceeds. (a) Promptly after the
occurrence of any damage to or destruction of the Combined Premises or any part
thereof the
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59
insurance proceeds with respect to which are expected by Lessee to exceed the
Significant Proceeds Amount, Lessee by notice to Lessor and the institution
appointed, shall appoint a depositary of the insurance proceeds under this
section 15.3 (the "Depositary"). Without limiting the foregoing, Lessee may
appoint a Depositary at any other time. The Depositary shall be a bank or trust
company having an office in the Borough of Manhattan and a combined shareholders
equity of at least $200 million. Funds held by the Depositary shall be invested
by the Depositary, upon the instructions of Lessee, in Permitted Investments.
(b) All insurance proceeds on account of any damage to or
destruction of the Combined Premises or any part thereof shall be payable as
follows:
(1) to Lessee, to the extent that such proceeds are equal to or less
than the Significant Proceeds Amount, and
(2) to the Depositary, to the extent that such proceeds are in
excess of the Significant Proceeds Amount;
provided, however, that if an Event of Default shall have occurred and be
continuing, the amounts paid or payable to Lessee in accordance with the
foregoing clause (1) shall be paid to the Depository and shall (without the
necessity of Lessee's compliance with the provisions of section 17) be returned
(together with the interest thereon) to Lessee only
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upon the curing of such Event of Default, but less the portion, if any, applied
and disbursed by the Depositary in accordance with the provisions of section 17.
15.4 Termination in Lieu of Restoration. (a) If:
(i) during the last three years of the then current term (x) the
Combined Premises shall be so damaged or destroyed that the Costs of
Restoration shall exceed the product of $10,000,000 multiplied by a
fraction whose numerator is the Index for the month which is three months
prior to the month in which the damage or destruction occurred and whose
denominator is the Index for February 1985, and (y) Lessee shall not have
exercised its right to extend the term hereof by giving the exercise
notice; or
(ii) at any time the Combined Premises shall be so damaged or
destroyed that 50% or more of the useable area thereof cannot, with the
exercise by Lessee of all due diligence, be rendered tenantable and fit
for the normal conduct of business within 30 days after the date of the
damage or destruction (the condition described in this clause (ii) being
called "50% Untenantability"),
then (subject to the further provisions of this section 15.4) Lessee may, by
notice (the "Damage Termination Notice") to Lessor given within the 180-day
period (the "Election Period") following the date (the "Damage Date") of damage
or destruction, elect to terminate this Lease as of a
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date specified in the Damage Termination Notice (the "Specified Damage
Termination Date"), which Specified Damage Termination Date:
(a) shall, in the case of a Damage Termination Notice given on
or prior to the 90th day following the Damage Date, be the date
which is 12 months (plus the positive remainder, if any, obtained
by subtracting 365 from the number of days in the Required Period
for Basic Rent as most recently determined pursuant to section
14.1(d) prior to the Damage Date) after the Damage Date; or
(b) shall, in the case of a Damage Termination Notice given
after the 90th day following the Damage Date and on or prior to the
180th day following the Damage Date, be the date which is 9 months
(plus the positive remainder, if any, obtained by subtracting 365
from the number of days in the Required Period for Basic Rent as
most recently determined pursuant to section 14.1(d) prior to the
Damage Date) after the date of the Damage Termination Notice.
(b) If Lessee shall timely give the Damage Termination Notice, this
Lease shall terminate on the Specified Damage Termination Date; provided,
however, that if on or prior to the date which is 45 days after Lessor receives
the Damage Termination Notice Lessor shall by
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notice to Lessee dispute Lessee's right to terminate this Lease pursuant to
section 15.4(a), the matter shall be determined by the Appropriate Engineer and
(i) if the Appropriate Engineer's determination is in Lessor's favor, this Lease
shall continue in full force and effect or (ii) if the Appropriate Engineer's
determination is in Lessee's favor, this Lease shall terminate effective as of
the Specified Damage Termination Date. At any time at the request of Lessor or
Lessee, the Appropriate Engineer shall make a determination as to whether Lessee
has the right to terminate this Lease pursuant to this section 15.4.
(c) At all times prior to the giving of the Damage Termination
Notice, Lessee shall prosecute the Restoration with all due diligence and in
accordance with the Plans and Specifications therefor (as approved by Lessor or
as determined by the Appropriate Engineer to have been required to be approved
by Lessor pursuant to this Lease); provided, however, that Lessee shall not be
obligated to expend more than the Significant Proceeds Amount with respect to
the Restoration of such damage or destruction unless (i) Lessee waives its
termination right under this section 15.4 with respect thereto or (ii) Lessee
does not give the Damage Termination Notice on or prior to the end of the
Election Period.
(d) Simultaneously with the giving of the Damage Termination Notice
Lessee shall:
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(i) assign to Lessor (by instruments reasonably satisfactory to Lessor)
all of Lessee's right, title and interest in and to the Plans and
Specifications (if any) for the Restoration and in and to that portion (if any)
of the Significant Proceeds Amount which has not yet been received by Lessee
from the insurer (provided that if and when Lessor receives such portion of the
Significant Proceeds Amount from the insurer, Lessor shall, within 10 business
days after receipt of a request therefor from Lessee, pay to Lessee an amount
equal to the lesser of (x) such portion of the Significant Proceeds Amount
received by Lessor from the insurer or (y) the amount, if any, by which the
aggregate amount expended by Lessee in connection with the Restoration on or
prior to the date of the Damage Termination Notice [exclusive, however, of any
amount expended for the restoration, repair or replacement of the Initial
Tenant Improvements] exceeds the sum of (a) the portion of the Significant
Proceeds Amount (if any) received by Lessee from the insurer on or prior to the
date of the Damage Termination Notice and (b) the Deductible Amount under the
insurance policy required to be maintained by Lessee under section 14.1(a));
(ii) pay to Lessor, in immediately available funds, an amount (the "Damage
Payment") equal to the sum of the positive remainder, if any, obtained by
subtracting the
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aggregate amount theretofore expended by Lessee in connection with the
Restoration (exclusive, however, of any amount expended for the
restoration, repair or replacement of the Initial Tenant Improvements) from
the sum of (a) that portion (if any) of the Significant Proceeds Amount
which Lessee received from the insurer on or prior to the date of the
Damage Termination Notice plus (b) the Deductible Amount under the
insurance policy required to be maintained by Lessee under section 14.1(a);
and
(iii) if the insurance policy required to be maintained by Lessee
under section 14.1(a) was for less than the full replacement cost most
recently determined pursuant to said section, deposit with the Depositary,
in immediately available funds, an amount equal to the excess of the amount
which would have been recoverable from the insurer if such policy had been
for the full replacement cost most recently determined pursuant to said
section over the amount which is recoverable from the insurer under such
policy on account of the damage or destruction.
(e) Subject to section 15.4(f), during the period commencing on the date
of the Damage Termination Notice and ending on the Specified Damage
Termination Date, Lessor shall have full control over the Restoration and may
use the Damage Payment and the amounts on deposit with the
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Depositary to defray the costs of the Restoration. Lessor and Lessee shall
reasonably cooperate with one another to effectuate the Restoration in an
efficient manner, and during the Restoration Lessor shall use reasonable efforts
to minimize interference with Lessee's use of the undamaged portion (if any) of
the Combined Premises. Lessor shall not be liable to Lessee for any matter
relating to or arising out of the Restoration unless due to Lessor's gross
negligence or wilful misfeasance; provided, however, that Lessor shall retain
reputable contractors who carry reasonable and customary public liability
insurance.
(f) If following the giving of the Damage Termination Notice, the
Appropriate Engineer shall determine that Lessee had no right to terminate this
Lease pursuant to section 15.4(a), then:
(i) Lessee shall thereupon assume full control of the Restoration
and shall prosecute the same with all due diligence to completion in
accordance with the requirements of this Lease; and
(ii) within 10 business days after the Appropriate Engineer's
determination, Lessor shall (x) reassign to Lessee that which was assigned
to Lessor pursuant to section 15.4(d)(i) and (y) pay to Lessee in
immediately available funds an amount equal to the positive remainder, if
any, obtained by subtracting the aggregate amount theretofore expended by
Lessor in connection with
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the Restoration (exclusive, however, of any amount disbursed to Lessor by
the Depositary) from the sum of (a) the amount, if any, received by Lessor
from the insurer by reason of the assignment referred to in section
15.4(d)(i) (exclusive, however, of any portion of such amount paid by
Lessor to Lessee pursuant to section 15.4(d)(i)), and (b) the Damage
Payment.
(g) Prior to the termination of this Lease pursuant to this section
15.4 there shall be no abatement of the Basic Rent or any other sum payable by
Lessee hereunder.
16. Taking of Property.
16.1 Notice. Lessor and Lessee shall each notify the other if it
becomes aware of a Taking, or the commencement of any proceedings or
negotiations which might result in a Taking.
16.2 Total Taking. In case of the Taking of the entire Combined
Premises or a Taking of 20% or more of the useable area of the Combined Premises
which renders the remainder thereof, in Lessee's reasonable opinion, not
reasonably susceptible to use as a first-class office building (a "Total
Taking"), this Lease shall terminate on the date of such Taking; provided,
however, that if Lessor shall dispute the reasonableness of Lessee's opinion,
the matter shall be determined by the Appropriate Engineer and (a) if the
Appropriate Engineer's determination is in favor of Lessor, the Taking in
question shall be deemed a Partial
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Taking (as defined in section 16.3) or (b) if the Appropriate Engineer's
determination is in favor of Lessee, this Lease shall terminate on the date of
the determination. Within 10 business days after termination of the Lease in
accordance with section 16.2, Lessor shall return to Lessee all Basic Rent
previously paid which is attributable to the period after such termination.
16.3 Partial Taking. In case of a Taking other than a Total Taking
(hereinafter called a "Partial Taking") (a) this Lease shall remain in full
force and effect; provided, however, that on the date of such Taking this Lease
shall terminate as to the portion of the Leased Premises taken (which portion
shall be deemed excluded from the Leased Premises) and the Basic Rent shall be
reduced by multiplying the same by a fraction, the numerator of which is the
area of the Building taken and the denominator of which is the area of the
Building immediately prior to such Taking, and (b) Lessee, whether or not the
awards or payments, if any, on account of such Taking shall be sufficient for
the purpose shall promptly commence Restoration of the Combined Premises
(exclusive of the taken portion) and thereafter diligently prosecute the same to
completion in accordance with the Plans and Specifications therefor (as approved
by Lessor or as determined by the Appropriate Engineer to be required to have
been approved by Lessor pursuant to this Lease).
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16.4 Application of Awards. (a) In the event of a Total Taking, the
award or awards for such Taking, less the cost of the determination of the
amount thereof (the "Condemnation Proceeds"), shall be paid as follows:
(i) if the Taking occurs at any time on or prior to June 30, 1998,
Lessor shall first be entitled to receive such portion of the Condemnation
Proceeds with interest thereon as shall equal the greater of:
(x) the sum (the "Recoverable Sum") of $310,000,000, plus the
aggregate amount of all reimbursements made by Lessor to Lessee
pursuant to section 6(e); or
(y) an amount equal to the greater of (a) the fair market
value of Lessor's fee estate in the Leased Premises, valued as
encumbered by this Lease, or (b) the fair market value of Lessor's
fee estate in the Land, valued as encumbered by this Lease;
(ii) if the Taking occurs at any time after June 30, 1998, Lessor
shall first be entitled to receive such portion of the Condemnation
Proceeds with interest thereon as shall equal the greater of (x) the fair
market value of Lessor's fee estate in the Leased Premises, valued as if
vacant and unencumbered by this Lease or otherwise, or (y) the fair market
value of
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69
Lessor's fee estate in the Land, valued as if vacant, unimproved and
unencumbered by this Lease or otherwise;
(iii) Lessee shall then be entitled to receive such portion of the
Condemnation Proceeds with interest thereon as shall equal the value of its
leasehold estate; and
(iv) Lessor shall then be entitled to receive the balance of the
Condemnation Proceeds.
(b) In the event of a Partial Taking, the Condemnation Proceeds
shall be paid as follows:
(i) Lessee shall first be entitled to receive such portion of the
Condemnation Proceeds with interest thereon as shall be awarded for
Restoration and such portion of the Condemnation Proceeds shall be payable
to the Depositary for disbursement in accordance with section 17;
(ii) if the Taking occurs at any time on or prior to June 30, 1998,
Lessor shall then be entitled to receive such portion of the Condemnation
Proceeds with interest thereon as shall equal the greater of:
(x) the Recoverable Sum multiplied by a fraction whose numerator
is the number of square feet in the portion of the Land so taken and
whose denominator is 58,223; or
(y) an amount equal to the greater of (x) the fair market value
of Lessor's fee estate in the
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70
part of the Leased Premises (if any) so taken, plus consequential damages,
if any, to Lessor's fee estate in the part of the Leased Premises not so
taken, the Leased Premises to be valued as encumbered by this Lease, or
(y) the fair market value of Lessor's fee estate in the part of the Land
(if any) so taken, plus consequential damages, if any, to the portion of
the Land not so taken, the Land to be valued as encumbered by this Lease;
(iii) if the Partial Taking occurs at any time after June 30, 1998, Lessor
shall then be entitled to receive such portion of the Condemnation Proceeds with
interest thereon as shall equal the greater of (x) the fair market value of
Lessor's fee estate in the part of the Leased Premises (if any) so taken, plus
consequential damages, if any, to the part of the Leased Premises not so taken,
the Leased Premises to be valued as if vacant and unencumbered by this Lease or
otherwise, or (y) the fair market value of Lessor's fee estate in the part of
the Land (if any) so taken, plus consequential damages, if any, to the portion
of the Land not so taken, the Land to be valued as if vacant, unimproved and
unencumbered by this Lease or otherwise; and
(iv) Lessor and Lessee shall then share equally in any balance of the
Condemnation Proceeds.
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71
(c) If the order or decree in any condemnation or similar proceeding
shall fail separately to state the amount to be awarded to Lessor and the amount
to be awarded to Lessee under section 16.4(a) or (b), or the amount of the
compensation for Restoration, and if Lessor and Lessee cannot agree thereon
within 30 days after the final award or awards shall have been fixed and
determined, the dispute shall be determined by arbitration.
(d) Nothing in this Lease shall preclude Lessee from claiming or
receiving from the condemning authority any compensation to which Lessee may
otherwise lawfully be entitled in respect of Lessee's Equipment and the Initial
Tenant Improvements, for moving to a new location, reimbursement for tenant
improvements or for interruption of, or damage to, Lessee's business; provided,
however, that any award made is separate to Lessee and not part of damages
recoverable by Lessor.
16.5 Temporary Taking. Sections 16.2 through 16.4 to the contrary
notwithstanding, the provisions of this section 16.5 shall govern any Taking for
temporary use. In the case of any Taking for temporary use, this Lease shall
remain in effect as to the Leased Premises (including the portion taken) and
there shall be no reduction in Basic Rent or (unless otherwise legally required)
other change in the obligations of Lessee hereunder. If the term of the
temporary Taking shall not extend beyond the term of this
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72
Lease and any extended term (for which Lessee has given the exercise notice)
the entire award shall be payable to Lessee and Lessee shall make Restoration
of the Leased Premises in accordance with the requirements of this Lease. If
the term of the temporary Taking shall extend beyond the term of this Lease and
any extended term (for which Lessee has given the exercise notice), Lessee need
not make Restoration, the portion of the award applicable to the Restoration
shall be paid to Lessor and the balance of the award shall be apportioned
between Lessee and Lessor by the condemning authority or, if the condemning
authority fails to act, by arbitration.
17. Disbursement of Deposited Sums. (a) Subject to the provisions of
this section 17, the Depositary shall, from time to time as any Restoration
proceeds and within 10 business days after receipt of Lessee's request therefor
(but in no event more frequently than once during any 30-day period), make
disbursements (collectively, "Restoration Advances") to Lessee from the funds
deposited with the Depositary pursuant to section 15.3(b), 15.4(d)(iii) or
16.4(b)(i) (collectively, the "Deposited Sums") for application to the Costs of
the Restoration in question. Simultaneously with the delivery of each such
request to the Depositary, Lessee shall give notice thereof to Lessor (which
notice shall be accompanied by copies of such request and all other papers
delivered to the Depositary).
<PAGE> 76
73
(b) No Restoration Advance shall be made on account of any fire or
other casualty until Lessee shall have delivered evidence reasonably
satisfactory to Lessor that an aggregate amount at least equal to the
Significant Proceeds Amount has been expended for Costs in connection with the
Restoration, and Restoration Advances on account of any fire or other casualty
shall be made only for amounts paid or payable by Lessee for Costs which are in
excess of the Significant Proceeds Amount.
(c) No Restoration Advance (other than the final Restoration
Advance) in respect of any fire or other casualty or any Partial Taking shall be
due unless Lessee's request for such Restoration Advance shall be accompanied
by:
(i) a certificate of Lessee addressed to the Depositary and Lessor
(in form reasonably satisfactory to Lessor) stating that the amount of the
Restoration Advance then requested has been paid or is then duly payable
by Lessee to Contractors (whose names and addresses and a description of
the work involved shall be stated), that the amount of the Restoration
Advance then requested (when taken together with the aggregate amount of
all Restoration Advances theretofore made by the Depositary) exceeds
neither 90% of the Deposited Sums (together with interest on such amount)
nor the value (the "Installed Value") of the Restoration work in
<PAGE> 77
74
question as actually installed in the Leased Premises (Lessee's
certificate to set forth a calculation of the Installed Value), and that
no part of cost of the work described in any previous or then pending
request for a Restoration Advance has been or is being made the basis for
the Restoration Advance then being requested; and
(ii) a certificate of the architect or engineer who prepared the
related Plans and Specifications addressed to the Depositary and Lessor
(in form reasonably satisfactory to Lessor) stating in substance that (x)
the calculation of Installed Value as set forth in the certificate
referred to in the foregoing clause (i) is correct, (y) the work has been
performed in a good and workmanlike manner and in accordance with the
Plans and Specifications (as approved by Lessor or as determined by the
Appropriate Engineer to have been required to be approved by Lessor
pursuant to this Lease) and (z) the unadvanced portion of the Deposited
Sums in question, together with any additional amount to be available from
the insurer, are at least equal to the Costs of the Restoration which will
remain unpaid after giving effect to the Restoration Advance in question.
(d) No Restoration Advance (including the final Restoration Advance)
in respect of any fire or other casualty or any Partial Taking shall be due
unless:
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75
(i) no certificate delivered to the Depositary or Lessor by Lessee or
by any architect or engineer in connection with the Restoration in question
shall have been materially incorrect at the time of delivery (Lessor to
give notice to Lessee within 10 business days after Lessor's receipt of the
certificate in question if Lessor contends that such certificate was
materially incorrect; any such dispute to be determined by the Appropriate
Engineer);
(ii) in the case of a Restoration Advance to be made on account of a
fire or other casualty, Lessee shall have waived its right to terminate
this Lease pursuant to section 15.4(a) on account of such damage or other
casualty;
(iii) Lessor shall have received true copies of all bills paid or
payable by Lessee to Contractors which form the basis for the Restoration
Advance in question; and
(iv) no Event of Default (including, without limitation, any
Event of Default specified in section 22(d)) shall have occurred and be
continuing.
(e) Neither any final Restoration Advance nor the release of any
remaining balance of Deposited Sums pursuant to section 17(f) shall be made
unless:
(i) Lessee's request for such Advance or such release shall be
accompanied by (x) a certificate of
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76
Lessee addressed to the Depositary and Lessor (in form reasonably
satisfactory to Lessor) stating that to Lessee's best knowledge (after due
inquiry) there shall (after giving effect to such Advance or release) be
no outstanding indebtedness due for labor, materials, supplies, permits or
services in any manner connected with the Restoration which if unpaid
might be the basis for any type of lien on the Combined Premises, or any
part thereof, and that (in the case of a request for a final Restoration
Advance) the amount requested has been paid or is then duly payable to
Contractors (whose names and addresses and a description of the work
involved shall be stated) and (y) a certificate of the architect or
engineer who prepared the related Plans and Specifications addressed to
the Depositary and Lessor (in form reasonably satisfactory to Lessor)
stating that the Restoration work has been fully completed in a good and
workmanlike manner and in accordance with the Plans and Specifications (as
approved by Lessor or as determined by the Appropriate Engineer to have
been required to be approved by Lessor pursuant to this Lease); and
(ii) the Depositary and Lessor shall have received (x) an instrument
in writing from any title company insuring Lessor's estate in the Leased
Premises certifying that there are no undischarged mechanics',
<PAGE> 80
77
laborers' or materialmen's liens affecting any part of the Combined
Premises (other than liens, if any, in respect of which Lessor has
consented to take security pursuant to section 13(a)(ii)) and (y) evidence
reasonably satisfactory to Lessor that Lessee has obtained waivers of
mechanics', laborers' or materialmen's liens or releases of such liens
from all Contractors engaged in the Restoration.
(f) Subject to section 17(g), any balance of a Deposited Sum
(together with interest thereon) remaining with the Depositary upon the
completion of any Restoration on account of fire or other casualty or any
Partial Taking shall (in the case of fire or other casualty) be remitted to
Lessee promptly upon its request or (in the case of a Partial Taking) be
released to Lessor for application in the manner provided in section 16.4.
(g) Notwithstanding anything to the contrary contained in this
Lease, upon any early termination of this Lease (including, without limitation,
any early termination pursuant to section 15.4(a)), the Depositary shall
forthwith remit to Lessor the balance of all Deposited Sums (together with
accrued interest thereon) held by the Depositary immediately prior to such
termination.
(h) Each Restoration Advance shall be made by the Depositary as soon
as reasonably practicable, but in no event later than the date which is 30 days
after Lessee
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shall have satisfied all of the applicable conditions to such Advance specified
in this section 17.
18. Certificate as to No Default, etc. Lessor and Lessee shall each
deliver to the other within 20 days after request, an Officer's Certificate
stating (i) that this Lease is unmodified and in full force and effect (or, if
there have been modifications, that this Lease is in full force and effect, as
modified, and stating the modifications), (ii) the dates to which the Basic Rent
has been paid and that, to the best knowledge (after due inquiry) of the party
giving such certificate, no Event of Default has occurred and is continuing
hereunder, or, if any Event of Default has occurred and is continuing specifying
the nature and period of existence thereof, and (iii) that, to the best
knowledge (after due inquiry) of the party giving such certificate, the other
party has fulfilled all of its obligations under this Lease or, if not, stating
in what respects such other party has failed to do so. Any Officer's Certificate
may be relied upon by any prospective purchaser or mortgagee of the Leased
Premises or any part thereof or interest therein or by any prospective assignee
or mortgagee of this Lease or any prospective subtenant.
19. Right of Lessor to Perform Lessee's Covenants, etc. If Lessee
shall fail to make any payment or perform any act required to be made or
performed by it hereunder,
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79
Lessor may (but shall be under no obligation to) without waiving or releasing
any obligation or default:
(a) in case of emergency, or reasonably foreseeable or actual
criminal liability,
(b) if such failure is under section 11.1(a), 14.1(a), 14.2 or 14.4,
and if Lessor shall give notice to Lessee referring to this section 19(b)
and specifying such failure and requiring it to be remedied and Lessee
shall not remedy such failure within 7 days after Lessee's receipt of such
notice,
(c) if such failure is under section 14.3, and if Lessor shall give
notice to Lessee referring to this section 19(c) and specifying such
failure and requiring it to be remedied and Lessee shall not remedy such
failure within 4 days after Lessee's receipt of such notice,
(d) if such failure is under section 12, and if Lessor shall give
notice to Lessee referring to this section 19(d) and specifying such
failure and requiring it to be remedied and Lessee shall not remedy such
failure within 15 days after Lessee's receipt of such notice; provided,
however, that in case such failure cannot with due diligence be remedied
by Lessee within a period of 15 days, if Lessee proceeds as promptly as
may be reasonably possible after the receipt of such notice and with all
due diligence to remedy such failure and
<PAGE> 83
80
thereafter to prosecute the remedying of such failure with all due
diligence, the period of time after the receipt of such notice by Lessee
within which to remedy such failure shall be extended for such period as
may be necessary to remedy the same with all due diligence,
(e) if such failure is under section 13, or
(f) if such failure is under a section of this Lease other than
sections 11.1(a), 12, 13 or 14, subject to the succeeding paragraph, if
Lessor shall give notice to Lessee referring to this section 19(f) and
specifying such failure and requiring it to be remedied and Lessee shall
not remedy such failure within 30 days after Lessee's receipt of such
notice; provided, however, that in case such failure cannot with due
diligence be remedied by Lessee within a period of 30 days, if Lessee
proceeds as promptly as may be reasonably possible after the receipt of
such notice and with all due diligence to remedy such failure and
thereafter to prosecute the remedying of such failure with all due
diligence, the period of time after the receipt of such notice by Lessee
within which to remedy such failure shall be extended for such period as
may be necessary to remedy the same with all due diligence,
make such payment or perform such act for the account and at the expense of
Lessee, and may enter upon the Combined Premises or any part thereof for such
purpose and take all
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81
such action thereon as, in the opinion of Lessor, may be necessary or
appropriate therefor. All payments so made by Lessor and all costs and expenses
(including, without limitation, attorneys' fees and expenses) incurred in
connection therewith, together with interest thereon at the prime interest rate
of Morgan Guaranty Trust Company of New York from time to time announced to be
in effect, shall be paid by Lessee to Lessor within 10 days of Lessee's receipt
of Lessor's demand therefor referring to this section 19 and section 22(c)
accompanied by copies of all bills therefor.
If within 15 days after the date on which Lessee receives notice from
Lessor under clause (f) above, Lessee shall commence an arbitration seeking a
determination that the matter referred to in Lessor's notice under clause (f)
does not constitute a failure to make a payment or perform an act required to be
made or performed hereunder, then (i) Lessor may not make such payment or
perform such act for the account and at the expense of Lessee and may not enter
upon the Combined Premises or any part thereof for such purpose or take action
thereon prior to the date upon which the determination in arbitration is made
(the "determination date") and (ii) if the action is determined in a manner
adverse to Lessee, the 30 day (or longer) period referred to in clause (f) above
shall be extended to the date 30 days after the determination date (or for such
longer period commencing on the determination date as may reasonably be
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required in order to remedy the matters in question with all due diligence).
20. Assignments; Subleases.
20.1 Generally. (a) Lessee may sublet the Combined Premises or any
part thereof or assign, mortgage, pledge or encumber this Lease or any interest
therein or any part thereof, without the consent of Lessor, provided that
(i) Lessee shall deliver to Lessor a fully executed counterpart of each such
sublease, assignment, mortgage or other relevant instrument and any modification
or amendment of any of the foregoing promptly after execution thereof and shall
notify Lessor of any occupancy no later than the date on which such occupancy is
to be taken, (ii) no assignment, whether by operation of law, consolidation,
merger or otherwise, shall be made unless within 15 days thereafter the assignee
shall execute and deliver to Lessor an instrument assuming all the obligations
of Lessee under this Lease thereafter accruing, (iii) no sublease, assignment,
mortgage or other transaction and no assumption, shall affect or reduce any of
the obligations of Lessee (including the original Lessee and each such assignee)
hereunder but this Lease and all the obligations of Lessee (including the
original Lessee and each such assignee) hereunder shall continue in full force
and effect as the obligations of a principal and not the obligations of a
guarantor or surety and (iv) each sublease, assignment, mortgage or other
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instrument made by Lessee after the date hereof shall be subject and
subordinate to this Lease and the terms and provisions hereof. Each sublease of
all or any part of the Combined Premises made by Lessee after the date hereof
shall provide that if Lessor shall terminate this Lease prior to the scheduled
expiration date of such sublease then, upon Lessor's request, the subtenant
thereunder (and anyone holding by, through or under such subtenant) shall
attorn to Lessor upon all of the terms, covenants and conditions of such
sublease. Lessee hereby assigns to Lessor all rents and other sums due to
Lessee under any sublease of all or any part of the Combined Premises;
provided however, that other than upon the occurrence of and during the
continuance of an Event of Default Lessee may freely modify or terminate all or
any of the subleases or otherwise deal with all or any of the subtenants, may
permit prepayments of rent and may retain all such rents (paid when due or
prepaid) and other sums free of any claim or lien of Lessor; provided, however,
that with respect to any sublease with respect to which Lessor and the
subtenant have executed a non-disturbance agreement (as hereinafter defined)
Lessor shall be bound by prepayments of rent and modifications of such sublease
only to the extent provided in such non-disturbance agreement. All amounts
received by Lessor pursuant to the preceding sentence shall be set-off against
Lessee's obligations hereunder.
<PAGE> 87
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(b) The interest of Lessor in this Lease and/or in and to the Leased
Premises may, at any time, be sold, conveyed, assigned or otherwise transferred,
or mortgaged, pledged or otherwise encumbered, without the consent of Lessee.
Upon any conveyance of the Leased Premises and the assumption by the new owner
of the Leased Premises of the obligations of Lessor hereunder thereafter
accruing, the conveyor shall be completely relieved of and from any and all
obligations of Lessor hereunder thereafter accruing, and Lessee shall thereupon
look only to the new owner of the Leased Premises for the performance of any
obligations of Lessor hereunder thereafter accruing.
20.2 Non-disturbance. With respect to any sublease of the Leased
Premises or any part thereof:
(a) demising at least one full floor;
(b) the term of which does not extend beyond the then current term
of this Lease (unless Lessee gives the appropriate exercise notice);
(c) the rent and additional rent under which (after deducting
therefrom an amount corresponding to the Impositions payable hereunder
with respect to the premises demised thereby and an amount equal to the
expenses payable by Lessee to provide to the premises demised thereby the
services referred to in clause (f) below) shall be no less than the
portion of the Basic
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Rent payable hereunder applicable on a pro-rata basis to the premises
demised thereby;
(d) which provides for occupancy of the premises demised thereby
only for purposes permitted by section 5 and specifically prohibiting use
by any government or governmental agency, personnel agency or school;
(e) the subtenant under which is financially sound and capable of
performing its obligations thereunder;
(f) which shall entitle the subtenant to services (HVAC, elevators,
cleaning, etc.) no more burdensome to provide than the services provided
under typical leases for comparable space in typical office buildings in
downtown New York City comparable in size and age to the Building as of
the date of such sublease; and
(g) which provides that, after termination of this Lease and
attornment by the subtenant to Lessor, the subtenant shall not, without
the prior written consent of Lessor, sublease all or any part of the
premises demised thereby or assign the sublease, except in either case, to
a wholly-owned subsidiary of, or a corporation wholly owning, the
subtenant, or to a successor of the subtenant, by merger, sale of assets
or consolidation,
Lessor shall, upon Lessee's request, enter into with the subtenant thereunder an
agreement in substantially the form attached hereto as Schedule C (a
"non-disturbance
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agreement"). If, after Lessor has executed a non-disturbance agreement with
respect to any sublease, Lessee and the subtenant thereunder propose to amend
such sublease, and if Lessor would, pursuant to the foregoing provisions of this
section 20.2, be required to enter into a non-disturbance agreement with respect
to such sublease as so amended, Lessor shall, upon Lessee's request, consent to
such amendment as contemplated by section 2 of the non-disturbance agreement.
Any dispute under this section 20.2 shall be resolved by arbitration; provided,
however, that the form of the non-disturbance agreement shall not be subject to
arbitration. If the result of such arbitration shall be adverse to Lessor,
Lessor shall not be liable for damages but Lessor shall then execute a
non-disturbance agreement or a consent to amendment. If Lessee shall make any
request under this section 20.2, it shall reimburse Lessor the reasonable
out-of-pocket expenses (including attorneys' fees and disbursements, credit
investigation fees and the fees and disbursements of other professionals)
incurred by Lessor in order to determine if the sublease or the sublease as
amended complies with clauses (a) through (g) above.
20.3 Leasehold Mortgages. If Lessee shall grant a Qualified
Mortgage, then from and after the date on which an executed copy of such
Qualified Mortgage is furnished to
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Lessor so long as such Qualified Mortgage shall remain unsatisfied of record the
following provisions shall apply:
(a) if Lessor shall become entitled to serve a Termination Notice (as
defined in section 22) Lessor shall, before serving such Termination Notice, use
its best efforts to give to the holder of any Qualified Mortgage a notice (the
"Mortgagee Notice") that an Event of Default specified therein remains
unremedied and that Lessor is entitled to serve a Termination Notice, and the
holder of such Qualified Mortgage shall have the right to remedy any Event of
Default under clause (a), (b) or (c) of section 22 within a period of 10 days
after its receipt of the Mortgagee Notice and any other Event of Default within
a period of 30 days after its receipt of the Mortgagee Notice.
(b) In case of the occurrence of an Event of Default (other than an Event
of Default specified in clause (a), (b) or (c) of section 22 or an Event of
Default specified in clause (d) of section 22 arising from the failure by Lessee
to perform its obligations under section 11.1(a)) if, within 30 days after its
receipt of the Mortgagee Notice, such holder shall:
(i) notify Lessor of its election to proceed with due diligence
promptly to acquire possession of the Combined Premises or to foreclose the
Qualified Mortgage or otherwise to extinguish Lessee's interest in this
Lease; and
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(ii) deliver to Lessor an instrument (the "Payment and Performance
Agreement") in writing duly executed and acknowledged wherein such holder
agrees that:
(x) during the period that such holder or its designee or a
receiver of rents and profits appointed upon application of such
holder shall be in possession of the Combined Premises or any part
thereof, or during the pendency of any such foreclosure or other
proceedings and until the interest of Lessee in this Lease shall
terminate, as the case may be, such holder shall pay or cause to be
paid to date and thereafter on a current basis to Lessor the Basic
Rent and all other sums from time to time becoming due to Lessor
under this Lease; and
(y) if delivery of possession of the Combined Premises or any
part thereof shall be made to such holder or its designee or such
receiver, whether voluntarily or pursuant to any foreclosure or
other proceedings or otherwise, such holder shall, promptly
following such delivery of possession, perform or cause such
designee to perform, as the case may be, such of the covenants and
agreements herein contained on Lessee's part to be performed as
Lessee shall have failed to perform to the date of delivery of
possession to the extent that under
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the laws of New York State amounts expended in performance of such
covenants and agreements can be added to the debt and be secured by
the Qualified Mortgage, and to perform or cause to be performed all
other covenants and agreements Lessee shall have failed to perform
promptly after extinguishment of Lessee's interest in this Lease;
then (provided that no default shall have occurred and be continuing under
the Payment and Performance Agreement) Lessor shall postpone the service
of the Termination Notice for such period or periods of time as may be
necessary for such holder, with the exercise of due diligence, to
extinguish Lessee's interest in this Lease and to perform or cause to be
performed all of the covenants and agreements to be performed by Lessee
hereunder. Nothing contained herein shall be deemed to require the holder
of a Qualified Mortgage to continue with any foreclosure or other
proceedings or, in the event such holder or receiver shall acquire
possession of the Combined Premises, to continue such possession, if the
Event of Default in respect of which Lessor shall have given a Mortgagee
Notice shall be remedied. If prior to any sale pursuant to any proceeding
brought to foreclose any Qualified Mortgage, or if prior to the date on
which Lessee's interest in this Lease shall otherwise be extinguished, the
Event of Default in
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respect of which Lessor shall have given a Mortgagee Notice shall have
been remedied and possession of the Combined Premises shall have been
restored to Lessee, then the obligations of the holder of the Qualified
Mortgage pursuant to the Payment and Performance Agreement shall thereupon
be null and void and of no further effect. Nothing contained herein shall
affect the right of Lessor, upon the subsequent occurrence of any Event of
Default, to exercise any right, power or remedy reserved herein to Lessor.
(c) In the event of the termination of this Lease, prior to the
expiration of the term, whether by summary proceedings to dispossess, service of
notice to terminate, or otherwise due to the occurrence of an Event of Default,
Lessor shall use its best efforts to serve upon the holder of such Qualified
Mortgage notice that this Lease has been terminated together with a statement of
any and all sums which would at that time be due under this Lease but for such
termination, and of all other Events of Default, if any, then known to Lessor.
Such holder shall thereupon have the option to obtain a new lease in accordance
with and upon the following terms and conditions:
Upon the written request of the holder of such Qualified Mortgage,
within thirty days after service of such notice that this Lease has been
terminated, Lessor shall enter into a new lease of the Leased Premises
with such holder or with its designee (the "Holder Designee"), as follows:
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Such new lease shall be effective as of the date of termination of
this Lease, and shall be for the remainder of the term of this Lease and
at the rent and upon all the agreements, terms, provisions, covenants and
conditions hereof, including any applicable rights of extension;
provided, however, that if such new lease is with the Holder's Designee,
the holder of the related Qualified Mortgage shall guarantee the
obligations of the Holder's Designee under such new lease pursuant to an
instrument reasonably satisfactory to Lessor. Such new lease shall require
the tenant thereunder to perform any unfulfilled obligation of Lessee
under this Lease which is reasonably susceptible of being performed by
such tenant. Upon the execution of such new lease, the tenant thereunder
shall pay any and all sums which would at the time of the execution
thereof be due under this Lease but for such termination, and shall pay
all expenses, including reasonable counsel fees, court costs and
disbursements incurred by Lessor in connection with such termination and
the preparation, execution and delivery of such new lease. Upon the
execution of such new lease, Lessor shall allow to the tenant thereunder
and such tenant shall be entitled to an adjustment in an amount equal to
the net income derived by Lessor from the Leased Premises during the
period from the date of termination of this Lease to the date of execution
of such new lease.
Effective upon the commencement of the term of any new lease Lessor's
interest, if any, in all subleases shall be assigned and transferred
without recourse by Lessor to the tenant thereunder, and all moneys on
deposit with the Depositary under section 17 or on deposit under section
11.3 which Lessee would have been entitled to use but for the termination
or expiration of this Lease may be used by the tenant thereunder for the
purposes of and in accordance with the provisions of such new lease.
Nothing herein contained shall be deemed to obligate Lessor to
deliver possession of the Combined Premises or any part thereof to the
tenant under any new lease.
(d) All Mortgagee Notices or other communication which Lessor shall
desire or be required to use its best efforts to serve upon the holder of a
Qualified Mortgage shall be in writing and be served by registered or
<PAGE> 95
92
certified mail, return receipt requested, addressed to such holder at his
address as set forth in such Qualified Mortgage, or at such other address as
shall last have been designated by such holder by notice in writing given to
Lessor by registered or certified mail, return receipt requested.
Any notice or other communication which the holder of a Qualified
Mortgage shall desire or is required to give to or serve upon Lessor shall be
deemed to have been duly given or served if sent by registered or certified
mail, return receipt requested, addressed to Lessor at Lessor's addresses as set
forth in section 33 or at such other addresses as shall be designated by Lessor
by notice given to such holder by registered or certified mail, return receipt
requested.
(e) Lessee irrevocably directs that Lessor accept, and Lessor shall
accept, performance and compliance by the holder of any Qualified Mortgagee of
and with any term, covenant, agreement, provision, condition or limitation on
Lessee's part to be kept, observed or performed hereunder with the same force
and effect as though kept, observed or performed by Lessee.
(f) Lessor and Lessee shall not enter into any agreement modifying,
cancelling or surrendering this Lease without the prior consent of the holder of
a Qualified Mortgage.
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21. Vaults. Lessor shall have no responsibility for title to or any
other aspect of vaults and areas, if any, now or hereafter built extending
beyond the boundary line of the Land. Lessee may occupy and use the same during
the term of this Lease, subject to this Lease and such laws, permits, orders,
rules and regulations as may be imposed by appropriate governmental authorities
with respect thereto. No revocation on the part of any governmental department
or authority of any license or permit to maintain and use any such vault and
areas shall in any way affect this Lease or the amount of the rent or any other
charge payable by Lessee hereunder. Lessee shall comply with all such licenses
and permits, and if any such license or permit shall be revoked, Lessee shall do
and perform all such work as may be necessary to comply with any order revoking
the same.
22. Events of Default; Termination. Each of the following shall
constitute an Event of Default:
(a) if Lessee shall fail to pay any Basic Rent when and as the same
becomes due and payable and such failure continues for a period of ten days
after notice from Lessor of such failure referring to this section 22(a),
specifying such failure and requiring it to be remedied is received by Lessee;
or
(b) if, in any period of 12 consecutive months, (i) in two separate
instances, Lessee shall fail to pay any Basic Rent when and as the same becomes
due and payable and
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Lessee shall receive notice of such failure under section 22(a) and (ii) in a
third or later instance, Lessee shall fail to pay any Basic Rent coming due when
and as the same becomes due and payable; or
(c) if Lessee shall fail to pay any amount under section 19 when
due; or
(d) if Lessee shall fail to perform or comply with any term of
section 11.1(a), 13 or 14 and such failure continues for a period of 15 days
after notice from Lessor of such failure referring to this section 22(d),
specifying such failure and requiring it to be remedied is received by Lessee;
or
(e) if Lessee shall fail to perform or comply with any term of
section 12 and such failure shall continue for a period of 30 days after notice
from Lessor of such failure referring to this section 22(e), specifying such
failure and requiring it to be remedied is received by Lessee; provided,
however, that, in case such failure cannot with due diligence be remedied by
Lessee within a period of 30 days, if Lessee proceeds as promptly as may be
reasonably possible after the receipt of such notice and with all due diligence
to remedy such failure and thereafter to prosecute the remedying of such failure
with all due diligence, the period of time after the receipt of such notice by
Lessee within which to remedy such failure shall be extended for such period as
may be necessary to remedy the same with all due diligence;
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95
(f) if Lessee shall fail to perform or comply with any term of this Lease
(other than any failure referred to in a previous subdivision of this section
22), and such failure shall continue for more than 30 days after notice from
Lessor of such failure referring to this section 22(f), specifying such failure
and requiring it to be remedied is received by Lessee; provided, however, that
in case such failure cannot with due diligence be remedied by Lessee within a
period of 30 days, if Lessee proceeds as promptly as may be reasonably possible
after the receipt of such notice and with all due diligence to remedy such
failure and thereafter to prosecute the remedying of such failure with all due
diligence, the period of time after the receipt of such notice by Lessee within
which to remedy such failure shall be extended for such period as may be
necessary to remedy the same with all due diligence; provided further, that if
Lessee within 15 days after the receipt of such notice of default shall dispute
the existence of such failure the matter shall be determined by arbitration and
if it shall be determined that such failure exists, the time within which Lessee
shall have to remedy the same shall be computed from the date of such
determination;
(g) if Lessee shall fail to perform any covenants contained in Section
10.8 of the Contract and such failure continues for a period of 15 days after
notice of such failure referring to this section 22(g), specifying such
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96
failure and requiring it to be remedied is received by Lessee; provided,
however, that in case such failure cannot with due diligence be remedied by
Lessee within a period of 15 days, if Lessee proceeds as promptly as may be
reasonably possible after the receipt of such notice and with all due diligence
to remedy such failure and thereafter to prosecute the remedying of such failure
with all due diligence, the period of time after the receipt of such notice by
Lessee within which to remedy such failure shall be extended for such period as
may be necessary to remedy the same with all due diligence; provided further,
that if Lessee within 7 days after the receipt of such notice of default shall
dispute the existence of such failure the matter shall be determined by
arbitration and if it shall be determined that such failure exists, the time
within which Lessee shall have to remedy the same shall be computed from the
date of such determination; or
(h) if Lessee shall admit in writing its inability to pay its debts
as they fall due, or shall make a general assignment for the benefit of
creditors, or shall file a petition in bankruptcy, or shall be adjudicated a
bankrupt or insolvent, or shall file a petition seeking any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief under any present or future statute, law or regulation, or shall file an
answer admitting or not contesting the material allegations
<PAGE> 100
97
of a petition filed against it in any such proceeding, or shall seek or consent
to or acquiesce in the appointment of any trustee, custodian, receiver or
liquidator of Lessee or any material part of its properties; or
(i) if, within 90 days after the commencement of any proceeding against
Lessee seeking any reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any present or future statute,
law or regulation, such proceeding shall not have been dismissed or stayed (or
if within 90 days after the expiration of any such stay such proceeding shall
not have been dismissed), or if, within 90 days after the appointment without
the consent or acquiescence of Lessee of any trustee, custodian, receiver or
liquidator of Lessee or of any material part of its properties, such appointment
shall not have been vacated or stayed (or if within 90 days after the expiration
of any such stay such appointment shall not have been vacated).
Lessor may at any time during the continuance of an Event of Default,
give a termination notice (a "Termination Notice") to Lessee specifying a date,
not less than five days after the date of such notice, on which specified date
this Lease shall terminate, and on such date, subject to section 25 relating to
the survival of Lessee's obligations, the term of this Lease shall expire and
terminate by limitation and all rights of Lessee under this Lease shall
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98
cease, unless before such date (i} all arrears of Basic Rent and all other sums
payable by Lessee under this Lease, and all costs and expenses (including,
without limitation, attorneys' fees and expenses) incurred by or on behalf of
Lessor shall have been paid by Lessee, and (ii) all other Events of Default at
the time existing under this Lease shall have been fully remedied. All costs and
expenses incurred by or on behalf of Lessor (including, without limitation,
attorneys' fees and expenses) occasioned by any Event of Default by Lessee under
this Lease shall be payable by Lessee upon demand by Lessor (together with
interest thereon at a rate per annum equal to the prime rate of Morgan Guaranty
Trust Company of New York announced to be in effect from time to time, plus 2%).
As used in this section 22, the term "Lessee" shall mean only the person then
owning the Lessee's interest hereunder, not such person's immediate or remote
assignors.
23. Repossession. If an Event of Default shall have occurred and be
continuing, Lessor, after termination of this Lease pursuant to section 22, may
enter upon and repossess the Combined. Premises or any part thereof by summary
proceedings or other legal proceedings and may remove Lessee and all other
persons and any and all property therefrom. Lessor shall be under no liability
for or by reason of such entry, repossession or removal.
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99
24. Reletting. At any time or from time to time before or after the
repossession of the Combined Premises or any part thereof pursuant to section
23, Lessor may relet the Combined Premises or any part thereof for the account
of Lessee, in the name of Lessee or Lessor or otherwise, without notice to
Lessee, for such term or terms (which may be greater or less than the period
which would otherwise have constituted the balance of the term of this Lease)
and on such conditions (which may include concessions or free rent) and for such
uses as Lessor, in its uncontrolled discretion may determine, and may collect
and receive the rents therefor. Lessor shall not be responsible or liable for
any failure to relet the Combined Premises or any part thereof or for any
failure to collect any rent due upon any such reletting.
25. Survival of Lessee's Obligations; Damages.
25.1 Termination of Lease Not to Relieve Lessee of Obligations. No
expiration or termination of the term of this Lease pursuant to section 22 or
otherwise (other than under section 15 or 16), and no repossession of the
Combined Premises or any part thereof pursuant to section 23 or otherwise, shall
relieve Lessee of its liabilities and obligations hereunder, all of which shall
survive such expiration, termination or repossession.
25.2 Current Damages. In the event of any such expiration,
termination or repossession pursuant to
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100
section 22 or 23, Lessee shall pay to Lessor the Basic Rent and all other sums
required to be paid by Lessee pursuant to this Lease up to the time of such
expiration, termination or repossession, and thereafter Lessee, until the end
of what would have been the term of this Lease in the absence of such
expiration, termination or repossession (excluding all unexercised options to
extend), and whether or not the Combined Premises or any part thereof shall
have been relet, shall be liable to Lessor for, and shall pay to Lessor, as
liquidated and agreed current damages for Lessee's default, (a) the Basic Rent
and all other sums which would be payable under this Lease by Lessee in the
absence of such expiration, termination or repossession, plus (b) all
reasonable expenses of Lessor in connection with such expiration, termination
and repossession and any reletting effected for the account of Lessee pursuant
to section 24 (including, without limitation, all repossession costs, brokerage
commissions, legal expenses, attorneys' fees, employees' expenses, alteration
costs and expenses of preparing for such reletting) less (c) the proceeds, if
any, of such reletting. Lessee shall pay such current damages monthly on the
days on which the Basic Rent would have been payable under this Lease in the
absence of such expiration, termination or repossession, and Lessor shall be
entitled to recover the same from Lessee on each such day.
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101
25.3 Final Damages. At any time after any such expiration, termination or
repossession, whether or not Lessor shall have collected any current damages as
aforesaid, Lessor at its option shall be entitled to recover from Lessee and
Lessee shall pay to Lessor on demand, as and for liquidated and agreed final
damages for Lessee's default and in lieu of all current damages beyond the date
of such demand, an amount equal to the excess, if any, of (a) the then present
value of the Basic Rent and all other sums (computed on the basis of such other
sums paid in the calendar year immediately preceding the date of such
expiration, termination or repossession) which would be payable under this
Lease from the date of such demand (or, if it be earlier, the date to which
Lessee shall have satisfied in full its obligations under section 25.2 to pay
current damages), for what would be the then unexpired term of this Lease in
the absence of such expiration, termination or repossession (excluding all
unexercised options to extend), over (b) the then present value of the then
fair net rental value of the Leased Premises for the same period (as determined
by Lessor, or if Lessee shall object to such determination within 10 business
days after notice thereof is received by Lessee, as determined by arbitration
in the manner provided in section 2.2). Present value shall be determined by
discounting future amounts at the prime interest rate of Morgan Guaranty Trust
Company of New York
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announced and in effect on the date of termination of this Lease. If any statute
or rule of law shall limit the amount of such liquidated final damages to less
than the amount above agreed upon, Lessor shall be entitled to the maximum
amount allowable under such statute or rule of law, but not in excess of the
amount provided by this section 25.3.
26. No Waiver. No failure by Lessor or Lessee to insist upon the
strict performance of any term hereof or to exercise any right, power or remedy
consequent upon a breach thereof, and no payment or acceptance of full or
partial rent during the continuance of any such breach, shall constitute a
waiver of any such breach or of any such term. No waiver of any breach shall
affect or alter this Lease, which shall continue in full force and effect, or
the rights of Lessor or Lessee with respect to any other then existing or
subsequent breach.
27. Remedies Cumulative. Each right, power and remedy of Lessor or
Lessee provided for in this Lease or now or hereafter existing at law or in
equity or by statute or otherwise shall be cumulative and concurrent and shall
be in addition to every other right, power or remedy provided for in this Lease
or now or hereafter existing at law or in equity or by statute or otherwise, and
the exercise by Lessor or Lessee of any one or more of the rights, powers or
remedies provided for in this Lease or now or hereafter existing at law or in
equity or by statute or otherwise
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103
shall not preclude the simultaneous or later exercise by Lessor or Lessee of any
or all such other rights, powers or remedies. All sums payable by Lessee to
Lessor hereunder (other than the Basic Rent) shall be deemed additional rent and
Lessor shall have all of the same rights, powers and remedies in the case of the
failure by Lessee to pay any such sum when due as Lessor would have in the case
of the failure by Lessee to pay Basic Rent when due (provided that the notice
periods in sections 22(a) and (b) shall not be applicable thereto).
28. Acceptance of Early Termination or Surrender. No early termination
of this Lease or surrender to Lessor of this Lease, and no surrender of the
Leased Premises or any part thereof or of any interest therein, shall be valid
or effective unless agreed to and accepted in writing by Lessor, and no act by
Lessor, other than such a written agreement and acceptance by Lessor, shall
constitute an agreement thereto or acceptance thereof.
29. No Merger of Title. There shall be no merger of this Lease nor of
the leasehold estate created by this Lease with the fee estate or any other
leasehold estate in the Leased Premises or any part thereof by reason of the
fact that the same person, firm, corporation or other entity may acquire or own
or hold, directly or indirectly, (a) this Lease or the leasehold estate created
by this Lease or any interest in this Lease or in any such leasehold estate,
and
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(b) the fee estate or any other leasehold estate in the Leased Premises or any
part thereof or any interest in such fee estate or leasehold estate, and no such
merger shall occur unless and until all persons, firms, corporations and other
entities having an interest in or lien upon (i) this Lease or the leasehold
estate created by this Lease and (ii) the fee estate or any other leasehold
estate in the Leased Premises or any part thereof shall join in a written
instrument effecting such merger and shall duly record the same.
30. Exculpation. (a) Except as provided below, no general or limited
partner of Goldman, Sachs & Co., a New York limited partnership ("GS&Co."), or
of any assignee which is a successor to substantially all the assets and
business of GS&Co. (a "successor-assignee") shall have any personal liability
under this Lease and any judgment taken or rendered against GS&Co. or any
successor-assignee hereunder or related hereto shall be enforceable only against
the property of GS&Co. or such successor-assignee; provided, however, that
(i) if at any time GS&Co. or a successor-assignee (x) shall dissolve
(other than pursuant to, or as a result of, insolvency proceedings) and
(y) shall distribute its assets without adequately providing for any and
all of its obligations and liabilities under this Lease, then all persons
who were general partners
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of GS&Co. or of such successor-assignee immediately prior to the
dissolution shall be personally and jointly and severally liable to GS&Co.
or such successor-assignee for the benefit of Lessor to extent of any
loss, cost, damage or injury which Lessor may suffer as a result of the
failure to make adequate provision for such obligations and liabilities;
and
(ii) this section 30(a) shall not relieve any general or limited
partner of GS&Co. or of a successor-assignee from any obligation to
restore to GS&Co. or such successor-assignee any distributions of cash,
property or other assets by GS&Co. or such successor-assignee made to such
partner which (x) were made at any time when the distributor was insolvent
or (y) resulted in the distributor's becoming insolvent. For purposes of
this Lease, GS&Co. or a successor-assignee shall be "insolvent" if (a) it
is generally unable to pay its debts and other liabilities as they become
due or (b) the sum of its debts is greater than all of its property at a
fair valuation (taking into account this Lease and the liabilities of the
lessee hereunder).
This section 30(a) is for the sole benefit of GS&Co. and each
successor-assignee. Any other party acquiring the leasehold estate created by
this Lease shall have full personal liability hereunder.
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106
(b) Any judgment taken or rendered against Lessor hereunder or
related hereto shall be enforceable only against the interest of Lessor in the
Combined Premises or, in the event of a sale, financing or other disposition by
Lessor of the Combined Premises or any part thereof, against cash, property or
other assets of Lessor equal in amount to the proceeds of such sale, financing
or other disposition; provided, however, if the foregoing is insufficient to
satisfy such judgment, Lessor shall have personal liability for the unsatisfied
portion of such judgment to the extent (but only to the extent) that such
unsatisfied portion equals or is less than the sum of (i) the aggregate amount
(as of the date Lessee enforces any judgment against Lessor's fee estate) of any
mortgages covering Lessor's fee estate in the Leased Premises and (ii) the
aggregate amount of all other liens (as of the date Lessee enforces any judgment
against Lessor's fee estate) which Lessor has caused or suffered to be placed
against the Leased Premises or any part thereof, except liens which Lessee is
obligated hereunder to remove or cause to be removed.
31. Definitions. As used in this Lease, the following terms have the
following respective meanings:
Basic Rent: as defined in section 2.
business day: any weekday on which the New York Stock Exchange, or
its successor, is open for business.
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107
Combined Premises: the Leased Premises and the Initial Tenant
Improvements.
Costs: with respect to any construction, improvements, alteration,
restoration, replacement, repairs, or rebuilding ("work") shall include the
costs charged by contractors, subcontractors and materialmen for all labor,
materials, machinery and equipment purchased, leased or used in connection with
such work, fees and compensation payable to contractors and subcontractors in
connection with such work, governmental fees and charges assessed or incurred in
connection with such work, fees and expenses of architects and engineers,
whether retained by Lessor or Lessee, for estimates, surveys, preliminary
investigations, plans, drawings, specifications and supervision related to such
work, and the reasonable out-of-pocket expenses of Lessee's administration,
supervision and inspection of such work.
Deductible Amount: with respect to any insurance policy issued in
any month, the product of $500,000 multiplied by the fraction whose numerator is
the Index for the third month preceding the month in which such policy is issued
and whose denominator is the Index for February 1985.
Event of Default: as defined in section 22.
Existing Leases: as set forth in Schedule B.
Index: for any month the "Consumer Price Index" for such month of
all items, U.S. City Average, for all urban consumers, not seasonally adjusted,
published by the
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Bureau of Labor Statistics of the U.S. Department of Labor or a successor or
substitute index appropriately adjusted. In the event that the Index ceases to
use 1967 = 100 as the basis of calculation, or if a substantial change is made
in the terms or number of items contained in the Index, then the Index shall be
adjusted to the figure that would have been arrived at had the manner of
computing the Index in effect at the date of this Lease not been altered. In the
event such Index (or a successor or substitute index) is not available, a
reliable governmental or other impartial publication evaluating the information
theretofore used in determining the Index shall be used. No adjustments or
recomputations, retroactive or otherwise, shall be made because of any revision
which may later be made in the first published figure of the Index for any
month.
Initial Tenant Improvements: those items of property ownership of
which Lessee has retained and not conveyed to Lessor by the deed from Lessee to
Lessor of even date herewith. A copy of said deed is attached hereto as Schedule
E.
Insurance Requirements: all terms of or incorporated by reference
into any insurance policy (including the requirements of the Board of Fire
Underwriters and the Fire Insurance Rating Organization) covering or applicable
to the Combined Premises or any part thereof.
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Leased Premises: as defined in section 1.
Legal Requirements: all laws, statutes, codes, acts, ordinances,
orders, judgments, decrees, injunctions, rules, regulations, permits, licenses,
authorizations, directions, health, safety, environmental and other requirements
of all governmental departments, commissions, boards, courts, authorities and
agencies, foreseen or unforeseen, ordinary or extraordinary, which now or at any
time hereafter may be applicable to the Combined Premises or any part thereof or
interest therein.
Lessee: Goldman, Sachs & Co., a New York limited partnership, or any
successor or assign hereunder.
Lessee's Equipment: all furniture, furnishings, office equipment,
computers, telex, telephone and telecommunications equipment, cooking and dining
equipment, and other items of personal property (whether or not attached to the
Combined Premises) used or useful in the conduct of Lessee's business on the
Combined Premises as distinguished from the operation of the Combined Premises.
Lessor: Metropolitan Life Insurance Company, a New York corporation,
or any successor or assign hereunder.
Major Building Equipment: the items of equipment listed on Schedule
D and all replacements thereof.
Officer's Certificate: a certificate signed by a party or a general
partner or corporate officer of a party.
Original Term: as defined in section 1.
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110
Permitted Encumbrances: as set forth in Schedule B.
Permitted Investment: (i) direct obligations of the United States of
America, or obligations for which the full faith and credit of the United States
of America is pledged, and obligations of any agency or instrumentality of the
United States of America, (ii) obligations of any State of the United States of
American or Canada or any Province of Canada or any political subdivision or
agency or instrumentality of any thereof rated in the third highest grade or
better by two or more of Standard and Poor's Corporation, Moody's Investors
Service Inc. or Fitch Investors Service (or their successors), (iii) any
commercial paper issued by a corporation organized under the laws of the United
States of America or any State thereof or of Canada or any Province thereof or
by any foreign bank having a branch or agency in the United States of America
and rated in the second highest grade or better by two or more of Standard &
Poor's Corporation, Moody's Investors Service Inc. or Fitch Investors Service
(or their successors) and having a maturity not in excess of nine months, (iv)
certificates of deposit of, or drafts or bills of exchange accepted generally
by, any bank or trust company or any savings and loan association incorporated
under the laws of the United States of America or any State thereof or Canada or
any Province thereof or by any foreign bank having
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111
a branch or agency in the United States of America and, in each case, which has
capital and surplus aggregating at least $200,000,000 as of the date of its most
recent report of condition and (v) such other securities or investments as
Lessor shall from time to time consent to; provided, however, that in no event
shall either of the following be "Permitted Investments": (a) any security of,
or investment in, any person or entity in which Lessee and/or any affiliate of
Lessee have (either directly or indirectly) a 5% or greater equity interest or
(b) a security or investment of any kind whose stated maturity is longer than 3
years.
Plans and Specifications: plans and specifications prepared by a
reputable and licensed architect or engineer regularly involved in first-class
office buildings in the Borough of Manhattan in work of the nature described in
such Plans and Specifications.
Qualified Mortgage: a first mortgage on the leasehold estate created
hereby,
(a) which is held by a commercial bank or trust company or insurance
company organized under the laws of the United States or one of the states
thereof (other than any such bank or company in which Lessee and/or any
affiliate of Lessee have, either directly or indirectly, a 5% or greater
equity interest) having assets (as shown on its audited statement of
condition most recently
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released prior to the date on which such holder acquires such mortgage) of
at least $1 billion;
(b) the principal amount of the indebtedness secured by which (not
including interest and amounts incurred or advanced by the holder for
taxes, insurance, repairs and protection of the leasehold estate) does not
exceed the Qualified Mortgage Amount; and
(c) the principal of the indebtedness secured by which was advanced
to Lessee under an agreement requiring Lessee to use substantially all of
the funds advanced for improvements to the Combined Premises.
Qualified Mortgage Amount: with respect to a mortgage on the
leasehold estate created hereby the product of $25 million multiplied by the
fraction whose numerator is the Index for the third month preceding the month in
which such mortgage becomes a lien on the leasehold estate created hereby and
whose denominator is the Index for February, 1985.
Restoration; Restore: as defined in section 15.
Significant Proceeds Amount: with respect to any damage or
destruction or Taking, the product of $5 million multiplied by the fraction
whose numerator is the Index for the third month preceding the month in which
such damage or destruction or Taking occurs and whose denominator is the Index
for February, 1985.
Special Alteration: as defined in section 6(h).
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Taking: a taking during the term hereof of all or any part of the
Combined Premises, or any interest therein or right accruing thereto, including,
without limitation, any right of access thereto, as the result of or in lieu of
or in anticipation of the exercise of the right of condemnation or eminent
domain, or a change of grade affecting the Leased Premises or any part thereof.
Total Taking: as defined in section 16.
The words "enter", "re-enter", "entry" and "re-entry" as used in
this lease are not restricted to their technical legal meaning.
32. End of Lease Term. Upon the expiration or earlier termination of
this Lease, Lessee shall quit and surrender to Lessor the Leased Premises free
and clear of all tenancies and occupancies other than those with respect to
which Lessor has executed a non-disturbance agreement and in good order and
condition, ordinary wear and tear and damage which Lessee is not required
hereunder to repair excepted.
33. Notices. All notices, requests, demands, certifications and
other communications hereunder (each a "notice") shall (except in the case of
the telephonic notices referred to in section 6(d)(vi) and 6(e)(vi)) be in
writing and shall be deemed to have been given when (a) deposited in the United
States mail, first class registered or certified, return receipt requested,
postage prepaid,
<PAGE> 117
114
addressed (1) if to Lessee, at 85 Broad Street, New York, New York 10004,
Attention: General Services Department or (2) if to Lessor, at One Madison
Avenue, New York, New York 10010, Attention: Executive Vice President, Real
Estate Investments, or (b) actually delivered by hand and receipted for (1) if
to Lessee, at 85 Broad Street, New York, New York 10004, Attention: General
Services Department, or (2) if to Lessor, at One Madison Avenue, New York, New
York 10010, Attention: Executive Vice President, Real Estate Investments.
Any notice mailed in accordance with this section shall be deemed
received on the date of the return receipt or, if delivery is refused, on the
date of refusal. Any notice actually delivered by hand and receipted for in
accordance with this section shall be deemed received on the date of the
receipt.
Whenever Lessor gives any notice as aforesaid, it shall give a copy
thereof in the same manner to Lessee at 85 Broad Street, New York, New York
10004, Attention: General Counsel.
Whenever Lessee gives any notice as aforesaid, it shall give a copy
thereof in the same manner to Lessor at Room 3122, 200 Park Avenue, New York,
New York 10166-0114, Attention: Vice President.
Lessor or Lessee, by notice given at least 30 days prior to the
effective date thereof, may from time to time
<PAGE> 118
115
change either or both of its above addresses to any other address within the
State of New York.
34. Annual Reports. Within 120 days of the end of each of Lessee's
fiscal years ending during the term hereof, Lessee shall furnish to Lessor a
statement of the income received for such fiscal year under subleases of all or
any part of the Combined Premises and a statement of Building operating expenses
for such fiscal year together with a schedule of subleases of all or any part of
the Combined Premises indicating the premises demised, commencement date,
expiration date, renewal options, base rent and escalation provisions.
35. Miscellaneous. (a) If any term of this Lease or any application
thereof shall be invalid or unenforceable, the remainder of this Lease and any
other application of such term shall not be affected thereby. All covenants and
obligations of Lessor and Lessee hereunder which are not fully performed upon
the expiration or earlier termination of this Lease shall survive such
expiration or earlier termination.
(b) This Lease may be changed or amended only by an instrument in
writing, signed by the party against whom enforcement of such change or
amendment is sought.
(c) Subject to section 20, this Lease shall be binding upon and
inure to the benefit of and be enforceable
<PAGE> 119
116
by the respective successors and assigns of the parties hereto.
(d) This Lease shall be construed and enforced in accordance with
and governed by the laws of the State of New York.
(e) The headings in this Lease are for purposes of reference only
and shall not limit or otherwise affect the meaning hereof. References herein to
sections are, unless otherwise indicated, references to sections hereof.
(f) Lessor and Lessee each represents to the other that it has dealt
with no broker (other than affiliates of Lessee) in connection with the
negotiation and execution of this Lease. Lessee shall pay, and shall indemnify
and defend Lessor against any claims for, any commission with respect to this
Lease due to any such affiliate.
(g) Lessor and Lessee hereby waive trial by jury in any action
arising under this Lease.
(h) No matter concerning this Lease shall be arbitrable unless
arbitration of such matter is specifically provided for herein. Except as
provided in section 2.2 with respect to arbitrations thereunder, in any instance
in this Lease in which arbitration is specifically provided for, such
arbitration shall be conducted pursuant to the rules of the American Arbitration
Association, or if the American Arbitration Association shall have ceased to
function as an arbitration association, of a successor or comparable
<PAGE> 120
117
organization and the arbitrators shall be persons experienced in matters of the
same general nature as the matter subject to arbitration. If, in any
arbitration, the arbitrator or arbitrators shall award any sum to be paid by one
party hereto to the other, the arbitrators shall also award interest thereon,
computed at the prime rate of Morgan Guaranty Trust Company of New York
announced to be in effect from time to time, from the date (prior to such
arbitration) on which, according to the terms hereof, such sum was to have been
paid.
(i) In any instance in this Lease in which Lessor covenants not
unreasonably to withhold its consent or approval, Lessee's sole remedy in case
of such unreasonable withholding is an action for specific performance or
injunction directing such consent or approval and Lessor shall have no liability
for monetary damages.
36. "Structural Work" consists solely of the following:
(a) Curtain Wall. Any replacement (including replacement of windows
above the ground floor constituting a part of the precast concrete panels,
together with the zippers and hard rubber frames of such windows) and/or repair
of the curtain wall in whole or in part, except that Structural Work shall not
include (i) caulking or acrylic treatment of the curtain wall not done in
conjunction with repairs to or replacement of the portion of the curtain wall
<PAGE> 121
118
caulked or treated, (ii) any work ("Contract Work") to be done by Lessee to
comply with Lessee's obligations under Section 10.8 (the "Contract Section") of
the Contract of Sale (the "Contract") pursuant to which Lessor acquired the
Leased Premises (a copy of the Contract Section being annexed as Schedule F),
(iii) any work resulting from Lessee's failure to do the Contract Work in
accordance with the requirements of the Contract Section or (iv) if the Contract
Work is undertaken in accordance with Seller's Recommendation (as defined in the
Contract Section), any work which Lessor reasonably determines, by notice
received by Lessee on or prior to the third anniversary of the date of full
completion of the Contract Work, is necessary because of the failure of the
Contract Work to remedy the Section 10.8 Condition (as defined in the Contract)
wherever it may exist or to prevent its occurrence anywhere else in the
Building's curtain wall (any dispute as to the reasonableness of Lessor's
determination to be determined by the Appropriate Engineer).
(b) Curtain Wall Windows. Replacement (but not repair) of curtain
wall windows above the ground floor in their entirety (inclusive of the glass,
zippers and hard rubber frames in such windows).
(c) Window Glass. Replacement (but not repair) of the glass in
curtain wall windows above the ground floor.
<PAGE> 122
119
(d) Window Zippers. Replacement (but not repair) of the zippers in
curtain wall windows above the ground floor.
(e) Window Hard Rubber Frames. Replacement (but not repair) of the
hard rubber frames in curtain wall windows above the ground floor.
(f) Steel Frame. Replacement and/or repair of the Building's steel
frame, footings, foundations, columns, beams, floors (including concrete floors
and the steel floors supporting each concrete floor) and core walls, except that
Structural Work shall not include any Special Alteration or any waterproofing
of, or repairing of leaks in, the Building's foundation walls.
(g) Roof. Replacement (but not repair) of the Building's roof in its
entirety (but not in part) required in order to preserve the structural
integrity of the Building or the watertightness and airtightness of the
Building.
In no event shall Structural Work include the replacement or repair
in whole or in part of the Building's ground floor plaza or the work and
obligations under the Distinctive Street Improvement Maintenance Agreement
(recorded in the Office of the New York County Clerk in Reel 895, at page 337),
the financial responsibility for which shall be Lessees's in all instances for
so long as this Lease is in effect.
<PAGE> 123
37. Limitation on Interest. Notwithstanding anything to the contrary
contained in this Lease, neither Lessor nor Lessee shall ever be required to
pay interest pursuant to any provision of this Lease in excess of the maximum
interest permitted by applicable law.
IN WITNESS WHEREOF, Lessor and Lessee have caused this Lease to be
duly executed and delivered, all as of the date and year first above written.
METROPOLITAN LIFE INSURANCE COMPANY
/s/ [signature]
By:___________________
GOLDMAN, SACHS & Co.
/s/ [signature]
By:___________________
a General Partner
<PAGE> 124
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the _____ day of _____________, 1985, before me personally came
[signature] to me known, who being by me duly sworn, did depose and say that he
resides at 45 Commodore Road Chappaqua, NY 10514; that he is a Vice-President of
METROPOLITAN LIFE INSURANCE COMPANY, the corporation described in and which
executed the foregoing instrument; and that he signed his name thereto by order
of the board of directors of said corporation.
_____________________________
<PAGE> 125
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the _____ day of _____________, 1985, before me personally came
____________________________, to me known to be the individual described in and
who executed the foregoing instrument and acknowledged that he executed the same
in the firm name as a General Partner and on behalf of GOLDMAN, SACHS & CO., a
limited partnership.
_____________________________
Notary Public
<PAGE> 126
Schedule A
Legal Description of the Land
That certain plot, piece or parcel of land, situate, lying and being in the
Borough of Manhattan, City, County and State of New York.
BEGINNING at the corner formed by the intersection of the northerly side of
Pearl Street with the easterly side of Broad Street;
Running thence northerly, along the easterly line of Broad Street, 68.00 feet to
a point;
Thence easterly, at right angles to the preceding course, 7.50 feet to a point;
Thence northerly, along the easterly line of Broad Street and at right angles to
the preceding course, 40.00 feet to a point;
Thence westerly, at right angles to the preceding course, 7.50 feet to a point;
Thence northerly, along the easterly line of Broad Street and at right angles to
the preceding course, 128.09 feet to a point in the southerly line of South
William Street;
Thence easterly, along the southerly line of South William Street and forming an
angle of 109 degrees 27 minutes 57 seconds on its southerly side with the
preceding course 94.54 feet to an angle point therein;
Thence still easterly, along the southerly line of South William Street and
forming an angle of 187 degrees 20 minutes 55 seconds on its southerly side with
the preceding course, 114.03 feet to a point;
Thence southerly, along a line forming an angle of 91 degrees 14 minutes 00
seconds on its westerly side with the preceding course, 6.10 feet to a point;
Thence still southerly, forming an angle of 175 degrees 24 minutes 30 seconds on
its westerly side with the preceding course, 83.40 feet to a point in the
northerly line of Stone Street;
<PAGE> 127
2
Thence still southerly, along the westerly line of Stone Street and forming an
angle of 153 degrees 30 minutes 16 seconds on its westerly side with the
preceding course, 42.13 feet to a point in the westerly line of Coenties Alley;
Thence still southerly, along the westerly line of Coenties Alley and forming an
angle of 198 degrees 05 minutes 24 seconds on its westerly side with the
preceding course, 37.55 feet to an angle point therein;
Thence still southerly along the westerly line of Coenties Alley and forming an
angle of 187 degrees 59 minutes 20 seconds on its westerly side with the
preceding course, 19.09 feet to an angle point therein;
Thence still southerly, along the westerly line of Coenties Alley and forming an
angle of 187 degrees 17 minutes 25 seconds on its westerly side with the
preceding course, 51.14 feet to a point in the northerly line of Pearl Street;
Thence westerly, along the northerly line of Pearl Street and forming an angle
of 97 degrees 44 minutes 26 seconds on its northerly side with the preceding
course, 84.22 feet to an angle point therein;
Thence still westerly, along the northerly line of Pearl Street and forming an
angle of 154 degrees 33 minutes 55 seconds on its northerly side with the
preceding course, 206.48 feet to the point or place of BEGINNING.
<PAGE> 128
Schedule B
Permitted Encumbrances
1. Easement Agreement dated June 17, 1980 between 85 Broad Street
Associates as Grantor and New York Telephone Company and Empire City Subway
Company Limited as Grantees recorded in Reel 534 Page 271.
2. Consent to Rapid Transit Railroad recorded in Liber 139 Sec. 1, Cp. 459
dated September 9, 1912.
3. Easement Agreement dated October 2, 1980 between 85 Broad Street
Associates and the City of New York, and recorded in Reel 541 Page 1258.
4. Easements as set forth in Easement Agreement dated June 17, 1980
between 85 Broad Street Associates as Grantor and Consolidated Edison Company of
New York, Inc., as Grantee recorded in Reel 563 Page 155.
5. Sidewalk Easement and Sewer, Sidewalk and Roadway Easement contained in
deed and recorded in Reel 540 Page 641 as amended by Correction Deed recorded in
Reel 604 page 728.
6. Distinctive Street Improvement Maintenance Declaration made by Lessee
recorded in Reel 895 p 337.
7. Zoning regulations and ordinances, municipal building restrictions,
environmental quality or land use restrictions or regulations and all other
laws, ordinances, regulations or restrictions which are not violated by the
existing structures or the present use thereof.
8. Rights as of the date hereof to lay, maintain, install, repair and
remove pipes, lines, poles, conduits, cable boxes and related equipment and
facilities on, over and under the Combined Premises in connection with the
provision of utility, telephone, water and sewer services to the Combined
Premises.
9. Easements that affect any land in the bed of any street, road or
avenue, opened or proposed, in front of or adjoining the Combined Premises.
<PAGE> 129
Schedule C
Ground Lessor's
Non-Disturbance Agreement
and
Sub-Lessee's Agreement to Attorn
This Agreement, made as of this __ day of _______, ______, by and between
METROPOLITAN LIFE INSURANCE COMPANY, a corporation organized and existing under
the laws of the State of New York, having its principal office and place of
business located at One Madison Avenue, New York, New York 10010 (hereinafter
referred to as "Ground Lessor") and ___________________________, a ___________
organized and existing under the laws of _____________________________, having
an office and place of business located at ____________, __________, __________
(hereinafter referred to as "Sub-Lessee").
W I T N E S S E T H:
WHEREAS, Ground Lessor is the present holder of the fee estate in the
building located at 85 Broad Street, New York, New York (hereinafter referred to
as "Building"); and
WHEREAS, by indenture of lease (hereinafter referred to as "Ground Lease")
dated _________________ between Ground Lessor, as lessor, and Goldman, Sachs &
Co., as lessee (hereinafter referred to as "Ground Lessee") Ground Lessor leased
the premises and property known as 85
<PAGE> 130
2
Broad Street together with the Building and all other improvements thereon to
Ground Lessee; and
WHEREAS, Ground Lessee, as sub-lessor, and Sub-Lessee, as sub-lessee,
entered into a certain sub-lease of space in the Building dated as of
_______________, which sub-lease is hereinafter referred to as "Sub-Lease" and
the premises demised thereby are hereinafter referred to as "Demised Premises"
and which Demised Premises are more particularly described in the Sub-Lease; and
WHEREAS, Sub-Lessee has requested that Ground Lessor agree not to disturb
Sub-Lessee's possessory rights in the Demised Premises in the event that Ground
Lessor should terminate the Ground Lessee's interest in the Ground Lease or
otherwise cancels the Ground Lease provided that Sub-Lessee is not in default
under the Sub-Lease and further provided the Sub-Lessee attorns to Ground
Lessor; and
WHEREAS, Ground Lessor is willing to so agree on the terms and conditions
hereinafter provided.
NOW, THEREFORE, in consideration of the premises, the mutual covenants
contained herein and TEN ($10.00) DOLLARS and other good and valuable
consideration each to the other in hand paid, receipt of which is hereby
acknowledged, Ground Lessor and Sub-Lessee hereby agree as follows:
<PAGE> 131
3
1. The Sub-Lease is and shall be subject and subordinate in all respects
to the Ground Lease and to all renewals, modifications, replacements, amendments
and/or extensions of the same.
2. That, at such time as the term of the Sub-Lease commences, Sub-Lessee
takes occupancy of the Demised Premises and commences payment of the full rents
called for thereunder and provided Sub-Lessee complies with this Agreement and
is not in default under the terms of the Sub-Lease in the payment of the rent or
the additional rents called for under the Sub-Lease (for a period in excess of
the lesser of (i) the applicable period of grace contained in the Sub-Lease or
(ii) 10 days after Sub-Lessee receives a default notice in respect of the
payment in question) nor in the performance of any of the other terms,
conditions, covenants, clauses or agreements on its part to be performed under
the Sub-Lease (for a period in excess of the lesser of (i) the applicable period
of grace contained in the Sub-Lease or (ii) 30 days after Sub-Lessee receives a
default notice in respect of the non-performance in question, provided that such
30-day period shall, in the case of a default which cannot with due diligence be
remedied within a 30-day period, be extended for such period as may be required
to remedy such default with due diligence), as of
<PAGE> 132
4
the date Ground Lessor cancels or terminates the Ground Lease for any reason
before the date provided in the Sub-Lease for the termination of the Sub-Lease,
as the same may have been modified, extended, renewed and/or replaced, no
cancellation or termination of the same will disturb Sub-Lessee's possession
under the Sub-Lease and the Sub-Lease will not be affected or cut off thereby
(except that Sub-Lessee's right to receive or set off any monies or obligations
owed or to be performed by the Ground Lessee or the successors or assigns to the
Ground-Lessee's interest in the Ground Lease shall not be enforceable thereafter
against Ground Lessor or any subsequent fee owner of the Building) and
notwithstanding any such termination or cancellation of the Ground Lease or
other acquisition of the Ground Lessee's interest in the Ground Lease and merger
with the Ground Lessor's fee interest in the Building, the Sub-Lease will be
recognized as a direct lease from Ground Lessor or any subsequent holder of the
fee estate in the Building, except that the Ground Lessor or any subsequent
holder of the fee estate in the Building shall not (a) be liable for any
previous act or omission under the Sub-Lease by the holder of the Ground
Lessee's interest in the Ground Lease, (b) be subject to any offset which shall
theretofore have accrued to Sub-Lessee against the holder of the Ground Lessee's
<PAGE> 133
5
interest in the Ground Lease, (c) have any obligation with respect to any
security deposited under the Sub-Lease unless such security has been physically
delivered to Ground Lessor, or (d) be bound by any previous modification of the
Sub-Lease or by any previous prepayment of rent for a period greater than one
(1) month, unless such modification or prepayment shall have been expressly
approved in writing by the Ground Lessor.
3. That if Ground Lessor elects to accept from the then holder of Ground
Lessee's interest in the Ground Lease a surrender or an assignment of the
leasehold interest in the Ground Lease in lieu of cancelling or terminating the
Ground Lease, Sub-Lessee's right to receive or set off any monies or obligations
owed or to be performed by the then holder of the leasehold interest in the
Ground Lease shall not be enforceable thereafter against Ground Lessor or any
subsequent holder of the fee estate in the Building.
4. That Sub-Lessee will, upon request of the Ground Lessor or any
subsequent holder of the fee estate in the Building, execute a written agreement
whereunder Sub-Lessee confirms this attornment to Ground Lessor or any such
subsequent holder of the fee estate in the Building and affirms Sub-Lessee's
obligations under the Sub-Lease and agrees to pay all rentals and charges then
due or to become
<PAGE> 134
6
due as they become due to Ground Lessor or any such subsequent holder of the fee
estate in the Building.
5. Sub-Lessee from and after the date hereof shall send a copy of any
notice or statement under the Sub-Lease to Ground Lessor at the same time such
notice or statement is sent to the lessor under the Sub-Lease.
6. Sub-Lessee hereby agrees that from and after the date hereof in the
event of any act or omission by the lessor under the Sub-Lease (other than any
such act or omission which is not capable of being remedied by lessor under the
Sub-Lease within a reasonable period) which would give Sub-Lessee the right,
either immediately or after the lapse of the period of time, to terminate the
Sub-Lease, or to claim a partial or total eviction, Sub-Lessee will not exercise
any such right (i) until it has given written notice of such act or omission to
Ground Lessor by delivering such notice of such act or omission, by certified
mail, return receipt requested, addressed to Ground Lessor, at the Ground
Lessor's address as given herein (attention: Vice President, Real Estate
Investments, Northeastern Office), or at the last address of Ground Lessor,
furnished to Sub-Lessee in writing and (ii) until a reasonable period for
remedying such act or omission shall have elapsed following such giving of
notice and following the time when
<PAGE> 135
7
Ground Lessor shall have become entitled under the Ground Lease to remedy the
same; provided, Ground Lessor, at its option shall, following the giving of such
notice, have elected to commence and continue to remedy such act or omission or
to cause the same to be remedied.
7. Sub-Lessee will neither offer nor make prepayment of rent (for a period
in excess of one month) nor further change the terms, covenants, conditions and
agreements of the Sub-Lease in any manner without the express consent in writing
of the Ground Lessor.
8. No modification, amendment, waiver or release of any provision of this
Agreement or of any right, obligation, claim or cause of action arising
hereunder shall be valid, or binding for any purpose whatsoever unless in
writing and duly executed by the party against whom the same is sought to be
asserted.
9. This Agreement shall inure to the benefit of the parties hereto, their
successors and assigns; provided, however, that in the event of the assignment
or transfer of the interest of Ground Lessor, all obligations and liabilities of
Ground Lessor under this Agreement shall terminate, and thereupon all such
obligations and liabilities shall be the responsibility of the party to whom
Ground Lessor's interest is assigned or transferred; and
<PAGE> 136
8
provided further that the interest of Sub-Lessee under this Agreement may not be
assigned or transferred, except in connection with an assignment permitted under
and in accordance with the terms of the Sub-Lease.
10. Sub-Lessee agrees that this Agreement satisfies any condition or
requirements in the Sub-Lease relating to the granting of a non-disturbance
agreement from the fee owner of the real property of which the Demised Premises
are a part.
11. In the event that Ground Lessor notifies Sub-Lessee of an Event of
Default under the Ground Lease and demands that Sub-Lessee pay its rent and all
other sums due under the Sub-Lease to Ground Lessor, Sub-Lessee agrees that it
will honor such demand and pay its rent and all other sums due under the
Sub-Lease directly to the Ground Lessor during the continuance of such default.
12. Ground Lessor shall have no responsibility to provide any additional
space for which Sub-Lessee has any option or right under the Sub-Lease unless
Ground Lessor at its option elects to provide the same and Sub-Lessee hereby
releases Ground Lessor from any obligation to provide the same, if any, and
agrees that it shall have no right to cancel the Sub-Lease or any claim against
Ground Lessor as a result of the failure to provide any additional space.
<PAGE> 137
9
13. Sub-Lessee covenants and acknowledges that it has no right or option
of any nature whatsoever, whether pursuant to the Sub-Lease or otherwise, to
purchase the Demised Premises or the real property of which the Demised Premises
are a part, or any portion thereof or any interest therein and to the extent
that Sub-Lessee has, or hereafter acquires any such right or option, the same is
hereby acknowledged to be subject to and subordinate to the Ground Lease and is
hereby waived and released as against Ground Lessor.
14. Ground Lessor shall have no obligation, nor incur any liability, with
respect to any warranties of any nature whatsoever, whether pursuant to the
Sub-Lease or otherwise, including, without limitation, any warranties respecting
use, compliance with zoning, title of lessor under the Sub-Lease, the authority
of lessor under the Sub-Lease, habitability, fitness for purpose and possession.
15. Anything herein or in the Sub-Lease to the contrary notwithstanding,
Ground Lessor shall have no obligation, nor incur any liability, beyond Ground
Lessor's then interest, if any, in the fee estate in the Building and Sub-Lessee
shall look exclusively to such interest of Ground Lessor, if any, in the fee
estate in the Building for the payment and discharge of any obligations imposed
upon Ground
<PAGE> 138
10
Lessor hereunder or under the Sub-Lease and Ground Lessor is hereby released or
relieved of any other obligations hereunder and under the Sub-Lease. Sub-Lessee
agrees that with respect to any money judgment which may be obtained or secured
by Sub-Lessee against Ground Lessor, Sub-Lessee shall look solely to the fee
estate or interest owned by the Ground Lessor in the Building, and Sub-Lessee
will not collect or attempt to collect any such judgment out of any other assets
of Ground Lessor.
IN WITNESS WHEREOF, the parties hereto have respectively signed and sealed
this Agreement as of the day and year first above written.
METROPOLITAN LIFE INSURANCE COMPANY
By
_______________________________________
By_______________________________________
<PAGE> 139
11
Goldman, Sachs & Co. as lessor under the Sub-Lease and as the Ground
Lessee under the Ground Lease, agrees for itself and its successors and assigns,
that (i) the within Agreement does not (a) constitute a waiver by Ground Lessor
of any of its rights under the Ground Lease and/or (b) in any way release the
Ground Lessee from its obligation to comply with the terms, provisions,
conditions, covenants, agreements and clauses of the Ground Lease, (ii) the
provisions of the Ground Lease remain in full force and effect and must be
complied with by the Ground Lessee, and (iii) upon the occurrence and
continuance of an Event of Default under the Ground Lease, Sub-Lessee may pay
all rent, additional rents and all other sums due under the Sub-Lease to the
Ground Lessor as provided in the within Agreement.
GOLDMAN, SACHS & CO.
By
_______________________________________
<PAGE> 140
Schedule D
Major Building Equipment
Major Building Equipment consists solely of the following:
(a) any vertical electrical riser;
(b) any vertical standpipe riser;
(c) any vertical condenser water riser;
(d) any vertical domestic water riser;
(e) any vertical chilled water riser;
(f) any vertical condensate riser;
(g) any vertical steam riser;
(h) any vertical radiation riser;
(i) any vertical venting stack;
(j) any vertical draining stack;
(k) the hoist motor of any elevator;
(l) the motor drive of any elevator;
(m) the cab of any elevator;
(n) any drive motor of any escalator;
(o) any emergency generator;
(p) any chiller;
(q) any cooling tower;
(r) any steam station;
(s) any strainercycle;
(t) any air compressor;
<PAGE> 141
2
(u) any house tank;
(v) the life safety system (consisting of the data gathering panels on
the various floors, the fire command center at the lobby desk, the
automation center and the central processing unit);
(w) any cooling coil system;
(x) any elevator bank control system processor; or
(y) the tubing system of any chiller or condensor.
In no event shall anything not specified in clauses (a) through (y) above
(including, without limitation, any expansion joint of any vertical riser, the
window washing rig, the pre-heat coils and the component parts of any of the
items listed in clauses (a) through (y) above) be an independent item of Major
Building Equipment, the financial responsibility for the repair or replacement
thereof being Lessees's in all instances; provided, however, that the
replacement of an item of Major Building Equipment in its entirety shall include
the replacement of the component parts thereof.
<PAGE> 142
SCHEDULE E
DEED
THIS INDENTURE, made the 11th day of June, nineteen hundred and eighty-five,
between GOLDMAN, SACHS & CO., 85 Broad Street, New York, New York 10004
("Grantor") and METROPOLITAN LIFE INSURANCE COMPANY, One Madison Avenue, New
York, New York 10010 ("Grantee").
WITNESSETH, that Grantor, in consideration of ten dollars ($10), lawful money of
the United States, and other good and valuable consideration paid by Grantee,
does hereby grant and release unto Grantee and its heirs, successors and assigns
forever, subject to the terms and exclusions listed below,
ALL that certain lot, plot, piece or parcel of land, with the buildings,
structures and improvements thereon erected, situate, lying and being in the
Borough of Manhattan, City, County and State of New York.
BEGINNING at the corner formed by the intersection of the northerly side of
Pearl Street with the easterly side of Broad Street;
Running thence northerly, along the easterly line of Broad Street, 68.00 feet to
a point;
Thence easterly, at right angles to the preceding course, 7.50 feet to a point;
Thence northerly, along the easterly line of Broad Street and at right angles to
the preceding course, 40.00 feet to a point;
Thence westerly, at right angles to the preceding course, 7.50 feet to a point;
Thence northerly, along the easterly line of Broad Street and at right angles to
the preceding course, 128.09 feet to a point in the southerly line of South
William Street.
Thence easterly, along the southerly line of South William Street and forming an
angle of 109 degrees 27 minutes 57 seconds on its southerly side with the
preceding course, 94.54 feet to an angle point therein;
<PAGE> 143
Thence still easterly, along the southerly line of South William Street and
forming an angle of 187 degrees 20 minutes 55 seconds on its southerly side with
the preceding course, 114.03 feet to a point;
Thence southerly, along a line forming an angle of 91 degrees 14 minutes 00
seconds on its westerly side with the preceding course, 6.10 feet to a point;
Thence still southerly, forming an angle of 175 degrees 24 minutes 30 seconds on
its westerly side with the preceding course, 83.40 feet to a point in the
northerly line of Stone Street;
Thence still southerly, along the westerly line of Stone Street and forming an
angle of 153 degrees 30 minutes 16 seconds on its westerly side with the
preceding course, 42.13 feet to a point in the westerly line of Coenties Alley;
Thence still southerly, along the westerly line of Coenties Alley and forming an
angle of 198 degrees 05 minutes 24 seconds on its westerly side with the
preceding course, 37.55 feet to an angle point therein;
Thence still southerly, along the westerly line of Coenties Alley and forming an
angle of 187 degrees 59 minutes 20 seconds on its westerly side with the
preceding course, 19.09 feet to an angle point therein;
Thence still southerly, along the westerly line of Coenties Alley and forming an
angle of 187 degrees 17 minutes 25 seconds on its westerly side with the
preceding course, 51.14 feet to a point in the northerly line of Pearl Street;
Thence westerly, along the northerly line of Pearl Street and forming an angle
of 97 degrees 44 minutes 26 seconds on its northerly side with the preceding
course, 84.22 feet to an angle point therein;
Thence still westerly, along the northerly line of Pearl Street and forming an
angle of 154 degrees 33 minutes 55 seconds on its northerly side with the
preceding course, 206.48 feet to the point or place of BEGINNING.
TOGETHER with all right, title and interest, if any, of Grantor in and to any
streets and avenues abutting the above described premises to the center lines
thereof,
TOGETHER with the appurtenances and all the estate and rights of Grantor in and
to said premises;
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<PAGE> 144
EXCEPTING THEREFROM, HOWEVER, THE FOLLOWING:
(a) Grantor's rights as landlord under the following leases for
space at the premises:
1. Indenture of Lease between Seller as successor in interest
to 85 Broad Street Associates and Merrill Lynch, Pierce, Fenner & Smith dated
September 17, 1981, as supplemented by Agreement dated April 14, 1983.
2. Agreement of Lease between Seller and Emigrant Savings Bank
dated June 17, 1983;
3. Agreement of Lease between Seller and Restaurant
Associates, Inc. dated June 30, 1983 as supplemented by letter agreement dated
June 30, 1983 and as amended by Assignment and Assumption of Lease dated October
23, 1984 by which Restaurant Associates, Inc. assigned its interest in such
lease to RA/Eastern Newsstand Corporation;
4. Agreement of Lease between Seller and Godiva Chocolatier,
Inc. dated July 15, 1983; and
(b) The following fixtures and improvements:
Electrical Work and Communications Wiring - Occupant electric work from base
building panels on each floor to local wiring. Communications wiring throughout
the entire Building.
H.V.A.C. - Occupant HVAC from fire damper in shaft to local distribution.
Lath & Acoustics - Occupant lath and acoustics
Computer and Smoke Dampers - computer installation and smoke dampers in occupant
computer rooms.
Drywall, Rough Carpentry, Finished Carpentry, Millwork and Cabinetwork -
Occupant drywall, rough carpentry, finished carpentry, millwork doors, cabinets
and counters. Occupants' plastic laminate.
Plumbing and Sprinklers - Occupant plumbing and sprinkler from base building
risers to local distribution.
Raised Flooring and Floor Finishes - Raised floor and floor finishes in occupant
spaces.
Painting, Wall covering and Lauren Veneer - Paint and wall covering of occupant
spaces and lauren veneer supplied for occupant woodwork.
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<PAGE> 145
Aluminum Frame & Glass - Aluminum frame and glass occupant office fronts.
Security System and Vault Equipment - Security system including intercom, lobby
security doors and roll-up security gate in cafeteria. Bullet proof pass thru
vault window.
Kitchen Equipment and Carved Glass - Kitchen equipment and carved glass
decoration for occupant cafeteria.
Vertical Conveyors, Pneumatic Tubes and Audio Visual Equipment - Vertical
conveyors for occupant mail distribution, pneumatic tubes for occupant use and
audio visual equipment for occupant spaces.
Telephone Closets - Occupant telephone spaces.
Spray Fireproofing, Waterproofing and Floor Sealant - Repair spray on
fireproofing after occupant construction; waterproofing in occupant kitchen
areas and floor sealant in occupant areas.
Architectural Metal and Glass, Hollow Metal, Miscellaneous Metals and Hardware -
Architectural metal and glass, hollow metal, miscellaneous metal work and
hardware for occupant areas.
Venetian Blinds, Black-Out Shades and Finish Fabric - Venetian blinds and
black-out shades for occupant spaces, and fabric for occupant finishes.
Demountable, Acoustical and Folding Partitions - Removable and folding metal and
glass partitions and acoustical partitions in occupant spaces.
Masonry, Marble and Concrete - Masonry and marble for occupant areas and
concrete for occupant construction work.
Automatic Doors Equipment - Automatic doors in occupant areas.
Toilet Partitions and Accessories - Toilet partitions and accessories in
occupant area for added toilets.
TO HAVE AND TO HOLD the premises herein granted unto Grantee, the heirs,
successors and assigns of Grantee, forever.
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<PAGE> 146
AND Grantor, in compliance with Section 13 of the Lien Law, covenants that
Grantor will receive the consideration for this conveyance and will hold the
right to receive such consideration as a trust fund to be applied first for the
purpose of paying the cost of the improvement and will apply the same first to
the payment of the cost of the improvement before using any part of the total of
the same for any other purpose.
IN WITNESS WHEREOF, Grantor has duly executed this deed the day and year first
above written.
GOLDMAN, SACHS & CO.
By:
---------------------------------------
a general partner
-5-
<PAGE> 147
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 11th day of June, 1985, before me personally came
__________________________, to me known to be the individual described in and
who executed the foregoing instrument and acknowledged that he executed the same
in the firm name as a General Partner and on behalf of GOLDMAN, SACHS & CO., a
limited partnership.
-----------------------------
Notary Public
<PAGE> 148
BARGAIN AND SALE DEED SECTION: 1
BLOCK: 29
Title No. LOT: 1,59 and
======================================= 19 and the beds of
Stone Street and
former Coenties
Alley
GOLDMAN, SACHS & CO.,
Grantor
TO
METROPOLITAN LIFE INSURANCE COMPANY,
Grantee
RETURN BY MAIL TO:
------------------------------------
- --------------------------------------------------------------------------------
Reserve this space for use of Recording Office.
<PAGE> 149
Schedule F
Section l0.8 of the Contract of Sale
10.8. (a) Seller and Purchaser acknowledge that cracks exist in
certain of the pre-cast concrete panels on the Building's curtain wall, that
certain panels have locally spalled at the surface and that exposed reinforcing
bars have been observed. Seller has retained the firm of Peter Corsell
Associates, Inc. ("Seller's Consultant") to investigate the conditions referred
to in the preceding sentence and to inspect the entire curtain wall to determine
the extent to which such conditions exist anywhere in the curtain wall
(collectively, the "Section 10.8 Condition"). Seller shall cause Seller's
Consultant to submit to
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<PAGE> 150
Seller and Purchaser, on or prior to July 1, 1985, a final report ("Seller's
Report") containing the results of the inspection by Seller's Consultant and
including a recommendation ("Seller's Recommendation") of the most appropriate
measures designed (i) to remedy the Section 10.8 Condition wherever it may exist
and (ii) to prevent its occurrence anywhere else in the curtain wall.
(b) Purchaser shall have the right, exercisable by notice (the
"Objection Notice") to Seller delivered not later than fifteen (15) business
days after Purchaser's receipt of Seller's Report, to object to Seller's
Recommendation, and if Purchaser shall timely give the Objection Notice, to
cause the firm of Purdy & Henderson Associates, Inc. ("Purchaser's Consultant")
to inspect the Section 10.8 Condition and to submit to Seller and Purchaser, on
or prior to the date which is two (2) months after the date Seller receives the
Objection Notice, a final report ("Purchaser's Report") containing the results
of the inspection by Purchaser's Consultant and including a recommendation
("Purchaser's Recommendation") of the most appropriate measures designed (i) to
remedy the Section 10.8 Condition wherever it may exist and (ii) to prevent its
occurrence anywhere else in the curtain wall.
(c) If Purchaser shall have timely given the Objection Notice, then
Seller, within ten (10) business days after receipt of Purchaser's Report, shall
cause copies of Seller's Report and Purchaser' s Report to be submitted to
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<PAGE> 151
the firm of Eipel Associates (the "Deciding Firm") which shall, within thirty
(30) days after such submission, select either Seller's Recommendation or
Purchaser's Recommendation as the one which is most appropriate in the
circumstances.
(d) Seller shall perform with all due diligence all work set forth
in Seller's Recommendation or (if Purchaser shall have timely given the
Objection Notice and the Deciding Firm selects Purchaser's Recommendation) all
work set forth in Purchaser's Recommendation (the "Contract Work").
(e) Seller shall be solely responsible for the cost of the Contract
Work and shall pay the fees and disbursements of Seller's Consultant. Purchaser
shall pay the fees and disbursements of Purchaser's Consultant. Seller and
Purchaser shall share equally the fees and disbursements of the Deciding Firm.
(f) Except for the Contract Work, the provisions of the GS Lease
shall govern the respective responsibilities of the parties (in their capacities
as lessee and lessor) for maintenance and repair of the Premises, including the
curtain walls of the Building, after the Closing.
(g) This Section 10.8 shall survive the Closing.
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<PAGE> 1
Exhibit 10.2
LEASE
between
THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION)
"Landlord"
and
THE GOLDMAN SACHS GROUP, L.P.
"Tenant"
April 5, 1994
<PAGE> 2
Lease
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C> <C>
ARTICLE 1 Premises, Term and Fixed Rent ..................................................................1
ARTICLE 2 Use of Premises ................................................................................3
ARTICLE 3 Escalations ....................................................................................6
ARTICLE 4 Delivery of Premises; Landlord's Work .........................................................31
ARTICLE 5 Subordination, Non-Disturbance and
Attornment ..................................................................................33
ARTICLE 6 Quiet Enjoyment ...............................................................................37
ARTICLE 7 Assignment, Subletting and Mortgaging .........................................................37
ARTICLE 8 Compliance with Laws ..........................................................................61
ARTICLE 9 Insurance .....................................................................................66
ARTICLE 10 Rules and Regulations..........................................................................69
ARTICLE 11 Alterations....................................................................................70
ARTICLE 12 Tenant's Improvements and Tenant's Property....................................................78
ARTICLE 13 Repairs and Maintenance........................................................................80
ARTICLE 14 Electric Energy................................................................................83
ARTICLE 15 Landlord's Services............................................................................92
ARTICLE 16 Access and Name of Building...................................................................103
ARTICLE 17 Partnership Tenant............................................................................114
ARTICLE 18 Indemnification and Non-Liability.............................................................115
ARTICLE 19 Damage or Destruction.........................................................................117
ARTICLE 20 Eminent Domain................................................................................122
ARTICLE 21 Surrender.....................................................................................124
ARTICLE 22 Conditions of Limitation......................................................................124
ARTICLE 23 Reentry by Landlord...........................................................................127
ARTICLE 24 Damages.......................................................................................128
ARTICLE 25 Affirmative Waivers...........................................................................130
ARTICLE 26 No Waivers....................................................................................131
ARTICLE 27 Curing Tenant's Defaults......................................................................131
ARTICLE 28 Broker........................................................................................132
ARTICLE 29 Notices.......................................................................................132
ARTICLE 30 Estoppel Certificates.........................................................................133
ARTICLE 31 Definitions...................................................................................133
ARTICLE 32 No Representations by Landlord................................................................138
</TABLE>
-i-
<PAGE> 3
<TABLE>
<CAPTION>
<S> <C> <C>
ARTICLE 33 Untenantability...............................................................................138
ARTICLE 34 Holdover......................................................................................138
ARTICLE 35 Miscellaneous Provisions and Definitions......................................................139
ARTICLE 36 Parking.......................................................................................145
ARTICLE 37 Tenant's Termination Right....................................................................147
ARTICLE 38 Renewal Terms.................................................................................154
ARTICLE 39 Definition of Landlord; Condominium
Provisions.........................................................................162
ARTICLE 40 Arbitration...................................................................................164
ARTICLE 41 Structural Work and Exterior Improvements.....................................................165
ARTICLE 42 47th Floor Space..............................................................................185
</TABLE>
-ii-
<PAGE> 4
SCHEDULES AND EXHIBITS
<TABLE>
<CAPTION>
<S> <C>
Schedule A Fixed Rent
Exhibit A Land
Exhibit B List of Units of Condominium
Exhibit C-1 Floor Plan of 41st Floor
Exhibit C-2 Floor Plan of 42nd Floor
Exhibit C-3 Floor Plan of 43rd Floor
Exhibit C-4 Floor Plan of 44th Floor
Exhibit C-5 Floor Plan of 45th Floor
Exhibit C-6 Floor Plan of 46th Floor
Exhibit C-7 Floor Plan of 48th Floor
Exhibit C-8 Floor Plan of 49th Floor
Exhibit C-9 Floor Plan of 50th Floor
Exhibit D Rentable Area of Building and Each Floor
Exhibit E Landlord's Work
Exhibit F-1 Form of Non-Disturbance Agreement for
Underlying Leases
Exhibit F-2 Form of Non-Disturbance Agreement for
Mortgages
Exhibit G Form of Assumption Agreement
Exhibit H Rules and Regulations
Exhibit I List of Contractors Approved for Initial
Alterations
Exhibit J Alteration Rules and Regulations
Exhibit K HVAC Specifications
Exhibit L Cleaning Specifications
Exhibit M-1 PSI Dedicated Lobby
Exhibit M-2 Bank X Elevator Lobby and Bank X Concourse
Elevator
Exhibit M-3 Location of Lobby Partitions, Security Desk
and Podium
Exhibit N Building's Certificate of Occupancy
Exhibit O-1 Form of Landlord's Consent to Assignments
Exhibit O-2 Form of Landlord's Consent to Subleases
Exhibit P Permitted Location of Unisex Lavatories (Each
Floor)
Exhibit Q Acknowledged ACM Areas
Exhibit R Switchgear Room (Containing Designated 20th
Floor Electrical Panels)
Exhibit S Primary Landlord Conduit Areas
Exhibit T-1 Stairwell B Enclosure Location
Exhibit T-2 Stairwell E Enclosure Location
Exhibit T-3 Designated Fire Stairwells
Exhibit U Map of Possible Area of Qualified Relocation
Premises
Exhibit V-1 Specifications for Chilled Water Meter
Exhibit V-2 Specifications for Steam Meter
Exhibit W Lease Amendments and Modifications; Re: GSAM
Exhibit X-1 Tenant's Penthouse Roof Area
Exhibit X-2 Building Penthouse
Exhibit X-3 Ancillary Telecommunications Roof Area
Exhibit X-4 Tenant's Fuel Tank Area
Exhibit X-5 Tenant's 20th Floor Electrical Power Areas
Exhibit X-6 Structural Work Preliminary Plans
Exhibit X-7 Penthouse Work Preliminary Plans
Exhibit X-8 Noise and Vibration Specification
Exhibit X-9 Description of Tenant's UPS Units
Exhibit X-10 Fire Tower
Exhibit X-11 Designated Hot Decks
Exhibit X-12 Building's Freight Elevator Lobby
Exhibit X-13 Specifications for 50th Floor Pipe Relocation
Work
Exhibit Y Floor Plan of 47th Floor (47th Floor Space)
Exhibit Z Disabled Person Access Procedures
</TABLE>
-iii-
<PAGE> 5
LEASE, dated April 5, 1994, between THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION), incorporated under the laws of the United States of
America, having an office at 4 Chase MetroTech Center, 17th Floor, Brooklyn, New
York 11245, Attention: Vice President (herein called "LANDLORD") and THE GOLDMAN
SACHS GROUP, L.P., a Delaware limited partnership, having its principal business
address at 85 Broad Street, New York, New York 10004, Attention: General
Services Department (herein called "TENANT").
W I T N E S S E T H:
ARTICLE 1
Premises, Term and Fixed Rent
1.01. Landlord hereby leases to Tenant, and Tenant hereby
hires from Landlord, upon and subject to the terms, covenants, provisions and
conditions of this lease, the premises described in Section 1.03, which premises
are located in the building known as One New York Plaza in the City, County and
State of New York (herein called the "BUILDING"), which Building is located on
the land described in Exhibit A attached hereto and made a part hereof (herein
called the "LAND").
1.02. As of March 4, 1993, Landlord, as the then sole fee
simple owner of the Building and the Land, submitted the Building and the Land
to condominium ownership in accordance with the Condominium Act (as defined in
Article 31 hereof) by recording the Condominium Declaration (as defined in
Article 31 hereof), and thereby created the condominium known as The One New
York Plaza Condominium (the "CONDOMINIUM"), which Condominium consists of the
units described on Exhibit B annexed hereto and made a part hereof (each, a
"UNIT", and collectively, the "UNITS"), and which Condominium is governed by the
Common Owner and/or the Board, as such terms are defined in and as more
particularly set forth in the Condominium Declaration; such Board and Common
Owner being herein referred to collectively as the "CONDOMINIUM BOARD").
1.03. The premises leased to Tenant hereunder (herein called
the "PREMISES") consist of those portions of the forty-first (41st),
forty-second (42nd), forty-third (43rd), forty-fourth (44th), forty-fifth
(45th), forty-sixth (46th), forty-eighth (48th), forty-ninth (49th) and
fiftieth (50th) floors of the Building that are shown hatched on the floor plans
attached hereto as Exhibit C-1 through Exhibit C-9, respectively.
1.04. The term of this lease (a) shall commence on the date
hereof (the "COMMENCEMENT DATE"), and (b) shall end at 11:59 p.m. on last day of
the month in which occurs the tenth (10th) anniversary of the day preceding the
Fixed Rent Commencement Date (as hereinafter defined) (such day being herein
called the "INITIAL EXPIRATION DATE", and such day, as the same may be extended
pursuant to Article 38 hereof, being herein called the "EXPIRATION DATE"), or on
such earlier date upon which the term of this lease shall expire or be canceled
or terminated pursuant to any of the conditions or covenants of this lease or
pursuant to law. As used in this lease, the term "THEN CURRENT EXPIRATION DATE"
shall mean, as of any date, the last day of the last Renewal Term the Renewal
Option with respect to which has, as of such date, been finally exercised or if,
as of such date, no Renewal Option has been finally exercised, the Initial
Expiration Date. As used above, the phrase "finally exercised" shall mean, with
respect to any Renewal Option, that the same has been duly exercised by Tenant,
that any right of Landlord to render such exercise void, and any right of Tenant
to rescind such exercise, shall have lapsed or been waived in writing.
<PAGE> 6
1.05. The rents shall be and consist of (1) fixed rent (herein
called "FIXED RENT"), which shall be payable for the Premises at the per annum
rates therefor set forth on Schedule A annexed hereto, and which, subject to the
provisions of Section 1.06 below, shall be payable commencing on the
Commencement Date and thereafter in equal monthly installments in advance on the
first day of each and every calendar month during the term of this lease, and
(2) additional rent (herein called "ADDITIONAL CHARGES") consisting of Tax
Payments (as hereinafter defined), Operating Payments (as hereinafter defined)
and all other sums of money as shall become due from and payable by Tenant to
Landlord hereunder; all to be paid in lawful money of the United States to
Landlord at its office, or such other place, or to Landlord's agent and at such
other place, as Landlord shall designate by written notice to Tenant.
1.06. The "FIXED RENT COMMENCEMENT DATE" shall be September
21, 1994. Notwithstanding anything to the contrary contained in Section 1.05
above, (i) there shall be a complete abatement of the Fixed Rent set forth on
Schedule A attached hereto for the period commencing on the Commencement Date
and ending on the day preceding the Fixed Rent Commencement Date, both days
inclusive, and (ii) such Fixed Rent for the month in which the Fixed Rent
Commencement Date occurs shall be a prorated amount, determined on a per diem
basis, and shall be payable on the Fixed Rent Commencement Date. Furthermore,
there shall be an additional abatement of the Fixed Rent payable with respect to
the Premises located on the forty-third (43rd) floor of the Building only
(determined on a pro-rata rentable square foot basis between the Premises
located on such forty-third (43rd) floor of the Building and the entirety of the
Initially Demised Premises (as defined in Article 31 hereof) based solely upon
the Fixed Rent as set forth on Schedule A attached hereto, i.e., without regard
to any increase in such Fixed Rent pursuant to the provisions of Article 42
hereof and the operation of Section 1.11 hereof)) for the period commencing on
the Fixed Rent Commencement Date and ending on the day preceding the first (1st)
anniversary of the Fixed Rent Commencement Date, both days inclusive.
1.07. Tenant covenants and agrees to pay Fixed Rent and
Additional Charges as follows: Tenant shall pay Fixed Rent and Recurring
Additional Charges (as hereinafter defined) without notice or demand therefor.
Tenant shall pay all other Additional Charges at such time or times as may be
provided for herein, or, if no due date is specified, within thirty (30) days of
notice or demand therefor. Tenant shall pay Fixed Rent and all Additional
Charges without any abatement, deduction or setoff for any reason whatsoever,
except as may be expressly provided in this lease. Unless otherwise instructed
by Landlord, Fixed Rent and Recurring Additional Charges shall be paid by wire
transfer of immediately available federal funds to Landlord or its designee, to
such account(s) as may be designated in written directions delivered by Landlord
to Tenant from time to time, and in the absence of any such instructions, in the
same manner as hereinafter provided for other Additional Charges. All other
Additional Charges shall be paid by good and sufficient check (subject to
collection) drawn on a bank which is a member of the Federal Reserve system or a
successor thereto. As used herein, the term "RECURRING ADDITIONAL CHARGES" shall
mean (i) those Additional Charges payable periodically by Tenant in accordance
with the provisions of Section 3.02(b) hereof, (ii) those Additional Charges
payable monthly by Tenant in accordance with the provisions of Section 3.03(b)
hereof, and (iii) those Additional Charges payable monthly by Tenant in
accordance with the provisions of Section 41.07 hereof.
1.08. No payment by Tenant or receipt or acceptance by
Landlord of a lesser amount than the correct Fixed Rent or Additional Charges
shall be deemed to be other than a payment on
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<PAGE> 7
account, nor shall any endorsement or statement on any check or any letter
accompanying any check or payment be deemed an accord and satisfaction, and
Landlord may accept such check or payment without prejudice to Landlord's right
to recover the balance or pursue any other remedy in this lease or at law
provided.
1.09. If any of the Fixed Rent or Additional Charges payable
under the terms and provisions of this lease shall be or become uncollectible,
reduced or required to be refunded because of any legal rent restrictions
enacted by a governmental authority, Tenant (without any additional expense to
Tenant, other than expense which is de minimis or which Landlord has agreed to
pay) shall enter into such agreement(s) and take such other steps as Landlord
may request and as may be legally permissible to permit Landlord to collect the
maximum rents which from time to time during the continuance of such legal rent
restriction may be legally permissible (but not in excess of the amounts nor
earlier than the due dates reserved therefor under this lease). Upon the
termination of such legal rent restriction, (a) the Fixed Rent and/or Additional
Charges shall become and thereafter be payable in accordance with the amounts
reserved herein for the periods following such termination, and (b) Tenant shall
pay to Landlord within thirty (30) days after being billed, to the maximum
extent legally permissible, an amount equal to (i) the Fixed Rent and/or
Additional Charges which would have been paid pursuant to this lease but for
such legal rent restriction less (ii) the rents paid by Tenant during the period
such legal rent restriction was in effect. The rights and obligations set forth
in this Section 1.09 shall survive the expiration or termination of this lease
for a period of three (3) years following such expiration or termination.
1.10. Additional Charges shall be deemed to be rent and
Tenant's failure to pay Additional Charges shall be considered a failure to pay
rent hereunder and Landlord shall be entitled to all rights and remedies
provided herein or by law in connection therewith.
1.11. For all purposes of this lease, the Fixed Rent payable
with respect to any particular portion of the Premises shall, absent any express
provisions to the contrary (such as the last sentence of Section 1.06 hereof),
be determined on a pro-rata rentable square foot basis between such portion of
the Premises and the entirety of the Premises.
ARTICLE 2
Use of Premises
2.01. Tenant shall have the right to use and occupy the
Premises only as follows: (i) primarily, for general and executive office use,
and, to the extent incidental to such general and executive office use, for
computer and data processing, photocopying, kitchenette (including microwave and
dishwasher), pantry and vending machine areas (the uses described in this clause
(i) being herein called the "PRIMARY USE"); and (ii) secondarily, for (x)
printing, (y) cooking, cafeteria and dining facilities (whether food and
beverages be provided with or without charge), and health and exercise
facilities (whether the same be available with or without charge), all for use
solely by Tenant's employees and business invitees, and (z) other uses
incidental to the Primary Use which are consistent with a first-class office
building (the uses described in this clause (ii) being herein called the
"SECONDARY USES").
2.02. (a) Landlord, throughout the term of this lease, shall
maintain in effect a Certificate of Occupancy for the Building (either temporary
or permanent) which, subject to the completion by Tenant of its Initial
Alterations (as such term
-3-
<PAGE> 8
is defined in Article 11 hereof) in accordance with this lease, will (I) permit
the use of the Premises by Tenant for the Primary Use at occupancy levels, for
each portion thereof, which are not less than the occupancy levels therefor set
forth in the existing Certificate of Occupancy for the Building, a copy of which
is attached hereto as Exhibit N (herein called the "EXISTING CERTIFICATE OF
OCCUPANCY"), and (II) permit the floors of the Premises to be loaded with a load
at least equal to the permitted floor load set forth on the Existing Certificate
of Occupancy; provided, however that Landlord shall have no liability for a
breach of the foregoing if such breach results from any act or omission of
Tenant or any Tenant Party (as hereinafter defined), which act or omission
violates any provision of this lease.
(b) If any governmental license or permit (other
than a Certificate of Occupancy for the Building permitting the Premises to be
used for the Primary Use at the occupancy levels and with the floor loads
referred to in Section 2.02(a) above) shall be required for the proper and
lawful conduct of business in the Premises or any part thereof and if the
failure to have such license or permit would affect the Real Property, Landlord
or any occupant of the Building, then Tenant, at its expense, shall duly procure
and thereafter maintain such license or permit and, upon request, deliver a copy
thereof to Landlord. Additionally, if Tenant shall desire to use the Premises,
or any portion thereof, for a use other than the Primary Use at the occupancy
levels and with the floor loads referred to in Section 2.02(a) above, and such
use shall require a modification or amendment of the then existing Certificate
of Occupancy for the Building, then, prior to so using the Premises or such
portion thereof, Tenant, at its expense, shall procure any such required
modification or amendment. The foregoing provisions are not intended to be
deemed Landlord's consent to any Alterations or to a use of the Premises not
otherwise permitted hereunder. Landlord shall execute (and provide any readily
accessible information known by Landlord for) any applications and similar
documents reasonably required in connection with obtaining any licenses or
permits or any amendments or modifications of any Certificate of Occupancy for
the Building required by the foregoing provisions of this Section 2.02(b),
provided that such documents are in proper form. Tenant hereby agrees that it
shall (i) reimburse Landlord all Landlord's out-of-pocket expenses incurred in
connection with Tenant's obtaining of any such license, permit, amendment or
modification (including without limitation those incurred in connection with
Landlord's execution of any applications or similar documents, or its provision
of information, as provided in the preceding sentence), and (ii) indemnify and
hold harmless Landlord against any and all liabilities which Landlord may incur
by reason of its execution of any applications or similar documents, or its
provision of information, as provided in the preceding sentence; provided,
however, that neither such reimbursement nor such indemnity shall include any
such expenses or liabilities to the extent that (A) Landlord is responsible
therefor under any other provision of this lease, (B) the same would be, or
would have been, discharged, satisfied or avoided by Landlord's performance of
its obligations under this lease, or (C) the same arise out of any inaccuracy in
any information provided by Landlord.
(c) In connection with the Initial
Alterations, Landlord has heretofore delivered to Tenant a Form ACP-5 executed
by Landlord's hygienist with respect to the portion of the Premises located on
each Premises Floor (as hereinafter defined). In connection with any Alterations
made subsequent to the Initial Alterations, Landlord, reasonably promptly after
a request therefor, shall deliver to Tenant, with respect to each portion of the
Premises in respect of which such Alterations shall be performed, a Form ACP-5
executed by Landlord's hygienist and/or any other form or documentation which
evidences or confirms the absence of asbestos from such
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portion(s) of the Premises, provided that (i) such other form or documentation
is then required by any governmental agency as a condition to the performance of
such Alterations, and (ii) the matters evidenced or confirmed by such other form
or documentation are not greater in scope then the matters evidenced or
confirmed by the initial Form ACP-5 delivered by Landlord with respect to such
portion(s) of the Premises. In no event shall the provisions of this Section
2.02(c) require Landlord to perform any work in the Premises or otherwise.
2.03. Tenant shall not use or occupy the Premises or the
Building, or suffer or permit anyone to use or occupy the Premises, in any
manner which would violate the Certificate of Occupancy for the Building (except
to the extent that such violation is attributable to Landlord's failure to
comply with its obligations under Section 2.02(a) above). Tenant shall not at
any time use or occupy the Premises or the Building, or suffer or permit anyone
to use or occupy the Premises, in any manner, or do anything in the Premises or
the Building, or suffer or permit anything to be done in, brought into or kept
on the Premises, which (a) impairs the proper and economic maintenance,
operation and repair of the Building and/or its equipment, facilities or systems
(except to the extent that such impairment arises out of the use of the Premises
for the Primary Use in accordance with the provisions of this lease), (b)
constitutes a nuisance, public or private, (c) makes unobtainable from reputable
insurance companies authorized to do business in New York State all risk
property insurance, or liability, elevator, boiler or other insurance at
standard rates, or (d) discharges objectionable fumes, vapors or odors into the
Building's flues or vents or otherwise, except to the extent such fumes, vapors
or odors are discharged into flues or vents designed for such purposes and which
Tenant, pursuant to the terms of this lease, is permitted to use.
2.04. Tenant shall not use, or suffer or permit anyone to use,
the Premises or any part thereof, by or for (i) an agency, department or bureau
of the United States Government, (ii) any state or municipality within the
United States or any foreign government, or any political subdivision of any of
them, (iii) an employment or travel agency (other than an executive search firm
and other than an employment or travel agency primarily serving Tenant's
employees), (iv) any charitable or religious organization or union (except that,
so long as Original Tenant is in occupancy of more than one-half (1/2) of the
rentable area of the Premises, Original Tenant may sublease portions of the
Premises to one or more Qualified Charities (as hereinafter defined), provided,
that each such sublease shall be permitted under Article 7, no such sublease
shall provide for any sublease rent or other consideration to be paid to Tenant,
and that all such subleases, in the aggregate, do not demise an area greater
than 21,500 rentable square feet), (v) a school or classroom (it being agreed
that this clause shall not prohibit Tenant from using discrete portions of the
Premises for training, lectures or other classroom purposes for Tenant's
employees and/or customers in connection with Tenant's business, it being
understood that all such uses shall be considered Secondary Uses), (vi) medical
or psychiatric offices (it being agreed that this clause shall not prohibit
Tenant from employing doctors and/or nurses at the Premises for Tenant's
employees), (vii) conduct of an auction (other than in the ordinary course of
Tenant's business), (viii) gambling activities, (ix) the conduct of obscene,
pornographic or similarly disreputable activities, (x) an automated teller
machine or similar facility (except that Tenant, during any period that there is
no Qualified ATM (as hereinafter defined) located on the Real Property, shall
have the right to allow an automated teller machine or similar facility to be
located in the Premises for use solely by Tenant's employees, provided that the
same is removed promptly after the end of any such period), (xi) a restaurant
and/or bar and/or the sale of
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confectionery and/or soda and/or beverages and/or sandwiches and/or ice cream
and/or baked goods (the foregoing shall not prohibit the use of portions of the
Premises as kitchenette, pantry or vending machine areas pursuant to Section
2.01(i) or for the Secondary Uses described in Section 2.01(ii)(y) hereof),
(xii) the business of photographic reproductions and/or offset printing (except
that Tenant may use portions of the Premises for photographic reproductions
and/or offset printing in connection with, either directly or indirectly, its
own business and/or activities), (xiii) the retail offices or the retail
activities of a bank, trust company, safe deposit business, savings and loan
association, or loan company, (xiv) the retail sale of traveler's checks or
foreign exchange, or (xv) a retail stock brokerage office or for retail stock
brokerage purposes (except that Original Tenant and its Affiliates may use
portions of the Premises as a retail stock brokerage office or for retail stock
brokerage purposes, provided, that at no time shall the portions of the Premises
so used exceed, in the aggregate, 43,000 rentable square feet). For purposes of
this Section 2.04, (I) the term "QUALIFIED CHARITY" shall mean any charitable
organization (x) which has no political, religious or union affiliation (or
which has a religious affiliation, but no religious purpose), and (y) with which
either Original Tenant or one or more of the partners or principals of Original
Tenant are actively involved, (II) the term "QUALIFIED ATM" shall mean any
automated teller machine or similar facility operated and maintained on the Real
Property by Landlord or by any person authorized by Landlord, and which is
available for use by Tenant's employees, and (III) the term "RETAIL" shall refer
to a business whose primary patronage are customers visiting its offices in
person.
ARTICLE 3
Escalations
3.01. The terms defined below shall for the purposes of this
lease have the meanings herein specified:
(a) "OPERATING STATEMENT" shall mean, with
respect to any Operating Year, a document containing (i) a reasonably itemized
statement of Operating Expenses for such Operating Year prepared by an
independent certified public accountant, and (ii) with respect to any Operating
Year after the Base Operating Year, a statement, in reasonable detail, of the
Operating Payment payable by Tenant for such Operating Year.
(b) "TAX STATEMENT" shall mean a document
setting forth, in reasonable detail, the Tax Payment payable by Tenant for a
specified Tax Year pursuant to this Article 3.
(c) "OPERATING EXPENSES" shall mean, without
duplication, all expenses paid or incurred by, or on behalf of, Landlord or any
other Condominium Party (whether directly or indirectly by way of reimbursement
through common charges or otherwise) in respect of the repair, replacement,
maintenance, operation and/or security of the Real Property (as hereinafter
defined), determined on an accrual basis and otherwise in accordance with
generally accepted accounting principles (except to the extent that any of the
following provisions of this Section 3.01(c) are inconsistent with generally
accepted accounting principles), including, without limitation, the following:
(A) salaries, wages, medical, surgical, insurance
(including, without limitation, group life and disability insurance), union and
general welfare benefits, pension payments, severance payments, sick day
payments and other fringe benefits of, and payroll taxes, worker's compensation,
uniforms and similar related expenses (whether direct or
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indirect) for, employees engaged in such repair, replacement, maintenance,
operation and/or security (all of the foregoing being herein called "LABOR
COSTS"); provided, however, that if any such employees are not engaged
exclusively in such repair, replacement, maintenance, operation and/or security,
then the Labor Costs of or for such employees shall be included in Operating
Expenses on a pro-rated basis, based upon the proportion of such employees'
total work time that is spent engaged in such repair, replacement, maintenance,
operation and/or security;
(B) the cost of fuel, gas, steam,
electricity, heat, ventilation, air-conditioning and chilled or condenser water,
water, sewer and other utilities, together with any taxes and surcharges on, and
fees paid to third parties in connection with the calculation and billing of,
such utilities;
(C) the cost of painting and/or decorating
all areas of the Real Property, excluding, however, any leasable areas of the
Building (the phrase "LEASABLE AREAS" of the Building shall, at any time, mean
all areas of the Building that are then leased or available for lease to
tenants, whether or not the same are then being marketed, and shall include any
space occupied or held for occupancy by Landlord or any Affiliate of Landlord,
other than as Building Offices (as hereinafter defined));
(D) the cost of casualty, liability,
fidelity, rent and all other insurance regarding the Real Property and the
repair, replacement, maintenance, operation and/or security thereof, to the
extent the such types of insurance are customarily carried in respect of Similar
Buildings (as defined in Article 31 hereof);
(E) the cost of all supplies, tools,
materials and equipment, whether by purchase or rental, used in the repair,
replacement, maintenance, operation and/or security of the Real Property, and
any sales and other taxes thereon;
(F) all office expenses, such as telephone,
utility, stationery and similar expenses incurred in connection with any
Building office or other premises in the Real Property utilized by employees
and/or contractors engaged in the repair, replacement, maintenance, operation
and/or security of the Real Property (collectively, "BUILDING OFFICES") (it
being agreed that Operating Expenses shall not include the rental value of any
Building Offices);
(G) the cost of cleaning, janitorial and
security services, including, without limitation, glass cleaning, snow and ice
removal and garbage and waste collection and/or disposal;
(H) the cost of maintaining all existing
interior and exterior landscaping, but excluding the initial cost of any
additional landscaping;
(I) the cost of alterations, additions,
improvements, replacements and repairs made with respect to the Real Property
and of tools and equipment acquired for use in the operation, maintenance or
repair of the Real Property; provided, however, that (i) no Capital Costs (as
hereinafter defined) incurred in or prior to the Base Operating Year shall be
included in Operating Expenses for the year of incurrence or any subsequent
year, and (ii) Capital Costs incurred subsequent to the Base Operating Year
shall be included in Operating Expenses only:
(1) if, and to the extent that, the
alteration, addition, improvement, replacement, repair,
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equipment or tool in question (a) is required to be made by a
Subsequent Legal Requirement (as hereinafter defined) (it being agreed
that an alteration, addition, improvement, replacement, repair,
equipment or tool shall not be deemed required to be made by a
Subsequent Legal Requirement to the extent that such alteration,
addition, improvement, replacement, repair, equipment or tool is also
required to be made by an Existing Legal Requirement (as hereinafter
defined)), and (b) if made to any leasable area of the Building (or to
the passenger elevator lobby or any common corridors on any
multi-tenant floor of the Building), would not, if such leasable area
(or such lobby or corridors on a multi-tenant floor, as the case may
be), were demised by this lease, be the responsibility of Tenant under
Article 8 hereof; and, in such event, for each month during the useful
life of the alteration, addition, improvement, replacement, repair,
equipment or tool in question there shall be included in Operating
Expenses an amount equal to the combined constant monthly principal and
interest payment which would be payable on a loan (i) having an
original principal amount equal to the Capital Costs of such
alteration, addition, improvement, replacement, repair, equipment or
tool, (ii) bearing interest at the Capital Cost Rate (as hereinafter
defined) applicable to such Capital Costs, and (iii) providing for a
combined constant monthly payment of principal and interest sufficient
to fully-liquidate such loan over a period of time equal in length to
the length of such useful life (except, that (x) if such useful life
shall not commence on the first day of a month, then the amount so
included in the month in which such useful life shall commence shall be
computed on a prorata basis, and (y) if such useful life shall not end
on the last day of a month, then the amount so included in the month in
which such useful life shall end shall be computed on a prorata basis);
or
(2) if the alteration, addition,
improvement, replacement, repair, equipment or tool in question is such
that, at the time made, Landlord reasonably estimates that the same
will result in an avoidance of or a savings in Operating Expenses over
the useful life of such alteration, addition, improvement, replacement,
repair, equipment or tool, then (a) Landlord shall prepare a written
schedule setting forth Landlord's reasonable estimate of the Operating
Expenses avoided or saved for each Operating Year during the Cost
Savings Period for such alteration, addition, improvement, replacement,
repair, equipment or tool as a result of the same, and shall make the
same a part of the Operating Expense Records (or otherwise made
available to Tenant) on or prior to the date that Landlord delivers the
first Operating Statement reflecting Operating Expenses pursuant to
this Section 3.01(c)(I)(2) resulting from such alteration, addition,
improvement, replacement, repair, equipment or tool (which written
schedule, in respect of any alteration, addition, improvement,
replacement, repair, equipment or tool, is herein called the "ESTIMATED
COST SAVINGS SCHEDULE" and Landlord's estimate of the Operating
Expenses so avoided or saved for each Operating Year as set forth on
any such schedule is herein called an "ESTIMATED ANNUAL SAVINGS
AMOUNT"), and (b) there shall be included in Operating Expenses for
each month during the useful life of such alteration, addition,
improvement, replacement, repair, equipment or tool an amount equal to
the combined constant monthly principal and interest payment which
would be payable on a loan (i) having an original principal amount
equal to the Capital Costs of such alteration, addition, improvement,
replacement, repair, equipment or tool, (ii) bearing interest at the
Capital Cost Rate (as hereinafter defined) applicable to such Capital
Costs, and (iii) providing for a combined constant monthly
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payment of principal and interest sufficient to fully-liquidate such
loan over a period of time equal in length to the length of such useful
life (except, that (x) if such useful life shall not commence on the
first day of a month, then the amount so included in the month in which
such useful life shall commence shall be computed on a prorata basis,
and (y) if such useful life shall not end on the last day of a month,
then the amount so included in the month in which such useful life
shall end shall be computed on a prorata basis); provided, however,
that if, with respect to any alteration, addition, improvement,
replacement, repair, equipment or tool, (X) the present value of all
the monthly amounts which, absent this proviso, would be included in
Operating Expenses during the Cost Savings Period for such alteration,
addition, improvement, replacement, repair, equipment or tool pursuant
to the foregoing provisions of this Section 3.01(c)(I)(2) (which
present value shall be determined as of the first day of the such Cost
Savings Period, using a discount rate of 10%), exceeds (Y) the present
value of all the Estimated Annual Savings Amounts on the Estimated Cost
Savings Schedule in respect of such alteration, addition, improvement,
replacement, repair, equipment or tool (which present value shall be
determined as of the first day of such Cost Savings Period, using a
discount rate of 10%, and assuming that the Estimated Annual Savings
Amount for any Operating Year shall be payable in equal monthly
installments during such Operating Year, or during the portion thereof
within the Cost Savings Period) (such excess, in respect of any
alteration, addition, improvement, replacement, repair, equipment or
tool, being herein called the "SECTION 3.01(c)(I)(2) EXCESS"), then (i)
such monthly amounts referred to in subclause (X) above shall not be
included in Operating Expenses as hereinabove provided pursuant to this
Section 3.01(c)(I)(2), and (ii) in lieu thereof, the following
provisions shall apply:
(A) for each Operating Year
during the Cost Savings Period for the alteration, addition,
improvement, replacement, repair, equipment or tool in
question, there shall be included in Operating Expenses an
amount equal to the Estimated Annual Savings Amount for such
Operating Year as set forth on the Estimated Cost Savings
Schedule in respect of such alteration, addition, improvement,
replacement, repair, equipment or tool; and
(B) if the Cost Savings
Period shall end prior to the Expiration Date, then, for each
Operating Year after the Cost Savings Period for the
alteration, addition, improvement, replacement, repair,
equipment or tool in question, there shall be included in
Operating Expenses an amount, if any, equal to the lesser of
(i) the excess, if any, of (x) the Section 3.01(c)(I)(2)
Excess in respect of such alteration, addition, improvement,
replacement, repair, equipment or tool, over (y) all amounts
included in Operating Expenses for prior Operating Years
pursuant to this subclause (B) in respect of such alteration,
addition, improvement, replacement, repair, equipment or tool,
and (ii) Landlord's reasonable estimate of the Operating
Expenses avoided or saved for such Operating Year as a result
of such alteration, addition, improvement, replacement,
repair, equipment or tool;
it being agreed that, as used herein, (A) the term "CAPITAL COSTS" shall mean
the costs of any alteration, addition, improvement, replacement, repair,
equipment or tool the costs of which, under generally accepted accounting
principles consistently applied, are required to be capitalized (it being
understood that if, under generally accepted accounting
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principles, the issue of whether, or the extent to which, any such costs are
required to be capitalized shall depend upon whether such costs are deemed
"material", then the issue of whether such costs are deemed "material" shall be
determined assuming the Real Property were the sole asset of Landlord), (B) the
term "SUBSEQUENT LEGAL REQUIREMENT" shall mean (i) any statute or governmental
rule or regulation in implementation thereof which is adopted after the date
hereof or (ii) any amendment to or modification of a statute or governmental
rule or regulation in implementation thereof, which amendment or modification is
adopted after the date hereof (and, without limiting the generality of the
foregoing, such term shall exclude any Existing Legal Requirement taking effect
after the date hereof), (C) the term "EXISTING LEGAL REQUIREMENT" shall mean any
statute or governmental rule or regulation in implementation thereof which is
adopted on or prior to the date hereof or (ii) any amendment to or modification
of a statute or governmental rule or regulation in implementation thereof, which
amendment or modification is adopted prior to the date hereof, (D) the term
"USEFUL LIFE", of any alteration, addition, improvement, replacement, repair,
equipment or tool, shall mean the useful life thereof determined in accordance
with generally accepted accounting principles, and (E) the term "COST SAVINGS
PERIOD", for any alteration, addition, improvement, replacement, repair,
equipment or tool, shall mean the period of the useful life thereof, provided,
however, that such period, in all events, shall end on the Then Current
Expiration Date (as of the date that Landlord shall have made the Estimated Cost
Savings Schedule, in respect of such alteration, addition, improvement,
replacement, repair, equipment or tool, a part of the Operating Expense
Records);
(J) management fees; it being agreed that
(i) for the Base Operating Year, the amount included in Operating Expenses
pursuant to this Section 3.01(c)(J) shall be conclusively deemed to be $480,000
(and there shall not be included in Operating Expenses for the Base Operating
Year any actual management fees or any cost in respect of services customarily
provided by a managing agent as part of its standard and customary management
fee, i.e., without separate or additional charge, such as, by way of example,
bookkeeping), and (ii) for any subsequent Operating Year, or portion thereof,
during which no managing agent is employed in respect of the Real Property, the
amount included in Operating Expenses pursuant to this Section 3.01(c)(J) shall
be an amount equal to the then standard and customary management fee for a
Similar Building (and there shall not be included in Operating Expenses for such
Operating Year, or, as the case may be, the applicable portion thereof, any cost
in respect of services customarily provided by a managing agent as part of its
standard and customary management fee, i.e., without separate or additional
charge, such as, by way of example, bookkeeping);
(K) all reasonable costs and expenses of
legal, accounting and other professional services incurred with respect to the
repair, replacement, maintenance, operation and/or security of the Real
Property;
(L) vault taxes, sewer rents, water frontage
charges; and
(M) assessments, common charges or the like
imposed by the Condominium Board to the extent that the same are imposed to pay
for (or as reimbursement for) costs which constitute Operating Expenses.
Notwithstanding anything to the contrary
contained in the foregoing provisions of this subsection (c), the term
"OPERATING EXPENSES", as used and defined under this subsection (c), shall not
include the following items:
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(1) depreciation and amortization (except as provided above in
this subsection (c));
(2) interest on and amortization of debts (except as provided
above in this subsection (c));
(3) the cost of tenant improvements, installations and
decorations made in connection with preparing space for tenant(s) or renovating
space for an existing tenant, including any permit, license and inspection fees
and any contribution by Landlord to the cost of tenant improvements,
installations and decorations;
(4) leasing and brokerage commissions and similar fees;
(5) financing or refinancing costs;
(6) the cost of any work or service (or level or amount
thereof) provided to any tenant(s) of the Building (including Tenant) which is
in excess of the work or service (or level or amount thereof) which Landlord is
required by this lease to furnish to Tenant without separate or additional
charge (including without limitation the costs of all overtime HVAC,
supplemental HVAC, supplemental chilled water, supplemental condenser water,
special or supplemental cleaning, and overtime freight elevator service); it
being agreed, however, that, without limitation, none of the following costs
shall be excluded from Operating Expenses by reason of this clause (6): (i) the
costs of operating, maintaining, repairing and replacing any freight elevator
dedicated to one or more other tenants of the Building (other than the costs of
operating such freight elevator during overtime hours); and (ii) the costs of
operating, maintaining, repairing and replacing any passenger elevators in the
Building (except to the extent such costs are attributable to providing one or
more other tenants of the Building with a greater level of passenger elevator
service (as to number of elevators, determined on a proportional rentable square
foot basis, or hours of operation) than that provided to Tenant under this lease
without a separate or additional charge);
(7) the cost of any electricity consumed in the Premises or
any other leasable areas of the Building (together with any taxes and surcharges
on, and fees paid to third parties in connection with the calculation and
billing of such electricity);
(8) Taxes, as well as franchise, gains, transfer, inheritance,
estate and income taxes, excess profit taxes and capital stock taxes;
(9) interest, fines or penalties resulting from the violation
by Landlord or any tenant of the Building of any laws or requirements of public
authorities;
(10) costs and expenses incurred in connection with procuring
tenants, including lease concessions, landlord contributions and allowances,
lease takeover or rental assumption obligations;
(11) costs resulting from any judgment, settlement or
arbitration award against Landlord and attorneys' fees and disbursements and
other costs incurred in connection with the defense of any claim or action
against Landlord; provided, however, that any portion of such costs, fees and
disbursements (other than any thereof which were awarded as compensation for
bodily or personal injury) which would otherwise be included in and not excluded
from Operating Expenses pursuant to this Section 3.01(c), irrespective of such
liability, shall, notwithstanding the foregoing, constitute an Operating
Expense;
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<PAGE> 16
(12) Labor Costs for personnel above the grade of building
manager;
(13) rent and all other amounts payable under any ground,
overriding or underlying lease of all or any portion of the Real Property;
provided, however, that any sums paid under any such lease in respect of
expenses which would otherwise be included in and not excluded from Operating
Expenses pursuant to this Section 3.01(c) shall not be excluded from Operating
Expenses even though denominated as "rent" under any such lease;
(14) costs incurred for the repair and restoration of the
Building the need for which results from a casualty; provided, however, that
Operating Expenses shall include such costs to the extent of any commercially
reasonable deductible under the applicable insurance policy(ies), it being
agreed that (i) the costs so included in Operating Expenses shall be attributed
to the item(s) of the Landlord Restoration Work (as hereinafter defined) which
have the longest useful life(s) (such useful life(s) being determined in
accordance with generally accepted accounting principles), and (ii) in respect
of each such item, for each month of the useful life of such item (as so
determined) there shall be included in Operating Expenses an amount equal to the
combined constant monthly principal and interest payment which would be payable
on a loan (i) having an original principal amount equal to the cost of such
item, (ii) bearing interest at the Capital Cost Rate (as hereinafter defined)
applicable to such cost, and (iii) providing for a combined constant monthly
payment of principal and interest sufficient to fully-liquidate such loan over a
period of time equal in length to the length of such useful life (except, that
(x) if such useful life shall not commence on the first day of a month, the
amount so included in the month in which such useful life shall commence shall
be computed on a prorata basis, and (y) if such useful life shall not end on the
last day of a month, the amount so included in the month in which such useful
life shall end shall be computed on a prorata basis);
(15) the excess, if any, of (i) any sums paid or incurred
between affiliated parties for goods, services or other items the costs of which
are includable in Operating Expenses over (ii) the sums which would have been
paid or incurred therefor if the same had been furnished by unaffiliated third
parties on a competitive basis;
(16) any compensation paid to clerks, attendants or other
persons in commercial concessions;
(17) advertising and promotional expenditures;
(18) all costs which under generally accepted accounting
principles consistently applied are required to be capitalized (it being
understood that if, under generally accepted accounting principles, the issue of
whether, or the extent to which, any such costs are required to be capitalized
shall depend upon whether such costs are deemed "material", then the issue of
whether such costs are deemed "material" shall be determined assuming the Real
Property were the sole asset of Landlord), except for (i) Capital Costs
includable in Operating Expenses pursuant to Section 3.01(c)(I) above, (ii)
costs includable in Operating Expenses pursuant to Section 3.01(c)(14) above,
and (iii) costs which under generally accepted accounting principles
consistently applied would qualify as deferred expenses (e.g., prepaid charges)
(which deferred expenses shall be includable as and when chargeable in
accordance with generally accepted accounting principles consistently applied);
except, in any case pursuant to this clause (18), if and to the extent
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otherwise excluded from Operating Expenses by any other provision of this
Section 3.01(c);
(19) any charges or penalties resulting from a late payment of
any item of Operating Expenses;
(20) costs incurred in the removal, encapsulation, handling or
other treatment of asbestos;
(21) the costs of purchasing sculptures, paintings and other
works of fine art located within or outside the Building;
(22) any costs related to the Retail Part (as hereinafter
defined) of the Building (provided, however, that Operating Expenses shall
include costs incurred in connection with the portions of the Real Property
(other than leasable areas of the Building) that serve both the Retail Part and
other parts of the Building to the extent the same are otherwise includable in
Operating Expenses);
(23) costs incurred for the repair and restoration of the
Building the need for which results from a condemnation;
(24) costs incurred with respect to a sale of all or any
portion of the Real Property;
(25) legal fees, expenses and disbursements relating (A) to
the enforcement of leases, recovery of possession, collection of rent, (B) to
disputes with tenants or prospective tenants of the Building or real estate
brokers, or (C) to disputes with purchasers or mortgagees or underlying lessors
of the Real Property, (C) to negotiations of leases, contracts of sale or
mortgages or sale or finance documents, or (D) to the defense of any claims for
bodily or personal injury or for any other damages the payment of which would
not constitute Operating Expenses;
(26) costs incurred in the operation and maintenance of the
Building's Parking Garage (as hereinafter defined);
(27) costs relating to withdrawal liability or unfunded
pension liability under the Multi-Employer Pension Plan Act or similar law;
(28) the cost of installing, operating and maintaining any
specialty facility, such as an observatory, broadcasting facilities, luncheon
club, athletic or recreational club, cafeteria or dining facility; provided,
however, that Operating Expenses shall include costs incurred in connection with
the portions of the Real Property (other than the leasable areas of the
Building) that serve both any such specialty facility and other parts of the
Building to the extent the same are otherwise includable in Operating Expenses;
(29) Landlord's general overhead not related to the Building;
and
(30) assessments, common charges or the like imposed by the
Condominium Board to the extent that the same are imposed to pay for (or as
reimbursement for) costs which do not constitute Operating Expenses (it being
agreed that any such assessments, common charges or the like which are paid to
the Condominium Board or otherwise to establish "reserves" for future
expenditures shall not be included in Operating Expenses at the time so paid,
but cost paid from any such reserves shall be Operating Expenses, when incurred,
to the extent such costs constitute Operating Expenses).
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As used in this Section 3.01(c) the term
"tenant" shall include Landlord, and any Affiliate of Landlord, as occupant of
any leasable space in the Building.
If during any relevant period (i) any leasable
area of the Building shall be vacant or unoccupied, and/or (ii) the tenant or
occupant of any space in the Building shall undertake to perform work or
services therein, the cost of which, if the same had been performed by or on
behalf of Landlord, would have been included in Operating Expenses, then, in any
such event(s), the Operating Expenses for such period shall be adjusted to
reflect the Operating Expenses that would have been paid or incurred if
one-hundred (100%) percent of the leasable areas of the Building had been
occupied or if the costs of all such work or services were paid or incurred as
Operating Expenses, as the case may be.
(d) "OPERATING YEAR" shall mean each calendar
year in which occurs any part of the term of this lease.
(e) "BASE OPERATING YEAR" shall mean the
calendar year commencing on January 1, 1994.
(f) "BASE OPERATING AMOUNT" shall mean the
Operating Expenses for the Base Operating Year.
(g) "CAPITAL COST RATE", in respect of any
costs, shall mean a per annum rate equal to the Base Rate (as defined in Article
31 hereof) in effect as of December 31st of the Operating Year in which such
costs are incurred.
(h) "REAL PROPERTY" shall mean, collectively,
the Building and all fixtures, machinery and equipment installed therein or used
in the operation thereof (including, without limitation, the entire Base
Building (as hereinafter defined) and all improvements and betterments of the
Building's tenants (whether or not owned by Landlord)), including, but not
limited to, all cables, fans, pumps, boilers, generators, heating and cooling
equipment, wiring and electrical fixtures and metering, control and distribution
equipment, component parts of the HVAC, electrical, plumbing, elevator and any
life or property protection systems (including, without limitation, sprinkler
systems), window washing equipment and snow removal equipment, the Land, the
curbs, sidewalks and plazas on the Land, and all easements and other
appurtenances to the Building and/or the Land. For any Tax Year that the Real
Property shall include more than a single tax lot, the "Real Property", for
purposes of this Article 3, shall be deemed to include, and be comprised of, all
of such tax lots, and, without limiting the generality thereof, for so long as
the Condominium shall be in effect, the "Real Property", for purposes of this
Article 3, shall be deemed to include, and be comprised of, all of the Units and
the common interests appurtenant thereto (including without limitation the IDA
Units) and all common interests appurtenant thereto.
(i) "IDA UNITS" shall mean, at any time, the
Units in which title is then held by the IDA; the term "IDA" shall mean the New
York City Industrial Development Agency, its successors and assigns.
(j) "TAXES", with respect to the Real Property
(or any Unit(s) or other tax lot(s) comprising the same), shall mean all (A) the
real estate taxes and assessments (special or otherwise), rates, charges and any
other levies, impositions or charges of a similar or dissimilar nature, whether
general, special, ordinary or extraordinary, foreseen or unforeseen, which may
be levied, assessed or imposed upon or with respect to the Real Property (or any
Unit(s) or other tax lot(s) comprising the same) at any time by any federal,
state, municipal or other governments or governmental bodies or authorities, and
(B)
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expenses incurred in contesting taxes or assessments and/or the assessed value
of the Real Property (or any Unit(s) or other tax lot(s) comprising the same)
which expenses shall be allocated to the Tax Year to which such expenses relate.
If at any time during the term of this lease the methods of taxation prevailing
on the date hereof shall be altered so that in lieu of, or as an addition to or
as a substitute for, the whole or any part of such real estate taxes or
assessments (special or otherwise) now imposed on real estate, there shall be
levied, assessed or imposed (x) a tax, assessment, levy, imposition, license fee
or charge wholly or partially as a capital levy or otherwise on the rents
received therefrom, or (y) a tax, charge or assessment, special or otherwise,
intended to serve as a real estate tax or to fulfill substantially the same
function as existing real estate taxes, then the same shall be deemed to be
included within the term "Taxes" for the purposes hereof; provided, however,
that, for purposes of such inclusion, the amounts described in clause (x) above
shall be computed as if Landlord owned the entire Real Property (or the
applicable Unit(s) or other tax lot(s)) and the same was the only real estate
owned by Landlord. For the purposes hereof, assessments included within Taxes
shall, regardless of how actually paid, be deemed to be paid in the maximum
number of installments permitted by the taxing authority imposing any such
assessment, together with interest calculated at a rate equal to the rate then
being charged by the taxing authority imposing such assessment. If Landlord
shall receive any refund of Taxes, then Taxes shall be computed net of (i.e. by
deducting) such refund; for purposes of this lease, a "refund" of Taxes shall
include the interest, if any, which is paid by the taxing authority to Landlord
in respect of such refund.
(k) "REAL PROPERTY TAXES", for any Tax Year,
shall mean the sum of (A) all Taxes payable with respect to the Real Property
for such Tax Year, plus (B) all Taxes that would have been payable with respect
to the IDA Units for such Tax Year, but for any exemption then in effect
therefor (but which, in fact, are not payable as a result of such exemption).
(l) (1) "PSI'S GENERATOR TAXES" shall mean
either (i) for any Tax Year that PSI's Generator constitutes a separate tax lot
for purposes of Taxes, Taxes payable with respect to such separate tax lot for
such Tax Year, and (ii) for any Tax Year that PSI's Generator does not
constitute a separate tax lot for purposes of Taxes, the portion of Taxes
payable with respect to the Real Property which is attributable to PSI's
Generator; the term "PSI'S GENERATOR" shall mean those certain generators
heretofore installed and currently maintained in the Building by Prudential
Securities Incorporated (herein, together with its successors and assigns,
called "PSI"), inclusive of all fuel tanks, fuel pumps, fuel pipes and
electrical conduits ancillary thereto, and together with (x) any successor
generator(s) and/or ancillary equipment thereto, and (y) any of PSI's
supplements or additions to such generator and/or such ancillary equipment (by
way of additional generator units and/or ancillary equipment or otherwise).
(2) "TENANT'S GENERATOR TAXES" shall
mean either (i) for any Tax Year that Tenant's Generator constitutes a separate
tax lot for purposes of Taxes, Taxes payable with respect to such separate tax
lot for such Tax Year, and (ii) for any Tax Year that Tenant's Generator does
not constitute a separate tax lot for purposes of Taxes, the portion of Taxes
payable with respect to the Real Property which is attributable to Tenant's
Generator; the term "Tenant's Generator" being defined in Article 41 hereof.
(3) "GENERATOR TAXES" shall mean
Tenant's Generator Taxes and/or PSI's Generator Taxes; the term "GENERATOR"
shall mean Tenant's Generator and/or PSI's Generator.
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(m) "ADJUSTED REAL PROPERTY TAXES", for any Tax
Year, shall mean the excess of (i) Real Property Taxes for such Tax Year
(inclusive of PSI's Generator Taxes and Tenant's Generator Taxes for such Tax
Year), over (ii) the sum of (x) PSI's Generator Taxes for such Tax Year, plus
(y) Tenant's Generator Taxes for such Tax Year.
(n) "TAX YEAR" shall mean each period of twelve
(12) months, commencing on the first day of July of each such period, in which
occurs any part of the term of this lease (or the Applicable Period (as
hereinafter defined)), or such other period of twelve (12) months occurring
during the term of this lease (or the Applicable Period) as hereafter may be
duly adopted as the fiscal year for real estate tax purposes of the City of New
York.
(o) "BASE TAX AMOUNT" shall mean the sum of (i)
one-half (1/2) of Adjusted Real Property Taxes for the Tax Year commencing on
July 1, 1994 and ending on June 30, 1995, plus (ii) one-half (1/2) of Adjusted
Real Property Taxes for the Tax Year commencing on July 1, 1995 and ending on
June 30, 1996.
(p) "TENANT'S OPERATING SHARE", during any
period, shall mean a fraction (expressed as a percentage rounded to four decimal
places), (i) the numerator of which is the then aggregate rentable area of the
Premises, and (ii) the denominator of which is equal to Tenant's Operating Share
Denominator (as defined in Section 3.06 below). As of the date hereof, Tenant's
Operating Share is 16.3523%. If, for any Operating Year, Tenant's Operating
Share shall not remain a constant percentage throughout the entirety of such
Operating Year, then Tenant's Operating Share for such Operating Year shall be
that percentage which represents the weighted average (computed on a per diem
basis) of all the percentages constituting Tenant's Operating Share during such
Operating Year.
(q) "TENANT'S TAX SHARE", during any period,
shall mean a fraction (expressed as a percentage rounded to four decimal
places), (i) the numerator of which is the then aggregate rentable area of the
Premises, and (ii) the denominator of which is equal to Tenant's Tax Share
Denominator (as defined in Section 3.06 below). As of the date hereof, Tenant's
Tax Share is 15.9961%. If, for any Tax Year, Tenant's Tax Share shall not remain
a constant percentage throughout the entirety of such Tax Year, then Tenant's
Tax Share for such Tax Year shall be that percentage which represents the
weighted average (computed on a per diem basis) of all the percentages
constituting Tenant's Tax Share during such Tax Year.
(r) "TAX CLOSURE DATE", for any Tax Year, shall
mean the date upon which all tax reduction proceedings in respect of Taxes for
such Tax Year (exclusive of any such proceedings regarding Taxes with respect to
a Generator which, for such Tax Year, constitutes a separate tax lot) shall have
been finally resolved (or, if no such proceedings shall have been timely
instituted for such Tax Year, then the date upon which the right to bring such
proceedings shall have lapsed).
3.02. (a) Tenant, for each Tax Year (subject to the provisions
of Section 3.02(h) below), shall pay to Landlord as Additional Charges an amount
(herein called the "TAX PAYMENT") equal to the sum of (i) Tenant's Tax Share of
the excess of (x) the Adjusted Real Property Taxes for such Tax Year, over (y)
the Base Tax Amount (the portion of any Tax Payment described in this clause (i)
being herein called the "BASE COMPONENT" of such Tax Payment), plus (ii)
Tenant's Generator Taxes for such Tax Year (the portion of any Tax Payment
described in this clause (ii) being herein called the "GENERATOR COMPONENT" of
such Tax Payment).
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(b) Landlord, at anytime prior to, during, or
after the end of, any Tax Year, may deliver to Tenant a Tax Statement(s) for
such Tax Year. Tenant, for each Tax Year, shall pay to Landlord the Tax Payment
set forth on the Tax Statement(s) for such Tax Year in the same number of
installments as Taxes are required to be paid to the City of New York for such
Tax Year, with each such installment being due on the later to occur of (x) the
date that is thirty (30) days prior to the due date of the corresponding
installment of Taxes and (y) the date that is ten (10) Business Days after the
date that Tenant receives the initial Tax Statement for such Tax Year.
(c) If, at any time after the delivery of the
initial Tax Statement for any Tax Year, it is determined that, the Tax Payment
for such Tax Year is greater or less than the amount set forth on the then most
recent Tax Statement(s) (for any reason including without limitation (i) any
increase in Taxes for such Tax Year, whether before, during or after such Tax
Year, (ii) any decrease in the Taxes for any Tax Year, whether or before, during
or after such Tax Year, including without limitation any such decrease resulting
from any refund of Taxes for such Tax Year, or (iii) any decrease in Taxes
comprising the whole or any part of the Base Tax Amount, including without
limitation any such decrease resulting from any refund of Taxes for either or
both of the 1994/95 Tax Year or the 1995/96 Tax Year), then, in any case that
the Tax Payment is greater, Landlord may, or, in any case that the Tax Payment
is less, Landlord shall, furnish to Tenant a revised Tax Statement(s) for such
Tax Year. If any revised Tax Statement shall set forth a Tax Payment that is
greater than that set forth on the previous Tax Statement, then Tenant shall pay
to Landlord such additional amount within thirty (30) days after Tenant's
receipt of such revised Tax Statement. If any revised Tax Statement shall set
forth a Tax Payment that is less than that set forth on the previous Tax
Statement, then Landlord, within thirty (30) days after Tenant's receipt of such
revised Tax Statement, shall pay to Tenant the difference between the Tax
Payment, as set forth on the revised Tax Statement, and the Tax Payment set
forth on the previous Tax Statement.
(d) (1) Nothing contained in this lease shall
require the filing of any application, or the institution of any proceeding,
seeking a reduction in Taxes or assessed valuation. Tenant, for itself and its
immediate and remote subtenants and successors in interest hereunder, hereby
waives, to the extent permitted by law, any right Tenant may now or in the
future have to protest or contest any Taxes. As used herein, the phrase "PROTEST
OR CONTEST" of Taxes shall include the filing of any application, and the
institution, prosecution and/or settlement of any proceeding, seeking a
reduction in Taxes or the assessed valuation of the Real Property or any part
thereof, and any other challenge of the determination of Taxes or such assessed
valuation.
(2) Notwithstanding the provisions of
Section 3.02(d)(1) above, Landlord, upon Tenant's request received between
January 2 and February 10 of each calendar year during the term of this lease,
shall, on or before February 24 of such calendar year, advise Tenant whether or
not Landlord intends to file a Protest with respect to the next succeeding Tax
Year. A "PROTEST" shall mean such necessary administrative action(s) under
applicable law as shall be necessary to protest the tentative assessed valuation
of the Real Property. If Landlord advises Tenant that Landlord does not intend
to file a Protest with respect to such Tax Year, Tenant shall have the right,
upon notice given to Landlord on or before February 25 of such calendar year
(or, if February 25 is not a Business Day, then the next succeeding Business
Day), to require Landlord, at Tenant's expense, to file a Protest in accordance
with this Section 3.02(d)(2). If Tenant shall give such notice to Landlord,
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Landlord, at Tenant's expense, shall commence a Protest. Failure of Tenant to so
notify Landlord as aforesaid shall be deemed a waiver of Tenant's right to cause
Landlord to commence a Protest. Tenant, within thirty (30) days after demand by
Landlord, shall reimburse Landlord as Additional Charges for any costs and
expenses incurred by Landlord in connection with any Protest filed by reason of
Tenant's direction. If such Protest shall result in a refund of the Taxes paid
for such Tax Year, then, provided Tenant shall have paid all costs and expenses
required to be paid by Tenant in accordance with the preceding sentence and
Tenant shall not otherwise be in monetary default under this lease beyond the
expiration of any applicable notice and/or cure period, the amount of such
refund shall be paid to Tenant up to the amount of costs and expenses paid by
Tenant in connection with the prosecution of such Protest before application
thereof toward a refund of the tax payments for such Tax Year to tenants in the
Building (including without limitation Tenant) as may be required pursuant to
their respective leases.
(e) For any Tax Year, Taxes "payable" with
respect to the Real Property (or any Unit(s) or other tax lot(s) comprising the
same) shall be computed by and after giving effect to (i) any deferral or
abatement of Taxes in effect for such Tax Year, and (ii) any repayment, with
interest if applicable, during such Tax Year of any Taxes deferred or abated in
any prior year. Without limiting the generality of the foregoing, it is
understood and agreed:
(1) that Landlord has obtained, or intends to obtain,
benefits under Title 11, Chapter 2, Part 4 of the Administrative Code
of the City of New York (the "ICIP");
(2) that Tenant shall report to Landlord upon request the
number of workers permanently engaged in employment in the Premises,
the nature of each worker's employment and the New York City residency
of each worker;
(3) that Tenant shall provide access to the Premises by
employees and agents of the Department (as such term is defined in the
ICIP Rules and Regulations) at all reasonable times at the request of
Landlord (which request may be verbal); and
(4) that Tenant shall not be required to pay taxes or
charges which become due because of the willful neglect or fraud by
Landlord in connection with ICIP, or otherwise relieve or indemnify
Landlord from any personal liability arising under the Administrative
Code of the City of New York, Section 11-265, except where imposition
of such taxes, charges or liability is occasioned by actions of Tenant
in violation of this lease.
Landlord represents that, other than (x) the ICIP tax deferral and abatement
program(s), and (y) tax deferral and abatement programs applicable to the IDA
Units resulting from, or incident to, the IDA's ownership thereof or other
benefit programs of the IDA, (I) the Real Property is not currently subject to
tax deferral or abatement program, and (II) no tax deferral or abatement program
to which the Real Property is currently subject or was previously subject (prior
to the date hereof) will hereafter require any repayment of any Taxes deferred
or abated in any prior year.
(f) If Tenant installs Tenant's Generator, then
the following provisions shall apply:
(1) Tenant, at Tenant's expense, shall cooperate with
Landlord in connection with Landlord's efforts to
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<PAGE> 23
cause Tenant's Generator to be assigned a separate tax lot for purposes of
Taxes.
(2) For each Tax Year that Tenant's Generator does not
constitute a separate tax lot, the following provisions shall apply:
(A) Landlord, promptly after the occurrence of the Tax
Closure Date with respect to such Tax Year, shall furnish to Tenant a notice
that the same has occurred, it being understood and agreed that (i) such notice
may be given as part of a Tax Statement furnished after the Tax Closure Date,
and (ii) in any case where the initial Tax Statement for such Tax Year has not
theretofore been furnished, such notice shall be accompanied by such initial Tax
Statement (the date upon which such notice is furnished by Landlord being herein
called the "TAX CLOSURE NOTICE DATE"). The term "GENERATOR TAX DISPUTE PERIOD",
for any Tax Year, shall mean the period commencing on the Tax Closure Date for
such Tax Year and ending on the date one hundred twenty (120) days after the Tax
Closure Notice Date for such Tax Year; provided, however, that if, after the Tax
Closure Date for such Tax Year but prior to the expiration of such 120-day
period, Landlord shall issue a Tax Statement for such Tax Year, then the
Generator Tax Dispute Period shall be the period commencing on the Tax Closure
Date for such Tax Year and ending on the date one hundred twenty (120) days
after the later of (i) the Tax Closure Notice Date or (ii) the date on which
such Tax Statement is issued.
(B) (i) Tenant, unless and until there shall be a final
determination of Tenant's Generator Taxes for such Tax Year pursuant to the
provisions of this Section 3.02(f)(2) (by agreement, arbitration or otherwise),
shall make payments of the Tax Payment for such Tax Year based upon Landlord's
estimate of Tenant's Generator Taxes for such Tax Year, if any, as set forth
from time to time on the then most recent Tax Statement for such Tax Year.
Landlord's estimate of Tenant's Generator Taxes for any Tax Year, as set forth
on any Tax Statement, shall not be greater than Landlord's then good-faith
opinion of Tenant's Generator Taxes for such Tax Year.
(ii) If, at anytime during the Generator Tax Dispute
Period for such Tax Year, Tenant reasonably believes that the amount set forth
as Tenant's Generator Taxes on the then most recent Tax Statement for such Tax
Year is incorrect, then Tenant, by notice to Landlord given not later than end
of the Generator Tax Dispute Period for such Tax Year, shall so notify Landlord
of Tenant's belief, which notice shall refer to the Tax Year with respect to
which such notice is being served, and set forth Tenant's good-faith opinion of
the amount of Tenant's Generator Taxes for such Tax Year (each such notice being
herein called a "GENERATOR DISPUTE NOTICE"). If Tenant shall fail to serve a
Generator Dispute Notice prior to the end of the Generator Tax Dispute Period,
then, subject to the provisions of subsection (iii) below, the amount set forth
as Tenant's Generator Taxes on the most recent Tax Statement as of the end of
such period shall be binding and conclusive on Landlord and Tenant.
(iii) For purposes of this lease, Tenant's Generator
Taxes shall be deemed to have been finally determined for any Tax Year upon (x)
the expiration of the Generator Tax Dispute Period with respect to such Tax Year
(in the event that Tenant does not give a Generator Dispute Notice prior to the
end of such Generator Tax Dispute Period as provided in Section
3.02(f)(2)(B)(ii) above), (y) a determination in arbitration as to Tenant's
Generator Taxes (following Tenant's giving of a Generator Dispute Notice)
pursuant to Section 3.02(f)(2)(C) below, or (z) an agreement of Landlord and
Tenant as to Tenant's Generator Taxes (following Tenant's giving of a
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Generator Dispute Notice as contemplated by Section 3.02(f)(2)(C) below);
provided, however, that if Landlord, in accordance with the provisions of this
lease, shall issue a Tax Statement for such Tax Year after the lapse of the
Generator Tax Dispute Period, then, and in each such case, Tenant's Generator
Taxes for such Tax Year shall not be finally determined as aforesaid, but rather
the provisions of Sections 3.02(f)(2)(B)(ii) and 3.02(f)(2)(C), as well as this
Section 3.02(f)(2)(B)(iii), shall again apply, mutatis mutandis, except that the
Generator Tax Dispute Period shall be the period commencing on the date on which
Landlord issued such Tax Statement and ending on the date that is one hundred
twenty (120) days thereafter. Accordingly, pursuant to the operation of the
proviso to the preceding sentence there may be more than one final determination
of the Tenant's Generator Taxes.
(C) If Tenant shall timely serve a Generator Dispute Notice
for any Tax Year, then (I) Landlord and Tenant shall proceed in good-faith to
agree upon the amount of the Tenant's Generator Taxes for the Tax Year in
question, and (II) if Landlord and Tenant are unable to so agree on or prior to
the date that is sixty (60) days after the date that Landlord receives the
Generator Dispute Notice, then, at anytime thereafter, either of Landlord or
Tenant, by written notice to the other party (herein called a "GENERATOR
ARBITRATION NOTICE"), may submit the determination of Tenant's Generator Taxes
for such Tax Year to arbitration in accordance with the following provisions:
(w) Within thirty (30) days after either party's receipt
of a Generator Arbitration Notice, each of Landlord and Tenant, by
notice to the other party, shall appoint an arbitrator (the two
arbitrators so appointed being herein collectively called the "INITIAL
GENERATOR ARBITRATORS"). If either Landlord or Tenant shall fail to
timely appoint an Initial Generator Arbitrator within such 30-day
period, then the party which appointed an Initial Generator Arbitrator
may notify the other party of such failure (which notice shall refer
specifically to this Section 3.02(f)(2)(C)(w)), and if, in such event,
the other party does not, within a period of ten (10) days after its
receipt of such notice, appoint the second Initial Generator
Arbitrator, then the appointed Initial Generator Arbitrator shall
independently select and appoint the second Initial Generator
Arbitrator, within fifteen (15) days after the expiration of such
10-day period. Within twenty (20) days after the appointment of both
Initial Generator Arbitrators, the Initial Generator Arbitrators shall
jointly appoint a mutually agreeable third arbitrator who shall be
impartial (herein called the "THIRD GENERATOR ARBITRATOR"). If the
Initial Generator Arbitrators fail to agree upon and appoint the Third
Generator Arbitrator within such 10-day period, then either Landlord or
Tenant may request that the American Arbitration Association ("AAA")
appoint the Third Generator Arbitrator within twenty (20) days after
such request, and both parties shall be bound by any appointment so
made within such 20-day period. If the Third Generator Arbitrator shall
not have been appointed within such 20-day period, then either Landlord
or Tenant may apply to any court having jurisdiction to make such
appointment. The Third Generator Arbitrator shall subscribe and swear
to an oath to fairly and impartially perform the duties required of the
Third Generator Arbitrator pursuant to this Section 3.02(f)(2)(C).
(x) Within thirty (30) days after the appointment of the
Third Generator Arbitrator, Landlord and Tenant shall each submit to
the Third Arbitrator, in a sealed envelope, a written statement setting
forth such party's then good-faith determination of
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Tenant's Generator Taxes for such Tax Year (Landlord's determination is
herein called "LANDLORD'S GENERATOR DETERMINATION" and Tenant's
determination is herein called "TENANT'S GENERATOR DETERMINATION" and
Landlord's Generator Determination and Tenant's Generator Determination
are herein collectively called the "GENERATOR DETERMINATIONS"). Neither
of the Generator Determinations shall be opened except as and when
hereinafter expressly provided. If either Landlord or Tenant shall fail
to submit its Generator Determination in accordance with the provisions
of this Section 3.02(f)(2)(C)(x), then the party which made a Generator
Determination shall notify the other party of such failure (which
notice shall refer specifically to this Section 3.02(f)(2)(C)(x)), and
if, in such event, the other party does not, within a period of ten
(10) days after its receipt of such notice, submit its Generator
Determination, then the only Generator Determination which was made in
accordance with this Section 3.02(f)(2)(C)(x) shall promptly thereafter
be opened by the Third Generator Arbitrator, and Tenant's Generator
Taxes for such Tax Year shall be such Generator Determination, which
Generator Determination shall be conclusive and binding upon both
Landlord and Tenant.
(y) If both Landlord and Tenant submit their
respective Generator Determinations in accordance with the provisions
of Section 3.02(f)(2)(C)(x) above, then the Third Generator Arbitrator
shall arrange a meeting (herein called the "GENERATOR ARBITRATION
MEETING") to be held at the Building office (or at such other place as
is mutually agreeable to the Third Arbitrator and Landlord and Tenant
and located in the Borough of Manhattan), and which shall occur during
Business Hours on a day not later than twenty (20) days after the Third
Generator Arbitrator's receipt of both Generator Determinations.
Landlord and Tenant shall have not less than ten (10) days notice of
the date, time and location of the Generator Arbitration Meeting and
shall have the right to have its representatives present thereat. At
the Generator Arbitration Meeting, (i) the Generator Determinations
shall be opened by the Third Arbitrator and copies thereof shall be
distributed to Landlord and Tenant, and (ii) thereafter, each of
Landlord and Tenant may submit to the Third Generator Arbitrator such
written evidence in support of its Generator Determination as it deems
appropriate.
(z) Within twenty (20) days after the
Generator Arbitration Meeting, the Third Arbitrator shall independently
select the Generator Determination (as between Landlord's Generator
Determination and Tenant's Generator Determination) which, in his
opinion, more accurately reflects Tenant's Generator Taxes, and shall
notify Landlord and Tenant of such selection in writing.
(D) With respect to any arbitration
conducted pursuant to the provisions of Section 3.02(f)(2)(C) above, the
following provisions shall apply: (i) the fees and expenses of any such
arbitration shall be borne by the parties equally, but each party shall bear the
expense of the Initial Generator Arbitrator appointed by it and its attorneys
and experts as well as any expenses of presenting its own proof; (ii) Landlord
and Tenant shall each have the right to submit such data and memoranda to the
Third Arbitrator in support of their respective positions as they may deem
necessary or appropriate; (iii) each arbitrator shall be an attorney licensed to
practice law in the State of New York, who shall not be a sole practitioner, and
who shall have at least ten (10) years' experience in tax certiorari and real
estate tax litigation with respect to properties which are similar in character
to the Building; and (iv) no arbitrator shall have any power to add to, modify
or change any such definitions or any other provisions of
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this lease, and the jurisdiction of the arbitrators is accordingly limited.
(E) Within thirty (30) days after the final determination
of Tenant's Generator Taxes for any Tax Year as between Landlord and Tenant, the
Tax Payment for such Tax Year shall be re-computed and reconciled with payments
theretofore made on account of such Tax Payment, and (i) if the payments
theretofore made by Tenant on account of such Tax Payment were less than the Tax
Payment as re-computed, then Tenant shall pay to Landlord the amount of such
deficiency within twenty (20) days after demand therefor, or (ii) if the
payments theretofore made by Tenant on account of such Tax Payment were greater
than the Tax Payment as re-computed, then Landlord shall pay to Tenant the
amount of such overpayment within twenty (20) days after demand therefor.
(3) If, for any Tax Year that Tenant's Generator
constitutes a separate tax lot, Tenant shall have the obligation to pay to
Landlord, as the Generator Component of the Tax Payment, an amount equal to the
entire amount of Tenant's Generator Taxes, then, for each such Tax Year and
notwithstanding the provisions of Section 3.02(d) to the contrary, the following
provisions shall apply:
(A) Except as provided below, (i) Landlord shall not have
any right to protest or contest Tenant's Generator Taxes for such Tax Year or
any obligation to do so, and (ii) Tenant shall have the right to protest or
contest Tenant's Generator Taxes for such Tax Year.
(B) Landlord, in connection with any such protest or
contest of Tenant's Generator Taxes made or instituted by Tenant pursuant to
Section 3.02(f)(3)(A) above, shall, within fifteen (15) Business Days after
written request therefor, execute (and provide any readily accessible
information known by Landlord for) any documents reasonably required in
connection therewith, provided that such documents are in proper form. Tenant
hereby agrees that it shall (x) reimburse Landlord all Landlord's out-of-pocket
expenses incurred in connection with any protest or contest of Tenant's
Generator Taxes made or instituted by Tenant (including without limitation those
incurred in connection with Landlord's execution of any documents, or its
provision of information, as provided in the preceding sentence), and (y)
indemnify and hold harmless Landlord against any and all liabilities which
Landlord may incur by reason of its execution of any documents, or its provision
of information, as provided in the preceding sentence; provided, however, that
neither such reimbursement nor such indemnity shall include any such expenses or
liabilities to the extent that (i) Landlord is responsible therefor under any
other provision of this lease, (ii) the same would be, or would have been,
discharged, satisfied or avoided by Landlord's performance of its obligations
under this lease, or (iii) the same arise out of any inaccuracy in any
information provided by Landlord.
(C) Notwithstanding the foregoing provisions of this
Section 3.02(f)(3), Tenant's right to protest or contest Tenant's Generator
Taxes as set forth in Section 3.02(f)(3)(A) above for any Tax Year (as well as
Landlord's obligation to execute documents and provide information in connection
therewith as set forth in Section 3.02(f)(3)(B) above), shall be subject to such
protest or contest by Tenant not having, in Landlord's reasonable judgement, a
negative impact upon Landlord in any pending or prospective protest or contest
of any other Taxes for such Tax Year or any other Tax Year.
(g) In respect of PSI's Generator, the
following provisions shall apply:
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(1) Landlord shall make application to the applicable
taxing authority to have PSI's Generator assigned a separate tax lot for
purposes of Taxes.
(2) For each Tax Year that PSI's Generator does not
constitute a separate tax lot, the following provisions shall apply:
(A) Tenant, unless and until there shall be a final
determination of PSI's Generator Taxes as between Landlord and PSI (by agreement
or arbitration), shall make payments of the Tax Payment for such Tax Year based
upon Landlord's estimate of PSI's Generator Taxes for such Tax Year, if any, as
set forth from time to time on the then most recent Tax Statement for such Tax
Year. Landlord's estimate of PSI's Generator Taxes for any Tax Year, as set
forth on any Tax Statement, shall not be greater than Landlord's then good-faith
opinion of PSI's Generator Taxes for such Tax Year.
(B) Upon a final determination of PSI's Generator Taxes as
between Landlord and PSI for any Tax Year, PSI's Generator Taxes for purposes of
this lease for such Tax Year shall be deemed to be one of the following amounts
(which amount, in either case, shall be conclusive and binding upon Landlord and
Tenant): (i) if the final determination of PSI's Generator Taxes as between
Landlord and PSI for such Tax Year was the result of a binding arbitration
proceeding between Landlord and PSI, then PSI's Generator Taxes under this lease
for such Tax Year shall be deemed to be the amount of such final determination;
and (ii) in any other case, PSI's Generator Taxes under this lease for such Tax
Year shall be deemed to be an amount equal to (x) the Generator Differential
Factor (as hereinafter defined) for such Tax Year, multiplied by (y) Tenant's
Generator Taxes for such Tax Year (as finally determined under this lease). As
used herein, the "GENERATOR DIFFERENTIAL FACTOR", for any Tax Year, shall mean
the quotient obtained by dividing (I) the capacity of PSI's Generator (measured
in KVAs) for such Tax Year, by (II) the capacity of Tenant's Generator (measured
in KVAs) for such Tax Year (which quotient, if not a whole number, shall be
rounded to four decimal places).
(C) Within thirty (30) days after the final determination
of PSI's Generator Taxes under this lease for any Tax Year (it being understood
that if Section 3.02(g)(2)(B)(ii) is applicable, then such final determination
cannot be made until Tenant's Generator Taxes for such Tax Year have been
finally determined), the Tax Payment for such Tax Year shall be re-computed and
reconciled with payments theretofore made on account of such Tax Payment, and
(i) if the payments theretofore made by Tenant on account of such Tax Payment
were less than the Tax Payment as re-computed, then Tenant shall pay to Landlord
the amount of such deficiency within twenty (20) days after demand therefor, or
(ii) if the payments theretofore made by Tenant on account of such Tax Payment
were greater than the Tax Payment as re-computed, then Landlord shall pay to
Tenant the amount of such overpayment within twenty (20) days after demand
therefor.
(h) (1) Notwithstanding anything to the contrary
set forth above in this Section 3.02, there shall be an abatement of the Base
Component of the Tax Payment(s) which are payable in respect of all periods
prior to the Tax Payment Commencement Date (as hereinafter defined); there shall
be no such abatement of the Generator Component of such Tax Payment(s). The "TAX
PAYMENT COMMENCEMENT DATE" shall be July 1, 1995. If the Tax Payment
Commencement Date shall be a day other than the first day of a Tax Year, then
the Base Component of the Tax Payment for the Tax Year in which the Tax Payment
Commencement Date occurs shall be prorated (on a per diem basis) to correspond
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to that portion of the Tax Year occurring on or after the Tax Payment
Commencement Date.
(2) Notwithstanding anything to the contrary set forth
above in this Section 3.02, in respect of the Tax Year in which the Expiration
Date occurs, (i) the Base Component of the Tax Payment shall be prorated (on a
per diem basis) to correspond to that portion of such Tax Year occurring on or
prior to the Expiration Date, and (ii) except as provided in Section 3.02(h)(3)
below, the Generator Component of the Tax Payment shall also be prorated (on a
per diem basis) to correspond to that portion of such Tax Year occurring on or
prior to the Expiration Date.
(3) Unless (i) Landlord, pursuant to Section 12.02(c)
hereof, shall designate Tenant's Generator Unit as among Designated Exterior
Improvements (as hereinafter defined), or (ii) in any case that this lease shall
terminate pursuant to a Non-Scheduled Early Termination (as hereinafter
defined), the Section 12.02(c) Work shall include the removal of Tenant's
Generator Unit and Landlord shall not perform the same in accordance with the
provisions of Section 12.02(c), the following provisions shall apply
(notwithstanding the foregoing provisions of this Section 3.02): (A) in respect
of the Tax Year in which the Expiration Date occurs, the Generator Component of
the Tax Payment shall not be prorated (but rather Tenant shall pay, as the
Generator Component of the Tax Payment for such Tax Year, an amount equal to the
entirety of Tenant's Generator Taxes for such Tax Year, notwithstanding the fact
that this lease shall not be in effect for the entirety of such Tax Year), and
(B) in respect of each fiscal tax year or other period occurring after the Tax
Year in which the Expiration Date occurs, Tenant, notwithstanding that this
lease will not be in effect for any part of such fiscal tax year or other
period, shall continue to pay to Landlord an amount equal to either (i) for any
such fiscal tax year or other period for which a separate tax lot exists for
Tenant's Generator (whether or not Tenant's Generator is in existence during
such fiscal tax year or other period), Taxes payable with respect to such
separate tax lot, and (ii) for any other such fiscal tax year or other period,
the portion of Taxes payable with respect to the Real Property which is
attributable to the then current or past existence of Tenant's Generator. The
provisions of Sections 3.02(b), 3.02(c) and 3.02(f) above, as applicable to the
Generator Component of the Tax Payment for Tax Years, shall apply, mutatis
mutandis, to Tenant's payment obligations pursuant to clause (B) above for the
fiscal tax years and other periods described therein.
3.03. (a) Tenant, for each Operating Year occurring after the
Base Operating Year, shall pay to Landlord, as Additional Charges for such
Operating Year, an amount (herein called the "OPERATING PAYMENT") equal to
Tenant's Operating Share of the excess of (i) Operating Expenses for such
Operating Year, over (ii) the Base Operating Amount.
(b) Landlord may furnish to Tenant, prior to the
commencement of each Operating Year subsequent to the Base Operating Year, a
written statement setting forth Landlord's reasonable estimate of the Operating
Payment for such Operating Year (such estimate, as the same may be revised as
hereinafter provided, the "LANDLORD'S ESTIMATED OPERATING PAYMENT"). Tenant
shall pay to Landlord on the first day of each month during the Operating Year
for which the Operating Payment will be due, an amount equal to one-twelfth
(1/12th) of the Landlord's Estimated Operating Payment for such Operating Year.
If, however, Landlord shall not furnish any such estimate for an Operating Year
or if Landlord shall furnish any such estimate for an Operating Year subsequent
to the commencement thereof, then (i) until the first day of the month following
the month in which such estimate is furnished to Tenant, Tenant shall pay to
Landlord on the first
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day of each month an amount equal to the monthly sum payable by Tenant to
Landlord under this Section 3.03 for the last month of the preceding Operating
Year, (ii) after such estimate is furnished to Tenant, Landlord shall give
notice to Tenant stating whether the installments of the Operating Payment
previously made for such Operating Year were greater or less than the
installments of the Operating Payment which should have been previously made for
such Operating Year in accordance with such estimate, and (A) if there shall be
a deficiency, Tenant shall pay the amount thereof within thirty (30) days after
Tenant's receipt of such notice, or (B) if there shall have been an overpayment,
Landlord shall, within thirty (30) days from the giving of such notice, refund
to Tenant the amount thereof, together with interest on the amount thereof at
the Base Rate for the period from the date(s) of such overpayment to the date
such payment is made, and (iii) on the first day of the month following the
month in which such estimate is furnished to Tenant, and on the first day of
each month thereafter throughout the remainder of such Operating Year, Tenant
shall pay to Landlord an amount equal to one-twelfth (1/12th) of the Landlord's
Estimated Operating Payment set forth on such estimate. Landlord may, during
each Operating Year (but not more than twice during any Operating Year), furnish
to Tenant a revised statement of Landlord's Estimated Operating Payment for such
Operating Year, and in such case, the Landlord's Estimated Operating Payment for
such Operating Year shall be adjusted and paid or refunded or credited as the
case may be, substantially in the same manner as provided in the preceding
sentence.
(c) Landlord, after the end of each Operating Year
subsequent to the Base Operating Year, shall furnish to Tenant an Operating
Statement for such Operating Year. Landlord, prior to or together with the
delivery of the initial Operating Statement for the first Operating Year after
the Base Operating Year, shall furnish to Tenant an Operating Statement for the
Base Operating Year (the "BASE YEAR OPERATING STATEMENT"). If, for any Operating
Year after the Base Operating Year, the Operating Statement shall show that the
sums paid by Tenant, if any, under Section 3.03(b) exceeded the Operating
Payment to be paid by Tenant for such Operating Year (such excess for any
Operating Year being herein called the "OPERATING OVERPAYMENT"), then Landlord,
within thirty (30) days after delivery of such Operating Statement, shall refund
to Tenant the amount of such Operating Overpayment, together with interest on
the amount thereof at the Base Rate for the period commencing on the last day of
the Operating Year in question and ending on the date the appropriate refund is
made. If the Operating Statement for such Operating Year shall show that the
sums so paid by Tenant were less than the Operating Payment to be paid by Tenant
for such Operating Year (such deficiency for any Operating Year being herein
called the "OPERATING DEFICIENCY"), Tenant shall pay the amount of such
Operating Deficiency within thirty (30) days after Tenant's receipt of the
Operating Statement.
(d) (1) Tenant, upon notice given no later than the
applicable Audit Notice Deadline Date (as hereinafter defined) with respect to
any Operating Statement, may elect to have Tenant's employees, accountants or
other agents examine, at reasonable times and at such location(s) in the City of
New York as Landlord may reasonably designate, the Operating Expense Records (as
hereinafter defined) with respect to such Operating Statement; if Tenant shall
not timely give such notice, then the Operating Statement in question shall be
conclusive and binding upon Tenant (it being agreed that the foregoing shall not
be construed to prejudice Tenant's rights with respect to items constituting
revisions or corrections to such Operating Statement which are set forth in a
subsequently delivered revised or corrected Operating Statement for the same
Operating Year). As used herein, the "AUDIT NOTICE DEADLINE DATE", with respect
to any Operating Statement, shall refer to the date one hundred
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eighty (180) days after the date of Tenant's receipt thereof; provided, however,
that with respect to the initial Base Year Operating Statement, the initial
Operating Statement for the first Operating Year after the Base Operating Year
and the initial Operating Statement for the second Operating Year after the Base
Operating Year (such three Operating Statements being herein collectively called
the "THRESHOLD OPERATING STATEMENTS"), the term "Audit Notice Deadline Date"
shall refer to the date (herein called the "INITIAL AUDIT NOTICE DEADLINE DATE")
that is one hundred eighty (180) days after the first date after all of the
Threshold Operating Statements shall have been furnished to Tenant. As used
herein, "OPERATING EXPENSE RECORDS", with respect to any Operating Statement,
shall mean such books and records as are relevant to the Operating Expenses
incurred in the Operating Year for which such Operating Statement is furnished.
In connection with any examination by Tenant of the Operating Expense Records,
Tenant agrees to treat, and to instruct its employees, accountants, attorneys
and agents to treat, all information as confidential and not disclose it to any
other person except Tenant's accountants, employees, attorneys and agents,
except as may be required by law or may be necessary or appropriate in
connection with the prosecution of any claim by Tenant hereunder.
(2) If Tenant shall, in good-faith, dispute any Operating
Statement, then Tenant, no later than the Audit Notice Deadline Date with
respect to such Operating Statement, may send a written notice (each, a
"TENANT'S STATEMENT") to Landlord, setting forth such dispute(s) and specifying
in reasonable detail the basis therefor and Tenant's determination of the
Operating Expenses for such Operating Year. If Tenant shall not timely give such
Tenant's Statement, then the Operating Statement in question shall be conclusive
and binding upon Tenant. If Tenant shall timely give such Tenant's Statement,
then Landlord and Tenant shall attempt to resolve and adjust such dispute(s). If
they are unable to do so, Landlord and Tenant shall designate a certified public
accountant (the "ARBITER") whose determination made in accordance with this
Section 3.03(d)(2) shall be binding upon the parties. The Arbiter shall be a
member of an independent certified public accounting firm having at least twenty
(20) accounting professionals and shall have practiced as a certified public
accountant for at least ten (10) years. In the event that Landlord and Tenant
shall be unable to agree upon the designation of the Arbiter within thirty (30)
days after receipt of notice from the other party requesting agreement as to the
designation of the Arbiter, which notice shall contain the names and addresses
of two or more certified public accountants who are acceptable to the party
sending such notice (any one of whom, if acceptable to the party receiving such
notice as shall be evidenced by notice given by the receiving party to the other
party within such thirty (30) day period, shall be the agreed upon Arbiter),
then either party shall have the right to request the American Arbitration
Association (the "AAA") (or any organization which is the successor thereto) to
designate as the Arbiter a certified public accountant whose determination made
in accordance with this Section 3.03(d)(2) shall be conclusive and binding upon
the parties. Landlord and Tenant hereby agree that (A) except with respect to
the Base Operating Year, any determination of Operating Expenses made by an
Arbiter designated pursuant to this Section 3.03(d)(2) shall neither exceed the
determination of Landlord set forth in the Operating Statement nor be less the
determination of Tenant set forth in Tenant's Statement, (B) with respect to the
Base Operating Year, any determination of Operating Expenses made by an Arbiter
designated pursuant to this Section 3.03(d)(2) shall neither exceed the
determination of Tenant set forth in Tenant's Statement, nor be less than the
determination of Landlord set forth in the Operating Statement, and (C) that any
determination which does not comply with the foregoing shall be deemed increased
or
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decreased, as the case may be, to cure such noncompliance. In rendering such
determination the Arbiter shall not add to, subtract from or otherwise modify
the provisions of this lease, including the immediately preceding sentence.
Notwithstanding the foregoing provisions of this Section 3.03(d), Tenant,
pending the resolution of any contest pursuant to the terms hereof shall
continue to pay in the manner provided for in this Section 3.03 all sums as
determined to be due based upon the Operating Statement. If, and to the extent
that Tenant shall prevail, then within thirty (30) days after the resolution of
such contest (i.e., the Arbiter's determination), Landlord shall make an
appropriate refund to Tenant, together with interest on the amount thereof at
the Interest Rate (as defined in Article 31 hereof) for the period commencing on
the last day of the Operating Year to which such refund relates and ending on
the date such appropriate refund is made; if such determination shall relate to
the Base Operating Year, any applicable refund shall be made with respect to all
subsequent Operating Years with respect to which an initial Operating Statement
shall have been furnished to Tenant. With respect to any Operating Year other
than the Base Operating Year, (i) if the Operating Expenses set forth in the
Operating Statement shall, in the aggregate, exceed 105% of the Arbiter's
determination thereof, the costs of the Arbiter shall be borne by Landlord, (ii)
if the Operating Expenses set forth in Tenant's Statement shall, in the
aggregate, be less than 95% of the Arbiter's determination thereof, the costs of
the Arbiter shall be borne by Tenant, and (iii) otherwise, the costs of the
Arbiter shall be shared equally. With respect to the Base Operating Year, (x) if
the Operating Expenses set forth in Tenant's Statement shall, in the aggregate,
exceed 105% of the Arbiter's determination thereof, the costs of the Arbiter
shall be borne by Tenant, (y) if the Operating Expenses set forth in the
Operating Statement shall, in the aggregate be less than 95% of the Arbiter's
determination thereof, the costs of the Arbiter shall be borne by Landlord, and
(z) otherwise, the costs of the Arbiter shall be shared equally.
(3) Notwithstanding anything to the contrary contained in
Section 3.03(d)(2) above, the following provisions shall apply with respect to
Tenant's rights thereunder to dispute any amount included within Operating
Expenses on any Operating Statement pursuant to Section 3.01(c)(I)(2) hereof as
a result of any alteration, addition, improvement, replacement, repair,
equipment or tool (each such amount being herein called a "SECTION 3.01(C)(I)(2)
AMOUNT"):
(A) If Tenant shall not timely
give a Tenant's Statement with respect to any Operating Statement reflecting a
Section 3.01(c)(I)(2) Amount, or if Tenant's Statement with respect to such an
Operating Statement shall not set forth a dispute of any Section 3.01(c)(I)(2)
Amount reflected therein, then (i) any such Section 3.01(c)(I)(2) Amount, as
reflected in such Operating Statement, shall be conclusive and binding upon
Tenant, and (ii) in addition, the facts, figures and schedules used by Landlord
in determining such conclusive and binding Section 3.01(c)(I)(2) Amount (i.e.,
Landlord's determination of each of the useful life, the Cost Savings Period,
the Capital Costs and the Capital Cost Rate with respect to such alteration,
addition, improvement, replacement, repair, equipment or tool in question, as
well as the Estimated Cost Savings Schedule as prepared by Landlord with respect
thereto) shall all be conclusive and binding upon Tenant for purposes of all
Section 3.01(c)(I)(2) Amounts theretofore or thereafter based thereon (including
without limitation any such Section 3.01(c)(I)(2) Amounts may appear on any
subsequent Operating Statements), it being agreed that all further disputes by
Tenant of such facts, figures and schedules shall be foreclosed.
(B) If Tenant shall timely
give a Tenant's Statement with respect to any Operating Statement
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<PAGE> 32
reflecting a Section 3.01(c)(I)(2) Amount and such Tenant's Statement shall set
forth a dispute of any such Section 3.01(c)(I)(2) Amount reflected therein
(other than a dispute which is foreclosed pursuant to Section 3.03(d)(3)(A)
above), then, to the extent any disputes as to such amounts shall be arbitrated
as provided in Section 3.03(d)(2) above, the following provisions shall apply
and bind the Arbiter:
(x) If any Estimated
Cost Savings Schedule shall be disputed, as to one or more Estimated Annual
Savings Amounts, then the issue which the Arbiter shall determine shall be
whether each such disputed Estimated Annual Savings Amount was or was not a
reasonable estimate, at the time that the Estimated Cost Savings Schedule was
made a part of the Operating Expense Records, of the Operating Expenses which
would be avoided or saved for the applicable Operating Year as a result of the
alteration, addition, improvement, replacement, repair, equipment or tool in
question; in rendering his determination as to each such disputed Estimated
Annual Savings Amount, the Arbiter shall be bound by the following: (I) if any
Estimated Annual Savings Amount is equal to or less than 115% of the Arbiter's
opinion of what was the best estimate, at the time that the Estimated Cost
Savings Schedule was made a part of the Operating Expense Records, of the
Operating Expenses which would be avoided or saved for the applicable Operating
Year as a result of the alteration, addition, improvement, replacement, repair,
equipment or tool in question, then such Estimated Annual Savings Amount shall
conclusively be deemed to have been reasonable at such time; and (II) if any
Estimated Annual Savings Amount is greater than 115% of the Arbiter's opinion of
what was the best estimate, at the time that the Estimated Cost Savings Schedule
was made a part of the Operating Expense Records, of the Operating Expenses
which would be avoided or saved for the applicable Operating Year as a result of
the alteration, addition, improvement, replacement, repair, equipment or tool in
question, then such Estimated Annual Savings Amount shall conclusively be deemed
to have been unreasonable at such time. Each disputed Estimated Annual Savings
Amount which the Arbiter determines to be an unreasonable in accordance with the
foregoing, shall be changed to the Arbiter's opinion of what was the best
estimate, at the time that the Estimated Cost Savings Schedule was made a part
of the Operating Expense Records, of the Operating Expenses which would be
avoided or saved for the applicable Operating Year as a result of the
alteration, addition, improvement, replacement, repair, equipment or tool in
question. The determination of the Arbiter, as to any disputed Estimated Annual
Savings Amount, shall, if made in accordance with this Section 3.03(d)(3)(x), be
conclusive and binding upon Landlord and Tenant as to all Section 3.01(c)(I)(2)
Amounts theretofore or thereafter based thereon.
(y) If Landlord's
determination of the useful life, Cost Savings Period, Capital Costs or Capital
Cost Rate with respect to any alteration, addition, improvement, replacement,
repair, equipment or tool shall be disputed, then any determination of the
Arbiter with respect thereto shall be conclusive and binding upon Landlord and
Tenant as to all Section 3.01(c)(I)(2) Amounts theretofore or thereafter based
thereon.
(e) (1) Notwithstanding anything to the contrary set
forth above in this Section 3.03, there shall be an abatement of the Operating
Payment(s), if any, which are payable in respect of all periods prior to the
Operating Payment Commencement Date (as hereinafter defined). The "OPERATING
PAYMENT COMMENCEMENT DATE" shall be January 1, 1995. If the Operating Payment
Commencement Date shall be a day other than the first day of a Operating Year,
then the Operating Payment for the Operating Year in which the Operating Payment
Commencement Date occurs shall be prorated (on a per diem basis) to correspond
to
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that portion of the Operating Year occurring on or after the Operating Payment
Commencement Date.
(2) Notwithstanding anything to the contrary set forth
above in this Section 3.03, the Operating Payment for any Operating Year which
ends after the Expiration Date, shall be prorated (on a per diem basis) to
correspond to that portion of such Operating Year occurring on or prior to the
Expiration Date.
3.04. (a) In any case provided in this Article 3 in which
Tenant is entitled to a payment from Landlord pursuant to the terms of this
Article 3, Landlord, in lieu of making such payment, may credit the amount
thereof against the immediately following future installments of Fixed Rent and
Additional Charges; provided, however, that if such a credit would exceed
Tenant's next installment of Fixed Rent and Recurring Additional Charges, then
the uncredited portion of such excess shall bear interest at the Base Rate from
the date due until the date credited. Nothing in this Article 3 shall be
construed so as to result in a decrease in the Fixed Rent hereunder. If this
lease shall expire before any such credit shall have been fully applied, then
Landlord, within thirty (30) days after the expiration hereof, shall refund to
Tenant the unapplied balance of such credit, but if Tenant is in monetary
default hereunder Landlord may, in lieu thereof, credit the same against the
amount of such default or withhold the same until such default is cured.
(b) The expiration or termination of this lease
during any Tax Year or Operating Year (for any part or all of which there is a
Tax Payment or Operating Payment under this Article) shall not affect the rights
or obligations of the parties hereto respecting such payment and any Operating
Statement or Tax Statement, as the case may be, relating to such payment may be
sent to Tenant subsequent to, and all such rights and obligations of Landlord
and Tenant with respect thereto shall survive, any such expiration or
termination. Any payments due under such Operating Statement and Tax Statement,
as the case may be, shall be payable within thirty (30) days after such
statement or bill is sent to Tenant.
3.05. (a) (1) Landlord's failure to render, or delay in
rendering, a Tax Statement, or a revised or corrected Tax Statement, for any Tax
Year shall not prejudice Landlord's right to thereafter render a Tax Statement,
or a revised or corrected Tax Statement, for such Tax Year or any other Tax
Year, nor shall the rendering of a revised or corrected Tax Statement for any
Tax Year prejudice Landlord's right to thereafter render a further revised or
corrected Tax Statement for such Tax Year.
(2) Notwithstanding the provisions of Section 3.05(a)(1)
above or anything hereinabove contained to the contrary, if Landlord shall not
have rendered an initial Tax Statement for any Tax Year on or prior to the date
that is two (2) years after the end of such Tax Year, then Tenant may deliver to
Landlord a notice setting forth such failure, which notice shall expressly refer
to this Section 3.05(a)(2), and, in such event, if Landlord's failure to deliver
an initial Tax Statement for such Tax Year shall continue for a further period
of three (3) months after Landlord's receipt of such notice, then Landlord shall
no longer have the right to deliver a Tax Statement for such Tax Year and Tenant
shall not be obligated to make any Tax Payment for such Tax Year (it being
understood that the provisions of this Section 3.05(a)(2) however, shall not
affect, in any way, Landlord's right to deliver a Tax Statement for any other
Tax Year or to collect from Tenant any Tax Payment for such other Tax Year).
(3) Notwithstanding the provisions of Section 3.05(a)(1)
above or anything hereinabove contained to the
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contrary, Landlord shall not have the right to render a revised or corrected Tax
Statement for any Tax Year later than the later to occur of (i) the date two (2)
years after rendering of the initial Tax Statement for such Tax Year, and (ii)
the date one (1) year after Tax Closure Date for such Tax Year; provided,
however, that Landlord shall always be (a) entitled and required to render a
revised Tax Statement based upon a decrease in Taxes or increase in the Base Tax
Amount pursuant to any tax reduction proceeding or other tax litigation, and (b)
entitled to render a revised Tax Statement based upon an increase in Taxes or
decrease in the Base Tax Amount pursuant to any tax reduction proceeding or
other tax litigation.
(b) (1) Landlord's failure to render, or delay in rendering, an
Operating Statement with respect to any Operating Year shall not prejudice
Landlord's right to thereafter render an Operating Statement for such Operating
Year or any other Operating Year, nor shall the rendering of an Operating
Statement (or a revised or corrected Operating Statement) for any Operating Year
prejudice Landlord's right to thereafter render one or more revised or corrected
Operating Statements for such Operating Year.
(2) Notwithstanding the provisions of Section 3.05(b)(1)
above or anything hereinabove contained to the contrary, if Landlord shall not
have rendered an initial Operating Statement for any Operating Year prior to the
date that is two (2) years after the end of such Operating Year, then Tenant may
deliver to Landlord a notice setting forth such failure, which notice shall
expressly refer to this Section 3.05(b)(2), and, in such event, if Landlord's
failure to deliver an initial Operating Statement for such Operating Year shall
continue for a further period of three (3) months after Landlord's receipt of
such notice, then (i) Landlord shall still be obligated to deliver an Operating
Statement for such Operating Year and Tenant may suspend payment of any sums
which would otherwise come due under Section 3.03(b) until such Operating
Statement is furnished, (ii) Tenant shall not be obligated to pay any Operating
Deficiency for such Operating Year, and (iii) Landlord, within thirty (30) days
from delivery of such an Operating Statement for such Operating Year, shall
refund to Tenant the amount of such Operating Overpayment, together with
interest on the amount thereof at the Interest Rate (rather than at the Base
Rate as provided in Section 3.03(c) above) for the period commencing on the last
day of the Operating Year in question and ending on the date the appropriate
refund is made (it being understood that the provisions of this Section
3.05(b)(2), however, shall not affect, in any way, Landlord's right to deliver
an Operating Statement for any other Operating Year or to collect from Tenant
any Operating Deficiency for such other Operating Year). The provisions of this
Section 3.05(b)(2) shall not apply to the Base Year Operating Statement;
provided, however, that Landlord shall not be deemed to have delivered an
Operating Statement for any Operating Year subsequent to the Base Operating Year
unless and until it shall have furnished the Base Year Operating Statement.
(3) Notwithstanding the provisions of Section 3.05(b)(1)
above or anything hereinabove contained to the contrary, (I) with respect to any
Operating Year in respect of which one of the Threshold Operating Statements was
rendered, Landlord shall not have the right later than one (1) year after the
Initial Audit Notice Deadline Date to render a revised or corrected Operating
Statement with respect to such Operating Year, and (II) with respect to each
Operating Year occurring after the Operating Years in respect of which any of
the Threshold Operating Statements were rendered, Landlord shall not have the
right later than one (1) year after rendering the initial Operating Statement
with respect to such Operating Year
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to render a revised or corrected Operating Statement with respect to such
Operating Year.
3.06. The parties hereto agree that for purposes of this
lease: (i) the rentable area of each floor of the Building shall be deemed to be
the rentable square footages as set forth on Exhibit D attached hereto and made
a part hereof (and, accordingly, all references in this lease to the rentable
area of any portion of the Building, including without limitation the Premises
or any portion thereof, shall be deemed to mean the rentable area thereof
computed with reference to the applicable rentable square footages set forth on
Exhibit D attached hereto), (ii) the term "TENANT'S OPERATING SHARE DENOMINATOR"
shall be deemed to mean 2,333,731 and (iii) the term "TENANT'S TAX SHARE
DENOMINATOR" shall be deemed to mean 2,385,689; provided, however, in no event
shall such deemed rentable square footages and/or numbers constitute or imply
any representation or warranty by Landlord whatsoever, as to the actual size of
any floor, any other portion of the Building or the Building or portions
thereof.
ARTICLE 4
Delivery of Premises; Landlord's Work
4.01. Tenant acknowledges that it has inspected the Premises
and is fully familiar with the condition of the Premises. Tenant hereby accepts
the Premises "as is" on the date hereof. Except for Landlord's Work (as
hereinafter defined), Landlord shall have no obligation to perform any work in
readying the Premises for Tenant's occupancy. No provision of this Article 4
shall release Landlord from the performance of any of its obligations under any
other Article of this lease.
4.02. For purposes of this lease, the following terms shall
have the following meanings:
"LANDLORD'S WORK" shall mean, collectively, the following work:
(i) the work described in "PART I" of Exhibit E attached hereto (herein called
the "STAIRWAY WORK"); (ii) the work described in "PART II" of Exhibit E attached
hereto (herein called the "SECONDARY WORK"); (iii) the work described in "PART
III" of Exhibit E attached hereto (herein called "LANDLORD'S 50TH FLOOR WORK");
and (iv) the work described in "PART IV" of Exhibit E attached hereto (herein
called the "ELEVATOR WORK").
"STAIRWAY WORK TARGET DATE" shall be May 15 1994; provided,
however, that the Stairway Work Target Date shall be postponed one day for each
day that Landlord is delayed in causing the substantial completion of the
Stairway Work by reason of either (i) one or more acts or omissions of Tenant or
any Tenant Party (as such term is defined in Article 31 hereof), which acts or
omissions constitute a violation of this lease (including without limitation a
violation of Section 4.04 hereof), or (ii) any stoppage or interruption in the
prosecution of Stairway Work undertaken pursuant to a request by Tenant or any
Tenant Party, whether incident to the coordination of work pursuant to Section
4.04 or otherwise.
"SECONDARY WORK TARGET DATE" shall be June 30, 1994; provided,
however, that the Secondary Work Target Date shall be postponed one day for each
day that Landlord is delayed in causing the substantial completion of the
Secondary Work by reason of either (i) one or more acts or omissions of Tenant
or any Tenant Party (as such term is defined in Article 31 hereof), which acts
or omissions constitute a violation of this lease (including without limitation
a violation of Section 4.04 hereof), or (ii) any stoppage or interruption in the
prosecution of Secondary Work undertaken pursuant to a request by Tenant or
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any Tenant Party, whether incident to the coordination of work pursuant to
Section 4.04 or otherwise.
"LANDLORD'S 50TH FLOOR WORK TARGET DATE" shall be May 15, 1994;
provided, however, that Landlord's 50th Floor Work Target Date shall be
postponed one day for each day that Landlord is delayed in causing the
substantial completion of the Landlord's 50th Floor Work by reason of either (i)
one or more acts or omissions of Tenant or any Tenant Party (as such term is
defined in Article 31 hereof), which acts or omissions constitute a violation of
this lease (including without limitation a violation of Section 4.04 hereof), or
(ii) any stoppage or interruption in the prosecution of Landlord's 50th Floor
Work undertaken pursuant to a request by Tenant or any Tenant Party, whether
incident to the coordination of work pursuant to Section 4.04 or otherwise.
"ELEVATOR WORK TARGET DATE" shall be September 1, 1994;
provided, however, that the Elevator Work Target Date shall be postponed one day
for each day that Landlord is delayed in causing the substantial completion of
the Elevator Work by reason of either (i) one or more acts or omissions of
Tenant or any Tenant Party (as such term is defined in Article 31 hereof), which
acts or omissions constitute a violation of this lease (including without
limitation a violation of Section 4.04 hereof), or (ii) any stoppage or
interruption in the prosecution of the Elevator Work undertaken pursuant to a
request by Tenant or any Tenant Party, whether incident to the coordination of
work pursuant to Section 4.04 or otherwise.
4.03. (a) Landlord, at its sole cost and expense, shall
perform the Stairway Work and the Secondary Work, and may perform Landlord's
50th Floor Work. All Landlord's Work shall performed in a good and workmanlike
manner in accordance with all applicable laws and requirements of public
authorities having jurisdiction thereover, and sound construction practice.
(b) (1) Landlord, subject to one or more Events of Force
Majeure, shall substantially complete the Stairway Work on or prior to the
Stairway Work Target Date.
(2) If, for any reason (including one or more Events
of Force Majeure), Landlord fails to substantially complete the Stairway Work on
or prior to the Stairway Work Target Date, then Tenant, as its sole and
exclusive remedy therefor, shall have the right, but not the obligation, to
perform the Stairway Work (or, as the case may be, the then incomplete portions
thereof), which right may be exercised only by written notice thereof to
Landlord given within the period commencing on the day immediately following the
Stairway Work Target Date and ending on the date that is fifteen (15) days
thereafter, both days inclusive. If Tenant exercises such right, then (i)
Landlord shall no longer have any obligation to perform the Stairway Work (or,
as the case may be, the then incomplete portions thereof), (ii) Tenant, in
compliance with the provisions of Article 11 hereof, shall perform the same, and
(iii) Landlord shall reimburse Tenant an amount equal to the reasonable
out-of-pocket costs incurred by Tenant in performing the Stairway Work (or, as
the case may be, the incomplete portions thereof), including engineering,
permitting and construction costs, which reimbursement shall be made by Landlord
within thirty (30) days after its receipt of a statement from Tenant setting
forth all such reimbursable costs and accompanied by paid invoices therefor.
(c) Landlord, subject to one or more Events of Force
Majeure, shall substantially complete the Secondary Work on or prior to the
Secondary Work Target Date.
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(d) If Landlord elects to perform Landlord's 50th Floor
Work, then Landlord, subject to one or more Events of Force Majeure, shall
substantially complete the same on or prior to the Landlord's 50th Floor Work
Target Date.
(e) Landlord, subject to one or more Events of Force
Majeure, shall substantially complete the Elevator Work on or prior to the
Elevator Work Target Date.
4.04. During Landlord's prosecution of Landlord's Work, Tenant
shall have the right to perform, or cause its contractors to perform, the
Initial Alterations, provided Tenant shall have complied with the provisions of
Article 11 hereof, including the requirement that the labor union affiliation of
all such contractors shall be compatible with the labor employed by or on behalf
of Landlord. Landlord and Tenant shall cooperate with each other to facilitate
the simultaneous prosecution of Landlord's Work and the Initial Alterations and
shall each perform, or cause to be performed, their respective work in
accordance with good construction practices.
ARTICLE 5
Subordination, Non-Disturbance and Attornment
5.01. For purposes of this lease, the following terms shall
have the following meanings:
(a) "UNDERLYING LEASE" shall mean any ground lease,
overriding lease or underlying lease of the Land and/or any portion of the
Building of which the Premises are a part (but excluding any such lease which
(x) demises only leasable areas of the Building outside of the Premises, or (y)
demises only one or more Units, no part of which is within the Premises), now or
hereafter existing, and all renewals, modifications, replacements and extensions
of any such lease; and the lessor of an Underlying Lease or its successor in
interest, at the time referred in question, is herein called an "UNDERLYING
LESSOR". The term "Underlying Lease" shall include without limitation the Master
Ground Lease and the Common Elements Net Lease.
(b) "MASTER GROUND LEASE" shall mean that certain Ground
Lease, dated December 31, 1966, between Landlord (as successor-in-interest to
Sol G. Atlas and John P. McGrath), as lessor, and Landlord (as
successor-in-interest to New York Plaza Building Company), as lessee, a
memorandum of which was recorded April 18, 1967 in the Register's Office in Rec.
Liber 172 Page 10, as modified by (1) a certain Agreement dated June 14, 1968, a
memorandum of which was recorded July 2, 1968 in the Register's Office in Rec.
Liber 323 Page 162, (2) a certain Assignment and Assumption of Ground Lease,
dated October 19, 1989, which was recorded October 24, 1989 in the Register's
Office in Reel 1631 Page 1561, and (3) a certain Amendment to Ground Lease dated
April 30, 1993, a memorandum of which Agreement shall has heretofore been
recorded in the Register's Office.
(c) "COMMON ELEMENTS NET LEASE" shall mean that certain
Agreement of Lease, dated as of March 29, 1993, between the One New York Plaza
Condominium, as landlord, and Landlord, as tenant.
(d) "MORTGAGE" shall mean any mortgage which may now or
hereafter affect the Land and/or any portion of the Building of which the
Premises are a part and/or any Underlying Lease, whether or not any such
mortgage shall also cover other lands and/or buildings and/or leases, including
each and every advance made or hereafter to be made under any such mortgage, and
to all modifications, replacements and extensions, spreaders and
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consolidations of any such mortgage; and the holder of a Mortgage is herein
called a "MORTGAGEE".
(e) "NON-DISTURBANCE AGREEMENT" shall mean (1) in the
case of an Underlying Lease, an agreement between the Underlying Lessor under
such Underlying Lease and Tenant, either in the form annexed hereto as Exhibit
F-1 or in such other form as shall be proposed by such Underlying Lessor so long
as such other form, as compared to the form annexed as Exhibit F-1, does not, in
any material respect, increase the obligations or liabilities of Tenant or
decrease the rights or remedies of Tenant, and, in all cases, in recordable
form, providing in substance that (A) such Underlying Lessor will not name or
join Tenant as a party defendant or otherwise in any suit, action or proceeding
to enforce any rights granted to such Underlying Lessor under its Underlying
Lease (unless required by law), and (B) that if such Underlying Lease shall
terminate or be terminated, the Underlying Lessor will recognize Tenant as the
direct tenant of such Underlying Lessor on the same terms and conditions as are
contained in this Lease, and (2) in the case of a Mortgage, an agreement between
the Mortgagee under such Mortgage and Tenant, either in the form annexed hereto
as Exhibit F-2 or in such other form as shall be proposed by such Mortgagee so
long as such other form, as compared to the form annexed as Exhibit F-2, does
not, in any material respect, increase the obligations or liabilities of Tenant
or decrease the rights or remedies of Tenant, and, in all cases, in recordable
form, providing in substance that (A) Tenant shall not be named or joined as a
party defendant or otherwise in any suit, action or proceeding to enforce any
rights granted to such Mortgagee under its Mortgage (unless required by law),
and (B) the possession of Tenant shall not be disturbed or evicted and this
lease, Tenant's leasehold estate and Tenant's rights hereunder shall not be
terminated or otherwise adversely affected as a result of any foreclosure of any
such Mortgage, and any sale pursuant to any such foreclosure or the delivery of
a deed in lieu of foreclosure, or other acquisition of Landlord's interest in
the Land and/or Building pursuant to the enforcement of the Mortgagee's
remedies; provided, however, that (i) any such provisions of any Non-Disturbance
Agreement may be conditioned upon this lease being in full force and effect and
no Event of Default having occurred and being continuing, and may be further
conditioned upon and made subject to Tenant's compliance with the provisions of
Section 5.04 hereof (pursuant to the same or separate agreement), and (ii) any
Non-Disturbance Agreement may contain the substance of Section 5.03 hereof and
subclauses (a) through (f) of Section 5.04 hereof.
5.02. Subject to Section 5.05 hereof, this lease, and all
rights of Tenant hereunder, are and shall be subject and subordinate to each and
every Underlying Lease and to each and every Mortgage. In confirmation of such
subordination, Tenant shall promptly execute, acknowledge and deliver any
instrument that Landlord, any Underlying Lessor or any Mortgagee, or any of
their respective successors in interest, may reasonably request to evidence such
subordination. Without limiting the generality of the foregoing, this lease is
and shall be subject and subordinate in all respects to the Master Ground Lease
and the Common Elements Net Lease. Landlord represents that, as of the date
hereof, (i) there are no Mortgages, and (ii) there are no Underlying Leases,
other than the Master Ground Lease and the Common Elements Net Lease.
5.03. If any act or omission of Landlord would give Tenant the
right, immediately or after lapse of a period of time, to cancel or terminate
this lease, or to abate or offset against the payment of rent or to claim a
partial or total eviction, Tenant shall not exercise such right (a) until it has
given written notice of such act or omission to each Mortgagee and each
Underlying Lessor whose name and address shall previously have
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been furnished to Tenant (in each case with a copy to Landlord), and (b) until a
reasonable period for remedying such act or omission shall have elapsed
following the giving of such notice which shall include a reasonable period of
time for such Mortgagee or Underlying Lessor to have become entitled under such
Mortgage or Underlying Lease, as the case may be, to remedy the same and shall
in no event be less than the period to which Landlord would be entitled under
this lease or otherwise, after similar notice, to effect such remedy plus thirty
(30) days, provided that such Mortgagee or Underlying Lessor shall, within
thirty (30) days after its receipt of Tenant's notice given in accordance
herewith, give Tenant notice of its intention to diligently (i) take such
actions as shall be required in order to entitle it to remedy such act or
omission and (ii) having become so entitled, remedy such act or omission;
provided, however, that such reasonable period, if not theretofore expired,
shall be deemed to expire upon a failure by such Mortgagee or Underlying Lessor
to act in reasonable conformity with such notice of intention. The notice and
cure rights of Mortgagees and Underlying Lessors set forth in this Section 5.03
are not intended to apply to Tenant's rights to terminate this lease as
expressly set forth Sections 19.03, 20.02 and 37.01 hereof, or to Tenant's
rights to an abatement of rent expressly as set forth in Sections 1.06,
3.02(h)(1), 3.03(e)(1), 19.02 and 33.01 hereof.
5.04. If any Underlying Lessor or Mortgagee, any designee of
any Underlying Lessor or Mortgagee, or any other person shall succeed to the
rights of Landlord under this lease, whether through possession or foreclosure
action or delivery of a new lease or deed, then at the request of such party so
succeeding to Landlord's rights (herein called "SUCCESSOR LANDLORD"), Tenant
shall attorn to and recognize such Successor Landlord as Tenant's landlord under
this lease and shall promptly execute and deliver any instrument that such
Successor Landlord may reasonably request to evidence such attornment. Upon such
attornment this lease shall continue in full force and effect as a direct lease
between the Successor Landlord and Tenant upon all of the terms, conditions and
covenants as are set forth in this lease, except that a Successor Landlord shall
not be:
(a) liable for any previous act or omission of Landlord (or its
predecessors in interest); it being understood that the foregoing is not
intended to relieve Successor Landlord of any liability arising by reason of its
acts or omissions from and after the date of such attornment, including a
continuation of the failure of the prior Landlord to perform its obligations
under this lease, in which case Successor Landlord upon receipt of notice of
such continuation from Tenant shall have a reasonable period of time to remedy
same (which period shall not exceed the time period granted Landlord for such
remedy pursuant to the terms of this Lease);
(b) responsible for any monies owing by Landlord to the credit
of Tenant;
(c) subject to any offsets, claims, counterclaims, demands or
defenses which Tenant may have against Landlord (or its predecessors in
interest);
(d) bound by any payments of rent which Tenant might have made
for more than one (1) month in advance to Landlord (or its predecessors in
interest);
(e) required to account for any security deposit other than any
security deposit actually delivered to the Successor Landlord; and
(f) bound by any modification of this lease, which is made
after the date Tenant has actual notice of the existence of such Successor
Landlord's Mortgage or Underlying
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Lease, and which is made without the written consent of the Mortgagee or
Underlying Lessor.
5.05. (a) Landlord, with respect to any Mortgage or Underlying
Lease executed after the date hereof, shall deliver to Tenant a Non-Disturbance
Agreement from the Mortgagee or Underlying Lessor thereunder; provided, however,
that if an Event of Default has occurred and is continuing, then Landlord shall
have no obligation to deliver a Non-Disturbance Agreement to Tenant with respect
to any such future Mortgage or future Underlying Lease until such time as such
Event of Default shall have ceased to continue, and, during the continuance of
such Event of Default, this lease shall be subject and subordinate to such
Underlying Lease or Mortgage notwithstanding that a Non-Disturbance Agreement
has not been delivered to Tenant.
(b) If, in any instance, (i) Landlord shall have
delivered to Tenant a form of Non-Disturbance Agreement for execution by Tenant
(whether or not such form of Non-Disturbance Agreement shall have theretofore
been executed by the applicable Underlying Lessor or Mortgagee) together with a
request, referring to this clause (i) of this Section 5.05(b) and conforming to
the last sentence of this Section 5.05(b), that Tenant execute the same, (ii)
Tenant shall fail or refuse to execute and deliver same within fifteen (15)
Business Days after such delivery (or, in any case that the form of
Non-Disturbance Agreement is either (x) a form proposed by the applicable
Underlying Lessor which differs from the form annexed hereto as Exhibit F-1, or
(y) a form proposed by the applicable Mortgagee which differs from the form
annexed hereto as Exhibit F-2, within twenty (20) Business Days after such
delivery), (iii) following the expiration of such fifteen (15) Business Day
period (or, as the case may be, twenty (20) Business Day period), Landlord
delivers to Tenant a notice setting forth such failure or refusal and referring
to this clause (iii) of this Section 5.05(b) and conforming to the last sentence
of this Section 5.05(b), and (iv) Tenant's failure or refusal shall continue for
a period of five (5) Business Days after Tenant's receipt of the notice
described in clause (iii) above (the last day of such five (5) Business Day
period being herein called, with respect to such Underlying Lease or Mortgage,
the "NDA EXECUTION DEADLINE DATE"), then Landlord shall have no further
obligation pursuant to this Section 5.05 with respect to such Underlying Lease
or Mortgage, all of Landlord's obligations being deemed satisfied, and this
lease and all rights of Tenant hereunder shall remain subject and subordinate to
such Underlying Lease or Mortgage without any need to deliver to Tenant a
Non-Disturbance Agreement, and no further instrument of subordination shall be
required. Any notice from Landlord under this Section 5.05(b) shall include, on
the first page thereof, in capital letters the following legend: AS MORE FULLY
SET FORTH IN SECTION 5.05(b) OF THE LEASE, YOUR FAILURE TIMELY TO RESPOND TO
THIS NOTICE MAY RESULT IN THE LEASE BEING SUBJECT AND SUBORDINATE TO AN
UNDERLYING LEASE OR MORTGAGE WITHOUT NON-DISTURBANCE PROTECTION.
(c) If, in any instance, (i) Landlord shall deliver to
Tenant a form of Non-Disturbance Agreement for execution by Tenant which has not
theretofore been executed by the applicable Underlying Lessor or Mortgagee, as
the case may be, and (ii) Tenant executes such form of Non-Disturbance Agreement
and delivers the same to Landlord on or prior to the applicable NDA Execution
Deadline Date, then Landlord shall, within fifteen (15) Business Days after
Tenant's execution thereof, cause the same to be executed by such Underlying
Lessor or Mortgagee, as the case may be, and delivered to Tenant and, until such
time as the Non-Disturbance Agreement is so delivered to Tenant, this lease
shall be superior to such Underlying Lease or Mortgage, as the case may be.
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(d) If, with respect to any Mortgage or Underlying
Lease executed after the date hereof, Landlord shall not deliver to Tenant a
Non-Disturbance Agreement from the Mortgagee or Underlying Lessor thereunder as
required by the foregoing provisions of this Section 5.05, then, unless and
until the same is delivered, this lease shall be superior to such Underlying
Lease or Mortgage (and Landlord shall have no liability by reason of such not
having delivered the Non-Disturbance Agreement with respect to such Underlying
Lease or Mortgage).
(e) Tenant shall have the right to record any
Non-Disturbance Agreement, provided that Tenant shall pay for all costs, taxes
and/or expenses necessary for the recordation of such Non-Disturbance Agreement.
Upon the expiration or earlier termination of this lease (or the expiration or
termination of the applicable Mortgage or Underlying Lease, as the case may be),
Tenant agrees to promptly execute, acknowledge and deliver to Landlord all
necessary instrument(s) prepared by Landlord in recordable form and otherwise in
form reasonably satisfactory to Tenant, evidencing such expiration or
termination of this lease and sufficient to discharge of record any
Non-Disturbance Agreements (or, in the case of the expiration or termination of
the applicable Mortgage or Underlying Lease, to promptly execute, acknowledge
and deliver to Landlord all necessary instrument(s) prepared by Landlord (or by
the applicable Underlying Lessor or Mortgagee) in recordable form and otherwise
in form reasonably satisfactory to Tenant, sufficient to discharge of record any
Non-Disturbance Agreements delivered to Tenant by the holder of any such expired
or terminated Mortgage or Underlying Lease, as the case may be), and, in all
cases, Tenant shall pay for all costs, taxes and/or expenses necessary to effect
the recordation of such instrument(s). In the event that Tenant shall fail to
comply with the foregoing sentence, Tenant shall be liable for all Landlord's
damages, costs and other liability occasioned by such failure.
ARTICLE 6
Quiet Enjoyment
6.01. So long as no Event of Default has occurred and is
continuing, Tenant shall peaceably and quietly have, hold and enjoy the Premises
without hindrance, ejection or molestation by Landlord or any person lawfully
claiming through or under Landlord, subject, nevertheless, to the provisions of
this lease. This covenant shall be construed as a covenant running with the
Land, and is not, nor shall it be construed as, a personal covenant of Landlord,
except to the extent of Landlord's interest in the Real Property and only so
long as such interest shall continue, and thereafter, with respect to the period
commencing on the date Landlord has no interest in the Real Property and ending
on the date Landlord reacquires an interest therein, Landlord shall be relieved
of all liability hereunder and this covenant shall be binding only upon
subsequent successors in interest of Landlord's interest in this lease, to the
extent of their respective interests, as and when they shall acquire the same,
and so long as they shall retain such interest.
ARTICLE 7
Assignment, Subletting and Mortgaging
7.01. Except as may be expressly permitted herein, Tenant
shall not, whether voluntarily, involuntarily, or by operation of law or
otherwise, without in each instance obtaining the prior written consent of
Landlord: (a) assign in whole or in part or otherwise transfer in whole or in
part this lease or the
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term and estate hereby granted, (b) sublet the Premises or any part thereof, or
allow the same to be used, occupied or utilized by anyone other than Tenant, (c)
mortgage, pledge, encumber or otherwise hypothecate this lease or the Premises
or any part thereof or any Tenant's Improvements in any manner whatsoever, other
than as specifically set forth in Section 11.10, or (d) permit the Premises or
any part thereof to be occupied or used for desk space or mailing privileges by
any person other than Tenant.
7.02. (a) If Tenant is a corporation, then a transfer of stock
(by a single transfer or by multiple transfers effected pursuant to a common
plan) or any other transaction (such as, by way of example, the issuance of
additional stock, the redemption of stock, a stock voting agreement, a change in
classes of stock or a merger or consolidation involving Tenant) which transfer
or other transaction results in a change of control of Tenant (or, in the event
of a merger or consolidation involving Tenant, a change of control of the
resulting corporation), shall be deemed, for all purposes of this Article 7, an
assignment of this lease, and if Tenant is a partnership, joint venture or other
non-corporate entity, then a transfer of an interest in the distributions of
profits and losses of such partnership, joint venture or other non-corporate
entity (by a single transfer or by multiple transfers effected pursuant to a
common plan) or any other transaction (such as, by way of example, the creation
of partnership interests) which transfer or other transaction results in a
change of control of such partnership, joint venture or other non-corporate
entity, shall be deemed, for all purposes of this Article 7, an assignment of
this lease. As used above in this Section 7.02(a), the term "TRANSFER" shall not
includes sales effected through the "over-the-counter market" or through any
recognized stock exchange, unless such sales are effected by persons deemed
"insiders" within the meaning of the Securities Exchange Act of 1934, as
amended. As used herein, the term "CONTROL" shall have the meaning ascribed
thereto in Article 31 hereof.
(b) (1) Notwithstanding the provisions of Section
7.02(a) above, the transfers and other transactions which, pursuant to the
aforesaid provisions, constitute deemed assignments of this lease, shall
nevertheless be permitted hereunder (without the consent of Landlord) if (i)
immediately after such deemed assignment, Tenant (which, in the event of a
merger or consolidation involving Tenant, is the resulting corporation) has a
net worth computed in accordance with generally accepted accounting principles
consistently applied which is not less than the Minimum Net Worth (as
hereinafter defined), and (ii) such transfer or other transaction is effected
for legitimate business purposes, and not primarily for the purpose of
transferring this lease.
(2) Tenant shall have the right, without the consent
of Landlord, to assign its interest in this lease to any person acquiring, by
purchase or other transfer, all or substantially all of Tenant's assets provided
that (i) such purchase or other transfer is effected for legitimate business
purposes, and not primarily for the purpose of transferring this lease and (ii)
immediately after such assignment, the purchaser or other transferee, as the
case may be, has a net worth computed in accordance with generally accepted
accounting principles consistently applied which is not less than the Minimum
Net Worth.
(3) Within ten (10) after any deemed assignment or
assignment permitted by this Section 7.02(b) without Landlord's consent, Tenant
(which, in the event of a merger or consolidation involving Tenant, is the
resulting corporation, and, in the event of an assignment pursuant to Section
7.02, is the purchaser or other transferee) shall furnish Landlord with (i)
proof reasonably satisfactory to Landlord that
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its net worth exceeds the Minimum Net Worth, and (ii) a written description of
the transaction and a duplicate original instrument of the assignment, or
equivalent instrument, effecting the assignment, or deemed assignment, of this
lease, as the case may be.
(4) The term "MINIMUM NET WORTH" shall mean (i) with
respect to any deemed assignment or assignment made during the initial term of
this lease, a net worth, computed in accordance with generally accepted
accounting principles, equal to eighteen (18) times the sum of the aggregate of
the Fixed Rent due and payable over the last twelve (12) months of the initial
term of this lease (computed without regard to any abatements, credits or
offsets applicable thereto and without regard to any expansion rights
unexercised as of the date of such assignment or deemed assignment), or (ii)
with respect to any deemed assignment or assignment made during any Renewal Term
(as hereinafter defined), a net worth, computed in accordance with generally
accepted accounting principles, equal to eighteen (18) times the sum of the
aggregate of the Fixed Rent due and payable over the last twelve (12) months of
such Renewal Term (computed without regard to any abatements, credits or offsets
applicable thereto and without regard to any expansion rights unexercised as of
the date of such assignment or deemed assignment).
(c) (1) Notwithstanding anything to the contrary contained
herein, Tenant, without any need to obtain Landlord's consent, may sublet the
whole or any portion of the Premises to any person that, at the time of the
making of such sublease, is an Affiliate of Tenant, provided, that, at the time
such sublease is made, Tenant has no intention of effecting or permitting a
transfer of control of such Affiliate of Tenant. Within ten (10) days of the
commencement date of any such sublease, Tenant shall furnish Landlord with a
duplicate original instrument thereof duly executed by Tenant and the subtenant.
(2) Notwithstanding anything to the contrary contained
herein, if any person purchases or otherwise acquires a GS Business Unit (as
hereinafter defined), then Original Tenant, without any need to obtain
Landlord's consent, may sublet to such person all or any portion of the Premises
which, prior to such purchase or acquisition, was occupied, exclusively or
primarily, by such GS Business Unit, provided, that (i) such GS Business Unit
shall have been occupying space in the Premises for a period of at least one (1)
year prior to such purchase or other acquisition, (ii) such sublease shall be
made together with such purchase or other acquisition, and (iii) immediately
after such purchase or other acquisition, Original Tenant shall have a net worth
computed in accordance with generally accepted accounting principles
consistently applied which is not less the Minimum Net Worth. The term "GS
BUSINESS UNIT" shall mean any discernable and on-going part of the business
which Original Tenant and/or Affiliates of Original Tenant conducts at the
Premises (whether or not organized as a separate legal entity). A person shall
be deemed to have purchased or otherwise acquired a GS Business Unit only if
such person shall purchase or otherwise acquire all or substantially all of the
Tenant's Property used by such GS Business Unit immediately prior to such
purchase or other acquisition and, immediately after such purchase or other
acquisition, shall employ, or seek to employ, all or substantially all of the
employees of such GS Business Unit immediately prior to such purchase or other
acquisition. For purposes of this Section 7.02(c)(2), a person which "purchases
or otherwise acquires a GS Business Unit" shall include, without limitation, an
Affiliate of Original Tenant (whether pre-existing or newly formed) which
acquires a GS Business Unit, even in a case where Original Tenant has an
intention of effecting or permitting a transfer of control of such Affiliate
immediately after such acquisition. Within ten (10) days of the commencement
date of any such sublease, Original
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Tenant shall furnish Landlord with a duplicate original instrument thereof duly
executed by Original Tenant and the subtenant.
(d) (1) The terms and provisions of Section 7.02(a)
shall be deemed to apply, mutatis mutandis, to any permitted subtenant of Tenant
with respect to the assignment or deemed assignment of such subtenant's
sublease.
(2) The terms and provisions of Section 7.02(b)
hereof shall be deemed to apply, mutatis mutandis, to any permitted subtenant of
Tenant with respect to the assignment or deemed assignment of such subtenant's
sublease, except that the subtenant's assignee or deemed assignee need not
comply with the provisions thereof relating to net worth; provided, however,
that such terms and provisions shall not apply to permit any such assignment or
deemed assignment, if, immediately prior to such assignment or deemed
assignment, the subtenant is an Affiliate of Tenant, unless, immediately after
such assignment or deemed assignment, Tenant has a net worth computed in
accordance with generally accepted accounting principles consistently applied
which is not less the Minimum Net Worth.
(3) The terms and provisions of Section 7.02(c)(1)
hereof shall apply, mutatis mutandis, to any permitted subtenant of Tenant with
respect to the undersubletting of all or any part of the sublease premises to
Affiliates of such subtenant; provided, however, that such terms and provisions
shall not apply to any undersubletting by a subtenant that, at the time of the
making of such undersubletting, is an Affiliate of Tenant.
7.03. If this lease shall be assigned, whether or not in
violation of the provisions of this lease, Landlord may collect rent from the
assignee. If the Premises or any part thereof are sublet or used or occupied by
anybody other than Tenant, whether or not in violation of this lease, Landlord
may, after default by Tenant, and expiration of Tenant's time to cure such
default, collect rent from the subtenant or occupant. In either event, Landlord
shall apply the net amount collected to the Fixed Rent and Additional Charges
herein reserved, but no such assignment, subletting, occupancy or collection
shall be deemed a waiver of any of the provisions of Section 7.01, or the
acceptance of the assignee, subtenant or occupant as tenant, or a release of
Tenant from the performance by Tenant of Tenant's obligations under this lease.
The consent by Landlord to a particular assignment, mortgaging, subletting or
use or occupancy by others shall not in any way be considered a consent by
Landlord to any other or further assignment, mortgaging or subletting or use or
occupancy by others not expressly permitted by this Article. References in this
lease to use or occupancy by others (that is, anyone other than Tenant) shall
not be construed as limited to subtenants and those claiming under or through
subtenants but shall also include licensees and others claiming under or through
Tenant, immediately or remotely.
7.04. Any assignment or deemed assignment, whether made with
Landlord's consent pursuant to the provisions of this Article 7, or without the
need of Landlord's consent pursuant to this Section 7.02 hereof, shall be made
only if, and shall not be effective until, the entity owning the Tenant's
interest in this lease following such assignment or deemed assignment shall
execute, acknowledge and deliver to Landlord an agreement in the form of Exhibit
G hereto whereby such entity shall:
(a) assume the obligations of this lease on the
part of Tenant to be performed or observed as of the effective
date of the assignment or deemed assignment (except, that, in
the case of any assignment or deemed assignment effected
pursuant to Section 7.02
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hereof without the need of Landlord's consent, such assumption
shall be effective as of the Commencement Date); and
(b) agree that the provisions in Article 7
shall, notwithstanding such assignment or transfer, continue
to be binding upon it in respect of all future assignments and
deemed assignments;
provided, however, that, in the case of any deemed assignment, no such
instrument shall be required if the entity owning the Tenant's interest in this
lease following such deemed assignment shall be the same as the entity owning
the Tenant's interest in this lease prior to such deemed assignment. Tenant
covenants that, notwithstanding any assignment or deemed assignment, whether or
not in violation of the provisions of this lease, and notwithstanding the
acceptance of Fixed Rent and/or Additional Charges by Landlord from any
assignee, or any other party, Tenant shall remain fully liable for the payment
of the Fixed Rent and Additional Charges and for the performance and observance
of other obligations of this lease on the part of Tenant to be performed or
observed.
7.05. The joint and several liability of Tenant and any
immediate or remote successor in interest of Tenant and the due performance of
the obligations of this lease on Tenant's part to be performed or observed shall
not be discharged, released or impaired in any respect by any agreement or
stipulation made by Landlord extending the time of, or modifying any of the
obligations of, this lease, or by any waiver or failure of Landlord to enforce
any of the obligations of this lease. Notwithstanding the foregoing, if this
lease shall be assigned, the assignor Tenant shall not thereafter be liable with
respect to any obligations of Tenant to the extent that the same arise out of
any modification of this lease effected after the effective date of such
assignment.
7.06. The listing of any name other than that of Tenant,
whether on the doors of the Premises or the Building directory, or otherwise,
shall not operate to vest any right or interest in this lease or in the
Premises, nor shall it be deemed to be the consent of Landlord to any assignment
or deemed assignment of this lease or to any sublease of the Premises or to the
use or occupancy thereof by others.
7.07. (a) Notwithstanding anything to the contrary contained
in this Article, if Tenant shall at any time or times during the term of this
lease desire to assign this lease or sublet all or part of the Premises (other
than (i) an assignment, or deemed assignment, pursuant to Section 7.02(b) for
which Landlord's consent is not required, (ii) a sublease pursuant to Section
7.02(c) for which Landlord's consent is not required, or (iii) a Short-Term
Sublease (as hereinafter defined)), Tenant shall give notice thereof to
Landlord, which notice ("TENANT'S INITIAL NOTICE") shall contain all of the
following terms and conditions:
(1) in the case of a desired assignment, (i) the desired
effective date thereof (which desired effective date shall not be not
more than eighteen (18) months after the date Landlord receives
Tenant's Initial Notice (or, if the Premises, as of the date of such
Tenant's Initial Notice, consist of less than 100,000 rentable square
feet, not more than twelve (12) months after the date Landlord receives
Tenant's Initial Notice)), (ii) the total amount of all sums and other
consideration, if any, that Tenant in good faith, contemplates
receiving from a prospective third party assignee in consideration of
such assignment (assuming there will be no Excess Tenant Property
Payments (as hereinafter defined) in connection with such assignment),
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(iii) the nature and amount of all tenant inducements (such as, by way
of example only, direct payments, work allowances and workletters), if
any, that Tenant, in good faith, contemplates being required to grant a
prospective third party assignee, and (iv) Tenant's reasonably detailed
computation of the Net Effective Assignment Price (as hereinafter
defined) or the Net Effective Assignment Payment (as hereinafter
defined), as the case may be, for the desired assignment set forth in
such Tenant's Initial Notice; and
(2) in the case of a desired sublease, (i) the desired
commencement date of such desired sublease (it being agreed that such
desired commencement date (x) in the case of a desired sublease of an
area consisting of less than 100,000 rentable square feet, shall not be
more than twelve (12) months after the date Landlord receives Tenant's
Initial Notice, and (y) in the case of a desired sublease of an area
consisting of 100,000 rentable square feet or more, shall be not more
than eighteen (18) months after the date Landlord receives Tenant's
Initial Notice), and the desired expiration date of such desired
sublease (it being agreed that no Tenant's Initial Notice shall set
forth or contemplate any renewal, extension, termination or other
options whereby the term of the desired sublease could be shortened or
lengthened), (ii) a description of the portion of the Premises that
Tenant desires to sublease, including a floor plan delineating the same
(it being agreed that no Tenant's Initial Notice shall set forth or
contemplate any expansion, contraction or other option or provision
whereby the space to be demised under the desired sublease will or
could be enlarged or reduced at anytime during the term of the desired
sublease), (iii) all rent, additional rent and other consideration
(including without limitation all rent and additional rent payable with
respect to taxes, operating expenses and other "pass-through" expenses,
including, if applicable, information as to base years or amounts, and
rent concessions) which Tenant, in good faith, contemplates receiving
from a prospective third party subtenant in respect of the desired
sublease (assuming there will be no Excess Tenant Property Payments in
connection with such desired sublease) (it being agreed that each
Tenant's Initial Notice shall set forth a fixed rent which is payable
in equal monthly amounts throughout the term of the desired sublease,
except that, at Tenant's option, a Tenant's Initial Notice may set
forth a period, prior to the first such monthly payment, during which
such fixed rent would abate), (iv) the nature and amount of all tenant
inducements (such as, by way of example only, direct payments, work
allowances and workletters), if any, that Tenant, in good faith,
contemplates being required to offer a prospective third party
subtenant in respect of the desired sublease, and (v) Tenant's
reasonably detailed computation of the Net Effective Sublease Rental
(as hereinafter defined) for the desired sublease set forth in such
Tenant's Initial Notice (together, if applicable, with a statement
setting forth any assumptions made by Tenant in computing such Net
Effective Sublease Rental, including without limitation any assumptions
made with respect to future taxes, operating expenses and other
"pass-through" expenses, all of which assumptions shall be reasonable).
As used herein, the following terms shall have the following meanings:
(A) The term "NET EFFECTIVE ASSIGNMENT PRICE" shall mean,
with respect to any desired assignment set forth in a Tenant's Initial Notice or
any proposed assignment set forth in a Tenant's Proposal Notice (as hereinafter
defined), the excess, if any, of (I) the net present value, determined as of
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the effective date of the desired or proposed assignment using a discount rate
of 10% per annum, of all sums and other consideration to be paid by the assignee
in respect of the desired or proposed assignment (as well as, in the case of any
proposed assignment, any Excess Tenant Property Payments in connection
therewith), discounted from the date that any such payment(s) are to be made
under the desired or proposed assignment to the effective date of such desired
or proposed assignment, over (II) the net present value, determined as of the
effective date of the desired or proposed assignment using a discount rate of
10% per annum, of all tenant inducements (such as, by way of example only,
direct payments, work allowances and workletters) to be paid or incurred by
assignor to assignee in respect of such desired or proposed assignment,
discounted from the date that such tenant inducements are to be paid or incurred
under the desired or proposed assignment to the effective date of such desired
or proposed assignment.
(B) The term "NET EFFECTIVE ASSIGNMENT PAYMENT" shall mean,
with respect to any desired assignment set forth in a Tenant's Initial Notice or
any proposed assignment set forth in a Tenant's Proposal Notice, the excess, if
any, of (I) the net present value, determined as of the effective date of the
desired or proposed assignment using a discount rate of 10% per annum, of all
tenant inducements (such as, by way of example only, direct payments, work
allowances and workletters) to be paid or incurred by assignor to assignee in
respect of such desired or proposed assignment, discounted from the date that
such tenant inducements are to be paid or incurred under the desired or proposed
assignment to the effective date of such desired or proposed assignment, over
(II) the net present value, determined as of the effective date of the desired
or proposed assignment using a discount rate of 10% per annum, of the aggregate
of all sums and other consideration to be paid by the assignee in respect of the
desired or proposed assignment (as well as, in the case of any proposed
assignment, any Excess Tenant Property Payments in connection therewith),
discounted from the date that any such payment(s) are to be made under the
desired or proposed assignment to the effective date of such desired or proposed
assignment.
(C) The term "NET EFFECTIVE SUBLEASE RENTAL" shall mean,
with respect to any desired sublease set forth in a Tenant's Initial Notice or
proposed sublease set forth in a Tenant's Proposal Notice, the monthly amount
per rentable square foot, equal to the quotient obtained by dividing (I) the
quotient obtained by dividing (i) the excess of (x) the net present value,
determined as of the commencement date of the desired or proposed sublease using
a discount rate of 10% per annum, of the aggregate of all rent, additional rent
and other consideration payable under the desired or proposed sublease (as well
as, in the case of a proposed sublease, any Excess Tenant Property Payments in
connection therewith), discounted from the dates that such payments are to be
made under the desired or proposed sublease to the commencement date of such
desired or proposed sublease, over (y) the net present value of all tenant
inducements (such as, by way of example only, direct payments, work allowances
and workletters) to be paid or incurred to the subtenant under the desired or
proposed sublease, discounted, using a discount rate of 10% per annum, from the
date that such tenant inducements are to be paid or incurred under the desired
or proposed sublease to the commencement date of such desired or proposed
sublease, by (ii) the number of calendar months (rounded to the nearest one-half
month) within the term of such desired or proposed sublease, by (II) the number
of rentable square feet in the area to be demised by such desired or proposed
sublease. With respect to the application of the foregoing, it is agreed that
the Net Effective Sublease Rental of a proposed sublease set forth in a Tenant's
Proposal Notice shall be determined solely with reference to the initial term of
such proposed sublease,
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i.e., without regard to any renewal term pertinent to any Qualified Sublease
Renewal Provision (as hereinafter defined) set forth in such Tenant's Proposal
Notice.
(b) Each Tenant's Initial Notice shall be deemed an
offer from Tenant to Landlord, whereby Landlord may, at its option, (i)
terminate this lease, in the case of (x) a desired assignment or (y) a desired
sublease of an area comprising 90% or more of the rentable area of the Premises,
or (ii) terminate this lease with respect to the desired sublease area, in the
case of a desired sublease. Said option(s) ("LANDLORD'S RECAPTURE OPTIONS") may
be exercised by Landlord by giving notice to Tenant at any time within the
period (the "OPTION PERIOD") of thirty (30) days after Landlord's receipt of
Tenant's Initial Notice.
(c) No Tenant's Initial Notice (or series of Tenant's
Initial Notices) shall contemplate a sublease (or series of subleases) which is
(or are) intentionally structured in a manner which is designed to frustrate
Landlord's rights hereunder with respect to its Recapture Options. Without
limiting the generality of the foregoing, if any Tenant's Initial Notice shall
set forth a desired sublease of less than all of the Premises located on any
Premises Floor, then each of the desired sublease premises and the remaining
balance of such Premises Floor shall consist solely of one or more Rentable
Blocks. The term "RENTABLE BLOCK" shall mean any contiguous block of not less
than 10,000 rentable square feet which, taking into account its size, location
and configuration, can be leased as office space to willing office tenants in
accordance with applicable laws and requirements of public authorities.
(d) If, at the time it delivers Tenant's Initial Notice,
Tenant is then negotiating with any specific potential assignees or subtenants,
then Tenant shall set forth in Tenant's Initial Notice (A) the name and address
of each such potential assignee or subtenant, and (B) a reasonably detailed
description of the nature and character of the business of each such potential
assignee or subtenant. In addition, if a sublease, letter of intent or similar
writing has theretofore been executed (all of which writings must be conditioned
upon both Landlord not exercising any of its applicable Recapture Options and
Landlord granting its consent hereunder), then Tenant shall deliver a copy of
the same to Landlord with the Tenant's Initial Notice; and, if such a sublease,
letter or similar writing is thereafter executed prior to the end of the Option
Period, then Tenant shall deliver a copy of the same to Landlord promptly after
the same is executed.
7.08. (a) If Landlord exercises Landlord's Recapture Option
set forth in Section 7.07(b)(i) to terminate this lease, then, this lease shall
end and expire on (i) in the case of desired assignment, the later to occur of
(x) the date which is twelve (12) months after the date that Landlord received
the Tenant's Initial Notice setting forth such desired assignment (or, if the
Premises, as of the date of such Tenant's Initial Notice, consisted of (I) less
than 100,000 rentable square feet but more than space located solely on a single
Premises Floor, then the date six (6) months after the date Landlord received
such Tenant's Initial Notice, or (II) space located solely on a single Premises
Floor, then the date four (4) months after the date Landlord received such
Tenant's Initial Notice), and (y) the effective date of the desired assignment
set forth in such Tenant's Initial Notice, or (ii) in the case of a desired
sublease, the later to occur of (A) the date which is twelve (12) months after
the date that Landlord received the Tenant's Initial Notice setting forth such
desired sublease (or, if the Premises, as of the date of such Tenant's Initial
Notice, consisted of (X) less than 100,000 rentable square feet but more than
space located solely on a single Premises Floor, the date six (6)
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months after the date Landlord received such Tenant's Initial Notice, or (Y)
space located solely on a single Premises Floor, the date four (4) months after
the date Landlord received such Tenant's Initial Notice), and (B) the
commencement date of the desired sublease set forth in such Tenant's Initial
Notice; and, in each such case, the Fixed Rent and Additional Charges shall be
paid and apportioned to the date of such termination.
(b) If Landlord exercises Landlord's Recapture Option
set forth in Section 7.07(b)(ii) to terminate this lease with respect to the
desired sublease area set forth in a Tenant's Initial Notice, then (i) this
lease shall end and expire with respect to such desired sublease area on the
later to occur of (A) either (x) in the event that such desired sublease area
consists solely of space which is located on a single Premises Floor, the date
which is four (4) months after the date that Landlord received such Tenant's
Initial Notice, (y) in the event that such desired sublease area consists of
more than solely space which is located on a single Premises Floor, but consists
of less than 100,000 rentable square feet in the aggregate, the date which is
six (6) months after the date that Landlord received such Tenant's Initial
Notice, or (z) in the event that such desired sublease area consists of more
than 100,000 rentable square feet in the aggregate, the date which is twelve
(12) months after the date that Landlord received such Tenant's Initial Notice,
and (B) the commencement date of the desired sublease as set forth in such
Tenant's Initial Notice (any such area being hereinafter referred to as
"RECAPTURED SPACE"), (ii) from and after such date the Fixed Rent and Additional
Charges shall be adjusted, based upon the proportion that the rentable area of
the Premises remaining after the deletion of the Recaptured Space bears to the
total rentable area of the Premises prior to the deletion of the Recaptured
Space, and (iii) Landlord shall physically separate the Recaptured Space from
the balance of the Premises and in comply with any laws and requirements of any
public authorities relating to such separation, and Tenant, thereafter upon
demand, shall pay to Landlord, as Additional Charges hereunder, an amount equal
to one-half (1/2) the actual out-of-pocket costs incurred by Landlord in
physically separating such Recaptured Space from the balance of the Premises,
and in complying with any laws and requirements of any public authorities
relating to such separation.
(c) If (i) any Recaptured Space constitutes less than
the entire rentable area on any Premises Floor, and portions of the Premises
remain on such Premises Floor, and (ii) Landlord thereafter leases such
Recaptured Space to one or more tenants, then Tenant, as applicable, shall (x)
in any case where the Recaptured Space is not appurtenant to the Building's
passenger elevator lobby located on such Premises Floor or the Building's
freight elevator lobby located on such Premises Floor, provide such tenants of
Landlord with ingress and egress to and from such passenger and freight elevator
lobbies, and (y) in all cases, provide such tenants with ingress and egress to
and from, and with the use of, the Core Lavatories located on such Premises
Floor.
7.09. (a) If, in any case that Landlord has received a
Tenant's Initial Notice and Landlord has not exercised any of its Recapture
Options within the Option Period, Tenant, thereafter, continues to desire to
assign this lease or to sublease all or a portion of the Premises as set forth
in such Tenant's Initial Notice, then Tenant, no later than the Post-Option
Submission Deadline Date (as hereinafter defined) with respect to such Tenant's
Initial Notice, may submit to Landlord one or more Tenant's Proposal Notices (as
hereinafter defined), each describing either a proposed assignment (in any case
that the Tenant's Initial Notice set forth a desired assignment) or a proposed
sublease (in any case that the Tenant's Initial Notice set forth a desired
sublease). As used herein, the term "POST-
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OPTION SUBMISSION DEADLINE DATE", with respect to any Tenant's Initial Notice,
shall be the date that is one hundred twenty (120) days after the effective date
of the desired assignment set forth in such Tenant's Initial Notice or the
commencement date of the desired sublease set forth in such Tenant's Initial
Notice, as the case may be.
(b) In any case that Tenant desires to enter
into a Short-Term Sublease (and, accordingly, Tenant is not obligated under
Section 7.07 hereof to submit a Tenant's Initial Notice), Tenant (without first
submitting a Tenant's Initial Notice) may submit to Landlord a Tenant's Proposal
Notice describing a proposed Short-Term Sublease. The term "SHORT-TERM SUBLEASE"
shall mean a sublease which will expire prior to the date that is eighteen (18)
months prior to the Then Current Expiration Date (as of the execution of such
sublease); it being understood that a Short-Term Sublease may include one or
more renewal or extension options, provided, that, in the event that all such
renewal and extension options are exercised, such sublease will still expire
prior to the date that is eighteen (18) months prior to the Then Current
Expiration Date (as of the execution of such sublease).
(c) A "TENANT'S PROPOSAL NOTICE" shall be a
notice from Tenant to Landlord setting forth a proposed assignment or sublease
and requesting Landlord's consent thereto, which notice shall have been rendered
pursuant to either Section 7.09(a) or Section 7.09(b) above, and shall comply
with all the provisions of this Section 7.09. Each Tenant's Proposal Notice
shall set forth (i) the name and address of the proposed assignee or subtenant,
(ii) the effective date of the proposed assignment or the commencement date and
expiration date of the proposed sublease (it being agreed that no proposed
sublease, other than a proposed Short-Term Sublease, described in a Tenant's
Proposal Notice shall include or contemplate any renewal, extension, termination
or other option whereby the term of the proposed sublease will or could be
shortened or lengthened, except for one or more Qualified Sublease Renewal
Provisions (as hereinafter defined) with respect to such proposed sublease),
(iii) in the case of a proposed sublease, a description of the portion of the
Premises to be sublet (including a floor plan) and its proposed use (it being
agreed that no proposed sublease, other than a proposed Short-Term Sublease,
described in a Tenant's Proposal Notice shall include or contemplate any
expansion, contraction or other option or provision whereby the space to be
demised under the proposed sublease will or could be enlarged or reduced at
anytime during the term of the proposed sublease), (iv) the economic terms of
the proposed assignment or sublease, which shall include (x) in the case of a
proposed assignment, the sums and other consideration, if any, payable to Tenant
in respect of the assignment, and the nature and amount of all tenant
inducements to be paid or incurred to the proposed assignee (and, if applicable,
any Excess Tenant Property Payments payable in connection with such proposed
assignment), and (y) in the case of a proposed sublease, all rent, additional
rent and other consideration (including without limitation all rent and
additional rent with respect to taxes, operating expenses and other
"pass-through" expenses, including, if applicable, information as to base years
or amounts and rent concessions) payable to Tenant under the proposed sublease,
and the nature and amount of all tenant inducements to be paid or incurred to
the proposed subtenant (and, if applicable, any Excess Tenant Property Payments
payable in connection with such proposed sublease). The term "QUALIFIED SUBLEASE
RENEWAL PROVISION", with respect to any proposed sublease, shall mean (I) any
option provision contained in the original form of such proposed sublease
(exercisable by the subtenant under the proposed sublease or Tenant, as
sublandlord, under the proposed sublease) to extend the term of such proposed
sublease, or (II) any provision contained in the original form of such proposed
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sublease which provides that the term thereof shall be automatically deemed
extended upon a renewal of this lease; provided, however, that no such option or
provision in any proposed sublease shall be deemed a "Qualified Sublease Renewal
Provision" unless (X) the first renewal term pertinent to any such option or
provision contained in such proposed sublease shall commence on, or on the first
day after, the Then Current Expiration Date (as of the execution of the proposed
sublease), (Y) during the renewal term pertinent to all such options or
provisions contained in such proposed sublease, the sublease rent shall be equal
to the per annum per rentable square foot rate of Fixed Rent, Tax Payments and
Operating Expenses payable under this lease during such renewal term, and (Z)
each such option or provision shall be expressly conditioned upon the renewal of
this lease for the full duration the renewal term pertinent thereto. Each
Tenant's Proposal Notice shall be accompanied by (A) a conformed or photostatic
executed copy of the proposed assignment agreement or sublease (it being
understood that the effectiveness of the proposed assignment contemplated by the
assignment agreement or the commencement of the proposed sublease, as the case
may be, shall be expressly conditioned, in such assignment agreement or proposed
sublease, upon Landlord granting its consent to the proposed assignment or
proposed sublease in accordance with this Article 7 (which express condition of
Landlord's consent, with respect to any proposed assignment or sublease, is
herein called the "CONSENT CONDITION")), (B) a reasonably detailed description
of the nature and character of the business of the proposed subtenant or
assignee, and reasonably detailed character references for such proposed
assignee or subtenant, and (C) with respect to any assignment, reasonably
detailed financial references with respect to the proposed assignee and current
financial information with respect to the proposed assignee, including, without
limitation, its most recent balance sheet and income statements certified by its
chief financial officer, or, if available, a certified public accountant, to the
extent available to Tenant. Each Tenant's Proposal Notice shall expressly
request Landlord's consent to the proposed assignment or sublease set forth
therein and shall include, on the first page thereof, in capital letters the
following legend: AS MORE FULLY SET FORTH IN SECTION 7.10 OF THE LEASE,
LANDLORD'S FAILURE TO RESPOND TO THIS NOTICE WITHIN FIFTEEN (15) BUSINESS DAYS
OF ITS SUBMISSION TO LANDLORD MAY RESULT IN LANDLORD BEING DEEMED TO HAVE
CONSENTED TO THE PROPOSED ASSIGNMENT OR SUBLEASE DESCRIBED HEREIN.
(d) Each Tenant's Proposal Notice that is
submitted pursuant to Section 7.09(a) prior to the Post-Option Submission
Deadline Date, shall also include Tenant's reasonably detailed computation of
the Net Effective Assignment Price or Net Effective Assignment Payment, as
applicable, with respect to the proposed assignment set forth in such Tenant's
Proposal Notice, or the Net Effective Sublease Rental with respect to the
proposed sublease set forth in such Tenant's Proposal Notice (which Net
Effective Sublease Rental shall be computed using the same assumptions as were
reasonably set forth in the applicable Tenant's Initial Notice with respect to
the desired sublease set forth therein). It shall be condition precedent to
Tenant's right to proceed with the proposed assignment or proposed sublease set
forth in any such Tenant's Proposal Notice that such proposed assignment or
sublease satisfy the following conditions:
(i) (x) the effective date of any such proposed
assignment (it being agreed that, for purposes of determining such
effective date, the Consent Condition with respect to such assignment
shall be deemed satisfied on the date Landlord receives Tenant's
Proposal Notice) shall be no more than one hundred twenty (120) days
before or after the effective date of the desired assignment set forth
in the applicable Tenant's Initial Notice, and (y) the commencement
date of any proposed sublease (it being agreed that, for
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purposes of determining such commencement date, the Consent Condition
with respect to such sublease shall be deemed satisfied on the date
Landlord receives Tenant's Proposal Notice) shall be no more than one
hundred twenty (120) days before or after the commencement date of the
desired sublease set forth in the applicable Tenant's Initial Notice;
(ii) in the case of a proposed sublease, the
space proposed to be sublet shall not be materially different in size
(i.e., larger or smaller by more than 5%), and, except for the
foregoing size differential, shall not be in a different location, than
the desired sublease area set forth in the applicable Tenant's Initial
Notice;
(iii) in the case of a proposed sublease, the
expiration date of the sublease term (determined without regard to any
renewal terms pertinent to any Qualified Sublease Renewal Provisions)
shall not be materially earlier or later (i.e., earlier or later by
more than (x) three (3) months, if the sublease term of such proposed
sublease is five (5) years or less, or (y) six (6) months, if the
sublease term of such proposed sublease is longer than five (5) years)
than the desired expiration date set forth in the applicable Tenant's
Initial Notice; and
(iv) (x) in the case of a proposed sublease, the
Net Effective Sublease Rental of the proposed sublease shall be equal
to or greater than 92-1/2% of the Net Effective Sublease Rental of the
desired sublease set forth in the Tenant's Initial Notice, or (y) in
the case of a proposed assignment, either (1) both such proposed
assignment and the desired assignment set forth in the applicable
Tenant's Initial Notice shall reflect a Net Effective Assignment Price
and the Net Effective Assignment Price of such proposed assignment
shall be equal to or greater than 92-1/2% of the Net Effective
Assignment Price of such desired assignment, or (2) both such proposed
assignment and the desired assignment set forth in the applicable
Tenant's Initial Notice shall reflect a Net Effective Assignment
Payment and the Net Effective Assignment Payment of such proposed
assignment shall be equal to or less than 107-1/2% of the Net Effective
Assignment Payment of such desired assignment, or (3) neither such
proposed assignment nor the desired assignment set forth in the
applicable Tenant's Initial Notice shall reflect a Net Effective
Assignment Price or a Net Effective Assignment Payment.
In any case that a proposed assignment or sublease does not meet the foregoing
conditions, Tenant shall not have the right to render a Tenant's Proposal Notice
with respect thereto, and any purported Tenant's Proposal Notice rendered
pursuant thereto shall be null and void and Landlord need not consider the same.
(e) If, in any case where a Tenant's Initial
Notice is required under Section 7.07 and delivered in accordance therewith, (i)
Landlord fails to exercise any of its Recapture Options under Section 7.07, and
(ii) Tenant fails to submit a complying Tenant's Proposal Notice on or before
the Post-Option Submission Deadline Date, then Tenant shall again comply with
all of the provisions and conditions of Section 7.07, if applicable, before
assigning this lease or subletting all or part of the Premises.
7.10. If Tenant shall have complied with the provisions of
Sections 7.07, if applicable, and Tenant shall have submitted a Tenant's
Proposal Notice in accordance, and shall have otherwise complied, with Section
7.09, then Landlord's consent to the proposed assignment or sublease set forth
in a
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Tenant's Proposal Notice shall not be unreasonably withheld, provided and upon
condition that:
(a) the proposed assignee or subtenant is
engaged in a business which is in keeping with the then standards of
the Building;
(b) the proposed assignee or subtenant is a
reputable person or entity in keeping with the then standards of the
Building;
(c) the proposed assignee or subtenant (or any
person or entity which, directly or indirectly, controls, is controlled
by, or is under common control with, the proposed assignee or
subtenant) shall not then be an occupant of any part of the Building;
provided, however, that this clause (c) shall not apply to a proposed
subtenant that, at the time Landlord receives the Tenant's Proposal
Notice, is an existing subtenant of Tenant unless immediately prior to
becoming an existing subtenant of Tenant such proposed subtenant was an
existing direct tenant of Landlord;
(d) the proposed assignee or subtenant (or any
person or entity which, directly or indirectly, controls, is controlled
by, or is under common control with, the proposed assignee or
subtenant) shall not be a person or entity with whom Landlord has,
within the six (6) month period prior to Landlord's receipt of Tenant's
Proposal Notice, been actively negotiating to lease space in the
Building (as used herein the term "ACTIVELY NEGOTIATING" shall mean
Landlord has either (I) subsequent to a general or specific request,
expression of interest or discussions or negotiations, sent to a
specific prospective subtenant (or its designated agent), or (II)
received from a specific subtenant (or its designated agent), a written
proposal to lease space in the Building (or subsequent modification
thereof or supplement thereto), which proposal (or which proposal as
modified or supplemented) shall contain the financial terms of the
proposed lease and indicate the approximate square footage of the space
to be demised by such proposed lease);
(e) in the case of a proposed assignment, the
proposed assignee shall have a net worth computed in accordance with
generally accepted accounting principles equal to or greater than the
Minimum Net Worth;
(f) there shall not be more than four (4)
Premises Occupants (as hereinafter defined) on any Premises Floor
(which number "four (4)" shall be pro-rated on a rentable square foot
basis, and rounded to the nearest whole number, for Partial Premises
Floors (as defined in Article 31 hereof)) (as used herein, the term
"PREMISES OCCUPANT" shall mean any occupant of the Premises, including
Tenant, any subtenant and any undersubtenant (but excluding an
Affiliate of Tenant which only occupies space in the Premises which is
not separated by demising walls from the balance of the Premises));
(g) in the case of a proposed sublease, if the
area to be demised thereby consists of less than the entire rentable
area of a Premises Floor, then each of such area and the remaining
balance of such Premises Floor shall consist of one or more Rentable
Blocks;
(h) Tenant shall reimburse Landlord, within ten
(10) days after demand, for any out-of-pocket costs incurred by
Landlord in connection with said assignment or sublease, including,
without limitation, the costs of making investigations as to the
acceptability of the proposed assignee or subtenant, and reasonable
legal costs incurred
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in connection with the granting of any requested consent; and
(i) Tenant shall have complied with all the
provisions of this Article 7 (including without limitation Article
7.11), and no Event of Default shall then exist hereunder.
Provided Tenant shall have complied with the provisions of Sections 7.07, if
applicable, and shall have submitted a Tenant's Proposal Notice in accordance
with, and shall have otherwise complied with, Section 7.09, Landlord shall give
(or withhold) its consent to a proposed assignment or sublease within fifteen
(15) Business Days after the submission to Landlord of the Tenant's Proposal
Notice setting forth the same (if such consent is not given or withheld within
such fifteen (15) Business Day period, the same shall be deemed given).
Landlord's consent to a proposed assignment shall be in the form of Exhibit O-1;
which consent shall be conditioned upon Tenant, within ten (10) Business Days
after its receipt of such instrument, (i) executing, and causing the proposed
assignee to execute, the same, and (ii) delivering the same, as fully executed,
to Landlord. Landlord's consent to a proposed sublease shall be in the form of
Exhibit O-2; which consent shall be conditioned upon Tenant, within ten (10)
Business Days after its receipt of such instrument, (x) executing, and causing
the proposed subtenant to execute, the same, and (y) delivering the same, as
fully executed, to Landlord.
7.11. (a) For purposes of this Section 7.11 and Section 7.12,
the following definitions shall apply:
(1) "ASSIGNMENT CONSIDERATION", with respect to any
assignment, shall mean the sum of (i) any and all sums and other consideration
actually paid to Assignor (whether before, upon or after the assignment) by the
assignee for or by reason of such assignment (including without limitation any
amounts paid in respect of the sale or transfer of any Tenant's Improvements),
and (ii) any Excess Tenant Property Payments in connection with such assignment.
"ASSIGNOR" shall mean the Tenant prior to the assignment.
(2) "SUBLEASE CONSIDERATION", with respect to any sublease
for any calendar year, shall mean the sum of (i) any and all rents, additional
charges or other consideration actually paid to Tenant by the subtenant pursuant
to such sublease or in respect thereof (including without limitation any amounts
paid for the sale or other transfer of any Tenant's Improvements) during such
calendar year, and (ii) any Excess Tenant Property Payments in connection with
such sublease for such calendar year.
(3) "SUBLEASE PROFIT", with respect to any sublease for
any calendar year, shall mean the positive excess, if any, of (i) the Sublease
Consideration with respect to such sublease for such calendar year, over (ii)
the Fixed Rent and Additional Charges accruing hereunder during such calendar
year (or, if applicable, the portion of such calendar year which is within the
term of such sublease) in respect of the sublease premises (determined on a
pro-rated rentable square foot basis) pursuant to the terms hereof.
(4) "SUBLEASE LOSS", with respect to any sublease for any
calendar year, shall mean the positive excess, if any, of (i) the Fixed Rent and
Additional Charges accruing hereunder during such calendar year (or, if
applicable, the portion of such calendar year which is within the term of such
sublease) in respect of the sublease premises (determined on a pro-rated
rentable square foot basis) pursuant to the terms
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hereof, over (ii) the Sublease Consideration with respect to such sublease for
such calendar year.
(5) "TRANSACTION EXPENSES", with respect to any assignment
or sublease, shall mean the sum of the customary brokerage commissions actually
paid or incurred by Assignor or Tenant in connection therewith, as well as any
amount paid to Landlord pursuant to Section 7.10(h) hereof.
(6) "TENANT INDUCEMENTS", with respect to any assignment
or sublease, shall mean the sum of all tenant inducements (by way of example
only, direct payments, work allowances and workletters) paid or incurred to the
assignee or the subtenant in connection therewith (and, in the case of any such
tenant inducement not paid in cash, shall refer to the dollar value thereof).
(7) "EXCESS TENANT PROPERTY PAYMENTS", shall mean (i) in
connection with any assignment (or, if applicable, any desired or proposed
assignment), the positive excess, if any, of (A) the aggregate of all sums paid
for the sale or rental of Tenant's Property by the assignee under such
assignment (or, if applicable, such desired or proposed assignment), over (B)
the then (as of the date of the assignment) net unamortized or undepreciated
cost thereof (as set forth on Tenant's federal income tax return for the year of
the assignment), or (ii) in connection with any sublease (or, if applicable, any
desired or proposed sublease) for any calendar year, shall mean the positive
excess, if any, of (A) the aggregate of all sums paid for the sale or rental of
Tenant's Property during such calendar year by the subtenant under such sublease
(or, if applicable, such desired or proposed sublease), over (B) the portion of
the cost thereof amortized or depreciated during such calendar year (as set
forth on Tenant's federal income tax return for such calendar year), or, for any
calendar year that is partly within and partly without the term of the sublease,
a pro-rated portion thereof.
(8) "SHOWING AND SEPARATION EXPENSES", (i) with respect to
any assignment, shall mean the costs of any Alterations made by Assignor during
the period after Assignor shall have vacated the Premises and prior to Assignor
having executed any instrument effecting the assignment, which Alterations are
made to prepare the Premises for marketing or to enhance the marketability
thereof, or (ii) with respect to any sublease, shall mean (x) the costs of any
Alterations made by Tenant in or to the sublease premises during the period
after Tenant shall have vacated the sublease premises and prior to Tenant having
executed the sublease, which Alterations are made to prepare the Premises for
marketing or to enhance the marketability thereof, and (y) in any case where the
sublease premises (or any portion thereof) consist of less than all of the
leasable area on a given Premises Floor, the costs of any Alterations made by
Tenant to physically separate the sublease premises (or the applicable portion
thereof) from the balance of the Premises located on such Premises Floor and to
comply with any laws and requirements of any public authorities relating to such
separation; provided, however, that in no event shall Showing and Separation
Expenses ever include any costs which are included in Tenant's Inducements.
(9) "COLLECTION EXPENSES", with respect to any assignment
or sublease, shall mean the costs paid or incurred by Tenant or Assignor with
respect to such assignment or sublease, as the case may be, pursuant to the
provisions of Section 7.11(d)(1) hereof.
(b) If Landlord shall consent to any assignment
of this lease, then, in consideration therefor, Assignor, within ten (10) days
after Assignor's receipt of any
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Assignment Consideration, shall (i) deliver to Landlord a written statement,
certified by an officer of Assignor, setting forth, in reasonable detail, the
Assignment Consideration theretofore received and the Tenant Inducements,
Transaction Expenses, Showing and Separation Expenses and Collection Expenses
theretofore paid or incurred by Assignor with respect to such assignment, and
(ii) retain such Assignment Consideration or pay the same to Landlord in
accordance with the following:
first, such Assignment Consideration shall be
retained by Assignor to the extent of the sum of (w) all
Tenant Inducements theretofore paid or incurred by Assignor
with respect to such assignment, plus (x) all Transaction
Expenses theretofore paid or incurred by Assignor with respect
to such assignment, plus (y) all Showing and Separation
Expenses theretofore paid or incurred by Assignor with respect
to such assignment, plus (z) all Collection Expenses
theretofore paid or incurred by Assignor with respect to such
assignment (except to the extent that amounts were previously
retained by Assignor pursuant to this clause first with
respect to such assignment); and
second, with respect to the balance of such
Assignment Consideration, (x) fifty percent (50%) shall be
retained by Assignor, and (y) fifty percent (50%) shall be
paid to Landlord.
Tenant and Assignor shall be and remain jointly and severally liable for all
amounts due under this Section 7.11(b), and, in the case of Tenant, the all such
amounts due shall be due as Additional Charges hereunder.
(c) If Landlord shall consent to any sublease of
all or any portion of the Premises, then, in consideration therefor, Tenant,
within thirty (30) days after the close of each calendar year during the term of
this lease in which such sublease is in effect, shall (i) deliver to Landlord a
written statement, certified by an officer of Tenant, setting forth, in
reasonable detail, the Sublease Consideration and the Sublease Profit, if any,
with respect to such sublease for such calendar year, and the Tenant
Inducements, Transaction Expenses, Showing and Separation Expenses and
Collection Expenses theretofore paid or incurred with respect to such sublease,
and (ii) retain such Sublease Profit or pay the same to Landlord in accordance
with the following:
first, such Sublease Profit shall be retained by
Tenant to the extent of the sum of (v) all Tenant Inducements
theretofore paid or incurred by Tenant with respect to such
sublease, plus (w) all Transaction Expenses theretofore paid
or incurred by Tenant with respect to such sublease, plus (x)
all Showing and Separation Expenses theretofore paid or
incurred by Tenant with respect to such sublease, plus (y) all
Collection Expenses theretofore paid or incurred by Tenant
with respect to such sublease, plus (z) any Sublease Losses
for prior calendar years with respect to such sublease (except
to the extent that amounts were retained by Tenant for
previous calendar years pursuant to this clause first with
respect to such sublease); and
second, with respect to the balance of such
Sublease Profit, (x) fifty percent (50%) shall be retained by
Tenant, and (y) fifty percent (50%) shall be paid to Landlord.
(d) (1) Tenant covenants to make all
commercially reasonable efforts to collect from its assignee or
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subtenants, as the case may be, any amounts which would comprise Assignment
Consideration or Sublease Consideration, respectively; provided, however, that
(i) Tenant may compromise or settle any claim in good faith, (ii) Tenant shall
not be required to commence or continue such efforts if Tenant reasonably
believes that the amount and likelihood of recovery does not justify the costs
and risks of commencing or continuing such efforts, and (iii) this Section
7.11(d)(1) shall not be deemed to restrict Tenant's rights to terminate a
sublease, in whole or in part, as set forth in Section 7.14 hereof.
(2) Tenant, from time to time within
forty-five (45) days of a request therefor by Landlord, shall (i) provide
Landlord with an accounting of all such sums paid or payable to it as either
Assignment Consideration or Sublease Consideration (which accounting shall set
forth any past-due amounts), as well as any amounts paid or payable by it as
Tenant Inducements or Transaction Expenses, and (ii) permit Landlord, at
reasonable times during Business Hours, to inspect Tenant's books and records in
respect of Assignment Consideration, Sublease Consideration, Tenant Inducements,
Transaction Expenses, Showing and Separation Expenses and Collection Expenses.
7.12. (a) For purposes of this Section 7.12, the following
definitions shall apply:
(1) "CONTEMPLATED ASSIGNMENT" shall
mean any desired assignment set forth in a Tenant's Initial Notice, if, with
respect to such desired assignment and Tenant's Initial Notice, Landlord
exercises its Recapture Option set forth in Section 7.07(b)(i).
(2) "CONTEMPLATED ASSIGNMENT
CONSIDERATION", with respect to any Contemplated Assignment, shall mean the
Assignment Consideration that would have been paid pursuant to such Contemplated
Assignment (assuming the Contemplated Assignment had been consummated as
contemplated in the applicable Tenant's Initial Notice and that all such
Assignment Consideration that would have been payable thereunder had been paid
as and when due); it being further agreed that, for purposes of this Section
7.12, such Contemplated Assignment Consideration shall be deemed payable as and
when the aforesaid Assignment Consideration would have been paid pursuant to
such Contemplated Assignment had the same been consummated as contemplated in
the applicable Tenant's Initial Notice and had all such Assignment Consideration
that would have been payable thereunder been paid as and when contemplated.
(3) "CONTEMPLATED SUBLEASE" shall mean
any desired sublease set forth in a Tenant's Initial Notice (but only as to the
initial term thereof), if, with respect to such desired sublease and Tenant's
Initial Notice, Landlord exercises any of its Recapture Options set forth in
Section 7.07(b).
(4) "CONTEMPLATED SUBLEASE
CONSIDERATION", with respect to any Contemplated Sublease for the any calendar
year, shall mean the Sublease Consideration that would have been paid pursuant
to such Contemplated Sublease for such calendar year (assuming that such
Contemplated Sublease had been consummated as contemplated in the applicable
Tenant's Initial Notice and that all such Sublease Consideration that would have
been payable thereunder had been paid as and when contemplated).
(5) "CONTEMPLATED LEASE RENT", with
respect to any Contemplated Sublease for any calendar year, shall mean the Fixed
Rent and Additional Charges which, but for the termination of this lease in
respect of the premises contemplated to be demised by such Contemplated
Sublease, would have accrued hereunder during such calendar year (or, if
applicable, the
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portion of such calendar year which would have been within the term of the
Contemplated Sublease) in respect of the premises contemplated to be demised by
the Contemplated Sublease (determined on a pro-rated rentable square foot basis)
pursuant to the terms hereof.
(6) "CONTEMPLATED TENANT INDUCEMENTS",
with respect to any Contemplated Assignment or Contemplated Sublease, shall mean
the sum of all Tenant Inducements which would have been paid or incurred to the
assignee or the subtenant in connection therewith (assuming the Contemplated
Assignment or Contemplated Sublease had been consummated as contemplated in the
applicable Tenant's Initial Notice and that all such Tenant Inducements that
would have been payable or incurrable thereunder had been paid or incurred as
and when due); it being further agreed that, for purposes of this Section 7.12,
such Contemplated Tenant Inducements shall be deemed payable or incurrable as
and when the aforesaid Tenant Inducements would have been paid or incurred
pursuant to such Contemplated Assignment or the Contemplated Sublease, as the
case may be, had such Contemplated Assignment or Contemplated Sublease, as the
case may be, been consummated as contemplated in the applicable Tenant's Initial
Notice and had all such Tenant Inducements that would have been payable or
incurrable thereunder been paid or incurred as and when contemplated.
(7) "CONTEMPLATED BROKERAGE EXPENSES",
with respect to any Contemplated Assignment or Contemplated Sublease, shall mean
the customary brokerage commissions which would have been payable by Tenant in
connection therewith (assuming that the Contemplated Assignment or Contemplated
Sublease was consummated as provided in the applicable Tenant's Initial Notice);
it being further agreed that, for purposes of this Section 7.12, the
Contemplated Brokerage Expenses for any Contemplated Assignment or Contemplated
Sublease, as the case may be, shall be deemed incurred on the date that is
thirty (30) days after the contemplated effective date of the Contemplated
Assignment or the contemplated commencement date of the Contemplated Sublease,
as the case may be.
(8) "CONTEMPLATED ASSIGNMENT PROFIT
PAYMENT", with respect to any Contemplated Assignment Consideration which would
have been received by Assignor pursuant to any Contemplated Assignment, shall
mean the portion thereof, if any, which would have been payable to Landlord
pursuant to Section 7.11(b) hereof in respect of such Contemplated Assignment,
(a) assuming that (i) such Contemplated Assignment had been consummated as
contemplated in the applicable Tenant's Initial Notice, (ii) the applicable
Contemplated Assignment Consideration shall have been paid as and when
contemplated, (iii) the applicable Contemplated Tenant Inducements shall have
been paid or incurred as and when contemplated, and (iv) the Contemplated
Brokerage Expenses have been incurred as hereinabove provided, and (b)
reflecting Showing and Separation Expenses and Collection Expenses of zero.
(9) "CONTEMPLATED SUBLEASE PROFIT
PAYMENT", with respect to any Contemplated Sublease for any calendar year, shall
mean the amount of Sublease Profit, if any, which would have been payable to
Landlord pursuant to Section 7.11(c) hereof for such Contemplated Sublease for
such calendar year, (a) assuming that (i) such Contemplated Sublease had been
consummated as contemplated in the applicable Tenant's Initial Notice, (ii) the
applicable Contemplated Sublease Consideration shall have been paid as and when
contemplated, (iii) the applicable Contemplated Tenant Inducements shall have
been paid or incurred as and when contemplated, and (iv) the Contemplated
Brokerage Expenses have been incurred as hereinabove provided, and (b)
reflecting Showing and Separation Expenses and Collection Expenses of zero.
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(b) If Landlord shall exercise its Recapture Option set forth
in Section 7.07(b)(i) hereof in respect of a desired assignment set forth in any
Tenant's Initial Notice, and, as a result thereof, this lease shall be
terminated as provided in Section 7.08(a) hereof, then, with respect to the
Contemplated Assignment resulting from such exercise, Landlord or Tenant, as
applicable, shall make the following payments:
(1) Landlord, as and when any Contemplated Assignment
Consideration with respect to any Contemplated Assignment is deemed
payable pursuant to the provisions of this Section 7.12, shall pay to
Tenant the excess of (i) such Contemplated Assignment Consideration,
over (ii) the Contemplated Assignment Profit Payment, if any, with
respect to such Contemplated Assignment Consideration.
(2) Tenant shall pay to Landlord an amount equal to
the Contemplated Brokerage Expenses with respect to such Contemplated
Assignment, as and when the same are deemed to be payable pursuant to
the provisions of this Section 7.12.
(3) Tenant shall pay to Landlord an amount equal to
the Contemplated Tenant Inducements with respect to such Contemplated
Assignment, as and when the same are deemed to be payable pursuant to
the provisions of this Section 7.12.
(c) If either (i) Landlord shall exercise its Recapture Option
set forth in Section 7.07(b)(i) hereof in respect of a desired sublease set
forth in any Tenant's Notice, and, as a result thereof, this lease shall be
terminated pursuant to Section 7.08(a) hereof, or (ii) Landlord shall exercise
its Recapture Option set forth in Section 7.07(b)(ii) hereof in respect of a
desired sublease set forth in any Tenant's Notice, and, as a result thereof,
this lease shall be terminated with respect to Recaptured Space pursuant to the
provisions of Section 7.08(b) hereof, then, with respect to the Contemplated
Sublease resulting from each such termination, the following provisions shall
apply:
(1) Tenant shall make the following payments to
Landlord:
(A) Tenant shall pay to Landlord an amount equal to the
Contemplated Brokerage Expenses with respect to such Contemplated
Sublease, as and when the same are deemed to be incurred pursuant to
the provisions of this Section 7.12.
(B) Tenant shall pay to Landlord an amount equal to the
Contemplated Tenant Inducements with respect to such Contemplated
Sublease, as and when the same are deemed to be payable pursuant to
the provisions of this Section 7.12.
(2) Landlord, promptly after the close of each
calendar year the whole or any part of which is within the term of such
Contemplated Sublease, shall deliver to Tenant a written statement (each, an
"ANNUAL CONTEMPLATED SUBLEASE STATEMENT") setting forth the Contemplated
Sublease Consideration and the Contemplated Lease Rent for such Contemplated
Sublease for such calendar year. Within thirty (30) days after Tenant's receipt
of the Annual Contemplated Sublease Statement for any calendar year, Landlord or
Tenant, as applicable, shall make the following payments:
(A) Landlord shall pay to Tenant the excess, if any, of (i)
the Contemplated Sublease
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Consideration with respect to such Contemplated Sublease for such
calendar year, over (ii) the sum of (A) the Contemplated Lease Rent
with respect to such Contemplated Sublease for such calendar year, and
(B) the Contemplated Sublease Profit Payment with respect to such
Contemplated Sublease for such calendar year.
(B) Tenant shall pay to
Landlord the excess, if any, of (i) the Contemplated Lease Rent for
such Contemplated Sublease for such calendar year, over (ii) the
Contemplated Sublease Consideration for such Contemplated Sublease for
such calendar year.
(d) If Landlord shall exercise any Recapture
Option, then Landlord shall reimburse Tenant for one-half (1/2) of any Transfer
Taxes (as hereinafter defined) which Tenant incurs on account of (I) the
termination of this lease, in whole or in part, arising out of such exercise, or
(II) any amount paid or payable to Tenant pursuant to the provisions of this
Section 7.12 (including any amounts payable under this Section 7.12(d)), but
only to the extent that such Transfer Taxes exceed the Transfer Taxes which
Tenant would have incurred if Landlord had not exercised such Recapture Option
and the transaction described in the Tenant's Initial Notice giving rise to such
Recapture Option had been consummated in accordance with the terms of such
Tenant's Initial Notice. The term "TRANSFER TAXES" shall mean, collectively, (i)
the New York State Real Property Transfer Gains Tax payable under Article 31-B
of the New York State Tax Law, (ii) the New York State Real Estate Transfer Tax,
and (iii) the New York City Real Property Transfer Tax, and (iv) any other gains
or transfer taxes adopted after the date hereof.
(e) The payment of obligations of Landlord and
Tenant under this Section 7.12 shall survive the termination of this lease (in
whole or in part). In any such case, either Landlord or Tenant, upon the request
of the other party, shall provide such other party with reasonably satisfactory
documentation acknowledging and evidencing its payment obligations under this
Section 7.12.
7.13. With respect to each and every sublease or subletting
under this lease (including any sublease to which Landlord has consented and any
sublease entered into pursuant to Section 7.02(c) hereof), it is further agreed
as follows:
(a) No subletting shall be for a sublease term
ending later than one day prior to the Expiration Date.
(b) No sublease shall be valid, and no sub-
tenant shall take possession of the Premises or any part thereof, until an
executed counterpart of such sublease has been delivered to Landlord.
(c) Each sublease shall provide that it is
subject and subordinate to this lease and to any matters to which this lease is
or shall be subordinate, and that in the event of termination, reentry or
dispossess by Landlord under this lease Landlord may, at its option, take over
all of the right, title and interest of Tenant, as sublessor, under such
sublease, and such subtenant shall, at Landlord's option, attorn to Landlord
pursuant to the then executory provisions of such sublease, except that Landlord
shall not be (1) liable for any previous act or omission of Tenant under such
sublease, (2) subject to any credit, offset, claim, counterclaim, demand or
defense which such subtenant may have against Tenant, (3) bound by any previous
prepayment of more than one (1) month's rent, (4) required to account for any
security deposit of the subtenant other than any security deposit actually
delivered to Landlord by Tenant, or (5) required to remove any person occupying
the Premises or any part thereof.
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(d) (1) Each sublease shall provide that, except
as may be contemplated in subsections (2) and (3) of this Section 7.13(d), the
subtenant may not assign its rights thereunder or undersublet the space demised
under the sublease, in whole or in part, without Landlord's consent, and shall
set forth the terms and provisions of Section 7.02(a) hereof, mutatis mutandis,
with respect to the assignment or deemed assignment of such sublease.
(2) Each sublease may set forth the terms
and provisions of Section 7.02(b) hereof, mutatis mutandis, with respect to the
assignment or deemed assignment of such sublease, except that the subtenant's
assignee or deemed assignee need not comply with the provisions thereof relating
to net worth; provided, however, that each such sublease shall expressly provide
that such terms and provisions shall not apply to permit any such assignment or
deemed assignment, if, immediately prior to such assignment or deemed
assignment, the subtenant is an Affiliate of Tenant, unless, immediately after
such assignment or deemed assignment, Tenant has a net worth computed in
accordance with generally accepted accounting principles consistently applied
which is not less the Minimum Net Worth.
(3) Each sublease may set forth the terms
and provisions of Section 7.02(c)(1) hereof, mutatis mutandis, with respect to
the undersubletting by the subtenant of all or any part of the sublease premises
to Affiliates of such subtenant; provided, however, that each such sublease
shall expressly provide that such terms and provisions shall not apply to any
undersubletting by a subtenant that, at the time of the making of such
undersubletting, is an Affiliate of Tenant.
7.14. Tenant, without Landlord's consent (and without
submitting any Tenant's Initial Notice or Tenant's Proposal Notice), may modify,
amend or terminate, in whole or in part, any sublease; provided, however, that
(a) no such modification or amendment of any
sublease (other than a sublease which, at the time of such modification
or amendment, is to an Affiliate of Tenant), shall either
(1) extend the term of the sublease (other than (x) an
extension of the term of a sublease pursuant to a Qualified
Sublease Renewal Provision, it being understood that such
provision need not be implemented precisely in accordance with
its terms, so long as the commencement and expiration of the
pertinent renewal term and the rent payable during such
renewal term are the same as each would have been had such
Qualified Sublease Renewal Provision been implemented
precisely in accordance with its terms, or (y) an extension of
the term of a Short-Term Sublease pursuant to any option or
other provision set forth in the original form of such
sublease, it being understood that such provision need not be
implemented precisely in accordance with its terms, so long as
the commencement and expiration of the pertinent renewal term
and the rent payable during such renewal term are the same as
each would have been had such provision been implemented
precisely in accordance with its terms), or
(2) expand the premises demised by the sublease (other
than an expansion of the premises demised by a Short-Term
Sublease pursuant to any option or other provision set forth
in the original form of such sublease, it being understood
that such provision need not be implemented precisely in
accordance with its terms, so long as the space added to the
premises
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demised by such sublease is the same and the per annum rent
payable therefor are the same as each would have been had such
provision been implemented precisely in accordance with its
terms), and
(b) no such modification, amendment or
termination of any sublease (other than a sublease which, at the time
of such modification, amendment or termination, is to an Affiliate of
Tenant) shall decrease the rent payable under the sublease (other than
(i) a proportional decrease in rent resulting from a partial
termination of the sublease, or (ii) a complete elimination of rent
resulting from a termination of the sublease in whole), and
(c) no such modification or amendment of any
sublease shall cause the sublease not to comply with any of the
provisions of Sections 7.13, 7.15 and 7.16 hereof, and
(d) no such modification, amendment or
termination shall be valid until an executed counterpart thereof has
been delivered to Landlord, together with, in the case of a
termination, a certificate, signed by a partner of Tenant (or, if
Tenant is not then a partnership, an officer of Tenant at or above the
level of Vice President), indicating that the termination was not
contemplated at the time the sublease was executed.
7.15. Each subletting shall be subject to all of the
covenants, agreements, terms, provisions and conditions contained in this lease.
Notwithstanding any subletting to any subtenant and/or acceptance of rent or
additional rent by Landlord from any subtenant, Tenant shall and will remain
fully liable for the payment of the Fixed Rent and Additional Charges due and to
become due hereunder and for the performance of all the covenants, agreements,
terms, provisions and conditions contained in this lease on the part of Tenant
to be performed and all acts and omissions of any licensee or subtenant or
anyone claiming under or through any subtenant which shall be in violation of
any of the obligations of this lease, and any such violation shall be deemed to
be a violation by Tenant.
7.16. (a) Tenant agrees that, notwithstanding any subletting
by Tenant pursuant to this Article 7, (i) no other subletting of the Premises
(or any portion thereof) shall be made by Tenant, except in accordance with this
Article 7, and (ii) except as contemplated by subsections (2) and (3) of Section
7.13(d), no undersubletting of any part of the Premises shall be made by any
subtenant, and no subtenant shall assign its sublease, without Landlord's
consent.
(b) (1) If Tenant, on behalf of any subtenant under a
Qualified Sublease (as hereinafter defined), other than a subtenant that, at the
time of the request pursuant to this Section 7.16(b), is an Affiliate of Tenant,
shall request Landlord's consent to any proposed assignment of such sublease or
to a proposed undersubletting of all or a portion of the sublease premises
demised thereby, then, provided that Tenant and such subtenant shall have
previously complied with the provisions of such sublease described in Section
7.16(b)(3)(C) below and provided that such request is made pursuant to a notice
substantially in the form of a Tenant's Proposal Notice as described in Section
7.09, Landlord's consent, subject to the conditions set forth in Section 7.10,
applied mutatis mutandis, shall not be unreasonably withheld. The provisions of
Sections 7.07, 7.08, 7.09 (other than subsection (c) thereof), 7.11 (except as
provided below) and 7.12 shall not apply to any such assignment of a sublease or
to any such undersubletting.
(2) With respect to (i) any sublease other than a
Qualified Sublease, and (ii) any Qualified Sublease
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during any period that the subtenant thereunder is an Affiliate of Tenant,
Landlord, notwithstanding anything herein to the contrary, shall have no
obligation to consent to any assignment of any such sublease or to any
undersubletting of the sublease premises demised thereby, or to be reasonable in
any such regard.
(3) As used herein, the term "QUALIFIED
SUBLEASE" shall mean any sublease which (A) demises all of the leasable area on
a Premises Floor (it being understood that such sublease may demise other space
in addition thereto), (B) has an initial term of five (5) years or more (it
being agreed that, for purposes of this clause (B) only, the "initial term" of a
sublease shall be the initial term thereof, excluding any period within such
initial term during which the subtenant under such sublease is an Affiliate of
Tenant), (C) provides that if the subtenant under such sublease shall desire to
assign its sublease or undersublease the whole or any portion of its sublease
premises (other than as contemplated in subsections (2) and (3) of Section
7.13(d)), then Tenant and the subtenant shall jointly notify Landlord of the
subtenant's desire, which notification shall be given prior to the subtenant
either marketing its sublease for assignment or its sublease premises or any
part thereof for undersubletting, or otherwise considering offers therefor, (D)
sets forth the provisions of Section 7.11 hereof, mutatis mutandis, with respect
to the assignment of the sublease (other than an assignment or deemed assignment
contemplated by the provisions described in Section 7.13(d)(2) hereof) and the
undersubletting of all or a part of the sublease premises (other than an
undersubletting contemplated by the provisions described Section 7.13(d)(3)
hereof), such that Tenant shall be entitled to receive from the subtenant (I)
the same portion of the consideration paid to the subtenant on account of an
assignment of the sublease that Landlord is entitled to receive under Section
7.11(b) hereof from Tenant on account of an assignment of this lease, and (II)
the same portion of the rent and other consideration paid to the subtenant on
account of an undersubletting that Landlord is entitled to receive under Section
7.11(c) hereof from Tenant on account of a sublease of all or a part of the
Premises, and (E) provides that any and all of the rights of Tenant, as
sublandlord, under the provisions of the sublease described in clause (D) above
shall be assignable by Tenant to Landlord at any time and from time to time.
(c) (1) As used herein, the following terms
shall have the following meanings: (i) "SUBLEASE-LEVEL PROFIT PROVISIONS", of
any sublease, shall mean the provisions of such sublease described in Section
7.16(b)(3)(D) above; (ii) "ASSIGNMENT OF SUBLEASE PROFIT", with respect to the
assignment of any sublease, shall mean the amounts which Tenant is entitled to
receive pursuant to the Sublease-Level Profit Provisions of such sublease from
the subtenant thereunder on account of such assignment of such sublease; and
(iii) "UNDERSUBLETTING PROFIT", with respect to any undersubletting, shall mean
the amounts which Tenant is entitled to receive pursuant to the Sublease-Level
Profit Provisions of such sublease from the subtenant thereunder on account of
such undersubletting.
(2) Tenant, as and when it receives the
same pursuant to the Sublease-Level Profit Provisions of any sublease, shall pay
to Landlord, as Additional Charges hereunder, the entire amount of any
Assignment of Sublease Profit and Undersubletting Profit. Such amounts received
by Tenant and paid to Landlord shall not be considered "Assignment
Consideration" or "Sublease Consideration" for purposes of Section 7.11 hereof.
(3) Tenant, from time to time within
forty-five (45) days of a request therefor by Landlord, shall provide Landlord
with an accounting of all such sums paid or payable to Tenant as either
Assignment of Sublease Profit or
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Undersubletting Profit (which accounting shall set forth any past-due amounts).
(4) Tenant covenants to make all commercially reasonable
efforts to enforce the Sublease-Level Profit Provisions in each of its subleases
and collect from its subtenants (or former subtenants) any Assignment of
Sublease Profit or Undersubletting Profit due thereunder; provided, however,
that (i) Tenant may compromise or settle any claim in good faith (provided that
Tenant shall not compromise or settle any claim until after it shall have given
Landlord thirty (30) days written notice of its intention to do so, it being
understood that Landlord may exercise its rights set forth in the last sentence
of this Section 7.16(c)(4) with respect to any such claim during such 30-day
period), (ii) Tenant shall not be required to commence or continue such efforts
if Tenant reasonably believes that the amount and likelihood of recovery does
not justify the costs and risks of commencing or continuing such efforts, and
(iii) this Section 7.16(c)(4) shall not be deemed to restrict Tenant's rights to
terminate a sublease, in whole or in part, as set forth in Section 7.14 hereof.
Tenant, upon demand, shall assign to Landlord any or all of its rights under the
Sublease-Level Profit Provisions of any sublease (including without limitation
the right thereunder to receive Assignment of Sublease Profit or Undersubletting
Profit and the rights thereunder to receive accountings and inspect books and
records).
7.17. If Landlord shall decline to give its consent to any
proposed assignment or sublease, or if Landlord shall exercise any of its
Recapture Options, Tenant shall indemnify, defend and hold harmless Landlord
against and from any and all loss, liability, damages, costs and expenses
(including reasonable counsel fees) resulting from any claims that may be made
against Landlord by the proposed assignee or subtenant, or by any brokers or
other persons claiming a commission or similar compensation in connection with
the proposed assignment or sublease.
7.18. Notwithstanding the foregoing provisions of this Article
7, for so long as Original Tenant is Tenant, Original Tenant may, from time to
time, sublease space in the Premises to any Affiliate of Original Tenant without
there being a written sublease, provided, that (i) such unwritten sublease shall
be deemed subject and subordinate to this lease and to any matters to which this
lease is or shall be subordinate, and, without limiting the generality thereof,
the provisions of Section 7.13 hereof (excluding, however, subsection (b)
thereof) and Sections 7.14, 7.15 and 7.16 hereof shall apply to such unwritten
sublease (as fully and completely as if the same were a written sublease
incorporating and/or being subject to the same as required hereby), (ii) prior
to such Affiliate of Original Tenant taking occupancy of the space sublet
pursuant to such unwritten sublease, Original Tenant shall deliver to Landlord a
written notice (executed by both Original Tenant and such Affiliate of Original
Tenant) indicating that such Affiliate of Original Tenant is about to take
occupancy of such sublet space as a subtenant of Original Tenant without a
written sublease, which notice shall be accompanied by a floor plan(s)
describing the space being so sublet and which notice shall be deemed an
acknowledgement of the provisions of clause (i) of this sentence, and (iii) such
unwritten sublease (and such Affiliate's occupancy of the space sublet
thereunder) shall be deemed to automatically terminate upon the expiration or
earlier termination of this lease, or, if earlier, upon either (x) Original
Tenant ceasing to be Tenant hereunder, or (y) such Affiliate of Original Tenant
ceasing to be an Affiliate of Original Tenant.
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ARTICLE 8
Compliance with Laws
8.01. (a) Tenant shall give prompt notice to Landlord of any
written notice of any violation of any law or requirement of any public
authority with respect to the Premises or the use or occupation thereof which
Tenant receives from any governmental authority.
(b) Tenant, at its expense, shall comply with all
present and future laws and requirements of any public authorities to the extent
that the same require compliance in, to or upon the Premises or the Base
Building Premises Components (including without limitation compliance requiring
the performance of alterations, additions, improvements, replacements or
repairs, whether the same are structural or non-structural, ordinary or
extraordinary, foreseen or unforeseen); provided, however, that Tenant shall not
be required to make any alterations, additions, improvements, replacements or
repairs in, to or upon the Base Building Premises Components (other than as
provided in Section 8.03 hereof) in order to comply with any such law or
requirement of public authorities, except to the extent that the need for such
compliance arises by reason of (i) Tenant's use and occupancy of the Premises
for the Primary Use, but only if (x) the need for such compliance arises by
reason of Tenant's particular manner of use of the Premises for the Primary Use
(including, without limitation, the nature and layout of Tenant's Improvements
and Tenant's Property and the density of personnel), and (y) such particular
manner of use is untypical among tenants of Similar Buildings which use space
for the Primary Use or an equivalent use (it being agreed that Tenant's
particular manner of use shall not be deemed so untypical on the basis of the
number of persons occupying the Premises on any Premises Floor so long as such
number of persons does not exceed the occupancy levels for such Premises Floor
as set forth on the Existing Certificate of Occupancy), (ii) Tenant's use and
occupancy of the Premises for any Secondary Use, (iii) Tenant's performance of
any Section 8.01 Alterations (as hereinafter defined), (iv) the presence or
operation of any Tenant's Improvements resulting from any Section 8.01
Alterations, or (v) a violation by Tenant of the provisions of this lease. As
used herein, the term "SECTION 8.01 ALTERATIONS" shall mean any Alterations
which (w) are not limited to the Premises or which affect the exterior of the
Building (it being understood that Alterations within the Premises shall not be
deemed Section 8.01 Alterations solely by reason of being visible from outside
the Premises), (x) are structural or otherwise affect (other than to a de
minimis extent) the structural elements of the Building, (y) affect the
functioning or performance of the Building Systems (as hereinafter defined) in
areas of the Building outside of the Premises (other than to a de minimis
extent), or (z) are otherwise not commonly performed by or on behalf of tenants
in Similar Buildings.
(c) Tenant, in addition, shall be responsible for the
cost of compliance with all present and future laws and requirements of any
public authorities to the extent that the same require compliance in, to or upon
the Real Property outside the Premises and the Base Building Premises Components
(including without limitation compliance requiring the performance of
alterations, additions, improvements, replacements or repairs whether the same
are structural or non-structural, ordinary or extraordinary, foreseen or
unforeseen), but only to the extent that the need for compliance therewith
arises by reason of (i) Tenant's use and occupancy of the Premises for any
Secondary Use, (ii) Tenant's performance of any Section 8.01 Alterations, (iii)
the presence or operation of any Tenant's Improvements resulting from any
Section 8.01 Alterations, or (iv) any violation by Tenant of the provisions of
this lease.
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(d) In addition to the foregoing, Tenant, within thirty
(30) days after its receipt of a demand therefor, shall pay all expenses, fines
and penalties which may be imposed upon Landlord or any Landlord Party (as
hereinafter defined) by reason of or arising out of Tenant's failure to fully
and promptly comply with and observe the provisions of this Article 8 after
Tenant has notice of the need for such compliance.
(e) Whenever, pursuant to the provisions of this Section
8.01, Tenant shall be required to comply, or to be responsible for the costs of
compliance with, any law or requirement of any public authority, Tenant may, in
lieu thereof, as the case may be, (i) cease or alter its use or occupancy giving
rise to such requirement of compliance, or (ii) cease or alter its performance
of Alterations giving rise to such requirement of compliance, or (iii) remove or
alter the Tenant's Improvements (or cease or alter the operation thereof) giving
rise to such requirement of compliance, (iv) cure the violation of this lease
giving rise to such requirement of compliance, or (v) take any other action (so
long as taking the same does not violate this lease), such that after such
cessation, alteration, removal, cure or other action, such compliance is no
longer required. Furthermore, notwithstanding the foregoing provisions of this
Section 8.01, Tenant need not comply with any law or requirement of any public
authority referred to in Section 8.01(b) above, and Tenant shall not be
responsible for the costs of compliance with any law or requirement of any
public authority referred to in Section 8.01(c) above, in either case, so long
as Tenant shall be contesting the validity thereof, or the applicability
thereof, in accordance with Section 8.02.
(f) The parties agree that nothing in this Section 8.01
is intended to, or shall be deemed to, impose any liability or obligation upon
Tenant with respect to any violations of law or requirements of public
authorities affecting the Premises on the date of this lease.
8.02. Tenant, at its expense, after notice to Landlord, may
contest, by appropriate proceedings prosecuted diligently and in good faith, the
validity or applicability of any law or requirement of any public authority,
provided that (a) Tenant shall be obligated to comply with the same pursuant to
Section 8.01(b) above or responsible for the cost of complying with the same
pursuant to Section 8.01(c) above, (b) no Event of Default shall have occurred
and be continuing, (c) neither Landlord nor any Landlord Party shall be subject
to criminal penalty or to prosecution for a crime, or any other fine or charge
(unless Tenant pays such other fine or charge), nor shall the Premises or any
part thereof or the Real Property or any part thereof, be subject to being
condemned or vacated, nor shall the Real Property or any part thereof, be
subjected to any lien or encumbrance, by reason of non-compliance or otherwise
by reason of such contest, unless such lien or encumbrance shall be bonded,
discharged or otherwise removed of record within thirty (30) days after the
creation of such lien or encumbrance, (d) if any Underlying Lease and/or any
Mortgage shall permit such non-compliance or contest on condition of the
furnishing of security by Landlord or any Landlord Party, such security shall be
furnished at the expense of Tenant, (e) such non-compliance or contest shall not
prevent Landlord or any other Condominium Party (as defined in Article 31
hereof) from (i) obtaining any and all permits and licenses in connection with
the operation of the Real Property or (ii) performing any alterations, additions
or improvements in or to the Real Property or obtaining any and all permits and
licenses in connection therewith, and (f) Tenant, upon request, shall keep
Landlord advised as to the status of such proceedings; in addition, Tenant shall
indemnify Landlord against any loss, cost, damage or expense (including
reasonably attorneys fees, but excluding consequential damages) incurred by
Landlord by reason of any such contest or any such deferral of
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compliance. Without limiting the application of the above, a party shall be
deemed subject to prosecution for a crime if such party, as an individual, is
charged with a crime of any kind or degree whatever, whether by service of a
summons or otherwise, unless such charge is withdrawn before such party is
required to plead or answer thereto.
8.03. Notwithstanding anything to the contrary contained
herein, as part of the Initial Alterations, Tenant shall perform all work and
make all installations necessary in order to fully sprinkler the Premises in
compliance with the provisions of Local Law 5 of the New York City
Administrative Code, as approved January 18, 1973, as amended and as may be
hereafter amended from time to time through the completion of the Initial
Alterations.
8.04. (a) Landlord, at its expense, shall comply with all
present and future laws and requirements of any public authorities to the extent
that the same require the performance of alterations, additions, improvements,
replacements or repairs (whether the same are structural or non-structural,
ordinary or extraordinary, foreseen or unforeseen) in, to or upon the Base
Building Premises Components, except to the extent that Tenant is obligated to
comply therewith pursuant to the provisions of Section 8.01(b) or Section 8.03
hereof.
(b) Landlord, at its expense (except as otherwise
provided below), shall comply with all present and future laws and requirements
of public authorities to the extent that the same require compliance in, to or
upon the Base Building other than the Base Building Premises Components
(including without limitation compliance requiring the performance of
alterations, additions, improvements, replacements and repairs whether the same
are structural or non-structural, ordinary or extraordinary, foreseen or
unforeseen), but only to the extent that the failure to effect such compliance
would subject Tenant to liability or adversely affect, other than to a de
minimis extent, (i) Tenant's use or occupancy of the Premises, (ii) access to
the Premises, (iii) the provision of Building Services to the Premises, or (iv)
Tenant's right and ability to perform Alterations which would otherwise be
permitted hereunder; provided, however, that such compliance shall be at
Tenant's expense to the extent Tenant is responsible for the cost of such
compliance pursuant to Section 8.01(c) hereof; provided, further, however, that
(I) if Tenant is validly exercising its rights under Section 8.02 hereof to
contest the validity or applicability of the law or requirement of public
authority requiring such compliance, then, during the pendency of such contest,
(x) Landlord shall have no obligation under this Section 8.04 to effect such
compliance, and (y) in the event that Landlord elects to effect such compliance,
the same shall be at Landlord's expense (as opposed to Tenant's expense),
provided that, in such event, Tenant shall reimburse Landlord the cost of such
compliance to the extent that Landlord can demonstrate that such law or
requirement of public authority was valid and applicable, and (II) except in
cases of emergency (in which cases no such notice or opportunity need by
furnished or afforded), it shall be a condition precedent to Tenant's obligation
to pay the costs of such compliance that Landlord shall have (A) furnished
Tenant with reasonable prior notice of Landlord's intention to effect such
compliance at Tenant's expense and (B) afforded Tenant a reasonable opportunity
to exercise its rights under the first sentence of Section 8.01(e) hereof such
that, after the exercise thereof, such compliance is no longer required.
(c) Notwithstanding the foregoing provisions of this
Section 8.04, Landlord may defer compliance with any law or requirements of
public authorities with which it is obligated to comply hereunder, so long as
Landlord shall be contesting the validity or applicability thereof in good faith
by appropriate
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proceedings, provided that (i) Tenant shall not be subject to criminal penalty
or to prosecution for a crime, or any other fine or charge (unless Landlord pays
such other fine or charge), (ii) neither the Premises (or any part thereof) nor
any part of the Real Property which affects the Premises or Tenant's use and
occupancy thereof, shall be subject to being condemned or vacated, by reason of
non-compliance or otherwise by reason of such contest, (iii) such non-compliance
or contest shall not prevent Tenant from lawfully occupying the Premises, or
performing any Alterations (other than Section 8.01 Alterations) in the
Premises, or obtaining any and all permits and licenses required to be obtained
by it in connection therewith, and (iv) Landlord, after request, shall use
reasonable efforts to keep Tenant advised as to the status of such proceedings;
in addition, Landlord shall indemnify Tenant against any loss, cost, damage or
expense (including reasonably attorneys fees, but excluding consequential
damages) incurred by Tenant by reason of any such contest or any such deferral
of compliance.
8.05. (a) If, as of the date hereof, the Core Lavatories do
not comply with the Americans with Disabilities Act and the regulations
thereunder, as amended and in effect as of the date hereof (the "ADA"), then,
regardless of when such noncompliance shall become known, notwithstanding
anything to the contrary set forth in this lease, Landlord, at its sole cost and
expense, shall perform any and all additional or other work needed to cause such
Core Lavatories to comply with the ADA. Tenant hereby agrees that Tenant shall
not take any action or commence any proceeding to require Landlord to comply
with the ADA as it relates to the Core Lavatories, unless (i) either (x) a
governmental body or agency asserts or alleges, in substance, that any Core
Lavatory does not comply with the ADA, or (y) a customer or employee asserts or
alleges in writing, in substance, that any Core Lavatory does not so comply, and
(ii) on the basis of any such assertion or allegation described in clause (i)
above, Tenant reasonably believes that (A) such Core Lavatory does not so
comply, and (B) such non-compliance will give rise to liability on the part of
Tenant to a governmental entity or to Tenant's employees or other persons. The
preceding sentence shall not be deemed to limit Tenant's rights under Section
18.02 hereof.
(b) Tenant agrees that it shall reasonably cooperate, at
Landlord's expense, with Landlord in its efforts (i) to comply with the ADA as
it relates to the Core Lavatories, and (ii) to demonstrate to the applicable
governmental authorities that the Core Lavatories do in fact comply with the
ADA. Additionally, Tenant further agrees that if (x) the Core Lavatories on any
Premises Floor do not comply with the ADA, and (y) as a result thereof, Landlord
is required to take action in order to comply with the ADA on such Premises
Floor, then Landlord, at its sole cost and expense, shall have the right to
perform the work necessary to install within the Premises on each such Premises
Floor a unisex lavatory containing not more than 100 rentable square feet (each,
a "UNISEX LAVATORY"); provided, however, that any Unisex Lavatory installed on
any Premises Floor shall be installed within the area of the Premises on such
Premises Floor designated on Exhibit P attached hereto (such Exhibit P is a
floor plan which illustrates a typical floor plan for the Premises Floors). If
Landlord installs a Unisex Lavatory within the Premises on any Premises Floor,
then, from and after the date upon which Landlord commences the construction
work necessary for the installation of such Unisex Lavatory, the Fixed Rent,
Tenant's Operating Share and Tenant's Tax Share thereafter in effect from time
to time hereunder shall be proportionately reduced based upon the relationship
which (1) the number of rentable square feet contained within the Unisex
Lavatory plus the number of rentable square feet outside the Unisex Lavatory
which, by reason of the existence of the Unisex Lavatory, becomes
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unusable, if any, bears to (2) the number of rentable square feet contained
within the Premises.
8.06. (a) Landlord hereby represents that, to the best of its
knowledge, there are no asbestos-containing materials ("ACMS") located on any
Premises Floor or in any Designated Conduit Areas (as hereinafter defined),
other than in or about the Acknowledged ACM Areas (as hereinafter defined). As
used herein, (i) the term "DESIGNATED CONDUIT AREAS" shall mean the areas
through which Tenant has the right to run pipes and conduits pursuant to Section
14.02(b), Section 16.11, Section 16.14 and Article 41 hereof, and (ii) the term
"ACKNOWLEDGED ACM AREAS" shall mean (x) each of the Designated Hot Decks (as
defined in Section 41.09 hereof) and (y) the areas on any Premises Floor or in
any Designated Conduit Areas which are so delineated on one or more of the floor
plans attached hereto as Exhibit Q.
(b) If, at anytime during the term of this lease, any
ACMs (other than any ACMs installed by Tenant) are found to be located on any
Premises Floor outside of the Acknowledged ACM Areas or in any Designated
Conduit Areas outside of the Acknowledged ACM Areas and Tenant notifies
Landlord, in writing, of the existence of such ACMs (herein called the
"ADDITIONAL NOTICED ACMS"), then, whether or not Landlord had knowledge of the
same as of the date hereof, the following provisions shall apply:
(1) If any Additional Noticed ACMs are required to be
removed, encapsulated or otherwise treated by any law or requirement of public
authority, then, notwithstanding anything to the contrary contained in the
foregoing provisions of this Article 8, Landlord, at its expense, shall promptly
remove, encapsulate or otherwise treat such Additional Noticed ACMs in
accordance with all laws and requirements of public authorities. With respect to
any Additional Noticed ACMs which Landlord is not required to remove pursuant to
this Section 8.06(b)(1), Landlord, nevertheless (and irrespective of whether
Landlord is required to encapsulate or otherwise treat the same), may, at its
option, elect to remove the same at anytime, any such optional removal to done
in accordance with all laws and requirements of public authorities.
(2) If, at anytime during the term of this lease, (i)
Tenant shall inform Landlord, by written notice, that the existence of any
Additional Noticed ACMs (which Landlord is not then required to remove pursuant
to Section 8.06(b)(1) above and which Landlord has not otherwise theretofore
elected to remove) will result in Tenant incurring increased costs to perform
Alterations which Tenant intends to perform, and which Tenant hereunder has the
right to perform, which notice shall (x) describe, in reasonable detail, the
particular Alterations and Additional Noticed ACMs in question, and (y) set
forth Tenant's best estimate of the total costs to perform such Alterations and
of the incremental portion of such costs which will be directly attributable to
the existence of such Additional Noticed ACMs, and (ii) Landlord, within twenty
(20) Business Days after its receipt of such notice from Tenant, does not agree,
in writing, that Landlord will remove such Additional Noticed ACMs, then, and
only in such events, Landlord will reimburse Tenant all incremental
out-of-pocket costs incurred by Tenant in performing such Alterations which are
directly attributable to the existence of such Additional Noticed ACMs, which
reimbursement shall be made by Landlord within thirty (30) days after its
receipt of a statement from Tenant setting forth all such reimbursable costs and
accompanied by paid invoices therefor. If, pursuant to clause (ii) of this
Section 8.06(b)(2), Landlord agrees in writing that it will remove any
Additional Noticed ACMs, then Landlord, at its expense, shall promptly
thereafter remove such
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Additional Noticed ACMs in accordance with all laws and requirements of public
authorities.
ARTICLE 9
Insurance
9.01. Tenant shall not violate, or permit the violation of,
any condition imposed by any insurance policy then issued to Landlord, any
Condominium Party, any Mortgagee or any receiver in possession in respect of the
Real Property and shall not do, or permit anything to be done, or keep or permit
anything to be kept in the Premises which would (i) increase any insurance rate
in respect of the Real Property over the rate which would otherwise then be in
effect, (ii) result in insurance companies of good standing refusing to insure
the Real Property in amounts reasonably satisfactory to Landlord, or (iii)
result in the cancellation (in whole or in part) of, or give rise to any defense
by the insurer to claims under, any policy of insurance in respect of the Real
Property. Tenant's use of the Premises for the Primary Use in accordance with
the provisions of this lease shall not, in and of itself, violate the provisions
of this Section 9.01. Tenant shall not be deemed in violation of the provisions
of this Section 9.01 unless and until Tenant receives notice thereof from
Landlord.
9.02. If, by reason of any failure of Tenant to comply with
the provisions of this lease, the premiums on any insurance of Landlord or any
Condominium Party on the Real Property shall be higher than they otherwise would
be, then Tenant shall reimburse Landlord, on demand and as Additional Charges,
for that part of such premiums attributable to such failure on the part of
Tenant. A schedule or "make up" of rates for the Real Property or the Premises,
as the case may be, issued by the New York Fire Insurance Rating Organization or
other similar body making rates for insurance for the Real Property or the
Premises, as the case may be, shall be conclusive evidence of the facts therein
stated and of the several items and charges in the insurance rate then
applicable to the Real Property or the Premises, as the case may be.
9.03. Tenant, at its expense, shall maintain at all times
during the term of this lease (a) "all risk" property insurance covering
Tenant's Improvements and all Tenant's Property to a limit of not less than the
full replacement cost thereof with a deductible of not more than $10,000), (b)
commercial general liability insurance (including a contractual liability
endorsement and an endorsement specifying that such insurance is primary and
does not require contribution by any insurance policy maintained by Landlord or
any other person or entity), and personal injury liability coverage, in respect
of the Premises and the conduct or operation of business therein, with Landlord,
each Condominium Party, the Building's managing agent, if any, and each
Underlying Lessor and Mortgagee whose name and address shall previously have
been furnished to Tenant, as additional insureds, with limits for bodily injury
and death of not less than Five Million ($5,000,000) Dollars for any occurrence
involving one person, Ten Million ($10,000,000) Dollars for any occurrence
involving two or more persons and not less than Five Million ($5,000,000)
Dollars for property damage liability in any one occurrence, (c) steam boiler,
air conditioning or machinery insurance, if there is a boiler or pressure object
or similar equipment in the Premises and installed by Tenant, with Landlord,
each Condominium Party, the Building's managing agent, if any, and each
Underlying Lessor and Mortgagee whose name and address shall previously have
been furnished to Tenant, as additional insureds, with limits of not less than
Five Million ($5,000,000) Dollars, (d) Workers' Compensation Insurance with
coverage applicable in New York State
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with limits in accordance with the statutory requirements of New York State,
which insurance shall contain provisions waiving underwriters' rights of
subrogation against Landlord, (e) Coverage B - Employer's Liability Coverage,
including occupational disease with a limit of not less than $1,000,000 per
accident, which insurance shall contain provisions waiving underwriters' rights
of subrogation against Landlord, and (f) when Alterations are in progress, the
insurance specified in Section 11.06 hereof and/or in the Alterations Rules and
Regulations (as hereinafter defined). The limits of such insurance shall not
limit the liability of Tenant. Tenant shall deliver to Landlord, on or prior to
the Commencement Date, such fully paid-for policies or certificates of
insurance, in form reasonably satisfactory to Landlord, issued by the insurance
company or its authorized agent. Tenant shall procure and pay for renewals of
such insurance from time to time before the expiration thereof, and Tenant shall
deliver to Landlord and any additional insureds such renewal policy or a
certificate thereof at least thirty (30) days before the expiration of any
existing policy. All such policies shall be issued by companies of recognized
responsibility and rated by Best's Insurance Reports or any successor
publication of comparable standing and carrying a rating of "B+" or better (or
the then equivalent of such rating) with a financial size category of VIII or
better (or the then equivalent of such financial size), and all such policies
shall contain a provision whereby the same cannot be canceled or modified unless
Landlord and any additional insureds are given at least thirty (30) days' prior
written notice of such cancellation or modification. Tenant shall have the right
to insure and maintain the insurance coverages set forth in this Section under
blanket insurance policies covering other premises occupied or owned by Tenant
and Affiliates of Tenant so long as such blanket policies comply as to terms and
amounts with the insurance provisions set forth in this lease without
co-insurance; provided that upon request, Tenant shall deliver to Landlord a
certificate of Tenant's insurer evidencing the portion of such blanket insurance
allocated to the Premises.
9.04. (a) During the term of this lease, Tenant shall include
in each of its insurance policies insuring Tenant's Improvements and Tenant's
Property and the use thereof against loss, damage or destruction by fire or
other casualty, a waiver of the insurer's right of subrogation against Landlord,
each Condominium Party and the Building's managing agent or, if such waiver
should be unobtainable or unenforceable, (i) an express agreement that such
policy shall not be invalidated if the insured party waives the right of
recovery against the person responsible for a casualty covered by the policy
before the casualty or (ii) any other form of permission for the release of
Landlord, each Condominium Party and the Building's managing agent. If such
waiver, agreement or permission shall not be, or shall cease to be, obtainable
from Tenant's then current insurance company, then Tenant shall so notify
Landlord promptly after learning thereof, and shall use its best efforts to
obtain the same from another insurance company described in Section 9.03 hereof.
Tenant hereby releases Landlord, each Condominium Party and the Building's
managing agent, with respect to any claim (including a claim for negligence)
which it might otherwise have against Landlord, a Condominium Party and/or the
Building's managing agent, for loss, damage or destruction of or to any Tenant's
Improvements and/or Tenant's Property, or the use thereof, to the extent to
which it is, or is required to be, insured under a policy or policies containing
a waiver of subrogation or permission to release liability, as provided in this
Section 9.04(a).
(b) Landlord shall include in each of its insurance
policies insuring the Building and all Landlord's property and interest therein
and the rents therefrom against loss, damage or destruction by fire or other
casualty, a waiver
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of the insurer's right of subrogation against Tenant and any subtenant of the
Premises during the term of this lease or, if such waiver should be unobtainable
or unenforceable, (i) an express agreement that such policy shall not be
invalidated if the insured party waives the right of recovery against the person
responsible for a casualty covered by the policy before the casualty or (ii) any
other form of permission for the release of Tenant and any subtenant of the
Premises. If such waiver, agreement or permission shall not be, or shall cease
to be, obtainable from the then current insurance company of Landlord, then
Landlord shall so notify Tenant promptly after learning thereof, and shall use
its best efforts, to obtain the same from another insurance company described in
Section 9.03 hereof. Landlord hereby releases Tenant and any subtenant of the
Premises, with respect to any claim (including a claim for negligence) which it
might otherwise have against Tenant or any subtenant of the Premises, for loss,
damage or destruction of or to the Building or the rents therefrom to the extent
to which it is, or is required to be, insured under a policy or policies
containing a waiver of subrogation or permission to release liability, as
provided in this Section 9.04(b).
(c) Nothing contained in this Section 9.04 shall be
deemed to relieve either Landlord or Tenant of any duty imposed elsewhere in
this lease to repair, restore or rebuild or to nullify any abatement of rents
provided for elsewhere in this lease.
9.05. Landlord may from time to time require that the amount
of the insurance to be maintained by Tenant under Section 9.03 hereof be
increased, so that the amount thereof is substantially equivalent to the amount
generally required of tenants by prudent landlords of Similar Buildings.
9.06. Landlord shall keep and maintain (a) "all risk" property
insurance covering the Building (not including Tenant's Improvements, Tenant's
Property, or any other tenant improvements and betterments or tenant property)
to a limit of not less than the full replacement cost thereof, and (b)
commercial general liability insurance (including a contractual liability
endorsement and an endorsement specifying that such insurance is primary and
does not require contribution by any insurance policy maintained by Tenant or
any other person or entity), and personal injury liability coverage, in respect
of the Real Property and the management, operation, repair and replacement
thereof, with Tenant, as additional insureds, with limits for bodily injury and
death of not less than Five Million ($5,000,000) Dollars for any occurrence
involving one person, Ten Million ($10,000,000) Dollars for any occurrence
involving two or more persons and not less than Five Million ($5,000,000)
Dollars for property damage liability in any one occurrence, (c) steam boiler,
air conditioning or machinery insurance, if there is a boiler or pressure object
or similar equipment in the Real Property (other than any installed by any
tenant), with Tenant, as additional insureds, with limits of not less than Five
Million ($5,000,000) Dollars, (d) Workers' Compensation Insurance with coverage
applicable in New York State with limits in accordance with the statutory
requirements of New York State, which insurance shall contain provisions waiving
underwriters' rights of subrogation against Tenant, (e) Coverage B - Employer's
Liability Coverage, including occupational disease with a limit of not less than
$1,000,000 per accident, which insurance shall contain provisions waiving
underwriters' rights of subrogation against Tenant, and (f) when Landlord is
performing alterations, additions or improvements in the Real Property,
appropriate Builder's risk insurance and commercial general liability insurance
with completed operations coverage. The limits of such insurance shall not limit
the liability of Landlord. Landlord shall procure and pay for renewals of such
insurance from time to time before the expiration thereof, and Landlord shall
deliver to
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Tenant and any additional insureds such renewal policy or a certificate thereof
at least thirty (30) days before the expiration of any existing policy. All such
policies shall be issued by companies of recognized responsibility and rated by
Best's Insurance Reports or any successor publication of comparable standing and
carrying a rating of "B+" or better (or the then equivalent of such rating) with
a financial size category of VIII or better (or the then equivalent of such
financial size). Landlord shall have the right to insure and maintain the
insurance coverages set forth in this Section 9.06 under blanket insurance
policies covering other real property occupied or owned by Landlord and/or
Affiliates of Landlord so long as such blanket policies comply as to terms and
amounts with the insurance provisions set forth in this lease without
co-insurance.
ARTICLE 10
Rules and Regulations
10.01. Tenant and its employees and agents shall faithfully
observe and comply with the rules and regulations annexed hereto as Exhibit H,
and such reasonable changes therein, whether by addition, modification or
elimination, as Landlord at any time or times hereafter may make and communicate
in writing to Tenant, which, in the reasonable judgment of Landlord, shall be
necessary for the reputation, safety, care and appearance of the Real Property,
or the preservation of good order therein, or the operation or maintenance of
the Real Property, and which do not materially affect the conduct of Tenant's
business in the Premises or materially affect Tenant's rights or obligations
under this lease (such rules and regulations as changed from time to time being
herein called "RULES AND REGULATIONS"); provided, however, that in case of any
conflict or inconsistency between the provisions of this lease and any of the
Rules and Regulations, the provisions of this lease shall control.
10.02. Nothing in this lease contained shall be construed to
impose upon Landlord any duty or obligation to enforce the Rules and Regulations
against Tenant or any other tenant or any employees or agents of Tenant or any
other tenant, and Landlord shall not be liable to Tenant for violation of the
Rules and Regulations by another tenant or its employees, agents, invitees or
licensees. Landlord shall not enforce against Tenant, and Tenant shall have no
obligation to comply with, any Rule or Regulation except to the extent that the
same is applicable to, and enforced by Landlord against, all office tenants and
occupants of the Building other than any as to which or against which, on the
basis of reasonable concerns of Landlord relating to the operation and
maintenance of the Building, applied by Landlord in a non-discriminatory manner,
such Rule or Regulation is not applicable or not enforced.
10.03. If Tenant, in good faith, shall dispute whether any
change in the Rules and Regulations made and communicated by Landlord is
authorized by the provisions of Section 10.01, then Tenant, at its option, may
elect to submit such dispute to arbitration in accordance with the provisions of
Article 40 (in which arbitration the sole issue to be determined shall be
whether such change is authorized by the provisions of Section 10.01); in order
so to submit such dispute to arbitration, Tenant shall so notify Landlord within
sixty (60) days after Tenant's receipt of notice from Landlord of such change
(time being of the essence). Pending resolution of such dispute by arbitration,
Tenant shall comply with such change; provided, however, that if (i) Tenant, in
the aforesaid notice, shall notify Landlord that Tenant's compliance with such
change will immediately and materially affect the conduct of Tenant's business
in the Premises or immediately and materially affect Tenant's rights or
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obligations under this lease, and (ii) Tenant's non-compliance with such change
shall not adversely affect the health, safety or welfare of any other tenant or
occupant of the Building, then, and only then, Tenant shall not be required to
comply with such change during the pendency of the arbitration proceeding.
Tenant's failure to submit such dispute to arbitration shall not constitute a
waiver of Tenant's right to later contest such change, by means other than
arbitration, on the basis that the same was not authorized by the provisions of
Section 10.01.
ARTICLE 11
Alterations
11.01. For purposes of this Article 11, the following
terms shall have the following meanings:
(a) "ALTERATIONS" shall mean any alterations, additions,
improvements or changes (the term "changes" to include without limitation any
removals or demolition) of any nature which are performed, by or on behalf of
Tenant, in, to or about the Building, including without limitation the Premises
and the Building Systems. "Alterations" shall not include any alterations,
additions, improvements or changes which are performed by or on behalf of
Landlord.
(b) "INITIAL ALTERATIONS" shall mean any and all
Alterations performed by or on behalf of Tenant in order to prepare the
Initially Demised Premises and the 47th Floor Space (as hereinafter defined) for
Tenant's initial occupancy thereof (and, unless otherwise expressly provided to
the contrary, the term "Alterations" shall include Initial Alterations).
(c) "MATERIAL ALTERATIONS" shall mean any Alterations
which (i) are not limited to the Premises or which affect the exterior of the
Building (it being understood that Alterations within the Premises shall not be
deemed Material Alterations solely by reason of being visible from outside the
Premises), (ii) are structural or otherwise affect (other than to a de minimis
extent) the structural elements of the Building, (iii) affect the functioning or
performance of the Building Systems (as hereinafter defined) in areas of the
Building outside of the Premises (other than to a de minimis extent), or (iv)
require permission from or notice to any governmental authority.
(d) "EXTERIOR MATERIAL ALTERATIONS" shall mean any
Material Alterations described in clause (i) of Section 11.01(c) above;
excluding, however, any such Material Alterations which are performed within one
or more electrical closets located on any Premises Floor even though such
electrical closets are not part of the Premises.
(e) "MINOR ALTERATIONS" shall mean any Alterations which
are not Material Alterations.
(f) "PRE-AUTHORIZED ALTERATIONS" shall mean any
Alterations which, pursuant to the express provisions of any other Article of
this lease, Tenant has been granted the right to perform; it being understood
that if Tenant is granted to the right to perform any Alterations subject to any
specified conditions, then such Alterations shall be deemed "Pre-Authorized
Alterations" only to the extent all such conditions shall have been satisfied.
(g) "REQUIRED ALTERATIONS" shall mean any Alterations
which, pursuant to the express provisions of any other Article of this lease,
Tenant has the obligation to perform; it being understood that Alterations may
be both Required Alterations and Pre-Authorized Alterations.
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(h) "DISCRETIONARY ALTERATIONS" shall mean any
Exterior Material Alterations which are not Pre-Authorized Alterations and/or
Required Alterations.
(i) The term "PLANS AND SPECIFICATIONS" shall
(i) when used with respect to Material Alterations, mean a complete set of fully
detailed and coordinated working drawings setting forth such Material
Alterations, and (ii) when used with respect to Minor Alterations, mean a
complete set of architectural drawings and, if applicable, mechanical
specifications.
11.02. (a) Tenant, subject to its compliance with the
applicable provisions of this lease, including without limitation the provisions
of this Article 11, may perform Minor Alterations without the need to obtain
Landlord's approval. Tenant, not less than two (2) Business Days prior to
commencing any Minor Alterations for which Tenant has retained a contractor,
shall give Landlord notice thereof, which notice shall include a description of
the work to be performed, and, to the extent that plans and specifications
therefor have been prepared by Tenant, such notice shall be accompanied by such
plans and specifications.
(b) Tenant, subject to its compliance with the
applicable provisions of this lease, including without limitation the provisions
of this Article 11, may perform Material Alterations, provided that Tenant shall
have first obtained Landlord's prior written approval of such Material
Alterations as set forth on plans and specifications therefor, which approval,
other than with respect to Discretionary Alterations, shall not be unreasonably
withheld. Tenant, prior to commencing any Material Alterations, shall request
Landlord's approval thereof by written notice (each, a "MATERIAL ALTERATION
REQUEST NOTICE"), which notice shall (i) include a description of the work to be
performed, and (ii) set forth, on the first page thereof, in capital letters,
the following legend: AS MORE FULLY SET FORTH IN SECTION 11.02(b) OF THE LEASE,
LANDLORD'S FAILURE TO RESPOND TO THIS NOTICE WITHIN FIFTEEN (15) BUSINESS DAYS
OF ITS SUBMISSION TO LANDLORD MAY RESULT IN LANDLORD BEING DEEMED TO HAVE
APPROVED THE PROPOSED MATERIAL ALTERATIONS DESCRIBED IN THE PLANS AND
SPECIFICATIONS ACCOMPANYING THIS NOTICE. Each Material Alteration Request Notice
shall be accompanied by reasonably detailed plans and specifications setting
forth the Material Alterations described therein. If Tenant shall request
Landlord's approval of any Material Alterations pursuant to a complying Material
Alteration Request Notice and such notice shall be accompanied by reasonably
detailed plans and specifications setting forth such Material Alterations as
hereinabove required, then, except with respect to Discretionary Alterations,
Landlord shall either approve or disapprove such Material Alterations as set
forth on such plans and specifications on or prior to the Material Alteration
Plan Review Deadline Date (as hereinafter defined) with respect to such Material
Alterations. If Landlord shall not grant or deny approval by the Material
Alteration Plan Review Deadline Date for any Material Alterations, Landlord's
approval thereof shall be deemed to have been granted. As used herein the term
"MATERIAL ALTERATION PLAN REVIEW DEADLINE DATE", with respect to any Material
Alterations, shall mean the fifteenth (15th) Business Day after the submission
to Landlord of a complying Material Alteration Request Notice requesting
Landlord's approval of such Material Alterations which is accompanied by
reasonably detailed plans and specifications setting forth such Material
Alterations as hereinabove required; provided, however, that if prior to such
fifteenth (15th) Business Day, Landlord shall request from Tenant additional
information reasonably required by Landlord in order to make its decision, then
the Material Alteration Plan Review Deadline Date with respect to such Material
Alterations shall be the fifteenth (15th) Business Day after Landlord's receipt
of
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such additional information. Notwithstanding the foregoing, references in the
foregoing provisions of this Section 11.02(b) to "fifteen (15) Business Days" or
the "fifteenth (15th) Business Day" shall, as applied to any Material
Alterations which are Initial Alterations, be deemed to be "twenty (20) Business
Days" or the "twentieth (20th) Business Day".
(c) (1) Tenant's right to perform any Pre-
Authorized Alterations shall nevertheless be conditioned upon (i) in the case of
Minor Alterations, Tenant first complying with provisions of Section 11.02(a),
and (ii) in the case of Material Alterations, Tenant first complying with
provisions of Section 11.02(b) and, incident thereto, Tenant obtaining
Landlord's approval of such Material Alterations as set forth on plans and
specifications submitted by Tenant in accordance therewith; and
(2) Tenant's obligation to perform any Required
Alterations shall include an obligation of the part of Tenant to (i) in the case
of Minor Alterations, first comply with provisions of Section 11.02(a), and (ii)
in the case of Material Alterations, first comply with provisions of Section
11.02(b) and, incident thereto, obtain Landlord's approval of such Material
Alterations as set forth on plans and specifications submitted by Tenant in
accordance therewith.
(3) In addition, Tenant's right to perform any
Pre-Authorized Alterations or Required Alterations shall, as with all other
Alterations, be further subject to the other provisions of this Article 11
(Section 11.03 hereof through Section 11.12 hereof, inclusive).
(d) Except as expressly permitted by this Article
11, Tenant shall not perform any Alterations.
11.03. (a) (1) Tenant, in connection with any Material
Alterations, shall reimburse Landlord, as Additional Charges, for (i) all
reasonable out-of-pocket costs incurred by Landlord on an arms-length basis to
outside parties for reviewing plans and specifications submitted by Tenant (but
not any costs incurred by Landlord for or in connection with the review thereof
by employees of Landlord or any Affiliate of Landlord), (ii) all reasonable
out-of-pocket costs incurred by Landlord on an arms-length basis to outside
parties for on-site inspections (but not any costs incurred by Landlord for or
in connection with on site inspections by employees of Landlord or any Affiliate
of Landlord), and (iii) any supervision and coordination costs incurred pursuant
to Section 11.03(c) below, whether the same are incurred to outside parties or
to Landlord's employees.
(2) Tenant shall pay to Landlord, as Additional
Charges, Landlord's labor costs incurred in connection with the performance by
Tenant of any Alterations on an overtime basis (i.e., after Business Hours on
Business Days), including, without limitation, all labor costs for overtime
hoisting and stand-by overtime personnel (including without limitation operating
engineers and stand-by electricians) payable in respect of periods other than
Business Hours on Business Days; provided, however, if any such labor shall
simultaneously be used by Landlord in connection with any work by Landlord, or
by any other tenant or occupant of the Building in connection with any work by
such tenant or occupant, then such labor costs shall be equitably apportioned
among Tenant, Landlord and such other tenants or occupants, as applicable.
(3) Tenant, in connection with any Alterations,
shall pay for and obtain directly all labor and carting for the cleanup and
removal of debris.
(4) All sums payable by Tenant to Landlord
pursuant to this Section 11.03(a) shall be due thirty
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(30) days after demand therefor by Landlord, each of which demands shall set
forth with reasonable detail the manner in which the amount due thereunder was
calculated.
(b) Tenant agrees that any review or approval by
Landlord of any plans and/or specifications with respect to any Alterations is
solely for Landlord's benefit, and without any representation or warranty
whatsoever to Tenant with respect to the adequacy, correctness or efficiency
thereof or otherwise. No approval of plans or specifications by Landlord or
consent by Landlord allowing Tenant to make Alterations shall in any way be
deemed to be an agreement by Landlord that the contemplated Alterations comply
with any laws and requirements of any public authorities or requirements of
insurance bodies or the certificate of occupancy for the Building nor shall it
be deemed to be a waiver by Landlord of the compliance by Tenant with any of the
terms of this lease (it being the intent of the parties that this sentence shall
not be construed to mean that Landlord may take the position that Tenant failed
to obtain Landlord's approval of the plans and specifications for an Alteration
after Landlord has approved such plans and specifications). Notice is hereby
given that neither Landlord nor any Landlord Party shall be liable for any labor
or materials furnished or to be furnished to Tenant upon credit, and that no
mechanic's or other lien for such labor or materials shall attach to or affect
any estate or interest of Landlord or any Landlord Party in and to the Premises,
the Building or the Real Property.
(c) To the extent that any Alterations permitted to be
made hereunder, or any portions thereof, require work to be performed outside of
the Premises, such work shall be performed only at such time or times as are
reasonably designated by Landlord, and, at Landlord's option, under the
supervision of Landlord or its designated representative. Landlord shall have
the right to coordinate such work with any of work then being undertaken by
Landlord or by any other tenants of the Building.
11.04. (a) Tenant shall perform Alterations using only
contractors that are first approved by Landlord with respect to such Alterations
in writing, which approval shall not be unreasonably withheld. Landlord's
approval of any trade contractor shall be solely with respect to the trade or
trades in which it is engaged and for which approval is requested. Landlord
shall not have the right to designate one or a limited number of general
contractors or, except as provided in Section 11.04(c), one or a limited number
of trade contractors for any trade; provided, however, that this sentence shall
not require Landlord to approve any general or trade contractor as to which
Landlord (acting in accordance with the first sentence of this Section 11.04(a)
and without regard to the number of general contractors or trade contractors for
any trade then approved) is permitted to withhold approval.
(b) Any contractor that Landlord hereafter approves in
writing in connection with any Alterations, shall be deemed approved for a
period of one (1) year from the date of Landlord's notice approving such
contractor, unless Landlord, upon notice to Tenant, thereafter elects to revoke
its approval of any such contractor, in which event, such contractor, upon the
giving of such notice to Tenant, shall no longer be deemed approved (except that
such contractor shall remain approved with respect to any contract that Tenant
shall have theretofore entered into with such contractor prior to the giving of
such notice).
(c) Notwithstanding anything to the contrary set forth
in subsections (a) or (b) above or elsewhere in this lease, Tenant shall only be
permitted to use Landlord's designated life safety system contractor to make
connections between the Building's life safety system and the sensors,
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strobes, speakers alarms and other terminal devices installed by
Tenant.
(d) Without limiting the generality of the foregoing,
Landlord hereby approves with respect to the Initial Alterations, the
contractors listed on Exhibit I annexed hereto; the contractors so listed shall
be deemed approved for the duration of the Initial Alterations.
(e) All contractors approved or designated by Landlord
pursuant to this Section 11.04 shall be subject to the provisions of Sections
11.05 and 11.07 hereof.
11.05. Tenant shall, and shall cause its contractors to,
faithfully observe and comply with the alteration rules and regulations annexed
hereto as Exhibit J, and such reasonable changes therein (whether by addition,
modification or elimination) as Landlord at any time or times hereafter may make
and communicate in writing to Tenant, which, in the reasonable judgment of
Landlord, shall be necessary for the reputation, safety, care and appearance of
the Real Property, or the preservation of good order therein, or the operation
or maintenance of the Real Property, and which do not materially affect the
performance of Alterations in the Premises or materially affect Tenant's rights
or obligations under this lease (such alteration rules and regulations as
changed from time to time being herein called "ALTERATION RULES AND
REGULATIONS"); provided, however, that in case of any conflict or inconsistency
between any of the provisions of this Article 11 and any of the provisions of
the Alteration Rules and Regulations, the provisions of this Article 11 shall
control. The provisions of Sections 10.02 and 10.03 shall apply, mutatis
mutandis, to the Alteration Rules and Regulations.
11.06. (a) Tenant, at its expense, shall obtain (and furnish
true and complete copies to Landlord of) all necessary governmental permits and
certificates for the commencement and prosecution of Alterations and for final
approval thereof upon completion, and shall cause Alterations to be performed in
compliance therewith, with all applicable laws and requirements of public
authorities, with all applicable requirements of insurance bodies and, if
applicable, with the plans and specifications approved by Landlord. Landlord,
within three (3) Business Days after its receipt of a written request from
Tenant therefor, shall execute (and provide any readily accessible information
known by Landlord for) any permit applications and similar documents reasonably
required in connection with obtaining such permits and certificates and any such
final approvals, provided that such applications and documents are in proper
form; provided, however, that neither Landlord's execution of such applications
and documents nor its provision of information shall constitute Landlord's
approval of any Alterations described in such applications or documents, and, if
Landlord, pursuant to Section 11.02 hereof, shall disapprove any Alterations
described in such applications or documents, then any such applications and
documents, as well as any permits, certificates and approvals obtained thereby,
shall be promptly withdrawn or canceled by Tenant. Tenant hereby agrees that it
shall (i) reimburse Landlord all Landlord's out-of-pocket expenses incurred in
connection with Tenant's obtaining of any such permits, certificates or
approvals (including without limitation those incurred in connection with
Landlord's execution of any permit applications and similar documents, or its
provision of information, as provided in the preceding sentence), and (ii) and
indemnify and hold harmless Landlord against any and all liabilities which
Landlord may incur by reason of its execution of any permit applications and
similar documents, or its provision of information, as provided in the preceding
sentence; provided, however, that neither such reimbursement nor such indemnity
shall include any such expenses or liabilities to
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the extent that (A) Landlord is responsible therefor under any other provision
of this lease, (B) the same would be, or would have been, discharged, satisfied
or avoided by Landlord's performance of its obligations under this lease, or (C)
the same arise out of any inaccuracy in any information provided by Landlord.
(b) Alterations shall be diligently performed in a good
and workmanlike manner, using materials at least equal in quality and class to
the then standards for the Building.
(c) Alterations (including the Initial Alterations)
shall be performed in such manner as not to unreasonably interfere with or delay
and as not to impose any additional expense (except to the extent Tenant
reimburses Landlord therefor) upon Landlord in the construction, maintenance,
repair or operation of the Real Property; if the performance of an Alteration
will impose any additional expense upon Landlord, then Landlord shall advise
Tenant of the amount of such additional expense promptly after Landlord becomes
aware of such amount.
(d) Throughout the performance of Alterations, Tenant,
at its expense, shall carry, or cause to be carried, (i) workers' compensation
insurance in statutory limits, (ii) general liability insurance, with completed
operation endorsement, for any occurrence in or about the Premises (or, if
applicable, any other area of the Real Property in which the Alterations in
question are being performed), under which Landlord and its managing agent, if
any, and any Underlying Lessor and Mortgagee whose name and address shall
previously have been furnished to Tenant shall be named as parties insured, in
such limits as Landlord may reasonably require, and (iii) "all risk" Builders
Risk coverage, all with insurers reasonably satisfactory to Landlord. Tenant
shall furnish Landlord with reasonably satisfactory evidence that such insurance
is in effect at or before the commencement of Alterations and, on request, at
reasonable intervals thereafter during the continuance of Alterations.
(e) The provisions of Section 12.02 hereof shall not be
deemed to prohibit Tenant from removing during the term of this lease any or all
of Tenant's Improvements (or, after the 47th Floor Space (as hereinafter
defined) is leased hereunder, any or all of the PSI 47th Floor Improvements (as
hereinafter defined)); provided, however, that (i) any such removal shall be
deemed Alterations and, accordingly, Tenant's right to perform the same shall be
subject to the provisions of this Article 11, and (ii) no such removal shall be
effected within the last twelve (12) months of the term, unless the such removal
is effected for a legitimate business purpose and the same does not leave the
Premises or any other portion of the Building in an unsafe condition. The
removal of the PSI 47th Floor Improvements shall be deemed Pre-Authorized
Alterations. As used herein, the "PSI 47TH FLOOR IMPROVEMENTS" shall mean any of
the improvements, betterments, fixtures, equipment and appurtenances affixed to,
attached to, built into or otherwise installed in or on the 47th Floor Space by
PSI.
11.07. Tenant shall not exercise any of its rights pursuant to
the provisions of this Article 11 or Article 13 in a manner which would violate
Landlord's union contracts affecting the Real Property, or create any work
stoppage, picketing, labor disruption or dispute or any interference (other than
de minimis interference) with the operation of the Building by (or for)
Landlord. In addition, Tenant shall not enter into any service contract in
respect of Tenant's Improvements (as opposed to Tenant's Property) or any
cleaning contract, if any such contract or the performance of work thereunder
would violate Landlord's union contracts affecting the Real Property, or create
any work
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stoppage, picketing, labor disruption or dispute or any interference (other than
de minimis interference) with the operation of the Building by (or for)
Landlord. Tenant shall immediately stop any work or other activity under this
Article 11 or Article 13 or pursuant to one or more of the aforementioned
contracts if Landlord notifies Tenant that continuing such work or activity
would violate Landlord's union contracts affecting the Real Property, or create
any work stoppage, picketing, labor disruption or dispute or any interference
(other than de minimis interference) with the operation of the Building by (or
for) Landlord, provided such notice sets forth a reasonably detailed explanation
of the circumstances giving rise to the delivery of such notice.
11.08. Tenant, at its expense, and with diligence and
dispatch, shall procure the cancellation or discharge of all notices of
violation arising from or otherwise connected with Alterations, or any other
work, labor, services or materials done for or supplied to Tenant, or any person
claiming through or under Tenant, which shall be issued by the Department of
Buildings of the City of New York or any other public authority having or
asserting jurisdiction; provided, however, that Tenant may defer procuring such
cancellation or discharge so long as Tenant is contesting such notice of
violation, or the validity or applicability thereof, in accordance with Section
8.02. Tenant shall defend, indemnify and save harmless Landlord from and against
any and all mechanic's and other liens and encumbrances filed in connection with
Alterations, or any other work, labor, services or materials done for or
supplied to Tenant, or any person claiming through or under Tenant, including,
without limitation, security interests in any materials, fixtures or articles so
installed in and constituting part of the Premises and against all costs,
expenses and liabilities incurred in connection with any such lien or
encumbrance or any action or proceeding brought thereon. Tenant, at its expense,
shall procure the satisfaction or discharge of record by bonding, payment or
otherwise, of all such liens and encumbrances within thirty (30) days after
knowledge or notice thereof.
11.09. Tenant, promptly upon the completion of any
Alterations, other than Decorating, shall deliver to Landlord "as built"
drawings of such Alterations, or, in the event Tenant does not have "as built"
drawings prepared, a set of construction drawings marked to show any change(s)
made during construction.
11.10. All Tenant's Improvements shall be fully paid for by
Tenant in cash and shall not be subject to conditional bills of sale, chattel
mortgage or other title retention agreements. Tenant, however, may lease or
finance purchases of Tenant's Property, provided that, in conducting any entry
to and removal of fixtures or equipment from the Premises and/or the Building,
any lessor, vendor or lender shall, (a) prior to entry, provide Landlord upon
Landlord's request with evidence of appropriate liability insurance as
reasonably determined by Landlord, (b) use reasonable care, (c) repair all
damage caused by its activities in or about the Real Property, and (d) comply
with applicable law. In the event of a default by Tenant under this lease,
Landlord shall not be required to notify any such vendor, lessor or lender prior
to exercising Landlord's rights and remedies under this lease. Notice is hereby
given that neither Landlord nor any Landlord Party shall be liable for any labor
or materials furnished or to be furnished to Tenant upon credit, and that no
mechanics' or other lien for such labor or materials shall attach to or affect
any estate or interest of Landlord or any Landlord Party in any part of the Real
Property.
11.11. Tenant, within forty-five (45) days after a request by
Landlord, shall furnish to Landlord copies of all records with respect to
Alterations and the cost thereof then in Tenant's possession, if the same shall
be required in connection
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with any proceeding to reduce the assessed valuation of the Real Property, or in
connection with any proceeding instituted pursuant to Article 8 hereof or for
any other valid business reason or purpose.
11.12. (a) Before proceeding with any Alteration (other than
the Initial Alterations) the cost of which, when aggregated with the cost of all
other Alterations which have not then been completed, will cost more than
one-twentieth (1/20) of the then net worth of Tenant computed in accordance with
generally accepted accounting principles consistently applied (exclusive of the
costs of Decorating and items constituting Tenant's Property), as such cost is
estimated by a reputable contractor designated by Landlord, Tenant shall furnish
to Landlord one of the following (as selected by Tenant): (i) a cash deposit,
(ii) an irrevocable, unconditional, negotiable letter of credit, issued by and
drawn on a bank or trust company which is a member of the New York Clearing
House Association naming Landlord as beneficiary and in a form reasonably
satisfactory to Landlord or (ii) a payment and performance bond issued by a
bonding company reasonably satisfactory to Landlord naming Landlord as
beneficiary, and in a form reasonably satisfactory to Landlord (it being agreed
that a bond which requires any payment as a condition to the bonding company
performing its obligations under the bond shall not be a form reasonably
satisfactory to Landlord); each to be in an amount equal to one hundred
twenty-five (125%) percent of the cost of the Alteration, estimated as set forth
above; provided, however, if the security provided by Tenant is a cash deposit
or letter of credit pursuant to subclauses (i) or (ii) above, the amount thereof
shall be the lesser of (x) 125% of the cost of the Alteration, estimated as set
forth above or (y) the amount by which (1) the sum of the cost of the Alteration
in question plus the cost of all other Alterations which have not then been
completed exceeds (2) the amount which is 1/20th of the then net worth of
Tenant. Any such letter of credit shall be for one year and shall be renewed by
Tenant each and every year until the Alteration in question is completed and
shall be delivered to Landlord not less than thirty (30) days prior to the
expiration of the then current letter of credit. Failure to deliver such new
letter of credit on or before said date shall give Landlord the right, inter
alia, to present the then current letter of credit for payment. Upon Landlord's
request made in connection with any Alteration proposed to be made by Tenant
which Landlord reasonably believes might cost in excess of 1/20th of the then
net worth of Tenant, but not, in any case, more often than once in any calendar
year, Tenant shall submit to Landlord a balance sheet of Tenant, prepared in
accordance with generally accepted accounting principles consistently applied,
as of the end of the most recent calendar year, together with a certification of
the Chief Financial Officer of Tenant certifying that such balance sheet is true
and correct and accurately reflects the net worth of Tenant as of its date.
(b) Upon (i) the completion of the Alteration in
accordance with the terms of this Article 11 and (ii) the submission to Landlord
of proof evidencing the payment in full for said Alteration, the security
deposited with Landlord (or the balance of the proceeds thereof, if Tenant has
furnished cash or a letter of credit and if Landlord has drawn on the same)
shall be returned promptly to Tenant.
(c) Upon the Tenant's failure to properly perform,
complete and fully pay for all sums due for the said Alteration, Landlord shall
be entitled to draw on the security deposited under this Article 11 to the
extent it deems necessary in connection with the said Alteration, the
restoration and/or protection of the Premises or the Real Property and the
payment or satisfaction of any costs, damages or expenses in connection
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with the foregoing and/or Tenant's obligations under this Article
11.
ARTICLE 12
Tenant's Improvements and Tenant's Property
12.01. For purposes of this lease, the following terms
shall have the following meanings:
(a) The term "TENANT'S IMPROVEMENTS" shall mean all
improvements, betterments, fixtures (other than trade fixtures), equipment and
appurtenances affixed to, attached to, built into, or otherwise installed in or
on, the Building by or on behalf of Tenant (whether or not at Tenant's expense)
during the term of this lease, inclusive of all such improvements, betterments,
fixtures, equipment and appurtenances installed as part of either the Initial
Alterations or subsequent Alterations (other than Tenant's Structural Work (as
hereinafter defined) and the Fire Tower Work (as hereinafter defined) or, as the
case may be, the Hot Deck Work (as hereinafter defined)), including without
limitation (i) all installations, systems and facilities installed in or about
the Building by or on behalf of Tenant (whether wholly within the Premises,
wholly without the Premises, or partly within and partly without the Premises),
(ii) Tenant's line, riser and other connections to any such installations,
systems and facilities, (iii) Tenant's lines and other connections to the
Building Systems, (iv) raised floors, and (v) all wiring and cabling installed
below such raised floors, above hung ceilings, or within any shaft, wall or
fixed partition; but excluding, in all cases, Tenant's Property.
(b) The term "TENANT'S PROPERTY" shall mean all
articles of movable personal property owned or leased by Tenant and located in
the Premises, including without limitation office furniture and furnishings,
trade fixtures, business equipment, office machinery, movable partitions,
communications equipment, and wiring and cabling not included in clause (v) of
Section 12.01(a).
12.02. (a) All Tenant's Improvements, as they exist upon the
expiration or earlier termination of the term of this lease, shall be and remain
a part of the Building and shall be deemed Landlord's property, and,
accordingly, Tenant's Improvements shall not be removed by Tenant upon the
expiration or earlier termination of this lease.
(b) Notwithstanding the foregoing or anything else to
the contrary that may be contained herein, if (I) after the expiration or
earlier termination of the term of this lease, Landlord, in its sole discretion,
effects a demolition of the entirety of the Premises located on any Premises
Floor, and (II) such demolition is effected prior to any part of the Premises
located on such Premises Floor being occupied by any new tenant or occupant for
the conduct of its business for a period exceeding twelve (12) full calendar
months, then, and in each such case, Tenant, within thirty (30) days after a
written demand therefor, shall reimburse Landlord one-half (1/2) of the
aggregate costs reasonably incurred by Landlord in effecting such demolition. As
used herein, the "DEMOLITION", of any portion of the Premises, shall mean the
removal of all or substantially all of the Tenant's Improvements located in such
portion of the Premises and, following such removal, the restoration of such
portion of the Premises to a condition substantially similar to that existing as
of the date hereof.
(c) (1) As used herein, the following terms shall have
the following meanings:
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(A) The term "SECTION 12.02(c) EXTERIOR
IMPROVEMENTS" shall mean, collectively, all the Tenant's Improvements located
outside the Premises (including without limitation any or all of the Tenant's
Improvements installed pursuant to the provisions of Article 41 hereof) and all
the Structural Work Improvements; excluding, however, (I) the Non-Removable
Exterior Improvements and (II) except in cases where this lease is terminated
pursuant to a Non-Scheduled Early Termination, the Designated Exterior
Improvements.
(B) The "SECTION 12.02(c) WORK" shall mean all
the work required to (i) remove from the Building all the Section 12.02(c)
Exterior Improvements, and (ii) restore the applicable areas of the Building to
their condition prior to the installation of such Section 12.02(c) Exterior
Improvements, ordinary wear and tear excepted.
(C) The term "NON-REMOVABLE EXTERIOR
IMPROVEMENTS" shall mean, collectively, (i) the portions of the Tenant's
Improvements located outside the Premises which consist of (w) electrical
conduits (as opposed to the wiring and cabling therein), as well as the
enclosures within which such conduits are located, (x) communications conduits
(as opposed to the wiring and cabling therein), as well as the enclosures within
which such conduits are located, (y) fuel pipes to Tenant's Fuel Tank and
connecting Tenant's Fuel Tank to Tenant's Generator, as well as the enclosures
within which such pipes are located, and (z) chilled water pipes (other than
tapered chilled water pipes), as well as the enclosures within which such pipes
are located, and (ii) the steel plating of perimeter columns done as part of
Tenant's Structural Work or the Penthouse Work (as hereinafter defined).
(D) The term "DESIGNATED EXTERIOR IMPROVEMENTS"
shall mean, collectively, those portions of the Tenant Improvements located
outside the Premises and/or the Structural Work Improvements which Landlord, by
one or more written notices to Tenant (collectively, the "SECTION 12.02(c)
DESIGNATION NOTICES"), designates as improvements which are to remain at the end
of the term of this lease. Any Section 12.02(c) Designation Notice which is
received by Tenant after the date that is one hundred and eighty (180) days
prior to Expiration Date (or, if applicable, the date of an earlier termination
hereof), shall be effective to designate only the portion of the improvements
mentioned therein that have not theretofore been removed.
(E) The term "NON-SCHEDULED EARLY TERMINATION"
shall mean any termination of this lease prior to the Expiration Date, other
than such an early termination pursuant to either of Articles 7 or 37 hereof.
(2) Except in cases where this lease is terminated
pursuant to a Non-Scheduled Early Termination, Tenant, subject to and in
accordance with the provisions of Article 11 hereof, shall, at its expense,
perform all the Section 12.02(c) Work and shall complete the same on or prior to
the Expiration Date (or, if this lease shall be terminated prior to the
Expiration Date other than pursuant to a Non-Scheduled Early Termination, or
prior to the date of such termination). If, and to the extent that, Tenant fails
to complete the Section 12.02(c) Work on or prior to the Expiration Date (or
such termination date), then Landlord, at anytime thereafter, may, at its
option, perform Tenant's Section 12.02(c) Work at Tenant's expense. If, and to
the extent that, Landlord performs any of the Section 12.02(c) Work at Tenant's
expense pursuant to the foregoing provisions of this Section 12.02(c)(2), then
Tenant, from time to time within thirty (30) days after any written demand
therefor, shall reimburse Landlord the costs theretofore incurred by Landlord in
the prosecution of such the Section 12.02(c) Work,
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together with interest thereon at the Interest Rate for the period from the date
such costs were paid by Landlord to the date of such reimbursement.
(3) In any case where this lease is terminated
pursuant to a Non-Scheduled Early Termination, Landlord, may elect, at its
option and at Tenant's expense, to perform the whole or any portion of the
Section 12.02(c) Work after the date of such termination. If, and to the extent
that, Landlord elects to perform the Section 12.02(c) Work, such work (i) shall
be commenced on or prior to the date that is eighteen (18) months after the date
of such termination of this lease, and (ii) subject to Force Majeure, shall be
completed not later than the date that is twenty-four (24) months after the date
of such termination. If, and to the extent that, Landlord performs the Section
12.02(c) Work pursuant to the foregoing provisions of this Section 12.02(c)(3),
then Tenant, from time to time within thirty (30) days after any written demand
therefor, shall reimburse Landlord the reasonable out-of-pocket costs
theretofore incurred by Landlord in the prosecution of such Section 12.02(c)
Work.
12.03. All Tenant's Property shall be and shall remain the
property of Tenant throughout the term of this lease and may be removed by
Tenant at any time during the term of this lease (or, if applicable, within the
15-day period referred to below). On or prior to the Expiration Date (or within
fifteen (15) days after any earlier termination of this lease), Tenant, at its
expense, shall remove all Tenant's Property from the Premises. Tenant shall
repair any damage to the Building (including without limitation the Premises)
caused by such removal. Any items of Tenant's Property which shall remain in the
Premises after the Expiration Date (or, as the case may be, within fifteen (15)
days following the earlier termination of this lease), may, at the option of
Landlord, be deemed to have been abandoned, and in such case such items may be
retained by Landlord as its property or disposed of by Landlord, without
accountability, in such manner as Landlord shall determine and at Tenant's
expense.
ARTICLE 13
Repairs and Maintenance
13.01. (a) Tenant, throughout the term of this lease, shall,
at its expense, take good care of and maintain in good order and condition, and
shall be responsible for all repairs and replacements (ordinary and
extraordinary, foreseen and unforeseen) to (i) the Premises (but not the Base
Building Premises Components, except as provided below), and (ii) all Tenant's
Improvements whether within or outside of the Premises. Without limiting the
generality of the foregoing, Tenant, at its expense, shall promptly replace all
damaged or broken doors (including, without limitation, entrance doors) and all
interior glass in and about the Premises. Notwithstanding the foregoing, Tenant
shall not be responsible for any repairs or replacements under this Section
13.01(a) to the extent that Landlord is responsible for the same under Section
13.02(b) hereof.
(b) Tenant, in addition, shall be responsible for all
repairs and replacements, interior and exterior, structural and non-structural,
ordinary and extraordinary, foreseen and unforeseen, in and to (x) the Real
Property outside of the Premises (exclusive of any Tenant Improvements outside
of the Premises) and (y) the Base Building Premises Components (whether within
or outside of the Premises), in each case, to the extent the need for which
arises out of (i) the performance of Alterations, or the installation, use,
operation or existence of any Tenant's Improvements or Tenant's Property
(provided, however, that Tenant shall not be responsible therefor under this
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clause (i) to the extent that the repair or replacement in question would not
have been needed but for (x) a violation by Landlord of its obligations under
this lease, or (y) a representation made by Landlord hereunder being untrue),
(ii) the moving by or on behalf of Tenant of any Tenant's Improvements or
Tenant's Property in or out of the Building or between different floors or parts
of the Building or the Premises, (iii) any violation by Tenant of the provisions
of this lease, or (iv) the negligence or intentional misconduct of Tenant, any
Tenant Party or any of their agents, contractors or invitees.
(c) The maintenance, repairs and replacements for which
Tenant is responsible pursuant to the provisions of this Section 13.01 (herein
called "TENANT REPAIRS") shall be performed in accordance with the following
provisions:
(1) Tenant shall perform all Tenant Repairs for which
Tenant is responsible pursuant to Section 13.01(a) above promptly, at its
expense, and in a manner which will not interfere (in other than a de minimis
manner) with the use of the Building by others. If, and to the extent that, such
Tenant Repairs are to Tenant's Improvements located outside the Premises or
otherwise require work to be performed outside of the Premises, then (i) such
work shall be performed only at such time or times as are reasonably designated
by Landlord, and, at Landlord's option, under the supervision of Landlord or its
designated representative, (ii) Landlord shall have the right to coordinate such
work with any work then being undertaken by Landlord or by any other tenants of
the Building, and (iii) Tenant, within thirty (30) days after a written demand
therefor, shall reimburse Landlord all supervision and coordination costs
incurred by Landlord pursuant to clauses (i) or (ii) above (whether incurred to
Landlord's employees or outside parties); provided, however, that, in cases of
emergency, Tenant, subject to the rights of other tenants, may perform such work
at any time or times (to the extent necessitated by such emergency), so long as
Tenant, immediately prior to commencing any such work, shall give Landlord
notice of the emergency and the work to be performed (which notice may be oral
and shall be given to the applicable Building Office or, if such Building Office
is closed, the Building's security desk).
(2) Landlord, at its option, may elect to perform
Tenant Repairs for which Tenant is responsible pursuant to Section 13.01(b)
above (each, a "TENANT BUILDING REPAIR") at Tenant's expense. If Tenant notifies
Landlord of the need for any Tenant Building Repair, then Landlord shall
promptly notify Tenant as to whether Landlord elects to perform such Tenant
Building Repair, at Tenant's expense, or to have Tenant perform such repair. In
all cases, except in cases of emergency (in which cases Landlord need not so
notify Tenant), Landlord, prior to commencing any Tenant Building Repair, shall
notify Tenant that Landlord has elected to perform the same at Tenant's expense.
(A) To the extent that Landlord elects to
perform any Tenant Building Repair at Tenant's expense, (i) Landlord shall
perform the same promptly, and the provisions of Section 35.15 shall apply in
respect thereof, and (ii) Tenant, within thirty (30) days after a written demand
therefor, shall reimburse Landlord all of Landlord's out-of-pocket costs
reasonably incurred in connection with such Tenant Building Repair. Tenant, at
its own expense, shall have the right to monitor the progress of Tenant Building
Repair undertaken by Landlord.
(B) To the extent that Landlord elects to have
Tenant perform any Tenant Building Repair, (i) Tenant shall perform the same
promptly, at its expense, and in a manner which will not interfere (in other
than a de minimis
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manner) with the use of the Building by others, (ii) such work shall be
performed only at such time or times as are reasonably designated by Landlord,
and, at Landlord's option, under the supervision of Landlord or its designated
representative, (iii) Landlord shall have the right to coordinate such work with
any work then being undertaken by Landlord or by any other tenants of the
Building, and (iv) Tenant, within thirty (30) days after a written demand
therefor, shall reimburse Landlord all supervision and coordination costs
incurred by Landlord pursuant to clauses (ii) and (iii) above (whether incurred
to Landlord's employees or outside parties).
13.02. (a) Except to the extent that Tenant shall be
responsible for the same pursuant to the provisions of Section 13.01(a) or (b)
above, Landlord, at its expense, shall make repairs and replacements to, and
otherwise keep and maintain (in a condition befitting a first-class downtown
Manhattan office building), the Base Building, other than those portions of the
Base Building which are not Base Building Premises Components and which do not
affect, or affect only to a de minimis extent, (i) Tenant's use and occupancy of
the Premises, (ii) access to the Premises, (iii) the provision of Building
Services to the Premises, and (iv) Tenant's right or ability to perform
Alterations which would otherwise be permitted hereunder.
(b) Landlord, in addition, shall be responsible for all
repairs and replacements, interior and exterior, structural and non-structural,
ordinary and extraordinary, foreseen and unforeseen, in and to the Premises,
Tenant's Improvements and Tenant's Property, in each case, to the extent, the
need for which arises out of (i) the performance of any work in the Premises by
Landlord, or person authorized by Landlord to enter the Premises, or any of
their respective employees, agents or contractors (provided, however, that
Landlord shall not be responsible therefor under this clause (i) to the extent
that the repair or replacement in question would not have been needed but for a
violation by Tenant of its obligations under this lease), (ii) the conduct of
alterations, additions, improvements or changes in the Building by Landlord or
any of its employees, agents or contractors, (iii) any violation by Landlord of
this lease, or (iv) the negligence or intentional misconduct of Landlord or any
of its employees, agents, contractors or invitees (any such repairs and
replacements being herein called "LANDLORD'S ADDITIONAL REPAIRS"). Tenant, at
its option, may elect to perform any of Landlord's Additional Repairs at
Landlord's expense. If Landlord notifies Tenant of the need for any Landlord's
Additional Repairs, then Tenant shall promptly notify Landlord as to whether
Tenant elects to perform such Landlord's Additional Repairs, at Landlord's
expense, or to have Landlord perform such repair. In all cases, except in cases
of emergency (in which cases Tenant need not so notify Tenant), Tenant, prior to
commencing any Landlord's Additional Repairs, shall notify Landlord that Tenant
has elected to perform the same at Landlord's expense. To the extent that Tenant
elects to perform any Tenant Building Repair at Landlord's expense, (x) Tenant
shall perform the same in accordance with the provisions of Section 13.01(c)(1),
applied mutatis mutandis (except that the same shall be performed at Landlord's
expense and the provisions of Section 13.01(c)(iii) shall not so apply), and (y)
Landlord, within thirty (30) days after a written demand therefor, shall
reimburse Tenant all of Tenant's out-of-pocket costs reasonably incurred in
connection with such Landlord's Additional Repair.
13.03. All maintenance, repairs and replacements performed by
Tenant in the Building (including without limitation Tenant Repairs performed by
Tenant and Landlord's Additional Repairs performed by Tenant, but specifically
excluding any maintenance, repairs and replacements performed by Tenant to
Tenant's Property (as opposed to Tenant's Improvements)) shall be performed
using only contractors which have been approved or
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designated by Landlord in accordance with the provisions of Sections 11.04
hereof, applied mutatis mutandis with respect to such maintenance, repairs and
replacements. The provisions of Sections 11.05 and 11.07 hereof, as well as any
other provisions of Article 11 relating to the standards and/or prosecution of
work in the Building, shall likewise apply, mutatis mutandis, to maintenance,
repairs and replacements performed by Tenant pursuant to this Article 13.
13.04. Tenant shall have the right, as well as the obligation,
to perform the maintenance, repairs and replacements for which it is responsible
under Section 13.01(a) above, subject, in all cases, to the other provisions of
this Article 13. In respect thereof, it is agreed that Tenant's right to repair
and replace any Tenant Improvements shall include only (i) the right to repair
such Tenant Improvements, as needed, without modification or change thereto, and
(ii) the right to replace such Tenant Improvements or any portion thereof, as
needed, without modification or change thereto; it being understood that any
modifications or changes to any Tenant Improvements shall be deemed Alterations
and may be performed only subject to and in accordance with Article 11 hereof.
In addition, the right of Tenant to replace, as opposed to repair, any Tenant
Improvements located outside the Premises shall, notwithstanding anything to the
contrary contained herein, be deemed to allow Tenant to replace such Tenant
Improvements or a portion thereof (as opposed to repairing the same) only to the
extent that (x) such Tenant Improvements are of such a nature that the same can
only be replaced and not repaired, or (y) the repair of the same is not feasible
in light of the damage or defect in question.
13.05. Except as expressly set forth in this lease, Landlord
shall have no liability to Tenant, nor, except as expressly set forth in Section
33.01, shall Tenant's covenants and obligations under this lease be reduced or
abated in any manner whatsoever, by reason of any inconvenience, annoyance,
interruption or injury arising from Landlord's making any repairs or changes
which Landlord is required or permitted by this lease, or required by law, to
make in or to the Building, including without limitation the Premises. The
provisions of this Section 13.05 shall not absolve Landlord of its obligations
to comply with the provisions of Section 35.15 hereof.
13.06. This Article 13 shall not be applicable, to any extent,
to any fire or other casualty referred to in Article 19, or to any repairs or
replacements of any damage or destruction resulting therefrom; the same shall be
governed by the other applicable provisions of this lease, including Articles 9
and 19.
ARTICLE 14
Electric Energy
14.01. (a) Landlord shall furnish electricity, for use by
Tenant in the Premises and in the operation of Tenant's Improvements, to the
Base Connection Points (as hereinafter defined) at an aggregate level (for all
the Base Connection Points combined) of not less than six and one-half (6.5)
watts demand load per usable square foot of the Premises. As used herein, (i)
the "BASE CONNECTION POINTS" shall mean the points of connection on the
Building's electric risers which are located in the Premises Floor Electrical
Closets (as hereinafter defined), each of which shall be selected by Tenant and
approved by Landlord, (ii) the "PREMISES FLOOR ELECTRICAL CLOSETS" shall mean
each of the four (4) electrical closets located on each Premises Floor (it being
understood that such closets are not included within the Premises), (iii) the
"COMMITTED BASE ELECTRICITY LEVEL" shall mean the minimum aggregate level at
which Landlord shall furnish electricity to the Base Connection Points (i.e.,
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six and one-half (6.5) watts demand load per usable square foot of the
Premises), and (iv) "TENANT'S BASE ELECTRICITY" shall mean the electricity drawn
by Tenant from the Base Connection Points. It being agreed that, for purposes of
this Section 14.01(a), the useable area of the Premises shall be conclusively
deemed to be 80% of the deemed rentable area of the Premises determined pursuant
to the provisions of Section 3.06 hereof and Exhibit D annexed hereto.
(b) Tenant, subject to and in accordance with the
applicable provisions of this lease (including without limitation Article 11
hereof), shall (i) make such connections at the Base Connection Points as will
allow Tenant to draw electricity therefrom, and (ii) distribute Tenant's Base
Electricity from the Base Connection Points (x) to the various points throughout
the Premises where Tenant's Base Electricity is consumed, and/or (y) to Tenant
Improvements located outside the Premises which consume electricity. Tenant
shall not draw electricity from the Building's electrical risers other than from
the Base Connection Points. Nothing in this Section 14.01(b) or in Section
14.02(b) hereof shall be deemed to permit Tenant to utilize any electrical
conduits outside of the Premises; it being understood that Tenant shall have the
right to utilize certain electrical conduits outside the Premises pursuant to
the provisions of Section 14.02(c) hereof or Article 41 hereof (and that
Landlord may hereafter grant Tenant other rights to utilize certain electrical
conduits outside the Premises).
(c) In connection with the distribution of electricity
from the Base Connection Points, or any conversion of voltage incident thereto,
Tenant shall have the right to utilize or dispose of any transformers or panels
located, as of the date hereof, in the Premises Floor Electrical Closets, but
Landlord makes no representation or warranty concerning the condition of such
transformers or panels or the adequacy thereof for Tenant's connection,
distribution or conversion needs. After the completion of the Secondary Work and
thereafter throughout the term of this lease, (i) Tenant shall have access to
the Premises Floor Electrical Closets, and (ii) the same shall not service any
other tenant of the Building; except, that Landlord and persons authorized by
Landlord may run electrical conduits and risers through such closets.
(d) Tenant covenants that, at no time during the term
of this lease, shall Tenant ever draw electricity from the Base Connection
Points at a level in excess of the Committed Base Electricity Level. Tenant
further covenants that its use of electricity shall never exceed the capacity of
the electrical risers, distribution conductors and other equipment installed by
Tenant to distribute Tenant's Base Electricity as hereinabove provided.
14.02. (a) Landlord shall furnish electricity, for use by
Tenant in the Premises and in the operation of Tenant's Improvements, to the
Designated 20th Floor Electrical Panels (as hereinafter defined) at an aggregate
level of not less than 2,500 KVA. As used herein, (i) the "DESIGNATED 20TH FLOOR
ELECTRICAL PANELS" shall mean those certain electrical panels heretofore
designated by Landlord and being contained in the switchgear room on the 20th
floor of the Building which is shown hatched on Exhibit R attached hereto, (ii)
the "COMMITTED SUPPLEMENTAL ELECTRICITY LEVEL" shall mean the minimum aggregate
level at which Landlord shall furnish electricity to the Designated 20th Floor
Electrical Panels (i.e., 2,500 KVA), and (iii) "TENANT'S SUPPLEMENTAL
ELECTRICITY" shall mean the electricity drawn by Tenant from the Designated 20th
Floor Electrical Panels. Tenant, subject to and in accordance with the
provisions of Articles 11 hereof and in connection with the Initial Alterations,
shall, at its expense, perform the work needed to (x) install a meter pan in
respect of the Designated 20th Floor Electrical Panels (herein
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called the "20TH FLOOR METER PAN"), and (y) run up to twenty (20) 4-inch
electrical conduits (I) from the Designated 20th Floor Electrical Panels to
Tenant's Electrical Distribution Room (as hereinafter defined), and (II) from
Tenant's Electrical Distribution Room to Tenant's UPS Room (as hereinafter
defined), all of which electrical conduits to be run in locations on the 20th
floor of the Building reasonably designated by Landlord (such work being herein
called the "20TH FLOOR ELECTRICAL WORK"). For purposes of applying Article 11
hereof to the 20th Floor Electrical Work, the same shall be deemed Exterior
Material Alterations and Pre-Authorized Alterations.
(b) Tenant, subject to and in accordance with the
applicable provisions of this lease (including without limitation Article 11
hereof), shall (i) make such connections at the Designated 20th Floor Electrical
Panels as will allow Tenant to draw electricity therefrom, and (ii) distribute
Tenant's Supplemental Electricity from the Designated 20th Floor Electrical
Panels (x) to any points within the Premises where Tenant's Supplemental
Electricity is consumed, and/or (y) to any Tenant's Improvements located outside
the Premises which consume electricity.
(c) In connection with the distribution of Tenant's
Supplemental Electricity from the Designated 20th Floor Electrical Panels as
aforesaid, Tenant, subject to and in accordance with the provisions of Article
11 hereof, shall have the right, from time to time, to install one or more
electrical conduits connecting Tenant's Electrical Distribution Room and
Tenant's UPS Room to the Premises Floors and the roof of the Building, which
electrical conduits shall run vertically through Tenant's Stairwell B Enclosure
(as hereinafter defined) and/or Tenant's Stairwell E Enclosure (as hereinafter
defined), and, to the extent any of such electrical conduits need to run
horizontally, the same shall be run in locations reasonably designated by
Landlord; provided, however, that Tenant's right to install any such electrical
conduit shall be conditioned upon (i) Tenant having theretofore installed, or
Tenant contemporaneously therewith installing, either or both of Tenant's
Stairwell B Enclosure and Tenant's Stairwell E Enclosure pursuant to Section
16.14 hereof, and (ii) there being sufficient space within Tenant's Stairwell B
Enclosure and/or Tenant's Stairwell E Enclosure to install such electrical
conduit. Such electrical conduits are herein collectively called the "TENANT'S
SUPPLEMENTAL ELECTRICITY CONDUITS", and the work required to install the same
being herein called the "TENANT'S SUPPLEMENTAL ELECTRICITY CONDUIT WORK". For
purposes of applying Article 11 hereof to Tenant's Supplemental Electricity
Work, the same shall be deemed Exterior Material Alterations and, subject to the
foregoing provisions of this Section 14.02(c), Pre-Authorized Alterations.
(d) Tenant covenants that, at no time during the term
of this lease, shall Tenant ever draw electricity from the Designated 20th Floor
Electrical Panels at a level in excess of the Committed Supplemental Electricity
Level. Tenant further covenants that its use of electricity shall never exceed
the capacity of the electrical risers, distribution conductors and other
equipment installed by Tenant to distribute Tenant's Supplemental Electricity as
hereinabove provided.
14.03. (a) Tenant shall pay Landlord, or a meter company
designated by Landlord, for Tenant's Base Electricity and Tenant's Supplemental
Electricity (collectively, "TENANT'S ELECTRICITY") on a submetered basis in
accordance with the following provisions of Section 14.03(b) (unless the
provisions of Section 14.04 through Section 14.07 hereof shall apply) and, in
all events, at the rates and charges set forth in this Section 14.03(c).
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(b) Tenant's Electricity shall be measured by one or
more submeters, measuring both demand and consumption, and one or more of such
submeters, or a separate meter or device, shall measure demand as to all such
submeters on a "co-incident" basis (such submeters, together with all related
equipment, are herein collectively called "TENANT'S SUBMETERS"). As used herein,
the term "demand" shall mean demand as defined by the public utility company
furnishing electricity to the Building from time to time (herein called the
"UTILITY COMPANY") and as measured over such time period or interval as the
Utility Company shall measure the same. Tenant's Submeter(s) initially measuring
Tenant's Base Electricity shall be installed by Landlord, at its expense, on or
prior to the date that is six (6) weeks after the date that Tenant shall have
installed its electrical panels in each of the Premises Floor Electrical
Closets. Tenant's Submeter(s) measuring Tenant's Supplemental Electricity shall
be installed by Landlord, and Landlord shall endeavor to install such Tenant's
Submeter(s) on or prior to the date (herein called the "SUPPLEMENTAL METER
OUTSIDE DATE") that is six (6) weeks after the date that Tenant shall have
installed the 20th Floor Meter Pan and shall have notified Landlord thereof.
(c) The amount to be charged to Tenant by Landlord, for
any billing period, for Tenant's Electricity (whether the demand and consumption
components thereof are measured by Tenant's Submeters or determined by survey as
herein elsewhere provided), shall be 102% of the amount indicated by applying
both the number of KWs of demand for such period (measured on a co-incident
demand basis) and the KWHRs of consumption for such period, to Landlord's Rate
Schedule for such period. Tenant shall also pay, and Landlord shall remit to the
appropriate governmental agency, all sales tax payable on the amounts set forth
in the preceding sentence. As used herein, "LANDLORD RATE SCHEDULE", for any
period, shall be rate schedule, for both KWs and KWHRs, at which Landlord
purchases electricity for the Building from the Utility Company during such
period, excluding, however, any sales tax which may be included in such
schedule. Bills for Tenant's Electricity, which Tenant hereby agrees to pay,
shall be rendered by Landlord, or the meter company, to Tenant at such time and
for such billing periods as Landlord may elect, and shall be payable as an
Additional Charge within thirty (30) days after the rendition of any such bill.
Each electric bill rendered by Landlord to Tenant for Tenant's Base Electricity
shall be accompanied by a copy of the electricity bill(s) for the Building
identifying Landlord's Rate Schedule for the applicable billing period.
(d) (1) Prior to the date that the Tenant's Submeter(s)
measuring Tenant's Base Electricity are installed on any Premises Floor, (I)
Tenant, during the period commencing on the date hereof and ending on the day
prior to the date that Tenant first occupies such Premises Floor for the
ordinary conduct of its business, shall pay to Landlord, in respect of Tenant's
Base Electricity for such Premises Floor, an amount equal to $1.00 per rentable
square foot per annum, and (II) Tenant, during the period, if any, commencing on
the date that Tenant first occupies such Premises Floor for the ordinary conduct
of its business and ending on the date that the Tenant's Submeters measuring
Tenant's Base Electricity are installed and made operational on such Premises
Floor, shall pay to Landlord, in respect of Tenant's Base Electricity for such
Premises Floor, an amount equal to $2.50 per rentable square foot per annum,
which amount shall be deemed a payment on account for such period and shall be
retroactively adjusted, after the installation of the Tenant's Submeter(s)
measuring Tenant's Base Electricity for such Premises Floor, based upon the
first 12-months of readings of such Tenant's Submeter(s) substantially in
accordance with the provisions of Section 14.05 hereof.
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(2) Tenant shall not draw any electricity from
the Designated 20th Floor Electrical Panels, prior to the first to occur of (i)
the date that the Tenant's Submeter(s) measuring Tenant's Supplemental
Electricity are installed, and (ii) the day after the Supplemental Meter Outside
Date. Consistent with the foregoing, if Tenant's Submeter(s) measuring Tenant's
Supplemental Electricity are not installed on or prior to the Supplemental Meter
Outside Date, then, for the period commencing on the day after the Supplemental
Meter Outside Date and ending with the installation of such Tenant Submeter(s),
Tenant shall not be charged for drawing Tenant's Supplemental Electricity from
the Designated 20th Floor Electrical Panels.
(e) Landlord's obligations under this Article 14 shall
not be affected, diminished or excused by reason of Landlord's use or employment
of a meter company. Any such meter company shall for purposes of this lease be
deemed Landlord's agent.
14.04. In the event that the "submetering" of electricity in
the Building is hereafter prohibited by any law hereafter enacted, or by any
order or ruling hereafter issued by the Public Service Commission of the State
of New York, or by any final judicial decision hereafter issued by any
appropriate court, then, at the request of Landlord, Tenant shall, unless Tenant
elects to require Landlord to provide Tenant's Electricity pursuant to Section
14.05 hereof, promptly apply to the appropriate Utility Company for direct
electric service and bear all costs and expenses necessary to comply with all
rules and regulations of the Utility Company pertinent thereto, and, upon the
commencement of such direct service, Landlord shall be relieved of any further
obligation to furnish Tenant's Electricity to Tenant pursuant to this Article
14, except that Landlord shall permit its wires, conduits and electrical
equipment, to the extent available and safely capable, to be used for such
purpose. If any additional feeder, riser or other equipment is necessary to
supply such direct service, Landlord shall, at the sole cost and expense of
Tenant, install the same at reasonably competitive rates, if in Landlord's
reasonable judgment the same are so necessary and will not cause damage or
injury to the Building or the Premises or cause or create a dangerous or
hazardous condition (other than one which is temporary) or unreasonably
interfere with or disturb other tenants or occupants (other than on a temporary
basis).
14.05. (a) If submetering of electricity is prohibited as
described in Section 14.04 above and Tenant does not elect to obtain direct
electric service from the Utility Company, then the demand (KW) and consumption
(KWHR) components of Tenant's Electricity shall be determined from time to time
by electric survey made from time to time in accordance with the provisions of
this Section 14.05, Section 14.06 and Section 14.07. Pending an initial survey
made by Landlord's utility consultant, effective as of the date (the "INITIAL
SURVEY EFFECTIVE DATE") when Landlord has commenced charging Tenant for Tenant's
Electricity pursuant to this Section 14.05 (with suitable proration for any
period of less than a full calendar month), the Fixed Rent specified in Section
1.04 shall be increased by an amount (the "INITIAL CHARGE") which shall be at
the rate of $2.50 per rentable square foot per annum, or if there has been
twelve (12) months' charges of submetered electric, an amount per month equal to
the average of the prior twelve (12) months' charges for submetered electric.
After completion of an electrical survey made by Landlord's utility consultant
of Tenant's demand (KW) and consumption (KWHR) of electricity, said consultant
shall apply the rates set forth in Section 14.03 hereof to arrive at an amount
(the "ACTUAL CHARGE"), and the Fixed Rent shall be appropriately adjusted
retroactively to the Initial Survey Effective Date to reflect any amount by
which the Actual Charge differs from the Initial Charge. If the Actual
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Charge is greater than the Initial Charge, Tenant shall pay resulting deficiency
within ten (10) days after being billed therefor. If the Actual Charge is less
than the Initial Charge, Landlord shall refund the resulting overpayment within
ten (10) days after the determination of the Actual Charge. Landlord shall cause
its utility consultant to complete the aforesaid survey and computation, and to
notify the parties thereof, no later than sixty (60) days after the Initial
Survey Effective Date. Thereafter and from time to time during the term of this
lease, Landlord may, and whenever Tenant shall so request, Landlord shall
promptly, cause additional surveys of Tenant's electric demand and consumption
to be made by Landlord's utility consultant. Whenever Tenant shall so request,
the fees of Landlord's utility consultant shall be paid by Tenant. In the event
any of the foregoing surveys shall determine that there has been an increase or
decrease in Tenant's demand or consumption, then effective retroactively to the
date of such increase or decrease (except as otherwise provided below) the then
current Actual Charge, as same may have been previously increased or decreased
pursuant to the terms hereof, shall be increased or decreased in accordance with
such survey determination. If the Actual Charge is thus increased, Tenant shall
pay resulting deficiency within ten (10) days after being billed therefor. If
the Actual Charge is thus decreased, Landlord shall refund the resulting
overpayment within ten (10) days after such determination. Notwithstanding the
foregoing provisions of this Section 14.06, (i) no increase resulting from any
survey made after the initial survey shall be retroactive to any date more than
30 days prior to the date of such survey, (ii) no decrease resulting from any
survey made after the initial survey at Tenant's request shall be retroactive to
any date more than 30 days prior to the date of Tenant's request, and (iii) no
decrease resulting from any survey made after the initial survey without
Tenant's request shall be retroactive to any date more than 30 days prior to the
date of such survey. Each survey after the initial survey shall include a
statement of the date, determined in accordance with this Section 14.05(a), to
which it is to be given retroactive effect.
(b) In the event from time to time after the initial
survey or a subsequent survey any additional electrically operated equipment is
installed in the Premises by Tenant or connected or any electrically operated
equipment is removed from the Premises or disconnected, or if Tenant shall
increase or decrease its hours of operation, or if the charges by the Utility
Company are increased or decreased, then and in any of such events the Actual
Charge shall be increased or decreased accordingly. The amount of such increase
or decrease in the Actual Charge shall be determined in the first instance by
Landlord's utility consultant. At any time after any such event shall occur,
Landlord may, and if Tenant shall so request, Landlord shall promptly, cause the
amount of such increase or decrease to be so determined. Whenever Tenant shall
so request, the fees of Landlord's utility consultant shall be paid by Tenant.
In addition, the Actual Charge will be increased or decreased quarterly in
accordance with calculations by Landlord's utility consultant to reflect changes
in the fuel adjustment component of the Utility Company's charge. Any increase
or decrease pursuant to this Section 14.05(b) in the amount charged Tenant for
electricity shall be retroactive to the date on which the fact or condition
giving rise thereto occurred; provided, however, that (i) no increase shall be
retroactive to any date more than 30 days prior to the date on which Tenant is
notified thereof, (ii) no decrease resulting from any determination made at
Tenant's request shall be retroactive to any date more than thirty (30) days
prior to the date of Tenant's request, and (iii) no decrease resulting from any
determination made without Tenant's request shall be retroactive to any date
prior to the date on which Tenant is notified thereof. Each determination shall
include a statement of the date, determined in accordance
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with this Section 14.05(b), to which it is to be given retroactive effect.
14.06. Surveys made of Tenant's electrical demand and
consumption shall be based upon the use of electricity between the hours of 8:00
a.m. to 6:00 p.m., Mondays through Fridays, and such other days and hours as
Tenant (together with all Tenant Parties) uses electricity for lighting and for
the conduct of its business in the Premises (if Tenant uses electricity during
certain hours in portions of the Premises but not all of the Premises, such fact
shall be taken into account); and if cleaning services are provided by Landlord,
such survey shall include (i) during Landlord's normal cleaning hours of five
(5) hours per day (which shall not be subject to reduction), lighting within the
Premises, and (ii) during such portion of such five (5) hours as such equipment
is ordinarily so used, the use of the electrical equipment normally used for
such cleaning. The electric demand and consumption of any light or device shall
not be deemed to be constant or continuous (unless so by its nature) and the
utility consultant shall reasonably estimate the actual demand and consumption
of each light or device, and, for purposes of determining Tenant's total demand,
the utility consultant shall also reasonably estimate the diversity factor to be
applied to the demand of each such light or device.
14.07. All survey determinations made in accordance with
Section 14.05(a) and all other determinations made in accordance with Section
14.05(b), in each case including the date, determined in accordance with Section
14.05, to which the same shall be given retroactive effect, shall be accompanied
by full documentation and shall be subject to contest by Tenant as provided in
this Section 14.07. In the event electricity shall be furnished to Tenant as
contemplated in Section 14.05 hereof, then Tenant, within sixty (60) days after
notification from Landlord of any determination of Landlord's utility consultant
in accordance with the provisions of Section 14.05(a) or (b), shall have the
right to contest, at Tenant's cost and expense, such determination, in each case
including the aforesaid date, by submitting to Landlord a like determination
prepared by a utility consultant of Tenant's selection which will highlight the
differences between Landlord's determination and Tenant's determination. If
Landlord's utility consultant and Tenant's utility consultant shall be unable to
reach agreement within thirty (30) days, then such two consultants shall
designate a third utility consultant to make the determination, and the
determination of such third consultant shall be binding and conclusive on both
Landlord and Tenant. If the determination of such third consultant shall
substantially confirm the finding of Landlord's utility consultant (i.e., within
ten percent (10%)), then Tenant shall pay the cost of such third consultant. If
such third consultant shall substantially confirm the determination of Tenant's
consultant (i.e., within ten percent (10%)), then Landlord shall pay the cost of
such third consultant. If such third consultant shall make a determination
substantially different from that of both Landlord's and Tenant's utility
consultants (or is within ten percent (10%) of both such determinations), then
the cost of such third consultant shall be borne equally by Landlord and Tenant.
In the event that Landlord's utility consultant and Tenant's utility consultant
shall be unable to agree upon the designation of a third utility consultant
within thirty (30) days after Tenant's utility consultant shall have made its
determination (different from that of Landlord's utility consultant) then either
party shall have the right to request the American Arbitration Association in
the City of New York to designate a third utility consultant whose decision
shall be conclusive and binding upon the parties, and the costs of such third
consultant shall be borne as hereinbefore provided in the case of a third
consultant designated by Landlord's and Tenant's utility consultants. Pending
the resolution of any contest pursuant to the terms hereof, Tenant
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shall pay the Actual Charge determined by Landlord's utility consultant, and
upon the resolution of such contest, appropriate adjustment in accordance with
such resolution of such Actual Charge shall be made retroactive to (i) the date
to which the contested determination was given retroactive effect or (ii) if
Tenant shall have contested such date, to the date determined in such contest.
14.08. (a) If Tenant requires additional electrical capacity,
above the Committed Base Electricity Level and the Committed Supplemental
Electricity Level, then Tenant may deliver to Landlord a notice which shall set
forth the level of additional electrical capacity required and shall request
that Landlord endeavor to obtain such additional electrical capacity from the
Utility Company (each such notice being herein called a "ADDITIONAL ELECTRICITY
NOTICE"). If, after Landlord receives an Additional Electricity Notice, Tenant
shall demonstrate its need for the additional electrical capacity requested in
such Additional Electricity Notice to Landlord's reasonable satisfaction, then
Landlord, at Tenant's expense and in coordination with Tenant, shall make
reasonable efforts to cause the Utility Company to deliver to the Building the
additional electrical capacity set forth in the Additional Electricity Notice;
provided, however, that Landlord's foregoing obligation to use reasonable
efforts shall not require Landlord to (i) initiate or otherwise participate in
any litigation or administrative proceeding, (ii) make any alterations,
additions or improvements to the Real Property (other than, if applicable, the
installation of the Additional Electrical Equipment (as hereinafter defined)
pursuant to the provisions of Section 14.08(b) hereof at Tenant's expense),
(iii) expend any money (unless Tenant pays such amounts to Landlord prior to the
date the same are due from Landlord), or (iv) take any action which would or
might adversely affect on (x) Landlord's ability to obtain electricity from the
Utility Company for the remainder of the Real Property or (y) Landlord's ability
to distribute electricity to any portion of the Real Property. Tenant shall
reimburse Landlord all Landlord's out-of-pocket expenses incurred in connection
with, and indemnify and hold harmless Landlord against any and all claims and
liabilities arising out of, Landlord's obtaining of, or Landlord's attempts to
obtain, the additional electrical capacity requested in the Additional
Electricity Notice (including without limitation those incurred in connection
with or arising out of Landlord's execution of any applications and similar
documents).
(b) If, in response to a request of Tenant or Landlord,
the Utility Company shall agree to furnish the additional electrical capacity
set forth in any Additional Electricity Notice, then Landlord, at Tenant's
expense, shall (i) permit the Utility Company to install in the Building's
electric vault the equipment and connections necessary to provide such
additional electrical capacity to the Building (such equipment and connections
being herein called the "ADDITIONAL BUILDING ELECTRICAL EQUIPMENT"), and (ii)
either install, or, at Landlord's option, permit Tenant to install, the risers,
switches, transformers, panels and related equipment necessary to make such
additional electrical capacity available to the Premises and the meters or
submeters needed to measure the electricity drawn therefrom (all such risers,
switches, transformers, panels and related equipment, together with such meters
or submeters, being herein called the "ADDITIONAL TENANT ELECTRICAL EQUIPMENT").
Tenant shall (x) pay, or reimburse Landlord, all charges of the Utility Company
with respect to its installation of the Additional Building Electrical Equipment
or otherwise charged in connection with the furnishing of additional electrical
capacity to the Building pursuant to the provisions of this Section 14.08(b),
and (y) reimburse Landlord all reasonable out-of-pocket cost incurred by
Landlord in connection with the installation of the Additional Tenant Electrical
Equipment. Upon
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such installation of the Additional Tenant Electrical Equipment, the same shall
constitute Tenant's Improvements.
(c) Notwithstanding anything to contrary contained in
the foregoing provisions of this Section 14.08 or in any other provision of this
lease, Tenant hereby agrees that (I) except for Tenant's rights to draw
electricity expressly set forth in Sections 14.01 and 14.02 hereof, Landlord
shall never have any obligation to furnish to Tenant and Tenant shall never have
any right or claim whatsoever to any electrical capacity currently existing in
the Building (regardless of whether any such capacity is now being used or is
ever used and regardless of whether any such capacity may hereafter become
available for use), and (II) except for any additional electrical capacity
furnished to the Building by the Utility Company pursuant to this Section 14.08
as hereinabove provided, Tenant shall have no rights or claims whatsoever to any
additional electrical capacity hereafter furnished to the Building by the
Utility Company. Without limiting the generality of the foregoing, it is
understood and agreed that if the Utility Company denies a request made by
Landlord or Tenant to furnish to the Building the additional electrical capacity
set forth in an Additional Electricity Notice and gives as its reason therefor
that there is unused or available electrical capacity in the Building, then,
notwithstanding that there is such unused or available capacity, Landlord shall
have no obligation to furnish any portion of such capacity to Tenant and Tenant
shall have no rights thereto.
14.09. Landlord shall not be liable in any event to Tenant for
any failure, interruption or defect in the supply or character of electric
energy furnished to the Premises by reason of any act or omission of the public
utility serving the Building with electricity or for any other reason not
attributable to Landlord's willful misconduct or negligence (but in no event
shall Landlord be responsible for any consequential damages).
14.10. If pursuant to any law, ruling, order or regulation,
the charges under which Tenant is purchasing electricity from Landlord pursuant
to this Article 14 shall be reduced below that which Landlord is otherwise
entitled hereunder, then, unless prohibited by laws and requirements of public
authorities, Tenant shall pay said deficiency to Landlord as an Additional
Charge within thirty (30) days after being billed therefor by Landlord, as
compensation for the use and maintenance of the Building's electric distribution
system.
14.11. Tenant, at its sole cost and expense, using its own
employees, or a vendor or contractor selected by Tenant, shall furnish and
install all replacement lighting, tubes, lamps, bulbs and ballasts required in
the Premises.
14.12. If any rebates shall be available from the Utility
Company, as part of any utility sponsored energy conservation rebate program, on
account of the energy efficient nature of Tenant's lighting fixtures and/or
equipment, then Landlord, at Tenant's sole expense, (i) shall, if Tenant shall
request, make and prosecute applications for any such rebates, and take other
reasonably requested actions in furtherance thereof, and (ii) shall, to the
extent any such rebates are actually received by Landlord, promptly remit the
same to Tenant.
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ARTICLE 15
Landlord's Services
15.01. For the purposes of this Article 15, the fol-
lowing terms shall have the following meanings:
(a) "BUSINESS OCCUPANCY DATE", with respect to any
Premises Floor, shall mean the date on which Tenant takes occupancy of the
portion of the Premises located on such Premises Floor for the conduct of its
usual business. Tenant shall give Landlord notice of the Business Occupancy Date
with respect to each Premises Floor at least five (5) Business Days prior to the
occurrence thereof.
(b) "BUSINESS HOURS" shall mean the hours between
8:00 a.m. and 6:00 p.m. on Business Days.
(c) "BUSINESS DAYS" shall mean all days, except
Saturdays, Sundays and Holidays. Notwithstanding the foregoing, for purposes of
Section 15.03 hereof and Section 15.05 hereof (but not for any other purposes
hereunder), the term "Business Days" shall include Partial Service Holidays.
(d) "HOLIDAYS" shall mean New Year's Day, Washington's
Birthday, Memorial Day, Independence Day, Labor Day, Thanksgiving, the day
following Thanksgiving, Christmas and any other days which shall be either (i)
observed by the federal or the state governments as legal holidays, or (ii)
designated as a holiday by the applicable Building Service Union Employee
Service contract or by the applicable Operating Engineers contract. At anytime
after the beginning of a calendar year, Landlord, promptly after its receipt of
a written request therefor from Tenant, shall furnish Tenant with a notice
designating the Holidays for that calendar year.
(e) "PARTIAL SERVICE HOLIDAYS" shall mean any Holiday
which occurs on a weekday and on which the New York Stock Exchange is open for
trading.
15.02. (a) Landlord shall furnish cold water to the sprinklers
on each Premises Floor to the extent required for sprinkler purposes only.
Landlord's sprinkler system (up to and including the main sprinkler loop on each
Premises Floor) shall be hydraulically designed for office space with .015 gpm
per square foot to the 2,000 most remote square feet, a water reserve of 30
minutes and a maximum head coverage area of 196 square feet.
(b) Landlord shall furnish hot and cold water to the
Core Lavatories on each Premises Floor to the extent required for normal core
lavatory, drinking and cleaning purposes only. In addition, Landlord, without
charge to Tenant, shall furnish additional hot and/or cold water for use by
Tenant for the following purposes: (i) satellite lavatories (containing no more
than one sink and one toilet each), up to a maximum of two (2) per Premises
Floor, and (ii) pantries (containing no more than one dishwasher and one sink
each), up to a maximum of two (2) per Premises Floor. Such additional hot and/or
cold water shall be furnished through the Building's plumbing system to, and
shall be accessible by Tenant at, one or more of the valved outlets therefor
which currently exist in the core of the Building on each Premises Floor.
(c) If, consistent with Section 2.01 hereof, Tenant
shall require water for any purposes other than those set forth in Section
15.02(a) and (b) above (which other purposes shall include without limitation
(i) water for any additional pantries, or for any kitchenettes, kitchens or a
cafeteria or other dining facility, inclusive of any sinks, dishwashers,
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coffee machines, etc. therein, (ii) water for any additional satellite or
private lavatories installed by Tenant, (iii) water for any gymnasium or showers
installed by Tenant, and/or (iv) water for Tenant's Cooling Plant), then
Landlord need only furnish additional cold water for such other purposes, as so
required, which additional cold water shall be furnished through the Building's
plumbing system to, and shall be accessible by Tenant at, one or more of the
valved outlets therefor which currently exist in the core of the Building on
each Premises Floor and, after the completion of the Secondary Work, a single
valved outlet on the roof of the Building. Such furnished water shall have a
pressure at the outlet of not less than 13 psig and not more than 80 psig. If
Tenant uses water for any purposes other than as set forth in Section 15.02(a)
and (b) above, then Landlord may install and maintain, at Tenant's expense, one
or more meters to measure Tenant's consumption of such water for such other
purposes. Tenant shall reimburse Landlord for the quantities of water shown on
such meter or meters, periodically, within thirty (30) days after written demand
therefor, in accordance with the rates and charges of the utility company or
municipality supplying such water to the Building. Tenant, at its expense, shall
be solely responsible for distributing to and within the Premises, and, to the
extent Tenant requires hot water, heating any additional cold water furnished
pursuant to this Section 15.02(c). Landlord shall also make available to Tenant
at a plugged point of connection on each Premises Floor (i) a 4" waste line and
(ii) a 2" vent line.
15.03. (a) Landlord, during Business Hours, shall furnish, in
accordance with the specifications set forth on Exhibit K annexed hereto, (i)
heat and ventilation service at the perimeter of each Premises Floor through the
existing perimeter equipment (such heat and ventilation service being herein
called "BASE BUILDING HEAT SERVICE"), and (ii) air-conditioning and ventilation
service both (x) at the perimeter of each Premises Floor (through the existing
perimeter equipment), other than the 50th floor of the Building, and (y) at
delivery points (designated by Landlord) in the Building's core located on each
Premises Floor, other than the 50th floor of the Building (such air-conditioning
and ventilation service being herein called "BASE BUILDING AIR-CONDITIONING
SERVICE"). Tenant, at its expense, shall have right to measure the provision of
heat, air-conditioning and ventilation service to the Premises as aforesaid to
confirm that the same is in conformity with the specifications set forth on
Exhibit K, and to temporarily or permanently install equipment for that purpose,
provided, that no such equipment shall have any adverse affect on the operation,
performance or maintenance of the Building's HVAC system(s) or any related
equipment. Landlord shall provide either Base Building Heat Service or Base
Building Air-Conditioning Service according to outside conditions and not
according to the season or time of year.
(b) If Tenant shall request that Landlord furnish Base
Building Heat Service ("OVERTIME HEAT") or Base Building Air-Conditioning
Service ("OVERTIME AC") to any Premises Floor(s) at any time other than Business
Hours, then Landlord shall furnish such service at such times (x) upon no less
than five (5) hours' advance notice from Tenant for overtime service after six
(6) p.m. on Business Days, and (y) upon notice received before Noon on the
preceding Business Day for overtime service on non-Business Days. Each such
notice shall specify the Premises Floor or Floors to which service is to be
provided. Tenant, within thirty (30) days after its receipt of a demand
therefor, shall pay to Landlord (x) the Overtime AC Rate for any Overtime AC,
and (y) the Overtime Heat Rate for any Overtime Heat. As of the date hereof, the
"OVERTIME AC RATE" shall be $40 per hour, per floor, and the "OVERTIME HEAT
RATE" shall be $40 per hour, per floor. Each of the Overtime AC Rate and the
Overtime Heat Rate shall be Adjusted by CPI (as defined in Article 31 hereof).
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(c) Notwithstanding anything to the contrary contained
in the foregoing provisions of this Section 15.03, Landlord shall have no
obligation to furnish either Base Building Heat Service or Base Building
Air-Conditioning Service to the 50th floor of the Building or any part thereof.
Tenant, for so long as the Premises shall include any space on the 50th floor of
the Building, shall be solely responsible for furnishing heat and
air-conditioning to the leasable areas of the 50th floor of the Building
(including without limitation the Premises). For such purposes, Tenant shall be
entitled to utilize both (i) the existing separate heating system currently
located on the 50th floor of the Building, and (ii) the existing
air-conditioning unit currently located on the 50th floor of the Building, and,
subject to and in accordance with the provisions of Article 11 hereof, shall
have the right to modify and supplement such separate heating system and
air-conditioning unit (such separate heating system, as so modified and
supplemented, being herein called the "50TH FLOOR HEATING UNIT"; such
air-conditioning unit, as so modified and supplemented, being herein called the
"50TH FLOOR AC UNIT"; and such 50th Floor Heating Unit and such 50th Floor AC
Unit being herein collectively called the "50TH FLOOR HVAC UNITS"). Landlord,
without charge to Tenant, shall furnish the steam needed to operate the 50th
Floor Heating Unit; it being understood that Landlord shall have no other
obligation to furnish any service to the 50th Floor Heating Unit. Tenant,
subject to and in accordance with the applicable provisions of this lease,
shall, at Tenant's expense, furnish the electricity needed to operate the 50th
Floor AC Unit (from the electricity furnished by Landlord to Tenant pursuant to
Article 14 hereof) and the chilled water needed to operate the 50th Floor AC
Unit (from the chilled water furnished by Landlord to Tenant pursuant to Section
15.04 hereof or the chilled water generated by Tenant's Cooling Plant); it being
understood that Landlord shall have no separate obligation to furnish
electricity or chilled water or any other service to the 50th Floor AC Unit. The
50th Floor HVAC Units shall be deemed part of "Tenant's Improvements" for all
purposes of this lease; provided, however, that, in all events, each of the 50th
Floor HVAC Units shall be surrendered with the Premises upon the expiration or
earlier termination of this lease (or, as the case may be, the expiration or
earlier termination of this lease with respect to the entirety of the Premises
located on the 50th Floor of the Building) in the same or better condition, and
with equal or better capacity, than each such unit is in on the date hereof,
subject to ordinary wear and tear. Landlord makes no representation or warranty
whatsoever concerning the capacity or existing condition of either of the 50th
Floor HVAC Units. Notwithstanding the foregoing provisions of this Section
15.03(c), if, at anytime, the Premises shall include some, but less than all,
the leasable area on the 50th floor of the Building, then Tenant shall enter
into an agreement with Landlord (or, at Landlord's option, the tenant(s) or
other occupant(s) of such other leasable area), which agreement shall (I)
provide that Tenant, without charge to Landlord or the tenant(s) or other
occupant(s) of such leasable area, shall provide heat service and
air-conditioning service to such other leasable area substantially as it
provides heat service and air-conditioning service to the Premises (both during
and after Business Hours), (II) provide that Landlord (or, as the case may be,
the tenant(s) or other occupant(s) of such other leasable area), from time to
time, shall reimburse Tenant its (or their) proportionate share of the
reasonable costs incurred by Tenant in repairing and replacing the 50th Floor
HVAC Units (which proportionate share shall be computed on a pro-rata rentable
square basis), and (III) contain provisions substantially similar to Section
15.03(b) hereof and Section 15.10(a) and (b) hereof with respect to such heat
service and air-conditioning service.
15.04. (a) Landlord shall furnish chilled water to
the SCW Distribution Points, 24 hours a day, 7 days a week, at a
level which, subject to Tenant making proper connection thereto,
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will enable Tenant to draw at least 400 tons of chilled water, in the aggregate,
from such points at any time. Tenant shall have the right to draw from the SCW
Distribution Points, at any instance in time, up to, but not in excess of, 400
tons of chilled water, which chilled water shall be used in the operation of
Tenant's Supplemental AC Equipment (as hereinafter defined), the 50th Floor AC
Unit and/or Tenant's UPS System (as hereinafter defined). Tenant, at its
expense, shall be responsible for connecting to the SCW Distribution Points and
distributing any chilled water drawn from such SCW Distribution Points to
Tenant's Supplemental AC Equipment, the 50th Floor AC Unit and/or Tenant's UPS
System. Such chilled water shall be furnished at 48 degrees F., and shall be
returned at 58 degrees F.; the system differential pressure shall be 20 psig at
the highest floor. As used herein, the "SCW DISTRIBUTION POINTS" shall mean the
single point on each Premises Floor located in the Building's core, the single
point on the roof of the Building and the single point on the 20th floor of the
Building, which shall be designated by Landlord, and, at which Tenant, after the
completion of the Secondary Work, shall be able to draw chilled water.
Notwithstanding the foregoing, Landlord shall have no obligations under this
Section 15.04(a) until after the substantial completion of the Secondary Work.
The term "TENANT'S SUPPLEMENTAL AC EQUIPMENT" shall mean, collectively, all of
Tenant's water-cooled supplemental air-conditioning units.
(b) (1) For purposes of this Section 15.04, the
following terms shall have the following meanings:
"TON HOURS", for any period as measured by any
chilled water meter, shall mean a number of ton hours equal to the
quotient of (A) the product of (y) the number of BTUs of chilled water
consumed by Tenant during such period (as measured by such meter),
multiplied by (z) the "Meter Factor" (as such term is used in the
vernacular of the industry) applicable to the make and model number of
such meter, divided by (B) the BTUH Factor applicable to the make and
model number of such meter.
"ON-PEAK HOURS", for any period, shall mean
those hours which, during such period, are designated as on-peak hours
(or another designation similar thereto) on the electric rate schedule
at which Landlord purchases electricity for the Building from the
Utility Company. As of the date hereof, On-Peak Hours shall be the
hours from 8:00 a.m. to 10:00 p.m. Monday through Friday.
"OFF-PEAK HOURS", for any period, shall mean
those hours which are not On-Peak Hours during such period.
"ON-PEAK SUPPLEMENTAL CHILLED WATER RATE", as of
the date hereof, shall mean eighteen cents ($0.18) per Ton Hour, it
being agreed that such rate shall be Adjusted By CPI.
"OFF-PEAK SUPPLEMENTAL CHILLED WATER RATE", as
of the date hereof, shall mean thirteen cents ($0.13) per Ton Hour, it
being agreed that such rate shall be Adjusted By CPI.
"MINIMUM PER DIEM SCW CHARGE" shall mean an
amount equal to $137, which amount shall be Adjusted By CPI.
"50TH FLOOR PER DIEM CREDIT" shall mean (I)
during any period that the Premises include any space on the 50th floor
of the Building, an amount equal to $131, which amount shall be
Adjusted By CPI, and (II) during any other period, $0.
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(2) Tenant, prior to drawing any chilled water
from any SCW Distribution Points, shall, at its expense, install one or more
meters (each, a "CHILLED WATER METER") at one or more of such point(s) (or such
other location on the Building's chilled water loop approved by Landlord) which
will monitor Tenant's draw and consumption of chilled water from all the SCW
Distribution Points during each of On-Peak Hours and Off-Peak Hours, which
meter shall (i) separately register the number of Ton Hours consumption during
On-Peak Hours and consumption during Off-Peak Hours, (ii) otherwise provide
accurate time of day readings of Tenant's draw and consumption of chilled water
from the SCW Distribution Points, and (iii) otherwise be in conformity with the
meter specifications set forth on Exhibit V-1 attached hereto. In addition,
Tenant, together with the Chilled Water Meters, shall install such equipment as
will prevent Tenant from drawing, at any instant in time, chilled water from the
SCW Distribution Points in excess of 400 tons in the aggregate.
(3) Tenant, within thirty (30) days after its
receipt of a written demand therefor, shall pay to Landlord as Additional
Charges hereunder, for all chilled water it draws from the SCW Distribution
Points during any period, an amount equal to the positive excess, if any, of (I)
the greater of (x) an amount equal to Minimum Per Diem SCW Charge multiplied by
the number of days in such period, and (y) the Meter Charge for such period,
over (II) the 50th Floor Per Diem Credit multiplied by the number of days in
such period. As used herein, the "METER CHARGE", for any period, shall mean an
amount equal to the sum of (i) the product obtained by multiplying (1) the
aggregate of all Ton Hours consumed during On-Peak Hours during such period (as
measured by the Chilled Water Meters), by (2) the On-Peak Supplemental Chilled
Water Rate applicable during such period, plus (ii) the product obtained by
multiplying (A) the aggregate of all Ton Hours consumed during Off-Peak Hours
during such period (as measured by the Chilled Water Meters) by (B) the Off-
Peak Supplemental Chilled Water Rate applicable during such period.
15.05. (a) Landlord shall provide passenger elevator service
to the Premises Floors, which service shall be provided (i) during Business
Hours, through at least eight (8) hi-rise passenger elevators, and (ii) at all
other times, through at least the Evening Elevator Number (as hereinafter
defined) of hi-rise passenger elevators. Such passenger elevator service shall
continue, throughout the term of this lease, to be furnished by the passenger
elevators now serving the Premises Floors and, throughout the term of this
lease, no floor, other than the floors now regularly served by such passenger
elevators (i.e., only the 41st through 50th floors of the Building, the
Building's ground floor lobby and, as to the Bank X Concourse Elevator (as
hereinafter defined) only, the retail concourse level of the Building), shall be
served by such passenger elevators. Landlord's obligation to provide passenger
elevator pursuant to the provisions of this Section 15.05(a) shall not commence
with respect to any Premises Floor until the Business Occupancy Date with
respect to such Premises Floor. As used herein the term "EVENING ELEVATOR
NUMBER" shall mean (i) during the Bank X Control Period, seven (7), and (ii)
during any other period, two (2); provided, however, that, during any such other
period, Tenant, by notice to Landlord, may request that the Evening Elevator
Number be increased to a whole number which is not greater than seven (7) (the
excess of such requested whole number over two (2) being called the "REQUESTED
INCREMENTAL NUMBER"), and, in such event, (x) Landlord, promptly after its
receipt of such a notice, shall install the access and security controls in the
Requested Incremental Number of hi-rise passenger elevators as shall be
necessary for such passenger elevators to serve the Premises Floors at times
other than Business Hours consistent with Landlord's security requirements for
the Building, (y) after the installation of such controls, the Evening Elevator
Number
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shall be increased to be the sum of two (2) plus the Requested Incremental
Number, and (z) Tenant, within thirty (30) days after written demand, shall
reimburse Landlord all of the reasonable out-of-pocket expenses incurred by
Landlord in installing such controls.
(b) Prior to the Business Occupancy Date with respect
to each Premises Floor, Landlord, provided it shall have received forty-eight
(48) hours notice of Tenant's requirements, shall furnish Tenant, after Business
Hours on up to two (2) Business Days for each Premises Floor (but not exceeding
ten (10) Business Days in the aggregate for the move-in of the Premises), with
the exclusive use of up to two (2) high-rise passenger elevators for the purpose
of facilitating Tenant's move-in with respect to such Premises Floor. When
Tenant shall vacate any Premises Floor, Landlord, provided it shall have
received adequate notice of Tenant's requirements, shall furnish Tenant, after
Business Hours on up to two (2) Business Days for each Premises Floor (but not
exceeding ten (10) Business Days in the aggregate for the vacation of Premises
Floors during the term of this lease), with the exclusive use of up to two (2)
high-rise passenger elevators for the purpose of facilitating Tenant's move-out
of such Premises Floor. Tenant, within thirty (30) days after a written demand,
shall reimburse Landlord all out-of-pocket costs incurred by Landlord in
connection with or as a result of Tenant's use of any passenger elevators for
its move-in or move-out of any Premises Floor pursuant to the provisions of this
Section 15.05(b).
(c) Notwithstanding anything to the contrary that may
be contained herein, in no event shall Tenant ever use, or permit any Tenant
Party to use, any passenger elevator(s) to carry construction personnel or
materials. Tenant may, however, use the passenger elevators (i) for regular
deliveries of mail, food and similar items (but may not, except as provided
below, utilize hand trucks or similar devices to effect such deliveries), and
(ii) during the Bank X Control Period only, for the movement, from one Premises
Floor to another (but not between the Premises and the Building's lobby), of
packages and boxes by hand truck or similar device, provided, that (x) such
packages or boxes shall not be larger than the size of packages and boxes
normally handled by package delivery services such as Federal Express or UPS,
and (y) such packages and boxes shall not consist or contain heavy furniture or
equipment; it being agreed that Tenant shall be responsible for any repairs and
replacements to the passenger elevators the need for which arises from any uses
pursuant to this sentence. In addition, Tenant, during the prosecution of
Alterations, may allow its construction personnel to use the Building's fire
stairs to travel from one Premises Floor to another (but not between the
Premises and the Building's lobby); provided, however, that (A) Tenant shall
cause such fire stairs to be kept unobstructed and clean and free and debris at
all times, and shall cause all the doors on the Premises Floors which lead to
the fire stairs to be kept closed when not in actual use, and (B) Tenant shall
be responsible for any repairs and replacements to the fire stairs the need for
which arises from any use pursuant to this sentence.
15.06. (a) Landlord, during Business Hours, shall provide
Tenant with freight elevator service to each Premises Floor (and to other floors
of the Building in connection with Tenant's performance of any permitted
Alterations or permitted maintenance, repairs or replacements of Tenant's
Improvements on such other floors) on a non-exclusive, first-come first-served
basis (i.e., no advance scheduling). Tenant, however, shall not have the right
to use any of the Building's freight elevators during Business Hours for bulk
deliveries (i.e., deliveries requiring multiple trips) of construction
materials, furniture or equipment.
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(b) If Tenant shall require freight elevator service
other than during Business Hours ("OVERTIME FREIGHT ELEVATOR SERVICE"), then
Landlord shall provide the same on a first-reserved first-served basis, (i) upon
notice from Tenant that is received by Landlord no less than five (5) hours' in
advance, for evening overtime service after 6:00 p.m. on Business Days, (ii)
upon notice from Tenant that is received by Landlord before Noon on the
preceding Business Day, for overtime service on non-Business Days or (iii) upon
notice from Tenant that is received by Landlord before Noon on the preceding
Business Day, for morning overtime service before 8:00 a.m. on Business Days.
Tenant, within thirty (30) days after its receipt of a written demand therefor,
shall pay to Landlord the applicable Overtime Freight Rate (as hereinafter
defined) for any Overtime Freight Elevator Service. As of the date hereof, the
"OVERTIME FREIGHT RATE" is $55 per hour per freight elevator, with (x) a minimum
2-hour charge of $110 per freight elevator for any period of service commencing
at 6:00 p.m. on a Business Day, and (y) a minimum 4-hour charge of $220 per
freight elevator for any other period of service (it being agreed that the
minimum charge for any period of service may satisfied collectively by Tenant
and one or more other tenants or occupants of the Building). The Overtime
Freight Rate (as well as the minimum charges derived therefrom) shall be
Adjusted by CPI.
(c) Notwithstanding anything to the contrary contained
in the foregoing provisions of this Section 15.06, Tenant, during the Section
15.06(c) Period (as hereinafter defined) only, shall have the exclusive right,
both during and after Business Hours, to use the Designated Freight Elevator (as
hereinafter defined); provided, however, that (I) such exclusivity shall not
apply during any period during the Section 15.06(c) Period that any one of the
Building's three freight elevators is out of service, (II) Landlord, even at
times during the Section 15.06(c) Period when such exclusivity does apply, shall
have the right to use, or permit to be used, the Designated Freight Elevator for
emergency and/or critical deliveries (it being understood that any critical
delivery shall be limited to a single trip), and (III) Tenant shall still be
obligated to pay the Overtime Freight Rate for the use of the Designated Freight
Elevator after Business Hours during the Section 15.06(c) Period. As used
herein, the following terms shall have the following meanings: (A) the "SECTION
15.06(C) PERIOD" shall mean the period commencing on the date hereof and ending
on the first to occur of (i) December 31, 1994, and (ii) the date that the
Business Occupancy Date shall have occurred with respect to at least six (6)
Premises Floors; and (B) the "DESIGNATED FREIGHT ELEVATOR" shall mean the
freight elevator in the Building which shall be designated as such by Landlord
pursuant to this Section 15.06(c) (which freight elevator shall be designated
from the Building's two available freight elevators which generally provide
non-exclusive service (i.e., other than the freight elevator exclusively
dedicated to PSI pursuant to its lease)), it being agreed that Landlord may
change the Designated Freight Elevator from time to time during the Section
15.06(c) Period. The second sentence of Section 15.06(a) shall not be applicable
to the Designated Freight Elevator during any portion of the Section 15.06(c)
Period during which Tenant shall have the exclusive right to use the Designated
Freight Elevator pursuant to this Section 15.06(c).
(d) Freight elevator service shall include, whenever
Tenant shall so elect, use of a loading dock and there shall be no separate
charge therefor.
15.07. (a) Landlord shall cause the Premises and the
applicable portions of the Base Building (including the exterior
windows on each Premises Floor), to be cleaned in accordance with
the cleaning specifications set forth on Exhibit L annexed hereto
(herein called the "CLEANING SPECIFICATIONS"). Tenant shall pay
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to Landlord, within thirty (30) days after written demand, the additional costs
incurred by Landlord for (i) extra cleaning work in the Premises required
because of (x) carelessness, misuse or neglect on the part of Tenant or any
Tenant Party or its or their visitors, (y) interior glass partitions or unusual
quantity of interior glass surfaces, and (z) materials or finishes installed by
or on behalf of Tenant which are unusually difficult or time-consuming to clean,
and (ii) removal from the Premises and the Building of any refuse and rubbish of
Tenant in excess of that ordinarily accumulated in business office occupancy,
including, without limitation, kitchen refuse and rubbish, and (iii) removal
from the Premises and the Building of any refuse and rubbish of Tenant at times
other than Landlord's standard cleaning times.
(b) Notwithstanding the foregoing provisions of Section
15.07(a), Landlord shall not be required to clean any portions of the Premises
used for (A) kitchen, cafeteria or dining facilities, kitchenettes, pantries and
vending machine areas, (B) private lavatories or toilets installed by Tenant or
any Tenant Party, (C) any gymnasium or exercise facilities, (D) printing, or (E)
other special purposes requiring greater or more difficult cleaning work than
office areas (it being agreed that trading floor use is not such a special
purpose); and Tenant agrees, at Tenant's expense, to retain Landlord's cleaning
contractor (and no other cleaning contractor) to perform such cleaning;
provided, however, that if (i) Landlord's cleaning contractor proposes to charge
Tenant for such additional cleaning services at rates which, in the aggregate,
are materially in excess of the market rates for such additional cleaning
services (which "market rates" shall be determined with reference to the rates
charged for such services by cleaning contractors of Similar Buildings), and
(ii) Tenant, prior to retaining Landlord's cleaning contractor for such
additional cleaning services, notifies Landlord thereof in writing, then
Landlord shall reimburse Tenant the amount of such excess (unless Landlord, at
its option, shall, in lieu thereof, grant Tenant the right to employ its own
contractor to perform such additional cleaning services).
(c) Landlord, its cleaning contractor and their
respective employees shall have access to the Premises after 6:00 p.m. and
before 6:00 a.m. and shall have the right to use, without charge therefor, all
light, power and water in the Premises reasonably required to clean the Premises
as required under this Section 15.07.
(d) Tenant shall not clean, nor require, permit, suffer
or allow any windows in the Premises to be cleaned, from the outside in
violation of Section 202 of the Labor Law, or any other applicable law.
(e) Notwithstanding anything to the contrary contained
in the foregoing provisions of this Section 15.07, Landlord shall have no
obligation to provide any of the aforesaid cleaning services to any Premises
Floor (or the Premises thereon) prior to the Business Occupancy Date therefor.
15.08. Landlord shall provide life safety service through the
Building's Class E System to the DGPs serving the Premises. Landlord shall
provide Tenant with at least eight (8) points on each Premises Floor at which
Tenant may tie-in to the Building's Class E System.
15.09. Except as expressly provided in this Article
15, Landlord shall not be required to provide any services to the
Premises.
15.10. (a) Landlord, subject to Section 15.10(b), (c)
and (d) below, reserves the right, without liability to Tenant
and without it being deemed a constructive eviction, to stop or
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interrupt any heating, elevator, escalator, lighting, ventilating,
air-conditioning, steam, power, electricity, water, chilled water, cleaning or
other service and to stop or interrupt the use of any Building Systems or
Building facilities at such times as may be necessary and only for as long as
may reasonably be required by reason of accidents, strikes, or the making of
alterations, additions, improvements, replacements or repairs or the inability
to secure a proper supply of fuel, gas, steam, water, electricity, labor or
supplies, or by reason of any other similar or dissimilar cause beyond the
reasonable control of Landlord. No such stoppage or interruption shall (i)
result in any liability from Landlord to Tenant (except for any liability, other
than consequential damages, arising out of a violation of the provisions of
Section 15.10(b), (c) and (d) below) or (ii) entitle Tenant to any diminution or
abatement of rent (except as may be expressly provided for in Section 33.01
hereof) or other compensation nor shall this lease or any of the obligations of
Tenant be affected or reduced by reason of any such stoppage or interruption.
(b) Landlord shall not (i) voluntarily effect any
Service Shutdown of electricity without first providing Tenant with at least ten
(10) Business Days notice of the approximate time and duration of such Service
Shutdown, (ii) voluntarily effect any Service Shutdown of any other service
without first providing Tenant with at least five (5) Business Days notice of
the approximate time and duration of such Service Shutdown, (iii) voluntarily
effect or continue a Service Shutdown of electricity, chilled water or make-up
water (as defined below) other than during the hours from 8:00 a.m. Saturday to
8:00 p.m. Sunday, (iv) voluntarily effect or continue a Service Shutdown of
chilled water and make-up water simultaneously; provided, however, that Landlord
may voluntarily effect any Service Shutdown (including without limitation a
Service Shutdown of electricity, chilled water or make-up, or of chilled water
and make-up water simultaneously) at any time or times, and without any
requirement that it give Tenant notice thereof, if (A) the Service Shutdown is
effected by Landlord with a view toward averting or reducing danger to persons
or damage to property (including without limitation damage to any Building
Systems), (B) the Service Shutdown is effected by Landlord in response to any
actual or perceived emergency, (C) the Service Shutdown is effected by Landlord
in response to the directive of a governmental or quasi-governmental authority
or a public utility, or (D) the Service Shutdown is not a Service Shutdown to
electricity, chilled water or make-up water, and does not otherwise materially
affect the operation of Tenant's business in the Premises; provided, further,
however, that, in the cases described in clauses (A), (B) and (C) above,
Landlord shall, if practicable, give Tenant such prior notice of the Service
Shutdown to be effected as shall be reasonable under the circumstances (which
notice may be written or oral), except that Landlord shall never be required to
give notice in cases where it effects a Service Shutdown in response to an
actual or perceived emergency which could imminently result in danger to health
or safety of persons or in substantial damage to property. For purposes of this
Section 15.10(b), the term "SERVICE SHUTDOWN" shall mean (x) a shutdown of one
or more Building System(s) which provide one or more Building Services to
Tenant, or (y) any other act with respect to a Building System which results in
a diminution in the level of the Building Service provided thereby below the
levels required hereunder (other than a de minimis diminution which is not of
electricity); provided, however, that the term "Service Shutdown" shall not
include a shutdown of, or diminution in, either (I) passenger elevator service
(as set forth in Section 15.05 hereof) or (II) freight elevator service (as set
forth in Section 15.06 hereof) (it being agreed that the provisions of Section
15.10(d) below, and not the provisions of this Section 15.10(b), shall apply to
passenger elevator service and freight elevator service). As used herein,
Landlord shall be
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deemed to have "VOLUNTARILY EFFECTED" a Service Shutdown only if Landlord, by
its own direct, intentional and affirmative act, effects such a Service
Shutdown, and Landlord shall be deemed to have "VOLUNTARILY CONTINUED" a Service
Shutdown only if Landlord, by its own direct, intentional and affirmative act or
omission, continues a theretofore effected Service Shutdown. As used in this
Section 15.10(b), the term "MAKE-UP WATER" shall mean the domestic water, if
any, which is furnished to the valved outlet on the roof of the Building from
which Tenant intends to draw domestic water to be used by Tenant as "make-up
water" in connection with Tenant's Cooling Plant (as defined in Article 41
hereof).
(c) If (i) Landlord, pursuant to Section 15.10(b)
above, shall deliver to Tenant a notice indicating that a Proposed Optional
Electricity Service Shutdown (as hereinafter defined) shall occur and setting
forth the scheduled date and time therefor, and (ii) Tenant, on or prior to 5
p.m. of the Business Day immediately following the Business Day that Tenant
receives such notice (time being of the essence), shall deliver (by hand
delivery to the applicable Building Office) a notice (x) requesting that such
Proposed Optional Electricity Service Shutdown be rescheduled for a different
date other than the scheduled date therefor set forth in Landlord's notice, and
(y) setting forth one or more requested rescheduled dates, it being agreed that
no such requested rescheduled date shall be more than two (2) weeks after the
scheduled date set forth in Landlord's notice (which notice of Tenant is herein
called a "TENANT'S SECTION 15.10(C) REQUEST NOTICE"), then, and only in such
events, Landlord shall promptly reschedule the Proposed Optional Electricity
Service Shutdown to occur on one of the requested rescheduled dates set forth in
Tenant's Section 15.10(c) Request Notice (or on some later date which is
consistent with the foregoing provisions of this Section 15.10), unless
Landlord, in its reasonable judgement, determines that another tenant or
occupant of the Building will be inconvenienced (other than to a de minimis
extent) by such rescheduling (in which event Landlord need not reschedule the
Proposed Optional Electricity Service Shutdown and may voluntarily effect the
same on the original scheduled date without regard to Tenant's Section 15.10(c)
Request Notice). In any case where Landlord actually reschedules a Proposed
Optional Electricity Service Shutdown pursuant to the foregoing provisions of
this Section 15.10(c) or otherwise at Tenant's request, Tenant shall reimburse
Landlord all out-of-pocket costs incurred by Landlord in connection with such
rescheduling. As used herein, the term "PROPOSED OPTIONAL ELECTRICITY SERVICE
SHUTDOWN" shall mean any proposed Service Shutdown of electricity which is to be
voluntarily effected by Landlord other than (i) with a view toward averting or
reducing danger to persons or damage to property, (ii) in response to any actual
or perceived emergency, or (iii) in response to the directive of a governmental
or quasi-governmental authority or a public utility. Notwithstanding the
foregoing provisions of this Section 15.10(c), Tenant shall not have the right
to serve more than one Tenant's Section 15.10(c) Request Notice with respect to
any particular Proposed Optional Electricity Service Shutdown.
(d) Landlord shall not (i) during Rush Hours, shutdown
(i.e., take or keep out of service for repairs or any other purpose), any of the
passenger elevators which are required to serve the Premises pursuant to the
provisions of Section 15.05 hereof, (ii) during Mid-Day Hours, shutdown more
than two (2) of the passenger elevators which are required to serve the Premises
pursuant to the provisions of Section 15.05 hereof (except that Landlord may, in
addition, shutdown a third such passenger elevator if such shutdown is
reasonably needed to facilitate work to be performed on or with respect to
either of the first two such passenger elevators which were shutdown), (iii)
during Off Hours, shutdown the passenger elevators which are required to serve
the Premises pursuant to the provisions of Section 15.05
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hereof, such that less than two (2) of such passenger elevators shall then serve
the Premises (or, during any period when the Evening Elevator Number is less
than four (4), such that less than one (1) of such passenger elevator shall then
serve the Premises), or (iv) during any period, shutdown the Building's freight
elevators, such that there is no generally available freight elevator to provide
the service required under Section 15.06 hereof; provided, however, that
Landlord may shutdown any or all of the passenger elevators required to serve
the Premises pursuant Section 15.05 and/or any or all of the Building's freight
elevators, at any time or times, if (A) the shutdown is effected by Landlord
with a view toward averting or reducing danger to persons or damage to property
(including without limitation damage to any elevators), (B) the shutdown is
effected by Landlord in response to any actual or perceived emergency, or (C)
the shutdown is effected by Landlord in response to the directive of a
governmental or quasi-governmental authority or a public utility. As used
herein, (I) the term "RUSH HOURS" shall mean the hours from 7:00 a.m. to 9:00
a.m. and the hours from 4:00 p.m. to 6:00 p.m., Mondays through Fridays (other
than Holidays), (II) the term "MID-DAY HOURS" shall mean the hours from 9:00
a.m. to 4:00 p.m., Mondays through Fridays (other than Holidays), and (III) the
term "OFF HOURS" shall mean all hours on all days other than Rush Hours and
Mid-Day Hours.
15.11. Only Landlord or persons approved by Landlord (which
approval shall not unreasonably be withheld) shall be permitted to furnish or
sell laundry, linen, towels, drinking water, ice, food, beverages, bootblacking,
barbering and other similar supplies and services to tenants. Such persons
approved by Landlord may contract directly with Tenant. Landlord may fix the
reasonable circumstances under which such supplies and services are to be
furnished or sold. Landlord expressly reserves the right to exclude from the
Building any person not so approved by Landlord. However, Tenant, its regular
office employees or invitees may personally bring food or beverages into the
Building or order the same for delivery for consumption within the Premises
solely by Tenant, its regular office employees or invitees.
15.12. Landlord, after installing the Steam Outlets (as
hereinafter defined), shall furnish steam to the Steam Outlets, at a aggregate
level which, subject to Tenant making proper connection to such outlets, will
enable Tenant to draw at least 3000 pounds of steam per hour, in the aggregate,
from such outlets. Tenant shall have the right to draw steam from the Steam
Outlets up to, but not in excess of, 3000 pounds of steam per hour. Tenant,
prior to drawing any steam from the Steam Outlets, shall install a steam meter
conforming to the meter specifications set forth on Exhibit V-2 attached hereto
which shall measure the amount so drawn. Tenant, from time to time within thirty
(30) days after being billed therefor, shall pay Landlord for all steam drawn by
Tenant, as measured by such steam meter, in amounts determined by applying the
applicable utility rates (as set forth on applicable utility rate schedule),
excluding sales tax, to the steam so drawn. Tenant shall also pay, and Landlord
shall remit to the appropriate governmental agency, all sales tax payable on the
amounts set forth in the preceding sentence. Landlord, at its expense, shall
install the Steam Outlets on or prior to the date which is six (6) weeks after
the date that Tenant shall designate, by written notice to Landlord, the floor
on which it will initially locate its cafeteria, subject, however, to delays
occasioned by one or more Events of Force Majeure and/or one or more delays
occasioned by Tenant. As used herein, the "STEAM OUTLETS" shall mean (i) a 3
inch valved outlet, with a 1-1/2 inch medium pressure condensate return line,
which shall be located on the Premises Floor which Tenant designates as the
floor on which it will initially locate its cafeteria, and (ii) a 3 inch valved
outlet, with a 1-1/2 inch
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medium pressure condensate return line, which shall be located on the Premises
Floor which is immediately below such floor.
15.13. Landlord hereby grants Tenant the exclusive right to
use the gas riser now serving the 50th floor of the Building from the point at
which gas service to the 50th floor is now separately metered to the 50th floor
end thereof. Tenant shall make its own arrangements with the utility company for
the furnishing of gas to the Premises. Landlord makes no representation or
warranty whatsoever as to the condition of such gas riser.
15.14. Landlord shall not be liable in any event to Tenant for
any failure, interruption or defect in the supply or character of steam or gas
furnished to the Premises by reason of any act or omission of the public utility
serving the Building with steam or gas or for any other reason not attributable
to Landlord's willful misconduct or negligence (but in no event shall Landlord
be responsible for any consequential damages).
ARTICLE 16
Access and Name of Building
16.01. Except for the space within the inside surfaces of all
walls bounding the Premises, slab ceilings, floors, windows and doors bounding
the Premises (other than any such space used on the date hereof for shafts,
stacks, pipes, conduits, fan rooms, ducts, electric or other utilities, sinks or
other Building facilities), all of the Building (including, without limitation,
exterior Building walls, core walls, doors and entrances (or, on any
multi-tenant floor, corridor walls, doors and entrances), any terraces or roofs
and any areas on any Premises Floor which are not included within the Premises
(and further including without limitation the aforementioned space used on the
date hereof for shafts, stacks, pipes, conduits, fan rooms, ducts, electrical or
other utilities, sinks or other Building facilities), and the use thereof, as
well as access thereto through the Premises for the purposes of operation,
maintenance, alteration, addition, improvement, replacement and repair) is
reserved to Landlord, one or more of the other Condominium Parties and/or
persons authorized by either Landlord or one or more of the other Condominium
Parties, and no space or property so reserved shall be deemed to be part of the
Premises.
16.02. (a) Landlord reserves the right, and Tenant shall
permit Landlord and persons authorized by Landlord to install, erect, use,
maintain, repair and replace pipes, ducts and conduits in and through the
Premises; provided, however, that Landlord, after the date hereof, may locate
any such pipe, duct or conduit within the Premises (as opposed to the areas
reserved to Landlord pursuant to Section 16.01 hereof) only if it is not
feasible for Landlord to locate such pipe, duct or conduit within areas reserved
to Landlord pursuant to Section 16.01 hereof; provided, further, however, that,
even in cases where, pursuant to the preceding proviso, Landlord may locate a
pipe, duct or conduit within the Premises, Landlord may only locate such pipe,
duct or conduit within one or more of the Primary Landlord Conduit Areas (as
hereinafter defined), unless it is also not feasible for Landlord to locate such
pipe, duct or conduit within Primary Landlord Conduit Areas, in which event
Landlord may locate such pipe, duct or conduit within one or more of the
Secondary Landlord Conduit Areas.
(b) Landlord, prior to locating any pipe, duct or
conduit within the Premises pursuant to the provisions of Section 16.02(a) above
(whether within any Primary Landlord Conduit Areas or Secondary Conduit Areas),
shall notify Tenant of Landlord's intention to do so, which notice shall contain
an
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adequate description of the location(s) within the Premises in which Landlord
proposes to locate such pipe, duct or conduit (such location(s) being herein
called "LANDLORD'S PROPOSED LOCATION(S)"), it being agreed that any such notice
shall be accompanied by, and include, a floor plan(s) delineating such
location(s) to the extent that such delineation is needed to comprise an
adequate description of such location(s). Tenant, within ten (10) Business Days
after its receipt of such notice, shall have the right, by notice to Landlord
(given within such 10 Business Day period), to designate a different location(s)
within the Premises, or within the areas reserved to Landlord pursuant to
Section 16.01 hereof, in which such pipe, duct or conduit (such different
location(s) are herein called "TENANT'S ALTERNATIVE LOCATION(S)"). So long as it
is physically feasible to locate the pipe, duct or conduit in question in
Tenant's Alternative Location(s), Landlord shall locate the same in Tenant's
Alternative Location(s) rather than Landlord's Proposed Location(s). In any such
case, however, Tenant, within thirty (30) days after any written demand, shall
pay to Landlord an amount equal to Landlord's reasonable estimate of the
incremental cost of locating such pipe, duct or conduit in Tenant's Alternative
Location(s), as opposed to locating the same in Landlord's Proposed Location.
(c) Any pipe, duct or conduit located within the
Premises shall be concealed behind then existing walls, ceilings or raised
floors of the Premises if feasible (and if not feasible, then the same shall be
completely furred at points immediately adjacent to partitioning, columns or
ceilings).
(d) As used in this Section 16.02, (I) the term
"FEASIBLE" shall mean both physically feasible and economically feasible, from
Landlord's perspective, and consistent with all laws and requirements of public
authorities, (II) the term "PRIMARY LANDLORD CONDUIT AREAS" shall mean any of
(x) the areas of the Premises located between the hung and structural ceiling of
the Premises on each Premises Floor, (y) the areas of the Premises located
underneath any raised flooring, and (z) the other areas of the Premises shown
hatched on Exhibit S attached hereto, and (III) the term "SECONDARY LANDLORD
CONDUIT AREAS" shall mean any area of the Premises which is adjacent to (A) any
walls, floors or ceilings bounding the Premises (including without limitation
core and exterior walls) or (B) any areas reserved to Landlord pursuant to
Section 16.01 hereof.
16.03. (a) Subject to the terms of Sections 16.03(b) and
35.15, Landlord and persons authorized by Landlord shall have the right, upon
reasonable prior notice (except that no notice shall be required in the case of
emergency), to enter and/or pass through the Premises at any reasonable times
(or at any time in the case of emergency) for any one or more of the following
purposes: (i) to examine the Premises and to show them to actual and prospective
Condominium Parties or Mortgagees, or prospective purchasers of the Building;
(ii) to make such alterations, additions, improvements, repairs or replacements
in or to the Real Property (excluding, however, the Premises and Tenant's
Improvements located outside the Premises) as Landlord or any other Condominium
Party is required to make or deems reasonably necessary to make, (iii) to make
(x) such alterations, additions or improvements in and to the Premises (and
Tenant's Improvements located outside the Premises) as Landlord is required or
authorized by this lease to make, or (y) such repairs or replacements in and to
the Premises (and Tenant's Improvements located outside the Premises) as
Landlord is required or permitted by this lease or by law to make; (iv) to
provide the services which Landlord is required to provide hereunder; and (v) to
read any utility meters located therein.
(b) Tenant, from time to time (but not more frequently
than twice in any calendar year), may, upon not less
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than thirty (30) days prior written notice to Landlord, designate one or more
discrete portions of the Premises as high security areas (herein called the
"SECURITY AREAS"), provided, that (1) Tenant's notice shall be accompanied by
floor plans of the applicable Premises Floor(s) designating the Security Areas,
and (2) any such designation shall be reasonable in light of Tenant's business
requirements. Landlord shall have no right to enter any Security Areas except
for any entry made (i) for the purpose of operating, maintaining, repairing and
replacing the Building and/or the Building Systems, and (ii) either (x) at times
reasonably designated by Tenant, or (y) at any time in case of emergency. Except
in the case of an emergency, Landlord shall notify Tenant prior to entering the
Security Areas and Tenant shall have the right to have its representative(s)
accompany Landlord's representative(s) during any such entry; provided, however,
that Tenant, at all times during Business Hours (and, upon 24 hours' notice from
Landlord, at any other time), shall make one or more such representatives
available to so accompany Landlord. Landlord shall have no obligation to provide
any services, or make any repairs, to the Security Areas, or to other portions
of the Premises, to the extent that access to the Security Areas is necessary to
provide such services or make such repairs, unless Tenant shall provide Landlord
with access to the Security Areas for purposes of providing such services or
making such repairs at those times that Landlord shall reasonably designate in
respect thereof.
16.04. (a) If at any time any windows of the Premises are
either temporarily darkened or obstructed by reason of any repairs,
improvements, maintenance and/or cleaning in or about the Building (or
permanently darkened or obstructed if required by law), or if any part of the
Building, other than the Premises or access thereto, is temporarily or
permanently closed or inoperable, the same shall be without liability to
Landlord and without any reduction or diminution of Tenant's obligations under
this lease. Nothing contained in this Section 16.04(a) shall be deemed to
abrogate any of Landlord's obligations to furnish Building Services, as such
obligations are herein expressly set forth. In addition, this Section 16.04
shall not limit or restrict any abatement or termination right granted Tenant
pursuant to the provisions of Article 19, 20 or 33.
(b) (1) Landlord, except as hereinafter provided in
this Section 16.02(b)(2), shall have the right to cover some or all of the
exterior windows serving the Premises with any Mylar (as hereinafter defined),
but only if (i) Landlord is required to do so by law or requirement of public
authority, or (ii) Landlord elects to do so in order to effect compliance with a
law or requirement of public authority, even though there may be alternative
means of effecting such compliance. The term "MYLAR" shall mean any mylar or any
other transparent window covering which may create a mirror-like effect. Any
Mylar installed by Landlord on the exterior windows serving the Premises shall
be of a grade which is consistent with the top grade of Mylar then customarily
being installed on windows in first-class office buildings located in the
downtown Manhattan business district.
(2) In any case described in Section 16.04(b)(1)(ii)
above, Landlord, not less than thirty (30) days prior to covering any exterior
windows serving the Premises with Mylar, shall give Tenant notice of its
intention to do so (any such notice being herein called a "LANDLORD'S MYLAR
NOTICE"), which notice shall (x) indicate the law or requirement of public
authority in response to which Landlord proposes to so cover such windows, and
(y) whether Landlord proposes to so cover all or less than all of the exterior
windows serving the Premises, and, if less than all, the approximate area(s) of
the windows that Landlord proposes to cover. Tenant, within thirty (30) days
after its receipt of a Landlord's Mylar Notice (time being of the
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essence), may give a written notice to Landlord objecting to Landlord's proposed
covering of exterior windows serving the Premises with Mylar (such notice being
herein called the "TENANT'S MYLAR NOTICE"), which notice shall set forth one or
more proposed alternative means by which Landlord may effect compliance with the
law or requirement of public authority in question (each such alternative means
being herein called a "TENANT MYLAR PROPOSAL"). If Tenant shall give Landlord a
Tenant's Mylar Notice, then, unless Landlord reasonably believes that none of
the Tenant Mylar Proposals set forth therein will effect compliance with the law
or requirement of public authority in question, the following provisions shall
apply: (i) Landlord shall not have the right to proceed with the proposed
covering of exterior windows serving the Premises with Mylar as set forth in
Landlord's Mylar Notice; (ii) Landlord shall have the right to proceed to effect
compliance with the law or requirement of public authority in question by means
of any of the Tenant Mylar Proposals set forth in Tenant's Mylar Notice; and
(iii) Tenant, within thirty (30) days after written demand, shall pay to
Landlord all the incremental costs (if any) incurred by Landlord in effecting
compliance with the law or requirement of public authority in question by means
of such Tenant Mylar Proposal (as opposed to effecting such compliance by means
of the proposed covering of exterior windows of the Premises with Mylar as set
forth in Landlord's Mylar Notice).
16.05. During any Option Period (and following the exercise by
Landlord of any of its Recapture Options) and during the period of two (2) years
prior to the Expiration Date of this lease, Landlord and persons authorized by
Landlord may exhibit the Premises (or the applicable portions thereof) during
Business Hours on Business Days to prospective tenants upon reasonable advance
notice.
16.06. Landlord reserves the right, at any time, without it
being deemed a constructive eviction and without incurring any liability to
Tenant therefor, or affecting or reducing any of Tenant's covenants and
obligations hereunder, to make or permit to be made such alterations, additions
and improvements in or to the Building and the fixtures and equipment thereof
(but not in or to the Premises, except as expressly authorized by any provision
of this lease), as well as in or to the street entrances, doors, halls,
passages, elevators, escalators and stairways thereof, and other public parts of
the Building, as Landlord shall deem necessary or desirable, provided, that no
such change, alteration, addition or improvement shall (a) materially adversely
affect (i) access to the Premises, (ii) the size, configuration or utility of
any of the Core Lavatories, or (iii) the provision of any of the Building
Services, or (b) otherwise affect any of the rights and obligations of Landlord
and Tenant that are expressly set forth in this lease.
16.07. Landlord reserves the right to name the Building and to
change the name or address of the Building at any time and from time to time.
Neither this lease nor any use by Tenant shall give Tenant any easement or other
right in or to the use of any door, passage, concourse or plaza connecting the
Building with any subway or any other building or to any public conveniences,
and the use of such doors, passages, concourses, plazas and conveniences may
upon reasonable prior notice to Tenant (except in the case of emergency), be
regulated, in accordance with the provisions of Article 10 hereof, or generally
discontinued at any time by Landlord.
16.08. If Tenant shall not be personally present to open and
permit an entry into the Premises at any time when for any reason an entry
therein shall be urgently necessary by reason of fire or other emergency,
Landlord or Landlord's agents may forcibly enter the same without rendering
Landlord or such agents
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liable therefor (so long as Landlord or Landlord's agents shall exercise
reasonable care in respect of Tenant's Property) and without in any manner
affecting the obligations and covenants of this lease.
16.09. (a) Tenant acknowledges that, as of the date hereof,
the portion of the Building's ground floor lobby shown hatched on Exhibit M-1
attached hereto and made a part hereof, has been dedicated to exclusively
serving the space demised to PSI pursuant to its lease in the Building (such
dedicated portion of the Building's ground floor lobby being herein called the
"PSI DEDICATED LOBBY"), and that, incident thereto, the PSI Dedicated Lobby may
hereafter be physically separated from the remainder of the Building's ground
floor lobby. Accordingly, neither Tenant nor any Tenant Party, nor any of guests
or invitees of Tenant or any Tenant Party, shall have any rights of ingress to
or egress from the Premises or the Building (or any part thereof) through the
PSI Dedicated Lobby (such ingress and egress to be provided through the other
portions of the Building's ground floor lobby), or any other rights with respect
to PSI Dedicated Lobby. Tenant further acknowledges that PSI has exclusive use
of one of the Building's freight elevators and two of the Building's loading
docks.
(b) (1) For purposes of this Section 16.09(b), the
following terms shall have the following meanings:
(A) "BANK X ELEVATOR LOBBY" shall mean the
portion of the Building's ground floor lobby shown hatched on Exhibit
M-2 attached hereto.
(B) "BANK X CONTROL PERIOD" shall mean the
period commencing on the 47th Floor Commencement Date and ending on the
first date that the Premises no longer include all the Initially
Demised Premises and the 47th Floor Space; provided, however, that if
the Premises no longer include all of such space solely by reason of
one or more terminations of this lease in part pursuant to Article 7
hereof, then the Bank X Control Period shall not end by reason of such
terminations unless and until the same, in the aggregate, result in
Recaptured Space on more than two (2) floors of the Building, which
prior to such termination, were Premises Floors.
(C) "NORTH PARTITION LOCATION" shall mean the
location within the Bank X Elevator Lobby delineated as such on Exhibit
M-3 attached hereto.
(D) "SOUTH PARTITION LOCATION" shall mean the
location within the Bank X Elevator Lobby delineated as such on Exhibit
M-3 attached hereto.
(E) "SECURITY DESK LOCATION" shall mean the
location within Building's ground floor lobby delineated as such on
Exhibit M-3 attached hereto.
(F) "PODIUM LOCATION" shall mean the location
within the Bank X Elevator Lobby delineated as such on Exhibit M-3
attached hereto.
(G) "BANK X CONCOURSE ELEVATOR" shall mean the
passenger elevator serving the Premises and accessible through the Bank
X Elevator Lobby which is delineated as such on Exhibit M-2 attached
hereto.
(2) Tenant, during the Bank X Control Period (as
hereinafter defined), shall, subject to the provisions of Section 16.09(b)(3)
and (4) below, have the right to control ingress and egress to and from the Bank
X Elevator Lobby, and,
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incident thereto, to (i) install a movable rope partition in the North Partition
Location, (ii) install a security desk in the Security Desk Location (such
security desk being herein called "TENANT'S SECURITY DESK"), and to employ and
station up to two (2) security guards at Tenant's Security Desk, (iii) install
one or more telephone and communications cables from Tenant's Security Desk to
the Premises (by way of a 1-1/2 inch conduit running from Tenant's Security Desk
to the nearest communications closet on the retail concourse level of the
Building which can serve the Premises, which 1-1/2 conduit shall be installed by
Landlord, at Tenant's expense, on or prior to the June 30, 1994, subject to
delays occassioned by one or more Events of Force Majeure and/or delays
occasioned by Tenant), and (iv) to install a podium (not to exceed 6 feet in
length) within the Bank X Elevator Lobby at the Podium Location and to employ
and station an additional security guard at such podium. Landlord, throughout
the Bank X Control Period, shall (i) maintain a partition in the South Partition
Location separating the Bank X Elevator Lobby from the PSI Dedicated Lobby, and
(ii) furnish electricity to Tenant's Security Desk at a level sufficient to
allow for the operation of up to two (2) personal computers to be located on
Tenant's Security Desk (which electricity shall be furnished through one or more
electrical conduits which shall be installed by Landlord, at Tenant's expense,
which installation shall be completed by Landlord on or prior to the June 30,
1994, subject to one or more Events of Force Majeure and/or delays occasioned by
Tenant). All installations made pursuant to this Section 16.09(b) shall be done
subject to and in accordance with the provisions of Article 11 hereof, and, for
purposes thereof, such installations shall be deemed Exterior Material
Alterations and Pre-Authorized Alterations.
(3) The rights granted to Tenant pursuant to the
foregoing provisions of this Section 16.09(b) during the Bank X Control Period
shall be subject to and upon the following provisions:
(A) Upon the expiration of the Bank X Control
Period, Tenant shall immediately remove Tenant's Security Desk and any podium,
rope partition or cable then maintained by Tenant (as well as cease any other
indicia of control over ingress and egress to and from the Bank X Elevator
Lobby), and restore the affected areas of the Bank X Elevator Lobby and the
Security Desk Location to their condition prior to such installation, ordinary
wear and tear excepted.
(B) Landlord and any Landlord Party shall have
the absolute right to enter and/or pass through the Bank X Elevator Lobby at any
time or times for any purpose whatsoever (including without limitation (i) to
enter the Premises pursuant to the terms of this lease or (ii) any of the
purposes set forth in Section 16.03 hereof, applied mutatis mutandis, to the
Bank X Elevator Lobby). In addition, persons authorized by Landlord shall have
the right to enter and/or pass through the Bank X Elevator Lobby (x) for the
purpose of entering the Premises pursuant to the terms of this lease, or (y)
otherwise for the purposes set forth in Section 16.03 hereof, applied mutatis
mutandis, to the Bank X Elevator Lobby.
(C) Tenant shall exercise the rights granted to
it under this Section 16.09(b) during the Bank X Control Period in a manner so
as to comply with all laws and requirements of public authorities relating
thereto, and, notwithstanding anything to the contrary contained in Article 8
hereof, shall comply with all laws or requirements of public authorities to the
extent that the need for compliance therewith arises out of Tenant's exercise of
any of its rights under this Section 16.09(b). In addition, Tenant shall
exercise the rights granted to it under this Section 16.09(b) in a manner which
will not violate Landlord's union contracts affecting the Real
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Property, or create any work stoppage, picketing, labor disruption or dispute or
any other interference (other than de minimis interference) with the operation
of the Building. The provisions of this Section 16.09(b)(3)(C) shall not be
deemed to limit Tenant's obligations under any other provision of this lease.
(D) At all times during the Bank X Control
Period, (i) Tenant's Security Desk shall be a desk of the same quality, type,
color and style as the security desk(s) then maintained by Landlord in the
Building's ground floor lobby, and (ii) any rope partition or podium shall be of
a quality, type, color and style which is consistent with the remainder of the
Building's ground floor lobby. Tenant, prior to installing Tenant's Security
Desk in the Security Desk Location or any rope partition, podium or cable in the
Bank X Elevator Lobby, shall obtain Landlord's written consent thereto (which
consent shall not be unreasonably withheld, provided, that the same are
consistent with the first sentence of this Section 16.09(b)(3)(D)). Tenant shall
perform any such installation consistent with the applicable provisions of
Article 11 hereof. Tenant, throughout any Bank X Control Period, shall maintain
Tenant's Security Desk and any rope partition, podium or cable in good order and
repair.
(E) The rights granted to Tenant under this
Section 16.09(b) shall in no event be construed to grant to, or create for,
Tenant any leasehold or any other similar interest in the Bank X Elevator Lobby
or the Security Desk Location during any period, it being understood that
Tenant's rights in respect of the Bank X Elevator Lobby and the Security Desk
Location shall be only as expressly provided herein. Without limiting the
generality of the foregoing, Tenant shall have no right to make any Alterations
(or otherwise place any property) in (i) the Security Desk Location other than
the installation of Tenant's Security Desk as expressly authorized above, or
(ii) the Bank X Elevator Lobby, other than the installation of rope partition
and podium as expressly authorized above. In no event shall anything contained
in this Section 16.09(b) ever be deemed to grant Tenant any rights, of any kind
or nature, outside of the Bank X Elevator Lobby and the Security Desk Location.
(4) If, at anytime during the Bank X Control Period,
any Landlord Occupant (as hereinafter defined) shall lease or otherwise occupy
any leasable area of the Building which is serviced by one or more passenger
elevators accessible only through the Bank X Elevator Lobby, then Tenant shall
allow each such Landlord Occupant, its subtenants and its or their employees,
contractors, visitors, guests, licensees and invitees access to and through the
Bank X Elevator Lobby (24 hours a day, 7 days a week), for ingress and egress,
on the same basis and subject only to the same security requirements as those
imposed by Tenant upon its employees, contractors, visitors, guests, licensees
and invitees, as the case may be; provided, further, that, in all events, any
security requirement imposed upon any Landlord Occupant, its subtenants or its
or their employees, contractors, visitors, guests, licensees or invitees shall
be reasonable and customary (and at no charge to any such persons). Landlord, at
its option, may elect to submit any dispute as whether any security requirement
imposed upon any Landlord Occupant, its subtenants or its or their employees,
contractors, visitors, guests, licensees or invitees is reasonable and customary
to arbitration in accordance with the provisions of Article 40 (in which
arbitration the sole issue to be determined shall be whether such security
requirement is reasonable and customary). As used herein, the term "LANDLORD
OCCUPANT" shall mean any of Landlord, any Condominium Party or any tenant or
subtenant of Landlord or any Condominium Party, or any other party claiming by
through or under Landlord or any Condominium
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Party; excluding, however, Tenant and Tenant's subtenants (other than any of
Tenant's subtenants which are also direct tenants or direct subtenants of
Landlord).
(5) (A) Tenant acknowledges that the Bank X Concourse
Elevator is an essential means of travel for disabled persons between the retail
concourse (i.e. the first level below the Building lobby level) and the Building
lobby. Accordingly, during the Bank X Control Period (both during and outside of
Business Hours), Tenant shall permit disabled persons (and persons assisting
disabled persons) desiring to travel between the Building lobby and the retail
concourse access through the Bank X Elevator Lobby to or from the Bank X
Concourse Elevator. During the Bank X Control Period, the Bank X Concourse
Elevator shall serve the retail concourse only to provide the access required
under this Section 16.09(b)(5) for disabled persons (and persons assisting
disabled persons).
(B) In order to allow Tenant to maintain
security for the Premises while permitting the access required under Section
16.09(b)(5)(A) above during Business Hours, Landlord and Tenant, during Business
Hours, shall follow the procedures set forth on Exhibit Z attached hereto or
such alternative procedures as shall be proposed by Landlord and approved by
Tenant; it being agreed that Tenant's approval of any such alternative
procedures shall not be unreasonably withheld unless the proposed alternative
procedures (x) afford Tenant less security than the procedures set forth on
Exhibit Z attached hereto, or (y) result in the Bank X Concourse Elevator being
unavailable for a greater duration of time during Business Hours than is the
case under the procedures set forth on Exhibit Z attached hereto.
Notwithstanding the foregoing provisions of this Section 16.09(b)(5), if, and to
the extent, that any laws or requirements of public authorities (I) shall, at
anytime, require changes to the then applicable procedures, then Landlord and
Tenant shall promptly implement such changes to the procedures so as to fully
comply with such law or requirement, even if the procedures as changed (x)
afford Tenant less security than the procedures set forth on Exhibit Z attached
hereto, or (y) result in the Bank X Concourse Elevator being unavailable for a
greater duration of time during Business Hours than is the case under the
procedures set forth on Exhibit Z attached hereto, or (II) shall, at anytime,
require that elevator access between the retail concourse and the Building lobby
be available without any procedures for disabled persons (i.e., available
without their being required to obtain the assistance of any Building
personnel), then, for the remainder of the Bank X Control Period, then Landlord
and Tenant shall have no further obligation to comply with any procedures (but
Landlord, at Tenant's request, shall cause the Bank X Concourse Elevator, during
the balance of the Bank X Control Period, to serve only the retail concourse and
the Building lobby during Business Hours); it being further agreed that in any
case that either the provisions of clause (I)(x) of this sentence or the
provisions of clause (II) of this sentence are applicable, Tenant, for the
balance of the Bank X Control Period, shall be entitled to employ an additional
security guard (i.e., a security guard in addition to those to which Tenant is
entitled to employ pursuant to Section 16.09(b)(2) hereof), which additional
security guard shall be stationed within the Bank X Elevator Lobby, the Bank X
Concourse Elevator or the Premises. So long as security guards are used under
the then existing aforementioned procedures, Landlord and Tenant shall each
employ a security guard at all times so that the same may be followed. Landlord,
at its expense, shall install and maintain any cameras, elevator controls and
other equipment required in connection with such procedures.
(C) No failure by Landlord to comply the
procedures referred to in Section 16.09(b)(5)(B), and no failure by Landlord to
perform any of its other obligations under
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Section 16.09(b)(5)(B), shall entitle Tenant to deprive disabled persons of
access through the Bank X Elevator Lobby to or from the Bank X Concourse
Elevator. Tenant sole remedies in the event of any failure by Landlord to so
comply or perform shall be (i) an action for damages against Landlord in the
amount of the incremental costs incurred by Tenant in maintaining, or
endeavoring to maintain, its security while permitting the access required under
Section 16.09(b)(5)(A) above, by reason of Landlord's failure to so comply or
perform, and/or (ii) an action for specific performance or injunction to compel
Landlord to so comply or perform.
(6) If, at anytime and from time to time during
the Bank X Control Period, Tenant, by written notice to Landlord, shall request
that the hi-rise passenger elevators which serve the Premises Floors pursuant to
Section 15.05 hereof be reprogrammed such that (i) one or more of such passenger
elevators stop first on the 50th floor of the Building, (ii) certain of such
passenger elevators will stop only on certain of the Premises Floors, or (iii)
any previously effected reprogramming pursuant to this sentence be reversed,
then Landlord, at Tenant's expense, shall re-program such passenger elevators,
so that the same shall serve the Premises Floors in accordance with Tenant's
request for the balance of the Bank X Control Period; provided, however, that
(A) the Bank X Concourse Elevator shall always serve the retail concourse level
of the Building for the benefit of disabled persons as provided in Section
16.09(b)(5) above, (B) no Premises Floor (or any other floor of the Building
between the 41st floor thereof and the 50th floor thereof) shall, by reason of
such re-programming, be served by less than four (4) such passenger elevators
during Business Hours and less than three (3) such passenger elevators outside
of Business Hours, (C) no floor of the Building between the 41st floor thereof
and the 50th floor thereof on which there is located any Landlord Occupant
shall, by reason of such re- programming, receive passenger elevator service at
a level below the average level of passenger elevator service provided to the
Premises Floors, and (D) upon the expiration of the Bank X Control Period,
Landlord, at Tenant's expense, may reverse any re-programming done pursuant to
this Section 16.09(b)(6).
16.10. Tenant, and its permitted subtenants, may have a number
of listings in any Building directory maintained by Landlord in the Building's
ground floor lobby (other than in the PSI Dedicated Lobby) equal to (x) Tenant's
Tax Share of the total number of listing spaces/slots on such directory if such
directory is manual (i.e., not computerized) or (y) two hundred (200) listing
space/slots on such directory if such directory is computerized. Landlord, from
time to time, shall make such changes in the listings as Tenant shall request.
16.11. (a) In order to facilitate Tenant obtaining telephone,
fiber optic and/or cable television service for the Premises, Tenant, subject to
and in accordance with the provisions of Article 11 hereof, shall have the
right, from time to time, to install telecommunications conduits from the street
to the Premises Floors, which telecommunications conduits shall run vertically
through Tenant's Stairwell B Enclosure and/or Tenant's Stairwell E Enclosure,
and, to the extent any of such conduits need to run horizontally, the same shall
be run in locations reasonably designated by Landlord; provided, however, that
Tenant's right to install any such telecommunications conduit shall be
conditioned upon (i) Tenant having theretofore installed, or Tenant
contemporaneously therewith installing, either or both of Tenant's Stairwell B
Enclosure and Tenant's Stairwell E Enclosure pursuant to Section 16.14 hereof,
and (ii) there being sufficient space within Tenant's Stairwell B Enclosure
and/or Tenant's Stairwell E Enclosure to install such telecommunications
conduit. Such conduits are herein called "TENANT'S INITIAL COMMUNICATIONS
CONDUITS".
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(b) If, at anytime during the term of this lease,
Tenant shall require or desire additional telecommunications conduits in
addition to Tenant's Initial Communications Conduits, then, so long as the
Premises shall then consist of at least four (4) Full Premises Floors, Tenant,
subject to and in accordance with the provisions of Article 11 hereof, shall
have the right, from time to time, to install additional telecommunication
conduits, which conduits shall run vertically through Tenant's Section 41.09
Enclosures (as hereinafter defined), and, to the extent any of such conduits
need to run horizontally, the same shall be run in locations reasonably
designated by Landlord; provided, however, that Tenant's right to install any
such telecommunications conduit shall be conditioned upon (i) Tenant having
theretofore installed, or Tenant contemporaneously therewith installing Tenant's
Section 41.09 Enclosures pursuant to Section 16.14 hereof, and (ii) there being
sufficient space within Tenant's Section 41.09 Enclosures to install such
telecommunications conduit. Such conduits are herein called "TENANT'S
SUPPLEMENTAL COMMUNICATIONS CONDUITS".
(c) The work required to install either Tenant's
Initial Communications Conduits or Tenant's Supplemental Communications Conduits
is herein called the "TENANT'S COMMUNICATIONS CONDUIT WORK". Tenant's
Communications Conduit Work shall be deemed Exterior Material Alterations and,
subject to the foregoing provisions of this Section 16.11, Pre-Authorized
Alterations under Article 11 hereof.
16.12. Tenant, throughout the term of this lease, shall have
the right to utilize the vents currently located in and serving the Premises for
the purposes for which the same are designed.
16.13. (a) Landlord, throughout the term of this lease, shall
not install, erect or maintain, or allow to be installed, erected or maintained,
either (i) any sign in the ground floor lobby of the Building which faces toward
the Building's north (i.e., Water Street) side entrance, or (ii) any sign on the
Building's north (i.e., Water Street) facade below the fifth (5th) floor of the
Building; unless, in either event, Landlord grants Tenant the right to install,
erect or maintain a sign of substantially the same size and character (to the
aforementioned sign) in a substantially equivalent location (to the location in
which the aforementioned sign is so installed, erected or maintained), which
sign installed, erected or maintained by Tenant would be installed, erected and
maintained pursuant to Article 11 and 13 hereof and, in all events, would bear
only Tenant's name and/or logo. The term "SIGN", as used in this Section
16.13(a), shall mean any sign bearing a company's name, initials or logo (even
if the Building be named for such company); but shall not include names or other
lettering on a Building directory.
(b) Notwithstanding the foregoing provisions of Section
16.13(a) above, if, at anytime during the term of this lease, either (i) Tenant
shall not be Original Tenant, (ii) the Premises shall no longer include at least
five (5) Full Premises Floors (as defined in Article 31 hereof), or (iii)
Original Tenant, together with Affiliates of Original Tenant, shall not be in
actual occupancy of at least 175,000 rentable square feet of space in the
Premises, then, in either such event, (x) the provisions of Section 16.13(a)
above shall no longer apply (and, accordingly, there shall longer be
restrictions on Landlord's right to install, erect or maintain any signs or to
allow the same to be installed, erected or maintained), and (y) if Tenant shall
have theretofore installed, erected and maintained a sign bearing its name
and/or logo pursuant to rights granted to Tenant pursuant to the provisions of
Section 16.13(a) above, then Tenant shall promptly remove such sign from the
Building and restore the
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applicable areas of the Building to their condition prior to the installation or
erection thereof.
16.14. (a) For purposes of this Section 16.14, the
following terms shall have the following meanings:
The "STAIRWELL B ENCLOSURE LOCATION" shall mean
the location on each floor of the Building (being near the Building's internal
stairwell known as "Stairwell B") which is shown hatched on Exhibit T-1 attached
hereto.
The "STAIRWELL E ENCLOSURE LOCATION" shall mean
the location on each floor of the Building (being near the Building's internal
stairwell known as "Stairwell E") which is shown hatched on Exhibit T-2 attached
hereto.
(b) Tenant shall, subject to and in accordance with the
provisions of Article 11 hereof, have the right, from time to time, to:
(1) install one or more enclosures within the
Stairwell B Enclosure Location to house all the conduits to be
installed in such enclosures pursuant to Section 14.02(c) hereof,
Section 16.11(a) hereof and Article 41 hereof, it being understood and
agreed that (i) no such enclosure, or any part thereof (including
without limitation any exterior casing thereof and doors thereto when
closed), shall extend outside of the Stairwell B Enclosure Location,
and (ii) each such enclosure (inclusive of the doors thereto) shall
comply with all laws and requirements of public authorities, and shall
not cause any surrounding area to not comply with all laws and
requirements of public authorities (the enclosure or enclosures
installed pursuant to this Section 16.14(b)(1) are herein collectively
called "TENANT'S STAIRWELL B ENCLOSURE"); and
(2) install one or more enclosures within the
Stairwell E Enclosure Location to house all the conduits to be
installed in such enclosures pursuant to Section 14.02(c) hereof,
Section 16.11(a) hereof and Article 41 hereof, it being understood and
agreed that (i) no such enclosure, or any part thereof (including
without limitation any exterior casing thereof and any doors thereto
when closed), shall extend outside of the Stairwell E Enclosure
Location, and (ii) each such enclosure (inclusive of the doors thereto)
shall comply with all laws and requirements of public authorities, and
shall not cause any surrounding area to not comply with all laws and
requirements of public authorities (the enclosure or enclosures
installed pursuant to this Section 16.14(b)(2) are herein collectively
called "TENANT'S STAIRWELL E ENCLOSURE").
The work required to install and supplement Tenant's Stairwell B Enclosure
and/or Tenant's Stairwell E Enclosure is herein called "TENANT'S ENCLOSURE
WORK". For purposes of applying Article 11 hereof to Tenant's Enclosure Work,
the same shall be deemed Exterior Material Alterations and Pre-Authorized
Alterations.
(c) If Tenant installs Tenant's Stairwell B Enclosure
and/or Tenant's Stairwell E Enclosure, then the following provisions shall
apply: (i) Landlord shall not grant any other tenant or occupant of the Building
entry into either Tenant's Stairwell B Enclosure or Tenant's Stairwell E
Enclosure (it being understood that only Landlord and Tenant shall have a key to
each door providing entry into Tenant's Stairwell B Enclosure and Tenant's
Stairwell E Enclosure); and (ii) except in emergencies, Landlord, prior to
entering either Tenant's Stairwell B Enclosure or Tenant's Stairwell E
Enclosure, shall give Tenant notice thereof (which notice, at Landlord's option,
may be oral notice to Tenant's operations desk (which shall be
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manned 24 hours a day) given immediately prior to such entry), and, in any such
case, Tenant, at Tenant's expense, shall have the right to have Tenant's
representative accompany Landlord throughout the period of Landlord's entry.
Tenant shall have access to each of Tenant's Stairwell B Enclosure and Tenant's
Stairwell E Enclosure solely for purposes of performing (A) Tenant's Enclosure
Work and subsequent permitted Alterations within either Tenant's Stairwell B
Enclosure or Tenant's Stairwell E Enclosure (which access shall be subject to
the provisions of Article 11 hereof, including without limitation the provisions
of Section 11.03(c) hereof), or (B) maintenance, repairs and replacements to
Tenant's Stairwell B Enclosure, Tenant's Stairwell E Enclosure or any Tenant
Improvements located within Tenant's Stairwell B Enclosure, Tenant's Stairwell E
Enclosure (which access shall be subject to the provisions of Article 13 hereof,
including without limitation the provisions of Section 13.01(c)(1) hereof).
16.15. Tenant, for so long as the Premises shall include at
least four (4) Full Premises Floors, shall have the right to utilize, for
routine access amongst the Premises Floors, either or both of the Designated
Fire Stairwells (as hereinafter defined) and, incident thereto, shall have the
right to install either or both a card-key access system and an alarm system
with respect to the doors providing access between the Premises and the
Designated Fire Stairwells; provided, however, that (i) Tenant's right to
utilize the Designated Fire Stairwells shall be non-exclusive, (ii) Tenant's
right to utilize the Designated Fire Stairwells, or to install any card-key
access system or alarm system, shall be subject to the same being in compliance
with all laws and requirements of public authorities (and, without limiting the
generality of the foregoing, Tenant (x) shall recognize and maintain the legally
required number of re-entry floors, and (y) shall not install any card-key
system or any access inhibiting alarm system on any doors between the Premises
and the Designated Fire Stairwells on any re-entry floors), (iii) Tenant's right
to utilize the Designated Fire Stairwells, or to install any card-key access
system or alarm system, shall be subject and subordinate to Landlord's right to
cause the balance of the Building to be in compliance with laws and requirements
of public authorities, and (iv) Tenant shall (x) pay to, or reimburse Landlord,
all incremental costs and expenses incurred by Landlord in connection with, or
arising out of, Tenant's use of the Designated Fire Stairwells, including
without limitation incremental cleaning and insurance costs, and (y) in
accordance with the provisions of Section 18.01 hereof (applied mutatis
mutandis), shall indemnify and hold harmless Landlord from and against any
claims to the extent the same arise out of Tenant's use of the Designated Fire
Stairwells. As used herein, the term "DESIGNATED FIRE STAIRWELLS" shall mean
either or both of the fire stairwells of the Building delineated as Stairwell C
and Stairwell D on Exhibit T-3 attached hereto.
16.16. Tenant, throughout the term of this lease, shall have
the non-exclusive right to utilize the telephone closets located on the Premises
Floors, for purposes of running communications conduits among Premises Floors.
ARTICLE 17
Partnership Tenant
17.01. If Tenant is a partnership (or is comprised of two (2)
or more persons, individually and/or as co-partners of a partnership) or if
Tenant's interest in this lease shall be assigned to a partnership (or to two
(2) or more persons, individually and/or as co-partners of a partnership)
pursuant to this article (any such partnership and such persons are referred to
in this Section 17.01 as "PARTNERSHIP TENANT"), the following
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provisions of this section shall apply to such Partnership Tenant: (a) the
liability of each of the parties comprising Partnership Tenant (other than
limited partners) shall be joint and several, (b) each of the parties comprising
Partnership Tenant hereby consents in advance to, and agrees to be bound by, any
written instrument which may hereafter be executed by Partnership Tenant
changing, modifying or discharging this lease, in whole or in part, or
surrendering all or any part of the Premises to Landlord or renewing or
extending this lease and by any notices, demands, requests or other
communications which may hereafter be given by Partnership Tenant, (c) any
bills, statements, notices, demands, requests or other communications given or
rendered to Partnership Tenant shall be deemed given or rendered to Partnership
Tenant and to all such parties and shall be binding upon Partnership Tenant and
all such parties, and (d) if Partnership Tenant shall admit new general
partners, all of such new general partners shall, by their admission to
Partnership Tenant, be deemed to have assumed performance of all of the terms,
covenants and conditions of this lease on Tenant's part to be observed and
performed.
17.02. (a) Notwithstanding anything to the contrary contained
in Section 17.01 above, except as provided in Section 17.02(b), no general or
limited partner of Original Tenant shall have any personal liability under this
lease and any judgment hereunder or related hereto taken or rendered against
Original Tenant shall be enforceable only against the property of Original
Tenant.
(b) Notwithstanding the provisions of Section 17.02(a)
above, (1) if at any time Original Tenant (x) shall dissolve (other than
pursuant to, or as a result of, insolvency proceedings) and (y) shall distribute
its assets without adequately providing for any and all of its obligations and
liabilities under this lease, then all persons who were general partners of
Original Tenant immediately prior to the dissolution shall be personally and
jointly and severally liable to Original Tenant, for the benefit of Landlord, to
the extent of any loss, cost, damage or injury which Landlord may suffer as a
result of the failure to make adequate provision for such obligations and
liabilities, and (2) the provisions of Section 17.02(a) shall not relieve any
general or limited partner of Original Tenant from any obligation to restore to
Original Tenant any distributions of cash, property or other assets by Original
Tenant made to such partner which (x) were made at any time when the distributor
was insolvent or (y) resulted in the distributor's becoming insolvent. For
purposes of this lease, Original Tenant shall be "insolvent" if (a) it is
generally unable to pay its debts and other liabilities as they become due or
(b) the sum of its debts is greater than all of its property at a fair valuation
(taking into account this lease and the liabilities of the tenant hereunder).
ARTICLE 18
Indemnification and Non-Liability
18.01. Tenant shall indemnify and hold harmless Landlord and
all Landlord Parties from and against any and all claims (to the extent in
excess of any sums reimbursed by insurance or, which would have been so
reimbursed if Landlord had maintained the insurance required to be maintained by
it hereunder) to the extent that the same arises from (a) the conduct or
management of the Premises or of any business therein, or any condition created
(other than by Landlord or any Landlord Party or any contractor of Landlord or
any Landlord Party) in, at or upon the Premises, (b) the negligence or willful
misconduct of Tenant or any Tenant Party, or of any contractor of Tenant or any
Tenant Party, (c) any accident, injury or damage whatever (except
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to the extent caused by any negligence or willful misconduct of Landlord or any
Landlord Party or any contractor of Landlord or any Landlord Party) occurring
in, at or upon the Premises, or (d) any breach or default by Tenant in the full
and prompt payment and performance of Tenant's obligations under this lease;
together, subject to the provisions of this Section 18.01, with all costs,
expenses and liabilities incurred in or in connection with each such claim or
any action or proceeding brought thereon, including, without limitation, all
reasonable attorneys' fees and expenses. If any such claim is asserted against
Landlord and/or any Landlord Party, Landlord shall give Tenant prompt notice
thereof. If Tenant shall, in good faith, believe that such claim is or may not
be within the scope of the indemnity set forth in this Section then, pending
determination of that question, Tenant shall not be deemed to be in default
under this lease by reason of its failure or refusal to indemnify and hold
harmless Landlord or any Landlord Party therefrom or to pay such costs, expenses
and liabilities, but if it shall be finally determined by a court of competent
jurisdiction that such claim was within the scope of the indemnity set forth in
this Section then Tenant shall be liable for any judgement or reasonable
settlement or any reasonable legal fees incurred by the party entitled to
indemnity hereunder. If the issuer of any insurance policy maintained by Tenant
shall assume the defense of any claim then Landlord shall permit such insurance
carrier to defend the claim with its counsel and (x) neither Landlord nor any
Landlord Party shall settle such claim without the consent of the insurance
carrier (unless such settlement would relieve Landlord or such Landlord Party of
all liability for which Tenant or its insurance carrier may be liable
hereunder), (y) Landlord and all Landlord Parties shall reasonably cooperate, at
Tenant's expense, with the insurance carrier in its defense of any such claim,
and (z) Tenant shall not be liable for the costs of any separate counsel
employed by Landlord or any Landlord Party.
18.02. Landlord shall indemnify and hold harmless Tenant and
all Tenant Parties from and against any and all claims (to the extent in excess
of any sums reimbursed by insurance or, which would have been so reimbursed if
Tenant had maintained the insurance required to be maintained by it hereunder)
to the extent that the same arises from (a) the negligence or willful misconduct
of Landlord or any Landlord Party, or of any contractor of Landlord or any
Landlord Party, or (b) any breach or default by Landlord in the full and prompt
payment and performance of Landlord's obligations under this lease; together,
subject to the provisions of this Section 18.02, with all costs, expenses and
liabilities incurred in or in connection with each such claim or any action or
proceeding brought thereon, including, without limitation, all attorneys' fees
and expenses. If any such claim is asserted against Tenant and/or any Tenant
Party, Tenant shall give Landlord prompt notice thereof. If Landlord shall, in
good faith, believe that such claim is or may not be within the scope of the
indemnity set forth in this Section then, pending determination of that
question, Landlord shall not be deemed to be in default under this lease by
reason of its failure or refusal to indemnify and hold harmless Tenant or any
Tenant Party therefrom or to pay such costs, expenses and liabilities, but if it
shall be finally determined by a court of competent jurisdiction that such claim
was within the scope of the indemnity set forth in this Section then Landlord
shall be liable for any judgement or reasonable settlement or any reasonable
legal fees incurred by the party entitled to indemnity hereunder. If the issuer
of any insurance policy maintained by Landlord shall assume the defense of any
claim then Tenant shall permit such insurance carrier to defend the claim with
its counsel and (x) neither Tenant nor any Tenant Party shall settle such claim
without the consent of the insurance carrier (unless such settlement would
relieve Tenant or such Tenant Party of all liability for which Landlord or its
insurance carrier may be liable hereunder), (y) Tenant and all Tenant Parties
shall
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reasonably cooperate, at Landlord's expense, with the insurance carrier in its
defense of any such claim, and (z) Landlord shall not be liable for the costs of
any separate counsel employed by Tenant or any Tenant Party.
18.03. Notwithstanding any provisions of this lease to the
contrary, neither Landlord nor any Landlord Party shall be liable to Tenant, and
neither Tenant nor any Tenant Party shall be liable to Landlord, for
consequential damages of any kind or nature (including without limitation
consequential damages in respect of (i) any loss of use of the Premises or any
Tenant's Improvements or otherwise, or (ii) any loss of use of, or rents from,
the Building or any part thereof) in any event whatsoever, even if arising from
any act, omission or negligence of such party or from the breach by such party
of its obligations under this lease. Nothing in this Section 18.03 shall ever be
deemed to relieve Tenant of any obligation to pay Fixed Rent and Additional
Charges hereunder.
ARTICLE 19
Damage or Destruction
19.01. If the Building or the Premises shall be partially or
totally damaged or destroyed by fire or other casualty, then, unless this lease
is terminated as hereinafter provided in this Article 19, the following
provisions shall apply:
(a) Landlord shall repair the damage to and restore and
rebuild the Base Building (inclusive of the Base Building Premises Components)
to a condition which is substantially the same condition as (or to a better
condition than) the condition of the same immediately prior to the fire or other
casualty; excluding, however, (1) those portions of the Base Building which do
not affect, or affect only to a de minimis extent, (i) Tenant's use and
occupancy of the Premises, (ii) access to the Premises, (iii) the provision of
Building Services to the Premises, and (iv) Tenant's ability to perform
Alterations which would otherwise be permitted hereunder, and (2) in all events,
Tenant's Improvements and Tenant's Property; all such repair, restoration and
rebuilding work being herein called the "LANDLORD RESTORATION WORK". Landlord
shall commence the Landlord Restoration Work on or in respect of each Premises
Floor with due diligence after the Landlord Restoration Start Date (as
hereinafter defined) for such Premises Floor and, subject to Events of Force
Majeure, shall prosecute the same to completion with diligence and continuity.
(b) Tenant may, but shall not be required to, perform
the Tenant Restoration Work (as hereinafter defined); provided, however, that
Tenant shall be required to remove all debris, and to remove or clean or repair,
as it shall elect, any or all Tenant's Improvements, but shall not be required
to replace any Tenant's Improvements so removed. As used herein, the "TENANT
RESTORATION WORK" shall mean all the repairs, restoration and rebuilding
required to restore the Tenant's Improvements to their condition immediately
prior to the fire or other casualty. All Tenant Restoration Work shall be deemed
Alterations for the purpose of Article 11, and Tenant, to the extent it is
required or elects to perform the Tenant Restoration Work, shall do so in
accordance with the provisions thereof, provided, however, that Landlord's
approval of the plans and specifications therefor shall not be required to the
extent the Tenant Restoration Work consists of restoring the same Tenant's
Improvements which were damaged or destroyed (unless the same were made in
violation of this lease). Tenant shall commence so much of the Tenant
Restoration Work as it shall be required by the provisions of this Section
19.01(b) to perform on or in
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respect of each Premises Floor promptly after the Tenant Restoration Start Date
(as hereinafter defined) for such Premises Floor, and, subject to Events of
Force Majeure, shall prosecute the same to completion with diligence and
continuity. In addition and in all events, Tenant shall move or remove from the
Premises, as soon as it is feasible to do so, such salvageable Tenant's
Improvements and Tenant's Property as may be reasonably designated by Landlord
as necessary for Landlord to perform the Landlord Restoration Work.
(c) (1) The "LANDLORD RESTORATION START DATE", for any
Premises Floor, shall mean the date ten (10) days after the date that Landlord
shall first have knowledge of the damage or destruction giving rise to the need
for the Landlord Restoration Work on or in respect of such Premises Floor;
provided, however, that (I) in any case where Landlord is required to designate
an Expert (as hereinafter defined) pursuant to Section 19.03 hereof, the
"Landlord Restoration Start Date" for any Premises Floor shall not occur prior
to the date that Tenant receives a statement from the Expert setting forth the
Section 19.03 Estimated Period (as hereinafter defined) (or, if the Section
19.03 Estimated Period is longer than nine (9) months, then prior to the date
that is twenty (20) Business Days after Tenant's receipt of such statement), and
(II) in any case where Landlord designates an Expert pursuant to Section 19.04
hereof, the "Landlord Restoration Start Date" for any Premises Floor shall not
occur until the date that Tenant receives a statement from the Expert setting
forth the Section 19.04 Estimate (as hereinafter defined) (or, if, by reason of
the Section 19.04 Estimate, Landlord shall have a right to terminate this lease
pursuant to Section 19.04, the first date that Landlord no longer has such
termination right). Notwithstanding the foregoing, if, with respect to any fire
or other casualty, Tenant shall notify Landlord that Tenant is waiving any right
to terminate this lease that it might have or come to have under Section
19.03(a)(2), then, from and after the date of such notice, clause (I) of this
Section 19.01(c)(1) and clause (I) of Section 19.01(c)(2) shall each be
disregarded with respect to such fire or other casualty.
(2) The "TENANT RESTORATION START DATE", for any
Premises Floor, shall mean the Ten Day Date (as hereinafter defined) for such
Premises Floor; provided, however, that (I) in any case where Landlord is
required to designate an Expert pursuant to Section 19.03 hereof, the "Tenant
Restoration Start Date" for any Premises Floor shall not occur prior to the date
that Tenant receives a statement from the Expert setting forth the Section 19.03
Estimated Period (or, if the Section 19.03 Estimated Period is longer than nine
(9) months, then the date that is twenty (20) Business Days after Tenant's
receipt of such statement), and (II) in any case where Landlord designates an
Expert pursuant to Section 19.04 hereof, the "Tenant Restoration Start Date" for
any Premises Floor shall not occur until the date that Tenant receives a
statement from the Expert setting forth the Section 19.04 Estimate (or, if, by
reason of the Section 19.04 Estimate, Landlord shall have a right to terminate
this lease pursuant to Section 19.04, the first date that Landlord no longer has
such termination right). Notwithstanding the foregoing, if, with respect to any
fire or other casualty, Landlord shall notify Landlord that Landlord is waiving
any right to terminate this Lease that it might have or come to have under
Section 19.04, then, from and after the date of such notice, clause (II) of this
Section 19.01(c)(2) and clause (II) of Section 19.01(c)(1) shall be disregarded
with respect to such fire or other casualty.
(3) The "TEN DAY DATE", for any Premises Floor,
shall mean the date that is ten (10) Business Days after Landlord shall have
substantially completed enough of the Landlord Restoration Work (if any), that
Tenant shall be able, in
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accordance with good construction practices, to commence prosecution of the
Tenant Restoration Work it will be performing on or in respect of such Premises
Floor (including without limitation any Landlord Restoration Work that is needed
to provide Tenant with the access required to commence such Tenant's Restoration
Work) and shall have notified Tenant thereof in writing; or if, with respect to
any Premises Floor, no such Landlord Restoration Work is applicable, then the
"Ten Day Date" for such Premises Floor shall be the date ten (10) Business Days
after the date on which Tenant first learns of the damage or destruction giving
rise to the need for the Tenant Restoration Work to be performed on or in
respect of such Premises Floor.
19.02. If, on account of fire or other casualty, all or a part
of the Premises shall be rendered untenantable (whether as a result of damage or
destruction to the Premises or damage or destruction to parts of the Building
outside the Premises), then the Fixed Rent, the Base Component of Tax Payments
and the Operating Payments attributable to each portion of the Premises that is
so rendered untenantable shall abate for the period (if any) commencing on the
date that such portion of the Premises first becomes untenantable and ending on
the day preceding the later to occur of the following dates (as applicable):
(a) the earliest to occur of (i) the date that Tenant
shall have substantially completed so much of the Tenant Restoration
Work (if any) as is needed to render such portion of the Premises
tenantable, (ii) the date that Tenant would have substantially
completed so much of the Tenant Restoration Work (if any) as is needed
to render such portion of the Premises tenantable, had Tenant, from and
after the Tenant Restoration Start Date with respect to the Premises
Floor on which such portion of the Premises is located, prosecuted such
work to completion with diligence and continuity (subject to Events of
Force Majeure), and (iii) the date that is seven (7) months after the
Ten Day Date with respect to the Premises Floor on which such portion
of the Premises is located (provided that this subsection (a) shall
only be applicable if Tenant Restoration Work is needed to render such
portion of the Premises tenantable); and
(b) the date upon which Landlord shall have
substantially completed so much of the Landlord Restoration Work as is
needed to allow such portion of the Premises, subject to the completion
of the applicable Tenant Restoration Work, to be made tenantable
(provided that this subsection (b) shall only be applicable if Landlord
Restoration Work is needed to render such portion of the Premises
tenantable);
provided, however, that the aforesaid abatement period with respect to any
portion of the Premises shall not, in any event, extend beyond the day preceding
the date that such portion of the Premises becomes tenantable (e.g., if Tenant,
or any person claiming by, through or under Tenant, shall re-occupy such portion
of the Premises for the purposes demised hereunder, then the aforesaid abatement
with respect to such portion of the Premises shall thereupon automatically
cease).
19.03. (a) If, at anytime during the term of this lease, the
Building shall be damaged or destroyed by fire or other casualty, and, as a
result thereof, 40,000 rentable square feet or more of the Premises are rendered
untenantable (whether as a result of damage or destruction to the Premises or
damage or destruction to parts of the Building outside the Premises), then the
following provisions shall apply:
(1) Landlord, within twenty (20) Business Days
after Landlord has notice of such damage, shall designate an
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independent, reputable contractor, registered architect or licensed professional
engineer, having at least ten (10) years' experience in the applicable areas of
expertise (any such contractor, architect or engineer being herein called an
"EXPERT") to act in accordance with the provisions of this Section 19.03, which
Expert shall be subject to Tenant's approval, which approval shall not be
unreasonably withheld. In any case that Landlord requests Tenant's approval of
one or more designated Experts (together with a brief written description of
each such entity's qualifications), Tenant, within five (5) Business Days after
Tenant's receipt of such request, shall either grant or deny such approval with
respect to each such Expert (it being agreed that Tenant's failure to deny such
approval of any such Expert in a notice setting forth, in reasonable detail, its
reasons therefor, within such five (5) Business Day period shall be deemed an
approval of such Expert). Tenant further agrees that if, in connection with any
fire or other casualty, an Expert has been approved for substantially similar
purposes by a tenant of the Building (other than Tenant) that leases in excess
of 350,000 rentable square feet in the Building, then, with respect to such fire
or other casualty, Tenant's approval of such Expert shall be deemed given.
Within twenty (20) Business Days after an Expert has been approved (or deemed
approved) by Tenant, Landlord shall deliver to Tenant a statement prepared by
such Expert setting forth such Expert's estimate as to the time period (measured
from the date of the fire or other casualty) required for the substantial
completion of so much of the Landlord Restoration Work as is needed to allow the
Premises, subject to the completion of the applicable Tenant Restoration Work,
to be made tenantable (the time period so set forth in such estimate is referred
to as the "SECTION 19.03 ESTIMATED PERIOD").
(2) If the Section 19.03 Estimated Period
exceeds ten (10) months from the date of the fire or other casualty, then Tenant
may elect to terminate this lease by notice to Landlord given not later than
twenty (20) Business Days following receipt of such estimate, which notice shall
set forth the date upon which this lease shall terminate, which date shall in no
event be more than twelve (12) months following the date of Tenant's notice (and
in no event after the Expiration Date). If Tenant makes such election, then this
lease shall terminate upon the termination date set forth in Tenant's notice as
if such date was the Expiration Date.
(3) If (i) Tenant shall not have elected to
terminate this lease pursuant to Section 19.03(a)(2) above (or if Tenant shall
not have been entitled to terminate this lease pursuant to Section 19.03(a)(2)
above), and (ii) as of the Section 19.03 Outside Date (as defined below),
Landlord shall not have effected the substantial completion of so much of the
Landlord Restoration Work as is needed to allow the Premises, subject to the
completion of the applicable Tenant Restoration Work, to be made tenantable,
then Tenant, as its sole remedy on account thereof, may elect to terminate this
lease by notice to Landlord given not later than thirty (30) days following
Section 19.03 Outside Date, which notice shall set forth the date upon which
this lease shall terminate, which date shall in no event be more than twelve
(12) months after the date of Tenant's notice (and in no event after the
Expiration Date). The term "SECTION 19.03 OUTSIDE DATE", with respect to any
fire or other casualty, shall mean the later to occur of (I) the date that is
sixty (60) days after the last day of the Section 19.03 Estimated Period, and
(II) the date that is ten (10) months after the date of the fire or other
casualty; except that the Section 19.03 Outside Date shall be postponed, but not
by more than additional sixty (60) days, by Events of Force Majeure.
(b) Upon the termination of this lease under any of the
conditions provided above in this Section 19.03,
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Tenant's liability for Fixed Rent, the Base Component of Tax Payments and
Operating Payments shall, subject to the provisions of Section 19.02, be
prorated and adjusted as of the termination date.
19.04. (a) If, at anytime during the term of this lease, the
Building shall be materially damaged or destroyed by fire or other casualty
(whether or not any portion of the Premises is damaged, destroyed or rendered
untenantable), then Landlord, at anytime thereafter (but in no event more than
sixty (60) days after the date of the fire or other casualty), may designate an
Expert to act in accordance with the provisions of this Section 19.04, which
Expert shall be subject to Tenant's approval, which approval shall not be
unreasonably withheld. In any case that Landlord requests Tenant's approval of
one or more designated Experts (together with a brief written description of
each such entity's qualifications), Tenant, within five (5) Business Days after
Tenant's receipt of such request, shall either grant or deny such approval of
each such Expert (it being agreed that Tenant's failure to deny such approval of
any such Expert in a notice setting forth, in reasonable detail, its reasons
therefor, within such five (5) Business Day period shall be deemed an approval
of such Expert). Tenant further agrees that if an Expert has been approved, with
respect to any fire or other casualty, for substantially similar purposes by a
tenant of the Building (other than Tenant) that leases in excess of 350,000
rentable square feet in the Building, then, with respect to such fire or other
casualty, Tenant's approval of such Expert shall be deemed given. At anytime
after an Expert has been approved (or deemed approved) by Tenant (but in no
event more than thirty (30) days after such Expert was approved or deemed
approved), Landlord may deliver to Tenant a statement prepared by such Expert
setting forth such Expert's estimate of (i) the time required to fully repair
and restore the Base Building (measured from the date of the fire or other
casualty) and/or (ii) the cost of such repair and restoration (such estimate
being herein called the "SECTION 19.04 ESTIMATE").
(b) If the Section 19.04 Estimate shall indicate that
the full repair and restoration of the Base Building requires either (i) more
than twelve (12) months (measured from the date of the fire or other casualty)
or (ii) the expenditure of more than forty (40%) percent of the full insurable
value of the Base Building determined as of the date immediately prior to the
casualty (which term "FULL INSURABLE VALUE" shall refer to the replacement cost
of the Building, less the cost of footings, foundations and other structures
below the ground level of the Building), then, in either of such events,
Landlord may terminate this lease by giving Tenant notice to such effect within
twenty (20) Business Days after the date of the Section 19.04 Estimate (but not,
in any event, later than ninety (90) days after such fire or other casualty),
which notice shall set forth the date for the termination of this lease, which
date shall not be less than three (3) months nor more than twelve (12) months
from the date of such notice; provided, however, that Landlord shall not have
the right to terminate this lease pursuant to the foregoing provisions of this
Section 19.04(b) unless, on account of such fire or other casualty, Landlord has
theretofore terminated, or does simultaneously therewith terminate, one or more
Other Tower Part Leases (as hereinafter defined), which, in the aggregate,
demise (at the time of the fire or other casualty) an area equal to or greater
than 75% of the aggregate area demised by all Other Tower Part Leases. If
Landlord makes such election, then this lease shall terminate on the termination
date set forth in Landlord's notice as if the same was the Expiration Date, and
the Fixed Rent, Base Component of Tax Payments and Operating Payments shall,
subject to the provisions of Section 19.02, be prorated and adjusted as of such
termination date. The term "OTHER TOWER PART LEASES", with respect to any fire
or other casualty, shall mean all the leases
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(other than this lease) which, at the time of such fire or other casualty,
demise space in the Tower Part of the Building and do not demise space in the
Base Part of the Building.
19.05. Except as expressly provided in this Article 19,
neither Landlord nor Tenant shall be entitled to terminate this lease on account
of damage or destruction by fire or other casualty. Landlord shall have no
liability to Tenant for inconvenience, loss of business or annoyance arising
from any repair or restoration of any portion of the Premises or of the Building
pursuant to this Article 19. Landlord shall prosecute the Landlord Restoration
Work with diligence and continuity (subject to Force Majeure) and consistent
with the provisions of Section 35.15(a) hereof, and, without limiting the
generality of the foregoing, shall use reasonable efforts to complete the
applicable portions of any Landlord Restoration Work prior to end of any Section
19.03 Estimated Period; provided, however, that, notwithstanding anything to the
contrary contained in Section 35.15, in no event shall Landlord ever be
obligated to perform any Landlord Restoration Work except during Business Hours
on Business Days (i.e., the provisions of Section 35.15(b) and (c) shall not
apply to Landlord's Restoration Work).
19.06. Landlord will not be required to carry insurance of any
kind on Tenant's Improvements or Tenant's Property and shall not be required to
repair any damage to or replace Tenant's Improvements or Tenant's Property.
19.07. The provisions of this Article 19 shall be deemed an
express agreement governing any case of damage or destruction of the Premises by
fire or other casualty, and Section 227 of the Real Property Law of the State of
New York, providing for such a contingency in the absence of an express
agreement, and any other law of like import, now or hereafter in force, shall
have no application in such case.
19.08. Tenant, to the extent it has actual knowledge thereof,
shall give prompt notice to Landlord of any fire or other casualty in or
affecting the Premises.
19.09. If Tenant, pursuant to the provisions of Section 19.02
hereof, shall be entitled to an abatement of any Fixed Rent for any part of the
Premises for any period prior to the Fixed Rent Commencement Date, then the
dollar amount of such abatement of Fixed Rent to which Tenant is so entitled
under Section 19.02 hereof shall be deemed a credit against the first
installments of Fixed Rent payable with respect to such portion of the Premises
after the Fixed Rent Commencement Date.
ARTICLE 20
Eminent Domain
20.01. If the whole of the Building or the Premises shall be
taken by condemnation or in any other manner for any public or quasi-public use
or purpose, this lease and the term and estate hereby granted shall terminate as
of the date of the vesting of title in connection with such taking (herein
called "DATE OF THE TAKING"), and the Fixed Rent and Additional Charges shall be
prorated and adjusted as of such date.
20.02. If any part of the Building or the Land shall be so
taken, this lease shall be unaffected by such taking, except that (a) if more
than twenty (20%) percent of the Building shall be so taken, then, in either
event, Landlord may, at its option, terminate this lease by giving Tenant notice
to that effect within ninety (90) days after the Date of the Taking, and (b) if
twenty (20%) percent or more of the rentable area of the Premises shall be so
taken and the remaining rentable area of the
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Premises shall not be reasonably sufficient, in Tenant's reasonable judgement,
for Tenant to efficiently operate its business, then Tenant may terminate this
lease by giving Landlord notice to that effect within ninety (90) days after the
Date of the Taking. This lease shall terminate on the date that such notice from
Landlord or Tenant to the other shall be given, and the Fixed Rent and
Additional Charges shall be prorated and adjusted as of such termination date.
Upon such partial taking and this lease continuing in force as to any part of
the Premises, the Fixed Rent, Tenant's Tax Share and Tenant's Operating Share
shall be reduced and the Base Tax Amount and Base Operating Amount shall be
adjusted, all in the proportion that the area of the Premises taken bears to the
total area of the Premises.
20.03. (a) Landlord shall be entitled to receive the entire
award or payment (herein called the "BUILDING AWARD") in connection with any
taking, without reduction therefrom for any estate vested in Tenant by this
lease or any value attributable to the unexpired portion of the term of this
lease and, except as hereinafter expressly provided in Section 20.03(b) below,
Tenant shall receive no part of such award or payment. Tenant hereby expressly
assigns to Landlord all of its right, title and interest in and to any right to
the value of the unexpired portion of the term of this lease, and, except as
provided in Section 20.03(b) below, any such award or payment.
(b) If any portion of any Building Award is attributed
to any Tenant's Improvements (such portion of any Building Award being herein
called the "T.I. PORTION"), then Landlord, promptly after the final
determination of such Building Award (and the T.I. Portion thereof) and its
receipt of the same, shall pay to Tenant an amount equal to the T.I. Portion.
(c) Nothing contained in this Section 20.03 shall be
deemed to prevent Tenant from maintaining a separate action, or making a
separate claim in any condemnation proceedings, for Tenant's Improvements,
Tenant's Property and moving expenses; provided, however, any such award shall
not result in a reduction of any Building Award.
20.04. If the temporary use or occupancy of all or any part of
the Premises shall be taken by condemnation or in any other manner for any
public or quasi-public use or purpose during the term of this lease (any such
taking being herein called a "TEMPORARY TAKING"), then (i) this lease shall be
and remain unaffected by such taking and Tenant shall continue to be responsible
for all of its obligations hereunder insofar as such obligations are not
affected by such taking and shall continue to pay in full the Fixed Rent and
Additional Charges when due, (ii) Tenant shall be entitled, except as
hereinafter set forth, to receive that portion of the award for such temporary
taking which represents compensation for the use and occupancy of the Premises,
for the temporary taking of Tenant's Improvements, Tenant's Property and for
moving expenses, and (iii) Landlord shall be entitled to receive that portion of
the award, if any, for such temporary taking which represents reimbursement for
the cost of restoring the Premises. If the period of temporary use or occupancy
shall extend beyond the Expiration Date of this lease, that part of the award
which represents compensation for the use and occupancy of the Premises (or a
part thereof) shall be divided between Landlord and Tenant so that Tenant shall
receive so much thereof as represents the period up to and including such
Expiration Date and Landlord shall receive so much thereof as represents the
period after such Expiration Date.
20.05. In the event of a taking of less than the whole of the
Building and/or the Land which does not result in termination of this lease, or
in the event of a temporary taking of all or any part of the Premises which does
not result in a
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termination of this lease, (a) Landlord, at its expense, and whether or not any
award or awards shall be sufficient for the purpose (except as provided below),
shall proceed with reasonable diligence to perform the Landlord's Condemnation
Work (as defined below), and (b) Tenant, at its expense, and whether or not any
award or awards shall be sufficient for the purpose, shall have the right (but
shall not be obligated) to perform the Tenant's Condemnation Work (as defined
below). The "LANDLORD'S CONDEMNATION WORK" shall mean, the work necessary to
repair the remaining parts of the Building and the Premises (other than the
Tenant's Improvements and Tenant's Property) to substantially their former
condition to the extent that the same may be feasible (subject to reasonable
changes which Landlord shall deem desirable) and so as to constitute a complete
and rentable Building and Premises. The "TENANT'S CONDEMNATION WORK" shall mean
the work necessary to repair the Tenant's Improvements and Tenant's Property, to
substantially their former condition to the extent that the same may be
feasible, subject to reasonable changes; such work shall be deemed Alterations.
ARTICLE 21
Surrender
21.01. On the Expiration Date, or upon any earlier termination
of this lease, or upon any reentry by Landlord upon the Premises pursuant to
Article 23, Tenant shall quit and surrender the Premises to Landlord
"broom-clean" and in good order, condition and repair, except for ordinary wear
and tear and such damage or destruction as Landlord is required to repair or
restore under this lease or Tenant is not required under this lease to repair or
restore, and Tenant (i) shall remove those Tenant's Improvements which it is
required to remove pursuant to Article 12 hereof and (ii) shall remove all of
the Tenant's Property except as otherwise expressly provided in this lease.
21.02. No act or thing done by Landlord or its agents shall be
deemed an acceptance of a surrender of the Premises, and no agreement to accept
such surrender shall be valid unless in writing and signed by Landlord and each
Underlying Lessor and Mortgagee (of which Tenant has knowledge) whose lease or
mortgage, as the case may be, provides that no such surrender may be accepted
without its consent.
ARTICLE 22
Conditions of Limitation
22.01. This lease and the term and estate hereby granted are
subject to the limitation that whenever Tenant shall make a general assignment
for the benefit of creditors, or shall file a voluntary petition under any
bankruptcy or insolvency law, or an involuntary petition alleging an act of
bankruptcy or insolvency shall be filed against Tenant under any bankruptcy or
insolvency law (and such petition shall not be dismissed within 120 days after
its filing), or whenever a petition shall be filed by or against (and if
against, such petition shall not be dismissed within 120 days after its filing)
Tenant under the reorganization provisions of the United States Bankruptcy Code
or under the provisions of any law of like import, or whenever a petition shall
be filed by Tenant, under the arrangement provisions of the United States
Bankruptcy Code or under the provisions of any law of like import, or whenever a
permanent receiver of Tenant, or of or for the property of Tenant, shall be
appointed and not removed after a period of 120 days, then Landlord, at any time
after the occurrence of any such event, may give Tenant a notice of intention to
end the term of this lease at the expiration of five days from the date of
service of such
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notice of intention, and upon the expiration of said five-day period this lease
and the term and estate hereby granted, whether or not the term shall
theretofore have commenced, shall terminate with the same effect as if that day
were the expiration date of this lease, but Tenant shall remain liable for
damages as provided in Article 24.
22.02. This lease and the term and estate hereby
granted are subject to the further limitations that:
(a) if Tenant shall default in the payment of any (i)
Fixed Rent, and such default shall continue for ten (10) days after notice
thereof from Landlord or (ii) Additional Charges, and such default shall
continue for a period of fifteen (15) days after notice thereof from Landlord,
or
(b) if Tenant shall, whether by action or inaction, be
in default of any of its obligations under this lease (other than a default in
the payment of Fixed Rent or Additional Charges) and such default shall continue
and not be remedied as soon as reasonably practicable and in any event within
thirty (30) days after Landlord shall have given to Tenant a notice specifying
the same, or, in the case of a default which cannot with due diligence be cured
within a period of thirty (30) days, if Tenant shall not (x) within said thirty
(30) day period advise Landlord of Tenant's intention to take all steps
necessary to remedy such default, (y) duly commence within said 30-day period,
and thereafter diligently prosecute to completion all steps necessary to remedy
the default and (z) complete such remedy within a reasonable time after the date
of said notice of Landlord, or
(c) if any event shall occur or any contingency shall
arise whereby this lease or the estate hereby granted or the unexpired balance
of the term hereof would, by operation of law or otherwise, devolve upon or pass
to any person, firm or corporation other than Tenant, except as expressly
permitted by Article 7,
then in any of said cases Landlord may give to Tenant a notice of intention to
end the term of this lease at the expiration of ten (10) days from the date of
the service of such notice of intention, and upon the expiration of said ten
(10) days this lease and the term and estate hereby granted, whether or not the
term shall theretofore have commenced, shall terminate with the same effect as
if that day was the day herein definitely fixed for the end and expiration of
this lease, but Tenant shall remain liable for damages as provided in Article
24.
22.03. (a) If Tenant shall have assigned its interest in this
lease, and this lease shall thereafter be disaffirmed or rejected in any
proceeding under the United States Bankruptcy Code or under the provisions of
any Federal, state or foreign law of like import, or in the event of termination
of this lease by reason of any such proceeding, the assignor or any of its
predecessors in interest under this lease, upon request of Landlord given within
ninety (90) days after such disaffirmance or rejection shall (a) pay to Landlord
all Fixed Rent and Additional Charges then due and payable to Landlord under
this lease to and including the date of such disaffirmance or rejection and (b)
enter into a new lease as lessee with Landlord of the Premises for a term
commencing on the effective date of such disaffirmance or rejection and ending
on the Expiration Date, unless sooner terminated as in such lease provided, at
the same Fixed Rent and Additional Charges and upon the then executory terms,
covenants and conditions as are contained in this lease, except that (i) the
rights of the lessee under the new lease, shall be subject to any possessory
rights of the assignee in question under this lease and any rights of persons
claiming through or under such assignee, (ii) such new lease
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shall require all defaults existing under this lease to be cured by the lessee
with reasonable diligence, and (iii) such new lease shall require the lessee to
pay all Additional Charges which, had this lease not been disaffirmed or
rejected, would have become due after the effective date of such disaffirmance
or rejection with respect to any prior period. If the lessee shall fail or
refuse to enter into the new lease within ten (10) days after Landlord's request
to do so, then in addition to all other rights and remedies by reason of such
default, under this lease, at law or in equity, Landlord shall have the same
rights and remedies against the lessee as if the lessee had entered into such
new lease and such new lease had thereafter been terminated at the beginning of
its term by reason of the default of the lessee thereunder.
(b) If pursuant to the Bankruptcy Code Tenant is
permitted to assign this lease in disregard of the restrictions contained in
Article 7 (or if this lease shall be assumed by a trustee), the trustee or
assignee shall cure any default under this lease and shall provide adequate
assurance of future performance by the trustee or assignee including (i) the
source of payment of rent and performance of other obligations under this Lease,
for which adequate assurance shall mean the deposit of cash security with
Landlord in an amount equal to the sum of one year's Fixed Rent then reserved
hereunder plus an amount equal to all Additional Charges payable under Article 3
for the calendar year preceding the year in which such assignment is intended to
become effective, which deposit shall be held by Landlord, without interest, for
the balance of the term as security for the full and faithful performance of all
of the obligations under this lease on the part of Tenant yet to be performed,
and that any such assignee of this lease shall have a net worth exclusive of
good will, computed in accordance with generally accepted accounting principles,
equal to at least ten (10) times the aggregate of the annual Fixed Rent reserved
hereunder plus all Additional Charges for the preceding calendar year as
aforesaid and (ii) that the use of the Premises shall in no way diminish the
reputation of the Building as a first-class office building or impose any
additional burden upon the Building or increase the services to be provided by
Landlord. If all defaults are not cured and such adequate assurance is not
provided within 60 days after there has been an order for relief under the
Bankruptcy Code, then this lease shall be deemed rejected, Tenant or any other
person in possession shall vacate the Premises, and Landlord shall be entitled
to retain any rent or security deposit previously received from Tenant and shall
have no further liability to Tenant or any person claiming through Tenant or any
trustee. If Tenant receives or is to receive any valuable consideration for such
an assignment of this Lease, such consideration, after deducting therefrom (a)
the brokerage commissions, if any, and other expenses reasonably incurred by
Tenant for such assignment and (b) any portion of such consideration reasonably
designed by the assignee as paid for the purchase of Tenant's Property in the
Premises, shall be and become the sole exclusive property of Landlord and shall
be paid over to Landlord directly by such assignee.
(c) If Tenant's trustee, Tenant or Tenant as
debtor-in-possession assumes this lease and proposes to assign the same
(pursuant to Title 11 U.S.C. Section 365, as the same may be amended) to any
person, including, without limitation, any individual, partnership or corporate
entity, who shall have made a bona fide offer to accept an assignment of this
Lease on terms acceptable to the trustee, Tenant or Tenant as debtor-in-
possession, then notice of such proposed assignment, setting forth (x) the name
and address of such person, (y) all of the terms and conditions of such offer,
and (z) the adequate assurance to be provided Landlord to assure such person's
future performance under this lease, including, without limitation, the
assurances referred to in Title 11 U.S.C. Section 365(b)(3) (as the
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same may be amended), shall be given to Landlord by the trustee, Tenant or
Tenant as debtor-in-possession no later than twenty (20) days after receipt by
the trustee, Tenant or Tenant as debtor-in-possession of such offer, but in any
event no later than ten (10) days prior to the date that the trustee, Tenant or
Tenant as debtor-in-possession shall make application to a court of competent
jurisdiction for authority and approval to enter into such assignment and
assumption, and Landlord shall thereupon have the prior right and option, to be
exercised by notice to the trustee, Tenant or Tenant as debtor-in-possession,
given at any time prior to the effective date of such proposed assignment, to
accept an assignment of this lease upon the same terms and conditions and for
the same consideration, if any, as the bona fide offer made by such person, less
any brokerage commissions which may be payable out of the consideration to be
paid by such person for the assignment of this lease.
ARTICLE 23
Reentry by Landlord
23.01. If Landlord obtains a court order permitting reentry,
or if this lease shall terminate as provided in Article 22, Landlord or
Landlord's agents and employees may immediately or at any time thereafter
reenter the Premises, or any part thereof, either by summary dispossess
proceedings or by any suitable action or proceeding at law, without being liable
to indictment, prosecution or damages therefor, and may repossess the same, and
may remove any person therefrom, to the end that Landlord may have, hold and
enjoy the Premises. The word "reenter", as used herein, is not restricted to its
technical legal meaning. If this lease is terminated under the provisions of
Article 22, or if Landlord shall reenter the Premises under the provisions of
this Article, or in the event of the termination of this lease, or of reentry,
by or under any summary dispossess or other proceeding or action or any
provision of law by reason of default hereunder on the part of Tenant, Tenant
shall thereupon pay to Landlord the Fixed Rent and Additional Charges payable up
to the time of such termination of this lease, or of such recovery of possession
of the Premises by Landlord, as the case may be, and shall also pay to Landlord
damages as provided in Article 24.
23.02. In the event of a breach or threatened breach by Tenant
of any of its obligations under this lease, Landlord shall also have the right
of injunction. The special remedies to which Landlord may resort hereunder are
cumulative and are not intended to be exclusive of any other remedies to which
Landlord may lawfully be entitled at any time and Landlord may invoke any remedy
allowed at law or in equity as if specific remedies were not provided for
herein; provided, however, that this sentence shall not be deemed to authorize
Landlord to recover any damages, or exercise any remedy, expressly denied by any
other provision of this lease.
23.03. If this lease shall terminate under the provisions of
Article 22, or if Landlord shall reenter the Premises under the provisions of
this Article, or in the event of the termination of this lease, or of reentry,
by or under any summary dispossess or other proceeding or action or any
provision of law by reason of default hereunder on the part of Tenant, Landlord
shall be entitled to retain all monies, if any, paid by Tenant to Landlord,
whether as advance rent, security or otherwise, but such monies shall be
credited by Landlord against any Fixed Rent or Additional Charges due from
Tenant at the time of such termination or reentry or, at Landlord's option,
against any damages payable by Tenant under Article 24 or pursuant to law.
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ARTICLE 24
Damages
24.01. If this lease is terminated under the provisions of Article
22, or if Landlord shall reenter the Premises under the provisions of Article
23, or in the event of the termination of this lease by reason of Tenant's
default, or of reentry, by or under any summary dispossess or other proceeding
or action or any provision of law by reason of default hereunder on the part of
Tenant, Tenant shall pay to Landlord as damages, at the election of Landlord,
either:
(a) a sum which at the time of such termination of this
lease or at the time of any such re-entry by Landlord, as the case may be,
represents the then present value, discounted to present value at the
Article 24 Discount Rate (as defined below), of the excess, if any, of
(1) the aggregate amount of the Fixed Rent and the
Additional Charges under Article 3 which, in the absence of such
termination or re-entry, would have been payable by Tenant
(conclusively presuming the average monthly Additional Charges per
square foot of rentable area under Article 3 to be the same as were
payable for the last 12 calendar months, or if less than 12 calendar
months have then elapsed since the Commencement Date, all of the
calendar months immediately preceding such termination or reentry)
for the period (herein called the "COMPUTATION PERIOD") commencing
with such earlier termination of this lease or the date of any such
reentry, as the case may be, and ending with the Then Current
Expiration Date (as of the date immediately prior to such
termination or re-entry) (or, if, prior to such termination or
re-entry, either Landlord or Tenant shall have theretofore timely
exercised an expressly granted right to terminate this lease
pursuant to Article 7, 19, 20 or 37, then ending with such earlier
date upon which this lease would have terminated pursuant to such
previously exercised right, it being agreed that if any such
termination is pursuant to Article 7, 20 or 37 and the same relates
only to a portion of the Premises, then this parenthetical shall be
given effect only with respect to the portion of the Premises to
which such termination relates), over
(2) the aggregate rental value of the Premises for
the Computation Period; or
(b) sums equal to the Fixed Rent and the Additional
Charges under Article 3 which, in the absence of such termination or
re-entry, would have been payable by Tenant had this lease not so
terminated, or had Landlord not so reentered the Premises, payable upon
the due dates therefor specified herein following such termination or such
reentry and until the Then Current Expiration Date (as of the date
immediately prior to such termination or re-entry) (or, if, prior to such
termination or re-entry, either Landlord or Tenant shall have theretofore
timely exercised an expressly granted right to terminate this lease
pursuant to Article 7, 19, 20 or 37, then ending with such earlier date
upon which this lease would have terminated pursuant to such previously
exercised right, it being agreed that if any such termination is pursuant
to Article 7, 20 or 37 and the same relates only to a portion of the
Premises, then this parenthetical shall be given effect only with respect
to the portion of the Premises to which such termination relates);
provided, however, that if Landlord shall relet the Premises during said
period, Landlord shall credit Tenant with the
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net rents received by Landlord from such reletting, such net rents to be
determined by first deducting from the gross rents as and when received by
Landlord from such reletting the expenses incurred or paid by Landlord in
terminating this lease or in reentering the Premises and in securing
possession thereof, as well as the expenses of reletting, including,
without limitation, altering and preparing the Premises for new tenants,
brokers' commissions, legal fees, and all other expenses properly
chargeable against the Premises and the rental therefrom, 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 subdivision 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, then proper
apportionment on a square foot basis shall be made of the rent received
from such reletting and of the expenses of reletting.
If the Premises or any part thereof should be occupied by Landlord (or, if on
other than on an arm's length basis, by Landlord's agents or Affiliates) for the
conduct of such party's ordinary business (as distinguished from temporary use
for the business of operating and/or leasing the Real Property), then Landlord
shall credit Tenant with the fair market rental value of the portion of the
Premises so occupied, minus the costs incurred by Landlord (or such agent or
Affiliate) to prepare such portion for its occupancy.
If the Premises or any part thereof be relet by Landlord for the unexpired
portion of the term of this lease, or any part thereof, before presentation of
proof of such damages to any court, commission or tribunal, the amount of rent
reserved upon such reletting shall, prima facie, be the fair and reasonable
rental value for the Premises, or part thereof, so relet during the term of the
reletting.
Landlord shall not be liable in any way whatsoever for its failure or refusal to
relet the Premises or any part thereof, or if the Premises or any part thereof
are relet, for its failure to collect the rent under such reletting, and no such
refusal or failure to relet or failure to collect rent shall release or affect
Tenant's liability for damages or otherwise under this lease.
For the purposes of this Article 24, the "ARTICLE 24 DISCOUNT RATE" shall mean
the per annum rate in effect on the first day of the Computation Period, equal
to the interest rate on United States Treasury Securities having a maturity date
that will occur within the same calendar month as occurs the 60% Day (as defined
below). The "60% DAY" shall be the day that occurs the following number of days
after the first day of the Computation Period: a number of days equal to the
product obtained by multiplying the total number of days in the Computation
Period by 0.6. If at any time United States Treasury Securities cease to be
issued or actively traded, Landlord, upon written notice to Tenant, shall
reasonably designate other obligations backed by the full faith and credit of
the United States having such maturities as the instruments to be substituted
for such United States Treasury Securities in order to compute the Treasury
Rate.
24.02. Suit or suits for the recovery of such damages, or any
installments thereof, may be brought by Landlord from time to time at its
election, and nothing contained herein shall be deemed to require Landlord to
postpone suit until the date when the term of this lease would have expired if
it had not been so
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terminated under the provisions of Article 22, or had Landlord not reentered the
Premises. Nothing herein contained shall be construed to limit or preclude
recovery by Landlord against Tenant of any sums or damages to which, in addition
to the damages particularly provided above, Landlord may lawfully be entitled by
reason of any default hereunder on the part of Tenant, except consequential
damages. Nothing herein contained shall be construed to limit or prejudice the
right of Landlord to prove for and obtain as damages by reason of the
termination of this lease or reentry on the Premises for the default of Tenant
under this lease an amount equal to the maximum allowed by any statute or rule
of law in effect at the time when, and governing the proceedings in which, such
damages are to be proved whether or not such amount be greater than any of the
sums referred to in Section 24.01, except consequential damages.
24.03. In addition, if this lease is terminated under the provisions
of Article 22, or if Landlord shall reenter the Premises under the provisions
of Article 23, Tenant agrees that:
(a) the Premises then shall be in the condition in which
Tenant has agreed to surrender the same to Landlord at the expiration of the
term hereof;
(b) Tenant shall have performed prior to any such
termination any covenant of Tenant contained in this lease for the making of any
Alterations or for restoring or rebuilding the Premises or the Building, or any
part thereof; and
(c) for the breach of any covenant of Tenant set forth
above in this Section 24.03, Landlord shall be entitled immediately, without
notice or other action by Landlord, to recover, and Tenant shall pay, as and for
liquidated damages therefor, the cost of performing such covenant (as estimated
by an independent contractor selected by Landlord).
24.04. In addition to any other remedies Landlord may have under
this lease, and without reducing or adversely affecting any of Landlord's rights
and remedies under Article 22, if any Fixed Rent, Additional Charges or damages
payable hereunder by Tenant to Landlord are not paid within five (5) Business
Days after the due date therefor, the same shall bear interest at the Interest
Rate, from the due date thereof until paid, and the amount of such interest
shall be an Additional Charge hereunder.
ARTICLE 25
Affirmative Waivers
25.01. Tenant, on behalf of itself and any and all persons claiming
through or under Tenant, does hereby waive and surrender all right and privilege
which it, they or any of them might have under or by reason of any present or
future law, to redeem the Premises or to have a continuance of this lease after
being dispossessed or ejected therefrom by process of law or under the terms of
this lease or after the termination of this lease as provided in this lease.
25.02. If Tenant is in arrears in payment of Fixed Rent or
Additional Charges, Tenant waives Tenant's right, if any, to designate the items
to which any payments made by Tenant are to be credited, and Tenant agrees that
Landlord may apply any payments made by Tenant to such items as Landlord sees
fit, irrespective of and notwithstanding any designation or request by Tenant as
to the items to which any such payments shall be credited.
25.03. Landlord and Tenant hereby waive trial by jury in any action,
proceeding or counterclaim brought by either
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against the other on any matter whatsoever arising out of or in any way
connected with this lease, the relationship of Landlord and Tenant, Tenant's use
or occupancy of the Premises, including, without limitation, any claim of injury
or damage, and any emergency and other statutory remedy with respect thereto.
25.04. Tenant shall not interpose any counterclaim of any kind in
any summary action or proceeding commenced by Landlord to recover possession of
the Premises, other than a counterclaim which states only one or more claims
which, if not raised in such action or proceeding, would be irrevocably waived
by Tenant.
ARTICLE 26
No Waivers
26.01. The failure of either party to insist in any one or more
instances upon the strict performance of any one or more of the obligations of
this lease, or to exercise any election herein contained, shall not be construed
as a waiver or relinquishment for the future of the performance of such one or
more obligations of this lease or of the right to exercise such election, and
such right to insist upon strict performance shall continue and remain in full
force and effect with respect to any subsequent breach, act or omission. The
receipt by Landlord of Fixed Rent or partial payments thereof or Additional
Charges or partial payments thereof with knowledge of breach by Tenant of any
obligation of this lease shall not be deemed a waiver of such breach.
26.02. If this lease is terminated by Landlord or by Tenant pursuant
to any of the terms hereof, Tenant shall not have the right by virtue of any
renewal option herein granted to reinstate this lease.
ARTICLE 27
Curing Tenant's Defaults
27.01. If Tenant shall default in the performance of any of Tenant's
obligations under this lease, Landlord, any Underlying Lessor or any Mortgagee
without thereby waiving such default, may (but shall not be obligated to)
perform the same for the account and at the expense of Tenant, without notice in
a case of emergency, and in any other case only if such default continues after
the expiration of any applicable notice and cure period. If Landlord effects
such cure by bonding any lien which Tenant is required to bond or otherwise
discharge, Tenant shall obtain and substitute a bond for Landlord's bond at its
sole cost and expense and reimburse Landlord for the cost of Landlord's bond.
27.02. Bills for any expenses incurred by Landlord or any Underlying
Lessor or any Mortgagee in connection with any such performance by it for the
account of Tenant, and, if Landlord shall be the successful party in any action
or suit, bills for all costs, expenses and disbursements of every kind and
nature whatsoever, including reasonable counsel fees, involved in collecting or
endeavoring to collect the Fixed Rent or Additional Charges or any part thereof
or enforcing or endeavoring to enforce any rights against Tenant or Tenant's
obligations hereunder, under or in connection with this lease or pursuant to
law, including any such cost, expense and disbursement involved in instituting
and prosecuting summary proceedings or in recovering possession of the Premises
after default by Tenant or upon the expiration or sooner termination of this
lease, and interest on all sums advanced by Landlord or such Underlying Lessor
or Mortgagee under this Section and/or Section 27.01 (at
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the Interest Rate) may be sent by Landlord or such Underlying Lessor or
Mortgagee to Tenant monthly, or immediately, at its option, and such amounts
shall be due and payable as Additional Charges in accordance with the terms of
such bills.
ARTICLE 28
Broker
28.01. Landlord and Tenant each covenant, warrant and represent to
the other that no broker except Goldman, Sachs & Co. and Edward S. Gordon
Company, Inc. (collectively, the "BROKERS") was instrumental in bringing about
or consummating this lease and that they have had no conversations or
negotiations with any broker except the Brokers concerning the leasing of the
Premises. Landlord and Tenant each agree to indemnify and hold harmless the
other against and from any claims for any brokerage commissions and all costs,
expenses and liabilities in connection therewith, including, without limitation,
attorneys' fees and expenses, arising out of any conversations or negotiations
had by that party with any broker other than the Brokers. Landlord agrees to pay
the Brokers pursuant to separate agreements.
ARTICLE 29
Notices
29.01. Any notice, statement, demand, consent, approval or other
communication required or permitted to be given, rendered or made by either
Landlord or Tenant pursuant to this lease or pursuant to any applicable law or
requirement of public authority (collectively, "NOTICES") shall be in writing
(whether or not so stated elsewhere in this lease) and shall be deemed to have
been properly given, rendered or made only if sent by (i) registered or
certified mail, return receipt requested, posted in a United States post office
station or letter box in the continental United States or (ii) overnight courier
service, addressed to the other party at the address hereinabove set forth, and
shall be deemed to have been given, rendered or made on the second (2nd)
Business Day after the day so mailed, unless mailed outside of the State of New
York, in which case it shall be deemed to have been given, rendered or made on
the third (3rd) Business Day after the day so mailed or when delivered by
overnight courier service; provided, however, that notices of default given by
one party hereto to the other shall be deemed to have been given, rendered or
made on the day when actually receipted by the sendee (or if the sendee refuses
to accept such notice, then on the day on which the sendee refused to accept
delivery of such notice). Either party may, by notice as aforesaid, designate a
different address or addresses for notices intended for it. Notwithstanding the
foregoing, with respect to a default or termination of this lease, an occurrence
presenting imminent danger to the health or safety of persons or damage to
property in, on or about the Building or during a postal strike, notices may be
hand delivered to a party at the address to which notices to that party are to
be sent, provided that the same notice is also sent in the manner set forth
above.
29.02. Notices hereunder from Landlord to Tenant may be given by
Landlord's managing agent. A duplicate copy of all notices sent by Landlord to
Tenant shall be sent to Tenant marked to the attention of Legal Department.
29.03. A duplicate copy of all notices sent by Tenant to Landlord
shall be sent to Landlord at each of the following addresses: (i) Building
Office, One New York Plaza, New York, New York 10081, Attention: Building
Manager; and (ii) Real Estate
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Resources, 4 Chase MetroTech Center, 17th Floor, Brooklyn, New York 11245,
Attention: Vice President.
ARTICLE 30
Estoppel Certificates
30.01. Each party agrees, at any time and from time to time, on or
prior to the tenth day following a written request by the other party, to
execute and deliver to the other a statement certifying that this lease is
unmodified and in full force and effect (or if there have been modifications,
that the same is in full force and effect as modified and stating the
modifications), certifying the Commencement Date, Expiration Date and the dates
to which the Fixed Rent and Additional Charges have been paid, stating whether
or not, to the best knowledge of the signer, the other party is in default in
performance of any of its obligations under this lease, and, if so, specifying
each such default of which the signer shall have knowledge and stating whether
or not, to the best knowledge of the signer, any event has occurred which with
the giving of notice or passage of time, or both, would constitute such a
default, and, if so, specifying each such event, it being intended that any such
statement delivered pursuant hereto shall be deemed a representation and
warranty to be relied upon by the party requesting the certificate and by others
with whom such party may be dealing, regardless of independent investigation.
Tenant also shall include or confirm in any such statement the extent, if any,
to which Landlord's Work has not theretofore been completed.
ARTICLE 31
Definitions
31.01. For the purposes of this lease, the following terms have the
meanings indicated:
"ADJUSTED BY CPI" shall mean that the amount in question
shall be adjusted on each anniversary of the date hereof by adding to such
amount in question (as of the date hereof) an amount equal to the product of (i)
such amount, multiplied by (ii) the percentage of increase, if any, in the
Consumer Price Index for the month in which the applicable anniversary of the
date hereof occurs, over the Consumer Price Index for the month in which shall
occur the date hereof. "CONSUMER PRICE INDEX" shall mean the Consumer Price
Index for all Urban Consumers published by the Bureau of Labor Statistics of the
United States Department of Labor, New York, New York-Northeastern New Jersey
Area (1982-84 = 100), or any successor index thereto, appropriately adjusted;
provided that if there shall be no successor index, a substitute index shall be
reasonably selected by Landlord.
"AFFILIATE", of any person, shall mean a corporation,
partnership or other entity which controls, is controlled by or is under common
control with such person.
"AND/OR" when applied to one or more matters or things
shall be construed to apply to any one or more or all thereof as the
circumstances warrant at the time in question.
"BASE BUILDING" shall mean (i) the structural elements of
the Real Property, (ii) the walkways, plazas, stairways and all other
improvements or landscaping on the Land, (iii) the pedestrian and freight and
service entrances to the Building, (iv) the Building's ground floor lobbies and
all equipment, improvements and fixtures therein, (v) the common and service
areas of the Real Property used by or available to
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tenants and occupants, and all equipment, improvements and fixtures therein,
(vi) the Building's core and its shafts, stacks, pipes, ducts and other conduits
and all other areas of the Building located outside of the Premises and other
leasable areas of the Building, and all equipment, improvements and fixtures
therein, (viii) the Building Systems and all other facilities and equipment
which are used for the provision of Building Services (whether or not located in
the Premises), (ix) the Core Lavatories (whether or not included in the
Premises), and (x) the elevator lobby and common corridors on any multi-tenant
floor and all equipment, improvements and fixtures in such lobby and corridors;
excluding, however, in all events, Tenant's Improvements and Tenant's Property
as well as the improvements and betterments, and the moveable personal property,
of other tenants of the Building.
"BASE BUILDING PREMISES COMPONENTS" shall mean (I) all
components of the Base Building which are either within or bounding the Premises
(including without limitation the structural elements within or bounding the
Premises or any portion thereof) and (II) all other components of the Base
Building which are located on one or more Premises Floors and which exclusively
serve such Premises Floor.
"BASE PART", of the Building, shall mean all leasable
areas of the Building located on second (2nd) through eighteenth (18th) floors
of the Building.
"BUILDING SERVICES" shall mean the services required to
be furnished to Tenant pursuant to the provisions of Articles 14 and 15 hereof.
"BUILDING SYSTEMS" shall mean the electrical, HVAC,
mechanical, chilled water, sanitary, sprinkler, utility, power, plumbing,
cleaning, fire control, alarm and prevention systems, elevator, escalator,
window washing, waste compacting and removal, lighting, life safety and security
systems of the Building (together with all related equipment), brought to (and
including), but not beyond, the point of distribution to the Premises or the
point of connection to Tenant's Improvements, provided, that all components of
the Building's perimeter HVAC systems (including the units and controls located
in the Premises) and all components of the Building's sprinkler system up to and
including the main sprinkler loop on each floor and all components of the
Building's plumbing system in or serving the Core Lavatories shall be deemed to
be included in such term; excluding, however, in all events, Tenant's
Improvements and Tenant's Property as well as the improvements and betterments,
and the moveable personal property, of other tenants of the Building. In the
case of the Building's electrical system, the aforesaid point of distribution
shall be the Base Connection Points (with respect to Tenant's Base Electricity)
and the Designated 20th Floor Electrical Panels (with respect to Tenant's
Supplemental Electricity).
"CONDOMINIUM ACT" means the provisions of Article 9-B of
the Real Property Law of the State of New York, as the same may from time to
time be amended, or any successor statute thereto, and any regulations
promulgated thereunder as the same may from time to time be amended.
"CONDOMINIUM DECLARATION" shall mean, that certain
Declaration, dated as of February 16, 1993 (including, without limitation, the
By-Laws and all of the other Exhibits annexed thereto), establishing a plan for
condominium ownership of premises located at One New York Plaza, New York, New
York, pursuant to the Condominium Act, which Declaration was recorded on March
4, 1993 in the Register Office in Reel 1951, Page 758, as amended by that
certain First Amendment of Declaration of
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Condominium dated March 29, 1993 and subsequently recorded in the Register's
Office, and as the same may hereafter be amended.
"CONDOMINIUM PARTY" shall mean (1) the Condominium Board,
(2) any fee owner of one or more Units, and (3) any lessee under a ground,
overriding, or underlying lease demising one or more Units (including without
limitation any Underlying Lessee); and "CONDOMINIUM PARTIES" shall have the
corresponding plural meaning.
"CONTROL" shall mean (i) in the case of a corporation,
either (A) ownership or voting control, directly or indirectly, of at least
fifty (50%) percent of all the voting stock, or (B) the power to direct the
management and policies of such corporation, (ii) in case of a partnership or
joint venture, either (x) ownership, directly or indirectly, of at least fifty
(50%) percent of all the general or other partnership (or similar) interests
therein, or (y) the power to direct the management and policies of such
partnership or joint venture, and (iii) in the case of any other entity, either
(x) ownership, directly or indirectly, of at least fifty (50%) percent of all
the equity or other beneficial interest(s) therein, or (y) the power to direct
the management and policies of such entity.
"CORE LAVATORIES" shall mean (a) the Building's lavatories
located on the Premises Floors and in existence of the date hereof and any
Unisex Lavatories installed by Landlord pursuant to Article 8 (including, in
either case, all toilets, urinals, partitions, flooring, tiling, sinks, piping,
counters, soap dispensers, towel dispensers, trash disposal containers, and
other hardware, fixtures and equipment within or serving the same from time to
time) and (b) the slop sink rooms located on the Premises Floors and in
existence on the date hereof (including the slop sinks and other hardware,
fixtures and equipment within or serving the same from time to time).
"FORCE MAJEURE" and/or "EVENT(S) OF FORCE MAJEURE" shall
mean fire, casualty, accident, strike, lock-out or other labor trouble,
governmental preemption of priorities or other controls in connection with a
national or other public emergency or shortages of fuel, supplies or labor
resulting therefrom, or any other cause, whether similar or dissimilar, beyond
Landlord's or Tenant's reasonable control, as the case may be; or any failure or
defect in the supply, quantity or character of electricity, water, gas, steam or
other utility furnished to the Premises, by reason of any requirement, act or
omission of the public utility or municipality serving the Building with
electricity, water, gas, steam or other utility (provided such public utility's
act or omission was not due to Landlord's or Tenant's willful misconduct,
negligence or failure to remit payment to such public utility or municipality),
or for any other reason whether similar or dissimilar, beyond Landlord's or
Tenant's reasonable control, as the case may be. A party's inability to pay
money or to obtain funding or financing shall not constitute Force Majeure or an
Event of Force Majeure.
"HEREIN," "HEREOF" and "HEREUNDER," and words of similar
import, shall be construed to refer to this lease as a whole, and not to any
particular Article or section, unless expressly so stated.
"INITIALLY DEMISED PREMISES" shall mean the Premises as
initially demised as set forth in Section 1.03 hereof.
"INTEREST RATE," when used in this lease, shall mean an
interest rate equal to two percent (2%) above the so-called annual "BASE RATE"
of interest established and approved by The Chase Manhattan Bank (National
Association), from time to time, as its interest rate charged for unsecured
loans to its
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corporate customers, but in no event greater than the highest lawful rate from
time to time in effect.
"LANDLORD PARTY" shall mean (1) any principal, partner,
member, officer, stockholder, director, employee or agent of Landlord or of any
partner or member of any partnership constituting Landlord, disclosed or
undisclosed, (2) any Condominium Party and any principal, partner, member,
officer, stockholder, director, employee or agent thereof, or (3) any Mortgagee
and any principal, partner, member, officer, stockholder, director, employee or
agent thereof; and "LANDLORD PARTIES" shall have the corresponding plural
meaning.
"LANDLORD SHALL HAVE NO LIABILITY TO TENANT" or "THE SAME
SHALL BE WITHOUT LIABILITY TO LANDLORD" or "WITHOUT INCURRING ANY LIABILITY TO
TENANT THEREFOR", or words of similar import shall mean (unless expressly set
forth herein to the contrary) that Tenant is not entitled to terminate this
lease, or to claim actual or constructive eviction, partial, or total, or to
receive any abatement or diminution of rent, or to be relieved in any manner of
any of its other obligations hereunder, or to be compensated for loss or injury
suffered or to enforce any other right or kind of liability whatsoever against
Landlord under or with respect to this lease or with respect to Tenant's use or
occupancy of the Premises.
"LAWS AND REQUIREMENTS OF ANY PUBLIC AUTHORITIES" and
words of a similar import shall mean laws and ordinances of any or all of the
federal, state, city, county and borough governments and rules, regulations,
orders and directives of any and all departments, subdivisions, bureaus,
agencies or offices thereof, and of any other governmental, public or
quasi-public authorities having jurisdiction over the Building and/or the
Premises, and the direction of any public officer pursuant to law, whether now
or hereafter in force.
"MONETARY EVENT OF DEFAULT" shall mean an Event of Default
under Section 22.02(a).
"MORTGAGE" shall include a mortgage and/or a deed of
trust, and the term "HOLDER OF A MORTGAGE" or "MORTGAGEE" or words of similar
import shall include a mortgagee of a mortgage or a beneficiary of a deed of
trust.
"PERSON" shall mean any natural person or persons, a
partnership, a corporation, and any other form of business or legal association
or entity.
"PREMISES FLOOR" shall mean each floor in the Tower Part
of the Building on which any part of the Premises is located; such floors, as of
the date hereof, being the 41st, 42nd, 43rd, 44th, 45th, 46th, 48th, 49th and
50th floors of the Building. As used herein, (1) the term "FULL PREMISES FLOOR"
shall mean any Premises Floor the entire leasable area of which is within the
Premises, and (2) the term "PARTIAL PREMISES FLOOR" shall mean any Premises
Floor the leasable area of which is partly within and partly without the
Premises.
"REQUIREMENTS OF INSURANCE BODIES" and words of similar
import shall mean rules, regulations, orders and other requirements of the New
York Board of Underwriters and/or the New York Fire Insurance Rating
Organization and/or any other similar body performing the same or similar
functions and having jurisdiction or cognizance over the Building and/or the
Premises, whether now or hereafter in force.
"RETAIL PART" of the Building, shall mean those portions
of the retail concourse level of the Building (i.e., the first below grade
concourse level of the Building) that are leased or leasable for retail
purposes.
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"SIMILAR BUILDINGS" shall mean buildings which contain in
excess of one million rentable square feet and which are of an age and
construction similar to the Building, and which are located in the downtown
Manhattan business district; it being understood that (i) all references to
"Similar Buildings" shall allow for differences amongst the Building and other
such buildings based upon the different facilities and features thereof, and
(ii) for so long as the Condominium is in effect or any other condominium regime
is applicable to the Building, references to the "Similar Buildings" shall be
deemed to refer to both such other buildings that are condominiums and to other
such buildings that are not condominiums, but, in the case of the latter
buildings, allowing for appropriate adjustments based upon the fact that the
Building is a condominium and such buildings are not.
"STRUCTURAL ELEMENTS" shall mean the roof, the slabs, the
beams, columns, girders and other structural members and connections, the
interior and exterior of all exterior walls, window frames and windows and all
other parts of the Building's structure and supports.
"TENANT" shall mean the Tenant herein named or any
assignee or other successor in interest (immediate or remote) of the Tenant
herein named, which at the time in question is the owner of the Tenant's estate
and interest granted by this lease; but the foregoing provisions of this
subsection shall not be construed to permit any assignment of this lease or to
relieve the Tenant herein named or any assignee or other successor in interest
(whether immediate or remote) of the Tenant herein named from the full and
prompt payment, performance and observance of the covenants, obligations and
conditions to be paid, performed and observed by Tenant under this lease.
"TENANT PARTY" shall mean (1) any principal, partner,
member, officer, stockholder, director, employee or agent of Tenant or of any
partner or member of any partnership constituting Tenant, disclosed or
undisclosed, (2) any subtenant of Tenant or any other party claiming by, through
or under Tenant, and any principal, partner, member, officer, stockholder,
director, employee or agent of such subtenant or such other party; and "TENANT
PARTIES" shall have the corresponding plural meaning.
"TENANT NAMED HEREIN" shall mean The Goldman Sachs Group,
L.P., a Delaware limited partnership. "ORIGINAL TENANT" shall mean the Tenant
Named Herein and any immediate or remote assignee under one or more assignments
under Section 7.02(b) hereof.
"TOWER PART", of the Building, shall mean all leasable
areas of the Building located above the twentieth (20th) floor of the Building.
"UNITED STATES TREASURY SECURITIES" shall mean obligations
of the United States Government Treasury, yields for which obligations are
reported in Federal Reserve Statistical Release H.15 - Selected Interest Rates.
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"UNTENANTABLE", when used with respect to the Premises, or
any portion thereof, shall mean that (i) the Premises, or such portion thereof,
is not being occupied by Tenant (or any Tenant Party) for the purposes demised
hereunder, and (ii) either (x) the Premises, or such portion thereof, is not
reasonably capable of being occupied by Tenant (or any Tenant Party) for the
purposes demised hereunder in a reasonable manner, or (y) the Premises, or such
portion thereof, is not accessible by means of adequate passenger elevator
service; and "TENANTABLE", when used with respect to the Premises, or any
portion thereof, shall mean that the Premises, or such portion thereof, are not
untenantable.
ARTICLE 32
No Representations by Landlord
32.01. Tenant expressly acknowledges and agrees that Landlord has
not made and is not making, and Tenant, in executing and delivering this lease,
is not relying upon, any warranties, representations, promises or statements,
except to the extent that the same are expressly set forth in this lease or in
any other written agreement which may be made between the parties concurrently
with the execution and delivery of this lease and shall expressly refer to this
lease or the Premises. All understandings and agreements heretofore had between
the parties are merged in this lease and any other written agreement(s) made
concurrently herewith, which alone fully and completely express the agreement of
the parties and which are entered into after full investigation, neither party
relying upon any statement or representation not embodied in this lease or any
other written agreement(s) made concurrently herewith.
ARTICLE 33
Untenantability
33.01. If, at any time during the term of this lease, (i) there
shall be a stoppage or interruption of one or more of the Building Services,
(ii) such stoppage or interruption is caused by the negligence of Landlord,
(iii) such stoppage or interruption is not the result of one or more Events of
Force Majeure and/or one or more acts or omissions of Tenant or any Tenant
Party, (iv) as a result of such stoppage or interruption, the Premises (or a
substantial portion thereof, as more fully described below, that was then being
occupied) become untenantable, and, accordingly are vacated, and (v) Tenant
notifies of Landlord of such untenantability and vacation, then Tenant, as its
remedy, shall be entitled to an abatement of Fixed Rent, the Operating
Payment(s) and the Base Component of Tax Payment(s) otherwise payable hereunder
in respect of the Premises (or such substantial portion thereof) for the period
commencing on the date of such untenantability and vacation (or, if later the
date that Tenant notifies Landlord thereof) and ending on the date upon which
the Premises (or such substantial portion thereof) is no longer untenantable.
For purposes of this Section 33.01, a substantial portion of the Premises shall
be deemed to mean any portion of the Premises which consists of at least 5,000
contiguous rentable square feet.
ARTICLE 34
Holdover
34.01. (a) If Tenant shall remain in possession of the Premises
after the expiration or earlier termination of the term of this lease, then,
throughout the period commencing on
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such expiration or earlier termination and continuing until Tenant shall fully
vacate the entire Premises (such period being herein called the "HOLDOVER
PERIOD"), Tenant shall be deemed a holdover tenant and shall be liable to
Landlord for rent, or a charge in respect of use and occupancy, at a per diem
rate, for each day of the Holdover Period, equal to (I) the Holdover Factor (as
hereinafter defined) for such day of the Holdover Period, multiplied by (II) the
average per diem rate of Fixed Rent and Additional Charges payable by Tenant
during the last year of the term of this lease (i.e., the year immediately prior
to the Holdover Period). As used herein, the term "HOLDOVER FACTOR" shall mean
the following numbers for the following periods: (i) for the first three (3)
months of the Holdover Period, either (x) 1.25, if Tenant's holdover was the
result of one or more Events of Force Majeure, or (y) 1.50, in any other event;
(ii) for the next three (3) months of the Holdover Period (i.e., the 4th through
6th months of the Holdover Period), 1.50; and (iii) for the balance of the
Holdover Period (i.e., all portions thereof occurring after the 6th month of the
Holdover Period), 2.00. In addition to the foregoing, Landlord shall be entitled
to recover from Tenant any losses or damages arising from such holdover,
excluding damages arising from any loss or cancellation of any other lease of
the Premises or any part thereof and all other consequential damages on account
thereof.
(b) Anything to the foregoing notwithstanding, the
acceptance of any rent paid by Tenant pursuant to Section 34.01(a) above shall
not preclude Landlord from commencing and prosecuting a holdover or summary
eviction proceeding, and the preceding sentence shall be deemed to be an
"agreement expressly providing otherwise" within the meaning of Section 223-c of
the Real Property Law of the State of New York.
(c) If Tenant shall hold-over or remain in possession of
any portion of the Premises beyond the expiration or earlier termination of this
lease, Tenant shall be subject not only to summary proceedings, but shall also
be liable for all damages related thereto, excluding damages arising from any
loss or cancellation of any other lease of the Premises or any part thereof and
all other consequential damages. All damages to Landlord by reason of such
holding over by Tenant may be the subject of a separate action and need not be
asserted by Landlord in any summary proceedings against Tenant.
ARTICLE 35
Miscellaneous Provisions and Definitions
35.01. No agreement shall be effective to change, modify, waive,
release, discharge, terminate or effect an abandonment of this lease, in whole
or in part, including, without limitation, this Section 35.01, unless such
agreement is in writing, refers expressly to this lease and is signed by the
party against whom enforcement of the change, modification, waiver, release,
discharge, termination or effectuation of the abandonment is sought. If Tenant
shall at any time request Landlord to sublet the Premises for Tenant's account,
Landlord or its agent is authorized to receive keys for such purposes without
releasing Tenant from any of its obligations under this lease, and Tenant hereby
releases Landlord of any liability for loss or damage to any of the Tenant's
Property in connection with such subletting.
35.02. Except as otherwise expressly provided in this lease, the
obligations of this lease shall bind and benefit the successors and assigns of
the parties hereto with the same effect as if mentioned in each instance where a
party is named or referred to; provided, however, that (a) no violation of the
provisions of Article 7 shall operate to vest any rights in any
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successor or assignee of Tenant and (b) the provisions of this Section 35.02
shall not be construed as modifying the conditions of limitation contained in
Article 22.
35.03. Tenant shall look only to Landlord's estate and interest in
the Land and the Building for the satisfaction of Tenant's remedies, for the
collection of a judgment (or other judicial process) requiring the payment of
money by Landlord in the event of any default by Landlord hereunder, and no
other property or assets of Landlord or its partners, officers, directors,
shareholders or principals, disclosed or undisclosed, shall be subject to levy,
execution or other enforcement procedure for the satisfaction of Tenant's
remedies under or with respect to this lease, the relationship of Landlord and
Tenant hereunder or Tenant's use or occupancy of the Premises.
35.04. (a) The obligations of Tenant hereunder shall be in no
wise affected, impaired or excused, nor shall Landlord have any liability
whatsoever to Tenant, nor shall it be deemed a constructive eviction to the
extent that Landlord is unable to fulfill, or is delayed in fulfilling, any of
its obligations under this lease by reason of Force Majeure.
(b) The obligations of Landlord hereunder shall be in no
wise affected, impaired or excused, nor shall Tenant have any liability
whatsoever to Landlord, to the extent that Tenant is unable to fulfill, or is
delayed in fulfilling, any of its obligations under this lease by reason of
Force Majeure and nor shall the same give rise to any default or conditional
limitation under Article 22.
(c) If this lease specifies a time period for performance
of an obligation by any party, that time period shall be extended by the period
of any delay in such party's performance caused by Force Majeure, except that
(i) in any instance under this lease in which either party has a termination,
cancellation, rescission or revocation right, the dates on which or the
circumstances under which such party may exercise such right shall not be
affected even if the other party suffers Force Majeure (except to the extent
expressly so provided), (ii) in any instance under this lease in which Tenant
has the right to an abatement of, or a credit against, Fixed Rent or Additional
Charges, the dates in respect of which, the circumstances under which and the
amount of such abatement shall not be affected even if Landlord suffers Force
Majeure (except to the extent expressly so provided), and (iii) the date on
which any party must furnish any notice or information, make any election, or
exercise any right shall not be affected even if such party suffers Force
Majeure (except to the extent expressly so provided).
35.05. The obligations of Landlord and Tenant with respect to all
periods prior to the expiration or other termination of this lease, including
without limitation the obligation to pay, and/or to refund overpayments of,
Fixed Rent and Additional Charges, shall survive the expiration or other
termination of this lease.
35.06. (a) Neither Landlord nor Tenant shall record this lease or
any instrument modifying this lease. From and after the date hereof, however,
Landlord, at the request of Tenant, shall, within thirty (30) days after such
request, execute, acknowledge and deliver (i) a memorandum of lease in respect
of this lease and a memorandum of amendment of lease in respect of any amendment
of this lease, sufficient for recording and in form reasonably satisfactory to
Landlord, which memorandum may be recorded by Tenant, and (ii) any other
instrument(s) necessary to the effective recordation of such memorandum of lease
or memorandum of amendment of lease, as the case may be; provided, however, that
Tenant shall pay for all costs, taxes
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and/or other expenses necessary for the effective recordation of any such
memorandum. Notwithstanding the foregoing, no such memorandum described in this
Section 35.06 shall recite the amounts or rates of Fixed Rent or Additional
Charges payable hereunder. In no event, shall any memorandum of this lease or
any amendment hereof be deemed to change or otherwise affect any of the
obligations or provisions of this lease or such amendment hereof.
(b) In the event of a termination of this lease, Tenant,
within thirty (30) days of the date of such termination, shall execute,
acknowledge and deliver to Landlord all necessary instrument(s) in recordable
form evidencing a termination of this lease and sufficient to discharge any
memorandum hereof, and any memorandum of any amendment hereof, of record, and
Tenant shall pay for all costs, taxes and/or expenses necessary to the effective
recordation of such instrument(s). If there occurs a termination of this lease
and Tenant shall fail, for any reason whatsoever, to execute all of the
aforementioned instrument(s) within the aforementioned 30-day period, then,
without limiting any other rights or remedies that Landlord may have on account
thereof, (i) Landlord shall be deemed to be and Tenant hereby irrevocably
appoints Landlord, Tenant's attorney-in-fact, coupled with an interest, to
execute such instrument(s) in the name of Tenant and on Tenant's behalf and any
other instrument(s) necessary to the effective recordation of such instrument(s)
and the discharge of record of any memorandum or memoranda, (ii) Tenant shall
pay for all costs, taxes and/or expenses necessary to effectuate the recordation
of all such instrument(s), and (iii) Tenant shall be liable for all damages that
Landlord incurs as a result of Tenant's failure (including without limitation,
and notwithstanding the provisions of Section 18.03 hereof, consequential
damages; except that any such failure by Tenant during a period that Tenant is
in possession of the Premises shall not subject to Tenant to consequential
damages so long as such failure results from Tenant's good faith belief that the
lease is in full force and effect during such period of possession).
35.07. If Tenant shall request Landlord's consent or approval and
Landlord shall fail or refuse to give such consent or approval, Tenant shall not
be entitled to any damages or any other remedy for any such failure or refusal
by Landlord to grant its consent or approval; provided, however, that in those
cases where Landlord has expressly agreed in writing not to unreasonably
withhold its consent or approval, or where as a matter of law Landlord may not
unreasonably withhold its consent or approval, Tenant shall have the right, as
its sole and exclusive remedies, to dispute Landlord's failure or refusal to
grant its consent or approval either (i) by prosecuting an action for specific
performance, injunction and/or damages (provided that Tenant shall be entitled
to damages if and only if Landlord acted in bad faith in failing or refusing to
grant its consent or approval) or (ii) by submitting such dispute to arbitration
in accordance with Article 40 hereof. The remedies described in clause (i) and
in clause (ii) of the preceding sentence are mutually exclusive. Tenant may
elect the remedy set forth in clause (ii) above only by sending written notice
thereof to Landlord within fifteen (15) Business Days after Tenant's receipt of
the applicable denial of the consent or approval by Landlord, and, in each such
case, the sole issue to be resolved by such arbitration shall be whether
Landlord's denial of consent or approval was reasonable.
35.08. If an excavation shall be made upon land adjacent to or under
the Building, or shall be authorized to be made, Tenant shall afford to the
person causing or authorized to cause such excavation, license to enter the
Premises for the purpose of performing such work as is reasonably necessary to
preserve and protect the Building from injury or damage to
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support the same by proper foundations, without any claim for damages or
liability against Landlord and without reducing or otherwise affecting Tenant's
obligations under this lease.
35.09. Landlord represents that the floor load per square foot which
each of the Premises Floors is designed to carry is as set forth on the Existing
Certificate of Occupancy annexed hereto as Exhibit N. Tenant shall not place a
load upon any floor of the Premises which violates applicable law or the
Certificate of Occupancy of the Building or which exceeds the floor load per
square foot which such floor was designed to carry or which such floor is
reinforced to carry. All heavy material and/or equipment must be placed by
Tenant, at Tenant's expense, so as to distribute the weight. Business machines
and mechanical equipment shall be placed and maintained by Tenant, at Tenant's
expense, in settings sufficient in Landlord's reasonable judgment to absorb and
prevent vibration, noise and annoyance. If the Premises be or become infested
with vermin as a result of the use or any misuse or neglect of the Premises by
Tenant, its agents, employees, visitors or licensees, Tenant shall at Tenant's
expense cause the same to be exterminated from time to time to the reasonable
satisfaction of Landlord and shall employ such exterminators and such
exterminating company or companies as shall be reasonably approved by Landlord.
35.10. The submission by Landlord of this lease in draft form shall
be deemed submitted solely for Tenant's consideration and not for acceptance and
execution. Such submission shall have no binding force or effect and shall
confer no rights nor impose any obligations, including brokerage obligations, on
either party unless and until both Landlord and Tenant shall have executed the
lease and duplicate originals thereof shall have been delivered to the
respective parties.
35.11. Irrespective of the place of execution or performance, this
lease shall be governed by and construed in accordance with the laws of the
State of New York. If any provisions of this lease or the application thereof to
any person or circumstance shall, for any reason and to any extent, be invalid
or unenforceable, the remainder of this lease and the application of that
provision to other persons or circumstances shall not be affected but rather
shall be enforced to the extent permitted by law. The table of contents,
captions, headings and titles in this lease are solely for convenience of
references and shall not affect its interpretation. This lease shall be
construed without regard to any presumption or other rule requiring construction
against the party causing this lease to be drafted. All terms and words used in
this lease, shall be deemed to include any other number and any other gender as
the context may require.
35.12. If under the terms of this lease Tenant is obligated to pay
Landlord a sum in addition to the Fixed Rent under the lease and no payment
period therefor is specified, Tenant shall pay Landlord the amount due within
thirty (30) days after being billed.
35.13. (a) Tenant represents and warrants that this lease has
been duly authorized, executed and delivered by Tenant and constitutes the
legal, valid and binding obligation of Tenant.
(b) Landlord represents and warrants that this lease has
been duly authorized, executed and delivered by Landlord and constitutes the
legal, valid and binding obligation of Landlord.
35.14. If any sales or other tax is payable with respect to any
cleaning or other services which Tenant purchases directly from any third party
or parties, Tenant shall file any
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required tax returns and shall pay any such tax, and Tenant shall indemnify and
hold Landlord harmless from and against any loss, damage or liability suffered
or incurred by Landlord on account thereof.
35.15. (a) Landlord shall use reasonable efforts to (i) conduct
(or cause to be conducted) any entry into the Premises permitted under this
lease, and (ii) perform any work (i.e., alterations, additions, improvements,
repairs and replacements) performed by Landlord in the Building (or cause to be
performed any work performed by persons authorized by Landlord on any Building
System) (including without limitation any entry pursuant to, or work performed
under, Article 16 hereof) (including without limitation any work performed by
Landlord pursuant to Section 35.15(c) below), in a manner so as to minimize the
inconvenience or interference with the operation of Tenant's business in the
Premises that may occasioned by the performance of such entry or work; provided,
however, that Landlord shall not be obligated to continuously perform (or cause
to be continuously performed) any work and shall not be liable for any
interruptions of any work, nor shall Landlord be obligated to employ contractors
or labor at so-called overtime or premium pay rates or to incur any other
overtime costs and expenses in connection therewith.
(b) Notwithstanding the provisions of Section 35.15(a)
above, if (i) any work described in Section 35.15(a)(ii) above is being
performed, or is to be performed, on any Premises Floor or does or will
adversely impact the provision of Building Services to Tenant during Business
Hours, and (ii) Tenant shall request that such work, or any separable portion
thereof, be performed at times other than Business Hours (any such work
described in such a request by Tenant being herein called "DESIGNATED WORK"),
then, and in each such case, the following provisions shall apply with respect
to such Designated Work:
(1) Landlord, except in the case of an actual or
perceived emergency, shall perform (or cause to be performed) the
Designated Work outside of Business Hours (even if overtime or premium pay
rates be thus incurred), so long as (x) doing so will not have an adverse
impact on any other tenant of the Building as to the operation of its
business during Business Hours, and (y) overtime labor is reasonably
available; and
(2) (A) if, pursuant to this lease or any separate
agreement between Landlord and Tenant, the cost of any Designated Work is
to be borne by Tenant, then Tenant, within thirty (30) days after its
receipt of a demand therefor, shall pay to Landlord all of the costs that
Landlord incurs in connection with the performance of such work, including
without limitation (I) all of the Overtime Costs (as hereinafter defined)
with respect to such Designated Work, and (II) if Tenant's aforesaid
request is received after Landlord shall have commenced or scheduled the
performance of such Designated Work, rescheduling charges; or
(B) if Tenant is not to bear the costs of such
work pursuant to this lease or any separate agreement between Landlord and
Tenant, then (i) in any case where the performance of such work (or any
portion thereof) during Business Hours would have resulted in substantial
interference with the operation of Tenant's business in the Premises
during Business Hours, Tenant shall have no obligation to pay the Overtime
Costs with respect to such Designated Work (but if Tenant's aforesaid
request is received after Landlord shall have commenced or scheduled the
performance of such Designated Work, then Tenant shall reimburse Landlord
any rescheduling charges), or (ii) in any
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other case, Tenant, within thirty (30) days after its receipt of a demand
therefor, shall pay to Landlord (x) all of the Overtime Costs (as
hereinafter defined) with respect to such Designated Work, and (y) if
Tenant's aforesaid request is received after Landlord shall have commenced
or scheduled the performance of such Designated Work, rescheduling
charges.
As used herein, "OVERTIME COSTS", with respect to any work performed at times
other than Business Hours on Business Days, shall mean any and all additional
costs Landlord incurs by reason of performing such work at such times other than
Business Hours on Business Days (including without limitation incremental
overtime and premium pay rates), including without limitation, all the costs of
any stand-by personnel required in connection therewith (including, without
limitation, operating engineers and stand-by electricians).
(c) If (i) a Building System which provides
electricity, chilled water, make-up water, domestic water, HVAC or passenger
elevator service to the Premises or otherwise to Tenant shall breakdown or
otherwise be rendered incapable of providing the Building Services provided
thereby at the levels required hereunder, and (ii) Landlord, pursuant to the
provisions of Article 13 hereof, shall be obligated to repair or replace such
Building System, then Landlord, at its expense, shall perform such work both
during Business Hours and after Business Hours (it being agreed that Landlord
shall have both the right and the obligation to do so), except to the extent
that (x) Landlord, in its reasonable judgement, does not believe that performing
such work after Business Hours will result in the restoration of the applicable
Building Services on an earlier date, or (y) overtime labor is not reasonably
available. The provisions of this Section 35.15(c) shall override any
inconsistent provisions of Section 35.15(a) and (b) above.
(d) If, pursuant to this lease or any separate agreement
between Landlord and Tenant, the cost of any work undertaken by Tenant in the
Building is to be borne by Landlord, then, notwithstanding anything contained
herein to the contrary, Landlord shall have no obligation to pay any Overtime
Costs with respect to any such work performed outside of Business Hours on
Business Days.
35.16. Tenant acknowledges that it has no rights to any development
rights, "air rights" or comparable rights appurtenant to the Real Property, and
consents, without further consideration, to any utilization of such rights by
Landlord and agrees to promptly execute and deliver any instruments which may be
requested by Landlord, including instruments merging zoning lots, evidencing
such acknowledgment and consent. The provisions of this Section 35.16 shall be
deemed to be and shall be construed as an express waiver by Tenant of any
interest Tenant may have as a "party in interest" (as such quoted term is
defined in Section 12-10 Zoning Lot of the Zoning Resolution of the City of New
York) in the Real Property.
35.17. Tenant agrees that, without Landlord's consent in each
instance, neither it nor any Affiliate of Tenant, nor any agent or employee of
Tenant or any Affiliate of Tenant, shall disclose any of the terms of this lease
(other than the amount of space leased hereby) to any other person, other than
as and when required by law, or to its accountants or attorneys, its actual or
prospective assignees, its actual or prospective subtenants, or to real estate
brokers, auditors or consultants advising Tenant, or to governmental agencies or
recognized credit rating agencies. Furthermore, Tenant agrees that, without
Landlord's consent in each instance, neither it nor any Affiliate of Tenant
shall issue or authorize any advertising or press release referring to Landlord
(by name) or the Building in connection
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with either the consummation of this lease or the occupancy of Tenant in the
Building.
35.18. In the event of a breach or threatened breach by Landlord of
any of its obligations under this lease, Tenant shall also have the right of
injunction. The special remedies to which Tenant may resort hereunder are
cumulative and are not intended to be exclusive of any other remedies to which
Tenant may lawfully be entitled at any time and Tenant may invoke any remedy
allowed at law or in equity as if specific remedies were not provided for
herein; provided, however, that this sentence shall not be deemed to authorized
Tenant to recover any damages, or exercise any remedy, expressly denied by any
other provision of this lease.
35.19. Landlord agrees that, without Tenant's consent in each
instance, neither it, nor any Landlord Party nor any Affiliate of Landlord
(including Edward S. Gordon Company, Inc. or any other leasing or managing
agent) shall use Tenant's Name in any signage, in any advertising, in any
promotional materials (including any materials prepared for or used in
connection with offering the Building or any space therein or any interest
therein for lease or purchase or as security for any financing) or in any press
release, publicity or communication with or to the press, in any case, in any
way or respect, referring or otherwise relating to this lease, the Building ore
Tenant's occupancy in the Building; provided, however, that
(1) any of such persons may, in response to inquiries
from the press, confirm the fact that Tenant has entered into a lease for
space in the Building and the amount of such space (but, whether or not in
response to any such inquiry, none of such persons shall disclose or
confirm any of the other terms of this lease);
(2) Landlord may include in promotional materials the
fact that Tenant has entered into a lease for space in the Building, and
the amount of such space (but none of the other terms of this lease),
provided that such materials are not prepared for, and are not used in
connection with, promoting or offering the Building or any space in the
Building for lease or purchase for purposes of occupancy; and
(3) Landlord may disclose the terms of this lease to,
and may furnish a copy of this lease to, any purchaser, lender or, to the
extent that the same may be relevant thereto, tenant provided that such
prospective purchaser, lender or tenant has executed and delivered to
Landlord a written confidentiality agreement prohibiting its disclosing
any of the information or materials so provided (it being understood that
any such confidentiality agreement may permit disclosure (x) if and to the
extent required by applicable law, (y) to attorneys, accountants or other
professional advisors agreeing in writing to be bound by the terms of such
confidentiality agreement, or (z) of any information already in the public
domain).
As used herein, the term "TENANT'S NAME" shall mean the name of Tenant, any
identifying portion thereof, any abbreviation thereof, or any logo or symbol of
Tenant.
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ARTICLE 36
Parking
36.01. For purposes of this Article 36, the following terms shall
have the following meanings:
"BUILDING PARKING GARAGE" shall mean the current parking
garage located in the Building and containing approximately 200 parking
spaces.
"GARAGE OPERATOR" shall mean the person that is in charge
of the operation of the Building Parking Garage, whether by lease, license
or other agreement with Landlord or otherwise.
"PARKING PRIVILEGE" shall mean the right to park, or have
parked, a car or a similar sized vehicle in a single parking space in the
Building Parking Garage.
"ELIGIBLE PERSON" shall mean any person that is a partner,
principal, director, officer or employee of Tenant, excluding, however,
any such person whose Eligible Person status is terminated pursuant to
Section 36.05 below.
"DESIGNATED USER", of any Tenant Parking Privilege, shall
mean, from time to time, the Eligible Person then designated by Tenant to
utilize such Tenant Parking Privilege pursuant to the provisions of
Section 36.03 below (i.e., by notice to Landlord as described in Section
36.03).
The "THRESHOLD NUMBER", as of any date, shall mean the
excess of (i) the number of rentable square feet in the Premises as of
such date, divided by 12,000, over (ii) four (4).
The "EXCESS NUMBER", as of any date, shall mean the excess
of (i) the number of Tenant's Parking Privileges in effect as of such
date, over (ii) the Threshold Number as of such date.
36.02. (a) Landlord, subject to the provisions of this Article
36, hereby grants to Tenant, and Tenant hereby accepts, 31 Parking Privileges
(herein collectively called "TENANT'S PARKING PRIVILEGES") for the term of this
lease, it being agreed that each Tenant's Parking Privilege may be utilized
solely by the Designated User thereof.
(b) Tenant, from time to time during the term of this
lease, may terminate one or more of Tenant's Parking Privileges by giving
Landlord written notice thereof, which notice shall set forth the date of
termination, which date shall be not less than 90 days, nor more than 180 days,
after the date of such notice; once a Tenant's Parking Privilege shall be so
terminated, neither Tenant nor any Designated User shall have any further rights
in respect of such Parking Privilege (and, without limiting the generality of
the foregoing, Tenant shall have no right to have the same re-granted or
re-issued to it or to have any other Parking Privilege(s) granted or issued to
it in substitution therefor or otherwise).
(c) If, at any time during the term of this lease, the
number of Tenant's Parking Privileges shall exceed the Threshold Number, then
Landlord, at its option, may elect to terminate one or more of Tenant's Parking
Privileges, up to a maximum of the then Excess Number of Tenant's Parking
Privileges, by giving Tenant written notice thereof. Any such notice shall set
forth the date of termination, which date shall be not less than 30 days, nor
more than 90 days, after the date of such
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notice; once a Tenant's Parking Privilege shall be so terminated, neither Tenant
nor any Designated User shall have any further rights in respect of such Parking
Privilege (and, without limiting the generality of the foregoing, Tenant shall
have no right to have the same re-granted or re-issued to it or to have any
other Parking Privilege(s) granted or issued to it in substitution therefor or
otherwise).
(d) Upon the expiration or earlier termination of this
lease, any Tenant's Parking Privileges then in effect shall be automatically
terminated.
36.03. Tenant shall not permit any person to utilize any Tenant's
Parking Privilege other than the Designated User thereof. Each Designated User
shall be an Eligible Person. Tenant, within thirty (30) days after the date
hereof, shall submit to Landlord a notice designating the initial Designated
Users of each of Tenant's Parking Privileges (which notice shall include the
name, address and position of each Designated User and such information
regarding the license plate and make and model of such Designated User's car as
Landlord may reasonably require). Tenant, from time to time during the term of
this lease, may change the Designated User of any Tenant's Parking Privilege by
giving Landlord written notice thereof. If, at anytime during the term of this
lease, any person that is a Designated User as to any Tenant's Parking Privilege
shall cease to be an Eligible Person (either because such person ceases to be a
partner, principal, director, officer or employee of Tenant or because such
person has had its status as an Eligible Person terminated pursuant to Section
36.05 hereof), then such person shall thereupon cease to be a Designated User,
but Tenant may designate a replacement Designated User by notice as aforesaid.
36.04. Notwithstanding anything hereinabove contained to the
contrary, Tenant's Parking Privileges and the utilization thereof by any
Designated User shall be subject to the following provisions:
(a) Parking in the Building Parking Garage, from time to
time, at the option of Landlord or the Garage Operator, may be by means of
either self-parking or valet parking.
(b) Parking in the Building Parking Garage, from time to
time, at the option of Landlord or the Garage Operator, may be on a reserved or
on a non-reserved basis, or on a partly reserved and partly non-reserved basis.
(c) Landlord or the Garage Operator may require each
Designated User to use reasonable visible identification (e.g., bumper decal,
window sticker, or pass) to evidence authorized use thereof.
(d) Landlord or the Garage Operator may require each
Designated User to execute a parking agreement (each, a "PARKING AGREEMENT") in
connection with its utilization of a Tenant's Parking Privilege, which agreement
shall be reasonable in form and content; in which event, Tenant shall cause such
Designated User to execute such Parking Agreement within thirty (30) days after
request therefor from Landlord or the Garage Operator.
(e) Each Designated User shall comply with all reasonable
rules and regulations as may from time to time be promulgated by Landlord or the
Garage Operator (herein called the "PARKING REGULATIONS").
(f) Neither Landlord nor the Garage Operator shall be
obligated to police or provide security to the Building Parking Garage (or any
part thereof) or to any points of access
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which may connect the same to other areas of the Building. Neither Landlord nor
the Garage Operator shall have any responsibility for any injury, loss, theft or
damage, howsoever caused, to persons or property occurring in the Building
Parking Garage or arising out of or attributable to the utilization of the
Building Parking Garage by the Designated Users or any other persons.
36.05. If (i) a Designated User shall violate such person's Parking
Agreement and, as a result thereof, Landlord or the Garage Operator, as the case
may be, shall terminate such Parking Agreement, (ii) a Designated User shall
violate the Parking Regulations on more than two (2) occasions, or (iii) a
Designated User shall otherwise violate (or cause Tenant to violate) the
provisions of this Article 36, then Landlord, in any of such events, may, at
anytime thereafter, terminate such Designated User's status as an Eligible
Person and, in any such event, such Designated User shall thereupon cease to be
an Eligible Person or a Designated User and may never again be an Eligible
Person or a Designated User.
36.06. Tenant, in respect of Tenant's Parking Privileges from time
to time in effect, shall pay to Landlord (or, at Landlord's direction, to the
Garage Operator), as Additional Charges, as and when Fixed Rent is payable, a
monthly charge for each such Tenant's Parking Privilege equal to Landlord's or
the Garage Operator's then established monthly charges for Parking Privileges.
ARTICLE 37
Tenant's Termination Right
37.01. Subject to and in accordance with the provisions of this
Article 37, Tenant shall have the one-time right (the "TERMINATION RIGHT") to
terminate this lease as to the entire Premises or as to any Terminable Portion
(as hereinafter defined), effective as of the Early Termination Date (as
hereinafter defined), in consideration of the payment by Tenant to Landlord of
the Termination Fee (as hereinafter defined) as hereinafter provided. References
in this Article 37 to the "Premises" shall be deemed to refer to the Premises as
of the date of Tenant's Termination Notice (after giving effect to any
termination of this lease in part pursuant to Article 7 hereof which either (x)
has theretofore occurred or (y) will thereafter occur pursuant to a Recapture
Option theretofore exercised by Landlord).
37.02. (a) Tenant may exercise the Termination Right only by
rendering written notice thereof ("TENANT'S TERMINATION NOTICE") to Landlord,
which notice (i) shall be received by Landlord not earlier than December 1, 1996
and not later than November 30, 1997 (time being of the essence with respect to
Landlord's receipt of Tenant's Termination Notice), (ii) shall indicate whether
Tenant is exercising the Termination Right as to the entire Premises or a
Terminable Portion thereof, and, in any latter case, shall describe and
delineate the Terminable Portion, (iii) shall set forth the date that Tenant
desires to have this lease terminate (in whole or in part, as the case may be),
which date shall be a date occurring after the fifth (5th) anniversary of the
Fixed Rent Commencement Date and prior to the Initial Expiration Date, and shall
be the last day of a calendar month (such date being herein called the "EARLY
TERMINATION DATE"), (iv) shall, in any case that Original Tenant (as Tenant
hereunder) or an Affiliate of Original Tenant (as Tenant hereunder) is
exercising the Termination Right as to the entire Premises, indicate either (x)
that Original Tenant and/or one or more of its Affiliates have, prior to the
date of such notice, completed a Qualified Relocation, (y) that Original Tenant
and/or
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one or more of its Affiliates have not, prior to the date of such notice,
completed a Qualified Relocation, but that Tenant believes that Original Tenant
and/or one or more of its Affiliates will complete a Qualified Relocation after
the date of such notice, or (z) that Original Tenant and/or one or more of its
Affiliates have not completed a Qualified Relocation prior to the date of such
notice and that Tenant does not believe that Original Tenant and/or one or more
of its Affiliates will do so after the date of such notice, and (v) shall be
accompanied by Tenant's good and sufficient check(s) in the amount of the
Preliminary Termination Fee Payment (as hereinafter defined); provided, however,
that if Tenant's Termination Notice shall be accompanied by Tenant's good and
sufficient check (made payable to Landlord) for an amount which Tenant believes
in good faith to be equal to the Preliminary Termination Fee Payment and which
Tenant believes in good faith to have computed in a manner consistent with the
content of Tenant's Termination Notice, then such Tenant's Termination Notice
shall be valid even if the amount of such check(s) differs from the amount of
the Preliminary Termination Fee Payment; provided, further, however, that in
such event, Tenant shall remain liable to Landlord for any underpayment of the
Preliminary Termination Fee Payment (without interest, except in the case
described in Section 37.03(a) below), and Landlord shall be liable to Tenant for
any overpayment of the Preliminary Termination Fee Payment (without interest),
and, in either case, such reconciliation payment shall be made promptly after
demand therefor.
(b) Notwithstanding the foregoing, any Tenant's
Termination Notice shall be null and void (and, accordingly, such notice shall
not be effective to exercise the Termination Right as it so purports to
exercise), if, as of the date Landlord receives such notice, this lease shall
have theretofore been canceled or terminated (including without limitation a
termination pursuant to Article 22 hereof, but excluding a termination of this
lease in part pursuant to Article 7 or 20 hereof). In addition, if, as of the
date Landlord receives any Tenant's Termination Notice, Landlord, in good faith,
reasonably believes that a monetary Event of Default shall have theretofore
occurred and is then continuing, Landlord, at its option, may render the
Tenant's Termination Notice null and void (and, accordingly, the Tenant's
Termination Notice shall not be effective to exercise the Termination Right as
it so purports to exercise) by giving written notice thereof to Tenant no later
than ten (10) Business Days after Landlord's receipt of the Tenant's Termination
Notice (which notice is herein called "LANDLORD'S SECTION 37.02(B) NOTICE"),
which Landlord's Section 37.02(b) Notice shall set forth Landlord's
determination of the amount of such monetary Event of Default, i.e., the amount
then due and owing to Landlord as to which such Event of Default has occurred
and is continuing (which amount is herein called the "ALLEGED DEFAULT AMOUNT");
provided, however, that Tenant may reinstate Tenant's Termination Notice (and
the same shall then again be effective to exercise the Termination Right as it
so purports to exercise) by giving written notice thereof to Landlord no later
than ten (10) Business Days after Tenant receipt of Landlord's Section 37.02(b)
Notice (which notice is herein called "TENANT'S SECTION 37.02(B) NOTICE"), which
Tenant's Section 37.02(b) Notice shall either (A) be accompanied by Tenant's
good and sufficient check (made payable to Landlord) in the amount of the
Alleged Default Amount, with or without protest and reservation of rights, or
(B) both (i) indicate Tenant's good-faith belief that no monetary Event of
Default has occurred and is then continuing, and (ii) unless Original Tenant is
then Tenant, be accompanied by Tenant's good and sufficient check (made payable
to Landlord) in the amount of Alleged Default Amount. In any case described in
clause (B) above, Landlord shall deposit the proceeds of the check with an
escrow agent, who shall (x) hold the funds until there shall the resolution of
the dispute regarding the occurrence and continuance of a monetary
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Event of Default, and (y) upon such resolution, appropriately disburse such
funds to Landlord and/or Tenant.
37.03. (a) If, pursuant to Section 37.02(a)(iv)(y) above,
Tenant's Termination Notice shall provide that Original Tenant and/or one or
more of its Affiliates have not, prior to the date of such notice, completed a
Qualified Relocation, but that Tenant believes that Original Tenant and/or one
or more of its Affiliates will complete a Qualified Relocation after the date of
such notice, then the Preliminary Termination Fee Payment shall initially be
determined assuming that the Applicable Period will be the period described in
Section 37.04(g)(i); but if Original Tenant and/or one or more of its Affiliates
shall fail to make a Qualified Relocation and the Applicable Period is thus the
period described in Section 37.04(g)(ii), then the Preliminary Termination Fee
Payment shall be recomputed based thereon and Tenant shall promptly pay the
increased amount to Landlord, together with interest thereon at the Base Rate
for the period from the date that the initial payment of the Preliminary
Termination Fee Payment was made to the date such increased amount is paid.
(b) Within thirty (30) days after the final determinations
(between Landlord and Tenant) of both the Tax Payments for all of the Tax Years
included within the Applicable Period and the Operating Payments for all of the
Operating Years included within the Applicable Period, Landlord and Tenant shall
reconcile the amount of the Preliminary Termination Fee Payment with the
Termination Fee and (A) if the Termination Fee exceeds the Preliminary
Termination Fee Payment, then Tenant shall pay to Landlord such excess, together
with interest on the amount of such excess at the Base Rate (for the period from
the date that the Preliminary Termination Fee Payment was made to the date of
the payment of such excess), or (B) if the Preliminary Termination Fee Payment
exceeds the Termination Fee, then Landlord shall pay to Tenant such excess,
together with interest on the amount of such excess at the Base Rate (for the
period from the date that the Preliminary Termination Fee Payment was made to
the date of the payment of such excess).
37.04. (a) The "TERMINATION FEE" shall mean an amount equal to
the sum of (i) an amount equal to the Termination Space Percentage (as
hereinafter defined) of the sum of (x) the Unamortized Transaction Cost Amount
(as hereinafter defined) as of the Early Termination Date, plus (y) the
Unamortized 47th Floor Amount (as hereinafter defined) as of the Early
Termination Date, plus (ii) an amount equal to the Fixed Rent which would be
payable during the Applicable Period (as hereinafter defined) with respect to
the Termination Space assuming this lease were in full force and effect
throughout such period (determined without regard to any abatements, credits or
offsets), plus (iii) an amount equal to the sum of the Tax Payments which would
be payable during the Applicable Period with respect to the Termination Space
assuming this lease were in full force and effect throughout such period
(determined without regard to any abatements, credits or offsets), plus (iv) an
amount equal to the sum of the Operating Payments which would be payable during
the Applicable Period with respect to the Termination Space assuming this lease
were in full force and effect throughout such period (determined without regard
to any abatements, credits or offsets).
(b) The "PRELIMINARY TERMINATION FEE PAYMENT" shall mean
an amount equal to the sum of (i) an amount equal to the Termination Space
Percentage of the sum of (x) the Unamortized Transaction Cost Amount as of the
Early Termination Date, plus (y) the Unamortized 47th Floor Amount as of the
Early Termination Date, plus (ii) an amount equal to the Fixed Rent which would
be payable during the Applicable Period (as hereinafter defined) with respect to
the Termination Space
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assuming this lease were in full force and effect throughout such period
(determined without regard to any abatements, credits or offsets), plus (iii) an
amount equal to the sum of the Projected Tax Payments (as hereinafter defined)
for the Applicable Period with respect to the Termination Space, determined as
of the date that Tenant delivers Tenant's Termination Notice to Landlord, plus
(iv) an amount equal to the sum of the Projected Operating Payments (as
hereinafter defined) for the Applicable Period with respect to the Termination
Space, determined as of the date that Tenant delivers Tenant's Termination
Notice to Landlord.
(c) (1) The "TRANSACTION COST AMOUNT" shall mean the sum
of (i) an amount equal to the dollar amount of the Fixed Rent which is abated
pursuant to the provisions of Section 1.06 hereof, plus (ii) an amount equal to
the sum of all brokerage commissions or other compensation payable by Landlord
to the Brokers on account of Tenant's leasing of the Initially Demised Premises
(determined without regard to the provisions of the second sentence of Section
37.01 hereof).
(2) The "47TH FLOOR COST AMOUNT" shall
mean (A) the amount of 47th Floor Fixed Rent (as hereinafter defined) which is
abated during the 47th Floor Abatement Period (as hereinafter defined), if any,
and (B) all brokerage commissions or other compensation payable by Landlord to
the Brokers on account of Tenant's leasing of the 47th Floor Space.
(3) Within sixty (60) days after the occurrence of
the 47th Floor Commencement Date, each of Landlord and Tenant shall execute an
instrument, in mutually agreeable form, setting forth the Transaction Cost
Amount and the 47th Floor Cost Amount, provided, that the failure of either
party to execute such instrument shall not affect the validity of any provision
of this Article 37 or any other provision of this lease.
(d) (1) The "UNAMORTIZED TRANSACTION COST AMOUNT", as of
any date, shall mean the principal balance which would be outstanding, as of
such date, under a loan (i) advanced on the Fixed Rent Commencement Date in an
original principal amount equal to the Transaction Cost Amount, (ii) bearing
interest at a rate of 9% per annum, and (iii) providing for combined constant
monthly payments of principal and interest sufficient to fully-liquidate such
loan over the period commencing on the Fixed Rent Commencement Date and ending
on the Initial Expiration Date.
(2) The "UNAMORTIZED 47TH FLOOR AMOUNT", as of any
date, shall mean the principal balance which would be outstanding, as of such
date, under a loan (x) advanced on the 47th Floor Commencement Date (as
hereinafter defined) (or, if there is a 47th Floor Abatement Period, then the
day following such period) in the original principal amount equal to the 47th
Floor Cost Amount, (y) bearing interest at a rate of 9% per annum, and (z)
providing for combined constant monthly payments of principal and interest
sufficient to fully-liquidate such loan over the period commencing on the 47th
Floor Commencement Date (as hereinafter defined) (or, if there is a 47th Floor
Abatement Period, then the day following such period) and ending on the Initial
Expiration Date.
(e) The "PROJECTED TAX PAYMENTS" for any period determined
as of any date, shall mean the Tax Payments which would be payable during such
period (determined without regard to any abatements, credits or offsets)
assuming that (i) this lease (as modified through such date) were in full force
and effect throughout such period, (ii) Adjusted Real Property Taxes for each
Tax Year following the last Tax Year for which the Tax Closure Date has occurred
as of such date, will be 104% of the Adjusted Real Property Taxes for the prior
Tax Year (and, if, as
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of such date, no Tax Closure Date shall have occurred, then further assuming,
solely for purposes of computing Projected Tax Payments under this Section
37.04(e), (X) in the event Tenant shall have theretofore received a Tax
Statement for any Tax Year, that the Tax Closure Date shall have occurred with
respect to the last or most recent Tax Year for which Tenant shall have received
a Tax Statement and that the Adjusted Real Property Taxes for such Tax Year are
as set forth on the last or most recent Tax Statement for such Tax Year, and (Y)
in the event that Tenant shall not theretofore have received a Tax Statement for
any Tax Year, that the Tax Closure Date shall have occurred with respect to the
then most recently ended Tax Year and that the Adjusted Real Property Taxes
therefor are zero), and (iii) Tenant's Generator Taxes for each Tax Year
following the last Tax Year for which Tenant's Generator Taxes were finally
determined hereunder as of such date will be 104% of Tenant's Generator Taxes
for the prior Tax Year (or, if, as of such date, Tenant's Generator Taxes shall
not have been finally determined for any Tax Year, then assuming, solely for
purposes of this Section 37.04(e), that Tenant's Generator Taxes are zero).
(f) The "PROJECTED OPERATING PAYMENTS" for any period
determined as of any date, shall mean the Operating Payments which would be
payable during such period (determined without regard to any abatements, credits
or offsets) assuming that (i) this lease (as modified through such date) were in
full force and effect throughout such period, and (ii) Operating Expenses for
each Operating Year following the last Operating Year for which Operating
Expenses were finally determined as of such date will be 104% of the Operating
Expenses for the prior Operating Year (and, if, as of such date, Operating
Expenses shall not have been finally determined for any Operating Year, then
further assuming, solely for purposes of computing Projected Operating Payments
under this Section 37.04(f), (X) in the event Tenant shall have theretofore
received any Operating Statement for any Operating Year, that Operating Expenses
for the last or most recent Operating Year for which Tenant shall have received
an Operating Statement are as set forth on the last or most recent Operating
Statement for such Operating Year, and (Y) in the event that Tenant shall not
theretofore have received any Operating Statement for any Operating Year, that
Operating Expenses for the most recently ended Operating Year are zero).
(g) The "APPLICABLE PERIOD" shall mean either (i) in any
case that Original Tenant (as Tenant hereunder) or an Affiliate of Original
Tenant (as Tenant hereunder) exercises the Termination Right and Original Tenant
and/or its Affiliates shall make a Qualified Relocation (as defined below), the
period of nine (9) consecutive months commencing on the day after the Early
Termination Date, or (ii) in any other case, the period of eighteen (18)
consecutive months commencing on the day after the Early Termination Date.
(h) "QUALIFIED RELOCATION PREMISES" shall mean premises
located either (i) anywhere (within or without Manhattan) outside of lower
Manhattan (i.e., the entirety of Manhattan south of Canal Street) or (ii)
anywhere in the area shown on Exhibit U attached hereto.
(i) A "QUALIFIED RELOCATION" shall mean a relocation by
Original Tenant and/or one or more of its Affiliates (while either Original
Tenant or an Affiliate of Original Tenant is Tenant hereunder) to Qualified
Relocation Premises, provided, that such relocation shall include the relocation
to such Qualified Relocation Premises of (I) fifty (50%) or more of all the 85
Broad Street Employees (defined below) with respect to such relocation, and (II)
fifty (50%) or more of all the Premises Employees (defined below) with respect
to such relocation. The "85 BROAD STREET EMPLOYEES", with respect to any
relocation, shall mean all the employees of
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Original Tenant and/or its Affiliates (i.e., Affiliates of Original Tenant at
the time of such relocation) who, immediately prior to such relocation, were
regularly located at 85 Broad Street, New York, New York. The "PREMISES
EMPLOYEES", with respect to any relocation, shall mean all the employees of
Original Tenant and/or its Affiliates (i.e., Affiliates of Original Tenant at
the time of such relocation) who, immediately prior to such relocation, were
regularly located at the Premises. Notwithstanding the foregoing provisions of
this Section 37.04(i), if Tenant's Termination Notice shall not provide either
(X) that Original Tenant and/or one or more of its Affiliates have, prior to the
date of such notice, completed a Qualified Relocation (pursuant to Section
37.02(a)(iv)(x) above) or (Y) that Original Tenant and/or one or more of its
Affiliates have not, prior to the date of such notice, completed a Qualified
Relocation, but that Tenant believes that Original Tenant and/or one or more of
its Affiliates will complete a Qualified Relocation after the date of such
notice (pursuant to the provisions of Section 37.02(a)(iv)(y) above), then no
relocation by Original Tenant and/or one or more of its Affiliates shall ever be
considered a "Qualified Relocation".
(j) "TERMINABLE PORTION", of the Premises, shall mean a
portion (i.e., less than all) of the Premises consisting solely of either: (i)
the entirety of the Premises other than the Base Block; (ii) the entirety of the
Premises other than the Base Block and an Additional Full Floor Block; or (iii)
the entirety of the Premises other than a specific single Full Premises Floor,
but only if, as of the date of Tenant's Termination Notice, (x) not less than
80% of the rentable area of such specific single Full Premises Floor is occupied
by GSAM, and (y) GSAM intends to continue in such occupancy of such Full
Premises Floor for the remainder of the term of this lease. As used herein, (1)
"BASE BLOCK" shall mean (x) the entirety of the Premises located on the four (4)
highest Full Premises Floors, plus (y) the entirety of the Premises located on
each Partial Premises Floor, if any, which is a higher floor than one or more of
such four (4) highest Full Premises Floors, (2) an "ADDITIONAL FULL FLOOR BLOCK"
shall mean the entirety of the Premises located on any one or more Full Premises
Floors which are located below the Base Block, but only if (x) all such Full
Premises Floors, together, constitute a vertically contiguous block of floors,
and (y) the highest of such Full Premises Floors within the Additional Full
Floor Block is vertically contiguous with the lowest Full Premises Floor within
the Base Block, and (3) "GSAM" shall mean the company now known as Goldman Sachs
Asset Management, Inc., any successor to such company by merger or
consolidation, or any entity acquiring all or substantially all of the assets of
such company.
(k) The "TERMINATION SPACE" shall mean (i) in any case
that Tenant shall have properly exercised the Termination Right as to the entire
Premises, the entire Premises, and (ii) in any case that Tenant shall have
properly exercised the Termination Right as to a Terminable Portion, the
Terminable Portion described and delineated in Tenant's Termination Notice.
(l) The "TERMINATION SPACE PERCENTAGE" shall mean (i) in
any case that Tenant shall have properly exercised the Termination Right as to
the entire Premises, 100%, and (ii) in any case that Tenant shall have properly
exercised the Termination Right as to a Terminable Portion, a fraction, (A) the
numerator of which is the number of rentable square feet in the Terminable
Portion described and delineated in Tenant's Termination Notice, and (B) the
denominator of which is the number of rentable square feet in the entire
Premises.
37.05. If Tenant properly exercises the Termination Right, then, as of
the Early Termination Date, this lease shall terminate and end as to the
Termination Space as fully and
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completely, and with the same effect, as if the Early Termination Date was the
Expiration Date with respect to the Termination Space and the term "Expiration
Date" shall, with respect to the Termination Space, thereafter refer to the
Early Termination Date. Accordingly and without limiting the generality of the
foregoing, (i) on or prior to the Early Termination Date, Tenant shall (and
shall cause each Tenant Party to) vacate the Termination Space in accordance
with the provisions of this lease, and (ii) as of the Early Termination Date,
the Fixed Rent, the Base Component of the Tax Payments and the Operating
Payments payable with respect to the Termination Space shall be apportioned in
the same manner and to the same extent as if the Early Termination Date was the
Expiration Date with respect to the Termination Space.
37.06. If, pursuant to Section 37.04(j)(iii) above, the Tenant's
Termination Notice shall describe and delineate Termination Space consisting of
the entirety of the Premises other than a specific single Full Premises Floor
then occupied by GSAM, then the following provisions shall apply:
(a) Landlord, by notice to Tenant given no later than
thirty (30) days after its receipt of Tenant's Termination Notice, may, by
written notice to Tenant (the "GSAM PREMISES SUBSTITUTION NOTICE"), may
substitute as the Termination Space, in lieu of the Termination Space described
in Tenant's Termination Notice, the entirety of the Premises other than any
other single Full Premises Floor, such other single Full Premises Floor to be
specified in the GSAM Premises Substitution Notice.
(b) If Landlord shall give the GSAM Premises Substitution
Notice, then Tenant, by notice to Landlord given no later than thirty (30) days
after its receipt thereof (the "GSAM TERMINATION NOTICE"), may elect to revise
Tenant's Termination Notice to relate to the entirety of the Premises, but to
make no other revision to Tenant's Termination Notice. Upon the giving of the
GSAM Termination Notice, Tenant's Termination Notice shall be deemed, ab initio,
to relate to the entirety of the Premises. Together with the GSAM Termination
Notice, Tenant shall forward Tenant's good and sufficient check (payable to
Landlord) for an amount which Tenant, in good faith, believes to be equal to the
excess of the Preliminary Termination Fee Payment for the entirety of the
Premises over the Preliminary Termination Fee Payment originally included with
Tenant's Termination Notice.
(c) Unless Tenant serves the GSAM Termination Notice
within the 30-day period described in Section 37.06(b) above, the terms and
conditions of this lease, effective as of day after the Early Termination Date
(and whether the Termination Space is as initially set forth in Tenant's
Termination Notice or as set forth in the GSAM Premises Substitution Notice),
shall, automatically and without further act of the parties, be deemed amended
and modified as follows: (i) the Fixed Rent payable under this lease shall be
increased by an amount equal to $2.00 multiplied by the number of rentable
square feet in the Premises (after the operation of the provisions of Section
37.05 above); and (ii) this lease shall be further amended and modified as
provided on Exhibit W attached hereto. Tenant, at the request of Landlord, shall
execute an instrument, in the form of a lease amendment, confirming the
aforesaid amendments and modifications to this lease, effective as of the day
after the Early Termination Date, provided, that the failure of Tenant to
execute such instrument shall not affect the effectiveness of such amendments
and modifications or the validity thereof or the validity of any other provision
of this lease.
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ARTICLE 38
Renewal Terms
38.01. (a) Tenant shall have the option (herein called the "FIRST
RENEWAL OPTION") to extend the term of this lease as to the entire Premises or
any Renewable Portion (as hereinafter defined) thereof for an additional five
(5) year period (the "FIRST RENEWAL TERM"), which First Renewal Term shall
commence on the date immediately succeeding the Initial Expiration Date, and end
on the fifth (5th) anniversary of the Initial Expiration Date (the "FIRST
RENEWAL EXPIRATION DATE"); provided, that, as of the date that Tenant gives
Landlord the First Renewal Notice (as hereinafter defined) this lease shall be
in full force and effect. The First Renewal Option shall be exercisable only
with respect to the entire Premises or any Renewable Portion thereof and only by
Tenant giving Landlord written notice of such exercise (herein called the "FIRST
RENEWAL NOTICE"), which notice (x) shall indicate whether Tenant is exercising
the First Renewal Option as to entire Premises or a Renewable Portion thereof,
and, in the latter case, shall describe and delineate the Renewable Portion (it
being agreed that if the First Renewal Notice does not so indicate, then Tenant
shall be conclusively deemed to have exercised the First Renewal Option as to
the entire Premises), and (y) shall be received by Landlord not later than the
date that is eighteen (18) months prior to the Expiration Date (time being of
the essence with respect to Landlord's receipt of the First Renewal Notice).
Landlord, at its option, by notice to Tenant given no later than ten (10)
Business Days after Landlord's receipt of the First Renewal Notice, may render
the First Renewal Notice null and void if, at the time that Landlord receives
the same, an Event of Default shall have occurred and is then continuing.
(b) Tenant shall have the option (herein called the
"SECOND RENEWAL OPTION") to extend the term of this lease as to the entire
Premises or any Renewable Portion thereof for an additional five (5) year period
(the "SECOND RENEWAL TERM"), which Second Renewal Term shall commence on the
date immediately succeeding the First Renewal Expiration Date, and end on the
fifth (5th) anniversary of the First Renewal Expiration Date (the "SECOND
RENEWAL EXPIRATION DATE"); provided, that, Tenant shall have previously
exercised the First Renewal Option, and, as of the date that Tenant gives
Landlord the Second Renewal Notice (as hereinafter defined), this lease shall be
in full force and effect. The Second Renewal Option shall be exercisable only
with respect to the entire Premises or any Renewable Portion thereof and only by
Tenant giving Landlord written notice of such exercise (herein called the
"SECOND RENEWAL NOTICE"), which notice (x) shall indicate whether Tenant is
exercising the Second Renewal Option as to entire Premises or a Renewable
Portion thereof, and, in the latter case, shall describe and delineate the
Renewable Portion (it being agreed that if the Second Renewal Notice does not so
indicate, then, in either such case, Tenant shall be conclusively deemed to have
exercised the Second Renewal Option as to the entire Premises), and (y) shall be
received by Landlord not later than the date that is eighteen (18) months prior
to the First Renewal Expiration Date (time being of the essence with respect to
Landlord's receipt of the Second Renewal Notice). Landlord, at its option, by
notice to Tenant given no later than ten (10) Business Days after Landlord's
receipt of the Second Renewal Notice, may render the Second Renewal Notice null
and void if, at the time that Landlord receives the same, a Event of Default
shall have occurred and is then continuing.
(c) As used herein, the following terms shall have the
following meanings:
"RENEWABLE PORTION", of the Premises, shall mean a
portion (i.e., less than all) of the Premises
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consisting solely of either: (i) the Base Block; or (ii) the Base Block and an
Additional Full Floor Block.
"FIRST RENEWAL PREMISES" shall mean either (i) the
entire Premises as of the date of the First Renewal Notice, if Tenant exercises
(or is deemed to have exercised) the First Renewal Option as to the entire
Premises, or (ii) the Renewable Portion described and delineated in the First
Renewal Notice, if Tenant exercises the First Renewal Option as to a Renewable
Portion (as opposed to the entire Premises).
"SECOND RENEWAL PREMISES" shall mean either (i) the
entire Premises as of the date of the Second Renewal Notice, if Tenant exercises
(or is deemed to have exercised) the Second Renewal Option as to the entire
Premises, or (ii) the Renewable Portion described and delineated in the Second
Renewal Notice, if Tenant exercises the Second Renewal Option as to a Renewable
Portion (as opposed to the entire Premises).
(d) The First Renewal Option and Second Renewal Option are
sometimes referred to individually as a "RENEWAL OPTION" and collectively as the
"RENEWAL OPTIONS"; the First Renewal Term and Second Renewal Term are sometimes
referred to individually as a "RENEWAL TERM" and collectively as the "RENEWAL
TERMS"; the First Renewal Premises and the Second Renewal Premises are sometimes
referred to individually and collectively as "RENEWAL PREMISES".
38.02. (a) If Tenant exercises the First Renewal Option in
accordance with the terms of Section 38.01(a) above, then this lease shall
thereupon be extended for the First Renewal Term upon all the same terms,
covenants and conditions as are contained in this lease, except that for, and
during, the First Renewal Term:
(1) the Fixed Rent shall be the Fair Market Fixed
Rent (as hereinafter defined) for the First Renewal Term, as defined and
determined pursuant to Sections 38.03, 38.04 and 38.05 below;
(2) if the First Renewal Premises shall consist of
less than the entire Premises (as of the date of the First Renewal Notice),
then, as applicable, Tenant's Operating Share and Tenant's Tax Share,
respectively, shall be appropriately reduced by operation of the provisions of
Sections 3.01(p) and 3.01(q), respectively;
(3) any provisions of this lease with respect to (i)
Landlord's Work, or (ii) any abatement period(s) with respect to Fixed Rent,
Operating Payment(s) or Tax Payment(s) set forth in Articles 1, 3 and 4 hereof,
shall not be applicable;
(4) the provisions of Section 38.01(a) above
relative to Tenant's right to renew the term of this lease shall not be
applicable;
(5) the Expiration Date shall be the First Renewal
Expiration Date; and
(6) the Base Tax Amount shall be the Adjusted Real
Property Taxes for the Tax Year ending immediately prior to the commencement of
the First Renewal Term, and the Base Operating Year shall be the Operating Year
ending immediately prior to the commencement of the First Renewal Term.
(b) If Tenant exercises the Second Renewal Option in
accordance with the terms of Section 38.01(b), then this lease shall thereupon
be extended for the Second Renewal
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Term upon all the same terms, covenants and conditions as are contained in this
lease, except that for, and during, the Second Renewal Term:
(1) the Fixed Rent shall be the Fair Market Fixed
Rent for the Second Renewal Term as defined and determined pursuant to Sections
38.03, 38.04 and 38.05 below;
(2) if the Second Renewal Premises shall consist of
less than the entire Premises (as of the date of the Second Renewal Notice),
then, as applicable, Tenant's Operating Share and Tenant's Tax Share,
respectively, shall be appropriately reduced by operation of the provisions of
Sections 3.01(p) and 3.01(q), respectively;
(3) any provisions of this lease with respect to (i)
Landlord's Work, or (ii) any abatement period(s) with respect to Fixed Rent,
Operating Payment(s) or Tax Payment(s) set forth in Articles 1, 3 and 4 hereof,
shall not be applicable;
(4) the provisions of Section 38.01 above relative
to Tenant's right to renew the term of this lease shall not be applicable;
(5) the Expiration Date shall be the Second Renewal
Expiration Date; and
(6) the Base Tax Amount shall be the Adjusted Real
Property Taxes for the Tax Year ending immediately prior to the commencement of
the Second Renewal Term, and the Base Operating Year shall be the Operating Year
ending immediately prior to the commencement of the Second Renewal Term.
38.03. For purposes of this Article 38, the term "FAIR MARKET FIXED
RENT", for any Renewal Term, shall mean the fixed annual rent that a willing
tenant would pay and a willing landlord would accept for a lease of the Renewal
Premises pertinent to such Renewal Term having a 10-year term (commencing with
the commencement of such Renewal Term), and providing for fixed annual rent on a
level payment basis throughout such term (i.e., no step-ups in fixed rent),
assuming: (i) that the Renewal Premises pertinent to such Renewal Term were
being demised in their "as is" condition as of the date that Tenant exercised
the applicable Renewal Option, without any allowance or contribution by
Landlord; (ii) that such Renewal Premises were being demised upon the same terms
and conditions as are provided for in this lease for such Renewal Term
(including without limitation the terms and conditions set forth in Section
38.02 above therefor); and (iii) to the extent that the creditworthiness of the
tenant is deemed relevant by the person determining such Fair Market Fixed Rent,
that the tenant has a creditworthiness substantially equivalent to that of
Tenant.
38.04. If Tenant exercises a Renewal Option in accordance with the
terms of this Article 38, then the following provisions shall apply:
(a) During the thirty (30) day period (the "INITIAL
PERIOD") following Landlord's receipt of an effective First Renewal Notice or
Second Renewal Notice, as the case may be, Landlord and Tenant shall attempt to
agree upon the Fair Market Fixed Rent for the Renewal Term in question.
(b) If Landlord and Tenant fail to agree upon the Fair
Market Fixed Rent for any Renewal Term within the Initial Period, then the
following provisions shall apply:
(1) During the six (6) Business Day period following
the last day of the Initial Period (the
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"BILATERAL APPOINTMENT PERIOD"), Landlord and Tenant shall attempt to
agree upon, and appoint, an impartial natural person to serve the
functions required of him under this Section 38.04. If Landlord and Tenant
fail to do so within the Bilateral Appointment Period, then Landlord,
within the period of six (6) Business Days after the Bilateral Appointment
Period (the "LANDLORD APPOINTMENT PERIOD"), may appoint to act as such
impartial natural person an attorney who is a partner of a law firm of 50
lawyers or more that has an office in New York City. If Landlord shall not
make such appointment within the Landlord Appointment Period, then Tenant,
within the period of twenty (20) Business Days after the Landlord
Appointment Period (the "TENANT APPOINTMENT PERIOD"), shall appoint to act
as such impartial natural person an attorney who is a partner of a law
firm of 50 lawyers or more that has an office in New York City. The person
appointed as such impartial person, either by agreement of the parties or
otherwise, is herein referred to as the "IMPARTIAL PERSON". Within five
(5) Business Days after the Impartial Person is appointed, he shall
execute and deliver to Landlord and Tenant an oath swearing that he shall
fairly and impartially perform the functions required of him under this
Section 38.04. The fees of the Impartial Person shall be divided and borne
equally between Landlord and Tenant. If Tenant shall not appoint the
Impartial Person prior to the end of the Tenant Appointment Period, then
(A) Tenant's Rescission Right (as hereinafter defined) with respect to
such Renewal Option shall be null and void (and, accordingly, the Renewal
Option in question shall be deemed irrevocably exercised), and (B)
Landlord and Tenant shall thereafter attempt in good-faith to agree upon
the Fair Market Fixed Rent for the Renewal Term in question.
(2) On the tenth (10th) Business Day after the
Impartial Person is appointed or selected (time being of the essence),
Landlord and Tenant shall each simultaneously submit to the Impartial
Person in sealed envelope a written statement setting forth its opinion of
the Fair Market Fixed Rent for the Renewal Term in question; the statement
submitted by Landlord pursuant to this sentence being herein called
"LANDLORD'S PRELIMINARY SUBMISSION", the statement submitted by Tenant
pursuant to this sentence being herein called "TENANT'S PRELIMINARY
SUBMISSION", and Landlord's Preliminary Submission and Tenant's
Preliminary Submission being herein collectively called "PRELIMINARY
SUBMISSIONS". Each Preliminary Submission shall set forth the Fair Market
Fixed Rent as a per rentable square foot per annum amount for the Renewal
Premises. The Impartial Person shall not open or disclose either
Preliminary Submission submitted to it except as hereinafter expressly
provided. If either Landlord or Tenant shall fail to submit its
Preliminary Submission in accordance with the provisions of this Section
38.04(b)(2), then the party which submitted a Preliminary Submission may
notify the other party of such failure (which notice shall refer
specifically to this Section 38.04(b)(2)), and if, in such event, the
other party does not, within a period of seven (7) days after its receipt
of such notice, submit its Preliminary Submission, then (I) Tenant's
Rescission Right (as hereinafter defined) with respect to such Renewal
Option shall be null and void (and, accordingly, the Renewal Option in
question shall be deemed irrevocably exercised), and (II) the only
Preliminary Submission which was made in accordance with this Section
38.04(b)(2) shall promptly thereafter be opened by the Impartial Person,
and the Fair Market Fixed Rent at issue shall be the determination thereof
as set forth in such Preliminary Submission, which determination shall be
conclusive and binding upon both Landlord and Tenant. If neither Landlord
or Tenant shall have submitted its Preliminary Submission in accordance
with the provisions
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of this Section 38.04(b)(2), then (A) Tenant's Rescission Right (as
hereinafter defined) with respect to such Renewal Option shall be null and
void (and, accordingly, the Renewal Option in question shall be deemed
irrevocably exercised), and (B) Landlord and Tenant shall thereafter
attempt in good-faith to agree upon the Fair Market Fixed Rent for the
Renewal Term in question.
(3) If both Landlord and Tenant submit their
respective Preliminary Submissions in accordance with the provisions of
Section 38.04(b)(2) above, then the Impartial Person, within three (3)
Business Days after his receipt of both the Preliminary Submissions, shall
concurrently open the same in the presence of Landlord and Tenant and (i)
deliver to Tenant a copy of Landlord's Preliminary Submission, and (ii)
deliver to Landlord a copy of Tenant's Preliminary Submission. Landlord
and Tenant shall reasonably cooperate to effect a time and place to meet
with the Impartial Person to effectuate the opening and delivering the
Preliminary Submissions in accordance with the foregoing provisions of
this Section 38.04(b)(3).
(4) Tenant, within the period of fifteen (15)
Business Days after it receives the Landlord's Preliminary Submission from
the Impartial Person (herein called the "RESCISSION PERIOD"), shall have
the right to rescind its exercise of the Renewal Option in question (which
right, with respect to any Renewal Option, being herein called "TENANT'S
RESCISSION RIGHT"), which right may be exercised only be giving Landlord
written notice thereof (each, a "TENANT'S RESCISSION NOTICE") prior to the
end of the Rescission Period (time being of the essence). If, with respect
to any Renewal Option, Tenant, for any reason, does not give Tenant's
Rescission Notice prior to the end of the Rescission Period, then (i)
Tenant's Rescission Right with respect to such Renewal Option in question
shall be null and void (and, accordingly, such Renewal Option shall be
deemed irrevocably exercised), and (ii) Landlord and Tenant shall
thereafter attempt in good-faith to agree upon the Fair Market Fixed Rent
for the Renewal Term in question. If, with respect to any Renewal Option,
Tenant does give Tenant's Rescission Notice prior to the end of the
Rescission Period, then (x) Tenant's exercise of such Renewal Option shall
be irrevocably rescinded, and (y) such Renewal Option (and, if applicable,
any other outstanding Renewal Option) shall be rendered null and void
(and, accordingly, this lease shall end upon the date then set forth for
the expiration thereof).
(c) If, with respect to any Renewal Option, (i) Tenant
shall not have given Tenant's Rescission Notice prior to the end of the
Rescission Period, (ii) the Fair Market Fixed Rent for the Renewal Term in
question shall not have been finally determined pursuant to the Section 38.04(b)
above, and (iii) Landlord and Tenant, as of the date that is two hundred and
seventy (270) days prior to the date upon which the Renewal Term in question
will commence (which date being herein called "270-DAY DATE"), shall not have
agreed upon Fair Market Fixed Rent for such Renewal Term, then, at anytime after
such 270-Day Date and prior to an agreement between Landlord and Tenant as to
such Fair Market Fixed Rent, either Landlord or Tenant may require that the Fair
Market Fixed Rent for such Renewal Term be determined by appraisal in accordance
with the provisions of Section 38.05 below (any such notice being herein called
a "RENEWAL APPRAISAL NOTICE").
(d) Upon the final determination of the Fair Market Fixed
Rent for any Renewal Term (pursuant to the provisions of Section 38.04(b) above,
by appraisal in accordance with the provisions of Section 38.05 hereof, or by an
agreement
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of Landlord and Tenant), the same shall constitute the Fixed Rent for such
Renewal Term as hereinabove provided.
(e) If, as of the commencement of any Renewal Term, the
Fair Market Fixed Rent therefor shall not have been finally determined, then (i)
for the period from the commencement of such Renewal Term until the date that
such Fair Market Fixed Rent is finally determined (herein called the
"PRE-DETERMINATION PERIOD"), Tenant shall make payments, on account of the Fixed
Rent for the Renewal Term (as and when Fixed Rent is payable hereunder
therefor), at a per rentable square foot per annum rate equal to average per
rentable square foot per annum rate of Fixed Rent for the Premises as of the
date immediately preceding the commencement of such Renewal Term, and (ii) upon
the final determination of such Fair Market Fixed Rent, the Fixed Rent for such
Renewal Term shall be such Fair Market Fixed Rent, and (x) if the payments made
by Tenant on account of such Fixed Rent during the Pre-Determination Period were
less than such Fair Market Fixed Rent payable for such period, then Tenant shall
pay to Landlord the amount of such deficiency, together with interest thereon at
the Base Rate, within twenty (20) days after demand therefor, or (y) if the
payments made by Tenant on account of the Fixed Rent for such Renewal Term
during the Pre-Determination Period were in excess of such Fair Market Fixed
Rent payable for such period, then Landlord shall credit the amount of such
excess, together with interest thereon at the Base Rate, against future
installments of Fixed Rent and/or Additional Charges payable by Tenant.
38.05. If, with respect to the Fair Market Fixed Rent for any
Renewal Term, either Landlord or Tenant shall serve a Renewal Appraisal Notice,
then such Fair Market Fixed Rent shall be determined by appraisal in accordance
with the following:
(a) Within thirty (30) days after the date that is the
Renewal Appraisal Notice is received by the party to whom it was sent, each of
Landlord and Tenant, by notice to the other party, shall appoint an appraiser
(the two appraisers so appointed being herein collectively called the "INITIAL
APPRAISERS"). If either Landlord or Tenant shall fail to timely appoint an
Initial Appraiser within such 30-day period, then the party which appointed an
Initial Appraiser may notify the other party of such failure (which notice shall
refer specifically to this Section 38.05(a)), and if, in such event, the other
party does not, within a period of seven (7) days after its receipt of such
notice, appoint the second Initial Appraiser, then the appointed Initial
Appraiser shall independently select and appoint the second Initial Appraiser,
who shall be impartial, within ten (10) days after the expiration of such 7-day
period.
(b) Within thirty (30) days after the appointment of both
Initial Appraisers, (i) Landlord shall submit to each of the Initial Appraisers,
in a sealed envelope, a written statement setting forth Landlord's good-faith
determination of the Fair Market Fixed Rent for the applicable Renewal Term (as
a per rentable square foot per annum amount for the Renewal Premises therefor),
which determination shall be not greater than 105%, and not less than 95%, of
the determination of such Fair Market Fixed Rent set forth in Landlord's
Preliminary Submission, if any (such sealed written determination of Landlord
being herein called "LANDLORD'S FAIR MARKET DETERMINATION"), and (ii) Tenant
shall each submit to each of the Initial Appraisers, in a sealed envelope, a
written statement setting forth Tenant's good-faith determination of the Fair
Market Fixed Rent for the applicable Renewal Term (as a per rentable square foot
per annum amount for the Renewal Premises therefor), which determination shall
be not greater than 105%, and not less than 95%, of the determination of such
Fair Market Fixed Rent set forth in Tenant's Preliminary Submission, if any
(such sealed written determination of Tenant being herein called "TENANT'S FAIR
MARKET
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DETERMINATION") (Landlord's Fair Market Determination and Tenant's Fair Market
Determination are herein collectively called the "FAIR MARKET DETERMINATIONS").
Neither of the Fair Market Determinations shall be opened except as and when
hereinafter expressly provided. If either Landlord or Tenant shall fail to
submit its Fair Market Determination in accordance with the provisions of this
Section 38.05(b), then the party which made a Fair Market Determination may
notify the other party of such failure (which notice shall refer specifically to
this Section 38.05(b)), and if, in such event, the other party does not, within
a period of seven (7) days after its receipt of such notice, submit its Fair
Market Determination, then the only Fair Market Determination which was made in
accordance with this Section 38.05(b) shall promptly thereafter be opened by the
Initial Appraisers, and the Fair Market Fixed Rent at issue shall be such Fair
Market Determination, which Fair Market Determination shall be conclusive and
binding upon both Landlord and Tenant.
(c) If both Landlord and Tenant submit their respective
Fair Market Determinations in accordance with the provisions of Section 38.05(b)
above, then the Initial Appraisers shall arrange a meeting (herein called the
"INITIAL APPRAISER MEETING") to be held at the Building office (or at such other
place as is mutually agreeable to the Initial Appraisers and located in the
Borough of Manhattan) during Business Hours within fifteen (15) days after the
receipt by both Initial Appraisers of each of the Fair Market Determinations for
the purpose of opening the Fair Market Determinations. Landlord and Tenant shall
have not less than ten (10) days notice of the date, time and location of the
Initial Appraiser Meeting and shall have the right to have its representatives
present thereat. At the Initial Appraiser Meeting, (i) the Fair Market
Determinations shall be opened by each of the Initial Appraisers and copies
thereof shall be distributed to Landlord and Tenant, and (ii) thereafter, each
of Landlord and Tenant may submit to the Initial Appraisers such written
evidence in support of its Fair Market Determination as it deems appropriate.
(d) Within twenty (20) days after the Initial Appraiser
Meeting, each of the Initial Appraisers shall independently select the Fair
Market Determination (as between Landlord's Fair Market Determination and
Tenant's Fair Market Determination which, in his opinion, more accurately
reflects the Fair Market Fixed Rent at issue, and shall notify Landlord, Tenant
and the other Initial Appraiser of such selection in writing. If the two Initial
Appraisers concur in such selection, then the Fair Market Fixed Rent at issue
shall be as set forth in the selected Fair Market Determination, which Fair
Market Determination shall be conclusive and binding upon both Landlord and
Tenant.
(e) If the Initial Appraisers do not concur in such
selection, then the two Initial Appraisers, within ten (10) days after the end
of such 20-day period, shall jointly appoint a mutually agreeable third
appraiser who shall be impartial (herein called the "THIRD APPRAISER"). If the
Initial Appraisers fail to agree upon and appoint the Third Appraiser within
such 10-day period, then either Landlord or Tenant may request that the American
Arbitration Association or its successor ("AAA") appoint the Third Appraiser
within twenty (20) days after such request, and both parties shall be bound by
any appointment so made within such 20-day period. If the Third Appraiser shall
not have been appointed within such 20-day period, then either Landlord or
Tenant may apply to any court having jurisdiction to make such appointment.
(f) The Third Appraiser shall subscribe and swear to an
oath to fairly and impartially select the Fair Market Determination which, in
his opinion, more accurately reflects the
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Fair Market Fixed Rent at issue. The Third Appraiser shall conduct such hearings
as he deems appropriate (or such hearings as either Landlord or Tenant shall
request). Within twenty (20) days after the Third Appraiser has been appointed,
the Third Appraiser shall select the Fair Market Determination (i.e., either
Landlord's Fair Market Determination or Tenant's Fair Market Determination)
which, in his opinion, more accurately reflects the Fair Market Fixed Rent at
issue, and shall notify Landlord, Tenant and each of the Initial Appraisers of
such selection in writing. The Fair Market Fixed Rent shall be as set forth in
the Fair Market Determination selected by the Third Appraiser, which Fair Market
Determination shall be conclusive and binding upon both Landlord and Tenant.
(g) In connection with any appraisal conducted pursuant to
this Section 38.05, Landlord, if required pursuant to the terms of a Mortgage,
may serve a copy of such notice on each Mortgagee, and allow such Mortgagee the
right to participate in such appraisal. Such right of participation shall
include, without limitation, (x) the right to be represented by counsel, (y)
submit evidence and (z) argument, but all submissions, designations, elections
and other actions shall be made or taken by Landlord.
(h) The fees and expenses of any such appraisal shall be
borne by the parties equally, but each party shall bear the expense of the
Initial Appraiser appointed by it and its attorneys and experts as well as any
expenses of presenting its own proof.
(i) Landlord and Tenant shall each have the right to
submit such data and memoranda to each of the appraisers in support of their
respective positions as they may deem necessary or appropriate.
(j) Each appraiser shall be a qualified member of the
American Institute of Real Estate Appraisers (or any successor of such
Institute, or if such organization or successor shall no longer be in existence,
a recognized national association or institute of appraisers) who shall not be a
sole practitioner, and shall have at least ten (10) years' experience in leasing
and valuation of properties which are similar in character to the Building.
(k) It is expressly understood, and each appraiser shall
acknowledge and agree, that any determination of the Fair Market Fixed Rent for
any Renewal Term shall be based solely on the definition thereof as set forth in
Section 38.03 hereof, including the assumptions and criteria set forth in such
definitions. The appraisers shall not have the power to add to, modify or change
any such definitions or any other provisions of this lease, and the jurisdiction
of the appraisers is accordingly limited.
ARTICLE 39
Definition of Landlord; Condominium Provisions
39.01. For purposes of this lease, the following terms shall have
the following meanings:
"PREMISES UNITS", at anytime, shall mean, collectively,
all the Units which encompass any leasable area which is located within the
Premises at such time. As of the date hereof, the Premises Units are the Units
known as Units 41, 42, 43, 44, 45, 46, 48, 49 and 50, and, as of the 47th Floor
Commencement Date, the Premises Units shall include the Unit known as Unit 47.
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"LANDLORD" shall mean: (i) during the period that the
Condominium is in effect, the owner, at the time in question, of the Premises
Units, or of a leasehold estate in the Premises Units, so that in the event of
any transfer or transfers of title to the Premises Units or of such leasehold
estate, the transferor shall be and hereby is relieved and freed of all
obligations of Landlord under this lease accruing after such transfer, and it
shall be deemed, without further agreement, that such transferee has assumed and
agreed to perform and observe all obligations of Landlord hereunder accruing
during the period it is the holder of title to the Premises Units or of a
leasehold estate in the Premises Units; provided, however, that where
appropriate in the context of this lease to reflect the parties intention that,
except as set forth in Section 39.03(c) below, that the rights and obligations
of the parties hereto shall not be affected by the existence of the Condominium
(but never with respect to the right to receive rent, or the making, giving or
receiving of notices, consents, approvals or elections) such term shall also
include the persons referred to in Section 39.03(b) below, subject to the
provisions of Section 39.03(c) below; and (ii) during any other period, the
owner, at the time in question, of the Building, or of a leasehold estate in the
Building, so that in the event of any transfer or transfers of title to the
Building or of such leasehold estate, the transferor shall be and hereby is
relieved and freed of all obligations of Landlord under this lease accruing
after such transfer, and it shall be deemed, without further agreement, that
such transferee has assumed and agreed to perform and observe all obligations of
Landlord hereunder accruing during the period it is the holder of title to the
Building or of a leasehold estate in the Building.
The term "BOARD" shall mean the "board of managers" as
such term is used in the Condominium Act.
The term "COMMON OWNER" shall have the meaning ascribed
thereto in the Condominium Declaration.
39.02. Landlord hereby covenants to Tenant that, at all times during
the term hereof, the Premises Units shall be owned or leased, as the case may
be, by a single entity. If this provision is violated, then, without limiting
any other remedies available to Tenant against Landlord, the owners or lessees,
as the case may be, of the Premises Units shall be jointly and severally liable
for the obligations of Landlord hereunder.
39.03. (a) Landlord, as of the date hereof, is (i) the lessee of,
and the holder of various reversionary interests in, the Units which, as of the
date hereof, are IDA Units (inclusive of the common interest in the common
elements of the Condominium appurtenant thereto), (ii) the owner of fee title
to, and the lessee of the Units which, as of the date hereof, are not IDA Units
(including without limitation the Premises Units) (inclusive of the common
interest in the common elements of the Condominium appurtenant thereto), and
(iii) the lessee of the common elements of the Condominium (such fee,
reversionary and leasehold estates being herein collectively called "LANDLORD'S
CURRENT ESTATES"). In addition, Landlord, as of the date hereof, is the Common
Owner under the Condominium Declaration.
(b) Landlord, as the holder of all of Landlord's Current
Estates and with the intent to cause this lease to run with and bind all
Landlord's Current Estates and thereby bind any and all future holders of any or
all thereof, and as Common Owner and with the intent to bind all future Common
Owners as well as all Boards, hereby agrees that neither the Condominium
Declaration nor any provision thereof shall be effective to limit or otherwise
adversely affect Tenant's rights under this lease, and, without limiting the
generality of the foregoing, that (i) Tenant shall be deemed in compliance with
the Condominium Declaration so long as Tenant is in compliance with
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Tenant's obligations under this lease, (ii) Tenant shall be under no obligation
to obtain any consent or approval of any person pursuant to the Condominium
Declaration, unless Tenant has an obligation to obtain the consent or approval
of such person under the terms of this lease, and (iii) Landlord shall grant or
deny consent or approval to Tenant in accordance with the terms of this lease,
irrespective of the provisions of the Condominium Declaration or the regime
created thereby, and any such consent to approval granted by Landlord pursuant
to this lease shall bind the Common Owner and/or the Board.
(c) Notwithstanding the foregoing provisions of this
Section 39.03, in the event of a breach of the Landlord's obligations under this
lease, the following provisions shall apply:
(1) Landlord (i.e., the then Landlord, determined
without regard to the proviso to clause (i) of the definition of Landlord set
forth above), subject to the applicable provisions of this lease (including
without limitation Section 18.03 and Section 35.03 hereof), shall be liable for
such breach, even if such breach occurs, in whole or in part, by reason of an
act or omission of any holder of a Landlord's Current Estate or any Board.
(2) Tenant's sole recourse against the holder of any
of Landlord's Current Estates (other than the then Landlord, determined without
regard to the proviso to clause (i) of the definition of Landlord set forth
above) or any Board on account of any such breach shall be an action for
specific performance or injunction; it being agreed that no holder of any of
Landlord's Current Estates (other than the then Landlord, determined without
regard to the proviso to clause (i) of the definition of Landlord set forth
above) and no Board shall ever be liable to Tenant in damages on account of a
breach of this lease. If Tenant shall prevail in any such action for specific
performance or injunction, then Landlord shall reimburse Tenant its reasonable
attorney's fees incurred in connection therewith.
(d) Landlord subject to and in accordance with the
provisions of Section 18.02 hereof (applied mutatis mutandis) shall indemnify
and hold harmless Tenant from and against any claims made by the holder of any
of Landlord's Current Estates (other than the then Landlord) and/or any Board,
which relate to the enforcement of the Condominium Declaration (or the regime
thereby created) against Tenant in contravention of the provisions of Section
39.03(b) hereof.
39.04. Nothing contained in this lease shall be construed as
requiring Landlord or any other party to keep the Condominium in effect during
the term of this lease (or any portion thereof), and Tenant acknowledges that
the same may be terminated during the term hereof. No termination of the
Condominium (howsoever, and for whatever reason, effected) occurring during the
term of this lease shall in any way affect the validity of this lease or the
rights and obligations of the parties hereunder.
ARTICLE 40
Arbitration
40.01. If, pursuant to any express provision of this lease, either
Landlord is entitled, Tenant is entitled, or either of Landlord or Tenant are
entitled, to submit a particular dispute to arbitration in accordance with the
provisions of this Article 40, then each party so entitled to submit the dispute
in question to arbitration may do so only by delivering a notice thereof to the
other party (each, an "ARBITRATION NOTICE"), and
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if such provision of this lease shall set forth a specific period within which
such party may submit the dispute to arbitration, then such Arbitration Notice
must be served prior to the expiration of such time period (time being of the
essence). For purposes of this Article 40, the party delivering an Arbitration
Notice shall be referred to as the "INITIATING PARTY", and the party receiving
an Arbitration Notice shall be referred to as the "RESPONDING PARTY". Each
Arbitration Notice shall (i) specifically set forth the Article and Section of
this lease in which are located the provisions hereof expressly entitling the
Initiating Party to submit the dispute in question to arbitration (such
provisions being herein called the "AUTHORIZING PROVISIONS"), (ii) set forth,
with reasonable specificity, the dispute being submitted to arbitration pursuant
to such Authorizing Provisions and the issue to be determined by arbitration
(which issue shall be consistent with the Authorizing Provisions) (such issue
being herein called the "ARBITRATION ISSUE"), and (iii) appoint, and set forth
the name and address of, an arbitrator (herein called the "FIRST ARBITRATOR") to
act in connection with the dispute in question.
40.02. In each case that an Arbitration Notice is delivered in
accordance with the provisions of this lease, the following provisions shall
apply:
(a) The Responding Party, within eight (8) Business Days
after its receipt of the Arbitration Notice, shall, by notice to Initiating
Party, appoint, and provided the name and address of, a second arbitrator
(herein called the "SECOND ARBITRATOR") to act in connection with the dispute in
question; it being agreed that if (x) the Responding Party shall fail to appoint
a Second Arbitrator within such 8 Business Day period, and (y) such failure
shall continue for 3 Business Days after the Responding Party receives a notice
of such failure from the Initiating Party (which notice shall expressly refer to
this Section 40.02(a)), then the First Arbitrator may appoint the Second
Arbitrator).
(b) After the appointment of both the First Arbitrator and
the Second Arbitrator (collectively, the "INITIAL ARBITRATORS"), the Initial
Arbitrators shall jointly appoint, by written instrument delivered to both the
Initiating Party and the Responding Party, a third arbitrator to act in
connection with the dispute in question (herein called the "THIRD ARBITRATOR");
it being agreed that if the Initial Arbitrators shall fail to appoint the Third
Arbitrator within the aforesaid 5 Business Day period, then either the
Initiating Party or the Responding Party may apply to the AAA, or if the AAA
shall refuse or fail to act, to a court of competent jurisdiction in the State
of New York, for the appointment of the Third Arbitrator.
40.03. Promptly after the appointment of the Third Arbitrator, each
of the First Arbitrator, the Second Arbitrator and the Third Arbitrator shall
proceed to decide the Arbitration Issue. The arbitrators shall be instructed to
render their respective decisions, in writing, within eight (8) Business Days
after the appointment of the Third Arbitrator. The written decision of any two
(2) of the arbitrators shall be binding and conclusive upon both the Initiating
Party and the Responding Party.
40.04. Landlord and Tenant shall each have the right to appear and
be represented by counsel before any arbitrator(s) and to submit such data and
memoranda in support of their respective positions with respect to the
Arbitration Issue as may be reasonably necessary or appropriate in the
circumstances; it being agreed that if a dispute shall arise as to whether any
such data or memoranda is reasonable arises, a majority of the arbitrators are
hereby authorized to resolve same.
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40.05. All the reasonable fees of the arbitrators appointed under
Article 40 (whether by Tenant, Landlord, the AAA or a court) shall be paid by
the non-prevailing party in the arbitration. In addition, the non-prevailing
party shall reimburse the prevailing party the reasonable out-of-pocket costs
(including without limitation reasonable attorneys' fees and the reasonable
costs of producing witnesses and experts) incurred by the prevailing party in
connection with the arbitration.
40.06. With respect to any conclusive and binding decision of the
arbitrator(s) rendered pursuant to the provisions of this Article 40, judgment
may be entered thereupon in any court of competent jurisdiction. In rendering
any decision, the arbitrator(s) shall have no power to modify any of the
provisions of this lease, and the jurisdiction of arbitrator(s) is limited
accordingly, it being specifically understood that the arbitrator(s), in any
arbitration under this Article 40, shall only have authority to decide the
Arbitration Issue in question, and in no event shall the arbitrator(s) have any
authority to award damages.
40.07. Each "ARBITRATOR" appointed hereunder (whether by Landlord,
Tenant or any other person(s), organization or court) shall not then be employed
by Landlord, Tenant or any Affiliate of Landlord or Tenant, and, in all other
respects, shall be impartial. In addition, each arbitrator (x) shall meet the
specific qualifications set forth in the applicable Authorizing Provisions, or
(y) if no such qualifications are so set forth in the Authorizing Provisions,
shall be an attorney with at least ten (10) years experience in commercial real
estate law in the Borough of Manhattan.
40.08. Landlord and Tenant shall not be deemed to have agreed to
have any dispute/issue arising out of this lease determined by arbitration
unless a determination in such manner shall be expressly provided hereunder.
ARTICLE 41
Structural Work and Exterior Improvements
41.01. For the purposes of this lease, the following terms shall
have the following meanings:
"TENANT'S PENTHOUSE ROOF AREA" shall mean the area on
the roof of the Building that is shown cross-hatched on Exhibit X-1
attached hereto.
The "BUILDING PENTHOUSE" shall mean the existing
penthouse of the Building which is located in the area on the roof of the
Building that is shown cross-hatched on Exhibit X-2 attached hereto.
"ANCILLARY TELECOMMUNICATIONS ROOF AREAS" shall mean the
areas on the roof of the Building that is shown hatched on Exhibit X-3
attached hereto, which area is adjacent to the Building Penthouse.
The "REMAINING ROOF AREA" shall mean the entire area on
the roof of the Building, other than Tenant's Penthouse Roof Area.
"TENANT'S FUEL TANK AREA" shall mean the area on the
subcellar level (i.e., the third below-grade level) of the Building that
is shown cross-hatched on Exhibit X-4 attached hereto.
"TENANT'S 20TH FLOOR ELECTRICAL POWER AREAS" shall mean,
collectively, the two (2) areas on the twentieth
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(20th) floor of the Building that are shown hatched on Exhibit X-5
attached hereto, and denoted thereon as "Area of UPS" and "Area of
Electrical Distribution", respectively.
"TENANT'S STRUCTURAL WORK" shall mean, collectively, the
following work: (i) the installation of a structural support system for
the roof of the Building in accordance with the Structural Work
Preliminary Plans; (ii) the stiffening of certain of the Building's
exterior columns on the forty-eighth (48th), forty-ninth (49th) and
fiftieth (50th) floors of the Building, by plating the inside surfaces
thereof in accordance with the Structural Work Preliminary Plans; (iii)
subsequent to the work described in clauses (i) and (ii) above having been
performed, the removal of certain of the interior columns on the fiftieth
(50th) floor of the Building in accordance with the Structural Work
Preliminary Plans; and (iv) any other work ancillary thereto which is
either shown on the Structural Work Preliminary Plans or otherwise
approved by Landlord (in its sole discretion).
The "STRUCTURAL WORK PRELIMINARY PLANS" shall mean the
preliminary plans listed on Exhibit X-6 attached hereto.
The "STRUCTURAL WORK IMPROVEMENTS" shall mean the
improvements, betterments, fixtures and equipment installed in the
Building by Tenant as part of Tenant's Structural Work.
The "PENTHOUSE WORK PRELIMINARY PLANS" shall mean the
preliminary plans attached hereto as Exhibit X-7.
41.02. (a) Tenant, subject to and in accordance with the provisions
of Article 11 and the following provisions of this Article 41, shall have the
right to perform Tenant's Structural Work. For purposes of applying Article 11
hereof to Tenant's Structural Work, all Tenant's Structural Work shall be deemed
Exterior Material Alterations and Initial Alterations. In addition, Tenant's
Structural Work shall be deemed Pre-Authorized Alterations, but only to the
extent that (i) such work is set forth on the Structural Work Preliminary Plans,
and (ii) such work is consistent with the provisions of Section 41.02(b) below.
(b) Tenant acknowledges and agrees as follows with respect to
Tenant's Structural Work: (i) Tenant's Structural Work shall be such that, after
its completion, the roof of the Building shall have a load capacity (in all
locations) which is equal to or greater than the load capacity of the roof as of
the date hereof; (ii) no Structural Work Improvements shall have a height or
elevation (measured from the structural roof) that is greater than the height or
elevation therefor as set forth on the Structural Work Preliminary Plans; and
(iii) no Structural Work Improvements shall illuminate any part of the roof of
the Building.
(c) (1) Tenant shall commence Tenant's Structural Work (if at
all) promptly after Landlord's approval of the plans and specifications therefor
pursuant to Section 11.02(b) and Section 41.02(a) above, and, in all events,
shall commence Tenant's Structural Work (if at all) on or prior to the
Structural Work Outside Start Date (as hereinafter defined). If, for any reason,
Tenant shall fail to commence Tenant's Structural Work on or prior to the
Structural Work Outside Start Date, then, notwithstanding anything to the
contrary contained in this Section 41.02, Tenant shall no longer have the right
to perform Tenant's Structural Work or any other rights under this Section
41.02. As used herein, the "STRUCTURAL WORK OUTSIDE START DATE" shall be
September 1, 1994; provided, however, that the
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Structural Work Outside Start Date shall be postponed one day for each day that
Tenant is delayed in commencing Tenant's Structural Work by reason of either (i)
one or more Events of Force Majeure, or (ii) one or more acts or omissions of
Landlord, which acts or omissions constitute a violation of this lease.
(2) Tenant, after commencing Tenant's Structural
Work (it being understood that, for purposes of this sentence only, the plating
of exterior columns alone shall not be deemed the commencement of Tenant's
Structural Work), shall prosecute the same to completion with diligence and
continuity, and, in all events, shall complete Tenant's Structural Work on or
prior to the Structural Work Outside Completion Date (as hereinafter defined).
If, for any reason, Tenant shall fail to complete Tenant's Structural Work on or
prior to the Structural Work Outside Completion Date, then, notwithstanding
anything to the contrary contained in this Section 41.02, Landlord, in addition
to any other rights or remedies it may have under this lease (including without
limitation Landlord's rights and remedies under Article 27 hereof, but
specifically excluding Landlord's right to terminate this lease as set forth in
Article 22 hereof and any right to re-enter the Premises under Article 23
hereof) as a result of such failure, shall have the following rights and
remedies (which shall be cumulative): (i) Landlord shall have the right to cause
Tenant to prosecute such work after Business Hours (as well as during Business
Hours), until the same is completed, and to employ overtime labor for such
purposes, all at Tenant's expense; and (ii) Landlord, unless and until it
exercises any rights it may have under Article 27 hereof, shall, in all other
events, be entitled to receive from Tenant, and Tenant shall pay to Landlord, an
amount equal to $2,000 per day for each day in the period commencing on the day
after the Structural Work Outside Completion Date and ending on the date that
Tenant actually completes Tenant's Structural Work (or, if applicable, the date
that Landlord exercises any rights it may have under Article 27 hereof), both
days inclusive. As used herein, the "STRUCTURAL WORK OUTSIDE COMPLETION DATE"
shall be December 31, 1994; provided, however, that the Structural Work Outside
Completion Date shall be postponed one day for each day that Tenant is delayed
in causing the completion of Tenant's Structural Work by reason of either (i)
one or more Events of Force Majeure, or (ii) one or more acts or omissions of
Landlord, which acts or omissions constitute a violation of this lease.
(d) (1) Notwithstanding anything to the contrary
contained in this lease, the Structural Work Improvements shall not be deemed
"Tenant's Improvements", but rather shall be deemed part of the "Base Building"
(except that, for purposes of Section 8.01(c)(iii) only, the Structural Work
Improvements shall be deemed Tenant's Improvements).
(2) Tenant, in respect of Tenant's Structural Work
and the Structural Work Improvements, hereby agrees as follows: (i) Tenant shall
pay, or reimburse Landlord, all costs reasonably incurred by Landlord in
effecting repairs or replacements to the Real Property (including without
limitation repairs and replacements to the Structural Work Improvements)
pursuant to Article 13 hereof or otherwise, to the extent that the need for such
repair or replacement arises out of any defect or design deficiencies in
Tenant's Structural Work or the Structural Work Improvements of which Tenant is
notified, or otherwise has knowledge of, prior to the expiration or earlier
termination of this lease (or, in the case of an earlier termination of this
lease pursuant to Article 22 hereof, the Then Current Expiration Date) (except
to the extent that the need for any such repair or replacement so arising arises
out of any abuse, misuse, neglect or damage of or to the Structural Work
Improvements occurring after the completion of Tenant's Structural Work, normal
wear and tear of or to the Structural Work Improvements, or the failure properly
to maintain the same
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after the completion of Tenant's Structural Work); (ii) Tenant, subject to and
in accordance with the provisions of Section 18.01 hereof (applied mutatis
mutandis), shall indemnify and hold harmless Landlord from and against any and
all claims brought prior to the expiration or earlier termination of this lease
(or, in the case of an earlier termination of this lease pursuant to Article 22
hereof, the Then Current Expiration Date) to the extent the such claims arise
out of any defect or design deficiencies in Tenant's Structural Work or the
Structural Work Improvements (except to the extent that such claims so arising
arise out of any abuse, misuse, neglect or subsequent damage of or to the
Structural Work Improvements occurring after the completion of Tenant's
Structural Work, normal wear and tear of or to the Structural Work Improvements,
or the failure properly to maintain the same after the completion of Tenant's
Structural Work); and (iii) Tenant shall pay to, or reimburse, Landlord all
other damages sustained or costs incurred by Landlord prior to the expiration or
earlier termination of this lease (or, in the case of an earlier termination of
this lease pursuant to Article 22 hereof, the Then Current Expiration Date) to
the extent that such damages or costs arise out of any defect or design
deficiencies in Tenant's Structural Work or the Structural Work Improvements
(except to the extent that such damages or costs so arising arise out of any
abuse, misuse, neglect or subsequent damage of or to the Structural Work
Improvements occurring after the completion of Tenant's Structural Work, normal
wear and tear of or to the Structural Work Improvements, or the failure properly
to maintain the same after the completion of Tenant's Structural Work). The
foregoing provisions of this Section 41.02(d)(2) shall not be deemed, in any
way, to limit any obligations or liability which Tenant might otherwise have on
account of Tenant's Structural Work or the Structural Work Improvements under
this lease or otherwise at law or in equity. The foregoing provisions of this
Section 41.02(d)(2) shall be subject to the provisions of Section 18.03 hereof.
In addition, Tenant, promptly upon the completion of Tenant's Structural Work,
shall obtain for Landlord (in Landlord's name) a roof warranty for the roof of
the Building as the same exists upon the completion of Tenant's Structural Work,
which roof warranty (I) shall be issued by one or more of the roof contractors
performing Tenant's Structural Work (or the manufacturer of the roofing
materials installed), (II) shall be in substantially the same form as Landlord's
existing roof warranty issued by GAF Building Materials Corporation (which
warranty is issued to ESG on behalf of the Building) (such existing roof
warranty being herein called "LANDLORD'S EXISTING ROOF WARRANTY"), and (III)
shall run for a period of not less than fifteen (15) years from the date of the
completion of the Tenant's Structural Work.
(e) (1) If (A) the Section 12.02(c) Work includes
removal and restoration work in respect of the Structural Work Improvements, and
(B) Tenant is obligated to perform the same pursuant to Section 12.02(c)(2)
hereof, then Tenant, with respect to the Section 12.02(c) Work in respect of the
Structural Work Improvements and the improvements, betterments, fixtures and
equipment installed as part of such Section 12.02(c) Work, agrees as follows:
(i) Tenant shall pay, or reimburse Landlord, all costs reasonably incurred by
Landlord in effecting repairs or replacements to the Real Property (including
without limitation repairs and replacements to such improvements, betterments,
fixtures and equipment) pursuant to Article 13 hereof or otherwise, to the
extent that the need for such repair or replacement arises out of any defect or
design deficiencies in the such Section 12.02(c) Work or such improvements,
betterments, fixtures and equipment of which Tenant is notified, or otherwise
has knowledge of, prior to the fifth (5th) anniversary of the completion of such
Section 12.02(c) Work (except to the extent that the need for any such repair or
replacement so arising arises out of any abuse, misuse, neglect or damage of or
to such improvements, betterments, fixtures and
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equipment occurring after the completion of such Section 12.02(c) Work, normal
wear and tear of or to such improvements, betterments, fixtures and equipment,
or the failure properly to maintain the same after the completion of such
Section 12.02(c) Work); (ii) Tenant, subject to and in accordance with the
provisions of Section 18.01 hereof (applied mutatis mutandis), shall indemnify
and hold harmless Landlord from and against any and all claims brought prior to
the fifth (5th) anniversary of the completion of such Section 12.02(c) Work to
the extent that such claims arise out of any defect or design deficiencies in
such Section 12.02(c) Work or such improvements, betterments, fixtures and
equipment (except to the extent that such claims so arising arise out of any
abuse, misuse, neglect or subsequent damage of or to such improvements,
betterments, fixtures and equipment occurring after the completion of such
Section 12.02(c) Work, normal wear and tear of or to such improvements,
betterments, fixtures and equipment, or the failure properly to maintain the
same after the completion of such Section 12.02(c) Work); and (iii) Tenant shall
pay to, or reimburse, Landlord all other damages sustained or costs incurred by
Landlord prior to the fifth (5th) anniversary of the completion of such Section
12.02(c) Work to the extent such damages or costs arise out of any defect or
design deficiencies in such Section 12.02(c) Work or such improvements,
betterments, fixtures and equipment (except to the extent that such damages or
costs so arising arise out of any abuse, misuse, neglect or subsequent damage of
or to such improvements, betterments, fixtures and equipment occurring after the
completion of such Section 12.02(c) Work, normal wear and tear of or to such
improvements, betterments, fixtures and equipment, or the failure properly to
maintain the same after the completion of such Section 12.02(c) Work). The
foregoing provisions of this Section 41.02(e)(1) shall not be deemed, in any
way, to limit any obligations or liability which Tenant might otherwise have on
account of the Section 12.02(c) Work in respect of the Structural Work
Improvements under this lease or otherwise at law or in equity. The foregoing
provisions of this Section 41.02(e)(1) shall be subject to the provisions of
Section 18.03 hereof. In addition, Tenant, promptly upon the completion of the
Section 12.02(c) Work in respect of the Structural Work Improvements, shall
obtain for Landlord (in Landlord's name) a roof warranty for the roof of the
Building as the same exists upon the completion of the Section 12.02(c) Work in
respect of the Structural Work Improvements, which roof warranty (I) shall be
issued by one or more of the roof contractors performing such Section 12.02(c)
Work (or the manufacturer of the roofing materials installed), (II) shall be in
substantially the same form as Landlord's Existing Roof Warranty, and (III)
shall run for a period of not less than fifteen (15) years from the date of the
completion of such Section 12.02(c) Work.
(2) If Landlord, pursuant to Section 12.02(c)(3),
elects to perform the Section 12.02(c) Work in respect of the Structural Work
Improvements at Tenant's expense, then, without limiting the costs for which
Tenant shall be obligated to reimburse Landlord under Section 12.02(c)(3),
Tenant shall reimburse Landlord the costs incurred by Landlord in obtaining (in
Landlord's name) a roof warranty for the roof of the Building as the same exists
upon the completion of the Section 12.02(c) Work in respect of the Structural
Work Improvements, which roof warranty (I) shall be issued by one or more of the
roof contractors performing such Section 12.02(c) Work (or the manufacturer of
the roofing materials installed), (II) shall be in substantially the same form
as Landlord's Existing Roof Warranty, and (III) shall run for a period of not
less than fifteen (15) years from the date of the completion of such Section
12.02(c) Work.
(f) Tenant acknowledges the existence of ACMs in the areas
of the Building in which Tenant's Structural Work will be performed. If, as a
result of the Tenant's Structural
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Work, any ACMs in the Building are required to be removed, encapsulated or
otherwise treated by any law or requirement of public authority, then,
notwithstanding anything to the contrary contained in Article 8 hereof
(including without limitation Section 8.06 hereof), Tenant, at its expense,
shall promptly remove, encapsulate or otherwise treat such ACMs in accordance
with all laws and requirements of public authorities. All the work required
under this Section 41.02(f) shall be performed in accordance with Article 11
hereof and shall constitute Pre-Authorized Alterations and, to the extent Tenant
performs Tenant's Structural Work, Required Alterations.
41.03. (a) Tenant, subject to and in accordance with the provisions
of Article 11 and further subject to the following provisions of this Article
41, shall have the following rights:
(1) the right to install a penthouse on the roof
of the Building in Tenant's Penthouse Roof Area in accordance with the
Penthouse Work Preliminary Plans (it being further agreed that, in all
events, (A) such penthouse shall be wholly within Tenant's Penthouse Roof
Area, (B) such penthouse shall be enclosed by walls (of uniform height) on
all four sides and by a roof of uniform height on top (except that such
roof need not extend the entire penthouse, i.e., a portion thereof may not
be covered by a roof), (C) such penthouse shall be of a height or
elevation (measured from the structural roof of the Building to the top of
the roof of such penthouse) which is not greater than that set forth on
the Penthouse Work Preliminary Plans, and (D) ingress and egress to such
penthouse shall be only by means of the doors which are shown on the
Penthouse Work Preliminary Plans) (such penthouse, as installed by Tenant,
being herein called "TENANT'S PENTHOUSE"; and the portion of Tenant's
Penthouse which is covered by a roof is herein is separately referred to
as the "CLOSED PORTION" of Tenant's Penthouse and the portion of Tenant's
Penthouse which is not covered by a roof is herein separately referred to
as the "OPEN PORTION" of Tenant's Penthouse); provided, further, that if
Tenant installs Tenant's Penthouse, then Tenant, at its expense and for
the benefit of Landlord, shall cause Tenant's Penthouse to include
facilities which provides an accommodation of counterbalance to adequately
support the Building's facade cleaning rig, together with facilities for
affixing cables (such facilities are herein called the "RIG FACILITIES";
it being agreed that such Rig Facilities shall, for all purposes, be
deemed part of Tenant's Penthouse); and
(2) the right to install the partition delineated
on the Penthouse Work Preliminary Plans, which allows for direct access
from one or more of the Building's roof entrances to Tenant's Penthouse,
but not from such entrance to the balance of the roof other than by
emergency exit (such partition, as installed by Tenant, being herein
called the "PENTHOUSE ROOF PARTITION").
The work required to install Tenant's Penthouse and the Penthouse Roof Partition
is herein collectively called the "TENANT'S PENTHOUSE WORK". For purposes of
applying Article 11 hereof to Tenant's Penthouse Work, all Tenant's Penthouse
Work shall be deemed Exterior Material Alterations. In addition, Tenant's
Penthouse Work shall be deemed Pre-Authorized Alterations, but only to the
extent that (i) such work is set forth on the Penthouse Work Preliminary Plans,
and (ii) such work is otherwise consistent with the provisions of Section
41.03(a) above.
(b) If Tenant installs Tenant's Penthouse, then Tenant,
subject to and in accordance with the provisions of Articles 11 hereof and
further subject to the following provisions of this Article 41, shall have the
following rights:
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(1) the right, from time to time, to install one
or more fuel powered, diesel driven emergency generators and related
equipment in one or more locations within the Closed Portion of Tenant's
Penthouse (such emergency generators and related equipment, as installed
from time to time, being herein collectively called "TENANT'S GENERATOR
UNITS");
(2) the right, from time to time, to install one
or more fuel tanks, together with fuel pumps, in Tenant's Fuel Tank Area
(such fuel tanks and fuel pumps being herein collectively called "TENANT'S
FUEL TANK");
(3) the right, in connection with Tenant's
installation of the initial Tenant's Generator Units and the initial
Tenant's Fuel Tank, to install, on the subcellar level of the Building, a
pipe enclosure containing both fill and vent pipes (which enclosure shall
not exceed 12 inches in diameter, in the aggregate) to supply fuel from
the sidewalk to Tenant's Fuel Tank, which fuel pipe shall be located in
the location on the subcellar level of the Building delineated on Exhibit
X-4 attached hereto (such fuel pipe being herein called "TENANT'S SUPPLY
FUEL PIPE");
(4) the right, in connection with Tenant's
installation of the initial Tenant's Generator Units and the initial
Tenant's Fuel Tank, to install a one or more fuel pipes running together
from from Tenant's Fuel Tank to Tenant's Generator Units (which pipes
being herein collectively called "TENANT'S MAIN FUEL PIPES"), which
Tenant's Main Fuel Pipes shall run vertically through a single Tenant's
Section 41.09 Enclosure (it being agreed that Tenant's Main Fuel Pipes
shall run though such Tenant's Section 41.09 Enclosure within a masonry
enclosure, which masonry enclosure shall not exceed 20 inches by 20
inches), and, to the extent that Tenant's Main Fuel Pipes need to run
horizontally, the same shall be run together in locations reasonably
designated by Landlord and shall continue to be enclosed within such
masonry enclosure and otherwise as reasonably determined by Landlord;
provided, however, that Tenant's right to install any Tenant's Main Fuel
Pipes shall be conditioned upon (i) Tenant having theretofore installed,
or Tenant contemporaneously therewith installing, a Tenant's Section 41.09
Enclosure, (ii) there being sufficient space within such Tenant's Section
41.09 Enclosure to install such Tenant's Main Fuel Pipes; and
(5) the right, from time to time, to install one
or more electrical conduits connecting Tenant's Generator Units to the
Premises Floors, Tenant's 20th Floor Electrical Power Areas, and Tenant's
Fuel Tank (such electrical conduits being herein called "TENANT'S
GENERATOR ELECTRICAL CONDUITS"), all of which electrical conduits shall
run vertically through Tenant's Section 41.09 Enclosures, and, to the
extent any of such electrical conduits need to run horizontally, the same
shall be run in locations reasonably designated by Landlord; provided,
however, that Tenant's right to install any such electrical conduit shall
be conditioned upon (i) Tenant having theretofore installed, or Tenant
contemporaneously therewith installing, a Tenant's Section 41.09
Enclosure, and (ii) there being sufficient space within Tenant's Section
41.09 Enclosures to install such such electrical conduit.
Tenant's Generator Units, Tenant's Fuel Tank, Tenant's Supply Fuel Pipe,
Tenant's Main Fuel Pipes and Tenant's Generator Electrical Conduits are herein
collectively called "TENANT'S GENERATOR". Any work required to install Tenant's
Generator, or any of the components thereof, is herein called "TENANT'S
GENERATOR WORK". For purposes of applying Article 11 hereof to
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Tenant's Generator Work, the same shall be deemed both Exterior Material
Alterations and Pre-Authorized Alterations.
(c) If Tenant installs Tenant's Penthouse, then Tenant,
subject to and in accordance with the provisions of Articles 11 hereof and
further subject to the following provisions of this Article 41, shall have the
following rights:
(1) the right, from time to time, to install one
or more chillers and related equipment, in one or more locations within
the Closed Portion of Tenant's Penthouse and/or one or more cooling towers
and related equipment within the Open Portion of Tenant's Penthouse, it
being agreed that no such chiller, cooling tower or related equipment
shall have a height or elevation (measured from the structural roof) which
is greater than that of the walls of the Open Portion of Tenant's
Penthouse (such chillers, cooling towers and related equipment, as
installed from time to time, being herein collectively called "TENANT'S
COOLING PLANT UNITS");
(2) the right to install a water pipe (not to
exceed 2 inches in diameter), to supply domestic water from the valved
outlet to be located on the roof of the Building (after the completion of
the Secondary Work) to Tenant's Cooling Plant Units, which water pipe
shall be located on the roof in a location to be reasonably designated by
Landlord and shall be enclosed as reasonably determined by Landlord (such
water pipe being herein called "TENANT'S MAKE-UP WATER PIPE");
(3) the right to install two (2) water pipes to
distribute chilled or condenser water from Tenant's Cooling Plant Units to
the Premises Floors and Tenant's UPS Room and to return such water to
Tenant's Cooling Plant Units (each of which pipes shall not exceed 3
inches in diameter between 20th and 41st floors of the Building and shall
not exceed 10 inches in diameter between the 41st floor of the Building
and the roof) (such water pipe being herein called "TENANT'S COOLING PLANT
WATER LOOP"), which water pipes shall run vertically through Tenant's
Section 41.09 Enclosures, and, to the extent any of such water pipes need
to run horizontally, the same shall be run in locations reasonably
designated by Landlord and shall be enclosed as reasonably determined by
Landlord; provided, however, that Tenant's right to install Tenant's
Cooling Plant Water Loop shall be conditioned upon (i) Tenant having
theretofore installed, or Tenant contemporaneously therewith installing, a
Tenant's Section 41.09 Enclosure, and (ii) there being sufficient space
within Tenant's Section 41.09 Enclosures to install Tenant's Cooling Plant
Water Loop.
Tenant shall distribute electricity to Tenant's Cooling Plant Units through one
or more of Tenant's Supplemental Electricity Conduits installed pursuant to
Section 14.02(c) hereof (the Tenant's Supplemental Electricity Conduits so used
are herein called "TENANT'S COOLING PLANT ELECTRICAL CONDUITS"). Tenant's
Cooling Plant Units, Tenant's Make-Up Water Pipe, Tenant's Cooling Plant
Electrical Conduits and Tenant's Cooling Plant Water Loop are herein
collectively called "TENANT'S COOLING PLANT". Any work required to install
Tenant's Cooling Plant (other than the installation of Tenant's Cooling Plant
Electrical Conduits), is herein called "TENANT'S COOLING PLANT WORK". For
purposes of applying Article 11 hereof to Tenant's Cooling Plant Work, the same
shall be deemed both Exterior Material Alterations and Pre-Authorized
Alterations.
(d) Tenant, after it shall have installed the Tenant's
Generator and/or Tenant's Cooling Plant shall have the right to operate the
same, subject to the following
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provisions of this Section 41.03(d) as well as any other applicable provisions
of this lease. Tenant shall operate each of Tenant's Generator and Tenant's
Cooling Plant (i) subject to, and in a manner so as to comply with, all laws and
requirements of public authorities relating thereto (and, accordingly, Tenant
shall obtain any licenses and permits required in that regard), (ii) in a manner
so as to not interfere with the reception, transmission or other operation of
any antennae or other telecommunications equipment now or hereafter located on
the roof of the Building, and (iii) in a manner so as to not otherwise interfere
(other than to a de minimis manner) with the use and occupancy of the Building
by others. Without limiting the generality of the foregoing, Tenant shall not
permit the noise or vibrations caused by either or both of Tenant's Generator or
Tenant's Cooling Plant, at any time or times, to exceed the maximum allowable
levels therefor set forth on the noise and vibration specifications attached
hereto as Exhibit X-8. Landlord, at its expense, shall have right to measure the
noise or vibrations caused by Tenant's Generator and/or Tenant's Cooling Plant
to confirm that the same is in conformity with the specifications set forth on
Exhibit X-8, and to temporarily or permanently install equipment for that
purpose. Furthermore, Tenant shall not test Tenant's Generator, other than on
Saturdays after 1:00 p.m. and on Sundays. Nothing in this Section 41.03(d) is
intended to limit any other provisions of this lease as the same may apply to
the operation of Tenant's Generator or Tenant's Cooling Plant.
(e) Tenant, subject to and in accordance with the
provisions of Article 13 hereof, shall have the right and obligation to repair
and replace, and maintain in good working order and condition, Tenant's
Penthouse, Tenant's Penthouse Partition, Tenant's Generator and Tenant's Cooling
Plant. In connection therewith, however, if Tenant installs Tenant's Penthouse
and Tenant's Penthouse Partition, then the provisions of the second sentence of
Section 13.01(c)(1) hereof shall not apply with respect to repairs, replacements
and maintenance to Tenant's Generator and Tenant's Cooling Plant which are
performed wholly within Tenant's Penthouse.
(f) If either applicable law or a union requirement
requires that one or more operating engineers be retained in connection with the
operation of Tenant's Cooling Plant, then Tenant, at its expense, shall directly
employ (or shall cause to be directly employed by one of its contractors) such
operating engineers as are needed to so comply. If either applicable law or a
union requirement requires Landlord to retain one or more operating engineers by
reason of the addition of Tenant's Cooling Plant to the other HVAC equipment
serving the Building (including without limitation Landlord's HVAC equipment for
the Building and any supplemental HVAC equipment installed and operated by or
for any tenant(s) of the Building), and such law or union requirement cannot be
complied with by Tenant employing directly (or causing one of its contractors to
employ directly) an operating engineer to be present during the operation of
Tenant's Cooling Plant (it being agreed that if such law or union requirement
can be complied with by Tenant directly employing, or causing one of its
contractors to directly employ, an operating engineer, that Tenant shall do so),
then Tenant, within thirty (30) days after its receipt of any written demand
therefor, shall pay, or reimburse Landlord, the actual costs of employing any
such operating engineer(s).
(g) Notwithstanding anything to the contrary contained
above in this Section 41.03, Landlord, and persons authorized by Landlord, shall
have the exclusive right to utilize the Rig Facilities in connection with the
operation and maintenance of the Building.
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41.04. (a) Tenant, subject to and in accordance with the
provisions of Article 11 hereof and further subject to the following provisions
of this Article 41, shall have the following rights:
(1) the right, from time to time, to install,
operate and maintain, on the "roof level" of the Building Penthouse (as
more particularly provided below), up to four (4) microwave dishes (no one
of which microwave dishes shall exceed 2 meters in diameter and no more
than two of which microwave dishes shall exceed 1 meter in diameter),
together with the ancillary equipment therefor (each such microwave dish,
as installed, together with the ancillary equipment therefor, being herein
called a "TENANT'S MICROWAVE DISH");
(2) the right, from time to time, to install,
operate and maintain, on the "roof level" of the Building Penthouse (as
more particularly provided below), up to two (2) "mast type" antennae (no
one of which shall exceed 3 meters in height), together with the ancillary
equipment therefor (each such "mast type" antenna, as installed, together
with its ancillary equipment therefor, being herein called a "TENANT'S
ANTENNA"); and
(3) the right, from time to time, to install one
or more telecommunications cable conduits (no one of which shall exceed 2
inches in diameter), to connect each Tenant's Microwave Dish and each
Tenant's Antenna to the Premises Floors, which conduits shall run
vertically through one or more of Tenant's Stairwell B Enclosure, Tenant's
Stairwell E Enclosure or Tenant's Section 41.09 Enclosures, and, to the
extent the same need to run horizontally, the same shall be run in
locations reasonably designated by Landlord (such telecommunications cable
conduits being herein collectively called "TENANT'S TELECOMMUNICATIONS
CABLE CONDUITS"); provided, however, that Tenant's right to install any
Tenant's Telecommunications Cable Conduit shall be conditioned upon (i)
Tenant having theretofore installed, or Tenant contemporaneously therewith
installing, Tenant's Stairwell B Enclosure, Tenant's Stairwell E Enclosure
or a Tenant's Section 41.09 Enclosure, and (ii) there being sufficient
space within such enclosures to install such Tenant's Telecommunications
Cable Conduit.
Tenant's Microwave Dishes, Tenant's Antennae and Tenant's Telecommunications
Cable Conduits are herein collectively called "TENANT'S TELECOMMUNICATIONS
EQUIPMENT". Any work required to install Tenant's Telecommunications Equipment,
or any of the components thereof, is herein called "TENANT'S TELECOMMUNICATIONS
WORK". For purposes of applying Article 11 hereof to Tenant's Telecommunications
Work, the same shall be deemed Exterior Material Alterations and, to the extent
the same is consistent with the provisions of Section 41.04(b) below,
Pre-Authorized Alterations.
(b) Tenant's right to install, operate and maintain any
Tenant's Telecommunications Equipment shall be further subject to the following
provisions (as well as any other applicable provisions of this lease):
(1) The particular location on the "roof level" of
the Building Penthouse on which each Tenant's Microwave Dish and each Tenant's
Antenna shall be located shall be such available location thereon as is first
selected by Tenant and then approved by Landlord (which approval by Landlord
shall not be unreasonably withheld).
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(2) Tenant acknowledges that its right to place any
Tenant's Microwave Dish or Tenant's Antenna on the Building's Penthouse shall be
non-exclusive.
(3) Tenant shall operate Tenant's Telecommunications
Equipment subject to, and in a manner so as to comply with, all laws and
requirements of public authorities relating thereto (and, accordingly, shall
obtain any licenses and permits required in that regard, including without
limitation all required operating permits and approvals from the Federal
Communications Commission).
(4) No Tenant's Microwave Dish or Tenant's Antenna
shall interfere with the reception, transmission or other operation of any other
telecommunications dish, antennae or other equipment placed on the roof of the
Building prior to the installation of such Tenant's Microwave Dish or Tenant's
Antenna. In each case that Landlord shall hereafter grant to any other person
the right to install any telecommunications dish, antenna or other equipment on
the roof of the Building, Landlord shall (i) as part of such grant, prohibit
such other person from installing any such telecommunications dish, antenna or
other equipment which will interfere with the reception, transmission or other
operation of any Tenant's Microwave Dish or Tenant's Antenna which was installed
on the roof of the Building prior to the installation of such other person's
telecommunications dish, antenna or other equipment (it being understood that in
determining when any particular telecommunications dish, antenna or other
equipment was installed, any relocation thereof at the instance or request of
Landlord shall be disregarded), and (ii) thereafter use reasonable efforts to
enforce any such prohibition (which reasonable efforts shall include litigation,
but only to the extent Landlord, in its reasonable judgement, believes that
litigation is the most expeditious way to facilitate a cessation of such
person's failure to observe such prohibition).
(5) Landlord, from time to time during the term of
this lease, shall have the right, upon not less than twenty (20) days' prior
written notice to Tenant (each, a "SECTION 41.04 RELOCATION NOTICE"), to (i)
cause Tenant to relocate any one or more of Tenant's Microwave Dishes or
Tenant's Antennae to a new location(s) on the roof of the Building designated by
Landlord, and (ii) in connection therewith, cause Tenant to relocate any other
Tenant's Telecommunications Equipment; provided, however, that the quality of
the reception and/or transmission of any relocated Tenant's Microwave Dish or
Tenant's Antenna in its new location on the roof of the Building shall not be
less than the quality of the reception and/or transmission thereof in its prior
location. Tenant, subject to and in accordance with the provisions of Article 11
hereof, shall perform all the work needed to effect any such required relocation
(such work to be deemed Pre-Authorized Alterations upon Tenant's receipt of the
applicable Section 41.04 Relocation Notice), and, in all events, shall complete
such relocation work within twenty (20) days after its receipt of the applicable
Section 41.04 Relocation Notice. Landlord, within thirty (30) days after a
written demand therefor, shall reimburse Tenant all of Tenant's out-of-pocket
costs reasonably incurred in connection with such relocation work.
(c) Tenant, subject to and in accordance with the
provisions of Article 13 hereof, shall have the right and obligation to repair
and replace, and maintain in good working order and condition, Tenant's
Telecommunications Equipment.
41.05. (a) Tenant, subject to and in accordance with the provisions
of Articles 11 hereof and further subject to the following provisions of this
Article 41, shall have the right (i) to install in the Tenant's 20th Floor
Electrical Power Area denoted on Exhibit X-5 attached hereto as "Area of UPS" an
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enclosed room (herein called "TENANT'S UPS ROOM"), and to install within
Tenant's UPS Room an uninterruptable power supply system, which system is more
particularly described on Exhibit X-9 attached hereto (such uninterruptable
power supply system being herein called "TENANT'S UPS UNITS"), and (ii) to
install in the Tenant's 20th Floor Electrical Power Area denoted on Exhibit X-5
attached hereto as "Area of Electrical Distribution" an enclosed room (herein
called "TENANT'S ELECTRICAL DISTRIBUTION ROOM"), and to install within Tenant's
Electrical Distribution Room electrical distribution equipment to be utilized in
the distribution of Tenant's Supplemental Electricity (such equipment being
herein called "TENANT'S ELECTRICAL DISTRIBUTION ROOM EQUIPMENT"). Tenant's UPS
Room and Tenant's UPS Units, together with any Tenant's Supplemental Electrical
Conduits running to or from any of thereof (and installed pursuant to Section
14.02 hereof), are herein collectively called "TENANT'S UPS SYSTEM". The work
required to install Tenant's UPS System (other than the aforementioned Tenant's
Supplemental Electrical Conduits) is herein called "TENANT'S UPS WORK". Tenant's
Electrical Distribution Room and Tenant's Electrical Distribution Room
Equipment, together with any Tenant's Supplemental Electrical Conduits running
to or from any of thereof (and installed pursuant to Section 14.02 hereof), are
herein collectively called "TENANT'S ELECTRICAL DISTRIBUTION SYSTEM". The work
required to install Tenant's Electrical Distribution System (other than the
aforementioned Tenant's Supplemental Electrical Conduits) is herein called
"TENANT'S ELECTRICAL DISTRIBUTION WORK". For purposes of applying Article 11
hereof to Tenant's UPS Work and Tenant's Electrical Distribution Work, each of
the same shall be deemed Exterior Material Alterations and Pre-Authorized
Alterations.
(b) Tenant, after installing Tenant's UPS System and/or
Tenant's Electrical Distribution System, shall have the right to operate the
same, subject to the following provisions of this Section 41.05(b) as well as
any other applicable provisions of this lease. Tenant shall operate Tenant's UPS
System and Tenant's Electrical Distribution System (i) subject to, and in a
manner so as to comply with, all laws and requirements of public authorities
relating thereto (and, accordingly, shall obtain any licenses and permits
required in that regard), and (ii) in a manner so as not to otherwise interfere
(other than in a de minimis manner) with the use and occupancy of the Building
by others. Without limiting the generality of the foregoing, Tenant shall not
permit the noise or vibrations caused by Tenant's UPS System and/or Tenant's
Electrical Distribution System, at any time or times, to exceed the maximum
allowable levels therefor set forth on the noise and vibration specifications
attached hereto as Exhibit X-8. Landlord, at its expense, shall have the right
to measure the noise or vibrations caused by Tenant's UPS System and/or Tenant's
Electrical Distribution System to confirm that the same is in conformity with
the specifications set forth on Exhibit X-8, and to temporarily or permanently
install equipment for that purpose. Nothing in this Section 41.05(b) is intended
to limit any other provisions of this lease as the same may apply to the
operation of Tenant's UPS System and/or Tenant's Electrical Distribution System.
(c) Tenant, subject to and in accordance with the
provisions of Article 13 hereof and the following provisions of this Section
41.05(c), shall have the right and obligation to repair and replace, and
maintain in good working order and condition, Tenant's UPS System and Tenant's
Electrical Distribution System. Tenant acknowledges that the twentieth (20th)
floor of the Building may contain various portions of the Building Systems as
well as other electrical and mechanical equipment, to which Tenant shall have no
access rights. Accordingly, Tenant's access to Tenant's 20th Floor Electrical
Power Areas shall be subject to Landlord's reasonable security
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requirements, which shall be designed to permit Tenant access to Tenant's 20th
Floor Electrical Power Areas while prohibiting such access to other areas of the
twentieth (20th) floor of the Building (such reasonable security requirements
may include, without limitation, the installation of a card key access system).
Subject to the foregoing provisions of this Section 41.05(c), the provisions of
the second sentence of Section 13.01(c)(1) hereof shall not apply with respect
to repairs, replacements and maintenance to Tenant's UPS System which are
performed wholly within either Tenant's UPS Room or repairs, replacements and
maintenance to Tenant's Electrical Distribution System performed wholly within
Tenant's Electrical Distribution Room.
41.06. (a) The rights granted to Tenant in this Article 41 are
given in connection with, and as part of the rights created under, this lease
and are not separately transferrable or assignable (and, accordingly, may not be
assigned except in connection with a permitted assignment of this lease pursuant
to Article 7 hereof).
(b) All the Tenant Improvements installed pursuant to the
provisions of Sections 41.03, 41.04 and 41.05 hereof (inclusive of Tenant's
Penthouse, Tenant's Generator, Tenant's Cooling Plant, Tenant's
Telecommunications Equipment, Tenant's UPS System and Tenant's Electrical
Distribution System) shall be for the sole use and benefit of Tenant and, at
Tenant's option, any permitted subtenant of Tenant; and shall not be used by, or
for the benefit of, any other parties. Without limiting the generality of the
foregoing, Tenant shall not resell, or grant licenses to, any rights in respect
of any such Tenant's Improvements (other than to any permitted subtenant of
Tenant pursuant to its sublease, and, in which event, the amounts so paid by the
subtenant shall be deemed Sublease Consideration).
(c) Tenant acknowledges and agrees that its right to
perform any of the work described in this Article 41 (including without
limitation Tenant's Structural Work, Tenant's Penthouse Work, Tenant's Generator
Work, Tenant's Cooling Plant Work, Tenant's UPS Work, Tenant's Electrical
Distribution Work and the Fire Tower Work or, as the case may be, the Hot Deck
Work) or any of Sections 14.02, 16.11 or 16.14 hereof shall be subject to the
following terms and conditions: (i) Tenant's right to perform any such work in,
or otherwise obtain access to, any leased areas of the Building (including
without limitation the areas of the forty-seventh (47th) floor of the Building
leased to PSI) shall be subject to the rights of the tenant(s) thereof; (ii)
Tenant, throughout the prosecution of such work, shall take such actions as are
needed to prevent any water or other damage to the Building or the Real Property
which may be directly or indirectly occasioned by reason of such work or the
prosecution thereof; and (iii) in the case of any such work performed on or
about the roof of the Building, Tenant shall perform such work in a manner so
that the prosecution thereof shall not disrupt, or interfere with the reception,
transmission or other operation of, any telecommunications or other equipment
located on the roof of the Building during such prosecution (whether now
existing or hereafter installed); except that, in the case of Tenant's
Structural Work, the provisions of clause (iii) of this sentence shall not apply
to any telecommunications and related equipment which are hereafter installed on
the roof of the Building other than on the Building Penthouse or in the
Ancillary Telecommunications Roof Areas. Nothing in this Section 41.06(c) shall
be deemed to limit any provision of Article 11 hereof (or any other applicable
provisions of this lease) as applied to any of the foregoing Alterations.
(d) Tenant shall indemnify and hold harmless Landlord and
all Landlord Parties from and against any and all claims (to the extent in
excess of any sums reimbursed by
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insurance or, which would have been so reimbursed if Landlord had maintained the
insurance required to be maintained by it hereunder) to the extent that the same
arises from (i) conduct in, or the management of, Tenant's Fuel Tank Area or
Tenant's 20th Floor Electrical Power Areas, or, from and after the commencement
of the Penthouse Work, Tenant's Penthouse Roof Area, or of any operations
therein, or any condition created (other than by Landlord or any Landlord Party
or any contractor of Landlord or any Landlord Party) in, at or upon Tenant's
Fuel Tank Area or Tenant's 20th Floor Electrical Power Areas, or, from and after
the commencement of the Penthouse Work, Tenant's Penthouse Roof Area, or (ii)
any accident, injury or damage whatever (except to the extent caused by any
negligence or willful misconduct of Landlord or any Landlord Party or any
contractor of Landlord or any Landlord Party) occurring in, at or upon Tenant's
Fuel Tank Area or Tenant's 20th Floor Electrical Power Areas, or, from and after
the commencement of the Penthouse Work, Tenant's Penthouse Roof Area; together,
subject to the provisions of this Section 41.06(d), with all costs, expenses and
liabilities incurred in or in connection with each such claim or any action or
proceeding brought thereon, including, without limitation, all reasonable
attorneys' fees and expenses. If any such claim is asserted against Landlord
and/or any Landlord Party, Landlord shall give Tenant prompt notice thereof. If
Tenant shall, in good faith, believe that such claim is or may not be within the
scope of the indemnity set forth in this Section 41.06(d), then, pending
determination of that question, Tenant shall not be deemed to be in default
under this lease by reason of its failure or refusal to indemnify and hold
harmless Landlord or any Landlord Party therefrom or to pay such costs, expenses
and liabilities, but if it shall be finally determined by a court of competent
jurisdiction that such claim was within the scope of the indemnity set forth in
this Section 41.06(d), then Tenant shall be liable for any judgement or
reasonable settlement or any reasonable legal fees incurred by the party
entitled to indemnity hereunder. If the issuer of any insurance policy
maintained by Tenant shall assume the defense of any claim then Landlord shall
permit such insurance carrier to defend the claim with its counsel and (x)
neither Landlord nor any Landlord Party shall settle such claim without the
consent of the insurance carrier (unless such settlement would relieve Landlord
or such Landlord Party of all liability for which Tenant or its insurance
carrier may be liable hereunder), (y) Landlord and all Landlord Parties shall
reasonably cooperate, at Tenant's expense, with the insurance carrier in its
defense of any such claim, and (z) Tenant shall not be liable for the costs of
any separate counsel employed by Landlord or any Landlord Party. Tenant's
insurance obligations under Section 9.03(b) hereof shall apply, mutatis
mutandis, to Tenant's Fuel Tank Area and Tenant's 20th Floor Electrical Power
Areas, and, after the commencement of Tenant's Penthouse Work, Tenant's
Penthouse Roof Area, as fully as the same apply to the Premises under Section
9.03(b) hereof.
(e) Notwithstanding anything to the contrary contained in
this Article 41, the rights granted under this Article 41 to utilize any of the
Tenant's Penthouse Roof Area, Tenant's Fuel Tank Area and the Tenant's 20th
Floor Electrical Power Areas for the purposes permitted hereunder are subject to
all such space being made available to Tenant in its "as is" condition as of the
date hereof (Tenant having inspected the same), and Landlord makes no
representation or warranty whatsoever as to whether any such space is suitable
for the purposes for which Tenant is permitted to use the same. Tenant, in
addition to its Article 13 obligations in respect thereof, shall keep each of
Tenant's Fuel Tank Area, Tenant's 20th Floor Electrical Power Areas, and, after
the commencement of Tenant's Penthouse Work, Tenant's Penthouse Roof Area, in a
neat, clean and safe condition.
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41.07. (a) Tenant, in consideration of the rights granted to it
under Section 41.03 above (regardless of whether such rights are hereafter
exercised or waived or, except as expressly provided in Section 41.08 below,
terminated), shall pay to Landlord, as Additional Charges, the following amounts
(herein collectively called the "SECTION 41.03 CHARGES"): (i) a per annum amount
equal to $75,000.00 (the "SECTION 41.03 BASE CHARGE"); and (ii) an amount equal
to (x) $28,000.00 per annum, for the period from the Fixed Rent Commencement
Date to the day prior to the fifth anniversary of the Fixed Rent Commencement
Date, and (y) $35,000.00 per annum, for the period from the fifth anniversary of
the Fixed Rent Commencement Date to the Initial Expiration Date (the "SECTION
41.03 FUEL TANK CHARGE"). Each of the Section 41.03 Charges shall be payable
commencing on the Fixed Rent Commencement Date and thereafter in equal monthly
installments in advance on the first day of each and every calendar month during
the term of this lease.
(b) Tenant, in consideration of the rights granted to it
under Section 41.04 above (regardless of whether such rights are hereafter
exercised or waived or, except as expressly provided in Section 41.08 below,
terminated), shall pay to Landlord, as an Additional Charge, an amount equal to
$25,000.00 per annum (herein called the "SECTION 41.04 CHARGE"), which Section
41.04 Charge shall be payable commencing on the Fixed Rent Commencement Date and
thereafter in equal monthly installments in advance on the first day of each and
every calendar month during the term of this lease.
(c) (1) Tenant, in consideration of the rights granted
to it under Section 41.05 above to install, operate, repair, replace and
maintain Tenant's UPS System (regardless of whether such rights are hereafter
exercised or waived or, except as expressly provided in Section 41.08 below,
terminated), shall pay to Landlord, as Additional Charges, a per annum amount
equal to $50,000.00 (the "SECTION 41.05 UPS CHARGE"), which Section 41.05 UPS
Charge shall be payable commencing on the Fixed Rent Commencement Date and
thereafter in equal monthly installments in advance on the first day of each and
every calendar month during the term of this lease.
(2) Tenant, in consideration of the rights granted
to it under Section 41.05 above to install, operate, repair, replace and
maintain Tenant's Electrical Distribution System (regardless of whether such
rights are hereafter exercised or waived or terminated), shall pay to Landlord,
as Additional Charges, a per annum amount equal to $14,000.00 (the "SECTION
41.05 EDS CHARGE"), which Section 41.05 EDS Charge shall be payable commencing
on the Fixed Rent Commencement Date and thereafter in equal monthly installments
in advance on the first day of each and every calendar month during the term of
this lease.
(d) Notwithstanding the foregoing provisions of this
Section 41.07, during any Renewal Term hereunder, each of the Section 41.03 Base
Charge, the Section 41.03 Fuel Tank Charge, the Section 41.04 Charge, the
Section 41.05 UPS Charge and the Section 41.05 EDS Charge shall be changed
(i.e., increased or decreased) to be a per annum amount equal to the product of
(I) the amount of such charge, per annum, as set forth above in this Section
41.07, multiplied by (II) Section 41.07 Index (as hereinafter defined) for such
Renewal Term. As used herein, the "SECTION 41.07 INDEX", for any Renewal Term,
shall mean a fraction, (X) the numerator of which is the average per annum per
rentable square foot rate of Fixed Rent payable under this lease as of the first
day of such Renewal Term (or, if the Fair Market Fixed Rent for such Renewal
Term shall not have been finally determined as of such day, then as of the day
immediately following such final determination) (determined, in either event,
without regard to any abatements, offsets or credits which might
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then be applicable), and (Y) the denominator of which is the average per annum
per rentable square foot rate of Fixed Rent payable under this lease as of the
Fixed Rent Commencement Date (determined without regard to any abatements,
offsets or credits which might then be applicable). If, as of the commencement
of any Renewal Term, the Fair Market Fixed Rent therefor shall not have been
finally determined (and accordingly the Section 41.07 Index for such Renewal
Term can not then be finally determined), then the provisions of Section
38.04(e) hereof shall apply, mutatis mutandis, to the payments of each of the
Section 41.03 Base Charge, the Section 41.03 Fuel Tank Charge, the Section 41.04
Charge, the Section 41.05 UPS Charge and Section 41.05 EDS Charge.
41.08. Notwithstanding anything to the contrary in this Article 41,
if, at anytime during the term of this lease, the Premises shall not include at
least four (4) Full Premises Floors, then, from and after the date upon which
the Premises shall first cease to include at least four (4) Full Premises Floors
(such date being herein called the "SECTION 41.08 DATE"), the following
provisions shall apply:
(a) Landlord shall have the right to terminate Tenant's
rights under Section 41.03 hereof, which right may be exercised at anytime after
the Section 41.08 Date by serving written notice thereof to Tenant (which notice
being herein called "LANDLORD'S SECTION 41.03 TERMINATION NOTICE"). If Landlord
serves Landlord's Section 41.03 Termination Notice, then (i) effective
thereupon, Tenant shall no longer have any rights under Section 41.03 hereof,
and (ii) promptly thereafter, Tenant, subject to and in accordance with the
provisions of Article 11 hereof, shall (x) remove from the Building all the
Tenant Improvements installed pursuant to Section 41.03 (inclusive of Tenant's
Penthouse, Tenant's Penthouse Partition, Tenant's Generator and Tenant's Cooling
Plant), other than any portions of such Tenant's Improvements which are
Non-Removable Exterior Improvements, and (y) restore the applicable areas of the
Building to their condition prior to the installation of such Tenant
Improvements, ordinary wear and tear excepted (such removal and restoration work
being herein collectively called "TENANT'S SECTION 41.03 TERMINATION WORK"). In
all events, Tenant shall complete Tenant's Section 41.03 Termination Work on or
prior to the date that is ninety (90) days after that Landlord shall have served
Landlord's Section 41.03 Termination Notice. Notwithstanding anything to the
contrary contained in Section 41.07(a), Tenant's obligation to pay the Section
41.03 Charges shall be end and be apportioned as of the date that Tenant
completes Tenant's Section 41.03 Termination Work. In addition, as of such date,
the provisions of Section 41.06(d) shall cease to apply to the Tenant's
Penthouse Roof Area and Tenant's Fuel Tank Area.
(b) Landlord shall have the right to terminate Tenant's
rights under Section 41.04 hereof, which right may be exercised at anytime after
the Section 41.08 Date by serving written notice thereof to Tenant (which notice
being herein called "LANDLORD'S SECTION 41.04 TERMINATION NOTICE"). If Landlord
serves Landlord's Section 41.04 Termination Notice, then (i) effective
thereupon, Tenant shall no longer have any rights under Section 41.04 hereof,
and (ii) promptly thereafter, Tenant, subject to and in accordance with the
provisions of Article 11 hereof, shall (x) remove from the Building all the
Tenant Improvements installed pursuant to Section 41.04 (inclusive of Tenant's
Telecommunications Equipment), other than any portions thereof which are
Non-Removable Exterior Improvements, and (y) restore the applicable areas of the
Building to their condition prior to the installation of such Tenant
Improvements, ordinary wear and tear excepted (such removal and restoration work
being herein collectively called "TENANT'S SECTION 41.04 TERMINATION WORK"). In
all events, Tenant shall complete Tenant's Section
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41.04 Termination Work on or prior to the date that is ninety (90) days after
that Landlord shall have served Landlord's Section 41.04 Termination Notice.
Notwithstanding anything to the contrary contained in Section 41.07(b), Tenant's
obligation to pay the Section 41.04 Charge shall end on, and be apportioned as
of, the date that Tenant completes Tenant's Section 41.04 Termination Work.
(c) Landlord shall have the right to terminate Tenant's
rights under Section 41.05 hereof to install, operate, repair, replace and
maintain Tenant's UPS System, which right may be exercised at anytime after the
Section 41.08 Date by serving written notice thereof to Tenant (which notice
being herein called "LANDLORD'S UPS TERMINATION NOTICE"). If Landlord serves
Landlord's UPS Termination Notice, then (i) effective thereupon, Tenant shall no
longer have any rights under Section 41.05 hereof to install, operate, repair,
replace and maintain Tenant's UPS System, and (ii) promptly thereafter, Tenant,
subject to and in accordance with the provisions of Article 11 hereof, shall (x)
remove from the Building the entirety of Tenant's UPS System, other than any
portions thereof which are Non-Removable Exterior Improvements, and (y) restore
the applicable areas of the Building to their condition prior to the
installation of Tenant's UPS System, ordinary wear and tear excepted (such
removal and restoration work being herein collectively called "TENANT'S UPS
TERMINATION WORK"). In all events, Tenant shall complete Tenant's UPS
Termination Work on or prior to the date that is ninety (90) days after that
Landlord shall have served Landlord's UPS Termination Notice. Notwithstanding
anything to the contrary contained in Section 41.07(c), Tenant's obligation to
pay the Section 41.05 UPS Charge shall end on, and be apportioned as of, the
date that Tenant completes Tenant's UPS Termination Work. In addition, as of
such date, the provisions of Section 41.06(d) shall cease to apply to the
Tenant's 20th Floor Electrical Power Areas (other than the Tenant's 20th Floor
Electrical Power Area denoted on Exhibit X-5 attached hereto as "Area of
Electrical Distribution", to which such provisions shall continue to apply).
41.09. (a) For purposes of this lease, the following terms shall
have the following meanings:
The "FIRE TOWER" shall mean the fire tower of the Building
located in the area shown hatched on Exhibit X- 10 hereto.
The "FIRE TOWER WORK" shall mean the work needed to
convert the Fire Tower into an enclosed electrical and mechanical shaft,
including without limitation the installation of structural supports,
access doors, catwalks and platforms (such catwalks and platforms being
herein called the "FIRE TOWER PLATFORMS") and appurtenances and conforming
to all laws and requirements of public authorities (it being further
agreed that the Fire Tower Work shall include, without limitation, any
removal or other treatment of asbestos required by any laws or
requirements of public authorities in connection therewith or as a result
thereof).
The "DESIGNATED HOT DECKS" shall mean those two (2)
certain existing "hot decks" located in the Building, and running from the
20th floor of the Building to the roof of the Building, which are located
in areas delineated on Exhibit X-11 hereto.
The "HOT DECK WORK" shall mean the work needed to convert
the Designated Hot Decks into electrical and mechanical shafts conforming
to all laws and requirements of public authorities (it being further
agreed that the Hot Deck Work shall include, without limitation, (x) any
removal
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or other treatment of asbestos required by any laws or requirements of
public authorities in connection therewith or as a result thereof, and (y)
the removal of any existing enclosures, conduits and other material
currently existing in the Designated Hot Decks).
The "LOWER ALTERNATE ENCLOSURE LOCATION" shall mean a
location, on each floor of the Building from the subcellar level of the
Building to the 20th Floor of the Building, as shall be reasonably
determined by Landlord, it being agreed that such location (I) shall be
somewhere within the Building's freight elevator lobby, which freight
elevator lobby is shown hatched on Exhibit X-12 hereto, and (II) shall
have a contiguous cross-sectional area which shall be not less than the
Aggregate Required Cross-Sectional Area (as to any floor of the Building
between the subcellar level of the Building and the 20th floor of the
Building).
The "AGGREGATE REQUIRED CROSS-SECTIONAL AREA" shall mean a
cross-sectional area of (i) 8 square feet, as to all floors of the
Building between the subcellar of the Building and the 20th floor of the
Building, (ii) 25 square feet, as to all floors of the Building between
the 20th floor of the Building and the 41st floor of the Building, and
(iii) 28 square feet, as to all floors of the Building between the 41st
floor of the Building and the roof of the Building.
"TENANT'S SECTION 41.09 ENCLOSURES", as used in this
lease, shall mean either (i) Tenant's Fire Tower Enclosures (in any case
that Tenant shall have performed the Fire Tower Work and installed any
Tenant's Fire Tower Enclosures), or (ii) any of the Designated Hot Decks
in which the Hot Deck Work has been performed, between the 20th floor of
the Building and the roof, and the Tenant's Lower Alternate Enclosure,
between the subcellar level of the Building to the 20th Floor of the
Building (in any case that Tenant shall have performed the Hot Deck Work
in any of the Designated Hot Decks and installed Tenant's Lower Alternate
Enclosure).
(b) (1) Tenant, with Landlord's consent, has heretofore
filed an application with the Department of Building for a permit to perform the
Fire Tower Work and thus convert the Fire Tower into a mechanical and electrical
shaft (the "CONVERSION APPLICATION"). If the Conversion Application is granted,
then Tenant, subject to and in accordance with the provisions of Article 11,
shall have the right to perform the Fire Tower Work (the same, for purposes of
Article 11 being deemed Pre-Authorized Alterations); provided, however, that if
Tenant, in accordance with the provisions of Section 41.09(c) below, shall serve
the Alternate Route Election Notice (as hereinafter defined), then Tenant shall
no longer have the right to perform the Fire Tower Work.
(2) If Tenant performs the Fire Tower Work, then
Tenant, subject to and in accordance with the provisions of Article 11 hereof,
have the right, from time to time, to install one or more enclosures within the
Fire Tower to house all the Tenant's Improvements to be installed in such
enclosures pursuant to Section 16.11 hereof and this Article 41, it being
understood and agreed that (i) such enclosures, in the aggregate, shall not
occupy an area greater than the Aggregate Required Cross-Sectional Area (as to
any floor of the Building), and (ii) each such enclosure shall be constructed
within the Fire Tower so as to be in compliance with all laws and requirements
of public authorities, and so as not to cause any surrounding area to not be in
such compliance with all laws and requirements of public authorities (the
enclosure or enclosures installed
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pursuant to this Section 41.09(b)(2) are herein collectively called "TENANT'S
FIRE TOWER ENCLOSURES"); and
(3) If Tenant performs the Fire Tower Work and
installs Tenant's Fire Tower Enclosures, then the following provisions shall
apply: (i) Landlord may, and may authorize other tenants or occupants of the
Building to, install, repair and replace other risers in the Fire Tower (any
such authorized tenant or occupant being herein called a "FIRE TOWER OCCUPANT"),
provided, that, at all times during the term, there shall be available in the
Fire Tower for Tenant's Fire Tower Enclosures a contiguous cross-sectional area
which shall be not less than the Aggregate Required Cross-Sectional Area (as to
any floor of the Building); (ii) Landlord shall not grant any tenant or occupant
of the Building, other than the Fire Tower Occupants, entry onto any Fire Tower
Platform, and shall not grant any tenant or occupant of the Building entry into
any Tenant's Fire Tower Enclosure (it being understood that (x) only Landlord
and Tenant shall have a key to any door providing entry onto any Fire Tower
Platform and into any Tenant's Fire Tower Enclosure); (iii) except in
emergencies, Landlord, prior to entering onto any Fire Tower Platform or into
any of Tenant's Fire Tower Enclosures, shall give Tenant notice thereof (which
notice, at Landlord's option, may be oral notice to Tenant's operations desk
(which shall be manned 24 hours a day) given immediately prior to such entry),
and, in any such case, Tenant, at Tenant's expense, shall have the right to have
Tenant's representative accompany Landlord throughout the period of Landlord's
entry; and (iv) except in emergencies, Landlord, prior to permitting any Fire
Tower Occupant to enter onto any Fire Tower Platform, shall give Tenant notice
thereof (which notice, at Landlord's option, may be oral notice to Tenant's
operations desk (which shall be manned 24 hours a day) given immediately prior
to such entry), and, in any such case, Tenant, at Tenant's expense, shall have
the right to have Tenant's representative accompany such Fire Tower Occupant
throughout the period of such Fire Tower Occupant's entry. Tenant shall have
access to the Fire Tower solely for purposes of performing (A) the Fire Tower
Work and subsequent permitted Alterations within the Fire Tower (which access
shall be subject to the provisions of Article 11 hereof, including without
limitation the provisions of Section 11.03(c) hereof), or (B) maintenance,
repairs and replacements to the Fire Tower (but this clause shall not be deemed
to require Tenant to maintain the Fire Tower) and any Tenant Improvements within
the Fire Tower (which access shall be subject to the provisions of Article 13
hereof, including without limitation the provisions of Section 13.01(c)(1)
hereof).
(c) (1) If (A) the Conversion Application is denied (it
being agreed that Tenant shall promptly notify Landlord in the event that the
Conversion Application is denied) or (B) Tenant, by written notice given to
Landlord at anytime prior to Tenant commencing the Fire Tower Work (which notice
is herein called the "ALTERNATE ROUTE ELECTION NOTICE"), elects not to perform
the Fire Tower Work because (i) Tenant reasonably believes that the Conversion
Application will not be granted prior to the time at which Tenant intends to
commence the Fire Tower Work, or (ii) Tenant, for any reason, is not legally
authorized to perform the Fire Tower Work, or (iii) Tenant reasonably believes
that (x) the cost of the Fire Tower Work plus the cost of installing all
Tenant's Improvements to be located in the Fire Tower, will exceed (y) one
hundred and fifty (150%) percent of (I) the cost of the Hot Deck Work plus (II)
the cost of installing Tenant's Lower Alternate Enclosure (as hereinafter
defined), plus (III) the cost of installing all Tenant's Improvements to be
located in either the Designated Hot Decks or Tenant's Lower Alternate
Enclosure, then, in either such event, Tenant, subject to and in accordance the
provisions of Article 11 hereof, Tenant shall have right to perform the Hot Deck
Work (the same being deemed Pre-Authorized Alterations). In addition,
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Landlord, within fifteen (15) Business Days after its receipt of either a notice
from Tenant indicating that the Conversion Application has been denied or the
Alternate Route Election Notice, shall designated the Lower Alternate Enclosure
Location in accordance with the definition thereof set forth in Section 41.09(a)
hereof.
(2) If Tenant performs the Hot Deck Work, then
Tenant, subject to and in accordance with the provisions of Article 11 hereof,
have the right, from time to time, to install one or more enclosures within the
Lower Alternate Enclosure Location (from the subcellar level of the Building to
the 20th floor of the Building) to house all the Tenant's Improvements to be
installed in such enclosures pursuant to Section 16.11 hereof and this Article
41, it being understood and agreed that (i) such enclosures, in the aggregate,
shall not occupy an cross-sectional area which is greater than the Aggregate
Required Cross-Sectional Area (as to any floor of the Building), and (ii) each
such enclosure shall be constructed entirely within the Lower Alternate
Enclosure Location so as to be in compliance with all laws and requirements of
public authorities, and so as not to cause any surrounding area to not be in
such compliance with all laws and requirements of public authorities (the
enclosure or enclosures installed pursuant to this Section 41.09(c)(2) are
herein collectively called "TENANT'S LOWER ALTERNATE ENCLOSURE").
(3) If Tenant performs the Hot Deck Work and
installs Tenant's Lower Alternate Enclosure, then the following provisions shall
apply: (i) Landlord shall not grant any other tenant or occupant of the Building
entry into either Designated Hot Deck or Tenant's Lower Alternate Enclosure (it
being understood that only Landlord and Tenant shall have a key to each door
providing entry into (x) each Designated Hot Deck and (y) Tenant's Lower
Alternate Enclosure); and (ii) except in emergencies, Landlord, prior to
entering any Designated Hot Deck or Tenant's Lower Alternate Enclosure, shall
give Tenant notice thereof (which notice, at Landlord's option, may be oral
notice to Tenant's operations desk (which shall be manned 24 hours a day) given
immediately prior to such entry), and, in any such case, Tenant, at Tenant's
expense, shall have the right to have Tenant's representative accompany Landlord
throughout the period of Landlord's entry. Tenant shall have access to the
Designated Hot Decks and the Lower Alternate Enclosure Location solely for
purposes of performing (A) the Hot Deck Work, the work needed to install
Tenant's Lower Alternate Enclosure and subsequent permitted Alterations within
the Designated Hot Decks or Tenant's Lower Alternate Enclosure (which access
shall be subject to the provisions of Article 11 hereof, including without
limitation the provisions of Section 11.03(c) hereof), or (B) maintenance,
repairs and replacements to the Designated Hot Decks (but this clause shall not
be deemed to require Tenant to maintain the Designated Hot Decks), Tenant's
Lower Alternate Enclosure and any Tenant Improvements within any Designated Hot
Decks and Tenant's Lower Alternate Enclosure (which access shall be subject to
the provisions of Article 13 hereof, including without limitation the provisions
of Section 13.01(c)(1) hereof).
(d) Notwithstanding anything to the contrary contained
herein, any fuel pipe installed by Tenant pursuant to this Article 41 shall,
when running vertically, be enclosed within masonry.
41.10. In each instance in which Tenant is authorized by or pursuant
to this lease to install any conduit, such authorization shall include the
right, from time to time, subject to and in accordance with the provisions of
Article 11 hereof, to run in such conduit, and remove from such conduit, wires
and cables for which the same is suited. For purposes of Article 11 hereof, the
running of such wires and cables (as opposed to the installation of the
conduits) shall be deemed Minor Alterations,
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notwithstanding the fact that such wires or cables will be located, in part,
outside of the Premises.
41.11. In each instance in which Tenant is authorized by or pursuant
to this lease to install any Tenant's Improvements, such authorization shall
include the right to keep such Tenant's Improvements, as installed, throughout
the term of this lease, except as otherwise provided in this lease (including
without limitation as otherwise provided in any Exhibit attached to this lease).
41.12. Tenant, prior to installing Tenant's Fuel Tank in Tenant's
Fuel Tank Area, shall, subject to the other provisions of this lease, have the
right to utilize Tenant's Fuel Tank Area for dry storage.
41.13. Landlord, at Tenant's expense, shall perform the pipe
relocation work on the 50th floor of the Building which is described on the
specifications therefor set forth on Exhibit X-13 attached hereof (such work
being herein called the "50TH FLOOR PIPE RELOCATION WORK"). Landlord, subject to
one or more Events of Force Majeure and/or delays occasioned by Tenant, shall
complete the 50th Floor Pipe Relocation Work on or prior to June 30, 1994.
Tenant, from time to time within thirty (30) days after a written demand
therefor, shall pay to, or reimburse, Landlord all the reasonable out-of-pocket
costs incurred by Landlord in connection with the performance of the 50th Floor
Pipe Relocation Work.
ARTICLE 42
47th Floor Space
42.01. Effective as of the 47th Floor Commencement Date (as
hereinafter defined), the portions of the forty-seventh (47th) floor of the
Building shown hatched on the floor plan attached hereto as Exhibit Y (such
space being herein called the "47TH FLOOR SPACE") shall become, and be deemed to
comprise, part of the Premises upon all the then executory terms hereof
(including without limitation the Expiration Date).
42.02. In respect of the addition of the 47th Floor Space to the
Premises, the following terms and conditions shall apply (notwithstanding any
other provision of this lease to the contrary):
(a) Effective as of the 47th Floor Commencement Date, the
Fixed Rent shall be increased by, and shall thereby include, the 47th
Floor Fixed Rent (as hereinafter defined). The "47TH FLOOR FIXED RENT"
shall mean the following per annum rents for the following periods during
the term: (i) for the period commencing on the 47th Floor Commencement
Date and ending on the day preceding the fifth (5th) anniversary of the
Fixed Rent Commencement Date, $1,028,232.50 (i.e., $23.75 per rentable
square foot multiplied by 43,294 rentable square feet); and (ii) for the
period commencing on the fifth (5th) anniversary of the Fixed Rent
Commencement Date and ending on the Initial Expiration Date, $1,158,114.50
(i.e., $26.75 per rentable square foot multiplied by 43,294 rentable
square feet). Accordingly, as of the 47th Floor Commencement Date, the
Fixed Rent (inclusive the Fixed Rent set forth on Schedule A and the 47th
Floor Fixed Rent) shall be $8,946,806.00, for the period until the day
preceding the 5th anniversary of the Fixed Rent Commencement Date, and
$10,221,542.00. After the 47th Floor Commencement Date, the provisions of
Section 1.11 hereof shall apply to the aggregate Fixed Rent figures set
forth in the preceding sentence.
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(b) Effective as of the 47th Floor Commencement Date,
Tenant's Operating Share and Tenant's Tax Share, respectively, shall be
appropriately increased by operation of the provisions of Sections 3.01(p)
and 3.01(q), respectively, based upon the deemed rentable area of the 47th
Floor Space (as such is set forth on Exhibit D attached hereto).
Accordingly, as of the 47th Floor Commencement Date, Tenant's Operating
Share shall be 18.2074%, and Tenant's Tax Share shall be 17.8109%.
(c) Effective as of the 47th Floor Commencement Date,
Article 14 hereof shall apply to the 47th Floor Space, except that Tenant,
at Tenant's expense, shall install the "Tenant's Submeters" for the 47th
Floor Space to measure Tenant's demand (i.e., co-incident demand measured
with the remainder of the Premises) and consumption of electricity in the
47th Floor Space; it being understood that, with the addition of the 47th
Floor Space to the Premises, the "Committed Base Electrical Service Level"
shall be increased by operation of the provisions of Section 14.01(a)
hereof.
(d) Effective as of the 47th Floor Commencement Date,
Article 15 hereof shall apply to the 47th Floor Space, except that the
provisions of Section 15.01(a) and the other provisions of Article 15
dealing with the Business Occupancy Date shall apply separately to the
47th Floor Space (and thus reflect a separate "Business Occupancy Date"
for the 47th Floor Space, which shall be the date for the commencement of
certain services to the 47th Floor Space as more particularly provided in
Article 15).
(e) In no event shall any of the following provisions of
this lease apply to the 47th Floor Space: (i) Article 4 hereof (it being
understood that the provisions of Section 42.03 below shall apply in lieu
thereof), or (ii) any provisions providing for a free rent period or
period of rent abatement in respect of Fixed Rent (it being understood
that the provisions of Section 42.04, if applicable, shall apply in lieu
thereof).
42.03. (a) The "47TH FLOOR COMMENCEMENT DATE" shall be the day
after the day that PSI shall have actually vacated the 47th Floor Space.
(b) Landlord and Tenant, in respect of the foregoing,
hereby acknowledge the following: (i) PSI is currently leasing, and in occupancy
of, the 47th Floor Space pursuant to PSI's lease in the Building; and (ii)
Landlord and PSI, as of the date hereof, have entered into an amendment to PSI's
lease, which amendment, inter alia, (1) provides for the addition of space to
the premises demised by PSI's lease effective as of the date of such amendment,
(2) provides that PSI will use commercially reasonable efforts to vacate the
47th Floor Space on or about September 6, 1994, (3) provides that PSI's lease
shall automatically terminate with respect to the 47th Floor Space on the date
that PSI actually vacates the 47th Floor Space, and (4) provides that PSI shall
not have any liability to Landlord in the event it does not vacate the 47th
Floor Space by September 6, 1994 or by any other date.
(c) Notwithstanding anything to the contrary that may be
contained in or implied by any other provision of this lease or the
aforementioned lease amendment, Tenant acknowledges and agrees as follows: (i)
Landlord shall have no obligation to Tenant to enforce (by way of litigation or
otherwise) any rights that Landlord may have against PSI, under the
aforementioned lease amendment or otherwise, on account of PSI's failure to
vacate the 47th Floor Space by August 1, 1994 or by any other date or PSI's
failure to exercise reasonable efforts
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to do so or any other act or omission of PSI with respect to the 47th Floor
Space or the vacation thereof, and Landlord shall have no liability to Tenant by
reason of Landlord not enforcing any such rights; and (ii) Landlord shall be
conclusively deemed to have delivered the 47th Floor Space to Tenant on the day
after PSI shall have vacated the same without further act of the parties (it
being the intention of the parties that the 47th Floor Commencement Date shall
occur automatically on the day after PSI shall have vacated the 47th Floor
Space, whenever that may be).
(d) Tenant shall accept the 47th Floor Space in its "as
is" condition as of the 47th Floor Commencement Date. Section 2.02 hereof,
including Section 2.02(c) hereof, shall apply to the 47th Floor Space.
(e) Tenant hereby waives any right to rescind this lease
or any part hereof under the provisions of Section 223-a of the Real Property
Law of the State of New York, and agrees that the provisions of this Article are
intended to constitute "an express provision to the contrary" within the meaning
of said Section 223-a.
42.04. Notwithstanding the provisions of Section 42.02(a), if the
47th Floor Commencement Date shall occur prior to the Fixed Rent Commencement
Date, then the 47th Floor Space Fixed Rent shall abate for the period commencing
on the 47th Floor Commencement Date and ending on the day prior to the Fixed
Rent Commencement Date, both days inclusive (such period, if applicable, being
herein called the "47TH FLOOR ABATEMENT PERIOD").
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42.05. Landlord and Tenant shall, upon the request of the other
party, execute, acknowledge and deliver to the other party an instrument or
instruments in form reasonably satisfactory to both parties confirming the
addition of the 47th Floor Space to the Premises, the 47th Floor Commencement
Date, any increase in Fixed Rent, Tenant's Operating Share and Tenant's Tax
Share pursuant to the provisions of this Article 42, and any other terms or
conditions in respect of the 47th Floor Space, but any failure of the parties to
execute, acknowledge and deliver such instrument(s) shall not affect the
validity of the leasing of the 47th Floor Space or any of the provisions of this
Article 42.
IN WITNESS WHEREOF, Landlord and Tenant have duly executed
this lease as of the day and year first above written.
LANDLORD:
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
By: /S/Victor Castellano
----------------------------------
Name: Victor Castellano
Title: Vice President
Landlord's Federal Tax I.D.
No.:
13-2633612
----------------------------------
TENANT:
THE GOLDMAN SACHS GROUP, L.P.
By: /S/David A. George
----------------------------------
Name: David A. George
Title: Partner
Tenant's Federal Tax I.D.
No.:
13-3501777
----------------------------------
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<PAGE> 194
LANDLORD
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 5th day of April, 1994, before me personally came Victor
Castellano , to me known, who, being duly sworn by me, did depose and say that
he resides at ___________ 84 Hillary, Westbury, New York ; that he is a Vice
President of The Chase Manhattan Bank, N.A., the national banking association
described in and which executed the foregoing instrument; and that he signed his
name thereto by order of the Board of Directors of said association.
/S/ Doreen Gismondi
----------------------------------
Notary Public
TENANT
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On the 5th day of April, 1994, before me personally came David A.
George , to me known, who, being duly sworn by me, did depose and say that he
resides at ___________ 85 Broad Street, New York, New York ; that he is a
general partner of THE GOLDMAN SACHS GROUP, L.P., the partnership described in
and which executed the foregoing instrument; that his execution of the
instrument was duly authorized according to the Articles of Partnership; that he
executed the instrument on behalf of, and as the act and deed of, said
partnership pursuant to said authorization.
/S/ Lynne Hoffman
----------------------------------
Notary Public
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SCHEDULE A
<PAGE> 196
SCHEDULE A
Fixed Rent
The Fixed Rent, for the Initially Demised Premises, shall be as
follows:
(a) SEVEN MILLION NINE HUNDRED EIGHTEEN THOUSAND FIVE HUNDRED SEVENTY
THREE and 50/100 ($7,918,573.50) Dollars per annum (i.e., $20.75 per rentable
square foot per annum, multiplied by 381,618 rentable square feet), for the
period from the Commencement Date to and including the day preceding the fifth
(5th) anniversary of the Fixed Rent Commencement Date.
(b) NINE MILLION SIXTY THREE THOUSAND FOUR HUNDRED TWENTY SEVEN and
50/100 ($9,063,427.50) Dollars per annum (i.e., $23.75 per rentable square foot
per annum, multiplied by 381,618 rentable square feet), for the period from the
fifth (5th) anniversary of the Fixed Rent Commencement Date to and including the
Initial Expiration Date.
<PAGE> 197
THIRD AMENDMENT TO LEASE
THIRD AMENDMENT TO LEASE (this "Amendment") made as of October 31,
1997, between THE CHASE MANHATTAN BANK, successor by merger to The Chase
Manhattan Bank, N.A., having an office at 633 Third Avenue, New York, New York
10017, Attention: Vice President (herein called "Landlord") and THE GOLDMAN
SACHS GROUP, L.P., a Delaware limited partnership, having its principal business
address at 85 Broad Street, New York, New York 10004, Attention: General
Services Department (herein called "Tenant").
W I T N E S S E T H :
WHEREAS, Landlord and Tenant have heretofore entered into a certain
lease dated as of April 5, 1994 (herein called the "Original Lease"), which
Original Lease demised certain office premises (herein collectively called the
"Original Lease Office Premises") located in the building known as One New York
Plaza in the City, County and State of New York (herein called the "Building");
WHEREAS, Landlord and Tenant have heretofore entered into a certain
First Amendment to Lease dated as of March 1, 1995 (herein called the "First
Amendment"), which First Amendment amended the Original Lease to, inter alia,
demise (i) certain storage space located on the subcellar level of the Building
(herein called the "Storage Space"), and (ii) certain other space located on the
retail concourse level of the Building (herein called the "Retail Concourse
Space");
WHEREAS, Landlord and Tenant have heretofore entered into a certain
Second Amendment to Lease dated as of June 17, 1997 (herein called the "Second
Amendment"), which Second Amendment amended the Original Lease, as theretofore
amended, to, inter alia, demise certain additional office space located on the
twenty-first (21st) floor of the Building (herein called the "21st Floor Space")
(the Original Lease, as amended by the First Amendment and Second Amendment,
being herein called the "Existing Lease") (the Original Lease Office Premises,
the Storage Space, the Retail Concourse Space and the 21st Floor Space are
herein collectively called "Existing Premises");
WHEREAS, (A) Landlord is currently a party to a certain Lease, dated
as of November 4, 1992, between Landlord, as landlord, and Shearson Lehman
Brothers Inc. (which entity has since changed its name to Lehman Brothers Inc.)
("Lehman"), as tenant (which lease, as heretofore amended and modified, being
herein called the "Lehman Lease"), which Lehman Lease demises the 40th Floor
Space (as defined below) to Lehman for a term which is currently set to expire
on April 7, 1998, and (B) Tenant, as of the date hereof, (i) has, pursuant to a
certain Assignment of Sublease, dated as of the date hereof, between Continental
Broker-Dealer Corp. ("Continental"), as assignor, and Tenant, as
<PAGE> 198
assignee (and a certain Consent and Agreement, executed incident thereto and
dated as of the date hereof, among Landlord, Lehman, Continental and Tenant),
become the subtenant under a certain Sublease, dated as of August 31, 1995,
between Lehman, as sublandlord, and Americorp Financial Services Inc.
("Americorp"), as subtenant (such sublease being herein called the
"Lehman-Tenant Sublease"), (x) which Lehman-Tenant Sublease was previously
assigned to Continental by Americorp pursuant to a sublease assignment and
assumption agreement dated February 3, 1997, and (y) which Lehman-Tenant
Sublease demises the 40th Floor Space to Tenant for a term which is currently
set to expire on April 6, 1998, and (ii) has, pursuant to the Lehman-Tenant
Sublease, taken possession of the 40th Floor Space;
WHEREAS, Landlord and Tenant, pursuant to this Amendment, desire to
amend the Existing Lease as hereinafter provided (the Existing Lease as the same
as hereby amended being herein called the "Lease"), to, inter alia, demise the
40th Floor Space upon the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
contained, the parties hereto agree as follows:
1. Defined Terms.
All capitalized terms used herein, and not otherwise defined herein,
shall have the meanings ascribed thereto in the Existing Lease.
2. Addition of 40th Floor Space.
(a) Effective as of April 8, 1998 (the "40th floor Commencement
Date"), the portion of the fortieth (40th) floor of the Building that is shown
hatched on the floor plan attached hereto as Exhibit A (such space being herein
called the "40th floor Space") shall be automatically (without further act of
the parties) demised to Tenant under the Lease upon the terms and conditions set
forth in Section 2(b) below, and, upon such terms and conditions, shall be added
to, and be deemed to comprise part of, the Premises. The parties agree that, for
purposes of the Lease, the rentable area of the 40th Floor Space shall be
conclusively deemed to be 42,125 rentable square feet; but in no event shall
such deemed rentable area constitute or imply any representation or warranty by
Landlord whatsoever as to the actual size of the 40th Floor Space or the
Building or any part thereof.
(b) The 40th Floor Space shall be added to the Premises upon all the
executory terms and conditions of the Lease (including without limitation the
Expiration Date), as of the 40th Floor Commencement Date, subject to and in
accordance with the following terms and conditions as well as the other
provisions of this Amendment:
(1) The 40th Floor Space shall be added to the Premises as
part of the Office Premises (and, as such, shall be used solely for the Primary
Use and Secondary
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Uses), and, thus, those provisions of the Lease which expressly apply solely to
either or both of the Storage Space or the Retail Concourse Space shall not
apply to the 40th Floor Space.
(2) The Fixed Rent, effective as of the 40th Floor Rent
Commencement Date, shall be increased by, and shall thus include, the 40th Floor
Fixed Rent. As used herein, the "40th Floor Fixed Rent" shall mean the Fixed
Rent payable for the 40th Floor Space, which shall be at the following rates for
the following periods: (i) for period from the 40th Floor Rent Commencement Date
to and including April 30, 2003, the rate of ONE MILLION ELEVEN THOUSAND and
00/100 ($1,011,000.00) DOLLARS per annum (payable in equal monthly installments
of $84,250.00); and (ii) for the period from May 1, 2003 to and including the
Initial Expiration Date, the rate of ONE MILLION TWO HUNDRED THOUSAND FIVE
HUNDRED SIXTY-TWO and 50/100 ($1,200,562.50) DOLLARS per annum (payable in equal
monthly installments of $100,046.88). The "40th floor Rent Commencement Date"
shall mean the date which is one hundred fifty (150) days after the 40th Floor
Commencement Date.
(3) For purposes of applying Article 3 of the Original Lease
to the 40th Floor Space, the following provisions shall apply:
(A) Notwithstanding anything to the contrary contained
in Sections 3.01(p) and (q) of the Original Lease, neither Tenant's Operating
Share nor Tenant's Tax Share shall be increased by the addition of the 40th
Floor Space to the Premises.
(B) The Tax Payment for the Tax Year in which the 40th
Floor Rent Commencement Date occurs, and for each Tax Year thereafter, shall (in
addition to the Base Component, the Generator Component and the 21st Floor
Component thereof) include an additional fourth component, in respect of the
40th Floor Space, which shall be equal to Tenant's 40th Floor Tax Share (as
hereinafter defined) of the excess of (i) the Adjusted Real Property Taxes for
such Tax Year, over (ii) the 40th Floor Base Tax Amount (as hereinafter defined)
(such additional component, of any such Tax Payment, being herein called the
"40th floor Component" of such Tax Payment); provided, however, that (x) in
respect of the Tax Year in which the 40th Floor Rent Commencement Date occurs,
the 40th Floor Component of the Tax Payment shall be prorated (on a per diem
basis) to correspond to that portion of the Tax Year occurring on or after the
40th Floor Rent Commencement Date, and (y) in respect of the Tax Year in which
the Expiration Date occurs, the 40th Floor Component of the Tax Payment shall be
prorated (on a per diem basis) to correspond to that portion of such Tax Year
occurring on or prior to the Expiration Date. As used herein, (I) "Tenant's 40th
floor Tax Share" shall mean 1.737%, and (II) the "40th floor Base Tax Amount"
shall mean the Adjusted Real Property Taxes for the Tax Year commencing July 1,
1998 and ending June 30, 1999.
(C) The Operating Payment for the Operating Year in
which the 40th Floor Rent Commencement Date occurs, and for each Operating Year
thereafter,
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shall (in addition to the amounts described in Section 3.03(a) of the Original
Lease and Section 2(b)(3)(C) of the Second Amendment) include (and be increased
by) an additional amount, in respect of the 40th Floor Space, which shall be
equal to Tenant's 40th Floor Operating Share (as hereinafter defined) of the
excess of (i) Operating Expenses for such Operating Year, over (ii) the 40th
Floor Base Operating Amount (as hereinafter defined) (such additional amount,
for any such Operating Year, being sometimes herein separately referred to as
"40th Floor Operating Payment"); provided, however, that (x) in respect of the
Operating Year in which the 40th Floor Rent Commencement Date occurs, the 40th
Floor Operating Payment shall be prorated (on a per diem basis) to correspond to
that portion of the Operating Year occurring on or after the 40th Floor Rent
Commencement Date, and (y) in respect of the Operating Year in which the
Expiration Date occurs, the 40th Floor Operating Payment shall be prorated (on a
per diem basis) to correspond to that portion of such Operating Year occurring
on or prior to the Expiration Date. As used herein, (I) "Tenant's 40th Floor
Operating Share" shall mean 1.791%, and (II) the "40th Floor Base Operating
Amount" shall mean an amount equal to Operating Expenses for the Operating Year
commencing January 1, 1998 and ending December 31, 1998.
(4) The provisions of Article 4 of the Original Lease shall
not apply to the 40th Floor Space or any part thereof.
(c) Tenant hereby acknowledges and agrees that Landlord shall have
no obligation whatsoever to deliver possession of the 40th Floor Space to Tenant
upon the 40th Floor Commencement Date (but rather, upon such date, the 40th
Floor Space shall be automatically added to the Premises as hereinabove
provided); it being further agreed, in that regard, that, upon the 40th Floor
Commencement Date, Tenant shall be automatically and irrevocably be deemed to
have accepted the 40th Floor Space in its "AS IS" condition as of the 40th Floor
Commencement Date (it being understood that the provisions of this sentence
shall not release Landlord from its obligations with respect to the 40th Floor
Space under any other provisions of the Lease). Furthermore, it is agreed that
there shall be no interruption in Tenant's occupancy between the end of the term
of the Lehman-Tenant Sublease and the 40th Floor Commencement Date. Tenant
hereby agrees that the provisions of this Article are intended to constitute "an
express provision to the contrary" within the meaning of Section 223-a of the
Real Property Law of the State of New York.
(d) In addition to 40th Floor Fixed Rent, Tenant, simultaneously
with the execution and delivery of this Amendment and in consideration therefor,
shall pay to Landlord, as additional rent under the Lease, the sum of FIVE
HUNDRED THOUSAND and 00/100 ($500,000.00) DOLLARS (herein called the "Section
2(d) Additional Rent"). Tenant shall pay the Section 2(d) Additional Rent by one
or more separate checks of Tenant (the number and amount of such checks to be
such as Landlord shall reasonably request), each to be made payable to the order
of Landlord or such other payee(s) as Landlord shall direct in writing.
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3. Miscellaneous Amendments, Etc. to Existing Lease.
(a) Effective as of the 40th Floor Commencement Date, and by
operation of the applicable definitions contained in Article 31 of the Original
Lease, the fortieth (40th) floor of the Building shall become a "Premises Floor"
for all purposes of the Lease.
(b) (1) Landlord, as of the date hereof, hereby remakes the
representation set forth in the last sentence of Section 5.02 of the Original
Lease.
(2) Landlord, as of the date hereof, hereby remakes the
representation set forth in Section 8.06(a) of the Original Lease as to the
fortieth (40th) floor of the Building; it being agreed that, in connection
therewith, the term "Acknowledged ACM Areas" is hereby amended to include (in
addition to those areas delineated as such in the Existing Lease) the areas on
the fortieth (40th) floor of the Building which are delineated on Exhibit B
attached hereto. Landlord and Tenant hereby agree that, as between Landlord and
Tenant, the provisions of Section 8.06 of the Lease shall be applicable to the
40th floor of the Building during the Lehman Sublease Period (as hereinafter
defined) (as fully as such Section will be applicable to such floor after the
Lehman Sublease Period); and, accordingly (but without limiting the generality
of the foregoing), for purposes of Section 8.06 of the Lease (i) during the
Lehman Sublease Period the 40th floor shall be deemed to be a Premises Floor,
and (ii) the Lehman Sublease Period shall be deemed to be a part of the term of
the Lease.
(c) Notwithstanding the provisions of Section 14.03 of the Original
Lease, Landlord, at Tenant's expense, shall reasonably promptly (after the 40th
Floor Commencement Date) install the initial Tenant's Submeter(s) to measure
Tenant's Base Electricity for the 40th Floor Space, and, for any period between
the 40th Floor Commencement Date and the date of such installation, Tenant shall
pay for the cost of such electricity at the rates set forth in, and in
accordance with the provisions of, Section 14.03(d)(1) (based upon the number of
rentable square feet in the 40th Floor Space).
(d) (1) Effective as of the 40th Floor Commencement Date, Article 15
of the Original Lease is hereby amended as follows: (i) the references in
Section 15.04(a) and Section 15.04(b)(2) to "400 tons of chilled water" (which,
pursuant to the Second Amendment, was changed in Section 15.04(a) to read "412
tons of chilled water") are hereby further changed to read "450 tons of chilled
water"; (ii) the reference to "$137" in the definition of Minimum Per Diem SCW
Charge, as set forth in Section 15.04(b)(1), is hereby changed to read "$154";
(iii) subject to provisions of Section 6 of this Amendment, the provisions of
Section 15.05 and Section 15.10(d) shall not apply to the 40th Floor Space or
otherwise to the fortieth (40th) floor of the Building or any elevators serving
such space or such floor (and, accordingly, such provisions shall continue to
apply only to Original Lease Office Premises and the Premises Floor(s) on which
are located the Original Lease Office Premises); and (iv) notwithstanding the
provisions of Section 15.12, Tenant may not
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designate the fortieth (40th) floor of the Building as the floor on which it
will initially locate its cafeteria.
(2) Subject to the provisions of Section 6 of this Amendment,
Landlord, commencing on the 40th Floor Commencement Date and thereafter
throughout the term of the Lease (for so long as the 40th Floor Space shall be
part of the Premises), shall provide passenger elevator service to the fortieth
(40th) floor of the Building (with at least one (1) passenger elevator being in
service at all times), subject to Section 15.10(a) of the Original Lease.
Notwithstanding anything to the contrary that may be contained herein, in no
event shall Tenant ever use, or permit any Tenant Party to use, any passenger
elevator(s) serving the fortieth (40th) floor of the Building (i) to carry
construction personnel or materials, (ii) for deliveries of mail, food and
similar items, or any deliveries of packages and boxes by hand truck or similar
device.
(e) Effective as of the 40th Floor Commencement Date, Article 16 of
the Original Lease (as heretofore amended by Section 3(h) of the Second
Amendment) is hereby further amended as follows: (i) the areas of the Premises
described in Section 16.02(d)(II)(z) relate also to the fortieth (40th) floor of
the Building (as well as the 41st through 50th floors of the Building); (ii) the
restrictions on Landlord's right to install Mylar on the Building's exterior
windows serving the Premises which are set forth in Section 16.04(b) shall also
apply to the Building's exterior windows serving the 40th Floor Space (as well
as the Building's exterior windows serving the Original Lease Office Premises);
(iii) clause (x) of Section 16.10 of the Original Lease is hereby further
amended in its entirety to read "(x) if such directory is manual (i.e., not
computerized), a percentage of the total number of listing spaces/slots on such
directory, which percentage is equal to the sum of Tenant's Tax Share, Tenant's
21st Floor Tax Share and Tenant's 40th Floor Tax Share"; and (iv) the rights of
Tenant under Section 16.15 shall also apply to the 40th Floor Space (in addition
to the Original Lease Office Premises), and the portions of the Designated Fire
Stairwells located on the fortieth (40th) floor of the Building (in addition to
such portions located on the 41st through 50th floors of the Building).
(f) Effective as of the date hereof, Article 37 of the Original
Lease (as amended by Section 7 of the First Amendment and Section 3(k) of the
Second Amendment) is hereby deleted from the Lease (and Tenant shall no longer
have any rights thereunder); provided, however, that the definitions of "Base
Block" and "Additional Full Floor Block" appearing in Section 37.04(j) of the
Original Lease (as modified by Section 7(a) of the First Amendment) shall remain
part of the Lease.
(g) (1) With respect to Article 39 of the Original Lease (as amended
by Section 9 of the First Amendment), it is agreed that Unit 40 (in which Unit
the 40th Floor Space is located) shall not constitute a "Premises Unit".
(2) Notwithstanding anything to the contrary contained in the
Lease, if, during any period during the term of the Lease (from and after the
40th Floor
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Commencement Date), the owner or net lessee (i.e., lessee under an Underlying
Lease) of all the Premises Units (i.e., the person which is defined as the
Landlord under the Lease pursuant to the definition of "Landlord" set forth
Section 39.01 of the Original Lease (disregarding the proviso to clause (i) of
such definition)) shall not also be either (i) the owner or net lessee of Unit
40, or (ii) the owner or net lessee of the portion of Unit 40 which includes the
40th Floor Space, then, during any such period, the owner or net lessee of Unit
40 (rather than the owner or net lessee of the Premises Units) shall be the
"Landlord" under the Lease with respect to the 40th Floor Space only (with the
owner or net lessee of the Premises Units remaining the Landlord under the Lease
with respect to the Original Lease Office Premises).
4. Amendments Re: Article 38 of Original Lease.
(a) Article 38 of the Original Lease is hereby amended by deleting
Sections 38.02 and 38.03 of the Original Lease (together with Section 8 of the
First Amendment) in their entirety, and adding in replacement thereof the
following new Sections 38.02 and 38.03 (effective as of the date hereof):
"38.02. (a) If Tenant exercises the First Renewal Option in
accordance with the terms of Section 38.01(a) of the Original Lease, then
the Lease shall thereupon be extended for the First Renewal Term upon all
the same terms, covenants and conditions as are contained in the Lease,
except that for, and during, the First Renewal Term:
(1) the Fixed Rent shall be the sum of (i) the Original
Lease Office Premises Renewal Fixed Rent for the First Renewal Term, plus
(ii) the 21st Floor Space Renewal Fixed Rent for the First Renewal Term
(if any part of the 21st Floor Space is included within the First Renewal
Premises), plus (iii) the 40th Floor Space Renewal Fixed Rent for the
First Renewal Term (if any part of the 40th Floor Space is included within
the First Renewal Premises), plus (iv) the Storage Space Renewal Fixed
Rent for the First Renewal Term (if the Storage Space is included within
the First Renewal Premises), plus (v) the Retail Concourse Space Renewal
Fixed Rent for the First Renewal Term (if the Retail Concourse Space is
included within the First Renewal Premises);
(2) the provisions of Article 3 of the Original Lease
(as amended and supplemented by the provisions of Second Amendment and the
Third Amendment) shall continue to apply to all the Office Premises
constituting part of the First Renewal Premises (and, as applicable, each
of the Tax Payment, including without limitation the 21st Floor Component
and the 40th Floor Component thereof, and the Operating Payment, including
without limitation the 21st Floor Operating Payment and 40th Floor
Operating Payment, shall continue to be payable thereunder), subject to
the following:
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(A) effective as of first day of the First Renewal
Term (and for the entirety thereof), (i) each of the Base Tax Amount and
the 21st Floor Base Tax Amount shall be an amount equal to the Adjusted
Real Property Taxes for the Tax Year ending immediately prior to the
commencement of the First Renewal Term, and (ii) each of the Base
Operating Amount and the 21st Floor Base Operating Amount shall be an
amount equal to the Operating Expenses for the Operating Year ending
immediately prior to the commencement of the First Renewal Term;
(B) effective as of May 1, 2008 (and for the
balance of the First Renewal Term), (i) the 40th Floor Base Tax Amount
shall be an amount equal to the Adjusted Real Property Taxes for the Tax
Year ending immediately prior to the commencement of the First Renewal
Term (it being understood that for the portion of the First Renewal Term
which is prior to May 1, 2008, the 40th Floor Base Tax Amount shall remain
an amount equal to the Adjusted Real Property Taxes for the Tax Year
commencing July 1, 1998 and ending June 30, 1999), and (ii) the 21st Floor
Base Operating Amount shall be an amount equal to the Operating Expenses
for the Operating Year ending immediately prior to the commencement of the
First Renewal Term (it being understood that for the portion of the First
Renewal Term which is prior to May 1, 2008, the 40th Floor Base Operating
Amount shall remain an amount equal to the Operating Expenses for the
Operating Year commencing January 1,1998 and ending December 31, 1998);
and
(C) if, and to the extent that, the First Renewal
Premises shall, pursuant to one or more of the provisions of the Lease,
consist of less than the entirety of the Office Premises theretofore
constituting part of the Premises, then, as applicable, the Tenant's Tax
Share, Tenant's 21st Floor Tax Share, Tenant's 40th Floor Tax Share,
Tenant's Operating Share, Tenant's 21st Floor Operating Share and/or
Tenant's 40th Floor Operating Share, as the case may be, shall be adjusted
on pro-rata rentable square foot basis (whether by operation of the
provisions defining the same or otherwise);
(3) any provisions of the Lease with respect to (i)
Landlord's Work, or (ii) any abatement period(s) with respect to Fixed
Rent, Operating Payments (including without limitation 21st Floor
Operating Payments and 40th Floor Operating Payments) and Tax Payments
(including without limitation the 21st Floor Component and the 40th Floor
Component of any Tax Payments) set forth in Articles 1, 3 and 4 of the
Original Lease (or any provision of the Second Amendment or Third
Amendment), shall not be applicable;
(4) the provisions of Section 38.01(a) of the Original
Lease relative to Tenant's right to renew the term of the Lease shall not
be applicable; and
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(5) the Expiration Date shall be the First Renewal
Expiration Date.
(b) If Tenant exercises the Second Renewal Option in
accordance with the terms of Section 38.01(b) of the Original Lease, then
the Lease shall thereupon be extended for the Second Renewal Term upon all
the same terms, covenants and conditions as are contained in the Lease,
except that for, and during, the Second Renewal Term:
(1) the Fixed Rent shall be the sum of (i) the Original
Lease Office Premises Renewal Fixed Rent for the Second Renewal Term, plus
(ii) the 21st Floor Space Renewal Fixed Rent for the Second Renewal Term
(if any part of the 21st Floor Space is included within the Second Renewal
Premises), plus (iii) the 40th Floor Space Renewal Fixed Rent for the
Second Renewal Term (if any part of the 40th Floor Space is included
within the Second Renewal Premises), plus (iv) the Storage Space Renewal
Fixed Rent for the Second Renewal Term (if the Storage Space is included
within the Second Renewal Premises), plus (v) the Retail Concourse Space
Renewal Fixed Rent for the Second Renewal Term (if the Retail Concourse
Space is included within the Second Renewal Premises);
(2) the provisions of Article 3 of the Original Lease
(as amended and supplemented by the provisions of Second Amendment and the
Third Amendment) shall continue to apply to all the Office Premises
constituting part of the Second Renewal Premises (and, as applicable, each
of the Tax Payment, including without limitation the 21st Floor Component
and the 40th Floor Component thereof, and the Operating Payment, including
without limitation the 21st Floor Operating Payment and 40th Floor
Operating Payment, shall continue to be payable thereunder), subject to
the following:
(A) effective as of first day of the Second
Renewal Term (and for the entirety thereof), (i) each of the Base Tax
Amount, the 21st Floor Base Tax Amount and the 40th Floor Base Tax Amount
shall be an amount equal to the Adjusted Real Property Taxes for the Tax
Year ending immediately prior to the commencement of the Second Renewal
Term, and (ii) each of the Base Operating Amount, the 21st Floor Base
Operating Amount and the 40th Floor Base Operating Amount shall be an
amount equal to the Operating Expenses for the Operating Year ending
immediately prior to the commencement of the Second Renewal Term; and
(B) if, and to the extent that, the Second Renewal
Premises shall, pursuant to one or more of the provisions of the Lease,
consist of less than the entirety of the Office Premises theretofore
constituting part of the Premises, then, as applicable, the Tenant's Tax
Share, Tenant's 21st Floor Tax Share, Tenant's 40th Floor Tax Share,
Tenant's Operating Share, Tenant's 21st Floor Operating Share and/or
Tenant's 40th Floor Operating Share, as the case may be, shall be adjusted
on
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pro-rata rentable square foot basis (whether by operation of the
provisions defining the same or otherwise);
(3) any provisions of the Lease with respect to (i)
Landlord's Work, or (ii) any abatement period(s) with respect to Fixed
Rent, Operating Payments (including without limitation 21st Floor
Operating Payments and 40th Floor Operating Payments) and Tax Payments
(including without limitation the 21st Floor Component and the 40th Floor
Component of any Tax Payments) set forth in Articles 1, 3 and 4 of the
Original Lease (or any provision of the Second Amendment or Third
Amendment), shall not be applicable;
(4) the provisions of Section 38.01 of the Original
Lease relative to Tenant's right to renew the term of the Lease shall not
be applicable; and
(5) the Expiration Date shall be the Second Renewal
Expiration Date.
38.03. As used herein, the following terms shall have the following
meanings:
(a) The "Fair Market Fixed Rent", for any Renewal Term, shall
mean the per annum per rentable square foot rate of fixed rent that a
willing tenant would pay and a willing landlord would accept for a lease
of the Office Premises (excluding any portions thereof which, pursuant to
one or more provisions of the Lease, are not to be demised for such
Renewal Term, i.e., which are not part of the First Renewal Premises or
the Second Renewal Premises, as the case may be) having a 10-year term
(commencing with the commencement of such Renewal Term), and providing for
fixed annual rent on a level payment basis throughout such term (i.e., no
step-ups in fixed rent), assuming: (i) that the Office Premises (excluding
such portions thereof) were being demised in their "as is" condition as of
the date that Tenant exercised the applicable Renewal Option, without any
allowance or contribution by Landlord; (ii) that the Office Premises
(excluding such portions thereof) were being demised upon the same terms
and conditions as are provided for in the Lease for such Renewal Term
(including without limitation the terms and conditions set forth in
Section 38.02 hereinabove set forth) (but, in all cases, excluding, for
purposes of the determination of the applicable rate of Fair Market Fixed
Rent only, any different terms and conditions which are applicable only to
the 40th Floor Space for the initial part of the First Renewal Term); and
(iii) to the extent that the creditworthiness of the tenant is deemed
relevant by the person determining such Fair Market Fixed Rent, that the
tenant has a creditworthiness substantially equivalent to that of Tenant.
(b) "Original Lease Office Premises Renewal Fixed Rent", for
any Renewal Term, shall mean a per annum rate of Fixed Rent equal to the
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product of (x) the Fair Market Fixed Rent for such Renewal Term,
multiplied by (y) the number of rentable square feet in the Original Lease
Office Premises (excluding any portions thereof which, pursuant to one or
more provisions of the Lease, are not to be demised during such Renewal
Term, i.e., which are not part of the First Renewal Premises or the Second
Renewal Premises, as the case may be). Such Fixed Rent shall be deemed
payable with respect to the Original Lease Office Premises (other than any
part thereof excluded as aforesaid) on pro-rata rentable square foot
basis.
(c) "21st Floor Space Renewal Fixed Rent", for any Renewal
Term, shall mean a per annum rate of Fixed Rent equal to the product of
(x) the Fair Market Fixed Rent for such Renewal Term, multiplied by (y)
the number of rentable square feet in the 21st Floor Space (excluding any
portions thereof which, pursuant to one or more provisions of the Lease,
are not to be demised during such Renewal Term, i.e., which are not part
of the First Renewal Premises or the Second Renewal Premises, as the case
may be). Such Fixed Rent shall be deemed payable with respect to the 21st
Floor Space (other than any part thereof excluded as aforesaid) on
pro-rata rentable square foot basis.
(d) "40th Floor Space Renewal Fixed Rent" shall (I) for the
First Renewal Term, mean (x) for the portion of the First Renewal Term
commencing on October 1, 2004 and ending on April 30, 2008, both days
inclusive, a per annum rate of Fixed Rent equal to the rate of ONE MILLION
TWO HUNDRED THOUSAND FIVE HUNDRED SIXTY-TWO and 50/100 ($1,200,562.50)
DOLLARS per annum (which rate shall be reduced on pro-rata rentable square
foot basis to the extent any part of the 40th Floor Space is not, pursuant
to one or more provisions of the Lease, part of the First Renewal
Premises), and (y) for the remainder of the First Renewal Term, a per
annum rate of Fixed Rent equal to the product of (aa) the Fair Market
Fixed Rent for the First Renewal Term, multiplied by (bb) the number of
rentable square feet in the 40th Floor Space (excluding any portions
thereof which, pursuant to one or more provisions of the Lease, are not to
be demised during the First Renewal Term, i.e., which are not part of the
First Renewal Premises), and (II) for the Second Renewal Term, mean a per
annum rate of Fixed Rent equal to the product of (A) the Fair Market Fixed
Rent for the Second Renewal Term, multiplied by (B) the number of rentable
square feet in the 40th Floor Space (excluding any portions thereof which,
pursuant to one or more provisions of the Lease, are not to be demised
during the Second Renewal Term, i.e., which are not part of the Second
Renewal Premises). Such Fixed Rent shall be deemed payable with respect to
the 40th Floor Space (other than any part thereof excluded as aforesaid)
on pro-rata rentable square foot basis.
(e) "Storage Space Renewal Fixed Rent", for any Renewal Term,
shall mean a per annum rate of Fixed Rent equal to the product of (x) the
per annum rate of Storage Space Fixed Rent payable immediately prior to
the Initial
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Expiration Date, multiplied by (y) the Office Premises Factor (as
hereinafter defined) for such Renewal Term. Such Fixed Rent shall be
deemed payable with respect to the Storage Space on pro-rata rentable
square foot basis.
(f) "Retail Concourse Space Renewal Fixed Rent", for any
Renewal Term, shall mean a per annum rate of Fixed Rent equal to the
product of (x) the per annum rate of Retail Concourse Space Fixed Rent
payable immediately prior to the Initial Expiration Date, multiplied by
(y) the Office Premises Factor for such Renewal Term. Such Fixed Rent
shall be deemed payable with respect to the Retail Concourse Space on
pro-rata rentable square foot basis.
(g) "Office Premises Factor", for any Renewal Term, shall mean
a fraction, (i) the numerator of which is the Fair Market Fixed Rent for
such Renewal Term, and (ii) the denominator of which is $23.75 per
rentable square foot per annum."
(b) Article 38 of the Original Lease (as amended pursuant to Section
4(a) above) is hereby further amended by adding thereto the following Sections
38.06, 38.07 and 38.08 (effective as of the date hereof):
"38.06. (a) For purposes of this Section 38.06, the following terms
shall have the following meanings:
"Measuring Period" shall mean the period
commencing on October 1, 2004 and ending on September 30, 2005, both days
inclusive.
"Non-Complete Renewal Fee" shall mean an amount
equal to the sum of (i) ONE MILLION TWO HUNDRED THOUSAND FIVE HUNDRED
SIXTY-TWO and 50/100 ($1,200,562.50) DOLLARS, plus (ii) 1.737% of the
excess (the "NCRF Tax Excess") of (x) the Adjusted Real Property Taxes
attributable to the Measuring Period, over (y) the Adjusted Real Property
Taxes for the Tax Year commencing July 1, 1998 and ending June 30, 1999,
plus (iii) 1.791% of the excess (the "NCRF Operating Excess") of (x)
Operating Expenses attributable to the Measuring Period, over (y)
Operating Expenses for the Operating Year commencing January 1, 1998 and
ending December 31, 1998. To the extent more than a single Tax Year occurs
within the Measuring Period, the portion of the Adjusted Real Property
Taxes for each such Tax Year which shall be deemed attributable to the
Measuring Period shall be determined based upon the ratio that the number
of days in such Tax Year that are within the Measuring Period bears to the
total number of days in such Tax Year. To the extent more than a single
Operating Year occurs within the Measuring Period, the portion of the
Operating Expenses for each such Operating Year which shall be deemed
attributable to the Measuring Period shall be determined based upon the
ratio that the number of days in such Operating Year that are within the
Measuring Period bears to the total number of days in such
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Operating Year. Notwithstanding the foregoing, if, as of March 31, 2003,
the Lease shall have been terminated as to one or more portions (but less
than the entirety) of the 40th Floor Space pursuant to the provisions of
Article 7 of the Original Lease (as amended), then the Non-Complete
Renewal Fee shall be reduced on a pro-rata rentable square foot basis
(based upon the ratio that the number of rentable square feet contained in
the theretofore terminated portions of the 40th Floor Space bears to the
number of rentable square feet comprising the entirety of the 40th Floor
Space).
"Preliminary Non-Complete Renewal Fee Amount"
shall mean an amount equal to the sum of (i) ONE MILLION TWO HUNDRED
THOUSAND FIVE HUNDRED SIXTY-TWO and 50/100 ($1,200,562.50) DOLLARS, plus
(ii) 1.737% of the best estimate of the NCRF Tax Excess (which estimate
shall be determined based upon the assumption that Adjusted Real Property
Taxes for each Tax Year following the last Tax Year for which the Tax
Closure Date occurred, as of September 1, 2003, will be 104% of the
Adjusted Real Property Taxes for the prior Tax Year), plus (iii) 1.791% of
the best estimate of the NCRF Operating Excess (which estimate shall be
determined based upon the assumption that Operating Expenses for each
Operating Year following the last Operating Year for which the Operating
Payment were finally determined between Landlord and Tenant, as of
September 1, 2003, will be 104% of the Operating Expenses for the prior
Operating Year). Notwithstanding the foregoing, if, as of March 31, 2003,
the Lease shall have been terminated as to one or more portions (but less
than the entirety) of the 40th Floor Space pursuant to the provisions of
Article 7 of the Original Lease (as amended), then the Preliminary
Non-Complete Renewal Fee shall be reduced on a pro-rata rentable square
foot basis (based upon the ratio that the number of rentable square feet
contained in the theretofore terminated portions of the 40th Floor Space
bears to the number of rentable square feet comprising the entirety of the
40th Floor Space).
"Determination Date" shall the later to occur of
(i) the date upon which the Tax Closure Date shall have occurred with
respect to all Tax Years the whole or any part of which occurs within the
Measuring Period, and (ii) the date upon which Operating Payment shall
have been finally determined (between Landlord and Tenant) for all
Operating Years the whole or any part of which occurs within the Measuring
Period.
(b) If, and only if, (A) as of March 3l, 2003, the Lease
shall not have been terminated as to the entirety of the 40th Floor Space
pursuant to the provisions of Article 7 of the Original Lease (as
heretofore amended), and (B) either (1) Tenant shall not exercise the
First Renewal Option (and shall further not exercise the Special 40th
Floor Extension Option (as defined below)), or (2) Tenant shall exercise
the First Renewal Option but the First Renewal Premises shall not include
the 40th Floor Space, then Tenant, on account thereof, shall pay to
Landlord an amount equal to the Non-Complete Renewal Fee as follows: (i)
on or prior to June
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30, 2004, Tenant shall pay to Landlord, on account of the Non-Complete
Renewal Fee, an amount equal to the Preliminary Non-Complete Renewal Fee
Amount; and (ii) within thirty (30) days after the Determination Date,
Landlord and Tenant shall reconcile the amount of the Preliminary
Non-Complete Renewal Fee Amount with the Non-Complete Renewal Fee, and (x)
if the Non-Complete Renewal Fee exceeds the Preliminary Non-Complete
Renewal Fee Amount, then Tenant shall pay to Landlord such excess,
together with interest on the amount of such excess at the Base Rate (for
the period from the date that the Preliminary Non-Complete Renewal Fee
Amount was paid to the date of the payment of such excess), or (y) if the
Preliminary Non-Complete Renewal Fee Amount exceeds the Non-Complete
Renewal Fee, then Landlord shall pay to Tenant such excess, together with
interest on the amount of such excess at the Base Rate (for the period
from the date that the Preliminary Non-Complete Renewal Fee Amount was
paid to the date of the payment of such excess).
38.07. (a) If, and only if, (i) Tenant shall have not theretofore
exercised the First Renewal Option, (ii) Tenant shall have theretofore
irrevocably waived the First Renewal Option and the Second Renewal Option
in writing, and (iii) Tenant shall then be leasing the entirety of the
40th Floor Space, then, and only in such events, Tenant shall have the
option (herein called the "Special 40th Floor Extension Option") to extend
the term of the Lease as to the 40th Floor Space only for an additional
period commencing on October 1, 2004 and ending on April 30, 2008 (such
additional period being herein called the "Special 40th Floor Extension
Period"); provided, that, as of the date that Tenant gives Landlord the
Special 40th Floor Extension Notice (as hereinafter defined) the Lease
shall be in full force and effect. The Special 40th Floor Extension Option
shall be exercisable only by Tenant giving Landlord written notice of such
exercise (herein called the "Special 40th Floor Extension Notice"), which
notice shall be received by Landlord not later than the date that is
eighteen (18) months prior to the Expiration Date (time being of the
essence with respect to Landlord's receipt of the Special 40th Floor
Extension Notice). Landlord, at its option, by notice to Tenant given no
later than ten (10) Business Days after Landlord's receipt of the Special
40th Floor Extension Notice, may render the Special 40th Floor Extension
Notice null and void if, at the time that Landlord receives the same, an
Event of Default shall have occurred and is then continuing.
(b) If Tenant exercises the Special 40th Floor Extension
Option in accordance with the terms of Section 38.07(a) above, then the
Lease shall thereupon be extended for the 40th Floor Space only for the
Special 40th Floor Extension Period upon all the same terms, covenants and
conditions as are contained in the Lease, except that for, and during, the
Special 40th Floor Period: (1) the Premises shall consist solely of the
40th Floor Space; (2) the Fixed Rent shall be a per annum rate of Fixed
Rent equal to the rate of ONE MILLION TWO HUNDRED THOUSAND FIVE HUNDRED
SIXTY-TWO and 50/100 ($1,200,562.50) DOLLARS per annum; (3) the provisions
of Article 3 of the Original Lease (as
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amended and supplemented by the provisions of Second Amendment and the
Third Amendment) shall continue to apply (but the Tax Payment shall
consist solely of the 40th Floor Component thereof, and the Operating
Payment shall consist solely of the 40th Floor Operating Payment); (4) any
provisions of the Lease with respect to (i) Landlord's Work, or (ii) any
abatement period(s) with respect to Fixed Rent, Operating Payments and Tax
Payments set forth in Articles 1, 3 and 4 of the Original Lease (or any
provision of the Second Amendment or Third Amendment) shall not be
applicable; (5) Tenant shall have no further right to renew or extend the
term of the Lease; and (6) the Expiration Date shall be April 30, 2008.
Furthermore, and notwithstanding anything to the contrary contained
herein, the Lease, effective as of first day of the Special 40th Floor
Extension Period, shall, automatically and without further act of the
parties, be deemed further amended and modified as provided on Exhibit C
attached hereto. Tenant, at the request of Landlord, shall execute an
instrument, in the form of a lease amendment, confirming the terms and
conditions of the Lease during the Special 40th Floor Extension Period
(including, without limitation, the amendments and modifications to the
Lease set forth on Exhibit C attached hereto), provided, that the failure
of Tenant to execute such instrument shall not affect the effectiveness of
terms and conditions (including without limitation such amendments and
modifications) or the validity thereof or the validity of any other
provision of the Lease.
38.08. (a) If Tenant exercises a Renewal Option as to less than the
entire Premises (as of such the date of such exercise), then, as of the
Initial Expiration Date (in the case of the First Renewal Option being
exercised as to less than the entire then Premises) and/or the First
Renewal Expiration Date (in the case of the First Renewal Option being
exercised as to less than the entire then Premises), the Lease shall be
deemed to have expired with respect to all portions of the then Premises
as to which such Renewal Option is not exercised, for all purposes of the
Lease (including without limitation any surrender or restoration
obligations of Tenant under the Lease as to all such portions of the
Premises).
(b) If Tenant exercises the Special 40th Floor Extension
Option in accordance with the terms of Section 38.07(a) above, then the
Lease (except as to the 40th Floor Space) shall be deemed to have expired
as of the Initial Expiration Date for all purposes (including without
limitation any surrender or restoration obligations of Tenant under the
Lease as to the Premises or any space in the Building (other than the 40th
Floor Space))."
5. Alterations Under Lehman Sublease.
(a) Landlord and Tenant acknowledge that, pursuant to the
aforementioned Consent and Agreement among Landlord, Lehman, Continental and
Tenant in respect of the assignment of the Lehman-Tenant Sublease, Lehman has
agreed that, for the period from the date hereof until the end of the term of
the Lehman-Tenant Sublease (the "Lehman Sublease
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Period"), Tenant may perform any and all Alterations in and to the 40th Floor
Space that Tenant desires, subject only to Tenant obtaining Landlord's consent
thereto or Landlord's agreement that its consent thereto is not required.
(b) Landlord and Tenant hereby agree that, as between Landlord and
Tenant during the Lehman Sublease Period, the provisions of the Lease shall
govern and control all Alterations made (or proposed to be made) by Tenant in
and to the 40th Floor Space (as fully as such provisions will govern and control
the same from and after the 40th Floor Commencement Date, when the 40th Floor
Space becomes part of the Premises); and, accordingly (but without limiting the
generality of the foregoing), (i) Tenant, during the Lehman Sublease Period,
shall not make any Alterations in or to the 40th Floor Space, except as
expressly permitted under the provisions of Article 11 of the Original Lease, as
amended (applied as though the 40th Floor Space were part of the Premises), (ii)
the provisions of Section 2.02(c) of the Original Lease shall apply to permitted
Alterations in or to the 40th Floor Space during the Lehman Sublease Period, and
(iii) all Alterations made during the Lehman Sublease Period shall be deemed
"Tenant's Improvements" for all purposes of the Lease (including any surrender
or restoration obligations of Tenant under the Lease), as fully as if the same
were made after the 40th Floor Commencement Date.
6. 40th Floor Elevator Work.
(a) For purposes hereof, the following terms shall have the
following meanings:
"40th Floor Elevator Work" shall mean (i) the Alterations
which would be necessary or appropriate to permit the Bank X Elevators to open
on the 40th floor of the Building, so as allow such elevators to serve the 40th
Floor Space, and (ii) if Tenant shall so elect in conjunction with or after the
performance of the Alterations referred to in clause (i) of this definition, the
Alterations which would be necessary or appropriate to close off the openings
through which the Current 40th Floor Elevators currently serve the 40th Floor of
the Building, so as to prevent access to the 40th Floor Space through such
elevators.
"Bank X Elevators" shall mean the hi-rise passenger elevators
currently serving the 41st through 50th floors of the Building and located
within the bank of passenger elevators known as "X Bank".
"Current 40th Floor Elevators" shall mean the hi-rise
passenger elevators currently serving the 40th floor of the Building (being
those passenger elevators located with the bank known as "W Bank").
(b) Landlord and Tenant hereby (i) acknowledge that the 40th Floor
Elevator Work, for purposes of the Lease, shall constitute Material Alterations
(and, as applicable, Exterior Material Alterations), and (ii) agree that the
40th Floor Elevator Work shall also be deemed Pre-Authorized Alterations (and,
accordingly, Tenant shall have the
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right to perform the 40th Floor Elevator Work, subject to and in accordance with
the provisions of Article 11 of the Original Lease, as amended, including
without limitation Section 11.02(c) of the Original Lease (which section, inter
alia, conditions such right upon Tenant obtaining Landlord's approval of the
40th Floor Elevator Work as set forth on plans and specifications pursuant to
the provisions of Section 11.02(b) of the Original Lease)).
(c) If Tenant performs the Alterations referred to in clause (i) of
the definition of 40th Floor Elevator Work above, then the following provisions
shall apply: (i) Landlord, after Tenant's request and at Tenant's sole expense,
shall (x) reasonably promptly reprogram the Bank X Elevators to stop at the 40th
floor of the Building (in addition to the 41st through 50th floors of the
Building), and (y) if Tenant shall so request in conjunction with or after the
performance of the Alterations referred to in clause (i) of the definition of
40th Floor Elevator Work above, reasonably promptly reprogram the Current 40th
Floor Elevators to no longer stop at the 40th floor of the Building (and, thus,
no longer serve the 40th Floor Space); (ii) Landlord, at Tenant's sole expense,
shall make appropriate modifications to the Building's existing elevator lobby
signage to reflect the fact that the Bank X Elevators now serve the 40th floor
of the Building (and, if the Current 40th Floor Elevators are reprogrammed
pursuant to clause (i)(y) above, to reflect the fact that the Current 40th Floor
Elevators no longer serve the 40th floor of the Building); and (iii) all the
work needed to reverse the 40th Floor Elevator Work and restore the applicable
areas of the Building to their condition existing prior to the performance of
the 40th Floor Elevator Work, ordinary wear and tear excepted (all such work
being herein called the "Elevator Restoration Work") shall be deemed added to
the Section 12.02(c) Work (in addition to the work currently set forth as the
Section 12.02(c) Work pursuant to Section 12.02(c)(1)(B) of the Original Lease),
and, accordingly, Tenant, at its sole expense, shall perform the same (together
with the balance of the Section 12.02(c) Work) as and when required under
Section 12.02(c) of the Original Lease.
7. Intentionally Omitted.
8. Brokerage.
(a) Landlord and Tenant each warrant and represent to the other that
no brokers, except Insignia/Edward S. Gordon Company, Inc. ("ESG"), as agent for
Landlord, and Goldman, Sachs & Co. ("GS") and Newmark & Company Real Estate,
Inc. ("Newmark"), as brokers for Tenant (ESG, GS and Newmark being herein
collectively called the "Brokers"), were instrumental in bringing about or
consummating this Amendment (or any transaction effected or contemplated hereby)
and that they have had no conversations or negotiations with any broker except
the Brokers concerning the leasing of the 40th Floor Space. Landlord and Tenant
each agree to indemnify and hold harmless the other against and from any claims
for any brokerage commissions and all costs, expenses and liabilities in
connection therewith, including, without limitation, reasonable attorneys' fees
and expenses,
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arising out of any conversations or negotiations had by that party with any
broker other than the Brokers.
(b) Landlord agrees to pay ESG any brokerage commission to which it
is entitled with respect to the leasing of the 40th Floor Space. Landlord
further agrees to indemnify and hold harmless Tenant against and from any claims
for any brokerage commissions by ESG based thereon, and all costs, expenses and
liabilities in connection therewith, including, without limitation, reasonable
attorneys' fees and expenses.
(c) Tenant agrees to pay (or cause to be paid) Newmark any brokerage
commission to which it is entitled with respect to the leasing of the 40th Floor
Space. Tenant further agrees to indemnify and hold harmless Landlord against and
from any claims for any brokerage commissions by Newmark based thereon, and all
costs, expenses and liabilities in connection therewith, including, without
limitation, reasonable attorneys' fees and expenses.
(d) Landlord agrees to pay GS a commission pursuant to a separate
agreement, dated as of the date hereof, between Landlord and GS (it being agreed
that any other commissions or amounts due GS in respect of the leasing of the
40th Floor Space shall be paid by Tenant to GS).
9. Miscellaneous.
(a) This Amendment shall not be binding upon either Landlord or
Tenant unless and until the same shall have been executed, acknowledged and
delivered by both Landlord and Tenant.
(b) Except as amended and modified by this Amendment, the Existing
Lease and all the covenants, agreements, terms, provisions and conditions
thereof are hereby in all respects ratified and confirmed.
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<PAGE> 215
(c) The covenants, agreements, terms, provisions and conditions
contained in this Amendment shall bind and inure to the benefit of the parties
hereto and their respective successors and, except as otherwise provided in the
Lease as amended and modified by this Amendment, their respective assigns.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment
as of the day and year first above written.
LANDLORD:
THE CHASE MANHATTAN BANK
By: /s/ Gerard J. Vanella
----------------------
Name: Gerard J. Vanella
Title: VP
TENANT:
THE GOLDMAN SACHS GROUP, L.P.
By: The Goldman Sachs Corporation,
general partner
By: /s/ David Blood
---------------------
Name: David Blood
Title: EVP
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<PAGE> 216
CONSENTS TO AMENDMENT:
The undersigned, pursuant to that certain Non-Disturbance Agreement, made as of
the 5th day of April, 1994, between the undersigned, as "Net Lessor", and
Tenant, does hereby consent to this Amendment.
THE ONE NEW YORK PLAZA CONDOMINIUM
By: The Board
By: /s/ Gerard J. Vanella
----------------------
Name: Gerard J. Vanella
Title: Pres.
The undersigned, pursuant to that certain Non-Disturbance Agreement, made as of
the 5th day of April, 1994, between the undersigned, as "Underlying Lessor", and
Tenant, does hereby consent to this Amendment.
THE CHASE MANHATTAN BANK
By: /s/ Gerard J. Vanella
----------------------
Name: Gerard J. Vanella
Title: Pres.
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<PAGE> 217
LANDLORD
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On the 6 day of November, 1997, before me personally came Gerard J.
Vanella, to me known, who, being duly sworn by me, did depose and say that he
resides at Coram, New York; that he is a Vice President of THE CHASE MANHATTAN
BANK, the banking association described in and which executed the foregoing
instrument; and that he signed his name thereto by order of the Board of
Directors of said association.
/s/ Jasmine W. Ho
-----------------------------------
Notary Public
Jasmine W. Ho
Notary Public, State of New York
TENANT No. 01HO5063005
Qualified in Kings County
Commission Expires July 15, 1998
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On the _________ day of _____________, 1997, before me personally came
______________________, to me known, who, being duly sworn by me, did depose and
say that he resides at _______________________________________________; that he
is a ______________of THE GOLDMAN SACHS CORPORATION (the "Corporation"), the
corporation described in and which executed the foregoing instrument; that such
corporation is a general partner of THE GOLDMAN SACHS GROUP, L.P. (the
"Partnership"), the partnership described in and which executed the foregoing
instrument; that the execution of the instrument by the Partnership was duly
authorized according to its Articles of Partnership; that the Corporation, as
general partner, executed the instrument on behalf of the Partnership pursuant
to said authorization; that the execution of the instrument by the Corporation
was authorized by its board of directors; and that he signed his name thereto by
order of such board of directors.
-----------------------------------
Notary Public
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<PAGE> 218
EXHIBIT A
FLOOR PLAN OF 40TH FLOOR SPACE
This floor plan is annexed to and made a part of this Amendment
solely to indicate the 40th Floor Space by outlining and diagonal marking. All
areas, conditions, dimensions and locations are approximate.
[FLOOR PLAN OMITTED]
40TH FLOOR OF ONE NEW YORK PLAZA
<PAGE> 219
EXHIBIT B
ACKNOWLEDGED ACM AREAS, RE: 40TH FLOOR
[see attached]
<PAGE> 220
FLOOR PLAN 40
[FLOOR PLAN OMITTED]
<PAGE> 221
EXHIBIT C
LEASE AMENDMENT AND MODIFICATIONS
RE: SPECIAL 40TH FLOOR EXTENSION OPTION
Effective as of the first day of the Special 40th Floor Extension
Period, the Lease shall be amended and modified as follows (all article and
section references are to the Original Lease, as such articles and sections may
have heretofore been amended, or may hereafter be amended):
1. Section 2.01(y) of the Lease shall be deemed deleted and the uses
set forth therein shall no longer be deemed permitted uses under the Lease.
2. Section 2.04 of the Lease shall be amended to read as follows:
2.04. Tenant shall not use, or suffer or permit anyone
to use, the Premises or any part thereof, by or for (i) an agency,
department or bureau of the United States Government, (ii) any state
or municipality within the United States or any foreign government,
or any political subdivision of any of them, (iii) an employment or
travel agency (other than an executive search firm and other than an
employment or travel agency primarily serving Tenant's employees),
(iv) any charitable or religious organization or union (it being
agreed that this clause shall not prohibit such an organization from
using discrete portions of the Premises on a short-term basis and
for discrete purposes, provided that Tenant receives no
consideration therefor), (v) a school or classroom (it being agreed
that this clause shall not prohibit Tenant from occasionally,
temporarily or permanently using conference rooms or other areas of
the Premises for training purposes and lectures in connection with
and incidental to Tenant's business, it being understood that all
such uses shall be considered Secondary Uses and, accordingly, that
Tenant shall be responsible for obtaining any permits or licenses
required in connection therewith), (vi) medical or psychiatric
offices (it being agreed that this clause shall not prohibit Tenant
from employing doctors and/or nurses at the Premises for Tenant's
employees), (vii) conduct of an auction (other than in the ordinary
course of Tenant's business), (viii) gambling activities, (ix) the
conduct of obscene, pornographic or similarly disreputable
activities, (x) an automated teller machine or similar facility,
(xi) a restaurant and/or bar and/or the sale of confectionery and/or
soda and/or beverages and/or sandwiches and/or ice cream and/or
baked goods (the foregoing shall not prohibit the use of portions of
the Premises for kitchenette, pantry and vending machine areas in
accordance with Section 2.01(i) above), (xii) the business of
photographic reproductions and/or offset printing (except that
Tenant may use portions of
<PAGE> 222
the Premises for photographic reproductions and/or offset printing
in connection with, either directly or indirectly, its own business
and/or activities), (xiii) the retail offices or the retail
activities of a bank, trust company, safe deposit business, savings
and loan association, or a loan company, (xiv) the sale of
traveler's checks or foreign exchange, or (xv) a retail stock or
securities brokerage office or for retail stock or securities
brokerage purposes. For purposes of this Section 2.04, the term
"retail" shall refer to a business whose primary patronage are
customers visiting its offices in person.
3. Section 3.02(d)(2) of the Lease shall be deemed deleted from the
Lease and the provisions thereof shall no longer be applicable.
4. Section 7.02(c)(2) of the Lease shall be deemed deleted from the
Lease and the provisions thereof shall no longer be applicable.
S. Section 10.03 of the Lease shall be deemed deleted from the Lease
and the provisions thereof shall no longer be applicable.
6. The last four sentences of Section 13.02(b) of the Lease shall be
deemed deleted from the Lease and the provisions thereof shall no longer be
applicable.
7. Section 14.02 of the Lease shall be deemed deleted from the
Lease, and, accordingly, (i) Landlord need no longer furnish, and Tenant shall
have no further right to, Tenant's Supplemental Electricity, and (ii) Tenant
shall have no further right to use Tenant's Supplemental Electricity Conduits.
8. Section 15.04 of the Lease shall be modified as follows: (i)
references therein to "450 tons of chilled water" shall be reduced to the
Revised Chilled Water Number (as defined below) of tons of chilled water (and
Landlord shall only be obligated to furnish the Revised Chilled Water Number of
tons of chilled water pursuant to such Section 15.04); and (ii) the "Minimum Per
Diem SCW Charge" shall be reduced by multiplying the same by a fraction the
numerator of which is the Revised Chilled Water Number and the denominator of
which is 450. The "Revised Chilled Water Number" shall mean the lesser of (I)
the number of tons of chilled water which, as of the first day of the Special
40th Floor Extension Period, is actually being drawing by Tenant with respect to
the 40th Floor Space, and (II) 60.
9. Section 15.05(a) of the Lease shall be modified as follows: (i)
the reference in Section 15.05(a)(i) to "eight (8)" shall be changed to "four
(4)"; and (ii) the Evening Elevator Number shall be changed to "two (2)".
10. Section 15.10(c) of the Lease shall be deemed deleted from the
Lease and the provisions thereof shall no longer be applicable.
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<PAGE> 223
11. Section 15.12 of the Lease shall be deemed deleted from the
Lease and, accordingly, Tenant shall no longer have any right to use the gas
riser referred to therein.
12. Section 15.13 of the Lease shall be deemed deleted from the
Lease and, accordingly, Landlord shall no longer have any obligation to furnish
steam as referred to therein.
13. Section 16.04(b) of the Lease shall be deemed deleted from the
Lease and the provisions thereof shall no longer be applicable.
14. Section 35.15(b) of the Lease shall be amended to read as
follows:
(b) If (i) Landlord shall perform work in
the Premises or on the floor on which the Premises are located, and
(ii) Tenant furnishes Landlord with a statement requesting that
Landlord perform such work (or specifically identified portions
thereof) on an overtime basis, then (A) Landlord shall perform such
work (or specifically identified portions thereof) on such overtime
basis (provided, that (x) doing so will not have an adverse impact
on other tenants of the Building, and (y) overtime labor is
reasonably available, and provided, further, that, if Tenant's
aforesaid request is received by Landlord after Landlord has either
commenced the work in question or made arrangements with respect to
the timing thereof, then Landlord need only perform such work on an
overtime basis to the extent it can reasonably do so without
disruption of such work), and (B) Tenant, within thirty (30) days
after its receipt of a demand therefor, shall pay to Landlord, as
Additional Charges, all of the costs Landlord incurs in connection
with the performance of such work on an overtime basis, including,
without limitation, all the costs of any stand-by personnel required
in connection therewith (including, without limitation, operating
engineers and stand-by electricians).
15. Section 35.15(c) of the Lease shall be deemed deleted from the
Lease and the provisions thereof shall no longer be applicable.
16. Article 38 of the Lease (other than Sections 38.07 and 38.08 of
the Lease) shall be deemed deleted in its entirety and, accordingly, Tenant
shall have no longer have any right to renew the Lease.
17. Tenant shall not have any further rights under Section 41.09 of
the Lease to install or keep any Section 41.09 Enclosures or to run any pipes,
conduits, wires or cables therein or any other rights under Section 41.09 of the
Lease; except that Tenant may keep any existing Section 41.09 Enclosures (and
the pipes, conduits, wires and cabling therein), but only to the extent that (x)
Landlord shall not have theretofore terminated, or does not herewith or
hereafter terminate, Tenant's rights under Sections 41.03 and/or 41.04 of the
Lease and/or Tenant's rights under Section 41.05 of the Lease to install,
operate,
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<PAGE> 224
repair, replace and maintain Tenant's UPS System (it being understood that
Landlord has such termination rights under Section 41.08 of the Lease), and (y)
such Section 41.09 Enclosures are used in connection with Tenant's exercise of
such rights.
18. In addition to the foregoing, any provisions of the Lease which,
by their terms, are no longer applicable due to the size of the Premises (i.e.,
a single floor) shall likewise be deemed deleted.
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<PAGE> 1
EXHIBIT 10.3
TEN HANOVER LLC,
Landlord,
TO
THE GOLDMAN SACHS GROUP, L.P.,
Tenant
Lease
Dated as of August 22, 1997
<PAGE> 2
TABLE OF CONTENTS
1. LEASED PREMISES; TERM OF LEASE ............................................1
1.1 LEASED PREMISES .......................................................1
1.2 TERM ..................................................................2
1.3 STEPHANEZE PREMISES ...................................................2
1.4 TENANT'S TERMINATION OPTIONS ..........................................8
1.5 LANDLORD'S FINANCING ..................................................9
1.6 CERTAIN DEFINITIONS ..................................................11
2. BASIC RENT, ETC ..........................................................14
2.1 BASIC RENT ...........................................................14
2.2 DETERMINATION OF FAIR MARKET RENT ....................................15
2.3 SUPPLEMENTAL RENT ....................................................17
3. MANNER OF PAYMENT ........................................................17
4. NET LEASE; NO ABATEMENT ..................................................18
5. CONDITION AND USE OF LEASED PREMISES .....................................18
6. MAINTENANCE; ALTERATIONS; CERTAIN REIMBURSEMENTS; ETC. ...................19
6.1 GENERALLY ............................................................19
6.2 CERTAIN DEFINITIONS ..................................................20
6.3 SUBMISSION AND APPROVAL OF PLANS AND SPECIFICATIONS IN
CERTAIN INSTANCES ....................................................23
6.4 REIMBURSABLE ALTERATIONS .............................................26
6.5 GENERAL PROVISIONS ...................................................36
6.6 CONSIDERATION BY TENANT ..............................................36
6.7 ENGINEER; APPROPRIATE ENGINEER .......................................37
7. HAZARDOUS SUBSTANCES .....................................................38
8. UTILITY SERVICES .........................................................39
9. INDEMNIFICATION BY TENANT ................................................40
10. ENTRY BY LANDLORD .......................................................41
11. PAYMENT OF TAXES ........................................................42
11.1 DEFINITIONS .........................................................42
11.2 PAYMENT OF TAXES ....................................................43
11.3 INITIAL TAX PAYMENTS ................................................43
11.4 EXTENDED TAX PAYMENTS ...............................................43
11.5 GENERAL PROVISIONS APPLICABLE TO TAXES ..............................45
11.6 INDUSTRIAL AND COMMERCIAL INCENTIVE PROGRAM .........................45
12. COMPLIANCE WITH LEGAL AND INSURANCE REQUIREMENTS AND
PERMITTED ENCUMBRANCES ..................................................46
12.1 GENERALLY ...........................................................46
12.2 PERMITTED CONTESTS ..................................................47
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<PAGE> 3
13. LIENS ...................................................................48
14. INSURANCE ...............................................................48
14.1 RISKS TO BE INSURED .................................................49
14.2 POLICY PROVISIONS ...................................................50
14.3 DELIVERY OF INSURANCE CERTIFICATES; PAYMENT OF PREMIUM ..............51
14.4 NO LIMITATION OF DAMAGES ............................................51
15. DAMAGE TO OR DESTRUCTION OF PROPERTY ....................................51
15.1 WAIVER OF SS. 227; TENANT TO GIVE NOTICE ............................51
15.2 RESTORATION .........................................................51
15.3 APPLICATION OF INSURANCE PROCEEDS ...................................52
15.4 TERMINATION IN LIEU OF RESTORATION ..................................52
16. TAKING OF PROPERTY ......................................................59
16.1 NOTICE ..............................................................59
16.2 TOTAL TAKING ........................................................59
16.3 PARTIAL TAKING ......................................................60
16.4 APPLICATION OF AWARD ................................................61
16.5 TEMPORARY TAKING ....................................................62
17. DISBURSEMENT OF DEPOSITED SUMS ..........................................63
18. CERTIFICATE AS TO NO DEFAULT, ETC. ......................................65
19. RIGHT OF LANDLORD TO PERFORM TENANT'S COVENANTS, ETC. ...................66
20. ASSIGNMENT; SUBLEASES ...................................................67
21. VAULTS ..................................................................68
22. EVENTS OF DEFAULT; TERMINATION ..........................................68
23. REPOSSESSION ............................................................70
24. RELETTING ...............................................................70
25. SURVIVAL OF TENANT'S OBLIGATIONS; DAMAGES ...............................70
25.1 TERMINATION OF LEASE NOT TO RELIEVE TENANT OF OBLIGATIONS ...........70
25.2 CURRENT DAMAGES AND DAMAGES IN RESPECT OF SUPPLEMENTAL RENT .........71
25.3 FINAL DAMAGES .......................................................72
26. NO WAIVER ...............................................................73
27. REMEDIES CUMULATIVE .....................................................73
28. ACCEPTANCE OF EARLY TERMINATION OR SURRENDER ............................73
29. NO MERGER OF TITLE ......................................................74
30. EXCULPATION .............................................................74
31. DEFINITIONS. ............................................................75
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<PAGE> 4
32. END OF LEASE TERM .......................................................77
33. NOTICES .................................................................78
34. ANNUAL REPORTS ..........................................................78
35. MISCELLANEOUS ...........................................................79
36. EXPEDITED ARBITRATION ...................................................81
37. SUBORDINATION ...........................................................82
38. LANDLORD'S FAILURE TO PAY TAXES .........................................83
39. LANDLORD'S FAILURE TO PAY COSTS OF BASE BUILDING UPGRADE WORK OR FIT-OUT
WORK ..................................................................84
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EXHIBITS
Exhibit A The Land
Exhibit B Initial Tax Payments
Exhibit C Permitted Encumbrances
Exhibit D Non-Disturbance Agreement
Exhibit E Major Building Equipment
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<PAGE> 6
Index of Definitions
--------------------
Defined Term Section Where Defined
- ------------ ---------------------
50% Untenantability .............................................15.4
Accountant .......................................................6.7
Additional Bidders ...............................................6.4
Alterations ......................................................6.1
Appropriate Engineer .............................................6.7
Appropriate Engineer .............................................6.7
Article 38 Advance ................................................38
Article 38 Demand Amount ..........................................38
Article 38 Demand Notice ..........................................38
Article 38 Dispute Notice .........................................38
Article 39 Advance ................................................39
Article 39 Demand Amount ..........................................39
Article 39 Demand Notice ..........................................39
Article 39 Dispute Notice .........................................39
Associated Reimbursables .........................................6.4
balance to be apportioned .......................................16.4
Base Amount ......................................................6.2
Base Building Savings Constant Payment ...........................1.6
Base Building Savings Credit .....................................2.1
Base Building Savings ............................................1.6
Base Rate ........................................................1.6
Base Tax Amount .................................................11.1
Basic Rent .......................................................2.1
Benchmark Amount .................................................6.4
Business Day ......................................................31
Cancellation Payment Payment Date ................................1.4
Cancellation Payment .............................................1.4
Comparable Treasury Rate .........................................1.6
Completed Percentage .............................................6.4
Condemnation Proceeds ...........................................16.4
ConEd ..............................................................8
Contractors ......................................................6.4
Cost Division Date ...............................................6.2
Cost Participation Limitation Notice .............................6.4
Costs .............................................................31
Credit Amount .....................................................35
Damage Cancellation Payment .....................................15.4
Damage Date .....................................................15.4
Damage Payment ..................................................15.4
Damage Termination Notice .......................................15.4
Deductible Amount .................................................31
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Depositary ......................................................15.3
Deposited Sums ....................................................17
Determinated Amount ..............................................6.2
Determination Date ................................................19
Different Scope of Work Statement ................................6.4
Dispute Notice ...................................................6.4
Disputed Article 38 Amount ........................................38
Disputed Article 39 Amount ........................................39
Election Period .................................................15.4
Emergency Reimbursement Amount ...................................6.4
Engineer Designation Notice ......................................6.7
Engineer .........................................................6.7
Estimated Cost ...................................................6.4
Estimated Substantial Completion Date ............................6.4
Expedited Arbitration .............................................36
Expiration Date ..................................................1.2
Extended Completion Notice .......................................6.4
Extended Tax Payment ............................................11.4
Fair Market Rent .................................................2.2
Financing Closing Date ...........................................1.5
Financing Termination Notice .....................................1.5
First Rent Period ................................................2.1
First-Class Standard .............................................6.1
Fit-Out Work Constant Payment ....................................1.6
Fit-Out Work Interest Rate .......................................1.6
Fit-Out Work Investment ..........................................1.6
Fourth Rent Period ...............................................2.1
full placement cost .............................................14.1
Full Proceeds Amount ............................................15.4
GAAP..............................................................6.2
Gross Amount .....................................................6.4
Ground Lease ....................................................12.1
GS ................................................................30
Hazardous Substances ..............................................31
ICIP ............................................................11.6
Improvements .....................................................1.1
Index .............................................................31
Initial Improvements Agreement ...................................1.1
Initial Tax Payment .............................................11.3
Insurance Requirements ............................................31
Interest Rate ......................................................3
Land .............................................................1.1
Landlord ..........................................................31
Landlord ................................................Introduction
Landlord's Alternate Bidders .....................................6.4
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<PAGE> 8
Landlord's Preferred Bidder ......................................6.4
Landlord's Revised Plans .........................................6.4
Lease Termination Notice ..........................................22
Leased Premises ..................................................1.1
Legal Requirement Alteration .....................................6.2
Legal Requirements ................................................31
Liability Insurance ..............................................1.3
Limited Reimbursement Amount .....................................6.4
LMEP ...............................................................8
Main Interest Rate ...............................................1.6
Major Building Equipment .........................................6.2
Measuring Fraction ...............................................6.2
net annual rental .................................................31
Next Available Termination Date .................................16.5
Non-Disturbance Agreement .........................................37
Notice ............................................................33
Notional Expiration Date ........................................25.1
Notional Fit-Out Work Loan Amount ................................1.6
Notional Main Loan Debt Service ..................................1.6
Notional Main Loan Original Balance ..............................1.6
Notional Main Loan Outstanding Balance ...........................1.6
Notional Make-Whole Amount .......................................1.6
Notional Termination Date ........................................6.4
Officer's Certificate .............................................31
OLS .............................................................11.6
Original Bidders .................................................6.4
Overrun Notice ...................................................6.4
Overrun ..........................................................6.4
Partial Taking ..................................................16.2
Permitted Encumbrances ...........................................1.1
Permitted Investment ..............................................31
Permitted Investments .............................................31
Plan Submission Date .............................................6.4
Plans and Specifications Notice ..................................6.3
Plans and Specifications ..........................................31
Plans Submission Notice ..........................................6.3
Post-Termination Insurance ......................................15.4
Pre-Existing Mortgages ..........................................12.1
Prime Rate ........................................................31
Project ..........................................................1.1
Property Insurance ..............................................14.1
Qualified Alteration .............................................6.2
Qualified Hazardous Substance .....................................31
Qualified Overrun ................................................6.4
Qualified Prefinancing Costs .....................................1.5
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Qualified Restoration Costs .....................................15.4
Reduced Proceeds Amount .........................................15.4
Reimbursable Alterations .........................................6.2
Reimbursable Legal Requirement Alteration ........................6.2
Reimbursable Removal of Hazardous Substances .....................6.2
Reimbursable Replacement .........................................6.2
Reimbursable Structural Work .....................................6.2
Reimbursement Advances ...........................................6.4
Reimbursement Amount .............................................6.4
removal ............................................................7
remove .............................................................7
Rent Based Cancellation Payment ..................................1.4
Rent Commencement Date ...........................................2.1
Required Replacements ............................................6.1
Restoration Advances ..............................................17
Retained Bidder ..................................................6.4
Rules ............................................................2.2
Second Rent Period ...............................................2.1
Significant Proceeds Amount .......................................31
Specified Damage Termination Date ...............................15.4
Stephaneze Possession Date .......................................1.3
Stephaneze Premises ..............................................1.3
Stephaneze Restriction Date ......................................1.3
Stephaneze .......................................................1.3
Structural Work ..................................................6.2
Successor Landlord ................................................37
successor-assignee ................................................30
Superior Mortgage .................................................37
Superior Mortgagee ................................................37
Supplemental Rent ................................................2.3
Taking Fraction .................................................16.2
Taking ............................................................31
Tax Payments ....................................................11.4
Tax Year ........................................................11.1
Taxes ...........................................................11.1
Tenant Impositions ..............................................11.5
Tenant ............................................................31
Tenant ..................................................Introduction
Tenant's Counsel ...................................................9
Tenant's Designation Notice ......................................2.2
Tenant's Selected Bidder .........................................6.4
Tenant's Total Taking Amount ....................................16.4
Term .............................................................1.2
Termination Date .................................................1.4
Termination Notice ...............................................1.4
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Termination Option ...............................................1.4
Third Rent Period ................................................2.1
Total Taking ....................................................16.2
Unamortized Fit-Out Work Investment ..............................1.6
Voluntary Alterations ............................................6.1
Witkoff Management Agreement ......................................31
work ..............................................................31
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<PAGE> 11
LEASE, dated as of August 22, 1997, between TEN HANOVER LLC ("Landlord"),
a New York limited liability company having its principal office c/o The Witkoff
Group LLC, 156 William Street, New York, New York 10038, and THE GOLDMAN SACHS
GROUP, L.P. ("Tenant"), a Delaware limited partnership having its principal
office at 85 Broad Street, New York, New York 10004, Attention: General Services
Department.
WITNESSETH:
That in consideration of the mutual agreements herein contained, Landlord
and Tenant hereby agree and covenant to and with each other as follows:
1. Leased Premises; Term of Lease
1.1 Leased Premises
Landlord leases to Tenant, and Tenant rents from Landlord, subject
to the Permitted Encumbrances, the land located in the City, County and State of
New York more particularly described on Exhibit A hereto (the "Land"),
TOGETHER WITH (i) all Improvements (excluding any thereof which
pursuant to the final paragraph of this Section 1.1 are not Landlord's
property), and (ii) all personal property owned by Landlord now or
hereafter attached to or used in connection with the Improvements,
TOGETHER WITH all right, title and interest, if any, of Landlord in
and to:
(a) any strips and gores of land adjoining the Land on
any side thereof;
(b) any land lying in the bed of any street or avenue
abutting the Land, to the center line thereof; and
(c) any easements or other rights in adjoining property
enuring to Landlord by reason of ownership of the Land;
all of the foregoing (together with any Improvements excluded from clause (i)
above) are collectively called the "Leased Premises".
The Land and the Improvements are collectively called the "Project".
The term "Permitted Encumbrances" shall refer to the matters listed on Exhibit C
hereto. Simultaneously with the execution of this Lease, Landlord and Tenant are
executing an Initial Improvements Agreement of even date herewith (the "Initial
Improvements Agreement") relating to certain work to be done to prepare the
Leased Premises for occupancy by Tenant.
The term "Improvements" shall mean all buildings, structures,
fixtures, equipment and improvements now or hereafter located on, or attached to
or appurtenant to, the Land or to other Improvements, including any thereof
installed (i) as Base Building Upgrade Work (as such
<PAGE> 12
term is defined in the Initial Improvements Agreement) or Fit-Out Work (as such
term is defined in the Initial Improvements Agreement) pursuant to the Initial
Improvements Agreement, or (ii) by Tenant pursuant to Article 6; provided, that
the term "Improvements" shall not include any furniture, furnishings, trade
fixtures or business equipment furnished, installed or placed in the
Improvements by Tenant at Tenant's sole cost and expense.
Except as otherwise provided in the next paragraph, all Improvements
shall be (or if hereafter installed shall upon installation become) the property
of Landlord, a part of the Leased Premises and subject to this Lease.
Notwithstanding the provisions of Article 6, Tenant shall not remove from the
Leased Premises
(i) any Improvements constituting Base Building Upgrade Work, or
(ii) any Improvements constituting Fit-Out Work paid for by Landlord
unless (x) such removal is required by Legal Requirements, or (y) Tenant
replaces the Improvements so removed with other Improvements of substantially
equal value.
All Improvements constituting Fit-Out Work paid for by Tenant shall
remain the property of Tenant, subject to removal by Tenant subject to the
provisions of Article 6; provided, that unless and until so removed, the same
shall nonetheless constitute Improvements for all purposes under this Lease. Any
such Improvements that shall not have been so removed shall, upon the expiration
or sooner termination of this Lease, become the property of Landlord.
1.2 Term.
Except as otherwise provided in Section 1.3, the term of this Lease
shall commence on the Possession Date (as such term is defined in the Initial
Improvements Agreement) and, unless sooner terminated pursuant to law or
pursuant to any of the terms of this Lease, shall expire at 11:59 p.m. on June
30, 2018 (the "Expiration Date"). The term of this Lease is referred to herein
as the "Term".
1.3 Stephaneze Premises.
(a) Landlord represents and warrants to Tenant that, as of the date
of this Lease, the Leased Premises are vacant and free of any occupancy or
tenancy or right thereto, other than the occupancy or tenancy by Stephaneze
("Stephaneze") of a portion of the Leased Premises (the "Stephaneze Premises"),
and that Landlord has commenced a summary proceeding against Stephaneze seeking
to recover possession of the Stephaneze Premises, and has furnished Tenant with
copies of all material pleading and material motion papers filed or served by
any party thereto. Landlord shall diligently prosecute such summary proceeding
and if such summary proceeding is dismissed or terminated without Landlord
having recovered possession of the Stephaneze Premises, then Landlord shall take
such further action as may be available to Landlord to recover possession of the
Stephaneze Premises.
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<PAGE> 13
Promptly after recovering possession of the Stephaneze Premises,
Owner shall (i) perform and complete any Asbestos Removal Work, Refireproofing
Work, and/or Demolition Work (as such terms are defined in the Initial
Improvement Agreement), that may be required under the provisions of the Initial
Improvement Agreement with respect to the Stephaneze Premises, and (ii) notify
Tenant that the foregoing has been performed and completed and, prior to or
together with such notice, furnish Tenant with one or more Forms ACP-5
evidencing the removal from the Stephaneze Premises of all asbestos and
asbestos-containing material.
The term of the Lease with respect to the Stephaneze Premises shall
commence on (and the term "Leased Premises" shall not include the Stephaneze
Premises until) the Stephaneze Possession Date. The term "Stephaneze Possession
Date" shall mean the last of
(x) the Possession Date,
(y) the date on which Landlord recovers possession
of the Stephaneze Premises,
(z) the date on which (i) all Asbestos Removal
Work, Refireproofing Work and Demolition Work throughout the
Stephaneze Premises shall have been completed, (ii) Tenant
shall have been furnished with or obtained one or more Forms
ACP-5 evidencing the removal from the Stephaneze Premises of
all asbestos and asbestos-containing material, and (iii)
Tenant shall have received the Stephaneze Completion Notice,
or, if Tenant shall so elect, such earlier date (not earlier than the later of
the Possession Date or the date 30 days after the date on which Landlord
recovers possession of the Stephaneze Premises) as Tenant shall elect by notice
to Landlord.
If the Stephaneze Possession Date does not occur by the later of the
Possession Date or October 15, 1997, then Tenant shall be entitled to a credit
against the Basic Rent during the 12 month period beginning on the Rent
Commencement Date equal to $347,000; one-twelfth of such credit shall be applied
against each of the 12 monthly installments of Basic Rent during such 12 month
period. If the Stephaneze Possession Date does not occur by the first or any
later anniversary of October 15, 1997, then Tenant shall be entitled to a credit
against the Basic Rent during the 12 month period beginning with the first or
such later anniversary of the Rent Commencement Date equal to $347,000; one
twelfth of such credit shall be applied against each of the 12 monthly
installments of Basic Rent during such 12 month period. The preceding sentence
may be applied repeatedly, so long as Landlord's inability to deliver vacant
possession of the Stephaneze Premises by an anniversary of October 15, 1997
continues.
This Section 1.3(a) shall be an express provision to the contrary
for purposes of Section 223-a of the New York Real Property Law and any other
law of like import now or hereafter in effect.
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<PAGE> 14
(b) The following provisions of this Section 1.3(b) shall be
applicable until the Stephaneze Possession Date:
(i) There shall be no direct access between the Stephaneze
Premises and the Building (i.e., all access to or from the
Stephaneze Premises shall be from the street only).
(ii) Tenant shall not be required to furnish any services or
utilities to the Stephaneze Premises. If and to the extent
that the electricity, water, sewer, gas and telephone lines
currently serving the Stephaneze Premises run through the
Leased Premises, Tenant shall permit the same to remain;
provided, that Tenant shall have the right
(A) to relocate such lines at Tenant's expense;
provided, that (i) any such relocation shall be
performed only at times other than during the
regular business hours of Stephaneze, and (ii) no
such relocation shall be performed prior to the
earlier of (1) October 15, 1997, or (2) the date
on which Landlord recovers possession of the
Stephaneze Premises (such earlier date being
herein called the "Stephaneze Restriction Date"),
and
(B) to shut down such lines or otherwise to interrupt,
stop, suspend or curtail the delivery of services
through such lines whenever and for so long as may
be reasonably necessary by reason of damage to
such lines, accidents, or any testing,
maintenance, repairs, replacements, alterations,
additions or other work being undertaken by
Tenant, or by reason of any other cause beyond
Tenant's reasonable control; provided, that,
except in case of emergency, or reasonably
foreseeable or actual criminal liability of
Tenant, damage to such lines, accident or any
other cause beyond Tenant's reasonable control,
Tenant (i) shall not shut down such lines or
otherwise interrupt stop, suspend or curtail the
delivery of services through such lines prior to
the Stephaneze Restriction Date, and (ii) shall
use reasonable efforts to minimize interference
with the ordinary conduct of the business of
Stephaneze.
Provided that Tenant complies with the provisions of this
Section 1.3(b), Tenant shall have no liability to Landlord or
any Occupant of the Stephaneze Premises for or on account of
any shutdown of such lines or any interruption, stoppage,
suspension or curtailment of service through such lines for
any reason. In case of any damage to such lines, Tenant shall,
with reasonable promptness and diligence, immediately after
Tenant becomes aware of such damage, repair such damage (at
Landlord's
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<PAGE> 15
expense, unless such damage shall have arisen from any act,
omission, negligence or intentional misconduct of Tenant). All
electricity, gas and water and sewer service to the Stephaneze
Premises shall be separately metered, and the charges therefor
shall be paid by Landlord directly to the public or municipal
utility supplier.
(iii) If the term of this Lease shall not have commenced with
respect to the Stephaneze Premises on or before March 1, 1998
then thereafter until the Stephaneze Possession Date: (A)
Landlord shall keep (or cause to be kept) all portions of the
Stephaneze Premises visible from without the Stephaneze
Premises in a well-maintained, clean and attractive condition;
(B) Landlord shall exterminate (or cause to be exterminated)
the Stephaneze Premises as necessary to keep the Stephaneze
Premises free of vermin; and (C) Landlord shall clean and
maintain (or cause to be cleaned and maintained) the exterior
surface of the exterior walls of the Stephaneze Premises,
including any and all glass located thereon.
(iv) Landlord shall make (or cause to be made) all repairs and
replacements in and to the Stephaneze Premises if the failure
to make such repair or replacement would result in an adverse
effect on the use, occupancy or appearance of the Leased
Premises and the need for such repair or replacement is not
the result of any act, omission, negligence or intentional
misconduct of Tenant (in which latter event such repair or
replacement shall be performed by Tenant). Landlord, at
Landlord's expense (unless the need for such compliance arises
out of any act, omission, negligence or intentional misconduct
of Tenant, in which event Tenant shall reimburse Landlord for
the cost of such compliance within 30 days after submission by
Landlord to Tenant of invoices evidencing the cost of such
compliance), shall promptly comply with all Legal
Requirements, Insurance Requirements and Permitted
Encumbrances relative to the Stephaneze Premises, whether or
not compliance therewith shall require Alterations or
interfere with the use or enjoyment of the Stephaneze
Premises. Landlord may contest any such Legal Requirement,
Insurance Requirement or Permitted Encumbrance (and not comply
therewith pending the resolution of such contest); provided,
that such contest has no adverse affect on Tenant's use or
occupancy of the Leased Premises. Tenant shall not at any time
use or occupy the Stephaneze Premises, or suffer or permit
anyone to use or occupy the Stephaneze Premises, in any
manner, or do anything in the Stephaneze Premises, or suffer
or permit anything to be done, brought into or kept on the
Stephaneze Premises which (A) constitutes a nuisance, public
or private, (B) makes unobtainable from reputable insurance
companies authorized to do business in New York State all risk
property insurance, or liability, elevator, boiler or other
insurance at standard rates, or (C) discharges objectionable
fumes, vapors or odors.
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<PAGE> 16
(v) Landlord shall keep in effect commercial general liability
insurance, including broad form bodily injury, personal
injury, property damage and blanket contractual insurance,
against claims arising out of or connected with the
possession, use, operation or condition of the Stephaneze
Premises ("Liability Insurance") with a combined single limit
of not less than $10,000,000 for all claims with respect to
bodily injury, property damage and personal injury with
respect to any one occurrence. All such Liability Insurance
shall name Tenant as an additional insured and provide that no
cancellation, reduction in amount or material change in
coverage thereof shall be effective until at least 30 days
after receipt by Tenant of written notice thereof. Landlord
may obtain the aforesaid insurance under blanket or umbrella
policies. On the date hereof (with respect to Liability
Insurance required to be carried by Landlord), and at least 7
days prior to each policy expiration, Landlord shall deliver
(or cause to be delivered) to Tenant certificates of all such
Liability Insurance.
(vi) Subject to the next sentence, Tenant shall have (A) the
exclusive right to use, disconnect or close (x) any pipe,
duct, conduit, utility line or similar installation running in
or through but not serving the Stephaneze Premises, or (y) any
exhaust duct running in or through or serving the Stephaneze
Premises, (B) the right to install in and through the
Stephaneze Premises new or additional pipes, ducts, conduits,
utility lines or similar installations, in locations adjacent
to ceiling slabs, demising walls or structural columns, in
each case in a manner so as not to unreasonably interfere with
the use or occupancy of the Stephaneze Premises as retail
space, (C) the right to maintain, repair and replace any of
the foregoing and (D) the right to enter the Stephaneze
Premises for (1) all or any of the foregoing purposes, (2) to
inspect the Stephaneze Premises or (3) to maintain or make
repairs, replacements, alterations, additions or improvements
in or to the Leased Premises; provided, that, except in case
of emergency or reasonably foreseeable or actual criminal
liability of Tenant, Tenant shall give Landlord reasonable
prior notice of any such entry and shall use reasonable
efforts to minimize interference with the use and occupancy of
the Stephaneze Premises arising by reason of such entry.
Notwithstanding the foregoing, except in case of emergency or
reasonably foreseeable or actual criminal liability of Tenant,
Tenant shall take no action pursuant to this Section
1.3(b)(vi) prior to the Stephaneze Restriction Date. The
Stephaneze Premises shall consist only of the space within the
inside surface of the structural (or centerline of any
non-structural) walls, windows, doors, columns, and floor
slabs bounding the Stephaneze Premises (exclusive of any such
space used for pipes, ducts, conduits, utility lines or
similar installations). If at any time any windows of the
Stephaneze Premises are either temporarily darkened or
obstructed by reason of maintenance, cleaning, repairs,
replacements, alterations, additions or improvements in or
about the Leased Premises or the
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<PAGE> 17
Stephaneze Premises, including by way of a sidewalk bridge (or
permanently darkened or obstructed if required by law), Tenant
shall have no liability to Landlord or any Occupant of the
Stephaneze Premises on account thereof; provided, that Tenant
shall use reasonable efforts not to darken or obstruct any
windows of the Stephaneze Premises and to minimize any such
darkening or obstruction when the same cannot reasonably be
avoided.
(c) Subject to the last sentence of this Section 1.3(c), if
Landlord shall fail to make any payment or perform any act required to be made
or performed by Landlord hereunder with respect or relating to the Stephaneze
Premises Tenant may (but shall be under no obligation to) without waiving or
releasing any obligation or default:
(i) in case of emergency, or reasonably foreseeable or actual
criminal liability of Tenant or interference with the use or
occupancy of, or the performance of the Base Building Upgrade
Work or the Fit-Out Work in, the Leased Premises, or
(ii) if Tenant shall give notice to Landlord referring to Tenant's
intent to exercise its self-help right under this Section
1.3(c), which notice shall specify Landlord's failure with
respect to the Stephaneze Premises and require such failure to
be remedied, and Landlord shall not remedy such failure within
30 days after the giving of such notice; provided, that in
case such failure cannot with due diligence be remedied by
Landlord within a period of 30 days, if Landlord proceeds as
promptly as may be reasonably possible after the giving of
such notice and with all due diligence to remedy such failure
and thereafter to prosecute the remedying of such failure with
all due diligence, the period of time after the receipt of
such notice by Landlord within which to remedy such failure
shall be extended for such period as may be necessary to
remedy the same with all due diligence,
make such payment or perform such act for the account and at the expense of
Landlord, and may enter upon the Stephaneze Premises or any part thereof for
such purpose and take all such action therein as, in the opinion of Tenant, may
be necessary or appropriate therefor. All payments so made by Tenant and all
costs and expenses (including without limitation attorneys fees and expenses)
incurred in connection with Tenant's exercise of its self-help right under this
Section 1.3(c), together with interest thereon at the Interest Rate, shall be
paid by Landlord to Tenant within 30 days after Landlord's receipt of Tenant's
demand therefor, accompanied by invoices evidencing the costs incurred by
Tenant. If Landlord objects to Tenant's exercise of its right of self-help under
this Section 1.3(c), then Tenant shall not be entitled to any reimbursement
under this Section 1.3(c) unless and until the matter is resolved in favor of
Tenant by Expedited Arbitration. Except in case of emergency or reasonably
foreseeable or actual criminal liability of Tenant, Tenant shall take no action
under this Section 1.3(c) prior to the Stephaneze Restriction Date.
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<PAGE> 18
(d) Landlord shall protect, indemnify and save harmless Tenant
from and against all liabilities, obligations, claims, damages, penalties,
causes of actions, costs and expenses (including, without limitation, attorneys'
fees and expenses) imposed upon or incurred by or asserted against Tenant by
reason of any action by Landlord to recover possession of the Stephaneze
Premises.
(e) Landlord shall reimburse Tenant for all incremental
out-of-pocket costs incurred by Tenant prior to the commencement of the Term
with respect to the Stephaneze Premises on account of the Stephaneze Premises,
or the use or occupancy thereof, including any such costs arising out of any
maintenance, repair or replacement of any utility lines serving the Stephaneze
Premises (unless the need therefor arises out of any act, omission, negligence
or intentional misconduct of Tenant). Such reimbursement shall be due from time
to time within 30 days after Tenant's presentation of an invoice detailing such
incremental out-of-pocket costs.
1.4 Tenant's Termination Options
(a) Subject to the further provisions of this Section 1.4,
Tenant shall have the option (each, a "Termination Option") to terminate this
Lease effective as of (i) September 30, 2004, (ii) September 30, 2006, (iii)
June 30, 2008 or (iv) June 30, 2013 (each of the dates set forth in the
preceding clauses (i) - (iv) is called a "Termination Date"), by giving an
exercise notice (the "Termination Notice") to Landlord on or before the date
that is (A) one year prior to the applicable Termination Date in the case of a
termination as of September 30, 2004 or September 30, 2006 or (B) 18 months
prior to the applicable Termination Date in the case of a termination as of June
30, 2008 or June 30, 2013. Time is of the essence with respect to the giving of
any Termination Notice. Tenant may, by notice to Landlord at any time, waive any
one or more of its Termination Options.
(b) If Tenant timely exercises a Termination Option providing
for the termination of this Lease as of September 30, 2004, September 30, 2006
or June 30, 2008, then Tenant shall pay to Landlord, on or before September 1,
2004, September 1, 2006 or June 1, 2008, as the case may be (the "Cancellation
Payment Payment Date"), in addition to the Basic Rent, Supplemental Rent and Tax
Payment due on the Cancellation Payment Payment Date, the applicable
Cancellation Payment. "Cancellation Payment" means
(i) the amount of the Unamortized Fit-Out Work Investment as
of the applicable Cancellation Payment Payment Date,
plus
(ii) in the case of a Termination Option providing for the
termination of this Lease as of September 30, 2004 or
September 30, 2006, the Basic Rent and the Tax Payments
that would be payable for the six month period
immediately following the applicable Termination Date if
Tenant had not exercised the Termination Option (the
portion of the Cancellation Payment referred to in this
clause (iii) is called the "Rent Based Cancellation
Payment").
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<PAGE> 19
(c) If Tenant timely exercises any Termination Option, then on
the applicable Termination Date (i) this Lease shall terminate, (ii) Tenant
shall deliver to Landlord vacant possession of the Leased Premises subject to
and in accordance with all applicable provisions of this Lease as if the
Termination Date were the Expiration Date, and (iii) Basic Rent, Supplemental
Rent and Tax Payments due hereunder shall be payable through and apportioned as
of the Termination Date, and (except as provided in Section 32(b) with respect
to any holdover) Tenant shall have no liability for Basic Rent, Supplemental
Rent or Tax Payments which would otherwise have been payable after the
Termination Date.
(d) If (i) Tenant timely exercises a Termination Option as of
September 30, 2004 or September 30, 2006 and (ii) any Reimbursable Alteration
(other than Reimbursable Removal of Hazardous Substances) was performed prior to
the applicable Termination Date, then on or before the applicable Termination
Date, Landlord shall pay to Tenant, in respect of each such Reimbursable
Alteration, an amount equal to the excess of (A) the Reimbursement Amount which
would have been payable by Landlord with respect thereto if the Cost Division
Date with respect to such Reimbursable Alterations had been the applicable
Termination Date rather than the last day of the Second Rent Period, over (B)
the Reimbursement Amount paid by Landlord with respect thereto; provided, that
if with respect to any such Reimbursable Alteration Landlord shall have been
required to pay the Limited Reimbursement Amount rather than the Reimbursement
Amount and shall not have subsequently been required to make the payment
described in Section 6.4(g)(vi), then rather than the excess of the amount
described in clause (A) above over the amount described in clause (B) above
Landlord shall pay to Tenant, in respect of such Reimbursable Alteration, an
amount equal to the excess of (C) the Limited Reimbursement Amount which would
have been payable by Landlord with respect thereto if the Cost Division Date
with respect to such Reimbursable Alteration had been the applicable Termination
Date rather than the last day of the Second Rent Period, over (D) the Limited
Reimbursement Amount paid by Landlord with respect thereto.
1.5 Landlord's Financing.
(a) Landlord shall make reasonable efforts, as promptly as
reasonably possible, to cause the Financing Closing Date to occur. The term
"Financing Closing Date" shall refer to the date on which
(i) Landlord has received full disbursement of one or more
new loans sufficient in amount to permit Landlord to
deposit, and Landlord has deposited (a) $17,350,000 into
the account described in Section 6 of the Initial
Improvements Agreement, and (b) $50,000,000 into the
account described in Section 7 of the Initial
Improvements Agreement,
(ii) Landlord has caused the holders of all mortgages or
other liens on the Project (including but not limited to
the lender or lenders who shall have disbursed the new
loan or
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loans referred to above) to execute and deliver to
Tenant a Non-Disturbance Agreement, and
(iii) Tenant shall have received the certificate called for by
the last paragraph of Section 5 of the Option Agreement
of even date among Landlord, Tenant and certain others.
Landlord represents that it has furnished to Tenant a true and complete copy of
a commitment letter dated______ from Credit Suisse First Boston Mortgage
Capital. On the Financing Closing Date, Landlord shall furnish Tenant with
evidence that the deposits referred to in clause (i) above have been made.
(b) If the Financing Closing Date does not occur on or before
September 30, 1997, then either Landlord or Tenant may terminate this Lease by
notice (the "Financing Termination Notice") to the other given at any time prior
to the Financing Closing Date, in which event this Lease shall terminate as of
the date of the receipt of such Financing Termination Notice and neither party
shall have any further obligations or liabilities to the other, except that
Landlord shall reimburse Tenant in an amount not to exceed $6,700,000 for any
Qualified Prefinancing Costs incurred by Tenant. Tenant may make one or more
demands for reimbursement under this Section 1.5(b), each to be accompanied by
invoices paid or payable by Tenant, and each amount payable under this Section
1.5(b) shall be due within 30 days of such demand therefor. If any payment
required to be made pursuant to this Section 1.5(b) is not made when due, the
same shall bear interest in accordance with Section 3(c). Upon payment of any
amount pursuant to this Section 1.5(b), Tenant shall assign to Landlord all of
Tenant's right, title and interest in and to the plans and specifications, work,
equipment or other property to which such payment related (including the benefit
of any deposits or other payments made by Tenant and reimbursed by Landlord),
without recourse or representation.
"Qualified Prefinancing Costs" means any and all Costs paid or
incurred by Tenant for or in connection with the Base Building Work and/or the
Fit-Out Work on or prior to the date of termination of this Lease under this
Section 1.5(b), including any partial payments (e.g. deposits) with respect to
any systems or equipment to be installed as a part of the Base Building Work
and/or the Fit Out Work which were made by Tenant prior to the termination of
this Lease pursuant to this Section 1.5(b) or for which under commitments made
prior to the termination of this Lease pursuant to this Section 1.5(b) Tenant is
obligated, excluding in all cases any sums of which Tenant would be entitled to
a refund or which Tenant would be excused from paying if, promptly after
receiving notice of termination of this Lease under Section 1.5(b), Tenant gave
prompt notice of termination to Tenant's contractors, subcontractors or other
suppliers.
(c) If the Financing Closing Date shall not occur by September
30, 1997 Tenant shall have the right to arrange or provide on commercially
reasonable terms financing in the amount required
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(i) to make the deposits referred to in Section 1.5(a)
above,
(ii) to refinance the existing debt on the Property,
(iii) to pay all points, fees and other expenses, including,
without limitation, legal fees, title insurance premiums
and charges and mortgage recording taxes incurred by
Landlord in connection with all such financing being
provided under this Section 1(c),
(iv) to make all scheduled payments of principal and interest
through August 1, 1998 on the portion of the financing
being provided under this Section 1(c) applicable to the
deposits referred to in clause (i) above and to a
pro-rata share of the points, fees and other expenses
referred to in clause (iii) above, and
(v) to make all scheduled payments of principal and interest
through May 1, 1998 on the balance of the financing
being provided under this Section 1(c).
Notwithstanding the provisions of Section 1.5(b) above, Landlord shall not have
the right to terminate this Lease prior to October 15, 1997 and if prior to that
date Tenant shall arrange or provide a commercially reasonable commitment for
such financing, Landlord shall accept the same and close the financing to be
provided thereunder and shall not have the right to terminate this Lease
pursuant to Section 1.5(b).
1.6 Certain Definitions
The term "Notional Fit-Out Work Loan Amount" shall refer to the sum
of
(i) $50,000,000, plus
(ii) a pro rata portion of all points, fees and other
expenses, including, without limitation, legal
fees, title insurance premiums and charges and
mortgage recording taxes incurred by Landlord for
or in connection with the new loan or loans
referred to in clause (i) of Section 1.5(a), such
proration to be made according to the ratio which
the Notional Fit-Out Work Loan Amount bears to the
total amount of such new loan or loans, plus
(iii) the amount of all scheduled payments (including
principal and interest) which
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would be required to be paid on or before August
1, 1998 on a loan in the principal amount of the
Notional Fit-Out Work Loan Amount bearing
interest at the Fit-Out Work Interest Rate and
disbursed on the Financing Closing Date if such
loan had provided for constant monthly payments
on the first day of each month equal to the
constant monthly payment which would be required
to fully amortize such principal amount over such
constant monthly payments beginning on the first
day of the month after the month in which such
disbursement is made and ending December 1, 2009,
with each such payment being applied first to
accrued interest and then to a reduction in
principal (except that if the Financing Closing
Date is other than the first day of a month (x)
the first payment shall be deemed to consist of
interest only from the date of such disbursement
to the first day of the month after the month in
which such disbursement is made and to be due on
such first day of such month and (y) the
aforesaid constant monthly payments shall be
deemed to begin on the first day of the next
month).
The term "Fit-Out Work Investment" shall mean the Notional Fit-Out
Work Loan Amount minus all amounts included therein in respect of principal
under clause (iii) of the definition thereof (it being understood that in
computing the Fit-Out Work Investment the amount of the interest under said
clause (iii) shall not be deducted).
The term "Base Building Savings" shall mean the excess, if any, on
the Base Building Savings Commencement Date of (i) $17,350,000 over (ii) all
amounts disbursed by Landlord pursuant to Section 6 of the Initial Improvements
Agreement.
The term "Fit-Out Work Constant Payment" shall mean the constant
monthly payment which would be required to fully amortize, with interest at the
Fit-Out Work Interest Rate, the Fit-Out Work Investment over such constant
monthly payments on the first day of each month beginning September 1, 1998 and
ending on December 1, 2009 with each such payment being applied first to
interest accrued at the Fit-Out Work Interest Rate and then to amortization (and
with interest commencing to accrue on the Fit Out Work Investment as of August
1, 1998).
The term "Base Building Savings Constant Payment" shall mean the
constant monthly payment which would be required to fully amortize, with
interest at the Main Interest Rate, the Base Building Savings over such constant
monthly payments on the first day of each month beginning on the Base Building
Savings Commencement Date (as such term is defined in the Initial Improvements
Agreement) and ending June 1, 2008 with each such payment being applied first to
interest accrued at the Main Interest Rate and then to amortization (and with
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<PAGE> 23
interest commencing to accrue on the Base Building Savings as of one month
before the Base Building Savings Commencement Date).
The term "Main Interest Rate" shall mean the sum of the Base Rate
plus 140 basis points per annum.
The term "Fit-Out Work Interest Rate" shall mean the sum of the Base
Rate plus 90 basis points per annum.
The term "Base Rate" shall mean the straight line interpolation to
seven years between (i) the interest rate on the on-the-run five year U.S.
Treasury securities quoted by Credit Suisse First Boston to Landlord and Tenant
at the time during the business day prior to the Financing Closing Date at which
the rate being paid by Landlord on the corresponding new loan referred to in
clause (i) of Section 1.5(a) is determined, and (ii) the interest rate on the
on-the-run ten year U.S. Treasury securities quoted by Credit Suisse First
Boston to Landlord and Tenant at such time.
The term "Unamortized Fit-Out Work Investment" shall mean, as of any
date, that amount which would be unamortized on such date if the Fit-Out Work
Investment were amortized with interest at the Fit-Out Work Interest Rate over
constant monthly payments on the first of each month equal to the Fit-Out Work
Constant Payment beginning on September 1, 1998 and ending on December 1, 2009,
with each such payment being applied first to interest accrued at the Fit-Out
Work Interest Rate and then to amortization (with interest commencing to accrue
on the Fit-Out Work Investment as of August 1, 1998). The Unamortized Fit-Out
Work Investment as of the first day of any month shall be computed as of after
the application of such constant monthly payment due on such first day of such
month.
The term "Notional Main Loan Original Balance" shall equal the
excess of (i) the principal amount of all mortgage debt of Landlord outstanding
(other than to affiliates) as of immediately after the Financing Closing Date
over (ii) the sum of (a) the Notional Fit-Out Work Loan Amount, plus (b) the
Base Building Savings.
The term "Notional Main Loan Outstanding Balance" shall mean, as of
any date, the principal amount which would be outstanding on a loan having an
original principal amount equal to the Notional Main Loan Original Balance,
disbursed on the Financing Closing Date, providing for 216 constant monthly
payments on the first day of each month, beginning on the lst day of the month
after the month in which such disbursement is made, equal to the constant
monthly payment which would be required to fully amortize the Notional Main Loan
Original Balance over such 216 constant monthly payments, with each such payment
being applied first to accrued interest and then to a reduction in principal
(except that if the Financing Closing Date is other than the first day of a
month (x) the first payment shall be deemed to consist of interest only from the
date of such disbursement to the first day of the month after the month in which
such disbursement is made and to be due on such first day of such month and (y)
the aforesaid 216 constant monthly payments shall be deemed to begin on the
first day of the next month).
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<PAGE> 24
The term "Notional Main Loan Debt Service" shall mean the amount of
the constant monthly payment referred to in the definition of Notional Main Loan
Outstanding Balance.
The term "Notional Make-Whole Amount" shall mean, as of any date,
the excess, if any, of (i) the present value as of such date (determined by
using a discount rate equal to Comparable Treasury Rate) of all Supplemental
Rent scheduled to be paid by Tenant under Section 2.3 of this Lease after such
date over (ii) the Unamortized Fit-Out Work Investment as of such date. In the
making the determination under clause (i) above, it shall be assumed that Tenant
has not exercised any of its Termination Options and any Termination Options
actually exercised by Tenant shall be disregarded. As used above, the term
"Comparable Treasury Rate" shall, as of any date, mean the yield to maturity of
U.S. Treasury securities maturing on or about June 1, 2008 as published by The
Wall Street Journal for the third business day prior to such date.
Promptly after the requisite facts are known, Landlord and Tenant
shall join in one or more instruments confirming (a) the Base Rate, the Fit-Out
Work Interest Rate, the Fit-Out Work Notional Loan Amount, the Fit-Out Work
Investment, the Fit-Out Work Constant Payment, the Unamortized Fit-Out Work
Investment as of September 1, 2004, the Unamortized Fit-Out Work Investment as
of September 1, 2006, and the Unamortized Fit-Out Work Investment as of June 1,
2008, and (b) the Main Interest Rate, the Base Building Savings, the Base
Building Savings Constant Payment and the Notional Main Loan Debt Service. The
failure of either party to execute such instrument referred to above shall not
constitute a default hereunder or otherwise affect this Lease.
Any dispute as to the computations and determination to be made
pursuant to this Section 1.6 shall be determined by Expedited Arbitration.
2. Basic Rent, etc.
2.1 Basic Rent
(a) Tenant shall pay to Landlord, as fixed annual rent for the
Leased Premises, Basic Rent. Basic Rent shall be payable by Tenant to Landlord
in advance, in equal monthly installments, on the Rent Commencement Date and on
the first day of each and every month thereafter throughout the Term.
(b) As used herein:
(i) "Basic Rent" means (A) during the period commencing
on June 1, 1998 (the "Rent Commencement Date"), to and including May 31, 2003
(the "First Rent Period"), a per annum rate equal to $8,420,095.88, payable in
equal monthly installments of $701,674.66, (B) during the period commencing on
June 1, 2003 to and including June 30, 2008 (the "Second Rent Period"), a per
annum rate equal to $10,573,515.14, payable in equal monthly installments of
$881,126.26, (C) during the period commencing on July 1, 2008 to and including
June 30, 2013 (the "Third Rent Period"), a per annum rate equal to 95% of the
Fair Market Rent
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<PAGE> 25
for such period and (D) during the period commencing on July 1, 2013 to and
including the Expiration Date (the "Fourth Rent Period") a per annum rate equal
to 95% of the Fair Market Rent for such period. Fair Market Rent shall be
determined in accordance with Section 2.2 below.
(ii) If (a) Tenant shall give a notice pursuant to
Section 6 of the Initial Improvements Agreement establishing the Base Building
Savings Commencement Date, and (b) there are any Base Building Savings, then
there shall be credited against the Basic Rent due for each of the months
beginning with the Base Building Savings Commencement Date and ending June 1,
2008, an amount equal to the Base Building Savings Constant Payment. The
aforesaid credit is herein called the "Base Building Savings Credit". In no
event shall Landlord ever be required to pay to Tenant any portion of the Base
Building Savings Credit.
2.2 Determination of Fair Market Rent
(a) Each determination of Fair Market Rent shall be made, to the
extent not inconsistent with this Section, in accordance with the rules from
time to time in effect of the American Arbitration Association or, if the
American Arbitration Association shall have ceased to function as an arbitration
association, of a successor or comparable organization (the "Rules"). There
shall be three arbitrators: one designated by Landlord; one designated by
Tenant; and one designated in the manner hereinafter described. Each arbitrator
shall, as of the date of his or her designation, be a real estate broker
licensed in the State of New York doing business in the Borough of Manhattan and
having at least 15 years experience in first-class Manhattan office building
leases. Not more than 30 months and not less than 24 months before the first day
of the Third Rent Period or the Fourth Rent Period, as applicable, Tenant shall
give to Landlord a notice designating the name and address of Tenant's
arbitrator ("Tenant's Designation Notice"). Landlord, by notice to Tenant given
not later than 20 days after the giving of Tenant's Designation Notice, shall
designate the name and address of Landlord's arbitrator.
If either party shall fail timely to designate its arbitrator, and such
failure shall continue for 10 days after receipt by the failing party of notice
of such failure, such other party may designate an arbitrator on behalf of the
failing party. Promptly after the designation of the second of the two
arbitrators to be designated, such two arbitrators shall meet and attempt to
mediate between Landlord and Tenant an agreement upon the Fair Market Rent in
question. If, within 15 days after the designation of the second of the two
arbitrators to be designated, Landlord and Tenant have not agreed upon the Fair
Market Rent in question, such two arbitrators shall jointly designate a third
arbitrator. If, within 30 days after the designation of the second of the two
arbitrators to be designated, no third arbitrator shall have been so jointly
designated, such third arbitrator shall be designated pursuant to the Rules. The
arbitrators shall render their decision within 60 days after the designation of
the third arbitrator to be designated. Landlord and Tenant shall each pay the
fees and disbursements of the arbitrator designated by or on behalf of it, and
Landlord and Tenant shall share equally the fees and disbursements of the third
arbitrator, if any.
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<PAGE> 26
(b) "Fair Market Rent" means the fixed annual rent that
would be payable for the Leased Premises by a third-party tenant having the then
creditworthiness of Tenant under a five year lease commencing on the first day
of the Third Rent Period or the Fourth Rent Period (as the case may be) upon all
of the terms and conditions of this Lease to be applicable to the Third Rent
Period or Fourth Rent Period (as the case may be), including, without
limitation, the following:
(i) that such fixed annual rent is payable from and
after the first day of the Third Rent Period or
the Fourth Rent Period (as the case may be),
(ii) that the Initial Improvements Agreement is not
applicable to the Third Rent Period or the Fourth
Rent Period (as the case may be), and that Tenant
shall accept the Leased Premises in its "as-is"
condition at the commencement of the Third Rent
Period or the Fourth Rent Period (as the case may
be), and that in connection with the Third Rent
Period or the Fourth Rent Period (as the case may
be) Landlord shall not be required to perform any
work, pay any amount or render any services to
make the Leased Premises ready for Tenant's use
and occupancy or provide any abatement of Basic
Rent or other sums due hereunder,
(iii) that during the Third Rent Period or the Fourth
Rent Period (as the case may be), Tenant shall be
responsible for any increases in Taxes above the
Base Tax Amount, and
(iv) that the ground floor of the Improvements are
legally permitted to be used for retail purposes,
and taking into account all relevant factors.
(c) Each arbitrator shall render as his or her
determination of the Fair Market Rent a fixed dollar amount per annum (in the
aggregate, not per rentable square foot), and shall give a notice to the other
arbitrators and Landlord and Tenant thereof. All notices pursuant to the
preceding sentence shall be given simultaneously at a meeting (called by the
third arbitrator on at least five Business Days' notice to Landlord and Tenant
and the other arbitrators) at which all three arbitrators and Landlord and
Tenant are present. The arithmetic average, of the two determinations closest to
one another shall be and constitute the determination of the arbitration;
provided, that if in any case the highest and lowest determinations are
equidistant from the middle determination, then the middle determination shall
be and constitute the determination of the arbitration.
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2.3 Supplemental Rent
In addition to Basic Rent, Tenant shall pay to Landlord additional
rental (the "Supplemental Rent"), (a) in advance, on September 1, 1998 and on
the first day of each and every month through and including June 1, 2008, in an
amount equal to the Fit-Out Work Constant Payment and (b) on June 1, 2008 (in
addition to the amount required to be paid on such date under clause (a) of this
Section 2.3), an additional amount equal to the Unamortized Fit-Out Work
Investment as of June 1, 2008.
3. Manner of Payment
(a) Basic Rent, Supplemental Rent, Tax Payments and all other sums
payable by Tenant to Landlord hereunder, all of which shall constitute rent,
shall be payable in lawful money of the United States of America and shall be
paid to Landlord (i) in the case of Basic Rent, Supplemental Rent and Tax
Payments, by wire transfer of immediately available federal funds as directed by
Landlord, and (ii) in the case of all other sums, either by wire transfer as
aforesaid or by check (subject to collection) drawn on a New York Clearing House
Association member bank at Landlord's address set forth above or at such other
address of Landlord within the United States as Landlord from time to time may
designate or to such agent or person or persons resident or having an office at
such other address within the United States as Landlord from time to time may
designate.
(b) If Tenant fails timely to pay any Basic Rent, Supplemental Rent,
Tax Payment or other sum payable by Tenant to Landlord under this Lease, Tenant
shall pay interest thereon from the date when such amount became due to the date
of Landlord's receipt thereof at the lesser of (i) the greater of (A) 18% per
annum, or (B) the Prime Rate, and (ii) the maximum rate permitted by law (the
lesser of such rates is called the "Interest Rate"). Any sums payable by Tenant
for which no due date is specified in this Lease shall be due and payable on the
30th day after the giving of an invoice therefor.
(c) If Landlord fails timely to pay any sum payable by Landlord to
Tenant under this Lease other than (i) a payment which Landlord is required to
make under Section 11.2, which failure to make such payments is governed by
Article 38, or (ii) a payment which Landlord is required to make under Section 6
or Section 7 of the Initial Improvements Agreement, which failure to make such
payment is governed by Article 39, or (iii) a payment of net annual rental
payable under the Ground Lease which Landlord is required to make under Section
12.3, which failure to make such payment is governed by Article 38, Landlord
shall pay interest thereon from the date when such amount became due to the date
of Tenant's receipt thereof at the Interest Rate. Any sum payable by Landlord
for which no due date is specified in this Lease shall be due and payable on the
30th day after the giving of an invoice therefor.
(d) If Tenant shall fail timely to pay the Cancellation Payment or
the Supplemental Rent payable under clause (b) of Section 2.3 when due then, in
addition to such Cancellation Payment or Supplemental Rent, Tenant shall pay as
additional rental upon demand (x) an amount equal to interest at the Interest
Rate on such Cancellation Payment (excluding the Rent-Based Cancellation
Payment) or on such Supplemental Rent from the Cancellation
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Payment Payment Date or June 1, 2008 (as the case may be) until payment in full
by Tenant of the Cancellation Payment or such Supplemental Rent and all amounts
required by this sentence, and (y) in case of any failure timely to pay the
Cancellation Payment when due on September 1, 2004 or September 1, 2006,
interest at the Interest Rate on the Rent-Based Cancellation Payment from the
Cancellation Payment Payment Date until payment in full of the Cancellation
Payment and all other amounts required by this sentence. If Tenant shall fail
timely to pay the Cancellation Payment or the Supplemental Rent payable under
clause (b) of Section 2.3 when due then, in addition to the amounts which Tenant
is required to pay under the preceding sentence, Tenant shall indemnify Landlord
against all other losses, damages, costs and expenses arising out of such
failure.
4. Net Lease; No Abatement
Except as otherwise provided in the Initial Improvements Agreement,
Landlord shall not be required to provide any services or utilities to the
Leased Premises. Subject to the last sentence of this Article 4, this Lease is a
net lease of the Leased Premises, and Tenant shall pay all costs, charges,
taxes, assessments and other expenses of every character, foreseen or
unforeseen, ordinary or extraordinary, for the payment of which Landlord or
Tenant is or shall become liable by reason of its respective estate, right,
title or interest in the Leased Premises or any part thereof, or which are
connected with or arise out of the possession, use, occupancy, maintenance,
addition to, repair or rebuilding of the Leased Premises, including, without
limitation, those specifically referred to in this Lease. Except as provided in
Article 16, Section 20(a), Article 38 and Article 39, the Basic Rent and all
other sums payable by Tenant hereunder shall be paid without notice, demand,
counterclaim, setoff, deduction or defense and without abatement, suspension,
deferment, diminution or reduction. The foregoing provisions of this
Article 4(a) shall not relieve Landlord of, or require Tenant to bear or
reimburse Landlord for, the costs of performing (i) Landlord's obligations under
the Initial Improvements Agreement, (ii) Landlord's obligations to make certain
reimbursements pursuant to Article 6, or (iii) Landlord's obligations under
Articles 3, 7, 11, 12, 38 or 39 or any other provision of this Lease which by
its terms imposes any obligation on Landlord, and (b) shall not obligate Tenant
to pay or reimburse Landlord for (A) any taxes or assessments which Tenant is
not required by the provisions of Article 11 to pay or to reimburse to Landlord
or (B) any interest, principal, or other costs or expenses relative to any
indebtedness or other financing of Landlord; provided that the foregoing shall
not relieve Tenant of its obligation to pay Supplemental Rent.
5. Condition and Use of Leased Premises
LANDLORD DOES NOT MAKE, AND TENANT ACKNOWLEDGES THAT LANDLORD HAS NOT
MADE, ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO THIS
LEASE, OR THE PRESENT OR FUTURE MERCHANTABILITY, HABITABILITY, CONDITION,
QUALITY, DURABILITY, FITNESS OR SUITABILITY OF THE LEASED PREMISES IN ANY
RESPECT OR IN CONNECTION WITH OR FOR THE PURPOSES AND USES OF TENANT, OR ANY
OTHER REPRESENTATION OR WARRANTY OF ANY KIND OR CHARACTER, EXPRESS OR IMPLIED,
WITH RESPECT THERETO, EXCEPT AS OTHERWISE
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<PAGE> 29
PROVIDED IN THIS LEASE. Subject to the performance by Landlord of Landlord's
obligations under the Initial Improvements Agreement, Tenant accepts the Leased
Premises "as-is". Tenant may use the Leased Premises only as an office building
and, subject to applicable Legal Requirements, for purposes reasonably ancillary
thereto, including, without limitation, for one or more dining rooms,
cafeterias, restaurants, bars or other food service or preparation facilities
for use by Tenant's personnel and invitees and for one or more health or
exercise facilities for the use of Tenant's personnel. In addition, Tenant may
use any portion of the Improvements above the subcellar and below the 2nd floor
for retail uses so long as there remains throughout the Term a first-class
office building lobby on the ground floor of the Improvements. Tenant shall not
suffer or permit the Leased Premises or any part hereof, to be used by the
public in such a manner as would subject the Leased Premises or any part thereof
to a claim of adverse possession by the public.
6. Maintenance; Alterations; Certain Reimbursements; Etc.
6.1 Generally
(a) Subject to the provisions of this Lease, Tenant:
(i) shall, in accordance with first-class
office building maintenance and operating standards
generally applicable in 1998 (collectively, the
"First-Class Standard"), keep the Leased Premises in
overall first-class order, condition and repair;
(ii) shall promptly make all replacements in
and to the Leased Premises (whether interior or
exterior, structural or nonstructural, ordinary or
extraordinary, foreseen or unforeseen) which are
necessary or appropriate in a first-class office
building according to the standards thereof generally
applicable in 1998 (collectively, "Required
Replacements"); and
(iii) may make additions, alterations and
replacements (other than Required Replacements) in and
to and, subject to the provisions of Section 1.1,
removals from the Leased Premises (collectively,
"Voluntary Alterations"; Required Replacements,
Structural Work and Voluntary Alterations are
collectively called "Alterations").
Notwithstanding the foregoing, (x) Tenant's obligation with respect to the shell
of the Building (excluding the roof) shall be limited to maintaining the same in
such condition as the same is required by applicable Legal Requirements to be
maintained and also in a condition not materially worse than the condition in
which the same was in on the date of this Lease, and (y) if Landlord shall give
a Cost Participation Limitation Notice with respect to any Reimbursable
Replacement or Reimbursable Legal Requirement Alteration, Tenant shall not be
obligated to Landlord to make such Reimbursement Replacement or Reimbursable
Legal Requirement
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Alterations nor, with respect to any such Reimbursable Replacement, to repair
the item which was to have been replaced.
(b) No Alteration may be undertaken if such Alteration would
(i) result in the Improvements not being a first-class office building or (ii)
materially and adversely affect any structural element of the Improvements or
any item of Major Building Equipment. Each Alteration shall be effected with due
diligence, in a good and workmanlike manner, and in compliance with all Legal
Requirements, Insurance Requirements and Permitted Encumbrances. All Structural
Work and all replacements of items of Major Building Equipment shall be of a
quality at least equal to the original installation. Landlord shall not be
liable to any contractors, subcontractors, laborers, materialmen, suppliers or
vendors for services performed or material provided on or in connection with the
Leased Premises. Landlord shall not be required to maintain, alter, repair,
rebuild or replace the Leased Premises or any part thereof. Tenant waives all
rights to make Alterations at Landlord's expense, except that Landlord shall in
accordance with the further provisions of this Article 6 make reimbursements to
Tenant on account of Reimbursable Alterations. Except as provided in Section
1.1, all Improvements arising from the making of any Alterations shall
immediately become the property of Landlord, shall be a part of the Leased
Premises and shall be subject to this Lease, and Tenant shall, upon demand of
Landlord, execute and deliver an appropriate instrument confirming Landlord's
title thereto.
6.2 Certain Definitions
As used herein:
(a) "Legal Requirement Alteration" means any Alteration
undertaken in order to comply with a Legal Requirement.
(b) "Reimbursable Replacement" means the replacement of any
item of Major Building Equipment in its entirety; provided, that (i) such
replacement is performed after completion of the Base Building Upgrade Work,
(ii) such replacement (in light of the physical condition of the item in
question) is consistent with the First-Class Standard, (iii) the repair of the
item in question is inconsistent with the First-Class Standard; (iv) such
replacement shall not have been necessitated by fire, other casualty or a
Taking, and (v) if the Witkoff Management Agreement shall have been terminated,
such replacement shall not have been necessitated by the negligence (including,
without limitation, failure to adhere to the manufacturer's suggested
maintenance procedures) or intentional misconduct of Tenant or the Building
management company employed by Tenant occurring after such termination.
(c) "Reimbursable Legal Recruitment Alteration" means any
Alteration undertaken solely in order to comply with a Legal Requirement enacted
after the date of this Lease and which (i) is performed after completion of the
Base Building Upgrade Work, (ii) in accordance with generally accepted
accounting principles consistently applied ("GAAP") should be capitalized, (iii)
is not an Alteration in any area designed for tenant occupancy, and (iv) is not
necessitated by fire, other casualty or a Taking.
(d) "Structural Work" consists solely of the following:
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(i) replacement and/or repair of the Building's
curtain wall in whole or in part, except that
Structural Work shall not include caulking
treatment of the curtain wall except for any such
caulking treatment done in conjunction with
repairs or replacement of the portion of the
curtain wall being caulked (other than any repairs
or replacement undertaken in order to avoid the
exclusion provided for in this clause (i)).
(ii) replacement and/or repair of the Building's steel
frame, footings, foundations, columns, beams,
floors (including concrete floors and the steel
floors supporting the concrete floors) and core
walls.
(iii) replacement (but not repair) of the roof in its
entirety (but not in part) required in order to
preserve the structural integrity of the Building
or the watertightness and airtightness of the
Building.
(iv) replacement of the watertight membrane or other
watertight barrier under the Building's plaza, and
any removal, reinstallation, repair or replacement
of the Building's plaza arising out of such
replacement
(e) "Reimbursable Structural Work" means any Structural Work
provided that (i) such Structural Work is performed after completion of the Base
Building Upgrades, (ii) such Structural Work (in light of a physical condition)
is consistent with the First-Class Standard, (iii) if such Structural Work is a
replacement, then (A) such replacement (in light of the physical condition of
the item in question) is consistent with the First-Class Standard and (B) the
repair of the item in question is inconsistent with the First-Class Standard,
(iv) such Structural Work shall not have been necessitated by fire, other
casualty or a Taking, and (v) if the Witkoff Management Agreement shall have
been terminated, such Structural Work shall not have been necessitated by the
negligence of Tenant or the Building management company employed by Tenant
occurring after such termination. Notwithstanding the foregoing, the first
$100,000 of Structural Work performed by Tenant in any calendar year which, but
for this sentence, would constitute Reimbursable Structural Work shall be deemed
not to be Reimbursable Structural Work.
(f) "Reimbursable Removal of Hazardous Substances" means the
removal of Qualified Hazardous Substances; provided, that (i) the term
"Reimbursable Removal of Hazardous Substances" shall not include any Asbestos
Removal Work or any Refireproofing Work except to the extent that Landlord fails
to perform the same on or before (a) the Partial Possession Date applicable to
the space in question with respect to any space other than the Stephaneze
Premises or (b) the Stephaneze Possession Date, in the case of the Stephaneze
Premises, and (ii) if the Costs of any removal of Qualified Hazardous Substances
(as reasonably
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estimated by Tenant) shall be less than $500,000 then, unless Tenant, by notice
to Landlord, shall elect to treat the same as a Reimbursable Removal of
Hazardous Substances, such removal shall be deemed not to be a Reimbursable
Removal of Hazardous Substance. In applying the provisions of this clause (ii)
each removal contracted for separately (unless done so solely in order to avoid
the provisions of this Section 6) shall be considered a separate removal.
(g) "Reimbursable Alterations" means, collectively,
Reimbursable Replacements, Reimbursable Structural Work, Reimbursable Legal
Requirement Alterations and Reimbursable Removal of Hazardous Substances.
(h) "Qualified Alteration" means (i) any Alteration (other
than any Reimbursable Replacement, any Structural Work or any Legal Requirement
Alteration) which affects any item of Major Building Equipment and (ii) any
Restoration.
(i) "Major Building Equipment" means any item listed on
Exhibit E and any replacement thereof.
(j) "Base Amount" means the lower of
1) the original contract price of the Retained
Bidder, less any portion of the original contract
price of the Retained Bidder not actually paid by
Tenant, or
2) the original contract price of Landlord's
Preferred Bidder or, if Tenant shall have timely
given the Dispute Notice and the Appropriate
Engineer shall have selected Tenant's Selected
Bidder, the original contract price of Tenant's
Selected Bidder.
(k) "Determined Amount" means the lower of
1) the original contract price of the Retained
Bidder, or
2) the original contract price of Landlord's
Preferred Bidder or, if Tenant shall have timely
given the Dispute Notice and the Appropriate
Engineer shall have selected Tenant's Selected
Bidder, the original contract price of Tenant's
Selected Bidder.
(l) "Cost Division Date" means, (i) with respect to any
Reimbursable Alteration (other than Reimbursable Removal of Hazardous
Substances) commenced during the First Rent Period or the Second Rent Period,
the last day of the Second Rent Period, (ii) with respect to any Reimbursable
Alterations commenced during the Third Rent Period, the last day of the Third
Rent Period, or (iii) with respect to any Reimbursable Alterations commenced
during the Fourth Rent Period, the last day of the Fourth Rent Period.
(m) "Measuring Fraction" means, with respect to any
Reimbursable Alteration (other than any Reimbursable Removal of Hazardous
Substances), the fraction whose
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numerator is the number of months in the period from the Cost Division Date with
respect to such Reimbursable Alteration to the end of the expected useful life
of such Reimbursable Alteration and whose denominator is the number of months in
the period from the Estimated Substantial Completion Date of such Reimbursable
Alteration to the end of the expected useful life thereof. Any dispute as to the
reasonableness of any Estimated Substantial Completion Date, and any dispute as
to the expected useful life of any Reimbursable Alteration, shall be determined
by the Appropriate Engineer. As to any Reimbursable Removal of Hazardous
Substances, the Measuring Fraction shall be one (1.00).
If Landlord and Tenant shall disagree (i) as to whether any item is an item of
Major Building Equipment, or (ii) as to whether any replacement is a
Reimbursable Replacement, or (iii) as to whether any work is Structural Work, or
(iv) as to whether any Structural Work is Reimbursable Structural Work, or (v)
as to whether a Legal Requirement requires an Alteration, or (vi) as to whether
an Alteration is a Legal Requirement Alteration, or (vii) as to whether any
Legal Requirement Alteration is a Reimbursable Legal Requirement Alteration, or
(viii) as to whether any Alteration is a Qualified Alteration, or (ix) as to
whether any removal of any Hazardous Substance is a Reimbursable Removal of
Hazardous Substances, the matter shall in each case be determined by the
Appropriate Engineer. Notwithstanding the foregoing, any dispute under clause
(vii) - in so far as it relates to whether in accordance with GAAP an item
should be capitalized - shall be determined by the Accountant.
6.3 Submission and Approval of Plans and Specifications in Certain
Instances.
(a) Required Submissions. Prior to:
(i) performing any of the Base Building
Upgrade Work; or
(ii) undertaking any Reimbursable
Replacement, any Structural Work (whether or not
Reimbursable Structural Work), any Legal Requirement
Alteration (whether or not a Reimbursable Legal
Requirement Alteration) or any Qualified Alteration;
Tenant shall (subject to Section 6.3(f)) submit all of the Plans and
Specifications therefor to Landlord for Landlord's approval, together with, in
case Tenant contends that the work in question is a Reimbursable Alteration, (i)
a statement to that effect, and (ii) a good faith estimate of the Costs of such
Reimbursable Alteration prepared by a reputable architect, engineer or
contractor. Each such submission is herein called a "Plans Submission Notice".
Landlord shall give notice (the "Plans and Specifications Notice") to Tenant of
Landlord's approval or disapproval of any Plans and Specifications within 20
Business Days after the date upon which the same are given to Landlord (which
Plans and Specifications Notice shall, in the case of a disapproval, be
accompanied by a reasonably complete and specific statement of the reasons for
disapproval); provided, that
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(A) with respect to all Plans and
Specifications submitted by Tenant prior to Tenant's
occupancy of the Leased Premises for the conduct of
business, the aforesaid 20 Business Day period shall be
shortened to 10 Business Days, and
(B) with respect to all Plans and
Specifications submitted by Tenant after Tenant's
occupancy of the Leased Premises for the conduct of
business, if (i) at least 10 Business Days before the
date upon which Tenant submits all of the Plans and
Specifications for the work in question to Landlord,
Tenant gives notice to Landlord that Tenant intends to
make any replacement of an item of Major Building
Equipment or to undertake any Structural Work, Legal
Requirement Alteration or Qualified Alteration (which
notice shall specify the general nature of the work and
an estimated date for the submission of all of the Plans
and Specifications therefor to Landlord) and (ii) Tenant
delivers all of the Plans and Specifications for the
work in question to Landlord within 2 Business Days of
the estimated submission date set forth in Tenant's
notice, then the aforesaid 20 Business Day period shall
be shortened to 10 Business Days.
If Tenant's notice shall have included a statement that the work in question is
a Reimbursable Alteration, the Plans and Specifications Notice shall include
Landlord's agreement or disagreement with such statement.
(b) Disapproval Only Under Certain Circumstances. Landlord
shall not disapprove any Plans and Specifications unless the work contemplated
thereby would (i) result in the Improvements not being a first-class office
building or (ii) materially and adversely affect any structural element of the
Improvements or any item of Major Building Equipment. If Tenant disputes
Landlord's right to disapprove, the matter shall be determined by the
Appropriate Engineer.
(c) Certain Conditions. Subject to Sections 6.3(d) and (f),
Tenant shall not perform any Base Building Upgrade Work or undertake any
Reimbursable Replacement, Structural Work, Legal Requirement Alteration or
Qualified Alteration unless and until (i) Landlord shall approve (or be deemed
to have approved) the Plans and Specifications therefor in a Plans and
Specifications Notice or (ii) the Appropriate Engineer shall determine that
Landlord did not have the right to disapprove such Plans and Specifications
pursuant to this Lease.
(d) Failure to Give timely Notice. Subject to the provisions
of the next paragraph, if Landlord shall fail timely to give Tenant a Plans and
Specifications Notice, Tenant may proceed with the work in question, and if
Landlord thereafter disapproves the Plans and Specifications therefor Tenant may
continue such work unless the Appropriate Engineer determines that Landlord had
the right to disapprove pursuant to this Lease. If the Appropriate
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Engineer so determines, Tenant shall cease such work, but the work done by
Tenant to the date of the Appropriate Engineer's determination shall not
constitute a default hereunder if Tenant thereupon commences and thereafter
diligently prosecutes to completion such remedial work (including, without
limitation, the removal of the work theretofore done by Tenant and the
restoration of the affected area of the Leased Premises) as Landlord may
reasonably determine to be appropriate in the circumstances (unless Tenant shall
dispute Landlord's determination, in which case the remedial work, if any, to be
done by Tenant shall be determined by the Appropriate Engineer).
Notwithstanding the provisions of the foregoing paragraph, if
(i) Tenant's Plans Submission Notice shall include the following statement in
block capital letters: "THIS NOTICE IS BEING GIVEN UNDER SECTION 6.3(a) OF OUR
LEASE. YOUR FAILURE TIMELY TO RESPOND WILL RESULT IN YOUR BEING DEEMED TO HAVE
APPROVED THE PLANS AND SPECIFICATIONS INCLUDED HEREWITH", and (ii) Landlord
shall fail timely to give to Tenant a Plans and Specifications Notice with
respect to such Plans and Specifications, then Landlord shall be deemed to have
given to Tenant a Plans and Specifications Notice approving such Plans and
Specifications and any Plans and Specifications Notice thereafter given by
Landlord disapproving such Plans and Specifications shall be void and of no
effect.
If (i) Tenant's Plans Submission Notice shall include the
following statement in block capital letters: "THIS NOTICE IS BEING GIVEN UNDER
SECTION 6.3(a) OF OUR LEASE WITH RESPECT TO A REIMBURSABLE ALTERATION. YOUR
FAILURE TIMELY TO DISAGREE WITH TENANT'S STATEMENT THAT THE WORK CALLED FOR BY
THE PLANS AND SPECIFICATIONS INCLUDED HEREWITH CONSTITUTES A REIMBURSABLE
ALTERATION WILL RESULT IN YOUR BEING DEEMED TO AGREE THAT SUCH WORK CONSTITUTES
A REIMBURSABLE ALTERATION." and (ii) Landlord shall fail timely to give to
Tenant a Plans and Specifications Notice with respect to such Plans and
Specifications indicating that Landlord disagrees with Tenant's statement that
the work called for by such Plans and Specifications constitutes a Reimbursable
Alteration, then Landlord shall be deemed to have agreed that such work
constitutes a Reimbursable Alteration.
(e) Submission of Certain Plans and Specifications Not
Requiring Approval. At the request of Landlord (made not more frequently than
once in any 12-month period), Tenant shall submit to Landlord Plans and
Specifications for all Alterations (other than Plans and Specifications required
to be submitted to Landlord pursuant to Section 6.3(a)) to the extent that such
Plans and Specifications have been prepared and have not theretofore been
submitted to Landlord. Landlord shall have no right to approve any Plans and
Specifications submitted by Tenant pursuant to this Section 6.3(e) unless it is
determined that such Plan and Specifications should have been submitted for
approval under Section 6.3(a).
(f) Emergencies. Provided that Tenant shall have given
Landlord prompt telephonic notice (confirmed in writing as soon as reasonably
practicable) of an emergency, Tenant may (without first complying with the
applicable provisions of Sections
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6.3(a)(b), (c) and (e)) proceed with such aspects of any Alteration as Tenant
may reasonably deem necessary in light of the emergency, but as promptly as
reasonably practicable thereafter Tenant shall comply with the applicable
provisions of said sections. Any dispute as to Tenant's right to avail itself of
this Section 6.3(f) shall be determined by the Appropriate Engineer.
6.4 Reimbursable Alterations
(a) Submission of Bids; Different Score of Work Statement.
(1) In the case of any Reimbursable Alteration, Tenant shall
(subject to Section 6.4(f)), simultaneously with the submission of all of the
Plans and Specifications therefor to Landlord (or as soon thereafter as
reasonably practicable, but in no event later than the date which is 5 Business
Days prior to the date upon which Landlord is required to give the Plans and
Specifications Notice), deliver to Landlord a list of at least 3 reputable
contractors (collectively, the "Original Bidders") from whom Tenant proposes to
obtain bids for the work. Landlord shall have the right, exercisable by notice
to Tenant delivered not later than 10 Business Days after receipt by Landlord of
the list of the Original Bidders, to designate no more than three additional
reputable contractors (which may include Landlord or an affiliate of Landlord)
from whom Landlord desires Tenant to obtain bids (collectively, the "Additional
Bidders"). Tenant shall, as promptly as reasonably practicable, obtain bids from
at least two of the Original Bidders and solicit bids from all of the Additional
Bidders (if any) on a competitive basis and submit all bids obtained (together
with the proposed contracts relating thereto) to Landlord together with (x)
Tenant's reasonable estimate of the date of substantial completion of the work
in question (the "Estimated Substantial Completion Date") and (y) Tenant's
reasonable estimate of reasonable fees and disbursements of any architect or
engineer retained by Tenant in connection with the work in question, and within
5 Business Days after receipt thereof Landlord shall give notice to Tenant
designating the Original Bidder or the Additional Bidder (in either case being a
bidder from whom Tenant has obtained a bid) which in Landlord's judgment should
perform the work in question (the bidder so designated by Landlord being called
"Landlord's Preferred Bidder"). All such bids shall be on a lump sum or
guaranteed maximum amount basis. Tenant shall have the right, exercisable by
notice (the "Dispute Notice") given to Landlord within 5 Business Days after the
date upon which Tenant receives notice of the identity of Landlord's Preferred
Bidder (which Dispute Notice shall specify the Original Bidder or the Additional
Bidder ("Tenant's Selected Bidder") which Tenant proposes to select to do the
work in question), to dispute Landlord's designation of Landlord's Preferred
Bidder, and if the Dispute Notice shall be timely given, the Appropriate
Engineer shall select either Landlord's Preferred Bidder or Tenant's Selected
Bidder as the bidder which (in light of the bid, contract terms, reputation and
experience of such bidder) is most appropriate to do the work in question.
Notwithstanding Landlord's designation of, or the Appropriate Engineer's
selection of, Landlord's Preferred Bidder, Tenant may retain any Original Bidder
or Additional Bidder from whom Tenant has obtained a bid in accordance with this
Section 6.4(a) to do the work in question (the bidder so retained being called
the "Retained Bidder").
(2) If Landlord believes that the Reimbursable Alteration reflected
in the Plans and Specifications submitted by Tenant is not the most appropriate
Alteration to address
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the condition in question (in the case of a Reimbursable Replacement or
Reimbursable Structural Work) or to comply with the Legal Requirement in
question (in the case of a Reimbursable Legal Requirement Alteration) or to
effect removal (in the case of Reimbursable Removal of Hazardous Substances)
then, Landlord shall include in its notice designating Landlord's Preferred
Bidder a statement to that effect (such statement being herein called a
"Different Scope of Work Statement") and shall include with such notice (x) such
revisions to or such replacement for the Plans and Specifications submitted by
Tenant as Landlord believes are needed to reflect such most appropriate
Alteration ("Landlord's Revised Plans"), (y) a list of at least 3 reputable
contractors from whom Landlord desires Tenant to obtain bids for the performance
of the Reimbursable Alteration in accordance with Landlord's Revised Plans
("Landlord's Alternate Bidders") and who may be the same as or different from
the Additional Bidders, and (z) if Landlord believes that the Alteration
reflected in Landlord's Revised Plans is not a Reimbursable Alteration, a
statement to that effect. In such a case, Tenant may elect to perform the
Alteration in question either pursuant to Landlord's Revised Plans or, subject
to Section 6.3(c), pursuant to the Plans and Specifications submitted by Tenant,
subject, in either case, to the provisions of Section 6.4(h). If Landlord shall
include the statement described in clause (z) above, and Tenant shall disagree
therewith, the dispute shall be resolved by the Appropriate Engineer.
If (A) Tenant's notice accompanying Tenant's submission to Landlord
of the bids required to be submitted to Landlord under Section 6.4(a)(1) shall
include the following statement in block capital letters: "THIS NOTICE IS BEING
GIVEN TO YOU UNDER SECTION 6.4(a) OF OUR LEASE WITH RESPECT TO A REIMBURSABLE
ALTERATION. YOUR FAILURE TIMELY TO FURNISH A DIFFERENT SCOPE OF WORK STATEMENT
WILL RESULT IN YOUR LOSING THE RIGHT TO FURNISH A DIFFERENT SCOPE OF WORK
STATEMENT. IF YOU FURNISH A DIFFERENT SCOPE OF WORK STATEMENT YOUR FAILURE TO
INCLUDE THEREIN A STATEMENT THAT YOU DO NOT BELIEVE THAT THE ALTERATION CALLED
FOR THEREBY IS NOT A REIMBURSABLE ALTERATION WILL RESULT IN YOUR BEING DEEMED TO
AGREE THAT SUCH ALTERATION CONSTITUTES A REIMBURSABLE ALTERATION" and (B)
Landlord shall fail to include in its notice designating Landlord's Preferred
Bidder a Different Scope of Work Statement or shall fail to include with such
notice Landlord's Revised Plans or shall fail to include with such notice a list
of Landlord's Alternate Bidders, then Landlord shall be deemed to have waived
its rights under this Section 6.4(a)(2) with respect to the Reimbursable
Alteration in question. If (i) Tenant's notice accompanying Tenant's submission
to Landlord of the bids required to be submitted to Landlord under Section
6.4(a)(1) shall include the statement set forth in clause (i) of the preceding
sentence, and (ii) Landlord shall furnish a Different Scope of Work Statement
and shall fail to include therein a statement that Landlord does not believe
that the Alteration called for thereby is not a Reimbursable Alteration, then
Landlord shall be deemed to have agreed that such Alteration is a Reimbursable
Alteration.
(b) Reimbursement Amount. Landlord shall, in accordance with Section
6.4(d) or 6.4(e), reimburse Tenant on account of any Reimbursable Alteration in
an amount (the "Reimbursement Amount") equal to the product of the Measuring
Fraction multiplied by the sum of (i) the Base Amount for the work in question,
plus (ii) any Qualified Overruns; plus (iii) the reasonable fees and
disbursements of any architect or engineer retained
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by Tenant in connection with the work in question (the sum of the amounts
referred to in clauses (i), (ii) and (iii) being herein called the "Gross
Amount"). Any dispute as to the reasonableness of the incurrence by Tenant of
any Cost under clause (ii) or (iii) above in connection with the work in
question, or as to the reasonableness of the amount of any such Cost, shall be
determined by the Appropriate Engineer.
(c) Overruns; Qualified Overruns. At any time during the performance
of any Reimbursable Alteration, Tenant may give notice (an "Overrun Notice") to
Landlord specifying any cost (an "Overrun") in excess of the original contract
price of Tenant's Selected Bidder which Tenant expects to incur and which Tenant
contends was unforeseeable by Tenant at the time of commencement of the work
(each Overrun Notice to specify the nature of and reasons for the Overrun in
question in reasonably complete and specific detail). Within 10 Business Days
after receipt of an Overrun Notice, Landlord shall notify Tenant as to whether
or not in Landlord's judgment the Overrun in question is reasonable in amount in
the circumstances and was unforeseeable by Tenant at the time of commencement of
the work. If Tenant shall dispute Landlord's judgment, the reasonableness of the
amount of, and the foreseeability by Tenant of, the Overrun in question shall be
determined by the Appropriate Engineer. Any Overrun determined by Landlord or
the Appropriate Engineer to be reasonable in amount in the circumstances and
unforeseeable by Tenant at the time of commencement of the work shall be a
"Qualified Overrun". Tenant shall not be chargeable with the failure by any
Contractor to foresee any Overrun.
(d) Reimbursement Upon Full Completion. Except in the case of a
Reimbursable Alteration in respect of which an Extended Completion Notice has
been given, Landlord shall upon the full completion of the work in question and
within 30 days after Landlord's receipt of Tenant's request therefor remit the
Reimbursement Amount to Tenant; provided, that Landlord shall not be obligated
to make such remittance unless:
(i) Tenant's request for remittance shall be
accompanied by (A) a certificate of Tenant (in
form reasonably satisfactory to Landlord) stating
that an amount at least equal to the Reimbursement
Amount has been paid to contractors,
subcontractors, materialmen, engineers, architects
or other persons (whose names and addresses and a
description of the work involved shall be stated)
who have furnished labor, materials, supplies,
permits or services for the work in question
(collectively, "Contractors") and that to Tenant's
best knowledge (after due inquiry) there is no
outstanding indebtedness due for labor, materials,
supplies, permits or services in any manner
connected with the work in question which if
unpaid might be the basis for any type of lien on
the Leased Premises or any part thereof, and (B) a
certificate of the architect or engineer who
prepared the related Plans and Specifications (in
form reasonably
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satisfactory to Landlord) stating that such work
has been fully completed in a good and
workmanlike manner and in accordance with the
Plans and Specifications (as approved by Landlord
or as determined by the Appropriate Engineer to
have been required to be approved by Landlord
pursuant to this Lease);
(ii) Landlord shall have received (A) true copies of
all bills paid by Tenant to Contractors in
connection with the work in question, (B) an
instrument in writing from any title company
insuring Landlord's estate in the Project
certifying that there are no undischarged
mechanics', laborers' or materialmen's liens
affecting any part of the Project (other than
liens, if any, in respect of which Landlord has
consented to take security pursuant to Article
13(a)(ii)) and
(iii) no Event of Default shall have occurred and be
continuing.
(e) Reimbursement as Work Proceeds. If at any time prior to or
during the performance of any Reimbursable Alteration Tenant determines that the
full completion thereof will not occur within six months after the commencement
of such Reimbursable Alteration, Tenant shall give Landlord notice of such
determination (an "Extended Completion Notice") and thereafter Landlord shall
from time to time within 30 days after Landlord's receipt of Tenant's request
therefor (but in no event more frequently than once during any 30-day period)
make advances to Tenant on account of the Reimbursement Amount for the work in
question (collectively, "Reimbursement Advances"); provided, that:
(i) no Reimbursement Advance shall be made until
Tenant shall have delivered to Landlord evidence
reasonably acceptable to Landlord that Tenant has
paid Contractors engaged in the work in question
an aggregate amount (the "Benchmark Amount") equal
to the positive remainder, if any, obtained by
subtracting the Determined Amount for the work in
question from the original contract price of the
Retained Bidder, and Reimbursement Advances shall
be made only for amounts paid by Tenant to such
Contractors which are in excess of the Benchmark
Amount;
(ii) no Reimbursement Advance (other than the final
Reimbursement Advance) shall be due unless:
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(a) Tenant's request for such Reimbursement Advance
shall be accompanied by (x) a certificate of
Tenant (in form reasonably satisfactory to
Landlord) stating that (1) the amount of the
Reimbursement Advance then requested has been paid
by Tenant to Contractors (whose names and
addresses and a description of the work involved
shall be stated) engaged in the work in question,
(2) the amount of the Reimbursement Advance then
requested (when taken together with the aggregate
amount of all Reimbursement Advances theretofore
made by Landlord) exceeds neither 90% of the
Reimbursement Amount nor the product of the
Determined Amount multiplied by the percentage
(the "Completed Percentage") of the work called
for in the contract of the Retained Bidder which
has actually been installed in the Leased
Premises, (3) the amount of the Reimbursement
Advance, when added to all amounts paid by Tenant
to Contractors engaged in the work in question and
not reimbursed by Landlord by way of prior
Reimbursement Advances or the then Reimbursement
Advance (but excluding the Benchmark Amount) is at
least equal to the quotient obtained by dividing
the amount of the then requested Reimbursement
Advance by the Measuring Fraction and (4) no part
of the cost of the work described in any previous
or then pending request for a Reimbursement
Advance has been or is being made the basis for
the Reimbursement Advance then being requested,
and (y) a certificate of the architect or engineer
who prepared the related Plans and Specifications
(in form reasonably satisfactory to Landlord)
stating in substance that the Completed Percentage
has been reached and that the work has been
performed in a good and workmanlike manner and in
accordance with the Plans and Specifications (as
approved by Landlord or as determined by the
Appropriate Engineer to have been required to be
approved by Landlord pursuant to this Lease);
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(b) Landlord shall have received true copies of all
bills paid or payable by Tenant to Contractors
which form the basis for the Reimbursement Advance
in question; and
(c) no Event of Default shall have occurred and be
continuing; and
(i) the final Reimbursement Advance shall not be due unless
all of the conditions specified in clauses (i) through
(iii) of Section 6.4(d) shall have been fulfilled in
respect of such Reimbursement Advance.
(f) Emergencies. Provided that Tenant shall have given Landlord
prompt telephonic notice (confirmed in writing as soon as reasonably
practicable) of an emergency, Tenant may proceed with any Reimbursable
Alteration without first complying with the applicable provisions of this
Section 6.4 and Landlord shall, following full completion of the emergency work
in question and within 30 days after Landlord's receipt of Tenant's request
therefor, remit the Emergency Reimbursement Amount (as hereinafter defined) to
Tenant; provided that Landlord shall not be obligated to make such remittance
unless all of the conditions specified in clauses (i) through (iii) of Section
6.4(d) shall have been fulfilled in respect of the work in question (provided,
that (i) if no architect or engineer was retained for the emergency work in
question, Section 6.4(a)(i)(B) shall be deemed fulfilled if (x) Tenant shall
deliver a certificate to Landlord stating that such emergency work has been
fully completed in a good and workmanlike manner and (y) such emergency work has
been fully completed in a manner consistent with the character of the
Improvements as a first-class office building (with due regard to the character
of the work as emergency work), and (ii) if an architect or engineer was
retained for the emergency work in question but (due to the nature of the
emergency) no Plans and Specifications therefor were prepared, Section
6.4(a)(i)(B) shall be deemed fulfilled if (x) Tenant shall deliver to Landlord a
certificate of such architect or engineer stating that such emergency work has
been fully completed in a good and workmanlike manner and (y) such emergency
work has been fully completed in a manner consistent with the character of the
Improvements as a first-class office building (with due regard to the character
of the work as emergency work).
"Emergency Reimbursement Amount" means the product of the Measuring
Fraction multiplied by an amount equal to all Costs reasonably incurred by
Tenant in connection with the emergency work in question.
Any dispute as to Tenant's right to avail itself of this Section
6.4(f), or as to the reasonableness of the incurrence by Tenant of any Cost in
connection with the emergency work in question, or as to the reasonableness of
the amount of any such Cost, shall be determined by the Appropriate Engineer.
Landlord shall not be required to make payment of any amount in dispute pending
resolution of such dispute.
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(g) Landlord's Right to Decline to Participate in Certain Costs.
(i) The term "Notional Termination Date" shall mean, as of any
date, (a) if prior to such date Tenant shall have exercised any Termination
Option, the Termination Date with respect thereto, and (b) if prior to such date
Tenant shall not have exercised any Termination Option, the Termination Date
with respect to the earliest Termination Option which, as of such date, has not
lapsed without exercise or been waived or, if all of the Termination Options
shall then have lapsed without exercise or been waived, the Expiration Date.
(ii) The term "Plan Submission Date" with respect to any
Reimbursable Replacement or Reimbursable Legal Requirement Alteration shall mean
the date on which Tenant furnishes the Plans Submission Notice with respect
thereto to Landlord under Section 6.3(a).
(iii) The term "Associated Reimbursables" shall mean
(a) with respect to any Reimbursable Replacement, (i)
all other Reimbursable Replacements the Plan
Submission Date for which occurred earlier than,
and in the same calendar year as, such
Reimbursable Replacement, excluding any thereof
with respect to which Tenant, by notice to
Landlord under Section 6.4(g)(vii), shall have
withdrawn its Plans Submission Notice and (ii) all
Reimbursable Legal Requirement Alterations the
Plans Submission Date for which occurred earlier
than, and in the same calendar year as, such
Reimbursable Replacement, excluding any thereof
with respect to which Tenant, by notice to
Landlord under Section 6.4(g)(vii), shall have
withdrawn its Plans Submission Notice, or
(b) with respect to any Reimbursable Legal Requirement
Alteration, (i) all other Reimbursable Legal
Requirement Alterations the Plan Submission Date
for which occurred earlier than, and in the same
calendar year as, such Reimbursable Legal
Requirement Alteration, excluding any thereof with
respect to which Tenant, by notice to Landlord
under Section 6.4(g)(vii), shall have withdrawn
its Plans Submission Notice and (ii) all
Reimbursable Replacements the Plans Submission
Date for which occurred earlier than, and in the
same calendar year as, such Reimbursable Legal
Requirement Alteration, excluding any thereof with
respect to which Tenant, by notice to Landlord
under Section 6.4(g)(vii), shall have withdrawn
its Plans Submission Notice
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(iv) The term "Estimated Cost" with respect to any
Reimbursable Replacement or any Reimbursable Legal Requirement Alteration shall
mean the sum of (a) the Determined Amount with respect thereto, and (b) Tenant's
reasonable estimate of reasonable fees and disbursements of any architect or
engineer retained by Tenant in connection with the work in question.
(v) If (a) on the Plan Submission Date with respect to any
Reimbursable Replacement or any Reimbursable Legal Requirement Alteration the
Notional Termination Date is earlier than the fifth anniversary of such Plan
Submission Date, and (b) the Estimated Cost with respect to such Reimbursable
Replacement or such Reimbursable Legal Requirement Alteration, together with the
Estimated Cost with respect to all Associated Reimbursables, exceeds $500,000,
then Landlord shall have the right to give a notice with respect to such
Reimbursable Replacement or Reimbursable Legal Requirement Alteration referring
to this Section (a "Cost Participation Limitation Notice") and, if Landlord
shall timely give a Cost Participation Limitation Notice with respect to such
Reimbursable Replacement or such Reimbursable Legal Requirement Alteration, then
(x) Landlord shall not be required to make the
reimbursement which, in the absence of this clause (x)
Landlord would otherwise be required to make under the first
sentence of Section 6.4(b), and
(y) Landlord shall, in accordance with Section
6.4(d) or 6.4(e), reimburse Tenant on account of such
Reimbursable Replacement or such Reimbursable Legal
Requirement Alteration in an amount (the "Limited
Reimbursement Amount") equal to the product of the Measuring
Fraction multiplied by the lesser of
(a) the Gross Amount with respect to such
Reimbursable Replacement or such
Reimbursable Legal Requirement Alteration,
or
(b) the excess, if any, of $500,000 over the
Gross Amounts with respect to all Associated
Reimbursables, if any.
Landlord may give a Cost Participation Limitation Notice with respect to any
Reimbursable Replacement or any Reimbursable Legal Requirement Alteration at any
time on or before the date on which Landlord is entitled to give notice under
Section 6.4(a) designating Landlord's Preferred Bidder; provided, that if Tenant
timely gives a Dispute Notice with respect to such Reimbursable Replacement or
Reimbursable Legal Requirement Alteration and the Appropriate Engineer selects
Tenant's Selected Bidder as the bidder which is most appropriate to do the work
in question, Landlord may give a Cost Participation Limitation Notice with
respect to such Reimbursable Replacement or Reimbursable Legal Requirement
Alteration within five (5) Business Days after receipt of notice of such
selection by the Appropriate Engineer.
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(vi) If (A) at any time after Landlord shall have given a Cost
Participation Limitation Notice with respect to any Reimbursable Replacement or
any Reimbursable Legal Requirement Alteration, any Termination Option shall
lapse without exercise or be waived, and (B) had such Termination Option and all
earlier Termination Options been waived immediately prior to the Plan Submission
Date with respect to such Reimbursable Replacement or such Reimbursable Legal
Requirement Alteration, Landlord would not have been entitled to give a Cost
Participation Limitation Notice with respect to such Reimbursable Replacement or
such Reimbursable Legal Requirement Alterations, then Landlord shall pay to
Tenant the excess of (x) the Reimbursement Amount with respect to such
Reimbursement Replacement or such Reimbursement Legal Requirement Alteration
(i.e. the Reimbursement Amount which would have been payable under Section
6.4(b) if Landlord had not given a Cost Participation Limitation Notice), over
(y) the Limited Reimbursement Amount with respect to such Reimbursable
Replacement or such Reimbursable Legal Requirement Alteration. Such payment
shall be due within thirty (30) days of Tenant's demand therefor, but not
earlier than the date on which it would otherwise be due under the provisions of
this Section 6.4. Notwithstanding the fact that the amount required to be paid
pursuant to this Section 6.4(g)(vi) is required to be paid on a date later than
the date on which the Reimbursement Amount would have been required to be paid
if Landlord had not given the Cost Participation Limitation Notice, no interest
shall be due on such amount, except for interest under Section 3(c) from and
after the date on which such amount is required to be paid pursuant to this
Section 6.4(g)(vi) if Landlord shall fail timely to make such payment.
(vii) Tenant may, by notice to Landlord given at any time
prior to the commencement of any Reimbursable Replacement or any Reimbursable
Legal Requirement Alteration, withdraw its Plans Submission Notice with respect
to such Reimbursable Replacement or Reimbursable Legal Requirement Alterations.
If Tenant shall do so, and shall subsequently desire to make such Reimbursable
Replacement or Reimbursable Legal Requirement Alteration, it must again give a
Plans Submission Notice with respect thereto and all of the applicable
provisions of Section 6.3 and 6.4 shall again be applicable as if such withdrawn
Plans Submission Notice had never been given.
(viii) If after Landlord shall have given a Cost Participation
Limitation Notice with respect to any Reimbursable Replacement or any
Reimbursable Legal Requirement Alterations (the "Reimbursable Replacement or
Reimbursable Legal Requirement Alteration in question"), Tenant shall give a
notice under Section 6.4(g)(vii) with respect to any Reimbursable Replacement
or Reimbursable Legal Requirement Alteration which, in the absence of such
notice by Tenant, constituted an Associated Reimbursable with respect to the
Reimbursable Replacement or Reimbursable Legal Requirement Alteration in
question, then for purposes of computing the Limited Reimbursement Amount with
respect to the Reimbursable Replacement or Reimbursable Legal Requirement in
question such Reimbursable Replacement or Reimbursable Legal Requirement
Alterations with respect to which Tenant shall have given a notice under Section
6.4(g)(vii) shall not be deemed to be an Associated Reimbursable. Any increase
in the Limited Reimbursement Amount payable by reason of this Section
6.4(g)(viii) shall be due and payable within thirty (30) days of Tenant's demand
therefor, but not earlier than the date on which it would otherwise be due under
the provisions of this Section 6.4.
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(h) Different Scope of Work Statement The provisions of this
Section 6.4(h) shall be applicable to any Alterations as to which Landlord
timely gives a Different Scope of Work Statement and timely furnishes Landlord's
Revised Plans and a list of Landlord's Alternate Bidders in accordance with
Section 6.4(a).
If Tenant shall elect to perform such Alteration in accordance
with Landlord's Revised Plans and such Alteration is a Reimbursable Alteration,
then the foregoing provisions of this Section 6.4, including without limitation
the provisions requiring Tenant to obtain and/or solicit bids and furnish the
bids so received to Landlord (and the related provisions of this Article 6)
shall be applied with reference to Landlord's Revised Plans, except that in such
a case
(a) the term "Additional Bidders" shall refer
only to Landlord's Alternate Bidders,
(b) the term "Original Bidders" shall refer only
to any other bidders from whom Tenant
requests and receives a bid to perform the
Reimbursable Alteration in accordance with
Landlord's Revised Plans, and
(c) notwithstanding the third sentence of
Section 6.4(a)(1), Tenant shall not be
obligated to obtain bids from any minimum
number of Original Bidders.
If Tenant shall elect to perform the Alteration in accordance
with the Plans and Specifications submitted by Tenant and such Alteration is a
Reimbursable Alteration, then (i) the foregoing provisions of Section 6.4 shall
be applied with reference to the Plans and Specifications submitted by Tenant,
(ii) the Appropriate Engineer shall select as more appropriate either the Plans
and Specifications submitted by Tenant or Landlord's Revised Plans, and (iii) if
the Appropriate Engineer selects the Landlord's Revised Plans and the Alteration
reflected thereon is a Reimbursable Alteration then, provided that at least one
of Landlord's Alternate Bidders shall submit a bid in accordance with Section
6.4(a) for the performance of the Reimbursable Alteration in accordance with
Landlord's Revised Plans, the Reimbursement Amount, Limited Reimbursement
Amount, Base Amount, Determined Amount, and Gross Amount with respect to such
Reimbursable Alteration shall be, respectively, the lower of (p) the
Reimbursement Amount, Limited Reimbursement Amount, Base Amount, Determined
Amount, and Gross Amount resulting from the application of the foregoing
provisions of Section 6.4 (and the related provisions of this Article 6) with
reference to the Plans and Specifications submitted by Tenant, or (q) the
Reimbursement Amount, Limited Reimbursement Amount, Base Amount, Determined
Amount, and Gross Amount which would have resulted from the application of the
foregoing provisions of Section 6.4 (and the related provisions of this Article
6) with reference to Landlord's Revised Plans. In order to determine the amounts
referred to in clause (q) above, Tenant shall solicit bids for the performance
of the Reimbursable Alteration in accordance with Landlord's Revised Plans from
Landlord's Alternate Bidders and any other bidders from whom Tenant desires to
solicit bids, and
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(a) when used with reference to the amounts
referred to in clause (q) above, (1) the
term "Additional Bidders" shall refer only
to Landlord's Alternate Bidders, and (2) the
term "Original Bidders" shall refer only to
any other bidders from whom Tenant requests
and receives a bid to perform the
Reimbursable Alteration in accordance with
Landlord's Revised Plans, and
(b) notwithstanding the third sentence of
Section 6.4(a)(1), Tenant shall not be
obligated to obtain bids from any minimum
number of Original Bidders.
Notwithstanding the foregoing provisions of this Section
6.4(h), (a) if Tenant so elects, the Appropriate Engineer's selection under
clause (ii) of the preceding paragraph of the Plans and Specifications submitted
by Tenant or Landlord's Revised Plans as more appropriate and/or, if applicable,
the Appropriate Engineer's determination whether the Alteration shown on the
Plans and Specifications submitted by Tenant constitutes a Reimbursable
Alteration and/or, if applicable, the Appropriate Engineer's determination
whether the Alteration shown on Landlord's Revised Plans constitutes a
Reimbursable Alteration shall occur before Tenant decides whether to perform the
Reimbursable Alterations in accordance with Landlord's Revised Plans or the
Plans and Specifications submitted by Tenant, and (b) if Tenant so elects,
Tenant may solicit bids for the performance of the Reimbursable Alteration in
accordance with Landlord's Revised Plans from Landlord's Alternate Bidders and
other bidders from Tenant shall desire to obtain bids before deciding whether to
perform the Reimbursable Alterations in accordance with the Plans and
Specifications submitted by Tenant or Landlord's Revised Plans.
6.5 General Provisions
Time shall be of the essence with respect to the giving of notices
and other submissions under this Article. The right to receive any reimbursement
under this Article 6, in respect of Reimbursable Alterations shall be for the
exclusive benefit of Tenant, it being the express intent of the parties hereto
that in no event shall such right be conferred upon or for the benefit of any
third party, including, without limitation, any contractor, subcontractor,
materialman, laborer, architect, engineer, attorney or any other person, firm or
entity.
6.6 Consideration by Tenant
(a) Upon demand of Landlord, Tenant shall comply in all
respects with any reasonable and timely suggestions made by Landlord with
respect to construction matters relating to any Reimbursable Alteration, and
shall correct any defect in the work in question or any material departure from
the Plans and Specifications for the work in question. Any dispute pursuant to
this Section 6.6(a) shall be determined by the Appropriate Engineer.
(b) Tenant shall, within 10 Business Days after receipt of a
statement therefor (accompanied by true copies of the bills paid by Landlord),
reimburse Landlord for all
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reasonable out-of-pocket expenses incurred for the services of an architect or
engineer making inspections of any Restoration.
6.7 Engineer; Appropriate Engineer
(a) "Engineer" means each of the following:
Syska & Hennessey Inc.
Meyer Strong & Jones P.C.
Jaros Baum & Bolles
Robert Derector Associates
Cosentini Associates
Joseph Loring & Associates
Weidlinger & Associates
Purdy & Henderson Associates Inc.
Weiskopf & Pickworth
Gilsanz Murray Stefick LLP
Office of James Ruderman LLP
or
such other independent engineering firm or firms having at least 15 years'
experience in first-class Manhattan office buildings as shall from time to time
be designated by Landlord to Tenant and approved by the other party (which
approval shall not be unreasonably withheld or delayed; any dispute as to
whether Landlord or Tenant has unreasonably withheld or delayed such approval to
be determined by Expedited Arbitration).
(b) Except as otherwise provided in Section 6.7(d),
"Appropriate Engineer" means, in respect of any matter required by this Lease to
be determined by an Appropriate Engineer, such Engineer as Tenant may designate
by notice (an "Engineer Designation Notice") to Landlord; provided, that if
Tenant shall fail to give an Engineer Designation Notice within 7 Business Days
after Tenant receives Landlord's request for the same, the "Appropriate
Engineer" for the matter in question shall be such Engineer as Landlord may
designate in a notice to Tenant delivered at any time prior to receipt by
Landlord of such Engineer Designation Notice.
(c) Each Appropriate Engineer shall make its determination or
selection as promptly as reasonably practicable, but in any event within 20 days
after request therefor by Landlord or Tenant. Each determination or selection
made by an Appropriate Engineer pursuant to this Lease shall be final and
binding on Landlord and Tenant. Landlord and Tenant shall each pay one-half of
the fees and expenses of each Appropriate Engineer which is called upon to act
hereunder.
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(d) In respect of any determination to be made by the
Appropriate Engineer under clause (i), (ii), (iii), (iv). (v), (vi), (vii) or
(ix) of the last paragraph of Section 6.2 or any selection to be made by the
Appropriate Engineer under Section 6.4(h), "Appropriate Engineer" mean such
independent Engineer or other independent engineering firm having at least 15
years' experience in first-class Manhattan office buildings as Landlord and
Tenant shall jointly designate (or if Landlord and Tenant shall be unable to
agree upon such joint designation within five business days after request of
either party to the other) as shall be designated by the American Arbitration
Association or its successor. In such a case, each party shall pay one-half the
fees and expenses of the American Arbitration Association or its successor.
(e) "Accountant" means, in respect of any matter required by
the last sentence of Section 6.2 of this Lease to be determined by an
Accountant, such independent certified public accountant who is a member of a
"Big-6" accounting firm as Tenant may designate in a notice to Landlord and as
may be approved by Landlord (which approval shall not be unreasonably withheld
or delayed); provided, that if Tenant shall fail to give such notice within 7
Business Days after Tenant receives Landlord's request for the same, the
Accountant for the matter in question shall be such independent certified public
accountant who is a member of a "Big-6" accounting firm as Landlord may
designate in a notice to Tenant delivered at any time prior to receipt by
Landlord of Tenant's notice designating the Accountant and as may be approved by
Tenant (which approval shall not be unreasonably withheld or delayed). The
Accountant shall make his or her determination as promptly as reasonably
practicable, but in any event within 20 days after request therefor by Landlord
or Tenant. Each determination made by an Accountant pursuant to this Lease shall
be final and binding on Landlord and Tenant. Landlord and Tenant shall each pay
one-half of the fees and expenses of any Accountant which is called to act
hereunder. Any dispute as to whether Landlord or Tenant has unreasonably
withheld or delayed approval of an independent certified public accountant
designated by the other party shall be determined by Expedited Arbitration.
7. Hazardous Substances
If Tenant shall remove from the Leased Premises any Qualified
Hazardous Substances, then Landlord shall (subject to the last sentence of this
Article 7) reimburse Tenant for the actual reasonable costs incurred by Tenant
to remove such Qualified Hazardous Substances, such reimbursement to be made
within 30 days after Tenant notifies Landlord of the amounts incurred by Tenant,
which notice shall be accompanied by paid invoices or other evidence reasonably
satisfactory to Landlord of the Costs incurred; provided, that the foregoing
provisions of this Article 7 shall not be applicable to any Reimbursable Removal
of Hazardous Substances which are governed by the provisions of Article 6. As
used in this Article 7 and in Article 6 the terms "remove" and "removal" (i)
when used with respect to any Hazardous Substance used for fireproofing or other
purpose necessary or appropriate for the continued occupancy and operation of
the Leased Premises as a first-class office building shall include the
replacement of such removed Hazardous Substance with suitable substitute
materials, and (ii) when used with respect to any Hazardous Substance shall
include, if Tenant shall elect, in lieu of removal, to enclose, encapsulate or
otherwise remediate such Hazardous Substance, such enclosure, encapsulation or
other remediation. Notwithstanding the foregoing, in no event shall
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Landlord have any obligation under this Article 7 to reimburse Tenant for the
costs of any Asbestos Removal Work or Refireproofing Work except to the extent
that Landlord fails to perform the same on or before (i) the Possession Date
with respect to any space other than the Stephaneze Premises or (ii) the
Stephaneze Possession Date, in the case of the Stephaneze Premises.
8. Utility Services
(a) Tenant shall pay all charges for all public or private
electrical, steam, gas, fuel, power and other utility services at any time
rendered to or in connection with the Leased Premises. Tenant shall be a direct
customer of the utility companies providing such services. If any rebates or
benefits shall be available from the utility company as part of any utility
company sponsored energy conservation program on account of the energy efficient
nature of Tenant's lighting fixtures and/or equipment, then Landlord, at
Tenant's sole expense, shall take such actions as Tenant may reasonably request
to obtain such rebates or benefits and, if any such rebates or benefits are paid
to or received by Landlord, Landlord shall promptly remit the same to Tenant.
The term "ConEd" shall refer to the electric utility from time to time
furnishing electricity to the Improvements.
(b) Landlord hereby notifies Tenant that Landlord has applied for
benefits under the Lower Manhattan Energy Program (Article 2-I of the General
City Law) (the "LMEP") and a certification that the Improvements are an
"eligible building" under subparagraph (a) of Section 25-aa of the General City
Law. Landlord shall be responsible for the preparation of all applications
(including revised applications) and any other documents, certificates and
instruments that may be required to obtain such benefits and certification
and/or in order to maintain such benefits and certification in effect. Tenant
shall, at Landlord's request, cooperate with Landlord's efforts to obtain such
benefits and certification (including, without limitation, the execution within
5 Business Days after request of any forms required to be executed by Tenant or
otherwise customarily executed by similarly situated tenants and supplying such
information not considered by Tenant to be confidential as may be necessary to
complete such forms and as Landlord is unable to obtain itself), provided, that
Tenant shall not be required to alter, modify or delay the Base Building Upgrade
Work or the Fit-Out Work or to alter its usage of electricity or alter in any
manner adverse to Tenant any electrical equipment in or serving the
Improvements. Landlord shall pay to Tenant, within 30 days after demand,
Tenant's reasonable out-of-pocket costs and expenses (including without
limitation attorneys fees' and disbursements) incurred in reviewing such
applications and such other documents, certificates and instruments, or
otherwise cooperating, at Landlord's request, with Landlord's efforts to obtain
such benefits. In addition to all other rent required by this Lease to be paid
by Tenant, Tenant shall pay to Landlord, within thirty (30) days of Tenant's
receipt of each ConEd bill for electricity service to the Improvements an amount
equal to the reduction shown thereon as a result of the Improvements receiving
benefits under the LMEP. If the amount of any ConEd bill for electricity service
to the Improvements shall reflect a reduction in the amount billed as a result
of the Improvements receiving benefits under the LMEP, but the amount of such
reduction is not shown thereon, the parties shall endeavor to agree upon the
amount of such reduction and, if they have not agreed upon such amount within
fifteen (15) days after Tenant's receipt of such
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ConEd bill, the same shall be determined by arbitration. If in any such case the
amount of such reduction shall not have been agreed upon or determined by
arbitration by the date on which Tenant is required to make payment to Landlord
under this Section 8(b), Tenant shall make payment in accordance with Tenant's
determination of such amount, subject to adjustment (plus interest thereon at
the Prime Rate from the 30th day after Tenant's receipt of the relevant ConEd
bill to the date of payment of such adjustment) upon the amount of such
determination being agreed upon or determined in arbitration.
(c) Landlord hereby notifies Tenant that Landlord intends to apply
to ConEd for ConEd's Business Incentive Rate (the "BIR"). Landlord shall be
responsible for the preparation of all applications (including revised
applications) and any other documents, certificates and instruments that may be
required to obtain the BIR and/or in order to maintain the BIR in effect. Tenant
shall, at Landlord's request, cooperate with Landlord's efforts to obtain the
BIR (including, without limitation, the execution within 5 Business Days after
request of any forms required to be executed by Tenant or otherwise customarily
executed by similarly situated tenants and supplying such information not
considered by Tenant to be confidential as may be necessary to complete such
forms and as Landlord is unable to obtain itself), provided that Tenant shall
not be required to alter, modify or delay the Base Building Upgrade Work or the
Fit-Out Work or to alter its usage of electricity or alter in any manner adverse
to Tenant any electrical equipment in or serving the Improvements. Landlord
shall pay to Tenant, within 30 days after demand, Tenant's reasonable
out-of-pocket costs and expenses (including without limitation attorneys fees'
and disbursements) incurred in reviewing such applications and such other
documents, certificates and instruments, or otherwise cooperating, at Landlord's
request, with Landlord's efforts to obtain such benefits. In addition to all
other rent required by this Lease to be paid by Tenant, Tenant shall, within
thirty (30) days of Tenant's receipt of each ConEd bill for electricity service
to the Improvements, furnish Landlord with a copy of such bill and pay to
Landlord, an amount equal to the reduction shown thereon as a result of the
Improvements receiving the BIR. If the amount of any ConEd bill for electricity
service to the Improvements shall reflect a reduction in the amount billed as a
result of the Improvements receiving the BIR, but the amount of such reduction
is not shown thereon, the parties shall endeavor to agree upon the amount of
such reduction and, if they have not agreed upon such amount within fifteen (15)
days after Tenant's receipt of such ConEd bill, the same shall be determined by
arbitration. If in any such case the amount of such reduction shall not have
been agreed upon or determined by arbitration by the date on which Tenant is
required to make payment to Landlord under this Section 8(c), Tenant shall make
payment in accordance with Tenant's determination of such amount, subject to
adjustment (plus interest thereon at the Prime Rate from the 30th day after
Tenant's receipt of the relevant ConEd bill to the date of payment of such
adjustment) upon the amount of such determination being agreed upon or
determined in arbitration.
9. Indemnification by Tenant
(a) Tenant shall protect, indemnify and save harmless Landlord from
and against all liabilities, obligations, claims, damages, penalties, causes of
action, costs and expenses (including, without limitation, attorneys' fees and
expenses) imposed upon or incurred
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by or asserted against Landlord or against the Leased Premises or any part
thereof by reason of the occurrence or existence of any of the following during
the Term: (1) the conduct, management or possession of the Leased Premises or
any part thereof, (2) any accident, injury to or death of persons or loss of or
damage to property occurring in, on or about the Leased Premises or any part
thereof or the adjoining sidewalks, curbs, vaults and vault space, if any,
streets or ways, (3) any use, nonuse or condition of the Leased Premises or any
part thereof or the adjoining sidewalks, curbs, vaults and vault space, if any,
streets or ways, (4) any failure on the part of Tenant to perform or comply with
any of the terms, provisions or conditions of this Lease, (5) performance of any
labor or services or the furnishing of any materials or other property in
respect of the Leased Premises or any part thereof, (6) any negligence or
tortious act or omission on the part of Tenant or any of its partners, agents,
contractors, servants, employees, licensees or invitees, (7) any negligence or
tortious act or omission on the part of any subtenant of Tenant, or of any
partners, agents, contractors, servants, employees, licensees or invitees of any
subtenant of Tenant, (8) any sublease of all or any part of the Leased Premises
or (9) the execution by Landlord of any application, document or instrument
under Section 35(1) below.
(b) In case any claim is made against Landlord or in case any
action, suit or proceeding (a "proceeding") is brought against Landlord or the
Leased Premises or any part thereof by reason of any of the foregoing, Landlord
shall give prompt notice to Tenant and Tenant shall cause such claim or
proceeding to be defended by counsel ("Tenant's Counsel") designated by Tenant
and approved by Landlord (which approval shall not be unreasonably withheld).
Tenant shall have the right to control the defense and settlement of any such
claim or proceeding and shall not be required to indemnify Landlord from the
costs and expenses of any settlement agreed to without Tenant's consent;
provided, that Landlord shall have the right (i) to require Tenant and Tenant's
Counsel to consult with Landlord and counsel retained and paid by Landlord, (ii)
to assume control of the defense and settlement of any such claim or proceeding
at any time if Landlord waives its right to be indemnified by Tenant on account
thereof and (iii) to make any settlement without Tenant's consent if Landlord
pays the amount of such settlement and waives its right to be indemnified by
Tenant on account of the claim or proceeding to which such settlement relates;
provided, further, that Tenant shall not settle any claim or proceeding without
Landlord's consent if such settlement requires an admission of liability (civil
or criminal) on the part of Landlord. Landlord shall cooperate with Tenant, at
Tenant's expense, in the defense of any such claim or proceeding in such manner
as Tenant may from time to time reasonably request.
10. Entry by Landlord
Tenant shall permit Landlord to enter the Leased Premises or any part
thereof at all reasonable times upon reasonable notice (except in case of
emergency) for the purpose of inspecting the same or doing any work under
Articles 7 and 19, and to keep and store all such materials therein as may be
reasonably necessary or appropriate for any such purpose without the same
constituting a partial or complete, constructive or actual eviction (but nothing
contained herein shall create or imply any duty on the part of Landlord to do
any work under Article 19). Landlord shall not have any duty to make any such
inspection and shall not incur any liability or obligation by making or for not
making any such inspection. Tenant shall also permit Landlord
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to enter the Leased Premises or any part thereof at all reasonable times upon
reasonable notice for the purposes of exhibiting the Leased Premises for sale or
mortgage. In addition, Tenant shall permit Landlord to enter the Leased Premises
or any part thereof at all reasonable times upon reasonable notice during each
of the 24 month periods prior to any Termination Date and the 24 month period
prior to the Expiration Date for purposes of exhibiting the Leased Premises for
lease; provided, that with respect to Landlord exhibiting the Leased Premises
prior to any particular Termination Date, if the time for exercising the
Termination Option that would result in this Lease terminating on such
Termination Date shall have lapsed without exercise by Tenant or if such
Termination Option shall have been waived, Landlord shall no longer be permitted
to enter the Leased Premises for purposes of exhibiting same for lease during
such 24 month period. Any entry pursuant to this Article 10 shall be subject to
the condition that, except in case of emergency, if Tenant so desires, any
representative of Landlord shall be accompanied at all times by a representative
of Tenant.
11. Payment of Taxes
11.1 Definitions
(a) "Base Tax Amount" means, with respect to (i) the Third Rent
Period, the Taxes (excluding any amounts described in Section 11.1(b)(ii)) for
the Tax Year beginning July 1, 2008 or such other date closest to and on or
after July 1, 2008 as may then be adopted as the beginning of the fiscal year
for real estate tax purposes for the City of New York and (ii) the Fourth Rent
Period, the Taxes (excluding any amounts described in Section 11.1(b)(ii)) for
the Tax Year beginning July 1,2013 or such other date closest to and on or after
July 1, 2013 as may then be adopted as the beginning of the fiscal year for real
estate tax purposes for the City of New York.
(b) "Taxes" means (i) the real estate taxes, vault taxes,
assessments and special assessments levied, assessed or imposed upon or with
respect to the Project by any federal, state, municipal or other government or
governmental body or authority and (ii) any expenses incurred by Landlord in
contesting such taxes or assessments and/or the assessed value of the Project,
which expenses shall be allocated to the Tax Year to which such expenses relate.
If at any time the method of taxation shall be altered so that in lieu of or as
a substitute for, the whole or any part of such real estate taxes, assessments
and special assessments now imposed on real estate, there shall be levied,
assessed or imposed (x) a tax, assessment, levy, imposition, fee or charge
wholly or partially as a capital levy or otherwise on the rents received
therefrom, or (y) any other such substitute tax, assessment, levy, imposition,
fee or charge, including without limitation, transit taxes, fees and
assessments, then all such taxes, assessments, levies, impositions, fees or
charges or the part thereof so measured or based shall be included in "Taxes".
If Landlord is an entity exempt from the payment of taxes described, in clauses
(i) and (ii), there shall be included in "Taxes" any amounts that such owner or
Tenant is obligated to pay in lieu of the taxes described in clauses (i) and
(ii). "Taxes" shall not include (A) any franchise, capital stock or transfer tax
(except to the extent franchise or capital stock taxes may be included in
"Taxes" under the preceding provisions of this Section 11.1), (B) personal
property taxes, (C) any business improvement district fees and charges, (D) all
taxes or charges imposed on Tenant
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with respect to the rentals payable under this Lease, including, without
limitation, the Commercial Rent or Occupancy Taxes imposed pursuant to Title 11,
Chapter 7 of the New York City Administrative Code, or (E) any water or sewer
charges, license fees, permit fees, inspection fees or similar charges, all of
which taxes, charges and fees described in clauses (B) through (E), subject to
the provisions of Section 12.2 shall be payable directly by Tenant to the
applicable taxing authority.
(c) "Tax Year" means each period of 12 months, commencing on the
first day of July of each such period, in which occurs any part of the Term, or
such other period of 12 months occurring during the Term as hereafter may be
adopted as the fiscal year for real estate tax purposes of the City of New York.
11.2 Payment of Taxes
Landlord shall pay, before any fine, penalty, interest or cost may
be added for non-payment, all Taxes, and upon request shall furnish Tenant with
an Officer's Certificate certifying to the payment of all Taxes and copies of
official receipts or other proof of payment satisfactory to Tenant.
11.3 Initial Tax Payments
On the first day of July, 1998 and on the first day of each and
every month thereafter through the end of the Second Rent Period, Tenant shall
pay to Landlord the respective monthly amounts set forth on Exhibit B (each, an
"Initial Tax Payment"); provided, that if the term of this Lease shall
terminate prior to the end of the Second Rent Period and on a day other than the
last day of the calendar month, the Initial Tax Payment for the month in which
the term of this Lease shall terminate shall be appropriately prorated. The
Initial Tax Payments shall not be affected by any changes in the Taxes assessed
against the Project, and Tenant shall have no right to share in any refund of
Taxes received by Landlord with respect to any periods occurring prior to June
30, 2008.
11.4 Extended Tax Payments
(a) During each of the Third Rent Period and the Fourth Rent Period,
if Taxes for any Tax Year exceed the Base Tax Amount applicable to such period,
Tenant shall pay to Landlord (each, an "Extended Tax Payment"; Initial Tax
Payments and Extended Tax Payments are collectively called "Tax Payments") the
amount by which Taxes for such Tax Year are greater than the applicable Base Tax
Amount. If there shall be any increase in the Taxes for any Tax Year, whether
during or after such Tax Year, or if there shall be any decrease in the Taxes
for any Tax Year, the Extended Tax Payments for such Tax Year shall be
appropriately adjusted and paid or refunded, as the case may be, in accordance
herewith. In no event, however, shall Taxes be reduced below the applicable Base
Tax Amount.
(b) If Landlord shall receive a refund of Taxes for any Tax Year in
respect of which Tenant has paid Extended Tax Payments, Landlord shall pay to
Tenant the net refund (i.e., after deducting the costs and expenses of obtaining
the same, including, without limitation,
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appraisal, accounting, consulting and legal fees, to the extent that such costs
and expenses were not included in the Taxes for such Tax Year); provided, that
such payment to Tenant shall in no event exceed Tenant's Tax Payment paid for
such Tax Year. If Landlord shall have received from the taxing authority any
interest on such refund, Landlord shall also pay to Tenant the portion of such
interest allocable to the portion of the refund being paid to Tenant.
(c) If the Taxes comprising the applicable Base Tax Amount are
reduced as a result of an appropriate proceeding or otherwise, the Taxes as so
reduced shall for all purposes be deemed to be the Base Tax Amount and Landlord
shall notify Tenant of the amount by which the Tax Payments previously made were
less than the Tax Payments required to be made under this Section 11.3, and
Tenant shall pay the deficiency within 10 days after demand therefor.
(d) Subject to the provisions of this Section 11.4(d), Landlord
shall have the sole right to contest the assessed valuation of the Project for
each Tax Year and to control the prosecution or settlement of such contest.
Notwithstanding the foregoing, Landlord shall not settle any tax reduction
proceedings with respect to any Tax Year commencing on or after July 1, 2009
without Tenant's consent, which consent (x) shall not be unreasonably withheld
and (y) if Landlord's request for consent shall include the following statement
in block capital letters:
THIS NOTICE IS BEING GIVEN UNDER SECTION 11.4 OF OUR
LEASE WITH YOU AND SEEKS YOUR CONSENT TO A PROPOSED
SETTLEMENT OF TAX REDUCTION PROCEEDINGS. YOUR FAILURE TO
GIVE NOTICE DENYING YOUR CONSENT WITHIN TEN DAYS AFTER
THE DATE OF THIS NOTICE
shall be deemed granted if not withheld in writing within 10 days after request
by Landlord. If on or before the 60th day prior to the last day on which a party
may contest the assessed valuation of the Project with respect to any such Tax
Year commencing on or after July 1, 2009, Tenant (by notice referring to this
Section 11.4(d)) shall request that Landlord advise Tenant whether or not
Landlord will contest the assessed valuation of the Project with respect to such
Tax Year, then (i) if Landlord shall not on or before the 30th day prior to such
last day advise Tenant that Landlord will contest the assessed valuation of the
Project with respect to such Tax Year then (subject to the last sentence of this
Section 11.4(d)) Tenant shall have the sole right to do so and to control the
prosecution or settlement of such contest, and (ii) if Landlord shall on or
before the 30th day prior to such last day advise Tenant that Landlord will
contest the assessed valuation of the Project with respect to such Tax Year then
Landlord shall do so. In any instance where pursuant to the foregoing provisions
of this Section 11.4(d) any such action or proceeding is being undertaken by
Tenant, (x) Landlord shall cooperate with Tenant, execute any and all documents
reasonably required in connection therewith and, if required by Legal
Requirements, join with Tenant in the prosecution thereof, and (y) Tenant shall
be entitled to recover first out of any refund obtained the costs and expenses
of obtaining the same, including, without limitation, appraisal, accounting,
consulting and legal fees and the balance of such refund shall be apportioned
between the parties subject to the provisions of Section 11.4(b).
Notwithstanding the foregoing, Tenant shall not settle any tax reduction
proceedings brought by Tenant pursuant to
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clause (i) above without Landlord's consent, which consent (x) shall not be
unreasonably withheld and (y) if Tenant's request for consent shall include the
following statement in block capital letters:
THIS NOTICE IS BEING GIVEN UNDER SECTION 11.4 OF
OUR LEASE WITH YOU AND SEEKS YOUR CONSENT TO A
PROPOSED SETTLEMENT OF TAX REDUCTION
PROCEEDINGS. YOUR FAILURE TO GIVE NOTICE
DENYING YOUR CONSENT WITHIN TEN DAYS AFTER
THE DATE OF THIS NOTICE
shall be deemed granted if not withheld in writing within 10 days after request
by Tenant.
11.5 General Provisions Applicable to Taxes
(a) The Extended Tax Payment for each Tax Year shall be due and
payable in installments in the same manner that Taxes for such Tax Year are due
and payable by Landlord, whether to the City of New York or to a Superior
Mortgagee. Tenant shall pay each such installment no later than the later of (i)
10 days after the rendering of a statement therefor by Landlord to Tenant, or
(ii) 20 days prior to the date on which the corresponding installment of Taxes
are due. The statement to be rendered by Landlord shall set forth in reasonable
detail the computation of the particular installment being billed.
(b) Landlord's failure to render or delay in rendering any
statement with respect to any Tax Payment or installment thereof shall not
prejudice Landlord's right to thereafter render such a statement, nor shall the
rendering of a statement for any Tax Payment or installment thereof prejudice
Landlord's right to thereafter render a corrected statement therefor.
(c) Except for amounts included in Taxes, subject to the
provisions of Section 12.2 Tenant shall pay, before any fine, penalty, interest
or cost may be added for nonpayment, (i) all personal property taxes, (ii) all
business improvement district fees and charges, (iii) all taxes or charges
imposed on Tenant with respect to the rentals payable under this Lease,
including, without limitation, the Commercial Rent or Occupancy Taxes imposed
pursuant to Title 11, Chapter 7 of the New York City Administrative Code, and
(iv) all water or sewer charges, license fees, permit fees, inspection fees or
similar charges, (collectively, "Tenant Impositions").
11.6 Industrial and Commercial Incentive Program
Landlord hereby notifies Tenant that Landlord intends to avail
itself of the Industrial and Commercial Incentive Program ("ICIP") with respect
to the Base Building Upgrade Work and the Fit-Out Work to the extent in either
case that the same qualify for the ICIP. In contracting pursuant to the Initial
Improvements Agreement for the Base Building Upgrade Work and, to the extent
that the same qualifies for the ICIP, the Fit-Out Work, Tenant shall include
provisions requiring all of the construction managers, contractors and
subcontractors to comply with the New York City Office of Labor
Services/Construction
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Division ("OLS") requirements applicable to construction projects benefiting
from the ICIP. Such compliance, as of the date hereof, includes the following:
the submission and approval of a Construction Employment Report, attendance at a
pre-construction conference with representatives of the OLS and adherence to the
provisions of Article 22 of the ICIP Rules and Regulations, the provisions of
New York City Charter Chapter 13-B and the provisions of Executive Order No. 50
(1980). Furthermore, at Landlord's request, Tenant shall (A) report to Landlord
the number of workers permanently engaged in employment in the Leased Premises,
the nature of each worker's employment and, to the extent applicable, the New
York City residency of each worker, (B) provide access to the Leased Premises by
employees and agents of the Department (as such term is defined in the ICIP
Rules and Regulations) at all reasonable times, and (C) enforce the contractual
obligations of such construction managers, contractors and subcontractors to
comply with the OLS requirements. Landlord shall be responsible for the
preparation of all applications (including any revised applications),
certificates of continuing eligibility and any other documents, certificates and
instruments that may be required in order to obtain benefits under the ICIP
and/or in order to maintain the benefits in effect. Tenant shall, at Landlord's
request, (i) make available to Landlord the Plans and Specifications and all
cost records relative to the Base Building Upgrade Work and the Fit-Out Work,
and (ii) otherwise cooperate with Landlord's efforts to obtain such benefits
(including, without limitation, the execution within 5 Business Days after
request of any forms required to be executed by Tenant or otherwise customarily
executed by similarly situated tenants), provided, that Tenant shall not be
required to alter, modify or delay the Base Building Upgrade Work or the Fit-Out
Work. Landlord shall pay to Tenant, within 30 days after demand, Tenant's
reasonable out-of-pocket costs and expenses (including, without limitation,
attorneys' fees and disbursements) incurred in reviewing such applications,
certificates of continuing eligibility and such other documents, certificates
and instruments, or otherwise cooperating, at Landlord's request, with
Landlord's efforts to obtain such benefits. All benefits obtained under ICIP
shall, to the extent legally permissible, accrue to Landlord (and if paid to or
received by Tenant, Tenant shall pay same to Landlord). Landlord shall indemnify
and hold harmless Tenant from and against any and all liability, damages,
claims, costs or expenses (including legal fees) incurred by or asserted against
Tenant by reason of or arising out of to the ICIP, any benefits granted
thereunder, or any application, certificates, documents or instruments prepared
or filed in connection therewith unless such liability, damages, claims, cost or
expenses arise out of Tenant's failure to comply with Article 11.
12. Compliance with Legal and Insurance Requirements and Permitted
Encumbrances
12.1 Generally
Subject to the Provisions of Article 6 and Section 12.2, Tenant
shall promptly comply (at Tenant's expense, unless the need for such compliance
arises out of any act, omission, negligence or intentional misconduct of
Landlord or any agent, employee, contractor, licensee of Landlord, in which case
Landlord shall reimburse Tenant for the costs of compliance within 30 days after
submission by Tenant to Landlord of invoices evidencing the costs of compliance)
with all Legal Requirements, Insurance Requirements and Permitted Encumbrances
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(exclusive of the lease described in item 1 of Exhibit C (the "Ground Lease")
and mortgages and related documents described in items 2, 3, 4 and 5 of Exhibit
C (the "Pre-Existing Mortgages"), as to which Tenant's obligations shall be only
as provided in Section 12.3), whether or not compliance therewith shall require
Alterations or interfere with the use and enjoyment of the Leased Premises or
any part thereof.
12.2 Permitted Contests
Tenant, without Landlord's consent may contest, by appropriate legal
proceedings conducted in good faith and with due diligence, the amount or
validity or application, in whole or in part, of any Tenant Imposition, Legal
Requirement, or Permitted Encumbrance and may withhold payment or performance of
the same pending such contest, provided, that (a) such proceedings shall suspend
the collection thereof from Landlord and the Leased Premises or any part
thereof, (b) neither the Leased Premises nor any part thereof or interest
therein would be in any danger of being sold, forfeited or lost, (c) Landlord
shall not be in any danger of any criminal liability by reason thereof and (d)
in the case of a contest involving any Legal Requirement or any Permitted
Encumbrance, if at any time Landlord determines that Landlord is in danger of
any civil liability in an amount in excess of one year's Basic Rent, Tenant
shall (within 5 Business Days after Tenant receives Landlord's request therefor)
furnish to Landlord such security against such civil liability as Landlord may
reasonably request. Tenant shall give prompt notice to Landlord of the
commencement of or of Tenant's desire to commence any contest permitted by the
preceding sentence and Landlord shall, at Tenant's expense, reasonably cooperate
with Tenant with respect to any such contest and, if in connection with the
commencement, prosecution or settlement of such contest only Landlord can
execute any report, certificate, instrument, application or other document or
take any other action, in each case reasonably required in connection with such
contest, then, upon Tenant's request and at Tenant's expense, Landlord shall
execute or take the same. If in connection with any such request Landlord
consults with an engineer, an attorney or other professional, Tenant shall,
within 10 days after Tenant's receipt of demand therefor accompanied by copies
of the bills paid by Landlord, reimburse Landlord for the reasonable
out-of-pocket expenses incurred by Landlord for the services of such
professionals. If such professional advises Landlord in writing that Landlord's
executing such document or taking such action might result in the Leased
Premises or any part thereof or interest therein being sold, forfeited or lost
or in Landlord becoming criminally liable, and if such professional furnishes a
reasonably detailed explanation of the foregoing and the reasons therefor,
Landlord shall promptly advise Tenant and furnish Tenant with a copy of such
professional's advice and explanation and Landlord need not execute such
document or take such action. If, while contesting any amount, Tenant withholds
payment of the same, Tenant shall maintain the amount withheld (together with
penalties and interest from time to time accruing thereon) on deposit in a
separate interest bearing account in Landlord's name with a bank or trust
company selected by Tenant having an office in the Borough of Manhattan and a
combined shareholders equity of at least $200 million (or, if Tenant and
Landlord so agree, with Landlord). If any of the conditions set forth in the
proviso to the first sentence of this Section 12.2 are violated, Landlord shall
be entitled to withdraw the funds on deposit in said account in order to make
payment of the amount being contested. All interest earned on funds in such an
account shall be credited to such account and Tenant shall pay all taxes
thereon. Upon termination or
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settlement of such contest, any required payment of the amount contested shall
be made from such account and the balance remaining in such account shall be
paid to Tenant. If the amount in the account is insufficient, Tenant shall pay
the amount of the deficiency.
12.3 Ground Lease and Pre-Existing Mortgages. Landlord shall comply
with the Ground Lease and the Pre-Exiting Mortgages; provided, that this Section
12.3 shall not be deemed to release Tenant from or require Landlord to perform
any of Tenant's obligations under this Lease and if and to the extent that any
action is required to be taken both by Landlord as tenant under the Ground Lease
or mortgagor under the Pre-Existing Mortgages and by Tenant as tenant hereunder,
such action shall be taken by Tenant hereunder at Tenant's expense.
Notwithstanding the foregoing, Landlord shall be solely responsible for the
payment of (i) the net annual rental payable under the Ground Lease, and (ii)
all principal and interest on any debt secured by any of the Pre-Existing
Mortgages. If and to the extent that Landlord shall be required by the
provisions of this Section 12.3 to perform any work in or to the Leased
Premises, Tenant shall have the right to perform such work at Landlord's
expense, in which case Landlord shall reimburse Tenant for the reasonable costs
of performance within 30 days after submission by Tenant to Landlord of invoices
evidencing the costs of performance. Landlord shall exercise all renewal options
required to keep the Ground Lease in effect so long as this Lease is in effect.
If Landlord shall acquire the lessor's interest under the Ground Lease, Landlord
shall have the right to terminate the same and, if Landlord acquires such
interest and terminates the Ground Lease, this Lease shall continue in full
force and effect, except that all provisions relating to the Ground Lease shall
be deemed deleted.
13. Liens
(a) Within 60 days after the date on which Landlord gives Tenant
notice, referring to this Article 13 and Section 19(a)(v), of the existence of
any mechanic's, laborer's or materialman's lien, any lien arising under any
Permitted Encumbrance or any security interest which might be or become a lien,
encumbrance or charge upon the Leased Premises or any part thereof (other than
any such lien, encumbrance or charge caused by Landlord) and directs Tenant to
remove or discharge the same, Tenant shall either (i) remove or discharge the
same, by bonding or otherwise, or (ii) if Landlord shall consent thereto,
provide Landlord with an unconditional and irrevocable letter of credit (issued
by a New York Clearing House Association member bank satisfactory to Landlord
and in form satisfactory to Landlord) or other security satisfactory to Landlord
indemnifying Landlord against such lien or security interest.
(b) Nothing contained in this Lease shall be deemed or construed in
any way as constituting the consent or request of Landlord, express or implied
by inference or otherwise, to any contractor, subcontractor, laborer or
materialman for the performance of any labor or the furnishing of any materials
for any specific improvement, alteration to or repair of the Leased Premises or
any part thereof.
14. Insurance
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14.1 Risks to be Insured
(a) Tenant shall maintain or cause to be maintained with insurers
and pursuant to insuring agreements approved by Landlord:
(i) insurance with respect to all buildings,
improvements, equipment and machinery constituting a part of the Leased Premises
against loss or damage by perils customarily included under standard "all-risk"
policies (including specifically damage by water), in amounts sufficient to
prevent Landlord or Tenant from becoming a co-insurer of any partial loss under
the applicable policies, and in any event in amounts not less than 90% of the
then full replacement cost (without deducting depreciation) of such buildings,
improvements, equipment and machinery (exclusive of the costs of foundations,
excavations and footings) (the "full replacement cost") as determined at the
request of Tenant (or at the request of Landlord, made not sooner than one year
after the previous determination), and (in either case) at Tenant's expense by
the insurer or insurers or by an expert selected by Tenant and approved by
Landlord;
(ii) boiler and machinery coverage, either, as Tenant
shall elect, as part of the policy referred to in clause (i) of this Section
14.1(a) or, if by a secondary policy, in an amount not less than $100,000,000 or
such greater amount as Landlord may reasonably require by notice to Tenant (the
insurance described in clause (i) above and this clause (ii) is collectively
called "Property Insurance");
(iii) commercial general liability insurance, including
broad form bodily injury, personal injury, property damage and blanket
contractual insurance, against claims arising out of or connected with the
possession, use, operation or condition of the Leased Premises with a combined
single limit of not less than $100,000,000 (or, such greater amount as Landlord
may reasonably require by notice to Tenant) for all claims with respect to
bodily injury, property damage and personal injury with respect to any one
occurrence;
(iv) appropriate builder's risk insurance with respect
to any Alterations (including, without limitation, any Restoration) or other
work on or about the Leased Premises or any part thereof;
(v) appropriate workers compensation and employer's
liability insurance with respect to any Alteration (including, without
limitation, any Restoration) or other work on or about the Leased Premises or
any part thereof; and
(vi) such other insurance with respect to the Leased
Premises or any part thereof in such amounts and against such insurable
casualties as Landlord from time to time may reasonably require by notice to
Tenant.
(b) All insurance required to be maintained under clause (ii) or
(iii) of Section 14.1(a) may be subject to a deductible of not more than the
Deductible Amount. Landlord shall not unreasonably withhold any of the approvals
referred to in Section 14.1(a). Any dispute whether Landlord has unreasonably
withheld such an approval and any dispute regarding the dollar amounts of the
limits of coverage under clause (ii) or (iii) of Section 14.1(a)
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and any dispute under clause (iv), (v), or (vi) of Section 14.1(a) shall be
resolved by arbitration. Pending the outcome of such arbitration, Tenant may act
as if the dispute had been resolved in its favor.
(c) The insurance required to be maintained by Tenant under
clause (i) of Section 14.1(a) shall also include (1) flood coverage of not less
than $25 million, (2) earthquake coverage of not less than $25 million, (3)
broad form water coverage (including backup of sewers and drains) of not less
than $5 million, (4) demolition coverage of not less than $10 million, (5)
increased cost of construction coverage of not less than $10 million, and (6)
law and ordinance coverage of not less than $10 million.
(d) Whenever in connection with any Alterations Tenant causes
its general contractor to name Tenant as an insured under any commercial general
liability insurance, Tenant shall also cause its general contractor also so to
name Landlord.
14.2 Policy Provisions
All insurance maintained by Tenant pursuant to Section 14.1(a)
shall: (a) except for any workers' compensation insurance and employers'
liability insurance, name as insureds, as their respective interests may appear,
Landlord and Tenant and any Superior Mortgagee who shall have executed and
delivered a Non-Disturbance Agreement; (b) include a stipulation that premiums
will be paid by and are the responsibility of Tenant; (c) except for any
comprehensive general liability, worker's compensation insurance or employer's
liability insurance, provide that no act or omission of Tenant shall impair or
affect the rights of the insureds to receive and collect the proceeds under the
relevant policy; and (d) provide that no cancellation, reduction in amount or
material change in coverage thereof shall be effective until at least 30 days
after receipt by Landlord of written notice thereof. Tenant shall have the sole
authority to settle claims under insurance policies; provided, that in case of
any damage or destruction affording Tenant the right to terminate this Lease
pursuant to Section 15.4(a), Tenant may not settle all or any of the claims
under the policies referred to in clauses (i), (ii), (iv) or (vi) of Section
14.1(a) arising from any damage or destruction unless it shall waive such right
with respect to such damage or destruction. Tenant may obtain any of the
insurance required hereby under blanket or umbrella policies; provided, that any
such policy of insurance provided for under clauses (i), (ii), (iv) or (vi) of
Section 14.1(a): (i) shall permit recovery in the amount required by the clause
in question to be carried without regard to other insured events with respect to
other properties, and (ii) shall not contain any clause which would result in
the insured thereunder being required to carry insurance with respect to the
property covered thereby in an amount equal to a minimum specific percentage of
the full insurable value of such property in order to prevent the insured
therein named from becoming a co-insurer of any loss with the insurer under such
policy.
Tenant shall also cause the members, partners or shareholders of
Landlord whose names shall have been furnished to Tenant and, so long as The
Witkoff Group LLC is an affiliate of Landlord, The Witkoff Group LLC as
additional named insureds under the insurance required to be maintained by
Tenant under clause (iii) of Section 14.1(a).
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14.3 Delivery of Insurance Certificates; Payment of Premium
On the date hereof and not less than 7 days prior to each policy
expiration Tenant shall deliver to Landlord certificates of all insurance
policies required by this Lease to be maintained. Tenant shall pay all premiums
on each such insurance policy within the time required under such policy and
furnish Landlord with evidence of payment thereof within 10 Business Days after
payment.
14.4 No Limitation of Damages
Landlord shall not be limited in the proof of any damages which
Landlord may claim against Tenant arising out of or by reason of Tenant's
failure during the Term (or thereafter in case of insurance required to be
provided under Section 15.4(k)) to provide and keep in force the insurance
required under this Lease to the amount of the insurance premium or premiums not
paid or incurred by Tenant and which would have been payable upon such
insurance, but Landlord shall also be entitled to recover as damages for such
breach the uninsured amount of any loss to the extent of any deficiency between
the insurance required by the provisions of this Lease and the insurance carried
by Tenant, together with all costs and expenses incurred by Landlord which
Landlord would not have incurred if the required insurance had been maintained
by Tenant. However, any such damages so recovered by Landlord shall be subject
to and limited by the provisions of Article 25.
15. Damage to or Destruction of Property
15.1 Waiver of ss. 227; Tenant to Give Notice
Tenant hereby waives the provisions of Article 227 of the Real
Property Law and confirms that the provisions of this Article 15 shall govern
and control in lieu thereof. In case of any damage to or destruction of the
Leased Premises or any part thereof, if, in Tenant's reasonable opinion, the
cost to repair or rebuild the same will exceed $1,000,000, Tenant shall promptly
give notice thereof to Landlord, generally describing the nature and extent of
such damage or destruction.
15.2 Restoration
In case of any damage to or destruction of the Leased Premises or
any part thereof, this Lease shall continue in full force and effect without
abatement of any Basic Rent, Supplemental Rent or other amounts payable by
Tenant hereunder. Tenant, whether or not the insurance proceeds, if any, on
account of such damage or destruction shall be sufficient for the purpose, shall
(subject to the applicable provisions of Article 6 and Section 15.4(c))
promptly commence and proceed with due diligence to complete the restoration,
replacement or rebuilding of the Leased Premises (which may include demolition
of the remaining portions of the Leased Premises prior to rebuilding) as nearly
as possible to its condition immediately prior to such damage or destruction
with such Voluntary Alterations as Tenant shall (subject to the applicable
provisions of Article 6) elect (such restoration, replacement and rebuilding,
together with any
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temporary repairs and protection pending completion of the work, being herein
called "Restoration").
15.3 Application of Insurance Proceeds
(a) Promptly after the occurrence of any damage to or destruction of
the Leased Premises or any part thereof the insurance proceeds with respect to
which are expected by Tenant to exceed the Significant Proceeds Amount, Tenant
by notice to Landlord and the institution appointed, shall appoint a depositary
of the insurance proceeds under this Section 15.3 (the "Depositary"). Without
limiting the foregoing, Tenant may appoint a Depositary at any other time. The
Depositary shall be a bank or trust company having an office in the Borough of
Manhattan and a combined shareholders equity of at least $200 million. Funds
held by the Depositary shall be invested by the Depositary, upon the
instructions of Tenant, in Permitted Investments.
(b) All insurance proceeds on account of any damage to or
destruction of the Leased Premises or any part thereof shall be payable as
follows:
(i) to Tenant, to the extent that such proceeds are
equal to or less than the Significant Proceeds Amount, and
(ii) to the Depositary, to the extent that such proceeds
are in excess of the Significant Proceeds Amount;
provided, that if an Event of Default shall have occurred and be continuing, the
amounts paid or payable to Tenant in accordance with the foregoing clause (i)
shall be paid to the Depository and shall (without the necessity of Tenant's
compliance with the provisions of Article 17) be returned (together with the
interest thereon) to Tenant only upon the curing of such Event of Default, but
less the portion, if any, applied and disbursed by the Depositary in accordance
with the provisions of Article 17.
15.4 Termination in Lieu of Restoration
(a) If:
(i) (x) after September 30, 2004 the Leased Premises shall be so
damaged or destroyed that the Costs of Restoration shall
exceed the product of $10,000,000 multiplied by a fraction
whose numerator is the Index for the month which is three
months prior to the month in which the damage or destruction
occurred and whose denominator is the Index for April, 1997,
and (y) on the date of such damage or destruction Tenant's
right to terminate this Lease as of June 30, 2008 shall not
have lapsed without exercise,
(ii) (x) after September 30, 2009 the Leased Premises shall be so
damaged or destroyed that the Costs of Restoration shall
exceed the
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product of $10,000,000 multiplied by a fraction whose
numerator is the Index for the month which is three months
prior to the month in which the damage or destruction occurred
and whose denominator is the Index for April, 1997, and (y) on
the date of such damage or destruction Tenant's right to
terminate this Lease as of June 30, 2013 shall not have lapsed
without exercise,
(iii) after September 30, 2014 the Leased Premises shall be so
damaged or destroyed that the Costs of Restoration shall
exceed the product of $10,000,000 multiplied by a fraction
whose numerator is the Index for the month which is three
months prior to the month in which the damage or destruction
occurred and whose denominator is the Index for April, 1997,
or
(iv) at any time the Leased Premises shall be so damaged or
destroyed that 50% or more of the useable area thereof cannot,
with the exercise by Tenant of all due diligence, be rendered
tenantable and fit for the normal conduct of business within
90 days after the date of the damage or destruction (the
condition described in this clause (iv) being called "50%
Untenantability"),
then (subject to the further provisions of this Section 15.4) Tenant may, by
notice (the "Damage Termination Notice") to Landlord given within the 180-day
period (the "Election Period") following the date (the "Damage Date") of damage
or destruction, elect to terminate this Lease as of a date specified in the
Damage Termination Notice (the "Specified Damage Termination Date"), which
Specified Damage Termination Date shall be no earlier than 20 days after the
giving of such Damage Termination Notice and no later than one year after the
giving of such Damage Termination Notice.
(b) If Tenant shall timely give the Damage Termination Notice then,
subject to Section 15.4(i), this Lease shall terminate on the Specified Damage
Termination Date; provided, that if on or prior to the date which is 15 days
after the giving of such Damage Termination Notice Landlord shall by notice to
Tenant dispute Tenant's right to terminate this Lease pursuant to Section
15.4(a), the matter shall be determined by the Appropriate Engineer and (i) if
the Appropriate Engineer's determination is in Landlord's favor, then this Lease
shall continue in full force and effect or (ii) if the Appropriate Engineer's
determination is in Tenant's favor, then, subject to Section 15.4(i), this Lease
shall terminate effective as of the Specified Damage Termination Date. At any
time at the request of Landlord or Tenant, the Appropriate Engineer shall make a
determination as to whether Tenant has the right to terminate this Lease
pursuant to this Section 15.4.
(c) At all times prior to the giving of the Damage Termination
Notice, Tenant shall prosecute the Restoration with all due diligence and in
accordance with the Plans and Specifications therefor (as approved by Landlord
or as determined by the Appropriate Engineer to have been required to be
approved by Landlord pursuant to this Lease); provided, that unless
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(i) Tenant waives in writing Tenant's termination right under this
Section 15.4 with respect thereto, or
(ii) Tenant does not give the Damage Termination Notice on or prior
to the end of the applicable Election Period,
Tenant shall not be obligated to (i) expend more than the Significant Proceeds
Amount with respect to the Restoration of such damage or destruction, or (ii)
expend any Costs which are not Qualified Restoration Costs. The term "Qualified
Restoration Costs" shall mean Costs of any Restoration to the extent undertaken
to (i) secure or prevent further damage to the Leased Premises and/or (ii)
effect Restoration of Building systems but only to the extent the same are not
located in any area designed for tenant occupancy.
(d) Simultaneously with the giving of the Damage Termination Notice,
Tenant shall:
(i) assign to Landlord (by instruments reasonably satisfactory to
Landlord) all of Tenant's right, title and interest in and to
the Plans and Specifications (if any) for the Restoration;
(ii) assign to Landlord (by instruments reasonably satisfactory to
Landlord) all of Tenant's right, title and interest in and to
that portion (if any) of the proceeds of Tenant's Property
Insurance which has not yet been received by Tenant from the
insurer (provided, that if and when Landlord receives such
portion of the proceeds of Tenant's Property Insurance from
the insurer, Landlord shall, within 10 Business Days after
receipt of a request therefor from Tenant, pay to Tenant an
amount equal to the lesser of (x) such portion of the proceeds
of Tenant's Property Insurance received by Landlord from the
insurer or (y) the amount, if any, by which the aggregate
amount expended by Tenant for Qualified Restoration Costs in
connection with the Restoration on or prior to the date of the
Damage Termination Notice exceeds the sum of (l) the portion
of the proceeds of Tenant's Property Insurance (if any)
received by Tenant from the insurer on or prior to the date of
the Damage Termination Notice and (2) the Deductible Amount
under the insurance policy required to be maintained by Tenant
under Section 14.1(a));
(iii) pay to Landlord, in immediately available funds, an amount
(the "Damage Payment") equal to the sum of the positive
remainder, if any, obtained by subtracting the aggregate
amount theretofore expended by Tenant for Qualified
Restoration Costs in connection with the Restoration from the
sum of (A) that portion (if any) of the proceeds of Tenant's
Property Insurance which Tenant received from the insurer on
or prior to the date of the Damage Termination Notice plus (B)
the Deductible Amount under the insurance policy required to
be maintained by Tenant under Section 14.1(a) (the computation
of the payment under
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this clause (iii) shall not be affected by any amount of
proceeds of Tenant's Property Insurance that Tenant may have
spent on other than Qualified Restoration Costs) ; and
(iv) if the insurance policy required to be maintained by Tenant
under Section 14.1(a) was for less than the full replacement
cost most recently determined pursuant to said Section,
deposit with the Depositary, in immediately available funds,
an amount equal to the excess of (x) the amount which would
have been recoverable from the insurer if such policy had been
for the full replacement cost most recently determined
pursuant to said Section over (y) the amount which is
recoverable from the insurer under such policy on account of
the damage or destruction.
If the insurer under the insurance policy required to be maintained
by Tenant under Section 14.1(a) shall pay to Tenant any amount which is required
by Section 15.3 to be paid to the Depositary, Tenant shall immediately deposit
such amount with the Depositary.
(e) Subject to Section 15.4(f), during the period commencing on the
date of the Damage Termination Notice and ending on the Specified Damage
Termination Date, Landlord shall have full control over the Restoration and may
use the Damage Payment and the amounts on deposit with the Depositary to defray
the costs of the Restoration. Landlord and Tenant shall reasonably cooperate
with one another to effectuate the Restoration in an efficient manner, and
during the Restoration Landlord shall use reasonable efforts to minimize
interference with Tenant's use of the undamaged portion (if any) of the Leased
Premises. Landlord shall not be liable to Tenant for any matter relating to or
arising out of the Restoration unless due to Landlord's gross negligence or
willful misfeasance; provided, that Landlord shall retain reputable contractors
who carry reasonable and customary public liability insurance.
(f) If following the giving of the Damage Termination Notice,
Landlord shall timely dispute Tenant's right to terminate this Lease pursuant to
Section 15.4(a) and the Appropriate Engineer shall determine that Tenant had no
right to terminate this Lease pursuant to Section 15.4(a), then:
(i) Tenant shall thereupon assume full control of the Restoration
and shall prosecute the same with all due diligence to
completion in accordance with the requirements of this Lease;
and
(ii) within 10 Business Days after the Appropriate Engineer's
determination, Landlord shall (x) reassign to Tenant that
which was assigned to Landlord pursuant to Section 15.4(d)(i)
and (ii) and (y) pay to Tenant in immediately available funds
an amount equal to the positive remainder, if any, obtained by
subtracting the aggregate amount theretofore expended by
Landlord in connection with the Restoration (exclusive,
however, of any amount disbursed to Landlord by the
Depositary) from the sum of (a) the amount, if any, received
by Landlord from the insurer by reason of the assignment
referred to in Section
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15.4(d)(ii) (exclusive, however, of any portion of such amount
paid by Landlord to Tenant pursuant to Section 15.4(d)(ii)),
and (b) the Damage Payment.
(g) Prior to the termination of this Lease pursuant to this Section
15.4 there shall be no abatement of the Basic Rent, Supplemental Rent or any
other sum payable by Tenant hereunder. Basic Rent, Supplemental Rent and Tax
Payments due hereunder shall be payable through and apportioned as of the
Specified Damage Termination Date, and (except as provided in Section 32(b) with
respect to any holdover) Tenant shall have no liability for Basic Rent,
Supplemental Rent or Tax Payments which would otherwise have been payable after
the Specified Damage Termination Date.
(h) If this Lease is terminated pursuant to this Section 15.4, then,
in addition to all amounts payable under Section 15.4(d), Tenant shall pay to
Landlord, on or before the Specified Damage Termination Date, a cancellation
payment (the "Damage Cancellation Payment") equal to the sum of
(i) the Basic Rent and the Tax Payments that would be payable for
the period commencing on the Specified Damage Termination Date
and ending on the earlier of (x) the date six months after the
Specified Damage Termination Date, or (y) (i) if the damage or
destruction shall have occurred on or before the end of the
Second Rent Period and Tenant shall have timely exercised
Tenant's option to terminate the Lease as of June 30, 2008,
the last day of the Second Rent Period, (ii) if the damage or
destruction shall have occurred during the Third Rent Period
and Tenant shall have timely exercised Tenant's option to
terminate the Lease as of June 30, 2013, the last day of the
Third Rent Period, or (iii) if the damage or destruction shall
have occurred during the Fourth Rent Period, the last day of
the Fourth Rent Period, plus
(ii) if the Specified Damage Termination Date shall occur prior to
June 1, 2008, the sum of (x) the amount of the Unamortized
Fit-Out Work Investment as of the Specified Damage Termination
Date, (y) if the Specified Damage Termination Date shall be
other than the first day of a month, interest at the Fit-Out
Work Interest Rate on such Unamortized Fit-Out Work Investment
from the first day of the month in which the Specified Damage
Termination Date shall occur to the Specified Damage
Termination Date, and (z) the Notional Make-Whole Amount as of
the Specified Damage Termination Date
provided, that (a) Tenant shall be entitled to a credit against the amount
required to be paid pursuant to clause (i) above equal to all Basic Rent and Tax
Payments previously paid, if any, which is attributable to the period after the
Specified Damage Termination Date, and (b) if under Section 15.4(b) Landlord
shall timely dispute Tenant's right so to terminate this Lease, then Tenant
shall not be required to make the Damage Cancellation Payment unless the
Appropriate
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Engineer's determination is in Tenant's favor. In any case under clause (b) of
the preceding sentence, the Damage Cancellation Payment shall be due within 5
days after the determination.
(i) It shall be a condition to the effectiveness of the Damage
Termination Notice and the termination of this Lease pursuant to this Section
15.4, that on or before the Specified Damage Termination Date Tenant pays either
(1) all amounts required to be paid by Tenant under Section 15.4(d) and Section
15.4(h), or (2) all amounts which Tenant believes in good faith are required to
be paid by Tenant under Section 15.4(d) and Section 15.4(h). Any dispute with
respect to the determination of any amount required to be paid by Tenant under
Section 15.4(d) shall be resolved by arbitration and any dispute with respect to
the determination of any amount required to be paid by Tenant under Section
15.4(h) shall be resolved by Expedited Arbitration. If in such arbitration or
Expedited Arbitration it is determined that Tenant underpaid, Tenant shall pay
the amount of the underpayment to Landlord within 5 days after the such
determination, together with interest thereon at the Prime Rate from the
Specified Damage Termination Date until paid by Tenant. If in such arbitration
or Expedited Arbitration it is determined that Tenant overpaid, Landlord shall
pay the amount of the overpayment to Tenant within 5 days after such
determination, together with interest thereon at the Prime Rate from the
Specified Damage Termination Date until paid by Landlord.
(j) If by reason of the termination of this Lease pursuant to
Section 15.4 or Tenant's failure to effect Restoration by reason of Tenant's
having so terminated this Lease
(p) the insurer under the insurance policy required to
be maintained by Tenant under clauses (i) and (ii) of
Section 14.1(a) is released under the terms of the
policy from its obligation to make payment on account of
the loss arising out of such damage or destruction, or
(q) the amount which under the terms of the policy such
insurer is required to pay on account of the loss
arising out of such damage or destruction is less than
the amount which under the terms of the policy such
insurer would have been required to pay if this Lease
had not been terminated and Tenant had effected such
restoration as Landlord, within the time period provided
by the policy, actually commits to such insurer to
effect (such lesser amount being herein called the
"Reduced Proceeds Amount"),
then Tenant shall, within 30 days after Landlord's demand,
(x) in the case of (p) above, pay to Landlord the amount
which under the terms of the policy such insurer would
have been required to pay on account of the loss arising
out of such damage or destruction if this Lease had not
been terminated and Tenant had effected such restoration
as
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Landlord, within the time period provided by the policy,
actually commits to such insurer to effect (the "Full
Proceeds Amount"), or
(y) in the case of (q) above, pay to Landlord the excess
of the Full Proceeds Amount over the Reduced Proceeds
Amount.
Together with the assignment delivered under Section l5.4(d) (ii),
Tenant shall furnish Landlord with a notice, in block capital letters, of the
period provided by the policy within which Tenant must make its restoration
commitment to the insurer.
Landlord, at Tenant's expense, shall prosecute all insurance claims
the proceeds of which have been assigned to Landlord under Section 15.4(d)(ii)
diligently and in accordance with the terms of the applicable policies and,
notwithstanding the provisions of Section 14.2 to the contrary, Landlord shall
have the sole right to settle such claims.
(k) If Tenant shall terminate this Lease pursuant to this Section
15.4, Tenant shall maintain in effect the insurance required by clauses (i) and
(ii) of Sections 14.1(a) ("Post-Termination Insurance") until the earliest of
(1) the later of (a) the end of Tenant's then current policy
period, or (b) the date two years after the Specified
Damage Termination Date,
(2) the date on which Landlord receives the proceeds of the
insurance required to be maintained by Tenant under
clauses (i) and (ii) of Section 14.1(a) with respect to
the damage or destruction giving rise to such
termination (including any amounts payable under Section
15.4(j)), or
(3) the date on which Landlord commences restoration of such
damage or destruction (other than protective work or
demolition).
All of the provisions of Article 14, in so far as they relate to the insurance
required by clauses (i) and (ii) of Sections 14.1(a), shall be applicable to
such Post-Termination Insurance, except that (a) Landlord shall be solely
entitled to all proceeds of such Post-Termination Insurance arising out of any
casualty occurring after the Specified Damage Termination Date, and (b)
Landlord, at its expense, shall prosecute all insurance claims to the proceeds
of which it is so entitled diligently and in accordance with the terms of the
applicable policies and, notwithstanding the provisions of Section 14.2 to the
contrary, Landlord shall have the sole right to settle such claims. At
Landlord's request, Tenant shall join in the execution of any documents
reasonably required by the insurer to be executed by Tenant in connection with
such claims. If Tenant shall fail, within 10 Business Days of Landlord's request
to execute any such document, Landlord is hereby appointed Tenant's
attorney-in-fact to do so.
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On or before the Specified Damage Termination Date, Tenant shall
furnish Landlord with a certificate of the insurance required by this Section
15.4(k) showing as the expiration date thereof the end of Tenant's then current
policy period. So long as Tenant is required by this Section 15.4(k) to maintain
insurance, Tenant shall, no later than 7 days prior to the end of each of
Tenant's policy periods, furnish Landlord with a certificate of the insurance
required by this Section 15.4(k) showing as the expiration date thereof the end
of Tenant's next policy period or, if such next policy period will end after two
years after the Specified Damage Termination Date, two years after the Specified
Damage Termination Date. No certificate delivered pursuant to this paragraph
shall be effective to extend the date through which Tenant is required by this
Section 15.4(j) to maintain insurance. If at any time Tenant does not maintain
the insurance required by this Section 15.4(k) to be maintained by it, Landlord,
after 2 Business Days notice to Tenant, may purchase insurance providing the
same coverage, and if Landlord does so Tenant shall reimburse Landlord on demand
for all of the costs incurred by Landlord in maintaining such insurance.
(l) If this Lease is terminated pursuant to this Section 15.4 on or
prior to June 1, 2008, Tenant shall also reimburse Landlord, within 10 days of
Landlord's demand, any document preparation fee, recording fee, attendance fee
or similar fee charged by any of Landlord's lenders, not exceeding $10,000 in
the aggregate for all lenders, by reason of Landlord applying the sum received
under Section 15.4(h)(ii) to prepayment of any of Landlord's mortgage debt due
to such lender.
16. Taking of Property
16.1 Notice
Landlord and Tenant shall each notify the other if it becomes aware
of a Taking, or the commencement of any proceedings or negotiations which might
result in a Taking.
16.2 Total Taking
In case of a Total Taking, this Lease shall terminate on the date of
such Taking. For purposes of the preceding sentence, a Taking shall be deemed a
"Total Taking" if all of the Leased Premises are taken or if, in Tenant's
reasonable opinion, the remainder of the Leased Premises that is not taken is
not reasonably susceptible to use by Tenant for the conduct of its business. In
the event of a dispute as to whether a Taking constitutes a Total Taking, the
matter shall be determined by Expedited Arbitration and (a) if the arbitrator
determines that the Taking in question is not a Total Taking the Taking in
question shall be deemed a Partial Taking or (b) if the arbitrator determines
that the Taking in question is a Total Taking this Lease shall terminate on the
later of the date of the determination or the date of such Taking. Basic Rent,
Supplemental Rent and Tax Payments due hereunder shall be payable through and
apportioned as of the date of termination, and (except as provided in Section
32(b) with respect to any holdover) Tenant shall have no liability for Basic
Rent, Supplemental Rent or Tax Payments which would otherwise have been payable
after the date of termination. Within 10 Business Days after termination of the
Lease in accordance with this Section 16.2, Landlord shall return to Tenant all
Basic Rent
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and Tax Payments previously paid, if any, which is attributable to the period
after such termination.
If this Lease shall terminate pursuant to this Section 16.2 on or
prior to June 1 2008, Tenant shall pay to Landlord an amount equal to the sum of
(x) the Unamortized Fit-Out Work Investment as of the date of termination, (y)
if the date of termination shall be other than the first day of a month,
interest at the Fit-Out Work Interest Rate on such Unamortized Fit-Out Work
Investment from the first day of the month in which the date of termination
shall occur to the date of termination, and (z) the Notional Make Whole Amount
as of the date of termination. In such a case, Tenant shall also reimburse
Landlord, within 10 days of Landlord's demand, any document preparation fee,
recording fee, attendance fee or similar fee charged by any of Landlord's
lenders, not exceeding $10,000 in the aggregate for all lenders, by reason of
Landlord applying the sum received pursuant to this paragraph to prepayment of
any of Landlord's mortgage debt due to such lender.
Any claim for compensation resulting from a Total Taking may be
settled by Landlord without Tenant's consent. Notwithstanding the foregoing, in
case of any Total Taking in respect of which Tenant will be required to make any
payment pursuant to the preceding paragraph (i) Tenant shall be entitled, at
Tenant's expense, to participate in the prosecution of such claim, and (ii) the
same shall not be settled without Tenant's consent unless the amount of such
settlement is sufficient to pay in full the Tenant's Total Taking Amount in
respect of such Total Taking.
16.3 Partial Taking
In case of a Taking other than a Total Taking (a "Partial Taking")
(a) this Lease shall remain in full force and effect; provided, that on the date
of such Taking this Lease shall terminate as to the portion of the Leased
Premises taken (which portion shall be deemed excluded from the Leased Premises)
and if the portion of the Leased Premises that was taken shall include any area
designed for tenant occupancy, the Basic Rent shall be reduced by multiplying
the same by a fraction, the numerator of which is the rentable square footage of
the portion of the Leased Premises that was taken and the denominator of which
is the rentable square footage of the Leased Premises prior to the Taking (the
"Taking Fraction") and (b) Tenant, whether or not the awards or payments, if
any, on account of such Taking shall be sufficient for the purpose shall
promptly commence Restoration of the Leased Premises (exclusive of the taken
portion) and thereafter diligently prosecute the same to completion in
accordance with the Plans and Specifications therefor (as approved by Landlord
or as determined by the Appropriate Engineer to be required to have been
approved by Landlord pursuant to this Lease). Notwithstanding any Partial
Taking, the Supplemental Rent shall not be reduced or otherwise abated.
Any claim for compensation resulting from a Partial Taking may be
settled by Landlord without Tenant's consent; provided, that if the portion
thereof awarded for Restoration is less than the estimated cost of such
Restoration then Tenant shall have a right to approve any such settlement, such
approval not to be unreasonably withheld, and if the portion of the Leased
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Premises that was taken shall include any Fit-Out Work, then Tenant shall have
the right to participate, at Tenant's expense, in the prosecution of such claim
and the right to approve any such settlement, such approval not to be
unreasonably withheld. Any dispute under the preceding sentence should be
resolved by the Appropriate Engineer.
16.4 Application of Award
(a) In the event of a Total Taking, the award for such Taking,
including interest, if any, paid by the condemning authority through the date of
payment of such award (the "Condemnation Proceeds"), shall be paid as follows:
(i) Landlord shall first be entitled to receive such
portion of the Condemnation Proceeds as shall
equal the Notional Main Loan Outstanding Balance
on the date of the Total Taking, plus interest
thereon at the Main Interest Rate from the date of
the Total Taking through the day of payment of
such amount to Landlord;
(ii) subject to Section 16.4(e), Tenant shall next be
entitled to receive such portion of the
Condemnation Proceeds as shall equal the amount
payable by Tenant pursuant to Section 16.2 by
reason of such Total Taking, if any, plus interest
thereon at the Fit-Out Work Interest Rate from the
date of such payment by Tenant through the day of
payment of such amount to Tenant (the amount so
payable by Tenant, plus such interest, is herein
called "Tenant's Total Taking Amount"); and
(iii) Landlord shall be entitled to receive the balance
of such Condemnation Proceeds.
(b) In the event of a Partial Taking, the Condemnation Proceeds
shall be paid as follows:
(i) Tenant shall first be entitled to receive such
portion of the Condemnation Proceeds as shall be
awarded for Restoration, plus interest thereon (if
paid by the condemning authority) at the rate paid
by the condemning authority from the date of the
Partial Taking through the day of payment of such
amount to the Depositary (and the amount referred
to in this clause (i) shall be paid to the
Depositary for disbursement in accordance with
Article 17); and
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(ii) (A) If the portion of the Leased Premises that was
taken does not include any Fit-Out Work, then
Landlord shall be entitled to the entire balance
of such award; or (B) if the portion of the Leased
Premises that was taken does include any Fit-Out
Work, then the balance of such award exclusive of
any interest thereon paid by the condemning
authority (the "balance to be apportioned") shall
be apportioned between Landlord and Tenant such
that (x) Landlord shall be entitled to receive all
of the balance to be apportioned exclusive of the
portion thereof allocable to the Fit-Out Work that
was so taken, and (y) Tenant shall be entitled to
receive the portion of the balance to be
apportioned allocable to the Fit Out Work, and (z)
all interest shall be apportioned in the same
proportions.
(c) If the order or decree in any condemnation or similar
proceeding shall fail separately to state the amount of the compensation for
Restoration and/or the apportionment of the Condemnation Proceeds pursuant to
Section 16.4(a) or (b), and if Landlord and Tenant cannot agree thereon within
30 days after the final award or awards shall have been fixed and determined,
the dispute shall be determined by arbitration.
(d) Nothing in this Lease shall preclude Tenant from claiming
or receiving from the condemning authority any compensation to which Tenant may
otherwise lawfully be entitled in respect of Tenant's furniture, furnishings,
trade fixtures or business equipment furnished, installed or placed in the
Improvements by Tenant at Tenant's sole cost and expense or for moving to a new
location or for interruption of, or damage to, Tenant's business; provided, that
any award made is separate to Tenant and not part of damages recoverable by
Landlord.
(e) Notwithstanding the provisions of Section 16.4(a), if and
to the extent that on the date of the payment by the condemning authority of the
Condemnation Proceeds with respect to any Total Taking Tenant shall not have
paid the amount payable by Tenant pursuant to Section 16.2 by reason of such
Total Taking, the amount which would otherwise be paid to Tenant under clause
(ii) of Section 16.4 shall be paid to Landlord and shall be a credit against
Tenant's obligation under the second paragraph of Section 16.2
16.5 Temporary Taking
Sections 16.2 through 16.4 to the contrary notwithstanding, the
provisions of this Section 16.5 shall govern any Taking for temporary use. In
the case of any Taking for temporary use, this Lease shall remain in effect as
to the Leased Premises (including the portion taken) and there shall be no
reduction in Basic Rent or (unless otherwise legally required) other change in
the obligations of Tenant hereunder. If the term of the temporary Taking shall
not extend (a) beyond the next Termination Date in respect of which Tenant has
or may then exercise a
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Termination Option (the "Next Available Termination Date"), or (b) if Tenant has
not exercised any Termination Option and no longer has available any Termination
Options, beyond the Expiration Date, then in either such case the entire award
shall be payable to Tenant and Tenant shall make Restoration of the Leased
Premises in accordance with the requirements of this Lease. If the term of the
temporary Taking shall extend (i) beyond the Next Available Termination Date, or
(ii) if Tenant has not exercised any Termination Option and no longer has
available any Termination Options, beyond the Expiration Date, then in either
such case Tenant need not make Restoration, the portion of the award applicable
to the Restoration shall be paid to Landlord and the balance of the award shall
be apportioned between Landlord and Tenant as of such Next Available Termination
Date or the Expiration Date (as the case may be) by the condemning authority or,
if the condemning authority fails to act, by arbitration; provided, that if
pursuant to the foregoing provisions of this sentence, such balance is
apportioned as of a Next Available Termination Date with respect to which Tenant
has not exercised its Termination Option and Tenant shall not thereafter
exercise such Termination Option then, in each case, such balance (together with
interest thereon at the Prime Rate from the date such award was originally paid
to and including the date such reapportioned award is payable) shall be
reapportioned between Landlord and Tenant as of the next succeeding Termination
Date.
17. Disbursement of Deposited Sums
(a) Subject to the provisions of this Article 17 the Depositary
shall, from time to time as any Restoration proceeds and within 10 Business Days
after receipt of Tenant's request therefor (but in no event more frequently than
once during any 30-day period), make disbursements (collectively, "Restoration
Advances") to Tenant from the funds deposited with the Depositary pursuant to
Sections 15.3(b), 15.4(d)(iii) or 16.4(b)(i) (collectively, the "Deposited
Sums") for application to the Costs of the Restoration in question.
Simultaneously with the delivery of each such request to the Depositary, Tenant
shall give notice thereof to Landlord (which notice shall be accompanied by
copies of such request and all other papers delivered to the Depositary).
(b) No Restoration Advance shall be made on account of any fire or
other casualty until Tenant shall have delivered evidence reasonably
satisfactory to Landlord that an aggregate amount at least equal to the
Significant Proceeds Amount has been expended for Costs in connection with the
Restoration, and Restoration Advances on account of any fire or other casualty
shall be made only for amounts paid or payable by Tenant for Costs which are in
excess of the Significant Proceeds Amount.
(c) No Restoration Advance (other than the final Restoration
Advance) in respect of any fire or other casualty or any Partial Taking shall be
due unless Tenant's request for such Restoration Advance shall be accompanied
by:
(i) a certificate of Tenant addressed to the Depositary and
Landlord (in form reasonably satisfactory to Landlord) stating that (A) the
amount of the Restoration Advance then requested has been paid or is then duly
payable by Tenant to Contractors (whose names and addresses and a description of
the work involved shall be stated), (B) the amount of
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the Restoration Advance then requested (when taken together with the aggregate
amount of all Restoration Advances theretofore made by the Depositary) exceeds
neither 90% of the Deposited Sums (together with interest on such amount) nor
the Installed Value of the Restoration work in question (Tenant's certificate to
set forth a calculation of the Installed Value), and (C) no part of cost of the
work described in any previous or then pending request for a Restoration Advance
has been or is being made the basis for the Restoration Advance then being
requested; and
(ii) a certificate of the architect or engineer who prepared
the related Plans and Specifications addressed to the Depositary and Landlord
(in form reasonably satisfactory to Landlord) stating in substance that (A) the
calculation of Installed Value as set forth in the certificate referred to in
the foregoing clause (i) is correct, (B) the work has been performed in a good
and workmanlike manner and in accordance with the Plans and Specifications (as
approved by Landlord or as determined by the Appropriate Engineer to have been
required to be approved by Landlord pursuant to this Lease) and (C) the
unadvanced portion of the Deposited Sums in question, together with any
additional amount to be available from the insurer, are at least equal to the
Costs of the Restoration which will remain unpaid after giving effect to the
Restoration Advance in question.
(d) No Restoration Advance (including the final Restoration Advance)
in respect of any fire or other casualty or any Partial Taking shall be due
unless:
(i) no certificate delivered to the Depositary or Landlord by
Tenant or by any architect or engineer in connection with the Restoration in
question shall have been materially incorrect at the time of delivery (Landlord
to give notice to Tenant within 10 Business Days after Landlord's receipt of the
certificate in question if Landlord contends that such certificate was
materially incorrect; any such dispute to be determined by the Appropriate
Engineer);
(ii) Landlord shall have received true copies of all bills
paid or payable by Tenant to Contractors which form the basis for the
Restoration Advance in question;
(iii) in the case of a Restoration Advance to be made on
account of a fire or other casualty, Tenant shall have waived its right to
terminate this Lease pursuant to Section 15.4(a) on account of such damage or
other casualty; and
(iv) no Event of Default shall have occurred and be
continuing.
(e) Neither any final Restoration Advance nor the release of any
remaining balance of Deposited Sums pursuant to Article 17(f) shall be made
unless:
(i) Tenant's request for such Restoration Advance or such
release shall be accompanied by (x) a certificate of Tenant addressed to the
Depositary and Landlord (in from reasonably satisfactory to Landlord) stating
that Tenant's best knowledge (after due inquiry) there shall (after giving
effect to such Restoration Advance or release) be no outstanding indebtedness
due for labor, materials, supplies, permits or services in any manner connected
with the Restoration which if unpaid might be the basis for any type of lien on
the Leased Premises, or
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any part thereof, and that (in the case of a request for a final Restoration
Advance) the amount requested has been paid or is then duly payable to
Contractors (whose names and addresses and a description of the work involved
shall be stated) and (y) a certificate of the architect or engineer who prepared
the related Plans and Specifications addressed to the Depositary and Landlord
(in form reasonably satisfactory to Landlord) stating that the Restoration work
has been fully completed in a good and workmanlike manner and in accordance with
the Plans and Specifications (as approved by Landlord or as determined by the
Appropriate Engineer to have been required to be approved by Landlord pursuant
to this Lease); and
(ii) the Depositary and Landlord shall have received (x) an
instrument in writing from any title company insuring Landlord's estate in the
Leased Premises certifying that there are no undischarged mechanics', laborers'
or materialmen's liens affecting any part of the Leased Premises (other than
liens, if any, in respect of which Landlord has consented to take security
pursuant to Article 13(a)(ii)) and (y) evidence reasonably satisfactory to
Landlord that Tenant has obtained waivers of mechanics', laborers' or
materialmen's liens or releases of such liens from all Contractors engaged in
the Restoration.
(f) Subject to Article 17(g), any balance of a Deposited Sum
(together with interest thereon) remaining with the Depositary upon the
completion of any Restoration on account of fire or other casualty or any
Partial Taking shall (i) in the case of fire or other casualty, be remitted to
Tenant promptly upon its request and (ii) in the case of a Partial Taking, be
remitted to Landlord promptly upon its request.
(g) Notwithstanding anything to the contrary contained in this
Lease, upon any early termination of this Lease (including, without limitation,
any early termination pursuant to Section 15.4(a)), the Depositary shall
forthwith remit to Landlord the balance of all Deposited Sums (together with
accrued interest thereon) held by the Depositary immediately prior to such
termination.
(h) Each Restoration Advance shall be made by the Depositary as soon
as reasonably practicable, but in no event later than the date which is 30 days
after Tenant shall have satisfied all of the applicable conditions to such
Restoration Advance specified in this Article 17.
18. Certificate as to No Default, etc.
Landlord and Tenant shall each deliver to the other within 10 days after
request, an Officer's Certificate stating (a) that this Lease is unmodified and
in full force and effect (or, if there have been modifications, that this Lease
is in full force and effect, as modified, and stating the modifications), (b)
the dates to which the Basic Rent, Supplemental Rent and Tax Payments have been
paid and that, to the best knowledge (after due inquiry) of the party giving
such certificate, no Event of Default has occurred and is continuing hereunder,
or, if any Event of Default has occurred and is continuing specifying the nature
and period of existence thereof, and (c) that, to the best knowledge (after due
inquiry) of the party giving such certificate, the other party has fulfilled all
of its obligations under this Lease or, if not, stating in what respects such
other party has failed to do so. Any Officer's Certificate may be relied upon by
any prospective
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purchaser or mortgagee of the Leased Premises or any part thereof or interest
therein or by any prospective assignee of this Lease or any prospective
subtenant.
19. Right of Landlord to Perform Tenant's Covenants, etc.
(a) If Tenant shall fail to make any payment or perform any act required
to be made or performed by Tenant hereunder, Landlord may (but shall be under no
obligation to) without waiving or releasing any obligation or default:
(i) in case of emergency, or reasonably foreseeable or actual
criminal liability,
(ii) if such failure is under Section 14.1(a), 14.2 or 14.4,
and if Landlord shall give notice to Tenant referring to this Section 19(a)
(ii) and specifying such failure and requiring it to be remedied and Tenant
shall not remedy such failure within 7 days after the giving of such notice,
(iii) if such failure is under Section 14.3, and if Landlord
shall give notice to Tenant referring to this Section 19(a)(iii) and specifying
such failure and requiring it to be remedied and Tenant shall not remedy such
failure within 4 days after the giving of such notice,
(iv) if such failure is under Article 12, and if Landlord
shall give notice to Tenant referring to this Section 19(a)(iii) and specifying
such failure and requiring it to be remedied and Tenant shall not remedy such
failure within 15 days after the giving of such notice; provided, that in case
such failure cannot with due diligence be remedied by Tenant within a period of
15 days, if Tenant proceeds as promptly as may be reasonably possible after the
receipt of such notice and with all due diligence to remedy such failure
thereafter to prosecute the remedying of such failure with all due diligence,
the period of time after the giving of such notice by Tenant within which to
remedy such failure shall be extended for such period as may be necessary to
remedy the same with all due diligence,
(v) if such failure is under Article 13, or
(vi) if such failure is under any provision of this Lease
other than Articles 12, 13 or 14, subject to the provisions of Section 19(b), if
Landlord shall give notice to Tenant referring to this Section 19(a)(vi) and
specifying such failure and requiring it to be remedied and Tenant shall not
remedy such failure within 30 days after the giving of such notice; provided,
that in case such failure cannot with due diligence be remedied by Tenant within
a period of 30 days, if Tenant proceeds as promptly as may be reasonably
possible after the giving of such notice and with all due diligence to remedy
such failure and thereafter to prosecute the remedying of such failure with all
due diligence, the period of time after the receipt of such notice by Tenant
within which to remedy such failure shall be extended for such period as may be
necessary to remedy the same with all due diligence,
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make such payment or perform such act for the account and at the expense of
Tenant, and may enter upon the Leased Premises or any part thereof for such
purpose and take all such action thereon as, in the opinion of Landlord, may be
necessary or appropriate therefor. All payments so made by Landlord and all
costs and expenses (including, without limitation, Costs and attorneys' fees and
expenses) incurred in connection therewith, together with interest thereon at
the Interest Rate, shall be paid by Tenant to Landlord within 10 days after
Tenant's receipt of Landlord's demand therefor referring to this Article 19 and
Section 22(c) accompanied by copies of all bills therefor.
(b) If within 15 days after the date on which Tenant receives notice
from Landlord under Section 19(a)(vi), Tenant shall commence an arbitration
seeking a determination that the matter referred to in Landlord's notice under
Section 19(a)(vi) does not constitute a failure to make a payment or perform an
act required to be made or performed hereunder, then (i) Landlord may not make
such payment or perform such act for the account and at the expense of Tenant
and may not enter upon the Leased Premises or any part thereof for such purpose
or take action thereon prior to the date upon which the determination in
arbitration is made (the "Determination Date") and (ii) if the action is
determined in a manner adverse to Tenant, the 30 day (or longer) period
referred to in Section 19(a)(vi) above shall be extended to the date 30 days
after the Determination Date (or for such longer period commencing on the
Determination Date as may reasonably be required in order to remedy the matters
in question with all due diligence).
20. Assignment; Subleases
(a) Tenant may, subject to the restrictions on the use of the Leased
Premises set forth in this Lease, sublet the Leased Premises or any part
thereof, or assign this Lease without the consent of Landlord; provided, that
(i) Tenant shall deliver to Landlord a fully executed counterpart of each such
sublease, assignment or other relevant instrument and any modification or
amendment of any of the foregoing promptly after execution thereof and shall
notify Landlord of any occupancy no later than the date on which such occupancy
is to be taken, (ii) no assignment, whether by operation of law, consolidation,
merger or otherwise, shall be made unless within 15 days thereafter the assignee
shall execute and deliver to Landlord an instrument assuming all the obligations
of Tenant under this Lease thereafter accruing, (iii) no sublease, assignment or
other transaction and no assumption, shall affect or reduce any of the
obligations of Tenant (including the original Tenant and each such assignee)
hereunder but this Lease and all the obligations of Tenant (including the
original Tenant and each such assignee) hereunder shall continue in full force
and effect as the obligations of a principal and not the obligations of a
guarantor or surety and (iv) each sublease, assignment or other instrument made
by Tenant after the date hereof shall be subject and subordinate to this Lease
and the terms and provisions hereof. Each sublease of all or any part of the
Leased Premises made by Tenant after the date hereof shall provide that if
Landlord shall terminate this Lease prior to the scheduled expiration date of
such sublease then, upon Landlord's request, the subtenant thereunder (and
anyone holding by, through or under such subtenant) shall attorn to Landlord
upon all of the terms, covenants and conditions of such sublease. As and for
security for the due and punctual payment and performance of its obligations
under this Lease, Tenant hereby assigns to Landlord all rents and other sums due
to Tenant under any sublease of all or any part of the Leased
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Premises; provided, that other than upon the occurrence of and during the
continuance of an Event of Default Tenant may (A) freely modify or terminate all
or any of the subleases or otherwise deal with all or any of the subtenants, (B)
collect rents when due, (C) permit and collect prepayments of rent and (D)
retain all such rents (paid when due or prepaid) and other sums free of any
claim or lien of Landlord. All amounts received by Landlord pursuant to the
preceding sentence shall be set-off against Tenant's obligations hereunder.
Tenant shall not mortgage, pledge or otherwise encumber this Lease or any
interest therein.
(b) The interest of Landlord in this Lease and/or in and to the
Leased Premises may, at any time, be sold, conveyed, assigned or otherwise
transferred, or mortgaged, pledged or otherwise encumbered, without the consent
of Tenant. Upon any conveyance of the Leased Premises and the assumption by the
new owner of the Leased Premises of the obligations of Landlord hereunder
thereafter accruing, the conveyor shall be completely relieved of and from any
and all obligations of Landlord hereunder thereafter accruing, and Tenant shall
thereupon look only to the new owner of the Leased Premises for the performance
of any obligations of Landlord hereunder thereafter accruing.
21. Vaults
Landlord shall have no responsibly for title to or any other aspect of
vaults and areas, if any, now or hereafter built extending beyond the boundary
line of the Land. Tenant may occupy and use the same during the Term, subject to
this Lease and any Legal Requirements. No revocation on the part of any
governmental department or authority of any license or permit to maintain and
use any such vault and areas shall in any way affect this Lease or the amount of
the rent or any other charge payable by Tenant hereunder. Tenant shall comply
with all such licenses and permits, and if any such license or permit shall be
revoked, Tenant shall do and perform all such work as may be necessary to comply
with any order revoking the same.
22. Events of Default; Termination
Each of the following shall constitute an Event of Default:
(a) if Tenant shall fail to pay any Basic Rent, Supplemental Rent,
Tax Payment or Cancellation Payment, when and as the same becomes due and
payable and such failure continues for a period of 7 days after notice from
Landlord of such failure referring to this Section 22(a), specifying such
failure and requiring it to be remedied is given to Tenant; or
(b) if, in any period of 12 consecutive months, (i) in two separate
instances, Tenant shall fail to pay any Basic Rent, Supplemental Rent or Tax
Payment when and as the same becomes due and payable and notice of such failure
has been given to Tenant under Section 22(a) and (ii) in a third or later
instance, Tenant shall fail to pay any Basic Rent, Supplemental Rent or Tax
Payment coming due when and as the same becomes due and payable;
(c) if Tenant shall fail to pay any sum due to Landlord under the
Initial Improvements Agreement or under this Lease other than any Basic Rent,
Supplemental Rent or Tax Payment when and as the same becomes due and payable
and such failure continues for a
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period of 30 days after notice from Landlord of such failure referring to this
Section 22(c), specifying such failure and requiring it to be remedied is given
to Tenant;
(d) if Tenant shall fail to pay any amount under Article 19 when
due; or
(e) if Tenant shall fail to perform or comply with any term of
Article 13 or 14 and such failure continues for a period of 15 days after notice
from Landlord of such failure referring to this Section 22(e), specifying such
failure and requiring it to be remedied is given to by Tenant; or
(f) if Tenant shall fail to perform or comply with any term of
Article 12, and such failure shall continue for more than 30 days after notice
from Landlord of such failure referring to this Section 22(f), specifying such
failure and requiring it to be remedied is given to Tenant; provided, that in
case such failure cannot with due diligence be remedied by Tenant within a
period of 30 days, if Tenant proceeds as promptly as may be reasonably possible
after the giving of such notice and with all due diligence to remedy such
failure and thereafter to prosecute the remedying of such failure with all due
diligence, the period of time after the receipt of such notice by Tenant within
which to remedy such failure shall be extended for such period as may be
necessary to remedy the same with all due diligence; or
(g) if Tenant shall fail to perform or comply with any term of this Lease or the
Initial Improvements Agreement (other than any failure referred to in a previous
subdivision of this Article 22), and such failure shall continue for more than
30 days after notice from Landlord of such failure referring to this Section
22(g), specifying such failure and requiring it to be remedied is given to
Tenant; provided, that in case such failure cannot with due diligence be
remedied by Tenant within a period of 30 days, if Tenant proceeds as promptly as
may be reasonably possible after the receipt of such notice and with all due
diligence to remedy such failure and thereafter to prosecute the remedying of
such failure with all due diligence, the period of time after the receipt of
such notice by Tenant within which to remedy such failure shall be extended for
such period as may be necessary to remedy the same with all due diligence;
provided further that, in the case of this Section 22(g) only, if Tenant within
15 days after the receipt of such notice of default shall dispute the existence
of such failure the matter shall be determined by arbitration and if it shall be
determined that such failure exists, the time within which Tenant shall have to
remedy the same shall run from the date of such determination; provided finally,
however, that if (i) by reason of such failure, any Superior Mortgagee shall
give notice of default under the Superior Mortgage held by it, and (ii) Landlord
shall so notify Tenant, then the immediately preceding proviso shall cease to be
effective with respect to such failure and the time within which Tenant shall
have to remedy the same shall run from the date of Landlord's notice under this
proviso.
This Lease and the term and estate hereby granted are subject to the
limitation that if an Event of Default shall occur then, in addition to any
other remedies available to Landlord at law or in equity, Landlord may at any
time during the continuance of such Event of Default give to Tenant a notice (a
"Lease Termination Notice") specifying a date, not less than five days after the
date of such notice, on which specified date this Lease shall terminate, and on
such date, subject
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to Article 25 relating to the survival of Tenant's obligations, this Lease and
the term and estate hereby granted shall expire and terminate by limitation and
all rights of Tenant under this Lease shall cease, but Tenant shall remain
liable for damages as provided herein or pursuant to law. All costs and expenses
incurred by or on behalf of Landlord (including, without limitation, attorneys'
fees and expenses) occasioned by any Event of Default by Tenant under this Lease
shall be payable by Tenant upon demand by Landlord (together with interest
thereon at the Interest Rate).
23. Repossession
If an Event of Default shall have occurred and be continuing, Landlord,
after termination of this Lease pursuant to Article 22, may enter upon and
repossess the Leased Premises or any part thereof by summary proceedings or
other legal proceedings and may remove Tenant and all other persons and any and
all property therefrom. Landlord shall be under no liability for or by reason of
such entry, repossession or removal.
24. Reletting
At any time or from time to time before or after the repossession of the
Leased Premises or any part thereof pursuant to Article 23, Landlord may (but
shall have no obligation to) relet the Leased Premises or any part thereof for
the account of Tenant, in the name of Tenant or Landlord or otherwise, without
notice to Tenant, for such term or terms (which may be greater or less than the
period which would otherwise have constituted the balance of the Term) and on
such conditions (which may include concessions or free rent) and for such uses
as Landlord, in its uncontrolled discretion may determine, and may collect and
receive the rents therefor. Landlord shall not be responsible or liable for any
failure to relet the Leased Premises or any part thereof or for any failure to
collect any rent due upon any such reletting.
25. Survival of Tenant's Obligations; Damages
25.1 Termination of Lease Not to Relieve Tenant of Obligations
No expiration or termination of the Term pursuant to Article 22 or
otherwise (other than a termination of this Lease under and in accordance with
Section 1.4, Article 15 or Article 16), and no repossession of the Leased
Premises or any part thereof pursuant to Article 23 or otherwise, shall relieve
Tenant of its liabilities and obligations accruing hereunder prior to such
expiration or termination, all of which shall survive such expiration,
termination or repossession. The term "Notional Expiration Date" shall refer to
(i) if prior to such expiration, termination or repossession
pursuant Articles 22 or 23 Tenant shall have exercised any
Termination Option, the Termination Date with respect thereto,
and
(ii) if prior to such expiration, termination or repossession
pursuant to Article 22 or 23 Tenant shall not have exercised
any Termination Option, the Termination Date with respect to
the earliest
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Termination Option which, as of the date of such expiration,
termination or repossession, had not lapsed without exercise
or been waived or, if all of the Termination Options shall
then have lapsed without exercise and/or been waived, the
Expiration Date,
provided, that, in case of any expiration, termination or repossession pursuant
to Articles 22 or 23 arising out of any Event of Default arising out of Tenant's
failure timely to pay the Cancellation Payment by reason of the exercise of a
Termination Option providing for the termination of this Lease as of September
30, 2004 or September 30, 2006, the Notional Expiration Date shall be deemed for
all purposes of this Lease (including without limitation Section 25.2(c) and
Section 25.3(b)) to be June 30, 2008. In case of any expiration, termination or
repossession pursuant to Articles 22 or 23 arising out of any Event of Default
arising out of Tenant's failure timely to pay the Cancellation Payment by reason
of the exercise of a Termination Option providing for the termination of this
Lease as of September 30, 2004, September 30, 2006 or June 30, 2008, Tenant
shall be entitled to a credit against the amounts payable by it under Section
25.2(b) and (c) and Section 25.3(b) equal to the amount of any payments made by
Tenant under Section 1.4.
Notwithstanding any provision of this Lease to the contrary (except as provided
in the next sentence), in case of any expiration or termination of the Term of
this Lease or repossession of the Leased Premises pursuant to Articles 22 or 23,
Tenant's liability in respect of any period after the Notional Expiration Date
shall be limited to that provided for in Section 25.2 and/or Section 25.3. The
preceding sentence shall not release Tenant from (i) any obligations under this
Lease with respect to any period after the Notional Expiration Date but prior to
Tenant's surrender to Landlord of vacant possession of the Leased Premises, or
(ii) any liability (other than for rent or on account of the non-payment
thereof) arising out of any act or omission in violation of this Lease committed
by Tenant or any party claiming by, through or under Tenant, or (iii) any
obligation which under Section 35(k) survives the termination or expiration of
this Lease.
25.2 Current Damages and Damages in Respect of Supplemental Rent
In the event of any such expiration, termination or repossession pursuant to
Articles 22 or 23, Tenant shall pay to Landlord
(a) (i) immediately upon such expiration, termination or
repossession, the Basic Rent, Supplemental Rent, Tax Payments and all other
sums required to be paid by Tenant pursuant to this Lease up to the time of such
expiration, termination or repossession, and (ii) thereafter Tenant, until the
Notional Expiration Date, and whether or not the Leased Premises or any part
thereof shall have been relet, shall be liable to Landlord for, and shall pay to
Landlord, as liquidated and agreed current damages for Tenant's default, (a) the
Basic Rent and Tax Payments and all other sums which would be payable under this
Lease by Tenant in the absence of such expiration, termination or repossession
(other than Supplemental Rent), plus (b) all reasonable expenses of Landlord in
connection with such expiration, termination and repossession and any reletting
effected for the account of Tenant pursuant to Article 24 (including, without
limitation, all repossession costs, brokerage commissions, legal expenses,
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attorneys' fees, employees' expenses, alteration costs and expenses of preparing
for such reletting) less (c) the proceeds, if any, of such reletting. Tenant
shall pay such current damages monthly on the days on which the Basic Rent and
Tax Payments and other sums would have been payable under this Lease in the
absence of such expiration, termination or repossession, and Landlord shall be
entitled to recover the same from Tenant on each such day, plus
(b) immediately upon such expiration, termination or repossession,
if such expiration, termination or repossession shall occur on or prior to June
1, 2008, the sum of (i) the then present value, discounted at the Fit-Out Work
Interest Rate, of the Supplemental Rent which would be payable under this Lease
from the date of such expiration, termination or repossession for what would be
the then unexpired Term in the absence of such expiration, termination or
repossession, plus (ii) the Notional Make-Whole Amount as of the date of such
expiration, termination or repossession, plus (iii) any charges (other than
prepayment or make-whole charges) incurred by Landlord to any of Landlord's then
existing lenders by reason of such expiration, termination or repossession.
(c) upon the Notional Expiration Date, if the Notional Expiration
Date is September 30, 2004 or September 30, 2006, the sum of the Basic Rent and
Tax Payments that would be payable for the 6 month period following such
Notional Expiration Date.
25.3 Final Damages
At any time after any such expiration, termination or repossession,
whether or not Landlord shall have collected any current damages as aforesaid,
Landlord at its option shall be entitled to recover from Tenant and Tenant shall
pay to Landlord on demand, as and for liquidated and agreed final damages for
Tenant's default and in lieu of all damages under Section 25.2(a)(ii) and
Section 25.2(c) (but not in lieu of damages under Section 25.2(b) which shall be
payable in addition to the damages payable under this Section 25.3) beyond the
date of such demand, an amount equal to the sum of
(a) the excess, if any, of (i) the then present value
discounted at the Main Interest Rate in effect on the date of termination
of this Lease, of the Basic Rent, Tax Payments and all other sums
(exclusive of Supplemental Rent) which would be payable under this Lease
from the date of such demand (or, if it be earlier, the date to which
Tenant shall have satisfied in full its obligations under Section 25.2(a)
to pay current damages) to the Notional Expiration Date (such Tax Payments
during the First and Second Rent Periods to be determined pursuant to
Exhibit B attached hereto and during the Third Rent Period and Fourth Rent
Period to be computed based on the assumption that Taxes will increase by
three percent per annum (on a compounded basis) over the Taxes in effect
for the Tax Year last ended prior to such expiration, termination or
repossession), over (ii) the sum of (x) the then present value, discounted
at the Prime Rate in effect on the date of termination of this Lease, of
the then fair net rental value (i.e. the fixed rent that would be paid
assuming that Tenant pays all Taxes and operating expenses for the
Improvements) of the Leased Premises for the same period, and (y) the then
present value, discounted at the Prime Rate in effect of the date of
termination of this
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Lease, of the Taxes for the same period (such Taxes to be computed on the
basis of the assumption that Taxes will increase three percent per annum
(on a compounded basis) above the Taxes in effect for the Tax Year last
ended prior to such expiration, termination or repossession), plus
(b) if the Notional Expiration Date is September 30, 2004 or
September 30, 2006, the sum of the Basic Rent and Tax Payments that would
be payable for the 6 month period following such Notional Expiration Date.
If any statute or rule of law shall limit the amount of such liquidated final
damages to less than the amount above agreed upon, Landlord shall be entitled to
the maximum amount allowable under such statute or rule of law, but not in
excess of the amount provided by this Section 25.3.
26. No Waiver
No failure by Landlord or Tenant to insist upon the strict performance of
any term hereof or to exercise any right, power or remedy consequent upon a
breach thereof, and no payment or acceptance of full or partial rent during the
continuance of any such breach, shall constitute a waiver of any such breach or
of any such term. No waiver of any breach shall affect or alter this Lease,
which shall continue in full force and effect, or the rights of Landlord or
Tenant with respect to any other then existing or subsequent breach.
27. Remedies Cumulative
Each right, power and remedy of Landlord or Tenant provided for in this
Lease or now or hereafter existing at law or in equity or by statute or
otherwise shall be cumulative and concurrent and shall be in addition to every
other right, power or remedy provided for in this Lease or now or hereafter
existing at law or in equity or by statute or otherwise, and the exercise by
Landlord or Tenant of any one or more of the rights, powers or remedies provided
for in this Lease or now or hereafter existing at law or in equity or by statute
or otherwise shall not preclude the simultaneous or later exercise by Landlord
or Tenant of any or all such other rights, powers or remedies. All sums payable
by Tenant to Landlord hereunder (other than the Basic Rent and Supplemental
Rent) shall be deemed additional rent and Landlord shall have all of the same
rights, powers and remedies in the case of the failure by Tenant to pay any such
sum when due as Landlord would have in the case of the failure by Tenant to pay
Basic Rent or Supplemental Rent when due.
28. Acceptance of Early Termination or Surrender
No early termination of this Lease (other than pursuant to and in
accordance with Section 1.4, Article 15 or Article 16) or surrender to Landlord
of this Lease, and no surrender of the Leased Premises or any part thereof or of
any interest therein, shall be valid or effective unless agreed to and accepted
in writing by Landlord, and no act by Landlord, other than such a written
agreement and acceptance by Landlord, shall constitute an agreement thereto or
acceptance thereof.
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29. No Merger of Title
There shall be no merger of this Lease nor of the leasehold estate created
by this Lease with the fee estate or any other leasehold estate in the Leased
Premises or any part thereof by reason of the fact that the same person, firm,
corporation or other entity may acquire or own or hold, directly or indirectly,
(a) this Lease or the leasehold estate created by this Lease or any interest in
this Lease or in any such leasehold estate, and (b) the fee estate or any other
leasehold estate in the Leased Premises or any part thereof or any interest in
such fee estate or leasehold estate, and no such merger shall occur unless and
until all persons, firms, corporations and other entities having an interest in
or lien upon (i) this Lease or the leasehold estate created by this Lease and
(ii) the fee estate or any other leasehold estate in the Leased Premises or any
part thereof shall join in a written instrument effecting such merger and shall
duly record the same.
30. Exculpation
(a) Except as provided below, no general or limited partner of The
Goldman Sachs Group, L.P., a Delaware limited partnership ("GS"), or of any
assignee which is a successor to substantially all the assets and business of
GS (a "successor-assignee") shall have any personal liability under this Lease
and any judgment taken or rendered against GS or any successor-assignee
hereunder or related hereto shall be enforceable only against the property of GS
or such successor-assignee; provided, that:
(i) if at any time GS or a successor-assignee (x) shall
dissolve (other than pursuant to, or as a result of, insolvency proceedings) and
(y) shall distribute its assets without adequately providing for any and all of
its obligations and liabilities under this Lease, then all persons who were
general partners of GS or of such successor-assignee immediately prior to the
dissolution shall be personally and jointly and severally liable to GS or such
successor-assignee or the benefit of Landlord to extent of any loss, cost,
damage or injury which Landlord may suffer as a result of the failure to make
adequate provision for such obligations and liabilities; and
(ii) this Article 30(a) shall not relieve any general or
limited partner of GS or of a successor-assignee from any obligation to restore
to GS or such successor-assignee any distributions of cash, property or other
assets by GS or such successor-assignee made to such partner which (x) were made
at any time when the distributor was insolvent or (y) resulted in the
distributor's becoming insolvent. For purposes of this Lease, GS or a
successor-assignee shall be "insolvent" if (A) it is generally unable to pay its
debts and other liabilities as they become due or (B) the sum of its debts is
greater than all of its property at a fair valuation (taking into account this
Lease and the liabilities of Tenant hereunder).
This Article 30(a) is for the sole benefit of GS and each successor-assignee.
Any other party acquiring the leasehold estate created by this Lease shall have
full personal liability hereunder.
(b) Any judgment taken or rendered against Landlord hereunder or
related hereto shall be enforceable only against the interest of Landlord in the
Project or, in the event of a sale, financing or other disposition by Landlord
of the Project or any part thereof, against cash,
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property or other assets of Landlord (but not of any member, partner,
stockholder, principal, officer or other person or entity which, directly or
indirectly, has an interest in Landlord) equal in amount to the proceeds of such
sale, financing or other disposition.
31. Definitions
As used in this Lease, the following terms have the following respective
meanings:
"Business Day" means any weekday on which the New York Stock Exchange, or
its successor, is open for business.
"Costs" means, with respect to any construction, improvements, alteration,
restoration, replacement, repairs, or rebuilding ("work"), the costs charged by
contractors, subcontractors and materialmen for all labor, materials, machinery
and equipment purchased, leased or used in connection with such work, fees and
compensation payable to contractors and subcontractors in connection with such
work, governmental fees and charges assessed or incurred in connection with such
work, fees and expenses of architects and engineers for estimates, surveys,
preliminary investigations, plans, drawings, specifications and supervision
related to such work, and the reasonable out-of-pocket expenses of
administration, supervision and inspection of such work.
"Deductible Amount" means, with respect to any insurance policy issued in
any month, the product of $500,000 multiplied by the fraction whose numerator is
the Index for the third month preceding the month in which such policy is issued
and whose denominator is the Index for April, 1997.
"Hazardous Substances" means any flammable or explosive materials, any
petroleum or petroleum products (including oil, crude oil, natural or synthetic
gas), any radioactive materials, any asbestos or asbestos containing materials,
PCBs, or any other hazardous or toxic waste, material or substance, including,
without limitation, any waste, material or substance now or hereafter included
in the definition of "hazardous substances," "hazardous wastes," hazardous
materials," "toxic substances," "toxic wastes" or "toxic materials" (or similar
term) contained in any Legal Requirement.
"Index" means, for any month the "Consumer Price Index" for such month for
all Urban Consumers, New York, New York-Northeastern New Jersey Area (1982-1984
= 100), published by the Bureau of Labor Statistics of the U.S. Department of
Labor or any successor index thereto. If the Index ceases to use 1982-1984 = 100
as basis of calculation, then the Index shall be adjusted to the figure that
would have been arrived at had the manner of computing the Index in effect at
the date of this Lease not been altered. In the event such Index (or a successor
index) is not available, another index reasonably selected by Landlord and
reasonably acceptable to Tenant shall be substituted therefor.
"Insurance Requirements" means all terms of or incorporated by reference
into any insurance policy covering or applicable to the Leased Premises.
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"Landlord" means only the owner, at the time in question, of the Project,
so that in the event of any transfer or transfers of title to the Project and
the assumption by the transferee of all of Landlord's obligations and liability
hereunder accruing after such transfer, the transferor shall be and hereby is
relieved and freed of all obligations of Landlord under this Lease accruing
after such transfer.
"Legal Requirements" means all laws, statutes, codes, acts, ordinances,
orders, judgments, decrees, injunctions, rules, regulations, permits, licenses,
authorizations, directions, health, safety, environmental and other requirements
of all governmental, public or quasi-public departments, commissions, boards,
courts, authorities and agencies foreseen or unforeseen, ordinary or
extraordinary, which now or at any time hereafter may be applicable to the
Stephaneze Premises (when such term is used in Section 1.3) or to the Leased
Premises (when such term is used in any other Section of this Lease).
The phrase "net annual rental" shall refer to the net annual rental
payable under the Ground Lease, as such phrase is used therein.
"Officer's Certificate" means a certificate signed by a party or a general
partner or corporate officer of a party.
"Permitted Investment" means (i) direct obligations of the United States
of America, or obligations for which the full faith and credit of the United
States of America is pledged, and obligations of any agency or instrumentality
of the United States of America, (ii) obligations of any State of the United
States of American or Canada or any Province of Canada or any political
subdivision or agency or instrumentality of any thereof rated in the third
highest grade or better by two or more of Standard and Poor's Corporation,
Moody's Investors Service Inc. or Fitch Investors Service (or their successors),
(iii) any commercial paper issued by a corporation organized under the laws of
the United States of America or any State thereof or of Canada or any Province
thereof or by any foreign bank having a branch or agency in the United States of
America and rated in the second highest grade or better by two or more of
Standard & Poor's Corporation, Moody's Investors Service Inc. or Fitch Investors
Service (or their successors) and having a maturity not in excess of nine
months, (iv) certificates of deposit of, or drafts or bills of exchange accepted
generally by, any bank or trust company or any savings and loan association
incorporated under the laws of the United States of America or any State thereof
or Canada or any Province thereof or by any foreign bank having a branch or
agency in the United States of America and, in each case, which has capital and
surplus aggregating at least $200,000,000 as of the date of its most recent
report of condition and (v) such other securities or investments as Landlord
shall from time to time consent to; provided, that in no event shall either of
the following be "Permitted Investments": (a) any security of, or investment in,
any person or entity in which Tenant and/or any affiliate of Tenant have (either
directly or indirectly) a 5% or greater equity interest or (b) a security or
investment of any kind whose stated maturity is longer than 3 years.
"Prime Rate" means the prime interest rate announced by Morgan Guaranty
Trust Company of New York (or, if Morgan Guaranty Trust Company of New York
shall not exist or
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shall cease to publish such rate, such other bank in New York, New York as shall
be designated by Landlord in a notice to Tenant) to be in effect at its
principal office in New York, New York.
"Plans and Specifications" means plans and specifications prepared by a
reputable and licensed architect or engineer regularly involved in first-class
office buildings in the Borough of Manhattan in work of the nature described in
such Plans and Specifications.
"Qualified Hazardous Substance" means any Hazardous Substance which (a)
exists in the Leased Premises on the date of this Lease or (b) is introduced by
Landlord, Landlord's agents, employees, contractors, or licensees, into the
Leased Premises after the date of this Lease.
"Significant Proceeds Amount" means with respect to any damage or
destruction or Taking, the product of $5 million multiplied by the fraction
whose numerator of which is the Index for the third month preceding the month in
which such damage or destruction or Taking occurs and whose denominator is the
Index for April, 1997.
"Taking" means a taking during the Term of all or any part of the Leased
Premises, or any interest therein or right accruing thereto, including, without
limitation, any right of access thereto, as the result of or in lieu of or in
anticipation of the exercise of the right of condemnation or eminent domain, or
a change of grade affecting the Leased Premises or any part thereof.
"Tenant" means the tenant originally named herein or any successor or
assign.
"Witkoff Management Agreement" means the Management Agreement of even date
herewith between Tenant and The Witkoff Group LLC as the same may be assigned,
amended, restated or supplemented from time to time.
The words "enter", "re-enter", "entry" and "re-entry" as used in this
lease are not restricted to their technical legal meaning.
32. End of Lease Term
(a) Upon the expiration or earlier termination of this Lease, Tenant
shall quit and surrender to Landlord the Leased Premises free and clear of all
tenancies and occupancies and in good order and condition, ordinary wear and
tear and damage which Tenant is not required hereunder to repair excepted.
(b) If Tenant holds over without the consent of Landlord after
expiration or termination of this Lease, Tenant shall pay as holdover rental (in
addition to any and all amounts payable by Tenant upon such expiration or
termination of this Lease) for each month of the holdover tenancy an amount
equal to the greater of (i) 125% of the fair market rental value of the Leased
Premises for such month, or (ii) 125% of the Basic Rent and Tax Payments which
Tenant was obligated to pay for the month immediately preceding the end of the
Term; provided, that
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(x) if such holdover shall continue for more than three
months the percentage under each of clause (i) and clause (ii)
shall increase for periods after the third month to 150%, and
(y) if such holdover shall continue for more than six
months the percentage under clause (ii) shall increase for
periods after the sixth month to 200%.
The aforesaid holdover rent shall be Landlord's sole monetary remedy on account
of such holdover, but Tenant shall not be deemed released from its obligation to
pay damages under Article 25 or from any obligation which under Section 35(k)
survives the termination or expiration of this Lease. Tenant shall not be liable
for Supplemental Rent in respect of any holdover, or for any consequential or
other damages incurred by Landlord on account of such holdover. No holding over
by Tenant after the Term shall operate to extend the Term. Notwithstanding the
foregoing, the acceptance of any rent paid by Tenant pursuant to this Section
32(b) shall not preclude Landlord from commencing and prosecuting a holdover or
summary eviction proceeding.
33. Notices
All notices, requests, demands, certifications and other communications
hereunder (each, a "Notice") shall (except in the case of the telephonic notices
expressly permitted under this Lease) be in writing and shall be delivered by
(a) personal delivery, (b) United States mail, certified or registered, postage
prepaid, return receipt requested, or (c) nationally recognized overnight
courier, in each case addressed to the party to be notified at the address for
such party specified in the first paragraph of this Lease or to such other place
as the party to be notified may from time to time designate by at least 10 days'
notice to the notifying party. Notices by either party may be given by such
party's attorney. Each notice shall be deemed to have been given on the date
such notice is actually received as evidenced by a written receipt therefor, and
in the event of such failure to deliver by reason of changed address of which no
notice was given or refusal to accept delivery, as of the date of such failure.
Whenever Landlord gives any Notice under this Lease, it shall give a copy
thereof in the same manner to Tenant at 85 Broad Street, New York, New York
10004, Attention: General Counsel, or at such other place as the party to be
notified may from time to time designate by at least 10 days' notice to the
notifying party.
Whenever Tenant gives any Notice under this Lease, it shall give a copy
thereof in the same manner to Landlord at 156 William Street, New York, New York
10038, Attention: James F. Stomber, Esq. or at such other place as the party to
be notified may from time to time designate by at least 10 days' notice to the
notifying party.
34. Annual Reports
Within 120 days of the end of each of Tenant's fiscal years ending during
the Term, Tenant shall furnish to Landlord a statement of operating expenses for
the Improvements for
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such fiscal year together with a schedule of subleases of all or any part of the
Leased Premises indicating the premises demised, commencement date, expiration
date, renewal options, base rent and escalation provisions.
35. Miscellaneous
(a) If any term of this Lease or any application thereof shall be
invalid or unenforceable, the remainder of this Lease and any other application
of such term shall not be affected thereby. All covenants and obligations of
Landlord and Tenant hereunder which are not fully performed upon the expiration
or earlier termination of this Lease shall survive such expiration or earlier
termination.
(b) This Lease may be changed or amended only by an instrument in
writing, signed by the party against whom enforcement of such change or
amendment is sought.
(c) Subject to Article 20, this Lease shall be binding upon and
inure to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto.
(d) This Lease shall be construed and enforced in accordance with
and governed by the laws of the State of New York.
(e) The headings in this Lease are for purposes of reference only
and shall not limit or otherwise affect the meaning hereof. References herein to
sections are, unless otherwise indicated, references to sections hereof.
(f) Landlord and Tenant each represents to the other that it has
dealt with no broker (other than affiliates of Tenant) in connection with the
negotiation and execution of this Lease. Tenant shall pay, and shall indemnify
and defend Landlord against any claims for, any commission with respect to this
Lease due to any such affiliate.
(g) Landlord and Tenant hereby waive trial by jury in any action
arising under this Lease.
(h) No matter concerning this Lease shall be arbitrable unless
arbitration of such matter is specifically provided for herein. Except (1) as
provided in Section 2.2 with respect to any arbitration under said Section and
(2) as provided in Article 36 with respect to any arbitration under any
provision of this Lease providing for Expedited Arbitrations, in any instance in
this Lease in which arbitration is specifically provided for, such arbitration
shall be conducted pursuant to the rules of the American Arbitration
Association, or if the American Arbitration Association shall have ceased to
function as an arbitration association, of a successor or comparable
organization and the arbitrators shall be persons experienced in matters of the
same general nature as the matter subject to arbitration. If, in any
arbitration, the arbitrator or arbitrators shall award any sum to be paid by one
party hereto to the other, the arbitrators shall also award interest thereon,
computed at the Prime Rate in effect from time to time, from the date (prior to
such arbitration) on which, according to the terms hereof, such sum was to have
been paid.
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(i) In any instance in this Lease in which Landlord covenants not
unreasonably to withhold its consent or approval, Tenant's sole remedy in case
of such unreasonable withholding is an action for specific performance or
injunction directing such consent or approval and Landlord shall have no
liability for monetary damages. In any instance in this Lease in which Tenant
covenants not unreasonably to withhold its consent or approval, Landlord's sole
remedy in case of such unreasonable withholding is an action for specific
performance or injunction directing such consent or approval and Tenant shall
have no liability for monetary damages. In any such action, the prevailing party
shall be entitled to recover its reasonable attorneys fees and disbursements
from the other party.
(j) Neither Landlord nor Tenant shall, without the consent of the
other party, refer to the other party, this Lease or any related transaction in
any advertising, promotional material, publicity, press release or similar
material. This Article 35(j) shall not prohibit disclosures in any offering
materials relating to any securitization of any mortgage debt on the Leased
Premises or relating to any other type of public or private security offering.
(k) No expiration or termination of the Term shall relieve Landlord
or Tenant of its respective liabilities and obligations.
(1) accruing hereunder prior to such expiration or
termination, or
(2) provided by this Lease to be performed after such
expiration or termination (including without limitation
Tenant's obligations under Section 15.4(k) in case of
any termination of this Lease pursuant to Section 15.4),
all of which shall survive such expiration or termination.
(l) If any governmental agency or any electric, gas, water, steam,
sewer or telecommunications utility or supplier shall require or request that
any application or other document or instrument required or requested by it to
be furnished to it in connection with any Alterations or with any electric, gas,
water, steam, sewer or telecommunication service to the Leased Premises be
executed by the owner of the Leased Premises, Landlord shall within
(1) prior to Tenant's opening for the conduct of
business in the Leased Premises, 2 Business Days after the
submission of such application, document or instrument to it
by Tenant, or
(2) thereafter, 5 Business Days after the submission of
such application, document or instrument to it by Tenant,
execute and return the same to Tenant. Notwithstanding the foregoing, Landlord
shall have no obligation to execute and return any such application, document or
instrument unless such application, document or instrument is either (i)
reasonable, or (ii) customarily required by any governmental agency or any
electric, gas, water, steam, sewer or telecommunications utility or
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supplier in situations similar to the situation in question, or (iii) required
by any Legal Requirement. Any dispute as to whether Landlord shall be obligated
to execute and return any application, document or instrument shall be subject
to Expedited Arbitration. If Tenant shall prevail and Landlord shall not execute
and return such application, document or instrument within 2 Business Days of
the decision in arbitration, Tenant is hereby appointed as attorney-in-fact of
Landlord to execute such application, document or instrument.
(m) This Lease shall be construed without regard to any presumption
or other rule requiring construction against the party which drafted or caused
to be drafted the provisions hereof.
(n) If on (i) the date of any termination of this Lease pursuant to
Section 15.4, (ii) the date of any termination of this Lease pursuant to Section
16.2, or (iii) any expiration, termination or repossession pursuant to Article
22 or 23, the aggregate amount theretofore disbursed by Landlord pursuant to
Section 7 of the Initial Improvements Agreement shall be less than the Owner's
FOW Cost Limit (as defined in the Initial Improvements Agreement), then (x) the
amount of the excess of the Owner's FOW Cost Limit over such aggregate amount
theretofore disbursed is herein called the "Credit Amount", and (y)
notwithstanding any provision of this Lease to the contrary, Tenant shall be
entitled to a credit equal to the Credit Amount against (1) in the case of
clause (i) above, the amount payable under Section 15.4(h)(ii), (2) in the case
of clause (ii) above, the amount payable under the second paragraph of Section
16.2, and (3) in the case of clause (iii) above, the amount payable under
Section 25.2(b). Promptly after Landlord's request given at any time after the
aggregate amount disbursed by Landlord pursuant to said Section 7 shall exceed
Owner's FOW Cost Limit, Tenant shall execute an instrument, in form reasonably
satisfactory to Landlord, confirm such fact and that Tenant shall have no right
to any credit pursuant to this Section 35(n).
(o) At the request of either party, the parties shall execute,
deliver and acknowledge a memorandum of this Lease under Section 291-c of the
Real Property Law, and any other documents required in connection with the
recording thereof. The requesting party shall bear the costs of recording the
same.
36. Expedited Arbitration.
The term "Expedited Arbitration" shall refer to arbitration under
this Article 36. In any case under this Lease in which a matter is to be
determined by Expedited Arbitration, either party may give notice to the other
stating that it wishes such dispute to be so determined. The arbitrator in any
such matter shall be the first of the following that is able and willing to act
as such:
Lee Kuntz
Lloyd Shor
If none of such named persons shall be able and willing to act as the
arbitrator, the parties shall apply to the American Arbitration Association
located in the City of New York for the designation of such arbitrator and if no
arbitrator shall have been appointed within 10 Business
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Days then either party may apply to the Supreme Court in New York County or to
any other court having jurisdiction for the designation of such arbitrator. Any
arbitrator so appointed shall be an attorney who is a partner at a law firm
having at least 100 attorneys and shall have at least 15 years experience in the
practice of commercial real estate in the Borough of Manhattan. The arbitrator
shall conduct such hearings as he or she may deem appropriate, and shall notify
Landlord and Tenant of his or her determination as soon as practicable, and, if
reasonably possible, within 5 Business Days after the designation of the
arbitrator. Judgment upon any decision rendered in arbitration held pursuant to
this Article 36 shall be final and binding upon Landlord and Tenant, whether or
not a judgment shall be entered in any court. Each party shall pay its own
counsel fees and expenses, if any, in connection with any arbitration under this
Article 36, and the parties shall share the fees of the arbitrator and all other
expenses and fees of any such arbitration. The arbitrator shall select as his or
her determination the determination of either Landlord or Tenant in the matter
that is in dispute, except that in arbitrations under Section 1.3, Article 38 or
Article 39 the arbitrator may make his or her determination partially in favor
of one party and partially in favor of the other, but in no event shall the
arbitrator make any award in excess of the amount claimed due by Tenant. The
arbitrator shall be bound by the provisions of this Lease, and shall not add to,
subtract from or otherwise modify such provisions.
37. Subordination
(a) Subject to Section 37(b), this Lease is subject and subordinate
to each mortgage (a "Superior Mortgage") which may now or hereafter affect all
or any portion of the Leased Premises. The mortgagee under a Superior Mortgage
is called a "Superior Mortgagee". Tenant shall execute, acknowledge and deliver
any instrument reasonably requested by Landlord or a Superior Mortgagee to
evidence such subordination, but no such instrument shall be necessary to make
such subordination effective. Tenant shall execute any amendment of this Lease
requested by a Superior Mortgagee, provided such amendment shall not (i)
increase the rent, (ii) reduce or extend the Term, (iii) enlarge or diminish the
Leased Premises, (iv) other than to a de minimis extent, increase Tenant's
obligations under this Lease or reduce Landlord's obligations under this Lease,
(v) other than to a de minimis extent, reduce Tenant's rights under this Lease
or increase Landlord's rights under this Lease, or (vi) other than to a de
minimis extent, otherwise adversely affect Tenant. In the event of the
enforcement by a Superior Mortgagee of the remedies provided for by law or by
such Superior Mortgage Tenant, upon request of any person succeeding to the
interest of Landlord (a "Successor Landlord"), shall automatically become the
tenant of such Successor Landlord upon the terms of any Non-Disturbance
Agreement between Tenant and the applicable Superior Mortgagee.
(b) Notwithstanding Section 37(a), this Lease shall not be subject
and subordinate to any Superior Mortgage unless the Superior Mortgagee under
such Superior Mortgage shall have executed and delivered to Tenant a
non-disturbance agreement in the form attached hereto as Exhibit D or another
form no less favorable to Tenant in any material respect (a "Non-Disturbance
Agreement"). Anything contained in Section 37(a) to the contrary
notwithstanding, if (i) such Superior Mortgagee executes and delivers to Tenant
a Non-Disturbance Agreement accompanied by a notice from Landlord including the
following statement in block capital letters -THIS NOTICE IS BEING GIVEN UNDER
SECTION 37(B)
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OF YOUR LEASE. YOUR FAILURE TIMELY TO RESPOND MAY RESULT IN LANDLORD BEING
DEEMED TO HAVE SATISFIED ITS OBLIGATION UNDER SAID SECTION 37(B) WITH RESPECT TO
THE MORTGAGE IN QUESTION - and (ii) Tenant either fails or refuses to execute
and deliver such Non-Disturbance Agreement within 15 Business Days after
delivery of such Non-Disturbance Agreement to Tenant, then, so long as such
Superior Mortgagee does not withdraw such Non-Disturbance Agreement and the same
remains available for acceptance and execution by Tenant, Landlord shall be
deemed to have satisfied its obligation under this Section 37(b) and shall have
no further obligation to deliver to Tenant a Non-Disturbance Agreement with
respect to the Superior Mortgage in question.
38. Landlord's Failure to Pay Taxes
(a) If Tenant believes that Landlord has failed timely to pay to the
appropriate governmental agency any amount which Landlord is required by Section
11.2 to pay, then (i) Tenant may give Landlord a notice (an "Article 38 Demand
Notice") specifying and identifying such amount (an "Article 38 Demand Amount")
and containing the following statement in block capital letters: "THIS NOTICE IS
BEING GIVEN UNDER ARTICLE 38 OF OUR LEASE. YOUR FAILURE TIMELY TO PAY THE TAXES
HEREIN SPECIFIED AND FURNISH EVIDENCE THEREOF TO TENANT WILL RESULT IN TENANT
HAVING THE RIGHT TO PAY SUCH TAXES AND OFFSET THE AMOUNT SO PAID AGAINST RENT
DUE UNDER THE LEASE" and (ii) at any time on or after the 30th day after the
giving of such Article 38 Demand Notice Tenant may pay the Article 38 Demand
Amount or any portion thereof to the appropriate governmental agency (together
with all interest, penalties, late charges and similar fees thereon or with
respect thereto); provided, that if within 30 days after the giving of the
Article 38 Demand Notice Landlord notifies Tenant that Landlord has paid all of
such Article 38 Demand Amount to the appropriate governmental agency (together
with all interest, penalties, late charges and similar fees thereon or with
respect thereto) (which notice shall include evidence of such payment) and
Landlord has actually done so Tenant shall not be entitled to make payment of
the Article 38 Demand Amount or any portion thereof, and if within 30 days after
the giving of such Article 38 Demand Notice Landlord notifies Tenant that
Landlord has paid a portion identified and specified in such notice of the
Article 38 Demand Amount to the appropriate governmental agency (together with
all interest, penalties, late charges and similar fees thereon or with respect
thereto) (which notice shall include evidence of such payment) and Landlord has
actually done so Tenant may pay only the balance of such Article 38 Demand
Amount not so paid by Landlord or any portion of such balance to the appropriate
governmental agency (together with all interest, penalties, late charges and
similar fees thereon or with respect thereto). The amount paid by Tenant
pursuant to this Section 38(a) is called an "Article 38 Advance").
(b) If Tenant makes an Article 38 Advance in accordance with Section
38(a), then, except as otherwise provided in Section 38(c), (i) Landlord shall
reimburse to Tenant within 15 days after Tenant's demand therefor the amount of
the Article 38 Advance, together with interest thereon at the Interest Rate from
the date of payment by Tenant to the date on which Landlord so reimburses
Tenant, (ii) if Landlord shall fail timely to make such reimbursement, Tenant
shall have the right to set-off the amount of the Article 38 Advance together
with such
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<PAGE> 94
interest thereon against the rent under this Lease (exclusive of the
Supplemental Rent), and (iii) Landlord shall be deemed to have waived its right
to claim that such setoff was improper or constitutes a failure to pay rent or
other default under this Lease; provided, that Landlord shall have the right to
bring and maintain a separate action against Tenant as provided for in Section
38(d).
(c) If within 30 days after the giving of the Article 38 Demand
Notice, Landlord notifies Tenant (an "Article 38 Dispute Notice") that Landlord
believes that all or a portion identified and specified in such Article 38
Dispute Notice of the Article 38 Demand Amount is not required by Section 11.2
to be paid by Landlord or is not overdue (in either case all or such identified
and specified portion being herein called the "Disputed Article 38 Amount"),
then Landlord shall not be required to reimburse Tenant and Tenant shall not
have a right of set-off with respect to the Disputed Article 38 Amount except to
the extent that the dispute with respect thereto is resolved in Tenant's favor
in accordance with the next sentence. Tenant shall have the right, with respect
to any such dispute, to elect by notice to Landlord that such dispute be
resolved by litigation or Expedited Arbitration, but any such election shall be
irrevocable with respect to the dispute in question.
(d) If Landlord does not timely give an Article 38 Dispute Notice,
Landlord shall nevertheless have the right to recover from Tenant by separate
action so much of the Article 38 Demand Amount setoff by Tenant as Landlord was
not required by Section 11.2 to pay or which was not overdue; provided, that
Landlord's sole remedy in such an action shall be a money judgment against
Tenant.
(e) Notwithstanding the provisions of Section 20(b) or the
provisions of the definition of the term "Landlord" set forth in Article 31,
Tenant's rights under this Article 38 shall survive any sale, conveyance,
assignment or other transfer of the Leased Premises and after any thereof shall
continue to be enforceable against the new owner of the Leased Premises,
notwithstanding that the amounts to which such rights relate were originally
required to be paid by such new owner's predecessor.
(f) The provisions of this Article 38 shall also be applicable to
the net annual rental which Landlord is required to pay under the Ground Lease,
mutatis mutandis. In applying such provisions to such net annual rent,
references in this Article 38 to the "appropriate governmental agency" shall be
deemed to refer to the landlord under the Ground Lease and references in this
Article 38 to "Section 11.2" shall be deemed to refer to the provisions of the
Ground Lease requiring the payment of net annual rental.
39. Landlord's Failure to Pay Costs of Base Building Upgrade Work or
Fit-Out Work
(a) If Tenant believes that Landlord has failed timely to pay to the
appropriate party any amount which Landlord is required by Section 6 or 7 of the
Initial Improvements Agreement to pay, then (i) Tenant may give Landlord a
notice (an "Article 39 Demand Notice") specifying and identifying such amount
(an "Article 39 Demand Amount") and containing the following statement in block
capital letters: "THIS NOTICE IS BEING GIVEN UNDER ARTICLE 39 OF
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<PAGE> 95
OUR LEASE. YOUR FAILURE TIMELY TO PAY THE COSTS HEREIN SPECIFIED AND FURNISH
EVIDENCE THEREOF TO TENANT WILL RESULT IN TENANT HAVING THE RIGHT TO PAY SUCH
COSTS AND OFFSET THE AMOUNT SO PAID AGAINST RENT DUE UNDER THE LEASE" and (ii)
at any time on or after the 10th day after the giving of such Article 39 Demand
Notice Tenant may pay the Article 39 Demand Amount or any portion thereof to the
appropriate party (together with all interest, penalties, late charges and
similar fees thereon or with respect thereto) provided, that if within 10 days
after the giving of the Article 38 Demand Notice Landlord notifies Tenant that
Landlord has paid all of such Article 39 Demand Amount to the appropriate party
(together with all interest, penalties, late charges and similar fees thereon or
with respect thereto) (which notice shall include evidence of such payment) and
Landlord has actually done so Tenant shall not be entitled to make payment of
the Article 39 Demand Amount or any portion thereof and if within 10 days after
the giving of such Article 39 Demand Notice Landlord notifies Tenant that
Landlord has paid a portion identified and specified in such notice of the
Article 39 Demand Amount to the appropriate party (together with all interest,
penalties, late charges and similar fees thereon or with respect thereto) (which
notice shall include evidence of such payment) and Landlord has actually done so
Tenant may pay only the balance of such Article 39 Demand Amount not so paid by
Landlord or any portion of such balance to the appropriate party (together with
all interest, penalties, late charges and similar fees thereon or with respect
thereto). The amount paid by Tenant pursuant to this Section 39(a) is called an
"Article 39 Advance").
(b) If Tenant makes an Article 39 Advance in accordance with Section
39(a), then, except as otherwise provided in Section 39(c), (i) Landlord shall
reimburse to Tenant within 15 days after Tenant's demand therefor the amount of
the Article 39 Advance, together with interest thereon at the Interest Rate from
the date of payment by Tenant to the date on which Landlord so reimburses
Tenant, (ii) if Landlord shall fail timely to make such reimbursement, Tenant
shall have the right to setoff the amount of the Article 39 Advance together
with such interest thereon against the rent under this Lease, and (iii) Landlord
shall be deemed to have waived its right to claim that such setoff was improper
or constitutes a failure to pay rent or other default under this Lease and its
right to bring and maintain a separate action against Tenant to recover all or
any portion of the Article 39 Demand Amount.
(c) If within 10 days after the giving of the Article 39 Demand
Notice, Landlord notifies Tenant (an "Article 39 Dispute Notice") that Landlord
believes that all or a portion identified and specified in such Article 39
Dispute Notice of the Article 39 Demand Amount is not required by Section 6 or 7
of the Initial Improvements Agreement to be paid by Landlord or is not overdue
(in either case all or such identified and specified portion being herein called
the "Disputed Article 39 Amount"), then Landlord shall not be required to
reimburse Tenant and Tenant shall not have a right of set-off with respect to
the Disputed Article 39 Amount except to the extent that the dispute with
respect thereto is resolved in Tenant's favor in accordance with the next
sentence. Tenant shall have the right, with respect to any such dispute, to
elect by notice to Landlord that such dispute be resolved by litigation or
Expedited Arbitration, but any such election shall be irrevocable with respect
to the dispute in question.
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<PAGE> 96
(d) Notwithstanding the provisions of Section 20(b) or the
provisions of the definition of the term "Landlord" set forth in Article 31,
Tenant's rights under this Article 39 shall survive any sale, conveyance,
assignment or other transfer of the Leased Premises and after any thereof shall
continue to be enforceable against the new owner of the Leased Premises,
notwithstanding that the amounts to which such rights relate were originally
required to be paid by such new owner's predecessor.
(e) For purposes of computing the Base Building Savings, the Base
Building Savings Constant Payment and the Base Building Savings Credit, Landlord
shall be deemed to have disbursed pursuant to Section 6 of the Initial
Improvements Agreement all amounts reimbursed by Landlord or set-off by Tenant
pursuant to this Article 39, exclusive of all such amounts representing
interest, penalties, late charges or similar fees paid by Tenant or interest
paid by Landlord. The resulting decrease in the Base Building Savings Constant
Payment and Base Building Savings Credit shall be effective as of the Basic Rent
payment date next following such reimbursement or set-off and, if such Basic
Rent payment date shall be after the Rent Commencement Date, shall be computed
with respect to the number of months provided for in the definition of "Base
Building Constant Monthly Payment" minus the number of months in the period
commencing with the Base Building Savings Commencement Date and ending on the
day preceding the day prior to such Basic Rent payment date, rather than the
number of months provided for in the definition of "Base Building Constant
Monthly Payment". Promptly after such reimbursement or set-off Landlord and
Tenant shall join in one or more supplements to the instruments referred to in
the penultimate paragraph of Section 1.6 confirming the matters set forth in
this Section 39(e). The failure of either party to execute such supplement shall
not constitute a default hereunder or otherwise affect this Lease.
(f) Each Article 39 Advance shall constitute a loan from Tenant to
Landlord and notwithstanding Tenant's having made such Article 39 Advance the
Base Building Upgrade Work and/or the Fit-Out Work to which such Article 39
Advance shall relate, shall nonetheless constitute the property of Landlord, a
part of the Lease Premises and subject to the Lease.
IN WITNESS WHEREOF, Landlord and Tenant have caused this lease to be duly
executed and delivered, all as of the date and year first above written.
TEN HANOVER L.L.C.
By: NEXT GENERATION DEVELOPMENT, L.L.C.
its sole manager
By: /s/ Steven C. Witkoff
-------------------------------------
Steven C. Witkoff, its sole manager
THE GOLDMAN SACHS GROUP L.P
By: /s/ Edward F. Markiewicz
-------------------------------------
Edward F. Markiewicz
Attorney-in-Fact
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Exhibit A
The Land
All that certain plot, piece or parcel of land, situate, lying and being in the
Borough of Manhattan, City and State o New York, more particularly bounded and
described as follows:
BEGINNING at the corner formed by the intersection of the northeasterly side of
Hanover Square and the southeasterly side of Pearl Street;
RUNNING THENCE Northeasterly along the southeasterly side of Pearl Street,
187.129 feet to a point;
THENCE RUNNING along a line forming an interior angle of 92 degrees 26 minutes
50 seconds to the last mentioned course, 120.854 feet to the northwesterly side
of Water Street;
THENCE RUNNING along the northwesterly side of Water Street, 189.352 feet to the
northeasterly side of Hanover Square;
THENCE RUNNING along the northeasterly side of Hanover Square, 138.897 feet to
the point or place of BEGINNING.
A-1
<PAGE> 98
Exhibit B
Initial Tax Payments
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
The monthly Tax Payment due on the first day is
of each month of the 12 month period
beginning July 1,
- --------------------------------------------------------------------------------
<S> <C>
1998 7,189.00
- --------------------------------------------------------------------------------
1999 14,593.67
- --------------------------------------------------------------------------------
2000 22,220.48
- --------------------------------------------------------------------------------
2001 30,076.09
- --------------------------------------------------------------------------------
2002 38,167.38
- --------------------------------------------------------------------------------
2003 46,501.40
- --------------------------------------------------------------------------------
2004 55,085.44
- --------------------------------------------------------------------------------
2005 63,927.00
- --------------------------------------------------------------------------------
2006 73,033.81
- --------------------------------------------------------------------------------
2007 82,413.83
- --------------------------------------------------------------------------------
</TABLE>
B-1
<PAGE> 99
Exhibit C
Permitted Encumbrances
1) Lease dated July 13, 1965, from Helen H. Arnold, individually and as the
Executrix of the Estate of Thomas B. Hall, deceased, Patricia Arnold, as
infant by Helen H. Arnold her General Guardian and Elizabeth J. Hall, as
lessor, to Cradle Realty Corporation, as lessee, a memorandum of which is
recorded in Reel 5335 at Page 210, as amended by Amendment to Lease dated
May 15, 1969 and recorded November 5, 1969 in Reel 155 at Page 1135 and by
Agreement dated as of August 1, 1985 between Helen H. Arnold and Patricia
Arnold Lawless, as landlord, and The Hanover Square Company, as tenant,
affecting a portion of the Land.
2) Amended and Restated First Mortgage, Consolidation and Security Agreement
between Ten Hanover LLC and CS First Boston Mortgage Capital Corp. dated
as of November 15, 1996 recorded November 27, 1996 in Reel 2396 at page
1552 and all of the mortgages referred to therein.
3) First Assignment of Leases and Rents, made by Ten Hanover LLC to CS First
Boston Mortgage Capital Corp., dated November 15, 1996 recorded November
27, 1996 in Reel 2396 page 1634.
4) Second Mortgage and Security Agreement made by Ten Hanover LLC to CS First
Boston Mortgage Capital Corp. dated November 15, 1996 recorded November
27, 1996 in Reel 2396 at page 1546, as amended by First Modification of
the Second Mortgage and Security Agreement dated __________, recorded
__________ in Reel ___ at page ___, and by the Second Modification of the
Second Mortgage and Security Agreement dated August 14, 1997, intended to
recorded.
5) Second Assignment of Leases and Rent, made by Ten Hanover LLC to CS First
Boston Mortgage Capital Corp., dated November 15, 1996 recorded November
27, 1996 in Reel 2396 page 1729.
6) Additional Mortgage and Security Agreement made by Ten Hanover LLC to CS
First Boston Mortgage Capital Corp. dated August 14, 1997, intended to be
recorded.
7) Additional Assignment of Leases and Rent, made by Ten Hanover LLC to CS
First Boston Mortgage Capital Corp., dated November 14, 1997, intended to
be recorded
8) Reservation of Water Course as set forth in deed recorded in Liber 3735
page 36.
9) Any state of facts as an accurate survey may show.
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<PAGE> 100
Exhibit D
Non-Disturbance Agreement
THIS SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT (this "Agreement"),
made as of the _______ day of _____________, ___ by and among [_______________],
a _________________ having an address at _____________ ("Mortgagee"), and THE
GOLDMAN SACHS GROUP, L.P., a Delaware limited partnership having an office at 85
Broad Street, New York, N.Y. 10004 ("Tenant")
W I T N E S S E T H:
WHEREAS, TEN HANOVER LLC, a New York limited liability company
("Landlord") and Tenant have entered into (i) a lease dated as of ____________,
with respect to the land described on Exhibit A hereto and all buildings,
structures, fixtures and equipment thereon (the "Original Lease") and (ii) an
initial improvements agreement dated as of __________, with respect to certain
improvements to be made in and to the premises demised by the aforesaid lease
(the "Original Initial Improvements Agreement") (the Original Lease and the
Original Initial Improvements Agreement, along with any amendments to either
thereof to which Mortgagee consents in writing, being referred to hereinafter as
the "Lease" and the premises demised by the Lease from time to time being
referred to hereinafter as the "Premises");
WHEREAS, Mortgagee is the holder of the mortgages described on Exhibit B
hereto (collectively, together with all renewals, modifications, consolidations,
replacements, substitutions, additions and extensions, and as spread or
consolidated, the "Mortgages"), which encumber the Premises and Landlord's
interest in the Lease;
WHEREAS, the Lease provides that, upon execution and delivery of this
Agreement, the Lease and all of Tenant's rights thereunder are and shall be at
all times and in all respects subject and subordinate to the lien of the
Mortgages, and to all advances now or hereafter made under or secured by the
Mortgages; and
WHEREAS, Mortgagee and Tenant desire to enter into this Agreement upon the
terms, covenants and conditions contained herein.
NOW, THEREFORE, in consideration of the agreements of the parties
contained herein, the parties hereby agree as follows:
1. Tenant hereby confirms that the Lease and all of Tenant's rights
thereunder are and shall be at all times and in all respects subject and
subordinate to the lien of the Mortgages, and to all advances now or hereafter
made under or secured by the Mortgages. Notwithstanding the provisions of this
Paragraph 1 or any other provision hereof or any of the provisions of the
Mortgages, Mortgagee specifically agrees that all insurance proceeds and all
proceeds of any Taking (as such term is defined in the Lease) shall be paid,
held and applied as provided for in the Lease; provided, however, that when, if
and to the extent that the Lease provides that any
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<PAGE> 101
such proceeds are to be paid to Landlord, the provisions of the Mortgages shall
govern and control such proceeds as between Landlord and Mortgagee.
[In any non-disturbance agreement executed and delivered prior to the full
disbursement of all amounts required to be available to pay Owner's BBW Cost
Installments and Owner's FOW Cost Installments under Sections 6 and 7 of the
Original Initial Improvements Agreement, insert the following paragraph:
Mortgagee further agrees that all of the funds required by Sections 6 and
7 of the Original Initial Improvements Agreement to be available to pay Owner's
BBW Cost Installments and Owner's FOW Cost Installments (as such terms are
defined in the Original Initial Improvements Agreement) shall be held in
separate bank accounts under Mortgagee's control and, provided that Tenant shall
not be in default under the Lease beyond the applicable grace period provided
for therein with respect to the default in question, shall be used and applied
in accordance with said Sections 6 and 7, and that, provided that Tenant shall
not be in default under the Lease beyond the applicable grace period provided
for therein, all rights of Mortgagee in and to said funds shall be subject and
subordinate in all respects to Tenant's rights under said Sections 6 and 7 to
require that such funds be so used and applied.]
2. Provided that Tenant shall not be in default under the Lease beyond the
applicable grace period provided therein with respect to the default in question
as of the date Mortgagee commences a foreclosure action or proceeding to enforce
the Mortgages, (a) Tenant shall not be named as a party in any foreclosure
action or proceeding to enforce the Mortgages (unless such joinder shall be
required under applicable law, and in which case Mortgagee shall not seek
affirmative relief from Tenant in such action or proceeding) nor shall the Lease
be cut off or terminated nor Tenant's possession or other rights thereunder be
disturbed in any such action or proceeding and (b) subject to the provisions of
Paragraphs 4 and 5 of this Agreement, Mortgagee will recognize the Lease and
Tenant's rights thereunder.
3. Upon any foreclosure of the Mortgage or other acquisition of the
Premises (whether by deed-in-lieu of foreclosure, in connection with a
proceeding under the United States Bankruptcy Code or any amendments,
modifications or supplements thereto or replacements thereof (the "Code") or
otherwise), Tenant shall attorn to Mortgagee or any other party acquiring said
property or so succeeding to Landlord's rights (any such party, including
Mortgagee in such capacity, being the "Successor Landlord") and shall recognize
the Successor Landlord as its landlord under the Lease, and Tenant shall
promptly execute and deliver any instruments that the Successor Landlord may
reasonably request in writing to evidence further said attornment.
4. Upon such attornment, the Lease shall continue as a direct lease
between the Successor Landlord and Tenant upon all the terms, covenants and
conditions thereof except that, subject to the provisions of Paragraph 5 below,
the Successor Landlord shall not be (a) liable for any previous act or omission
of Landlord under the Lease, but Successor Landlord shall be liable for any act
or omission of Successor Landlord under the Lease occurring after such
attornment, including the failure of Successor Landlord to remedy, within a
reasonable time after such attornment, any default by Landlord in performing any
of its obligations under the Lease which
D-2-
<PAGE> 102
continues after such attornment, (b) subject to any offsets, defenses, claims or
counterclaims that Tenant may have against Landlord or any predecessor landlord,
but Successor Landlord shall be subject to any offset, defense, claim or
counterclaim available to the Tenant under the Lease accruing after such
attornment, (c) bound by any payment of rent or other charges under the Lease
made more than thirty (30) days prior to its due date unless such payment shall
have been expressly approved in writing by Mortgagee or (d) bound by any
amendment, modification, extension, expansion, termination, cancellation or
surrender of the Lease unless Mortgagee has consented thereto in writing or
unless the same is effected pursuant to any of the terms or provisions of the
Lease.
5. Notwithstanding the foregoing, upon such attornment, Successor Landlord
shall be subject to all of Tenant's rights (including rights of set-off) and
remedies under Articles 38 and 39 of the Original Lease, as amended by any
amendments to which Mortgagee consents in writing, even if such rights and
remedies shall have accrued prior to such attornment and even if Landlord's acts
or omissions shall have caused or contributed to the condition or delay giving
rise to such rights and remedies.
6. The attornment provided for in Paragraph 3 of this Agreement shall
inure to the benefit of any Successor Landlord, shall be self-operative, and no
further instrument shall be required to give effect to the attornment. Tenant,
however, upon demand of any Successor Landlord, agrees to execute, from time to
time, instruments in confirmation thereof, reasonably satisfactory to any such
Successor Landlord, acknowledging such attornment and setting forth the terms
and conditions of its tenancy. Nothing contained in this Paragraph 6 shall be
construed to impair any right otherwise exercisable by any such Successor
Landlord.
7. From and after the date hereof, Tenant shall at the same time such
notice is sent to Landlord, send to Mortgagee a copy of any notice of default or
notice in connection with the commencement of any action to terminate the Lease
(whether in connection with a proceeding pursuant to the Code or otherwise) on
account of any default and agrees that, notwithstanding any provisions of the
Lease to the contrary, no such notice shall be deemed to have been given unless
Mortgagee shall have been given such notice. Such notices shall be sent by
certified or registered mail, postage prepaid, return receipt requested or shall
be delivered to Mortgagee at Mortgagee's address first set forth above (or at
such other address as Mortgagee shall specify in a written notice to Tenant at
the address first specified above for Tenant). Any such notice shall be deemed
to be given to Mortgagee on the earlier of (a) the day of receipt (as evidenced
by a receipt signed by Mortgagee or the refusal to accept delivery by Mortgagee)
or (b) three (3) days after Tenant's deposit of such notice in the mail, first
class postage prepaid. With respect to the commencement by Tenant of any action
to terminate the Lease, Mortgagee shall have the right, but not the obligation,
to cure any default on the part of Landlord that is the basis for such action
within a reasonable time (including the time required for Mortgagee to obtain
possession of the Premises if such possession is necessary to effect such cure)
after receipt of the notice by Tenant with respect to such action. This
Paragraph 7 shall not be applicable to any termination of the Lease in whole or
in part (or rescission of the exercise of any expansion option or right)
pursuant to any provision of the Lease providing for such a termination (or
rescission).
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<PAGE> 103
8. Tenant shall not, without Mortgagee's prior written consent, cancel,
surrender or terminate the Lease and any attempt to do so shall be null and void
and of no force or effect. This Paragraph 8 shall not be applicable to any
cancellation, surrender or termination of the Lease in whole or in part (or
rescission of the exercise of any expansion option or right) pursuant to any
provision of the Lease expressly providing for such a cancellation, surrender or
termination (or rescission).
9. Tenant acknowledges that Landlord's interest under the Lease has been
assigned to Mortgagee as further security for the indebtedness secured by the
Mortgages. In the event Mortgagee notifies Tenant of a default under the
Mortgages and demands that Tenant pay its rent and all other sums due under the
Lease to Mortgagee, Tenant agrees that it shall pay its rent and all other sums
due under the Lease to Mortgagee.
10. Tenant and Mortgagee acknowledge that this Agreement satisfies all
conditions and requirements in the Lease relating to the granting of a
non-disturbance agreement by Mortgagee.
11. This Agreement is not intended to amend the Mortgages, nor is it
intended to increase or diminish the rights and obligations under the Mortgages
of the parties thereto.
12. By signing below, each of the signatories to this Agreement represents
that (a) it has full power and authority to execute this Agreement and to bind
itself to performance hereunder and (b) the execution and delivery of this
Agreement (1) have been duly authorized by all necessary acts on its part, (2)
do not violate or conflict with its organizational documents, (3) do not
conflict with any law or judgment of a government authority applicable to it and
(4) do not result in the breach of or constitute a default under any agreement
or other obligation to which it is a party.
13. This Agreement may not be modified, amended or terminated unless in
writing and duly executed by the party against whom the same is sought to be
asserted and constitutes the entire agreement between the parties with respect
to the subject matter hereof. Upon execution by every party hereto, this
Agreement shall supersede any previously executed agreement in effect between
the Mortgagee and Tenant with respect to the matters addressed herein.
14. This Agreement shall be governed by the laws of the State of New York
applicable to agreements made and to be performed within such State. The
undersigned hereby submit to personal jurisdiction in the State of New York for
all matters, if any, which shall arise with respect to this Agreement, and waive
any and all rights under the laws of any other state or country to object to
jurisdiction within the State of New York or to institute a claim of forum non
conveniens with respect to any court in the State of New York for the purposes
of litigation with respect to this Agreement.
15. This Agreement shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns.
D-4-
<PAGE> 104
16. Anything herein or in the Lease to the contrary notwithstanding, if
Mortgagee or a Successor Landlord shall acquire title to the Property, or shall
otherwise become liable for any obligations of Landlord under the Lease,
Mortgagee and any such Successor Landlord shall have no obligation, nor incur
any liability, beyond Mortgagee's or such Successor Landlord's then interest, if
any, in the Property and Tenant shall look exclusively to such interest, if any,
of Mortgagee or such Successor Landlord in the Property for the payment and
discharge of any obligations imposed upon Mortgagee or such Successor Landlord
hereunder or under the Lease. Tenant agrees that with respect to any money
judgment that may be obtained or secured by Tenant against Mortgagee or a
Successor Landlord, Tenant shall look solely to the estate or interest owned by
Mortgagee or such Successor Landlord in the Property and Tenant shall not
collect or attempt to collect any such judgment out of any other assets of
Mortgagee or such Successor Landlord.
D-5-
<PAGE> 105
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the day and year first above written.
[Lender]
By: ______________________________
Name:
Title:
THE GOLDMAN SACHS GROUP, L.P.
By: The Goldman Sachs Corporation,
its general partner
By: ______________________________
Name:
Title:
D-6-
<PAGE> 106
Exhibit E
Major Building Equipment
HVAC
Any cooling tower
The collection basin of any cooling tower
Any chiller
The evaporator shell or tubes of any chiller
The condenser shell or tubes of any chiller
The steam condenser or tubes of any chiller
Any fan system heating coil
Any fan system cooling coil
Any fan system fan housing
Any fan system fan wheel
Any air receiver
Any chilled water riser
Any condenser water riser
Any steam riser
Any house tank
Any condensate riser
Any heating water riser
Electrical
Any electrical riser feeder (normal or emergency) 400 amps or higher
Any electrical horizontal feeder (normal or emergency) at or below ground level
400 amps or higher
Any motor control center (normal or emergency)
Any motor starter (normal or emergency) 200 amps or higher
Any diesel engine
Any emergency power system generator 1000 KW or higher
Elevator
The hoist motor of any elevator
The motor generator of any elevator
Plumbing and Fire Prevention
Any domestic hot or cold water riser or main
Any sanitary waste riser or main
Any storm drainage riser or main
Any fire standpipe riser or main
E-1-
<PAGE> 1
EXHIBIT 10.4
================================================================================
LEASE, dated as of July 16, 1998,
Between
TCC ACQUISITION CORP.,
as Agent, as Landlord
and
THE GOLDMAN SACHS GROUP, L.P.,
as Tenant
180 Maiden Lane
New York, New York 10038
================================================================================
<PAGE> 2
TABLE OF CONTENTS(1)
Page
----
Article 1. Basic Lease Provisions .................................. 1
Article 2. Demise of Premises; Term ................................ 4
Article 3. Rent .................................................... 6
Article 4. Tax and Operating Costs ................................. 8
Section 4.1 Definitions ................................ 8
Section 4.2 Additional Rent ............................ 16
Section 4.3 Payments on Account ........................ 17
Section 4.4 Escalation Statement ....................... 17
Section 4.5 Audit, etc ................................. 18
Section 4.6 Base Year Statement ........................ 18
Section 4.7 Base Year Audit, etc ....................... 18
Section 4.8 Excess Cleaning Costs ...................... 19
Article 5. Use of Premises ......................................... 20
Article 6. Alterations by Tenant ................................... 22
Section 6.1 In General ................................. 22
Section 6.2 Landlord's Approval in Certain Cases ....... 23
Section 6.3 Government Permits and Licenses ............ 24
Section 6.4 Tenant's Contractors ....................... 24
Section 6.5 Performance of Alterations ................. 25
Section 6.6 Mechanics Lien ............................. 25
Article 7. Various Covenants ....................................... 25
Section 7.1 Tenant's Covenants ......................... 25
Section 7.2 Landlord's Covenants ....................... 29
Section 7.3 Year 2000 Compliance ....................... 30
Article 8. Changes or Alterations by Landlord ...................... 31
Article 9. Surrender; Ownership of Improvements; Removal
of Special Installations; Tenant's Shafts and
Other Areas; Holdover ................................... 33
Section 9.1 Surrender .................................. 33
Section 9.2 Ownership of Improvements .................. 33
Section 9.3 Removal of Special Installations ........... 34
Section 9.4 Areas Reserved to Landlord ................. 35
Section 9.5 [Intentionally Omitted] .................... 35
- ----------
(1) This table of contents, list of exhibits and table of definitions was not
included in the Lease at the time of execution and is not a part of the Lease.
It was prepared subsequent to the execution of the Lease solely for convenience
of reference.
<PAGE> 3
Section 9.6 Removal of Personal Property ............. 35
Section 9.7 Holdover ................................. 35
Article 10. Electric Current and Water .............................. 36
Section 10.1 Base Electricity ......................... 36
Section 10.2 Supplemental Electricity ................. 36
Section 10.3 Additional Electricity ................... 37
Section 10.4 Character of Electricity ................. 37
Section 10.5 Tenant's Dedicated Switches .............. 37
Section 10.6 Electricity Supplier for the Building .... 37
Section 10.7 Electricity Charges--Average Cost
per KWH ................................ 38
Section 10.8 Electric Charges -- Actual Cost
Contribution ........................... 40
Section 10.9 Billing & Payment ........................ 40
Section 10.10 Direct Service -- Illegality of
Redistribution ......................... 41
Section 10.11 Direct Service -- Tenant's Election ...... 41
Section 10.12 Tenant's Generator Plan -- Sale of
Output ................................. 42
Section 10.13 General .................................. 42
Section 10.14 Lamps. Starters & Ballasts ............... 42
Section 10.15 Water .................................... 42
Section 10.16 Exculpation .............................. 43
Section 10.17 Gas ...................................... 43
Article 11. Elevators. Cleaning. Services, etc ...................... 43
Section 11.1 Definitions .............................. 43
Section 11.2 Passenger Elevator and Escalator Service . 43
Section 11.3 Freight Elevator Service ................. 45
Section 11.4 Heating, Ventilating and Air-
Conditioning ........................... 46
Section 11.5 Supplemental Condenser Water ............. 47
Section 11.6 Cleaning By Landlord ..................... 47
Section 11.7 Cleaning By Tenant ....................... 48
Section 11.8 Cooperation in the Selection of
Cleaning Contractors ................... 49
Section 11.9 Rubbish Removal .......................... 49
Section 11.10 Additional Services ...................... 49
Section 11.11 Interruption in Services ................. 50
Section 11.12 Damage or Defective Condition ............ 51
Section 11.13 Building Directory ....................... 51
Section 11.14 Operation & Maintenance of the Building .. 51
Section 11.15 Accessibility and Security ............... 52
Section 11.16 Tenant's Car Service Line ................ 54
Section 11.17 Applicable Price ......................... 54
Section 11.18 Fire Alarm ............................... 55
Article 12. Assignment and Subletting ............................... 55
Section 12.1 General .................................. 55
Section 12.2 Request for Consent ...................... 56
Section 12.3 Consent Not to Be Unreasonably Withheld;
Conditions ............................. 57
Section 12.4 Effect of Consent ........................ 58
2
<PAGE> 4
Section 12.5 Provisions Applicable to Every Sublease .. 58
Section 12.6 Profit Sharing ........................... 59
Section 12.7 Changes in Control; Transactions with
Successors ............................... 60
Section 12.8 Transactions with Related Parties ........ 60
Section 12.9 Miscellaneous Provisions Regarding
Assignments .............................. 60
Article 13. Damage by Fire, etc ..................................... 61
Article 14. Condemnation ............................................ 63
Article 15. Compliance with Laws .................................... 64
Article 16. Mortgage, Subordination, and Attornment ................. 65
Article 17. Conditions of Limitation ................................ 67
Article 18. Re-entry by Landlord .................................... 69
Article 19. Damages ................................................. 70
Article 20. Curing Tenant's Defaults-- Additional Rent .............. 71
Article 21. Consents ................................................ 72
Article 22. Insurance ............................................... 73
Article 23. Brokerage Commission .................................... 76
Article 24. Satisfaction of Tenant's Remedies ....................... 77
Article 25. Landlord's Payments to Tenant ........................... 77
Article 26. Tenant's Right to Lease Additional Space ................ 78
Article 27. Renewal Term ............................................ 85
Article 28. Notices ................................................. 91
Article 29. Quiet Enjoyment ......................................... 91
Article 30. Binding Authority ....................................... 91
Article 31. Governing Law; Severability ............................. 91
Article 32. Lease Contains All Agreements-- No Waivers .............. 92
Article 33. Parties Bound ........................................... 92
Article 34. Special Purpose Areas; 16th Floor ....................... 93
Section 34.1 Special Purpose Areas-- General .......... 93
Section 34.2 Continued Operation 0f 41st Floor
Special Purpose Area ..................... 96
Section 34.3 Continued Operation of 3rd/4th Floor
Special Purpose Area ..................... 97
Section 34.4 Continued Operation of 2nd Floor
Special Purpose Area ..................... 98
Section 34.5 Continued Operation of Basement
Special Purpose Area ..................... 99
Section 34.6 16th Floor -- General .................... 100
3
<PAGE> 5
Section 34.7 Miscellaneous ............................ 100
Section 34.8 Miscellaneous ............................ 101
Article 35. Arbitration ............................................. 101
Article 36. Other Installations By Tenant ........................... 102
Section 36.1 Tenant's Generator Plant and
Tenant's Cooling Plant ................... 102
Section 36.2 Tenant's Antenna Equipment ............... 105
Section 36.3 Tenant's Closed Circuit Television
Cameras ................................ 106
Section 36.4 Window Film and Window Treatment ......... 106
Section 36.5 Use of Fire Stairs ....................... 106
Section 36.6 Tenant's Messenger Center ................ 107
Article 37. Tenant's Right of First Offer to Purchase ............... 107
Article 38. Tenant's Termination Right .............................. 109
Article 39. Landlord Defaults -- Tenant Right to Cure ............... 110
Section 39.1 ............................................ 110
Section 39.2 Landlord's Failure to Pay Costs
of Initial Improvements .................. 112
Section 39.3 Successor Liability ...................... 113
Article 40. Miscellaneous ........................................... 113
Article 41. ICIP & LMEP Program ..................................... 114
Section 41.1 The Project; the Benefits ................ 114
Section 41.2 Requirements to Obtain Benefits .......... 115
Section 41.3 Requirements in Respect of Contractors ... 116
Section 41.4 Submetering .............................. 117
Section 41.5 Tenant's Obtaining Direct Electric
Service ................................ 117
Article 42. Tenant's Shafts and Other Areas ......................... 117
Section 42.1 General .................................. 118
Section 42.2 CNA Closet ............................... 119
Section 42.3 Freight Elevator Lobby Space ............. 120
Section 42.4 Carlift Room ............................. 121
Section 42.5 Carlift Conveyor Shaft ................... 122
Section 42.6 Fuel Oil Riser Shaft ..................... 122
Section 42.7 Pipe Space ............................... 123
Section 42.8 Unused Exhaust Space ..................... 123
Section 42.9 Existing Kitchen Exhaust Space ........... 124
Section 42.10 Fire Stair Riser Space ................... 125
Section 42.11 Relocations by Tenant .................... 125
Section 42.12 Other Provisions ......................... 125
Section 42.13 Telecommunications Points of Entry
Section 42.14 Tenant's Fuel Tank ....................... 126
4
<PAGE> 6
EXHIBITS
A. Landlord
B. Stacking Plan, Areas and Floor Plans
C. Premises
D. Floor Plans
E. [Intentionally Omitted]
F. Certificate of Occupancy
G. Structural Reinforcement Work
H. Pre-Approved Critical Trade Contractors
I. Building Rules and Regulations
J. Tenant's Security and Background Check Procedures
K. Construction Rules and Regulations
L. Elevator Specifications
M. Cleaning Specifications
N. Cleaning Contractors-- Initial Bid List
0. Supplemental, Overtime and Sundry Services
P. Consent to Assignment & Consent to Sublease
Q. Form of Assumption
R. Form of Mortgage Non-Disturbance Agreement
S. Schedule of Existing Leases
T. Roof Warranty
U. Tenant's Messenger Facilities
AA. Chilled Water Plant
BB. Cooling Towers
CC. Loadbank
DD. Emergency Generator Plan
EE. Goldman Sachs Emergency Switchgear Room
FF. New' Communication Riser Location
GG. Power Conduit Risers
HH. Fuel Oil Piping Risers
II. Chilled Water Piping Riser
JJ. Stair Conduit Risers
KK. Dish Antennae
LL. Emergency Power Distribution Equipment Location
MM. Dish Antennae Space
NN. Telecommunication Point of Entry
00. Basement Switchgear Room
PP. Relocated Existing Kitchen Exhaust Flues
AAA. Entry Provisions
BBB. Pipe Erection and Other Work Provisions
CCC. SSL Special Purpose Area Lease Provision
DDD. Other Special Purpose Area Lease Provisions
5
<PAGE> 7
180 Maiden Lane
Table of Definitions
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Lease Lease
Defined Term Section Page
- --------------------------------------------------------------------------------
<S> <C> <C>
16th Floor Right 34.6 100
- --------------------------------------------------------------------------------
2nd Floor Special Purpose Area 34.1 93
- --------------------------------------------------------------------------------
30 Day Tenant 34.1 94
- --------------------------------------------------------------------------------
3rd Floor Escalators 11.2 45
- --------------------------------------------------------------------------------
3rd/4th Floor Special Purpose Area 34.1 93
- --------------------------------------------------------------------------------
41st Floor Machine Room 36.1 102
- --------------------------------------------------------------------------------
41st Floor Special Purpose Area 34.1 93
- --------------------------------------------------------------------------------
Acceptance Notice 26.3 79
- --------------------------------------------------------------------------------
Accepted Offer Space 26.3 80
- --------------------------------------------------------------------------------
Actual Electric Cost Contribution 10.8 40
- --------------------------------------------------------------------------------
Additional Metering Equipment 10.8 40
- --------------------------------------------------------------------------------
Additional Rent Dispute Notice 4.5 18
- --------------------------------------------------------------------------------
Alterations 7.1 27
- --------------------------------------------------------------------------------
Amortized Capital Improvement 4.1 11
- --------------------------------------------------------------------------------
Applicable Laws 15.1 64
- --------------------------------------------------------------------------------
Applicable Portion 2.3 4
- --------------------------------------------------------------------------------
Applicable Price 11.17 54
- --------------------------------------------------------------------------------
Audit Period 4.1 8
- --------------------------------------------------------------------------------
Base Building 11.14 52
- --------------------------------------------------------------------------------
Base Building Closet Installations 42.2 119
- --------------------------------------------------------------------------------
Base Building Pipes 42.7 123
- --------------------------------------------------------------------------------
Base Premises 1.5 1
- --------------------------------------------------------------------------------
Base Year Statement 4.6 18
- --------------------------------------------------------------------------------
Basement Special Purpose Area 34.1 93
- --------------------------------------------------------------------------------
BLS 11.17 54
- --------------------------------------------------------------------------------
Books and Records 37.1 108
- --------------------------------------------------------------------------------
Broker 23 76
- --------------------------------------------------------------------------------
Building Electricity 10.6 38
- --------------------------------------------------------------------------------
Building Electricity Supplier 10.7 39
- --------------------------------------------------------------------------------
Building Requirements 10.3 37
- --------------------------------------------------------------------------------
Business Days 11.1 43
- --------------------------------------------------------------------------------
Business Hours 11.1 43
- --------------------------------------------------------------------------------
C&W 23 76
- --------------------------------------------------------------------------------
Cartlift Conveyor Shaft 42.5 122
- --------------------------------------------------------------------------------
Cartlift Room 42.4 121
- --------------------------------------------------------------------------------
Cartlift Room Leased Floors 42.1 118
- --------------------------------------------------------------------------------
Cartlift Room Leases 42.1 118
- --------------------------------------------------------------------------------
Claims 7.1 28
- --------------------------------------------------------------------------------
Cleaning Costs 4.1 9
- --------------------------------------------------------------------------------
Cleaning Payment 4.8 19
- --------------------------------------------------------------------------------
CNA Closet 42.2 119
- --------------------------------------------------------------------------------
CNA Closet Installations 42.2 119
- --------------------------------------------------------------------------------
ConEd 10.6 38
- --------------------------------------------------------------------------------
Continuing Premises 38 109
- --------------------------------------------------------------------------------
Contractors 41.3 116
- --------------------------------------------------------------------------------
contractors, contractor 6.4 24
- --------------------------------------------------------------------------------
CPI Factor 11.17 54
- --------------------------------------------------------------------------------
CPI-U 11.17 54
- --------------------------------------------------------------------------------
Critical Trade Contractors 6.4 24
- --------------------------------------------------------------------------------
DBS 41.3 116
- --------------------------------------------------------------------------------
</TABLE>
Page 1 of 5
<PAGE> 8
180 Maiden Lane
Table of Definitions
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Lease Lease
Defined Term Section Page
- --------------------------------------------------------------------------------
<S> <C> <C>
Default Termination 18.2 69
- --------------------------------------------------------------------------------
deliver, delivery 2.3 5
- --------------------------------------------------------------------------------
Delivery Date 2.3 5
- --------------------------------------------------------------------------------
Disputed Section 39.2 Amount 39.2 113
- --------------------------------------------------------------------------------
DOF 41.3 116
- --------------------------------------------------------------------------------
Early Termination Date 38 109
- --------------------------------------------------------------------------------
Early Termination Premises 38 110
- --------------------------------------------------------------------------------
Electric Charge 10.7 39
- --------------------------------------------------------------------------------
Electrical Equipment 10.3 37
- --------------------------------------------------------------------------------
Entry Provisions 42.1 118
- --------------------------------------------------------------------------------
Escalation Statement 4.1 9
- --------------------------------------------------------------------------------
Estimated Repair Time 13.3 62
- --------------------------------------------------------------------------------
Excess Cleaning Cost 4.8 19
- --------------------------------------------------------------------------------
Excluded Cleaning Areas 11.6 48
- --------------------------------------------------------------------------------
Executive Elevators 11.2 44
- --------------------------------------------------------------------------------
Existing Building Generators 36.1 102
- --------------------------------------------------------------------------------
Existing Bulkhead Enclosure 36.1 102
- --------------------------------------------------------------------------------
Existing First Mortgage 16.3 66
- --------------------------------------------------------------------------------
Existing Kitchen Exhaust Space 42.1 118
- --------------------------------------------------------------------------------
Existing Mortgages 16.3 67
- --------------------------------------------------------------------------------
Existing Second Mortgage 16.3 66
- --------------------------------------------------------------------------------
Existing Special Purpose Area Use 5.1 21
- --------------------------------------------------------------------------------
Expiration Date 1.7 1
- --------------------------------------------------------------------------------
Final ICIP Application 41.2 115
- --------------------------------------------------------------------------------
Fire Stair Riser Space 42.10 125
- --------------------------------------------------------------------------------
First Renewal Term 27.1 86
- --------------------------------------------------------------------------------
Fixed Rent 3.2 6
- --------------------------------------------------------------------------------
Freight Elevator Hours 11.3 45
- --------------------------------------------------------------------------------
Freight Elevator Lobby Leased Floors 42.1 119
- --------------------------------------------------------------------------------
Freight Elevator Lobby Leases 42.1 119
- --------------------------------------------------------------------------------
Freight Elevator Lobby Space 42.3 120
- --------------------------------------------------------------------------------
Fuel Oil Riser Shaft 42.6 122
- --------------------------------------------------------------------------------
Full Premises Floor 2.1 4
- --------------------------------------------------------------------------------
GS 23 76
- --------------------------------------------------------------------------------
Guarantor 17.2 68
- --------------------------------------------------------------------------------
hazardous materials 15.2 65
- --------------------------------------------------------------------------------
Holidays 11.1 43
- --------------------------------------------------------------------------------
ICIP Benefits 41.1 115
- --------------------------------------------------------------------------------
ICIP Program 41.1 115
- --------------------------------------------------------------------------------
ICIP Work 41.2 115
- --------------------------------------------------------------------------------
ICIP/LMEP Submissions 41.2 115
- --------------------------------------------------------------------------------
Index 11.17 54
- --------------------------------------------------------------------------------
Interest Rate 4.5 18
- --------------------------------------------------------------------------------
Kitchens 9.3 34
- --------------------------------------------------------------------------------
Land 1.1 1
- --------------------------------------------------------------------------------
Landlord Cleaned Building Area 4.1 9
- --------------------------------------------------------------------------------
Landlord Cleaned Premises Area 4.1 9
- --------------------------------------------------------------------------------
Landlord Failure 39.1 110
- --------------------------------------------------------------------------------
Landlord Indemnitees 7.1 28
- --------------------------------------------------------------------------------
Landlord Monthly Payments 25.1 77
- --------------------------------------------------------------------------------
</TABLE>
Page 2 of 5
<PAGE> 9
180 Maiden Lane
Table of Definitions
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Lease Lease
Defined Term Section Page
- --------------------------------------------------------------------------------
<S> <C> <C>
Landlord's Determination 26.10 83
- --------------------------------------------------------------------------------
Landlord's Exercise Deadline Date 26.2 79
- --------------------------------------------------------------------------------
Landlord's Final Determination 27.4 89
- --------------------------------------------------------------------------------
Landlord's Initial Determination 27.4 88
- --------------------------------------------------------------------------------
Landlord's Low Rise Elevator Cost Contribution 11.2 44
- --------------------------------------------------------------------------------
Landlord's Offer Notice 37.1 107
- --------------------------------------------------------------------------------
Landlord's Work 2.6 6
- --------------------------------------------------------------------------------
lease 26.1 79
- --------------------------------------------------------------------------------
LMEP Application 41.2 115
- --------------------------------------------------------------------------------
LMEP Benefits 41.1 115
- --------------------------------------------------------------------------------
LMEP Program 41.1 115
- --------------------------------------------------------------------------------
Minimum Price 37.2 108
- --------------------------------------------------------------------------------
Multi-Full Floor Contiguous Block 26.3 80
- --------------------------------------------------------------------------------
New Bulkhead Enclosure 36.1 102
- --------------------------------------------------------------------------------
Newmark 23 76
- --------------------------------------------------------------------------------
Nomura 2.3 5
- --------------------------------------------------------------------------------
Non-Compliant Party 41.3 116
- --------------------------------------------------------------------------------
Notice of Landlord Failure 39.1 110
- --------------------------------------------------------------------------------
OCS 41.3 116
- --------------------------------------------------------------------------------
Offer 37.1 107
- --------------------------------------------------------------------------------
Offer Notice 26.2 79
- --------------------------------------------------------------------------------
Offer Price 37.2 108
- --------------------------------------------------------------------------------
Offer Space 26.2 79
- --------------------------------------------------------------------------------
Offer Space Appraiser 26.10 84
- --------------------------------------------------------------------------------
Offer Space Commencement Date 26.6 81
- --------------------------------------------------------------------------------
Offer Space Fair Market Rent 26.9 82
- --------------------------------------------------------------------------------
Offer Space Initial Cleaning Cost 26.9 83
- --------------------------------------------------------------------------------
Office Area Renewal Fixed Rent 27.3 87
- --------------------------------------------------------------------------------
Operating Costs 4.1 9
- --------------------------------------------------------------------------------
Original Applicable Price 11.17 54
- --------------------------------------------------------------------------------
Other Special Purpose Area Lease Provision 34.1 94
- --------------------------------------------------------------------------------
Other Tenants 34.1 94
- --------------------------------------------------------------------------------
Partial Accepted Offer Space 26.7 81
- --------------------------------------------------------------------------------
Partial Premises Floor 2.1 4
- --------------------------------------------------------------------------------
Pipe Erection and Other Work Provisions 42.1 118
- --------------------------------------------------------------------------------
Pipe Space 42.7 123
- --------------------------------------------------------------------------------
plans and specifications 6.2 23
- --------------------------------------------------------------------------------
Preliminary ICIP Application 41.2 115
- --------------------------------------------------------------------------------
Prime Rate 19.1 70
- --------------------------------------------------------------------------------
procuring party 22.6 74
- --------------------------------------------------------------------------------
Prohibited Occupant 5.3 22
- --------------------------------------------------------------------------------
Project 41.1 115
- --------------------------------------------------------------------------------
Property 37.1 108
- --------------------------------------------------------------------------------
Property Information 37.1 107
- --------------------------------------------------------------------------------
Proposed Sublease Expiration Date 12.2 56
- --------------------------------------------------------------------------------
Proposed Sublease Premises 12.2 56
- --------------------------------------------------------------------------------
Real Estate Taxes 4.1 16
- --------------------------------------------------------------------------------
Recapture Provision 26.2 79
- --------------------------------------------------------------------------------
Records Retention Deadline 4.1 16
- --------------------------------------------------------------------------------
Registers Office 16.3 66
- --------------------------------------------------------------------------------
</TABLE>
Page 3 of 5
<PAGE> 10
180 Maiden Lane
Table of Definitions
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Lease Lease
Defined Term Section Page
- --------------------------------------------------------------------------------
<S> <C> <C>
Related Party 12.8 60
- --------------------------------------------------------------------------------
Renewal Notice 27.1 86
- --------------------------------------------------------------------------------
Renewal Option 27.1 85
- --------------------------------------------------------------------------------
Renewal Premises 27.1 86
- --------------------------------------------------------------------------------
Renewal Term 27.1 85
- --------------------------------------------------------------------------------
Renewal Term Appraiser 27.4 89
- --------------------------------------------------------------------------------
Renewal Term Fair Market Rent 27.3 87
- --------------------------------------------------------------------------------
Renewal Term Initial Cleaning Cost 27.3 88
- --------------------------------------------------------------------------------
Rent 3.1 6
- --------------------------------------------------------------------------------
Scheduled Delivery Date 2.3 4
- --------------------------------------------------------------------------------
Scheduled Offer Space Delivery Date 26.2 79
- --------------------------------------------------------------------------------
Second Renewal Term 27.1 86
- --------------------------------------------------------------------------------
Section 39.2 Advance 39.2 112
- --------------------------------------------------------------------------------
Section 39.2 Demand Amount 39.2 112
- --------------------------------------------------------------------------------
Section 39.2 Demand Notice 39.2 112
- --------------------------------------------------------------------------------
Section 39.2 Dispute Notice 39.2 112
- --------------------------------------------------------------------------------
Secure Area 7.1 26
- --------------------------------------------------------------------------------
Selected Removal Bid 9.3 34
- --------------------------------------------------------------------------------
Single Tenant Floors 42.2 120
- --------------------------------------------------------------------------------
Special Installations 9.3 34
- --------------------------------------------------------------------------------
Special Purpose Area 34.1 93
- --------------------------------------------------------------------------------
Special Purpose Area Right 34.1 94
- --------------------------------------------------------------------------------
Special Purpose Elevator 11.2 45
- --------------------------------------------------------------------------------
SSL Special Purpose Area Lease Provision 34.1 94
- --------------------------------------------------------------------------------
Switch 10.5 37
- --------------------------------------------------------------------------------
Tenant ID Card 11.15 52
- --------------------------------------------------------------------------------
Tenant Indemnitees 7.2 29
- --------------------------------------------------------------------------------
Tenant's Acceptance 37.1 108
- --------------------------------------------------------------------------------
Tenants Antenna Equipment 36.2 105
- --------------------------------------------------------------------------------
Tenant's Antennas 36.2 105
- --------------------------------------------------------------------------------
Tenant's Building Equipment 7.3 30
- --------------------------------------------------------------------------------
Tenant's CCTV Equipment 36.3 106
- --------------------------------------------------------------------------------
Tenants Cleaning Share 4.1 9
- --------------------------------------------------------------------------------
Tenant's Cooling Plant 36.1 103
- --------------------------------------------------------------------------------
Tenant's Cooling Tower 36.1 103
- --------------------------------------------------------------------------------
Tenant's Dedicated Switches 10.5 37
- --------------------------------------------------------------------------------
Tenant's Determination 26.10 83
- --------------------------------------------------------------------------------
Tenant's Electrical Equipment 36.1 103
- --------------------------------------------------------------------------------
Tenant's Electrical Work 10.5 37
- --------------------------------------------------------------------------------
Tenant's Final Determination 27.4 89
- --------------------------------------------------------------------------------
Tenant's Generator Plant 36.1 103
- --------------------------------------------------------------------------------
Tenant's Generators 36.1 102
- --------------------------------------------------------------------------------
Tenant's Initial Determination 27.4 88
- --------------------------------------------------------------------------------
Tenant's Loadbank 36.1 103
- --------------------------------------------------------------------------------
Tenant's Loading Dock Area 36.6 107
- --------------------------------------------------------------------------------
Tenants Low Rise Elevator Work 11.2 44
- --------------------------------------------------------------------------------
Tenant's Low Rise Elevator Work Costs 11.2 44
- --------------------------------------------------------------------------------
Tenants Mechanical Equipment 36.1 103
- --------------------------------------------------------------------------------
Tenants Self-Help Notice 39.1 111
- --------------------------------------------------------------------------------
Tenant's Self-Help Right 39.1 111
- --------------------------------------------------------------------------------
</TABLE>
Page 4 of 5
<PAGE> 11
180 Maiden Lane
Table of Definitions
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Lease Lease
Defined Term Section Page
- --------------------------------------------------------------------------------
<S> <C> <C>
Tenant's Shafts 42.1 118
- --------------------------------------------------------------------------------
Tenants Termination Option 38 109
- --------------------------------------------------------------------------------
Termination Fee 38 110
- --------------------------------------------------------------------------------
Termination Notice 38 109
- --------------------------------------------------------------------------------
Underlying Lease 16.1 65
- --------------------------------------------------------------------------------
Underlying Mortgage 16.1 65
- --------------------------------------------------------------------------------
untenantable 13.1 61
- --------------------------------------------------------------------------------
Unused Exhaust Space 42.8 123
- --------------------------------------------------------------------------------
Year 2000 Compliant, Year 2000 Compliance 7.3 31
- --------------------------------------------------------------------------------
</TABLE>
Page 5 of 5
<PAGE> 12
LEASE, dated as of July 16, 1998, between TCC ACQUISITION CORP., as
agent for the companies listed on Exhibit A, having an office at 180 Maiden
Lane, New York, New York 10038 ("Landlord"), and THE GOLDMAN SACHS GROUP, L.P.,
a Delaware limited partnership, having an office at 85 Broad Street, New York,
New York 10004 ("Tenant").
Article 1. Basic Lease Provisions.
1.1 Building:
The Building located on the parcel of land (the "Land") having
as an address 180 Maiden Lane, New York, New York 10038.
1.2 Rentable Area of the Building (excluding Basement):
1,091,570 rentable square feet. Attached as Exhibit B is a
stacking plan showing the rentable, useable, and gross area of
each floor of the Building, and typical floor plans of a Full
Premises Floor in the mid-rise elevator bank and of a Full
Premises Floor in the high rise elevator bank.
1.3 Premises:
as set forth on the listing attached as Exhibit C and as shown
on Exhibit D.
1.4 Effective Date of Lease:
The date first-above written.
1.5 Last Delivery Date:
The Delivery Date of the last to be delivered of the 4th Floor
Office Area and floors 6-16 (the 4th Floor Office Area and
floors 6-16 being together referred to as the "Base
Premises").
1.6 Term Commencement Date:
The first Delivery Date.
1.7 Initial Expiration Date:
The last day of the calendar month during which occurs the
fifteenth (15th) anniversary of the Last Delivery Date. As
used in this Lease the term "Expiration Date" shall refer to
the Initial Expiration Date or, if any Renewal Option provided
for in Article 27 is duly and validly exercised, the
expiration date of the applicable Renewal Term.
<PAGE> 13
1.8 Rent Commencement Date:
With respect to each Applicable Portion of the Premises
delivered to Tenant, seven (7) months after the Delivery Date
of such Applicable Portion.
1.9 Rent:
(a) Fixed Rent for Office Areas (as more particularly
described in Section 3.2):
<TABLE>
<CAPTION>
Years (From Last Annual Rate per
Delivery Date(1)) rentable square foot
----------------- --------------------
<S> <C>
1-5 $37.50
6-10 $39.50
11-15 $44.00
</TABLE>
(b) Fixed Rent for Special Purpose Areas (as more particularly
described in Section 3.2):
<TABLE>
<CAPTION>
Years (From Last Annual Rate per
Delivery Date(2)) rentable square foot
----------------- --------------------
<S> <C>
1-5 $20.00
6-10 $21.00
11-15 $23.25
</TABLE>
(c) Fixed Rent for Non-Office Areas (as more particularly
described in Section 3.2):
<TABLE>
<CAPTION>
Years (From Last Annual Rate per
Delivery Date(3)) rentable square foot
----------------- --------------------
<S> <C>
1-5 $18.75
6-10 $19.75
11-15 $22.00
</TABLE>
(d) Additional Rent
- ----------
(1) Section 3.2 provides that floors delivered prior to the Last Delivery Date
shall have Fixed Rent payable at $37.50 per rentable square foot, subject to the
applicable Rent Abatement Period.
(2) Section 3.2 provides that floors delivered prior to the Last Delivery Date
shall have Fixed Rent payable at $20.00 per rentable square foot, subject to the
applicable Rent Abatement Period.
(3) Section 3.2 provides that floors delivered prior to the Last Delivery Date
shall have Fixed Rent payable at $18.75 per rentable square foot, subject to the
applicable Rent Abatement Period.
2
<PAGE> 14
Additional Rent: All sums, others than Fixed Rent, which are
due and payable to Landlord by Tenant under this Lease.
1.10 Rent Abatement Period:
With respect to any Applicable Portion of the Premises, the
period commencing on the Delivery Date of such Applicable
Portion and ending on the day preceding the Rent Commencement
Date with respect to such Applicable Portion.
1.11 Base Year:
1999 calendar year.
1.12 Tenant's Proportionate Share:
At any time, the percentage which has been calculated by
dividing the total number of rentable square feet of the
Office Area and the Special Purpose Areas other those in the
Basement which has been delivered to Tenant by the total
Rentable Area of the Building.
1.13 Special Purpose Areas:
As defined in Article 34.
1.14 Non-Office Areas:
Basement Spaces "I", "G" & "M"
the 1,208 rentable square foot portion of the 28th floor
the 1.2 19 rentable square foot portion of the 26th floor
1.15 Office Areas:
All portions of the Premises other than the Special Purpose
Areas and the Non-Office Areas.
1.16 Renewal Terms:
Two (2) additional periods of five (5) years each, subject to
the provisions of Article 27 of this Lease.
1.17 Landlord Address for Notices:
TCC Acquisition Corp., as Agent
c/o The Continental Insurance Company
CNA Plaza
333 S. Wabash - 14 North
Chicago, Illinois 60685
Attention: Corporate Real Estate
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1.18 Tenant Address for Notices:
General Counsel
The Goldman Sachs Group, L.P.
85 Broad Street
New York, New York 10004
Attention: Elaine S. Laurence
AND
General Services -- Lease Administration
The Goldman Sachs Group, L.P.
85 Broad Street
New York, New York 10004
Attention: Marlene G. Krammer
1.19 Initial Improvements Agreement:
the Initial Improvements Agreement of even date herewith
between Landlord and Tenant.
Article 2. Demise of Premises; Term.
2.1 Landlord hereby leases and demises to Tenant, and Tenant hereby
hires and takes from Landlord, upon and subject to the covenants, agreements,
terms, provisions and conditions of this Lease, the Premises. For the purposes
of this Lease: the term "Full Premises Floor" shall mean any floor of the
Building on or above the mezzanine level all of the leasable area of which is
leased to Tenant, and the term "Partial Premises Floor" shall mean any floor of
the Building on or above the mezzanine level some but not all of the leasable
area of which is leased to Tenant.
2.2 This Lease is effective on the Effective Date. The term shall
commence on the Term Commencement Date and shall end at 11:59 p.m. on the
Expiration Date, or on such earlier date upon which the term may expire or be
terminated pursuant to any of the conditions of limitation or other provisions
of this Lease or pursuant to law.
2.3 Landlord agrees to deliver the Premises, or portions thereof, in
accordance with the dates set forth in Exhibit C under the column heading
"Scheduled Delivery Date" (each floor, or a portion of a floor as described in
Exhibit C shall be deemed an "Applicable Portion"), and may deliver any
Applicable Portion to Tenant on any date earlier than the Scheduled Delivery
Date of such Applicable Portion, upon sixty (60) days' notice to Tenant of such
earlier delivery date. Prior to delivering the 16th floor, the 37th floor or the
40th floor Landlord shall complete Landlord's Work (as hereinafter defined) with
respect thereto. As used in this Lease the term "Delivery Date" with respect to
any
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Applicable Portion shall mean the date of the actual delivery thereof; provided,
however, that in the case of the 16th floor, the 37th floor or the 40th floor
the term "Delivery Date" shall mean the later of (i) the date of the actual
delivery thereof, and (ii) the date of completion of Landlord's Work with
respect thereto. As used herein, the phrase "deliver" or "delivery" shall refer
to delivery to Tenant of vacant possession. Landlord represents to Tenant that
(except as provided in the next paragraph), pursuant to the terms thereof or the
terms of other written agreements now in effect, each lease now covering any
Applicable Portion will expire or terminate on or prior to Scheduled Delivery
Date relative to such Applicable Portion, it being understood that (i) no
holding over by any tenant beyond such expiration or termination shall give rise
to or constitute a breach of the representation set forth in this sentence, and
(ii) the provisions of Section 2.5 below shall not be applicable to any breach
of such representation.
Landlord has not yet obtained surrender agreements from the tenant
of the 22nd floor or from space E on the 21st floor. If the Delivery Date of the
22nd floor does not occur on or before January 1, 1999 Tenant shall have the
right, by giving notice to Landlord prior to such Delivery Date, to revoke its
leasing of the 22nd floor pursuant to this Article 2. If the Delivery Date of
such space E does not occur on or before January 1, 1999 Tenant shall have the
right, by giving notice to Landlord prior to such Delivery Date, to revoke its
leasing of space E pursuant to this Article 2.
Tenant acknowledges that Nomura Capital Management, Inc. ("Nomura")
has an option to lease space C on the 26th floor exercisable on or before
February 1, 2007 for delivery to Nomura no later than August 1, 2007. If Nomura
exercises such option, Landlord shall promptly notify Tenant and the term of
this Lease shall expire with respect such space C on July 31, 2007.
2.4 Within thirty (30) days after the Delivery Date with respect to
any Applicable Portion, at the request of the other party, Landlord and Tenant
shall execute a mutually acceptable instrument specifying the exact calendar
dates of the Term Commencement Date, the Delivery Date of such Applicable
Portion, the Rent Commencement Date with respect to such Applicable Portion,
Tenant's Proportionate Share following the Delivery Date and, following the Last
Delivery Date, the Initial Expiration Date.
2.5 Pursuant to Section 223-a of the Real Property Law of the State
of New York and notwithstanding any other law of like import now or hereafter in
force, the parties hereto expressly provide that, if any Applicable Portion of
the Premises are not available for delivery to Tenant on the Scheduled Delivery
Date, Tenant shall not have any claim against Landlord, except as described in
Section 3.5, nor any right to rescind this Lease. Landlord shall use
commercially reasonable efforts, including commencing eviction proceedings and
diligently prosecuting the same to completion, at Landlord's cost and expense,
to obtain possession of any Applicable Portion that is not available for
delivery to Tenant on the Scheduled Delivery Date by reason of the holding over
in the space by a prior tenant thereof.
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2.6 Subject to the Initial Improvements Agreement, Landlord shall
deliver, and Tenant shall accept each Applicable Portion in its present "as is
condition, subject to reasonable wear and tear between the Effective Date and
the Delivery Date of such Applicable Portion, except (i) for latent defects,
(ii) that prior to the delivery of the 16th floor, Landlord shall have performed
all of the demolition work required by Article 34, (iii) that prior to the
delivery of the 37th floor Landlord shall have demolished all of the
improvements therein, including the existing staircase, and filled in and
restored the floor slabs above and below, and (iv) that prior to the delivery of
the 40th floor Landlord shall have demolished the existing staircase and filled
in and restored the floor slabs above and below (the work described in clauses
(ii), (iii) and (iv) being herein called "Landlord's Work"). Notwithstanding the
foregoing, within sixty (60) days after the delivery of any Applicable Portion,
Landlord, at Landlord's expense, shall refurbish the perimeter single finned
pipe radiation units serving such Applicable Portion as required for efficient
heating and otherwise in good working order and condition, all to the reasonable
satisfaction of Tenant.
Article 3. Rent.
3.1 Except as otherwise provided herein, Tenant shall pay the Fixed
Rent and Additional Rent as and when the same shall become due and payable, to
Landlord, at its office in the United States of America, or at any other place
or places in the United States of America as Landlord shall designate to Tenant,
in cash or by check payable to Landlord in United States currency, without
demand therefor and without any setoff or deduction whatsoever. The Fixed Rent
and the Additional Rent are collectively referred to from time to time as the
"Rent."
3.2 The rent reserved under this Lease for the term hereof shall be
and consist of Fixed Rent payable as follows ("Fixed Rent") with respect to each
Applicable Portion delivered to Tenant in accordance with this Lease:
with respect to the Office Areas:
(i) Commencing on the Delivery Date for each Applicable Portion and
continuing through the date which is the fifth (5th) anniversary of the
Last Delivery Date, Fixed Rent shall be payable at the rate of $37.50 per
rentable square foot per annum; and
(ii) Commencing on the date following the fifth (5th) anniversary of
the Last Delivery Date and continuing through the date which is the tenth
(10th) anniversary of the Last Delivery Date, Fixed Rent shall be payable
at the rate of $39.50 per rentable square foot per annum; and
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(iii) Commencing on the date following the tenth (10th) anniversary
of the Last Delivery Date and continuing through the Initial Expiration
Date, Fixed Rent shall be payable at the rate of $44.00 per rentable
square foot per annum.
with respect to the Special Purpose Areas:
(iv) Commencing on the Delivery Date for each Applicable Portion and
continuing through the date which is the fifth (5th) anniversary of the
Last Delivery Date, Fixed Rent shall be payable at the rate of $20.00 per
rentable square foot per annum; and
(v) Commencing on the date following the fifth (5th) anniversary of
the Last Delivery Date and continuing through the date which is the tenth
(10th) anniversary of the Last Delivery Date, Fixed Rent shall be payable
at the rate of $21.00 per rentable square foot per annum; and
(vi) Commencing on the date following the tenth (10th) anniversary
of the Last Delivery Date and continuing through the Initial Expiration
Date, Fixed Rent shall be payable at the rate of $23.25 per rentable
square foot per annum.
with respect to the Non-Office Areas:
(vii) Commencing on the Delivery Date for each Applicable Portion
and continuing through the date which is the fifth (5th) anniversary of
the Last Delivery Date, Fixed Rent shall be payable at the rate of $18.75
per rentable square foot per annum; and
(viii) Commencing on the date following the fifth (5th) anniversary
of the Last Delivery Date and continuing through the date which is the
tenth (10th) anniversary of the Last Delivery Date, Fixed Rent shall be
payable at the rate of $19.75 per rentable square foot per annum; and
(ix) Commencing on the date following the tenth (10th) anniversary
of the Last Delivery Date and continuing through the Initial Expiration
Date, Fixed Rent shall be payable at the rate of $22.00 per rentable
square foot per annum.
3.3 Fixed Rent shall be payable in equal monthly installments in
advance on the first day of each and every calendar month throughout the term,
except that commencing on the Delivery Date for each Applicable Portion, Fixed
Rent shall be abated for the Rent Abatement Period.
3.4 Commencing upon the Delivery Date for each Applicable Portion,
Tenant shall pay Landlord for the electricity provided to the Premises pursuant
to Article 9 of this Lease.
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3.5 Notwithstanding the foregoing, in the event that Landlord shall
fail to deliver any Applicable Portion of the Base Premises or the Special
Purpose Areas on or before the thirtieth (30th) day following the Scheduled
Delivery Date for such Applicable Portion (as postponed by Section 34.1 if
applicable) for any reason other than force majeure delays, then for each day on
or after such thirtieth (30th) day until the Delivery Date of such Applicable
Portion of the Base Premises or the Special Purposes Areas, the Rent
Commencement Date for such Applicable Portion shall be postponed by two days for
each day, commencing with the thirtieth (30th) day following the Scheduled
Delivery Date until the Delivery Date for such Applicable Portion.
3.6 In the event the Fixed Rent or Additional Rent or any part
thereof required to be paid by Tenant under the provisions of this Lease during
the term become uncollectible or shall be reduced or required to be reduced or
refunded by virtue of any Federal, state, county or city law, order or
regulation, or any direction of a public officer or body pursuant to law, or the
orders, rules, codes or regulations of any public or private organization or
entity in the nature of rent control or rent regulation, then Landlord, at its
option, may at any time thereafter terminate this Lease by not less than ninety
(90) days' written notice to Tenant on a date set forth in the notice. Upon such
termination this Lease and the Term hereof shall terminate and come to an end as
of the date fixed in the notice as if that date were the Expiration Date.
Notwithstanding the foregoing, Landlord shall not have the right to terminate
this Lease, if within the ninety (90) day period Tenant agrees in writing that:
(a) the Rent herein reserved is a reasonable rental and agrees to continue to
pay the rentals to the extent legally enforceable, and (b) upon the expiration
or other legal termination of the applicable period of time during which any
amounts shall be uncollectible, reduced or refunded, the Fixed Rent and
Additional Rent shall become and shall thereafter be payable in accordance with
the amounts reserved herein for the periods following such expiration or
termination, and (c) upon the expiration or other legal termination of the
applicable period of time during which any amounts shall be uncollectible,
reduced or refunded, Tenant shall pay to Landlord as Additional Rent, within
sixty (60) days after demand, all uncollected, reduced or refunded amounts that
would have been payable, absent such law, order, regulation, direction, rule or
code, provided that it is then legally permissible for Landlord to collect and
Tenant to pay all such amounts.
Article 4. Tax, Operating Costs and Cleaning Cost.
4.1 Definitions. As used in this Article:
(a) "Audit Period" with respect to the Escalation Statement relative
to any Lease Year shall mean the five year period commencing upon the
delivery of such Escalation Statement to Tenant.
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(b) "Cleaning Costs" shall mean, for any period, the costs of
cleaning all office floors of the Building above the mezzanine level of
the Building (including the common areas on such floors) excluding any
Full Premises Floors cleaned by Tenant pursuant to pursuant to Section
11.7 (the "Landlord Cleaned Building Area"); provided, however, that
"Cleaning Costs" shall not include any of the costs referred to in clause
(2) through (31) of Section 4.1(g).
(c) "Tenant's Cleaning Share" shall mean, for any period, a fraction
(i) the numerator of which is the total number of rentable
square feet of the Premises cleaned by Landlord pursuant to clause
(b) and (c) of Section 11.6 during said period (the "Landlord
Cleaned Premises Area"), and
(ii) the denominator of which is the Landlord Cleaned Building
Area during said period.
(d) "Escalation Statement" shall mean a statement setting forth the
amount payable by Tenant for a specified Lease Year pursuant to this
Article, including a reasonably detailed statement of Real Estate Taxes
for such Lease Year and Operating Costs for such Lease Year in form
reasonably acceptable to Tenant.
(e) "Lease Year" shall mean each calendar year in which any part of
the term of this Lease occurs and, in the case of a Default Termination of
this Lease, in which any part of the term of this Lease would have
occurred except for such Default Termination.
(f) "Operating Costs" shall mean the aggregate of all expenses of
operating, maintaining, and repairing the Building and the plazas,
sidewalks and curbs adjacent thereto, including, but not limited to, the
following:
(1) the replacement of worn-out equipment, facilities and
installations;
(2) steam, water, fuel and other utilities;
(3) heat, air conditioning and ventilation;
(4) refuse and rubbish removal, window cleaning, janitorial
and exterminating services;
(5) electricity for, and painting of, the public or common
areas of the Building;
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(6) security;
(7) cleaning services with respect to (i) the common areas of
the Building on or below the mezzanine level of the Building, and
(ii) the fire stairs and the windows of the Building (both the
interior and exterior thereof);
(8) gardening and other landscaping services;
(9) insurance (including rental income insurance);
(10) uniforms and supplies;
(11) sale or use taxes on supplies or services;
(12) payroll taxes, wages and salaries of all persons engaged
in the operation, maintenance and repair of the Building and the
plazas, sidewalks and curbs adjacent thereto and so-called fringe
benefits, including social security taxes, unemployment taxes,
worker's compensation, coverage for disability benefits,
contributions to any pension, hospitalization, welfare or retirement
plans or any other similar or like expenses incurred under the
provisions of any collective bargaining agreement and any other
amount incurred to provide benefits for employees engaged in the
operation, maintenance and repair of the Building and the plazas,
sidewalks and curbs adjacent thereto;
(13) fees for management services provided by an independent
management company or by Landlord, in either case, not to exceed, in
any Lease Year, including the Base Operating Year, an amount that
would be a reasonable and customary management fee paid to a
management company not affiliated with Landlord and that would
result from competitive bidding in an arms' length transaction for
buildings similar to the Building located in the vicinity of the
Building;
(14) the annual amortization over the useful life thereof of
costs, including financing costs (if any) incurred by Landlord, of
any equipment or device for, or capital improvement to, the Building
installed or paid for by Landlord on or after
(i) the date hereof (in the case of the determination of
Operating Costs for the purpose of computing the amount
payable by Tenant under this Article 4 with respect to
any Applicable Portion), or
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(ii) the applicable Offer Space Commencement Date (in
the case of the determination of Operating Costs for the
purpose of computing the amount payable by Tenant under
this Article 4 with respect to any Accepted Offer Space)
(the equipment, device or capital improvement being herein called an
"Amortized Capital Improvement") that is either intended as a
labor-saving measure or to effect other economies in the operation
or maintenance of the Building (but not, in either case, in any
Lease Year with respect to any Amortized Capital Improvement an
amount in excess of the actual savings in Operating Costs resulting
in such Lease Year from such Amortized Capital Improvement) or that
is required to comply with any laws, rules or regulations of any
governmental authority having jurisdiction enacted after
(i) the date hereof (in the case of the determination of
Operating Costs for the purpose of computing the amount
payable by Tenant under this Article 4 with respect to
any Applicable Portion), or
(ii) the applicable Offer Space Commencement Date (in
the case of the determination of Operating Costs for the
purpose of computing the amount payable by Tenant under
this Article 4 with respect to any Accepted Offer
Space);
(15) the charges of any independent contractor who under a
contract does any of the work of operating and maintaining the
Building or any of the plazas, sidewalks or curbs adjacent thereto,
provided that any such contract shall be competitively bid or the
cost thereof shall not exceed an amount that would result if the
contract were competitively bid;
(16) legal and accounting fees and disbursements;
(17) liabilities, damages, awards and judgments including
interest thereon, paid or incurred by Landlord and arising from the
ownership, operation, maintenance and repair of the Building and the
plazas, sidewalks and curbs adjacent thereto (excluding specifically
(a) all liabilities, damages, awards and judgments for injury or
death to persons and for property damage arising from ownership,
operation, maintenance and repair of the Building
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and the plazas, sidewalks and curbs adjacent thereto, or (b) all
liabilities, damages, awards and judgments on account of any breach
or violation of any tenant's lease); and
(18) any other expense or charge of any nature whatsoever,
whether or not herein mentioned that would, under generally accepted
accounting principles, be construed as an operating expense.
If during any period for which the Operating Costs are being
computed, including the Base Operating Year, Landlord is not for all or
any part of such period furnishing any particular work or service (the
cost of which if performed by Landlord would constitute an Operating Cost)
to more than five percent (5%) of the rentable portion of the office area
in the Building due to the fact that more than five percent (5%) of the
rentable portion of the office area of the Building is not leased to a
tenant or that Landlord is not obligated to perform the work or service in
that portion, then the amount of the Operating Costs for that period shall
be deemed, for the purposes of this Article, to be increased by an amount
equal to the additional Operating Costs that reasonably would have been
incurred during that period by Landlord if it had at its own expense
furnished the work or service to ninety-five percent (95%) of the rentable
portion of the office area in the Building.
(g) Notwithstanding anything to the contrary in this Lease, the term
"Operating Costs" shall not include any of the following:
(1) all costs of cleaning (including costs includable under
any subsection of Section 4.1(f) with respect to cleaning) any
portion of the Building other than (i) the common areas of the
Building on or below the mezzanine level of the Building, (ii) the
fire stairs of the Building, or (iii) the windows of the Building
(both the interior and the exterior thereof);
(2) Real Estate Taxes, franchise, transfer, inheritance or
capital stock taxes or taxes imposed upon or measured by the income
or profits of Landlord;
(3) the cost of any item that is, or should in accordance with
generally accepted accounting principles be, capitalized on the
books of Landlord (except as provided in Section 4.1(f)(14));
(4) the cost of any electricity or steam furnished to the
Premises or any other leasable space in the Building whether vacant
or demised to other tenants; the cost of any work or service
furnished for a tenant of space in the Building (including Tenant)
at that tenant's cost and expense;
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(5) any cost to the extent that Landlord is reimbursed
therefor out of insurance proceeds or otherwise, or for which
Landlord would be reimbursed under a standard "all risk" policy that
an owner of a building similar to the Building would typically carry
containing a deductible limit not exceeding the deductible limit
that an owner of a building similar to the Building would typically
carry;
(6) leasing commissions or advertising expenses incurred in
leasing or procuring tenants for the Building and legal expenses
incurred in preparing leases for tenants or in enforcing the terms
of any lease;
(7) legal fees, expenses and disbursements (other than those
reasonably incurred in connection with the maintenance and operation
of the Building), including, without limitation those incurred in
connection with leasing, sales, financing or refinancing;
(8) the cost of overtime heating, ventilating and air
conditioning furnished to the Premises or any other space leased to
tenants;
(9) depreciation and amortization, except as provided in
Section 4.1(f)(14);
(10) interest on and amortization of debts, except as provided
in Section 4.1(f)(14);
(11) the cost of improvements, installations and decorations
made in connection with preparing space for any tenant or occupant
or renovating space for any existing tenant or occupant, including
permit, license and inspection fees and any contribution by Landlord
to the cost of any such improvements, installations and decorations;
(12) financing and refinancing costs; and any costs incurred
in connection with the sale of the Building or the making or
assignment of any underlying or ground lease;
(13) the cost of any work or service (or level or amount
thereof) provided to any tenant or occupant of the Building
(including Tenant) which is in excess of the work or service (or
level or amount thereof) which Landlord is required by this Lease to
furnish to Tenant without separate or additional charge (including
without limitation the costs of all overtime HVAC, supplemental
HVAC, supplemental chilled water, supplemental condenser water,
special or supplemental cleaning (it being understood that the term
"special or supplemental cleaning" shall include all cleaning (in
the Premises or in any other leasable area of the Building) of the
type excepted
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from Landlord's cleaning obligation under clause (ii) to the proviso
to the first paragraph of Section 11.6), and overtime freight
elevator service);
(14) interest, fines and penalties resulting from the
violation by Landlord or any tenant or occupant of the Building of
any laws or requirements of legal authorities;
(15) costs and expenses incurred in connection with procuring
tenants, including lease concessions, landlord contributions and
allowances, lease takeover or rental assumption obligations;
(16) costs resulting from any judgement, settlement or
arbitration award against Landlord (including any thereof for bodily
or personal injury or property damage) and attorneys fees and
disbursements and other costs incurred in connection with the
defense of any claim or action against Landlord;
(17) costs of the type described in Section 4.1 (f)(12)
relative to any personnel above the grade of Building Manager;
(18) amounts payable under any ground or underlying lease;
provided, however, that this subsection shall not be deemed to
exclude from Operating Costs any amount payable under any such lease
which is otherwise included in and not otherwise excluded from
Operating Costs;
(19) the excess, if any of (i) any sums paid or incurred to
affiliates of Landlord or to, or to the affiliates of, the managing
agent of the Building for goods, services or other items the costs
of which are includable in Operating Costs, over (ii) the sums which
would have been paid or incurred therefor if the same had been
furnished by unaffiliated third-parties on a competitive bid basis;
(20) any compensation paid to clerks, attendants or other
persons in commercial concessions;
(21) advertising and promotional expenses;
(22) interest, charges and penalties resulting from the late
payment of any Operating Costs;
(23) costs incurred in connection with the removal,
encapsulation, enclosure, handling or other treatment of any
hazardous material or substance;
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(24) the costs of purchasing sculptures, paintings or other
works of art for the Building or its plaza in excess of amounts that
reasonable owners of comparable buildings would spend for decorating
the common areas of such buildings;
(25) legal fees, expenses and disbursements relating (A) to
enforcement of leases, recovery of possession, or collection of
rent, (B) to disputes with tenants or occupants, or prospective
tenants or occupants, or real estate brokers, (C) to disputes with
purchasers or lenders or ground or underlying lessors, (D) to
negotiations of leases, contracts of sale or mortgages or sale or
finance documents, or (E) to the defense of any claim the payment of
which would not constitute an Operating Cost;
(26) the costs of installing, operating, maintaining,
repairing and replacing any parking facilities in the Building;
(27) costs relating to withdrawal liability or unfunded
pension liability under any pension plan;
(28) the cost of complying in the Premises or in any other
leasable space in the Building with any law, rule or regulation of
any governmental authority having jurisdiction to the extent that
(i) in the case of the Premises, Tenant is required by the
provisions of this Lease (other than this Article 4) to bear such
cost, or (ii) in the case of any other leasable space in the
Building, Tenant would be required by the provisions of this Lease
(other than this Article 4) to bear such cost if such other leasable
space were a part of the Premises;
(29) the cost of installing, operating, maintaining and
replacing any specialty facility, such as any cafeteria or other
food service facility, any conference. or meeting facility, any
auditorium (including the Ricker auditorium), any dining or luncheon
club (including the Continental Club), any athletic or recreational
facility, or any observatory or radio or TV facility; and
(30) Landlord's general overhead; and
(31) to the extent any costs includable in Operating Costs are
incurred with respect to both the Building and other properties
(including, without limitation, salaries, fringe benefits and other
compensation of Landlord's personnel who provide services to both
the Building and other properties), there shall be excluded from
operating expenses a fair and reasonable percentage thereof which is
properly allocable to the other properties.
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(h) "Real Estate Taxes" shall mean (i) the taxes and assessments
imposed upon the Building and the Land (other than any interest or
penalties imposed in connection therewith) reduced by all abatements,
reductions and exemptions if, as and when in effect and benefitting the
Building and/or the Land, and (ii) all expenses, including fees and
expenses of counsel and experts, incurred by, or reimbursable by, Landlord
in connection with any application for a reduction in the assessed
valuation for the Building or the Land or the Real Estate Taxes or for a
judicial review thereof. If due to a future change in the method of
taxation any franchise, income, profit or other tax shall be levied
against Landlord in substitution for or in lieu of, in whole or in part,
any tax that would otherwise constitute a Real Estate Tax, the franchise,
income, profit or other tax (computed as if the Building and Land were the
only asset or business of Landlord) shall be deemed to be a Real Estate
Tax for the purposes hereof
(i) "Records Retention Deadline" with respect to any Lease Year
shall mean the last day of the Audit Period with respect to the Escalation
Statement relative to such Lease Year; provided, however, that in no event
shall the Records Retention Deadline with respect to any Lease Year occur
until all disputes relative to such Lease Year timely commenced by Tenant
under this Article 4 have been resolved. Notwithstanding the foregoing,
the Record Retention Deadline with respect to the Base Year shall mean the
last day of the Audit Period with respect to Lease Year 2000; provided,
however, that in no event shall the Records Retention Deadline with
respect to the Base Year occur until all disputes relative to the Base
Year timely commenced by Tenant under this Article 4 have been resolved.
4.2 Additional Rent. Tenant shall pay, as Additional Rent, in
respect of each Lease Year:
(a) Tenant's Proportionate Share of the excess of Real Estate
Taxes for such Lease Year over Real Estate Taxes for the Base Year;
(b) Tenant's Proportionate Share of the excess of Operating
Costs for such Lease Year over Operating Costs for the Base Year;
and
(c) Tenant's Cleaning Share of the Cleaning Costs for such
Lease Year; provided, however, that if during such Lease Year the
Landlord Cleaned Premises Area or the Landlord Cleaned Building Area
shall change the amount referred to in this clause (c) shall be
computed separately for each portion of such Lease Year.
Tenant's liability under clause (c) above with respect to any Applicable Portion
shall not commence, and shall be pro-rated as of, the Rent Commencement Date
relative to such Applicable Portion.
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If the Real Estate Taxes for any Lease Year or part thereof shall be
reduced after a payment therefor shall have been made by Tenant in respect of
that Lease Year pursuant to this Section, Landlord shall credit to Tenant an
amount equal to the product obtained by multiplying Tenant's Proportionate Share
by the net refund of the Real Estate Taxes received by Landlord (after
deduction, to the extent not previously paid by Tenant, of Tenant's
Proportionate Share of expenses, including fees and expenses of counsel and
experts, incurred by, or reimbursable by, Landlord in connection with reducing
the assessed valuation for the Building or the Land and in obtaining any
reduction or refund of the Real Estate Taxes) to the extent that the amount
otherwise payable pursuant to this Article for that Lease Year by Tenant would
have been less if the reduction in Real Estate Taxes had occurred during the
Lease Year; provided, however, that if the amount of such credit to which Tenant
is entitled shall exceed $100,000 Landlord shall, if Tenant shall so request,
refund the same within ten (10) days of such request.
4.3 Payments on Account. In order to provide for current payments on
account of Additional Rent payable to Landlord pursuant to this Article for any
Lease Year, Tenant agrees to make estimated payments on account of the
Additional Rent for and during each Lease Year in twelve (12) monthly
installments. Each such installment shall be in an amount equal to 1/12th of the
amount payable by Tenant to Landlord pursuant to Section 4.2 for the preceding
Lease Year and such additional amount as reasonably estimated by Landlord,
except that
(i) Tenant's estimated payments in respect of its liability
under clauses (a) and (b) of Section 4.2 for the first Lease Year
after the Base Year shall be based on Landlord's good faith estimate
of such liability, and
(ii) Tenant's estimated payments in respect of its liability
under clause (c) of Section 4.2 for the first Lease Year shall be
based on Landlord's good faith estimate of such liability,
(iii) in any subsequent case, Tenant's estimated payments
shall not exceed by more than 5% the amount of Tenant's liability
under Section 4.2 for the most recent previous Lease Year for which
an Escalation Statement was furnished by Landlord to Tenant.
4.4 Escalation Statement. Promptly after the end of any Lease Year
Landlord shall furnish Tenant with an Escalation Statement for such Lease Year.
If, as reflected in the Escalation Statement for any Lease Year, the amount of
Additional Rent payable by Tenant to Landlord pursuant to this Article for such
Lease Year shall be greater than (resulting in an underpayment) or be less than
(resulting in an overpayment) the total of all the installments/estimated
payments paid on account to Landlord by Tenant for the Lease Year, then,
promptly after receipt of the Escalation Statement for that Lease Year, Tenant
shall, in case of an underpayment, pay to Landlord the amount of the
underpayment
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or Landlord shall, in case of an overpayment, credit to Tenant the amount of
the overpayment.
4.5 Audit, etc. During the Audit Period with respect to any
Escalation Statement, Landlord shall permit all books and records of Landlord
and its managing agent relative to Real Estate Taxes, Operating Costs and
Cleaning Costs for the Lease Year to which such Escalation Statement shall
relate to be examined (and photocopied at Tenant's expense) by an officer of
Tenant or by an independent certified public accountant designated by Tenant for
the purpose of substantiating Landlord's determination of the amounts set forth
in such Escalation Statement. Landlord shall preserve such records until the
Record Retention Deadline with respect to the Lease Year to which such
Escalation Statement shall relate. Tenant shall keep all information obtained by
it pursuant to this Section 4.5 confidential other than any disclosures to
accountants, attorneys or other advisors or otherwise in connection with its
activities under this Section 4.5 or as required by law.
If during the Audit Period Tenant shall notify Landlord that Tenant
disputes the correctness of such Escalation Statement (and include in such
notice a statement of its reasons therefor) (such notice being herein called an
"Additional Rent Dispute Notice"), the parties shall make a good faith effort to
resolve their differences within thirty (30) days after Landlord's receipt of
Tenant's notice of dispute. If they are unable to do so, then either party shall
have the right to refer such dispute to arbitration as provided in Article
Thirty-Five. If and to the extent such dispute is resolved in Tenant's favor
Tenant shall be entitled to a refund of its overpayment, together with interest
at a rate per annum equal to the prime commercial lending rate (as published
from time to time by The Wall Street Journal) plus 2% but not in excess of the
amount permitted by law (the "Interest Rate") on the overpayment, from July 1 of
such Lease Year to the date of refund.
4.6 Base Year Statement. On or before the delivery to Tenant of the
Escalation Statement for Lease Year 2000, Landlord shall also deliver a
reasonably detailed statement of Real Estate Taxes for the Base Year and the
Operating Costs for the Base Year in form reasonably acceptable to Tenant (the
"Base Year Statement") and the Escalation Statement for the Lease Year 2000
shall not be deemed delivered unless accompanied by such Base Year Statement.
Subject to the provisions of Section 4.7, the Base Year Statement shall be used
to determine Tenant's liability under this Article 4 with respect to all Lease
Years during the initial term of this Lease.
4.7 Base Year Audit, etc. During the Audit Period relative to the
Escalation Statement relating to Lease Year 2000, Landlord shall permit all
books and records of Landlord and its managing agent relative to Real Estate
Taxes and Operating Costs for the Base Year to be examined (and photocopied at
Tenant's expense) by an officer of Tenant or by an independent certified public
accountant designated by Tenant for the purpose of substantiating Landlord's
determination of the amounts set forth in the Base Year Statement. Landlord
shall preserve such records until the Record Retention Deadline with respect to
the Base Year. Tenant shall keep all information obtained by it pursuant to this
Section 4.7
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confidential other than any disclosures to accountants, attorneys or other
advisors or otherwise in connection with its activities under this Section 4.7
or as required by law.
If during the Audit Period relative to the Escalation Statement
relating to Lease Year 2000 Tenant shall notify Landlord that Tenant disputes
the correctness of the Base Year Statement (and include in such notice a
statement of its reasons therefor), the parties shall make a good faith effort
to resolve their differences within thirty (30) days after Landlord's receipt of
Tenant's notice of dispute. If they are unable to do so, then either party shall
have the right to refer such dispute to arbitration as provided in Article
Thirty-Five. If the Base Year Statement is corrected pursuant to this Section
4.7, the Base Year Statement as so corrected shall be used to determine Tenant's
liability under this Article 4 with respect to all Lease Years during the
initial term of this Lease.
4.8 Excess Cleaning Costs. If, for any Lease Year during which
Tenant is cleaning any portion of the Premises pursuant to clause (a) of the
first paragraph of Section 11.7, Landlord can establish to Tenant's reasonable
satisfaction that
(a) the quotient of (i) the Cleaning Costs for such Lease
Year, divided by (ii) the Landlord Cleaned Building Area for such
Lease Year, exceeds
(b) what such quotient would have been if Landlord had
cleaned, and the Landlord Cleaned Building Area had been, all of all
of the office floors of the Building above the mezzanine
(such excess as Landlord is able so to establish being herein called the "Excess
Cleaning Cost") then, in respect of such Lease Year, Tenant shall pay Landlord,
as Additional Rent, an amount (the "Cleaning Payment") equal to the product of
(i) the excess of the Landlord Cleaned Building Area for such
Lease Year over the Landlord Cleaned Premises Area for such Lease
Year, multiplied by
(ii) the Excess Cleaning Cost (but not more than $.15 per
square foot of rentable area per annum);
provided, however, that if during such Lease Year the Landlord Cleaned Premises
Area or the Landlord Cleaned Building Area shall change then the foregoing
provisions of this paragraph shall be applied separately to each portion of such
Lease Year and the Cleaning Payment for such Lease Year shall be the aggregate
thereof for each such portion. Tenant shall make the Cleaning Payment to
Landlord within thirty (30) days of the submission to Tenant of the Escalation
Statement for such Lease Year accompanied by Landlord's bill therefor the
Cleaning Payment (which shall include a statement in reasonable detail of the
derivation of the Cleaning Payment) and reasonably detailed supporting
documentation establishing the Cleaning Payment to Tenant's reasonable
satisfaction. Notwithstanding
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Landlord's having established the Cleaning Payment to Tenant's reasonable
satisfaction, all of the provisions of Section 4.5 shall be applicable to this
Section 4.8, mutatis mutandis.
Article 5. Use of Premises.
5.1 The Premises shall only be used for general and executive
offices (including trading operations) and uses incidental thereto, including
the following incidental uses (i) conference and meeting facilities, including
places of assembly, (ii) computer and data processing, (iii) photocopying, (iv)
printing, (v) food preparation and service (including kitchens and kitchenettes,
pantries, dining rooms, cafeterias and vending machines), (vi) a health and
medical facility, (vii) an exercise and recreation facility, (vii) storage, (ix)
installation of equipment, and (x) support and utility functions; provided,
however, that the Special Purpose Areas may also be used for the purposes for
which the same are now being used. Tenant shall not use, or suffer or permit the
use of, the Premises or any part thereof for any other purpose.
Landlord represents and warrants that attached hereto as Exhibit F
is a true and correct copy of the Certificate of Occupancy for the Building as
in effect on the date hereof.
If pursuant to Applicable Law, Tenant cannot use any portion of the
Premises for any of the uses referred to above without amending the Certificate
of Occupancy for the Building to permit such portion of the Premises to be used
for such use, then
(i) Landlord shall (a) cooperate with Tenant as necessary or
appropriate in order to obtain such amendment to such Certificate of
Occupancy, and (b) within two (2) business days of Tenant's request,
execute any application or other documents necessary or appropriate
in order to obtain such amendment to such Certificate of Occupancy
(and, in such a case, Tenant shall reimburse Landlord within twenty
(20) days of demand for any out-of-pocket costs incurred by Landlord
for review by an independent architect or engineer of any such
application or other documents);
(ii) if, in order to obtain such amendment to such Certificate
of Occupancy, it shall be necessary to remove any violations noted
against the Building (other than any violations which pursuant to
this Lease are the responsibility of Tenant), Landlord shall,
promptly after Tenant's request, remove such violation, and if
Landlord shall fail to do so within twenty (20) days of Tenant's
request, Tenant may do so and recover the costs of doing so pursuant
to Article 39.
If pursuant to Applicable Law in effect on the date hereof, Tenant
cannot use or continue to use any portion of the Special Purpose Area for the
use for which it is now
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used (an "Existing Special Purpose Area Use") without amending the Certificate
of Occupancy for the Building to permit such portion of the Special Purpose Area
to be used for such use, then (A) clause (i) and (ii) above shall apply (except
that the parenthetical provision of clause (i) shall not be applicable) and (B)
if, in order to obtain such amendment to such Certificate of Occupancy, it shall
be necessary to comply with any requirements of Applicable Law (other than any
compliance which pursuant to this Lease it is Tenant's responsibility to
effect), Landlord shall, promptly comply with such requirement of Applicable
Law, and if Landlord shall fail to do so within twenty (20) days of Tenant's
request, Tenant may do so and recover the costs of doing so pursuant to Article
39.
5.2 Tenant shall not use, or knowingly suffer or permit the use of,
the Premises or any part thereof in any manner or for any purpose or do, bring
or keep anything, or knowingly suffer or permit anything to be done, brought or
kept, therein that would (a) violate any covenant, agreement, term, provision or
condition of this Lease or be unlawful or, subject to Section 5.1 above, be in
contravention of the Certificate of Occupancy for the Building, or (b) except as
permitted by this Lease, unreasonably interfere with the use and enjoyment of
the common areas and facilities of the Building by other occupants of the
Building.
5.3 Tenant will not use, or knowingly suffer or permit the use of,
the Premises or any part thereof for any of the following purposes, whether or
not incidental to Tenant's business, namely:
(i) manufacturing of any kind,
(ii) the retail sale to persons visiting the Premises of any
item whatsoever,
(iii) an auction of any kind (other than an auction incident
to Tenant's business or by telephone or other electronic means),
(iv) the preparation, dispensation or consumption of food or
beverages (other than to Tenant, other occupants of the Premises and
their employees, clients and guests),
(v) as a school or classroom (other than for the use of
Tenant, other occupants of the Premises and their employees, clients
and guests),
(vi) as a medical or dental office (other than for the use of
Tenant, other occupants of the Premises and their employees),
(vii) as an employment or travel agency (other than a travel
agent servicing Tenant, other occupants of the Premises and their
employees),
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(viii) as retail banking facilities (which term shall exclude
any ATM installed in the Premises), and
(ix) for the conduct of any disreputable activities.
Further, the Premises may not be used or occupied by any agency, department or
bureau of the United States government, any state or municipality within the
United States or any foreign government, or any political subdivision of any of
them, or any charitable, religious, union or other not-for-profit organization,
or any tax exempt entity within the meaning of the Internal Revenue Code of
1986, as amended (a "Prohibited Occupant"). Landlord shall not lease any space
in the Building to, or suffer or permit any space in the Building to be used or
occupied by, any Prohibited Occupant.
Notwithstanding the foregoing provisions of this Section 5.3, Tenant shall have
the right, subject to the other applicable terms of this Lease, to permit other
companies (whether or not they occupy space in the Building) to use Tenant's
meeting and training rooms and facilities (including the Picker Auditorium) and,
in connection therewith, to use Tenant's food service and consumption
facilities. Tenant may charge for such use and such use shall not be subject to
the provisions of Article 12 of this Lease.
5.4 If any governmental license or permit (other than a certificate
of occupancy) shall be required for the proper and lawful conduct of any
business or other activity carried on in the Premises, and, if the failure to
secure such license or permit would in any way affect Landlord or the Building,
Tenant, at its expense, shall procure and thereafter maintain the license or
permit, submit the license or permit to inspection by Landlord, and comply with
the terms and conditions thereof.
Article 6. Alterations by Tenant.
6.1 In General. Subject to and in accordance with this Article 6 and
the other applicable provisions of this Lease, Tenant shall have the right, from
time to time, to make Alterations (as such term is defined in Section 7.1(e)) in
and to the Premises and the other areas of Building in which, pursuant to any of
the provisions of this Lease, Tenant is authorized to place or install property
or perform work. Without limiting the generality of the foregoing, it is
specifically agreed that, subject to compliance with the applicable provisions
of this Lease, Tenant shall have the right
(a) to reinforce floors and columns, including the
reinforcement of columns necessary or appropriate to support
Tenant's installations pursuant to Article 36 generally as described
on Exhibit G;
(b) to make slab cuts for the purpose of installing stairs and
running risers and conduits and to make beam cuts;
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(c) to remove existing stairs and to fill in existing slab
cuts (it being specifically agreed that from and after the Term
Commencement Date Tenant may remove the interconnecting stairs
between floors 11, 12 and 13 and fill-in the existing slab cuts
notwithstanding that one or more of such floor may not yet have been
delivered to Tenant);
(d) to install stone floors and/or raised floors, including in
either case, if Tenant shall so elect, raising the level of the
elevator stops and core areas to match such raised floors;
(e) to install additional toilets, showers and other plumbing
facilities;
(f) to use BX cable rather than rigid conduit whenever
permitted by applicable law; and
(g) to install a derrick and/or a Chicago boom in connection
with Tenant's work under Article 36 (it being hereby confirmed that
the installation of any such derrick or boom shall constitute an
Alteration).
6.2 Landlord's Approval in Certain Cases. Notwithstanding the
foregoing, Tenant shall not commence or perform
(i) any structural Alteration,
(ii) any Alteration which affects the operation of the systems
of the Building outside of the Premises,
(iii) any Alteration to or which affects any portion of the
Building outside of the Premises, or
(iv) any Alteration (or series of related Alterations) the
cost of which on any floor of the Building is greater than Five
Hundred Thousand ($500,000) Dollars
unless (a) Tenant shall have submitted to Landlord complete architectural and
engineering working drawings and specifications prepared, at Tenant's expense,
by a competent architect or engineer licensed in the State of New York ("plans
and specifications"), and (b) Landlord shall have approved such plans and
specifications.
Landlord shall not unreasonably withhold such approval and shall
grant or deny such approval (including with any denial a reasonably detailed
statement of the reasons therefor) within
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(a) ten (10) business days in the case of the initial
submission of plans and specifications with regard to any Alteration
referred to in clause (i), (ii) and (iii) above), or
(b) five (5) business days in the case of any resubmission of
plans and specifications with regard to any Alteration referred to
in clause (i), (ii) or (iii) above or in the case of any submission
of plans and specifications with regard to any Alteration referred
to in clause (iv) above.
If Landlord shall fail timely to disapprove any plans and specifications in
accordance with this Section 6.2 (including the required statement of reasons)
Landlord shall be deemed to have approved the same.
Any approval by Landlord shall not be deemed to be a representation
or warranty that the approved work is properly designed to perform the function
for which it is intended or complies with any Applicable Law.
6.3 Governmental Permits and Licenses. Tenant shall obtain all
governmental permits, licenses and approvals required in connection with any
Alterations performed or proposed to be performed by Tenant. Landlord shall,
within two (2) business days of Tenant's request, execute any permit, license or
approval application or any similar document required to be executed by Landlord
in connection with Tenant's obtaining any such permit, license or approval. In
case of any Alteration subject to Section 6.2, Landlord shall execute such
application or document notwithstanding its not having received or approved the
plans and specifications therefor, but Landlord's execution of such application
or document shall not constitute Landlord's approval of such plans and
specifications or a waiver of Landlord's rights under Section 6.2 with respect
thereto.
6.4 Tenant's Contractors. Subject to the provisions of Section
7.1(e), Tenant shall have the right to use contractors of its choice for
performance of any Alterations; provided, however, that Tenant's mechanical,
electrical, plumbing and fire life safety contractor ("Critical Trade
Contractors") shall be subject to Landlord's prior approval. Landlord shall not
unreasonably withhold such approval and shall grant or deny approval within five
(5) business days of Tenant's request therefor. If Landlord shall fail timely to
deny approval, it shall be deemed to have granted approval. Any Critical Trade
Contractor approved by Landlord shall remain approved with respect to the
Alteration in question and subsequent Alterations until Landlord shall by notice
to Tenant revoke such approval, but no such revocation shall be effective with
respect to the Alteration in question or any subsequent Alterations for which
such Critical Trade Contractor was retained prior to such revocation. Landlord
hereby approves the Critical Trade Contractors listed on Exhibit H hereto. As
used in this Lease (relative to Landlord or Tenant), the term "contractors" or
"contractor" (but not the phrase "general contractor") shall also include
subcontractors or subcontractor.
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6.5 Performance of Alterations. Tenant will use reasonable efforts
in performing Alterations to avoid unreasonable interference with the occupants
of other parts of the Building, and shall perform the following work during
non-Business Hours, if so requested by Landlord: (a) demolition on any floor
immediately above or immediately below a floor occupied by any other tenant of
the Building, or (b) core drilling and chopping or chasing of concrete. Tenant
shall, at its sole cost and expense, repair all structural and mechanical parts
of the Building and the systems of the Building that shall be damaged by
Tenant's performance of Alterations, subject to the release provisions of
Section 22.6. Tenant shall comply with all Applicable Laws relative to the
performance by it of any Alterations. Tenant shall cause its contractors to
maintain workmen's compensation insurance as required by law and shall cause its
general contractor to maintain public liability insurance as may be reasonably
required by Landlord.
6.6 Mechanics Lien. Tenant shall not do or fail to do any act that
shall or may render the Building subject to any mechanic's lien or other lien
and if any lien or liens are filed against the Building arising out of any
Alterations undertaken by Tenant, Tenant shall, at its sole cost and expense,
promptly remove the lien or liens of record within thirty (30) days after the
earlier of demand by Landlord or the receipt of notice by Tenant from the lienor
or anyone else concerning the filing of the lien or liens. If Tenant shall fail
to timely remove such lien or liens, Landlord may cause such lien or liens to be
removed of record by payment, bond or otherwise, as Landlord may elect, and
Tenant shall reimburse Landlord, as Additional Rent, for all reasonable costs
and expenses incidental thereto (including, without limitation, legal fees).
Article 7. Various Covenants.
7.1 Tenant's Covenants. Tenant shall:
(a) take good care of the Premises, keep clean the portions of the
Premises that Landlord is not required by this Lease to clean, and,
subject to the release provisions of Section 22.6, pay the cost of making
good any injury, damage or breakage to the Building or the Premises done
by Tenant or by the employees, agents, licensees or invitees of Tenant;
(b) observe and comply with the rules and regulations annexed hereto
as Exhibit I and any other and further reasonable rules and regulations
that Landlord hereafter at any time may make and communicate to Tenant,
and that, in the reasonable judgment of Landlord, shall be necessary or
desirable for the safety, care or appearance of the Building, or the
preservation of good order therein, or the operation or maintenance of the
Building, or the equipment thereof, or the comfort of tenants or others in
the Building; provided, however, that in the case of any conflict between
the provisions of this Lease and any rule or regulation, the provisions of
this Lease shall control and provided, further that (i) Landlord will
enforce all rules and regulations uniformly against all tenants, including
Tenant, and
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(ii) so long as the area of the portion of the Premises not sublet (other
than to pursuant to Section 12.7 and 12.8) shall exceed 250,000 rentable
square feet, Landlord will not make any such other or further rule or
regulation without the consent of Tenant, which consent, provided that
such other or further rule or regulation does not, other than to a di
minimis extent, affect Tenant's conduct of business or Tenant's rights and
obligations under this Lease, shall not be unreasonably withheld and, if
Landlord includes the following legend at the top of its request for
consent "THIS REQUEST FOR CONSENT IS MADE PURSUANT TO SECTION 7.1(b) OF
YOUR LEASE; IF YOU DO NOT DENY CONSENT WITHIN TEN (10) BUSINESS DAYS OF
YOUR RECEIPT HEREOF YOU SHALL BE DEEMED TO HAVE GRANTED CONSENT" shall be
deemed granted ten (10) business days after Tenant's receipt of Landlord's
request for Tenant's consent unless Tenant notifies Landlord of its denial
and the reasons therefor within that period of time;
(c) permit Landlord, and any mortgagee under any Underlying
Mortgage, and any lessor under any Underlying Lease, and their
representatives, to enter the Premises (i) in an emergency, at any time
and without notice, and (ii) otherwise, following reasonable notice at
such hours as shall not materially interfere with the conduct of Tenant's
business in the area entered, for the purposes of inspection, and permit
them or any of their agents or contractors to enter the Premises (i) in an
emergency, at any time and without notice, and (ii) otherwise, following
reasonable notice at such hours as shall not materially interfere with the
conduct of Tenant's business in the area entered, for the purpose of
complying with any Applicable Law, or exercising any right reserved to
Landlord in any other provision of this Lease, and permit Landlord,
following reasonable notice, to show the Premises at reasonable times
during Business Hours (or non-Business Hours if entry during Business
Hours would materially interfere with the conduct of Tenant's business) to
any mortgagee under any Underlying Mortgage, any lessor under any
Underlying Lease, or any prospective purchaser, lessee, mortgagee or
assignee of any mortgage of the Building or the Land or of Landlord's
interest therein, and their representatives, and during the period of
twelve (12) months next preceding the date of expiration of the term
hereof, to similarly show the Premises to any person contemplating the
leasing of all or a portion thereof provided, however, that (a) except in
the case of an emergency or as Tenant may otherwise permit, no individual
shall be permitted to enter the Premises for purposes of performing any
maintenance, repairs, alterations, cleaning or other services or work or
related inspections or preparations, unless such individual has cleared
Tenant's security and background check procedures as administered by
Tenant and in effect from time to time (a copy of Tenant's security and
background check procedures in effect on the date hereof being attached
hereto as Exhibit J), and (b) if Tenant shall identify to Landlord any
portions of the Premises that contain cash, negotiable instruments,
securities or confidential information or otherwise secure materials
("Secure Area"), neither Landlord nor any other party authorized by this
Section to enter the Premises shall (except in an emergency) enter any
Secure
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Area except following reasonable notice and accompanied by Tenant's
representative which Tenant shall make available to Landlord for this
purpose;
(d) make no claim against Landlord for any injury or damage to
Tenant or to any other person or for any damage to, or loss (by theft or
otherwise) of, or loss of use of, any property of Tenant or of any other
person, irrespective of the cause of the injury, damage or loss, unless
done by Landlord, its agents, servants, employees or contractors but
subject, in any case, to the release provisions of Section 22.6;
(e) make no alteration, change, addition, improvement, repair or
replacement other than the installation, relocation and removal of trade
fixtures and business equipment (any such alteration, change, addition,
improvement, repair or replacement other than any such installation,
relocation and removal of trade fixtures and business equipment being
herein called "Alterations") in, to, or about the Premises and do no work
in connection therewith, except in accordance with Article 6 and with
Landlord's rules and regulations relating to construction, a copy of which
is attached hereto as Exhibit K; not permit the use of any contractors,
workmen or labor without proper union affiliation in the performance of
any work, labor or service if the use thereof will disturb labor harmony
with any contractors, workmen or labor engaged by Landlord to perform any
other work, labor or service in or about the Building; comply with all
Applicable Laws relative to the performance of, and maintain workmen's
compensation insurance and public liability insurance as may be reasonably
required by Landlord in connection with, any Alteration made by Tenant and
any maintenance, cleaning or service performed by Tenant; pay all charges,
as and when they become due and payable, incurred by Tenant in connection
with any Alterations made by Tenant or any maintenance, cleaning or
service performed by Tenant; and reimburse Landlord within twenty (20)
days of demand for any out-of-pocket costs incurred by Landlord for (i)
the review by an independent architect or engineer retained by Landlord of
any plans and specifications with respect to which Landlord has a right of
approval under Article 6 and/or (ii) the inspection by such architect or
engineer of the work covered thereby;
(f) without incurring any liability to Tenant, except for Landlord's
negligence, permit Landlord access to the Premises and permit Landlord to
open the Premises, whether or not Tenant shall be present, upon demand of
any receiver, trustee, assignee for the benefit of any creditor, sheriff,
marshall or court officer entitled to, or reasonably purporting to be
entitled to, access for the purpose of taking possession of, or removing,
Tenant's property or for any other purpose (but this provision and any
action by Landlord hereunder shall not be deemed a recognition by Landlord
that the person or official making the demand has any right to or interest
in or to this Lease or the Premises), or upon demand of any representative
of the fire, police, building, sanitation or other department of the city,
state or federal government;
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(g) at any time and from time to time upon not less than ten (10)
days' prior notice by Landlord, execute, acknowledge and deliver to
Landlord a statement of Tenant (or if Tenant is a corporation, an
appropriate officer of Tenant) certifying (i) that this Lease is
unmodified and in full force and effect (or if there have been
modifications, that the same is in full force and effect as modified and
stating the modifications), (ii) the dates to which the Fixed Rent and
Additional Rent have been paid in advance, if any, (iii) whether or not,
to the best knowledge of the signer of the certificate, Landlord is in
default in the keeping, observance or performance of any covenant,
agreement, term, provision or condition contained in this Lease and, if
so, specifying each default of which the signer may have knowledge, and
(iv) as to any other information relative to this Lease reasonably
requested by Landlord, to the best of the knowledge of the signer of the
certificate, it being intended that the statement may be relied upon by
any mortgagee under any Underlying Mortgage, any lessor under any
Underlying Lease, or any prospective purchaser, lessee, mortgagee or
assignee of any mortgage of the Building or the Land or of Landlord's
interest therein; and
(h) indemnify and save harmless Landlord, CNA Financial Corporation,
The Continental Corporation and its subsidiaries and their respective
officers, directors, agents and employees (collectively, the "Landlord
Indemnitees") from and against all claims including any liability, lien,
loss, cost, damage or expense arising therefrom ("Claims") to which any
Landlord Indemnitee may be subject or suffer (except insofar as it (x)
arises out of the negligence or intentional misconduct of any Landlord
Indemnitee or any contractor of any Landlord Indemnitee, or (y) is covered
by any insurance maintained by any Landlord Indemnitee or would be covered
by any insurance required by this Lease to be maintained by Landlord if
the same had been maintained) whether by reason of, or by reason of any
claim of, any injury to, or death of any person or persons or damage to
property (including any loss of use thereof) or otherwise arising from or
in connection with the use of or from any work or thing whatsoever done in
the Premises other than by any Landlord Indemnitee or any contractor of
any Landlord Indemnitee (but excluding any work or thing done by Tenant as
Landlord's agent) during the term of this Lease or during the period of
time, if any, prior to the Term Commencement Date that Tenant may have
been given access thereto for the purpose of doing work or otherwise, or
arising from any condition of the Premises due to or resulting from any
default by Tenant in the keeping, observance or performance of any
covenant, agreement, term, provision or condition contained in this Lease
or from any negligence or intentional misconduct of any Tenant Indemnitee
or any contractor of any Tenant Indemnitee. If any such Claim is asserted
against any Landlord Indemnitee, Landlord will promptly notify Tenant
thereof and that such Landlord Indemnitee is entitled to indemnification
and Tenant, upon notice from Landlord, shall defend such Claim at Tenant's
expense with counsel reasonably satisfactory to Landlord. Provided that
Tenant complies with the requirements of this Section, Tenant shall not be
liable for the fees of any separate counsel retained by any Landlord
Indemnitee. If Tenant shall assert that any Claim
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with respect to which it has received a demand for indemnification under
this Section 7.1(h) is or may be not covered by this Section 7.1(h), in
whole or in part, and it shall be determined by a court of competent
jurisdiction that such Claim was not covered by this Section 7.1(h), in
whole or in part, then Landlord shall reimburse Tenant for all or such
part of the costs and expenses incurred by Tenant in providing such
indemnification, including attorneys fees, with interest thereon from the
date incurred at the Interest Rate. This provision shall survive the
expiration or earlier termination of this Lease.
7.2 Landlord's Covenants. Landlord shall:
(a) subject to the release provisions of Section 22.6, pay the cost
of making good any injury, damage or breakage to the Premises or any
property therein or any other property installed in the Building by Tenant
done by Landlord or by the agents, servants, employees or contractors of
Landlord;
(b) at any time and from time to time upon not less than ten (10)
days' prior notice by Tenant, execute, acknowledge and deliver to Tenant a
statement of Landlord (or if Landlord is a corporation, an appropriate
officer of Landlord) certifying (i) that this Lease is unmodified and in
full force and effect (or if there have been modifications, that the same
is in full force and effect as modified and stating the modifications),
(ii) the dates to which the Fixed Rent and Additional Rent have been paid,
(iii) whether or not, to the best knowledge of the signer of the
certificate, Tenant is in default in the keeping, observance or
performance of any covenant, agreement, term, provision or condition
contained in this Lease and, if so, specifying each default of which the
signer may have knowledge, and (iv) as to any other information relative
to this Lease reasonably requested by Tenant, to the best of the knowledge
of the signer of the certificate, it being intended that the statement may
be relied upon by any assignee or subtenant or prospective assignee or
subtenant of Tenant's interest under this Lease; and
(c) indemnify and save harmless the Tenant and its subsidiaries and
affiliates and their respective officers, directors, members, agents and
employees (collectively, the "Tenant Indemnitees") from and against all
Claims to which any Tenant Indemnitees may be subject or suffer (except
insofar as it (x) arises out of the negligence or intentional misconduct
of any Tenant Indemnitee or any contractor of any Tenant Indemnitee, or
(y) is covered by any insurance maintained by any Tenant Indemnitee or
would be covered by any insurance required by this Lease to be maintained
by Tenant if the same had been maintained) whether by reason of, or by
reason of any claim of, any injury to, or death of any person or persons
or damage to property (including any loss of use thereof) or otherwise
arising from or in connection with the use of or from any work or thing
whatsoever done in the Premises by any Landlord Indemnitee or any
contractor of any Landlord Indemnitee, or arising from any condition of
the Building (including the Premises) due to or
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resulting from any default by Landlord in the keeping, observance or
performance of any covenant, agreement, term, provision or condition
contained in this Lease or from any negligence or intentional misconduct
of any Landlord Indemnitee or any contractor of any Landlord Indemnitee.
If any such Claim is asserted against any Tenant Indemnitee, Tenant will
promptly notify Landlord thereof and that such Tenant Indemnitee is
entitled to indemnifications and Landlord, upon notice form Tenant, shall
defend such Claim at Landlord's expense with counsel reasonable
satisfactory to Tenant Provided that Landlord complies with the
requirements of this Section, Landlord shall not be liable for the fees of
any separate counsel retained by any Tenant Indemnitee. If Landlord shall
assert that any Claim with respect to which it has received a demand for
indemnification under this Section 7.2(c) is or may be not covered by this
Section 7.2(c), in whole or in part, and it shall be determined by a court
of competent jurisdiction that such Claim was not covered by this Section
7.2(c), in whole or in part, ten Tenant shall reimburse Landlord for all
or such part of the costs and expenses incurred by Landlord in providing
such indemnification, including attorneys fees, with interest thereon from
the date incurred at the Interest Rate. This provision shall survive the
expiration or earlier termination of this Lease.
7.3 Year 2000 Compliance. Landlord shall take all actions as shall
be necessary or appropriate to insure that the Base Building becomes Year 2000
Compliant (as hereinafter defined) on or before the date on which any failure to
be Year 2000 Compliant would have any adverse effect on the operation or control
of any component of the Base Building or Tenant's Building Equipment (as
hereinafter defined), and shall take all commercially reasonable actions as
shall be necessary or appropriate to insure that the Base Building becomes Year
2000 Compliant as soon as possible. Without limiting the generality of the
foregoing, Landlord shall, and shall cause it managing agent to, (i) test each
system or component of the Base Building to confirm that it is Year 2000
Compliant, (ii) coordinate the scheduling of such tests with Tenant and permit
Tenant to observe the same, and (iii) permit Tenant and its Year 2000
consultants to inspect and copy all plans, specifications, vendor materials, and
other information regarding the Year 2000 Compliance of the Base Building.
Tenant shall take all actions as shall be necessary or appropriate
to insure that any systems or equipment installed by Tenant in the Building the
operation or control of which is interconnected with the Base Building
("Tenant's Building Equipment"), if not Year 2000 Compliant upon installation,
becomes Year 2000 Compliant on or before the date on which any failure to be
Year 2000 Compliant would have any adverse effect on the operation or control of
any component of the Base Building, and shall take all commercially reasonable
actions as shall be necessary or appropriate to insure that Tenant's Building
Equipment, if not Year 2000 Compliant upon installation, becomes Year 2000
Compliant as soon as possible. Without limiting the generality of the foregoing,
Tenant shall (i) test each system or component of the Tenant's Building
Equipment to confirm that it is Year 2000 Compliant, (ii) coordinate the
scheduling of such tests with Landlord and permit Landlord to observe the same,
and (iii) permit Landlord and its Year 2000 consultants to
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inspect and copy all plans, specifications, vendor materials, and other
information regarding the Year 2000 Compliance of the Tenant's Building
Equipment.
Notwithstanding the foregoing, in no event shall either party be
required to permit the other to inspect or copy any confidential or proprietary
information.
As used in this Section 7.3, the term "Year 2000 Compliant" shall
mean that the system or component in question
(i) properly processes, uses, employs and refers to all dates
on and after January 1, 2000, and
(ii) properly functions (or, when applied prospectively, will
property function) on all dates on and after January 1, 2000,
in either case, without interruption, exception, error or inaccuracy arising by
reason of such dates being on or after January 1, 2000, and the term "Year 2000
Compliance" shall have the correlative meaning.
Article 8. Changes or Alterations by Landlord.
8.1 Landlord reserves the right, without the same constituting an
eviction and without incurring liability therefor:
(i) to make any changes, alterations, additions, improvements,
repairs or replacements in or to the Building (excluding the
Premises and the Tenant's Shafts (except for the repair or
replacement without enlargement of the Base Building Closet
Installations, the CNA Closet Installations and the Base Building
Pipes so long as the same shall remain in Tenant's Shafts)) and the
fixtures and equipment therein (excluding those in the Premises and
the Tenant's Shafts (except for the repair or replacement without
enlargement of the Base Building Closet Installations, the CNA
Closet Installations and the Base Building Pipes so long as the same
shall remain in Tenant's Shafts)), as well as in or to the street
entrances, plazas, sidewalks, curbs, halls, passages, elevators,
escalators and stairways and other parts of the Building (excluding
the Premises and Tenant's Shafts (except for the repair or
replacement without enlargement of the Base Building Closet
Installations, the CNA Closet Installations and the Base Building
Pipes so long as the same shall remain in Tenant's Shafts)), and
(ii) to make repairs to the Premises if required by the terms
of this Lease, and
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(iii) to erect, maintain and use pipes, ducts and conduits in
and through the Building core (excluding (a) the portions of the
Building core included in the Premises, and (b) Tenant's Shafts
(except for the maintenance and use of the Base Building Closet
Installations, the CNA Closet Installations and the Base Building
Pipes so long as the same shall remain in Tenant's Shafts)),
all as Landlord may deem reasonably necessary or desirable; provided that as a
result of any of the foregoing referred to in clause (i), (ii) or (iii) of this
sentence, there shall be (w) no reduction in any service required to be
furnished pursuant to any other provision of this Lease (except as permitted by
Section 11.11), (x) no more than a de minimis affect on Tenant's access to or
use of the Premises or the stairways, shafts, risers and other utility areas of
the Building or the areas of the Building in which pursuant to this Lease Tenant
is permitted to install property or perform work, (y) no adverse affect upon the
security of the Building or the Premises, and (z) no adverse effect upon, or
upon the use or access to, any of the installations then existing in Tenant's
Shafts or any installations for which Tenant's Shafts could be used in the
future, and provided, further that Landlord shall use reasonable efforts to
minimize interference with Tenant in the location of any pipes, ducts and
conduits and shall permanently enclose them.
8.2 Notwithstanding the foregoing, unless required by Applicable
Law, Landlord shall not make changes, alterations, additions, improvements or
replacements to the street entrances, plazas, sidewalks, atrium, plaza level
lobby, mezzanine level lobby, escalators or elevators (except for any of such
changes, alterations, additions, improvements or replacements which are merely
cosmetic and do not involve or include the construction, installation, removal
or relocation of any wall or partition, stair or stairway, door or doorway,
ceiling or floor), or to the use of any of the foregoing, without Tenant's prior
approval, which approval shall not be unreasonably withheld. Notwithstanding the
foregoing, Landlord shall be permitted, without consultation with Tenant, to
engage in its normal and typical maintenance of the atrium, plaza level lobby
and mezzanine level lobby in the same manner as it has prior to the date hereof
and as it shall deem necessary for the upkeep of the public portions of the
atrium. This Section 8.2 shall not be applicable so long as the Land and
Building are owned by CNA Corporation or its subsidiaries.
8.3 Landlord shall not lease or license any ground floor premises in
the Building (other than (i) the leasing of the now-existing lobby shop premises
to the present tenant thereof, or (ii) the leasing or licensing of the
now-existing lobby art gallery premises to the present tenant or licensee
thereof) without Tenant's prior approval of such person or entity and its use of
such premises (but not the terms of the lease or license), which approval shall
not be unreasonably withheld.
8.4 All art on the plaza level (including in the lobby art gallery
premises) or on the mezzanine level (i) shall be in keeping with museum quality
standards of presentation,
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(ii) shall reflect subject matter suitable to corporate environment, and (iii)
shall exclude subjects alluding to religion, sex and overt aggression.
8.5 On or before December 31, 1998 Landlord shall change the name of
the Building to 180 Maiden Lane, which shall remain the sole name of the
Building throughout the term of this Lease.
8.6 On or before December 31, 1998 Landlord shall remove all signs
the continued presence of which would violate this Section 8.6. On and after
January 1, 1999, Landlord shall not erect or maintain, or suffer or permit any
other person or entity to erect or maintain, any identity signage on the Land,
on the exterior of the Building, in any of the areas referred to in Section 8.2,
or visible from the Land, the exterior of the Building or any of the areas
referred to in Section 8.2; provided, however, that (a) any tenant, including
Tenant, having a security desk in the lobby may display discrete identity
signage on its security desk, and (b) any tenant may display identity signage in
the elevator lobby on its floor notwithstanding that such signage .is visible
from the Building elevators. As used above the term "identity signage" shall
mean any signage containing the name of any person or entity (or any portion or
any abbreviation thereof) or any symbol or mark associated with any person or
entity.
8.7 Neither this Lease nor any use by Tenant shall give Tenant any
right or easement to the use of any door or any passage connecting the Building
with any subway or any other building, and the use of such doors and passages
may be regulated or discontinued at any time by Landlord.
8.8 If an excavation shall be made upon any land adjacent to the
Building, or shall be authorized to be made, Tenant shall afford to the person
causing or authorized to cause the excavation a license to enter upon the
Premises for the purpose of doing any work the person deems necessary to
preserve the Building from injury or damage, all without any claim for damages
or indemnity against Landlord or diminution or abatement of rent
Article 9. Surrender; Ownership of Improvements; Removal of Special
Installations; Tenant's Shafts and Other Areas; Holdover.
9.1 Surrender. On or prior to the expiration or any earlier
termination of the term hereof, Tenant shall terminate its occupancy of, and
quit and surrender to Landlord, the Premises, broom-clean and in as good
condition as it was at the commencement of the term, except for ordinary wear
and tear and damage by fire or other casualty and except for other damage for
which Tenant is not responsible under the terms of this Lease.
9.2 Ownership of Improvements. All fixtures, equipment, improvements
and installations attached to, or built into, the Premises at the commencement
of or during the term hereof, whether installed by or at the expense of Landlord
or Tenant, shall be and remain the property of Landlord and part of the
Premises, subject to this Lease, and shall not
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be removed by Tenant except in connection with the continued use of the Premises
under this Lease; provided, however, that (i) unless such removal is required by
law, Tenant shall not remove any fixtures, equipment, improvements or
installations paid for by Landlord under the Initial Improvements Agreements
unless Tenant replaces the same with fixtures, equipment, improvements and
installations of substantially equal value, and (ii) Tenant shall have the
right, in all events, to remove any fuel tanks installed by it. All elevators
and all mechanical, electrical, plumbing and sprinklering fixtures, venetian
blinds, partitions, doors, vaults, stairs, paneling (including display cases and
cupboards recessed in paneling), molding, flooring, and heating, ventilation,
air conditioning and cooling equipment shall be deemed to be fixtures,
equipment, improvements and installations, whether or not attached to or built
into the Premises. If Tenant removes any fuel tank installed by it, it shall do
so in accordance with Applicable Law and shall remediate if and to the extent
required by Applicable Law.
9.3 Removal of Special Installations. As used in this Section 9.3
the term "Special Installations" shall mean any of the following furnished and
installed in the Premises by Tenant or Landlord at the request of Tenant
(whether or not attached thereto or built therein): internal staircases; slab
penetrations for interconnecting staircases and dumbwaiters; vaults; kitchens
with exhaust facilities ("Kitchens"); executive or private bathrooms; above-slab
slab reinforcements; vertical transportation systems (other than the conveyor
system installed by Landlord and existing on the date hereof); dumbwaiters; fuel
tanks; and Tenant's Antennas. If Landlord desires that any of the Special
Installations be removed from the Premises and so notifies Tenant prior to or
not more than six (6) months after the expiration or earlier termination of the
term of this Lease (which notice shall specify the Special Installations to be
removed and shall include a statement of the cost of such removal (which
Landlord shall have determined by (i) obtaining competitive bids from not fewer
than three qualified contractors (which bids shall be included with such
notice), and (ii) selecting the bid it believes to be most appropriate (which
most appropriate bid shall be identified in such notice) (the "Selected Removal
Bid"))) Tenant shall, by notice to Landlord given within thirty (30) days of its
receipt of Landlord's notice, elect either
(i) to remove such Special Installations (in which case Tenant
shall do so and repair any damage caused by such removal within
sixty (60) days after its receipt of Landlord's notice (or, if
later, within thirty (30) days after the expiration or earlier
termination of the term of this Lease), or
(ii) reimburse Landlord for the costs of such removal (in
which case if, within the period prescribed by clause (i) above,
Landlord shall remove such Special Installation Tenant shall
reimburse Landlord for the cost of such removal, not to exceed the
Selected Removal Bid).
Tenant's obligation to observe and perform this covenant shall survive the
expiration or earlier termination of this Lease. Notwithstanding the foregoing
provisions of this Section 9.3, Tenant shall not be required to remove (or pay
for the removal of) any Kitchen installed
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by it unless upon expiration of this Lease there shall be more than three
Kitchens in the Premises and, in such a case, if Landlord desires the removal of
any Kitchen (i) Tenant shall not be required to remove (or pay for the removal
of) more than such number of Kitchens installed by it as shall be required to
reduce to three the number of Kitchens in the Premises, and (ii) Tenant shall
have the right to select which of the Kitchens installed by it to remove (or pay
for the removal of). If Tenant removes any fuel tank installed by it, it shall
do so in accordance with Applicable Law and shall remediate if and to the extent
required by Applicable Law.
9.4 Areas Reserved to Landlord. All the perimeter walls of the
Premises, any balconies, terraces or roofs adjacent to the Premises (including
any flagpoles or other installations on any perimeter, walls, balconies,
terraces or roofs), and any space in and or adjacent to the Premises used for
shafts, stairways, stacks, pipes, conduits, ducts, electric or other utilities,
sinks, fan rooms or other Building facilities, and the use thereof, as well as
access thereto through the Premises (subject to the provisions of Section
7.1(c)) for the purposes of the use, operation, improvement, replacement,
repair, maintenance and decoration thereof, are expressly reserved to Landlord.
9.5 [Intentionally Omitted]
9.6 Removal of Personal Property. Except as provided in Section 9.2,
at or prior to the Expiration Date or any earlier date upon which the term of
this Lease may expire or be terminated, Tenant shall remove from the Premises
all of its personal property. Any personal property that remains in the Premises
after the expiration or termination of the term of this Lease shall be deemed to
have been abandoned, and either may be retained by Landlord as its property or
may be disposed of at Tenant's expense in any manner that Landlord chooses.
9.7 Holdover. If Tenant or Tenant's successors or assigns, whoever
is in possession, fails to vacate the Premises or any portion thereof on or
before the Expiration Date or other termination date of this Lease, such
continued use and occupancy of the Premises or such portion thereof shall
constitute a holdover under a month-to-month tenancy, in which event Tenant
shall be obligated to pay Landlord in advance on the first day of each month
with respect to all floors of the Premises which Tenant has not then completely
vacated (1) for the first ninety (90) days after the Expiration Date or other
termination date, a monthly fixed rental equal to one hundred fifty percent
(150%) of the aggregate of the Fixed Rent and the Additional Rent payable under
Article 4 for the last month of the term hereof and (2) thereafter a monthly
fixed rental equal to two hundred percent (200%) of the aggregate of the Fixed
Rent and the Additional Rent payable under Article 4 for the last month of the
term hereof. Tenant's liability under this Section 9.7 with respect to any floor
of the Premises shall terminate upon Tenant's vacation of such floor, but this
sentence shall not be deemed to release Tenant from any such liability under
this Section 9.7 with respect to such floor of the Premises accrued prior to
such vacation. The liability provided for in this Section 9.7 shall constitute
Landlord's sole remedy on account of any holdover by Tenant,
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and Tenant shall not be liable for any damages arising out of such holdover, or
to indemnify Landlord on account of any Claim arising out of such holdover;
provided, however, that this sentence shall not prevent Landlord from
prosecuting any action or proceeding to recover possession of the Premises.
Article 10. Electric Current and Water.
10.1 Base Electricity. Landlord shall furnish to the existing
electrical closets serving each floor of the Premises alternating electric
current in such amounts as Tenant shall from time to time draw or require;
provided, however, that Landlord shall not be required pursuant to this Section
10.1 to furnish alternating electric current in excess of 6 watts (demand) per
square foot of gross area of the Premises in the aggregate; provided, however,
that with respect to
(i) any of the Premises in the basement, the aforesaid amount
shall be 8.3 watts (demand) per square foot of gross area,
(ii) any of the Premises on the 3rd floor, the aforesaid
amount shall be 6.8 watts (demand) per square foot of gross area,
(iii) any of the Premises on the 4th floor, the aforesaid
amount shall be 12.8 watts (demand) per square foot of gross area,
and
(iv) any of the Premises on the 41st floor, the aforesaid
amount shall be 7.1 watts (demand) per square foot of gross area.
Tenant shall have the right to distribute the electrical current provided to it
under this Section 10.1 to the Premises (including transfers of electrical
current from one floor of the Premises to another) and to Tenant's installations
in, to, on or about the Building outside of the Premises. Tenant shall be
entitled to a key to the electrical closets on any floor all or any part of
which is included in the Premises.
10.2 Supplemental Electricity. Landlord shall furnish to each of
Tenant's Dedicated Switches (as hereinafter defined) alternating electric
current in such amounts as Tenant shall from time to time draw or require;
provided, however, that Landlord shall not be required pursuant to this Section
10.2 to furnish alternating electric current to Tenant's Dedicated Switches in
excess of 2000 amperes (demand) per switch, 4000 amperes (demand) in the
aggregate. Landlord shall not be obligated to furnish alternating electric
current under this Section 10.2 until Tenant shall have performed the work
described in Section 10.5. Tenant shall have the right to distribute the
electrical current provided to it under this Section 10.2 through the electrical
risers or buses installed by it pursuant to Article 42 to the Premises and to
Tenant's installations in, to, on or about the Building outside of the Premises.
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10.3 Additional Electricity. If Tenant shall request or desire
alternating electrical current in excess of that to which it is entitled under
Section 10.1 and 10.2, then, subject to the provisions of this Section 10.3,
Landlord shall furnish the same; provided, however, that if, in Landlord's
reasonable judgment, such additional electric current cannot be furnished unless
additional panels, transformers, risers, conduits, feeders, switches,
switchboards and/or appurtenances ("Electrical Equipment") are installed in the
Building (a) Landlord shall not be required to furnish such additional electric
current until such additional Electrical Equipment is so installed, and (b)
Tenant shall be permitted, following written notice to Landlord, to install such
additional Electrical Equipment provided that the installation and use thereof
is permitted by Applicable Laws and shall not cause permanent damage or injury
to the Building or cause or create a dangerous or hazardous condition or entail
unreasonable alterations or unreasonably interfere with or disturb other tenants
or occupants of the Building (collectively, "Building Requirements"), and Tenant
shall pay all costs and expenses in connection with such installation.
10.4 Character of Electricity. All alternating current finished by
Landlord pursuant to this Lease shall be furnished at nominal utility voltage
(265/460V with allowable fluctuations within regulatory agency requirements), 3
phase, 4 wire, with a power factor of 0.9. The electrical voltage and current
distortion at the service switchboards shall be within the limits stated in IEEE
519.
10.5 Tenant's Dedicated Switches. The term "Tenant's Electrical
Work" shall mean
(i) modification of an existing switchboard as shown on
Exhibit OO to accept two Switches in accordance with Applicable Law,
(ii) relocation of load from a Switch on switchboard B as
shown on Exhibit OO to one of the two Switches on said modified
existing switchboard, and
(iii) connection of (a) the Switch on switchboard B referred
to in clause (ii) above, and (b) the other Switch on the existing
modified switchboard to Tenant's load. (such two switches being
herein called "Tenant's Dedicated Switches").
The term "Switch" shall refer to a switch rated a 2500 amperes fused at 2000
amperes (demand). Tenant shall have the right to perform Tenant's Electrical
Work and, if Tenant does so, Tenant shall be entitled to exclusive use of
Tenant's Dedicated Switches. Upon the completion of Tenant's Electrical Work,
Landlord shall cause alternating electrical current to be furnished to Tenant's
Dedicated Switches in accordance with Section 10.2.
10.6 Electricity Supplier for the Building. Except to the extent
that Tenant shall otherwise consent from time to time or as otherwise provided
in this Lease, Landlord
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shall continue to purchase all electricity to be used by Landlord, Tenant or any
other tenant or occupant of the Building ("Building Electricity") from
Consolidated Edison Corporation or its successor ("ConEd") pursuant to ConEd's
applicable tariff and not pursuant to any contract or contractual arrangement.
Subject to the rights of any Building tenant under any lease now in
effect, Landlord shall not suffer or permit any tenant or occupant of the
Building (other than Tenant) to purchase electricity directly from ConEd or from
any other supplier (other than Landlord).
If Tenant shall so request Landlord shall solicit competitive bids
from at least three qualified electricity suppliers selected by Landlord and any
other qualified electricity suppliers identified by Tenant for the providing of
Building Electricity and, after consulting with Tenant and obtaining Tenant's
approval as provided below, shall enter into an electricity supply contract for
the providing of Building Electricity with the electricity supplier who Landlord
reasonably believes to be most beneficial to the tenants of the Building taking
into account price and any other relevant considerations; provided, however,
that Landlord shall not enter into any electricity supply contract with any
electricity supplier without Tenant's prior written approval of such contract
and such supplier. If any such contract entered into by Landlord shall provide
for any rebates or other payments to Landlord then the amounts payable by Tenant
under this Article 10 and Operating Costs under Article 4 shall be computed
after deducting such rebates and other payments. Upon the expiration or other
termination of any electricity supply contract, unless Tenant shall have
directed Landlord to purchase electricity from ConEd, Landlord shall again
comply with the provisions of this paragraph. If Tenant shall fail to approve
any electricity supply contract or any electricity supplier (either initially or
subsequently upon expiration or termination of the preceding electricity supply
contract) or shall direct Landlord to purchase Building Electricity from ConEd,
Landlord shall do so in accordance with the first paragraph of this Section
10.6, subject to the renewed application of this paragraph if Tenant shall
subsequently so request.
Landlord shall qualify and maintain qualification as a redistributor
of electricity under the applicable sales tax law, and, upon Tenant's request
from time to time, shall furnish to Tenant evidence that it has done so.
10.7 Electricity Charges -- Average Cost per KWH. All electric
current consumed by Tenant shall be measured by a meter or meters provided and
installed by Landlord at its expense at a location or locations selected by
Landlord. Each meter measuring the electricity referred to in Section 10.1 shall
be located in the Building electrical closet on the floor in question. Each
meter measuring the electricity referred to in Section 10.2 shall be located in
the basement of the Building on or adjacent to the switchboard on which the
switch in question is located. Prior to installing any meter pursuant to this
paragraph, Landlord shall so notify Tenant and, if Tenant promptly so request,
Landlord shall install a meter of the type referred to in Section 10.8 rather
than a consumption-only meter and in such a case Tenant shall reimburse Landlord
for increased cost of purchase or
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installation of such meter in excess of the cost of purchasing and installing a
consumption-only meter.
Commencing on the Term Commencement Date and upon the Delivery Date
of each Applicable Portion, Tenant shall pay to Landlord, for each billing
period of the electricity supplier furnishing the Building Electricity (the
"Building Electricity Supplier"), an amount (the "Electric Charge") equal to the
product obtained by multiplying
(i) the actual number of kilowatt hours of electric current
consumed by Tenant in the billing period, by
(ii) a fraction having as its numerator
(a) if ConEd shall be the Building Electricity Supplier,
the amount charged Landlord by ConEd pursuant to the
applicable tariff for Building Electricity for the billing
period including both the consumption charge (including fuel
adjustment) and the demand charge and all utility taxes, and
excluding all sales and use taxes whether or not separately
stated on the electric bill issued to Landlord,
(b) if ConEd shall not be the Building Electricity
Supplier, the sum of (i) the amount charged Landlord by the
Building Electricity Supplier pursuant to the electricity
supply contract entered into in accordance with this Lease for
Building Electricity for the billing period and (ii) the
amount charged Landlord by ConEd pursuant to the applicable
tariff for delivery to the Building of such Building
Electricity purchased from the Building Electricity Supplier
for the billing period, including, in both cases, both the
consumption charge (including fuel adjustment) and the demand
charge and all utility taxes, and excluding all sales and use
taxes whether or not separately stated on the electric bill
issued to Landlord,
and having as its denominator the total number of kilowatt hours of
Building Electricity consumed in the billing period.
Tenant shall also pay to Landlord any sales taxes on the Billing Period Electric
Charge payable by it pursuant to this Section, and Landlord shall remit such
sales tax to the appropriate governmental agency.
If, with Tenant's prior consent, the Building Electricity shall be
purchased from more than one electricity supplier for any billing period, the
aforesaid fraction shall be computed by aggregating the amounts charged by and
the electricity furnished by such suppliers.
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As used in this Section 10.7, the phrase "the amount charged
Landlord by ConEd" or "the amount charged Landlord by the Building Electricity
Supplier" shall mean such amount as reduced by all abatements, reductions and
exemptions if, as and when in effect and applicable to the electricity to which
this Section shall relate.
10.8 Electric Charges -- Actual Cost Contribution. By notice to
Landlord Tenant shall have the right to require that, in lieu of the amount
provided for in Section 10.7, the Electric Charge payable by Tenant be equal to
Tenant's actual contribution to the cost of Building Electricity ("Actual
Electric Cost Contribution"), considering consumption and demand (measured on a
co-incident demand basis) separately and, if Tenant shall so elect, considering
time of day; provided, however, that no such notice shall be effective unless
and until Tenant shall have installed in the Building such meters and other
equipment as are necessary to compute the Actual Electric Cost Contribution (the
"Additional Metering Equipment"). Tenant shall have the right to install the
Additional Metering Equipment in the Building. The demand component of the
Actual Electric Cost Contribution for any billing period shall be equal to the
ratio of Tenant's demand (measured on a co-incident demand basis) at the time of
the Building's peak demand for such billing period to the Building's peak demand
for such billing period, applied to the demand charge for such billing period.
The consumption component of the Actual Electric Cost Contribution for any
billing period shall be equal to the ratio of the Tenant's consumption for such
billing period to the Building's consumption for such billing period, applied to
the consumption charge (including fuel adjustment), and computed separately for
each applicable time of day, if applicable. The Actual Electric Cost
Contributions shall be computed exclusive of all sales and use taxes whether or
not separately stated on the electric bill issued to Landlord. Tenant shall also
pay to Landlord any sales taxes on the Electric Charge payable by Tenant
pursuant to this Section, and Landlord shall remit such sales tax to the
appropriate governmental agency. As used in this Section 10.8, the phrase "the
cost of Building electricity" shall mean such cost as reduced by all abatements,
reductions and exemptions if, as and when in effect and applicable to the
electricity to which this Section shall relate.
10.9 Billing & Payment. Landlord shall pay all charges for all
Building Electricity and shall indemnify Tenant against any claims therefor.
Landlord shall bill Tenant for the Electricity Charge, and the sales
and use tax thereon, monthly or at such other intervals as Landlord shall be
billed by the Building's Electricity Supplier. Each such bill shall be
accompanied by copies of the electric bills issued to Landlord on which it is
based, as well as records of the reading of the meters measuring Tenant's usage
and a statement showing the computation of the Electric Charge. Each such bill
rendered by Landlord in accordance with this Section shall be due and payable by
Tenant within twenty (20) days of presentation as aforesaid. If Tenant shall
dispute the amount of the Electric Charge for any billing period, and the
parties are unable to resolve such dispute within thirty (30) days of Tenant's
notice to Landlord thereof, such dispute shall be resolved by arbitration
pursuant to Article 35 and in any such arbitration the arbitrator shall be a
recognized electrical consultant practicing in New York City who shall have been
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engaged in such practice for not less than ten (10) years. No such dispute shall
excuse Tenant from payment on the basis of Landlord's bill, but Tenant shall be
entitled to interest at the Interest Rate on any overpayment from the date of
overpayment to the date of refund.
Landlord shall make available to Tenant from time to time upon
Tenant's request copies of all electricity billing records and meter and
submeter readings for the Building.
10.10 Direct Service -- Illegality of Redistribution. If it shall
become illegal for Landlord to purchase and redistribute electric current to its
tenants, Landlord shall, upon not less than thirty (30) days' prior notice to
Tenant, discontinue the furnishing of electric current to Tenant and Tenant
shall contract for electric current with the electricity supplier of Tenant's
choice; provided, however, that
(a) Landlord shall permit Tenant to use any existing
Electrical Equipment in the Building for the purpose of receiving
such electric current from such supplier but only to the extent that
the same is available, suitable and safely capable of supplying
electric current to Tenant,
(b) if and to the extent that any additional Electrical
Equipment is required to be installed in Building in order for
Tenant to receive such electrical current (without reduction in
capacity or diversity) Landlord shall install the same at its
expense subject to Tenant's approval thereof (not to be unreasonably
withheld), and
(c) Landlord shall not discontinue the furnishing of electric
current to Tenant until (i) Tenant has concluded arrangements with
Tenant's electric supplier, (ii) Tenant's electricity supplier has
commenced to provide electric current to Tenant, and (iii) if any
additional Electrical Equipment is required by clause (b) above to
be installed, the same has been installed and placed in service.
10.11 Direct Service--Tenant's Election. By notice to Landlord,
Tenant shall have the right (i) to purchase directly from the electricity
supplier of its choice any or all of the electric current otherwise required to
be furnished by Landlord pursuant to this Article 10 and (ii) for such purpose
to use any existing Electrical Equipment in the Building for the purpose of
receiving such electric current from such supplier but only to the extent that
the same is available, suitable and safely capable of supplying electric current
to Tenant; provided, however, that (a) Tenant shall not directly so purchase
electricity unless and until Tenant shall have installed in the Building any
additional Electrical Equipment necessary for Tenant to do so, and (b) Tenant
shall be required, at its expense, to maintain any such Electrical Equipment
used by Tenant pursuant to clause (ii) above or installed by Tenant pursuant to
clause (a) above. Tenant shall have the right to install in the Building such
additional Electrical Equipment as shall be necessary or appropriate in order
for Tenant to
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receive such electrical current (without reduction in capacity or diversity)
directly from Tenant's electricity supplier.
10.12 Tenant's Generator Plant -- Sale of Output. Tenant shall have
the right to sell the output of Tenant's Generator Plant to the purchaser of its
choosing (excluding Building tenants other than Tenant's subtenants), and to
install in the Building such additional Electrical Equipment as shall be
necessary for Tenant to do so; provided, however, that such additional
Electrical Equipment shall not adversely affect the Building's electrical system
or electric service to the Building or any of the other tenants therein.
10.13 General. Tenant's right to perform Tenant's Electrical Work
pursuant to Section 10.5 and Tenant's right to install Electrical Equipment
pursuant to Sections 10.3, 10.11 and 10.12 and Tenant's right to install
Additional Metering Equipment pursuant to Section 10.8 shall be subject to
Landlord's approval of the plans and specifications thereof (not to be
unreasonably withheld) and otherwise to the provisions of Section 6. Tenant
shall have the right to inspect and the right and obligation to maintain, repair
and replace all of the foregoing.
Tenant shall also have the right to inspect all meters referred to
in Section 10.7 and/or any Additional Metering Equipment in order to confirm the
accuracy thereof, and the right, subject to Landlord's approval (not to be
unreasonably withheld) to install devices to monitor and confirm the accuracy of
such meters and/or of such Additional Metering Equipment and/or to keep records
of Tenant's usage; provided, however, that such additional devices shall not
interfere with the functioning of such meters and/or of such Additional Metering
Equipment and that, if Landlord shall so request, Tenant shall remove such
devices upon the expiration or sooner termination of this Lease.
10.14 Lamps, Starters & Ballasts. Tenant shall purchase from the
vendor of its choice and install all lamps, starters and ballasts (including
replacements thereof) used in the lighting fixtures in the Premises.
10.15 Water. Landlord shall furnish hot and cold water for normal
use in Building lavatory and toilet facilities and for sprinklers, pantries and
slop sinks in or serving the Premises. Landlord shall furnish water for such
other purposes as Tenant shall require, including kitchens, a health club or
gymnasium, additional lavatory and toilet facilities and any cooling tower
installed by Tenant, for which Tenant shall pay as additional rent (i) the
actual out-of-pocket cost to Landlord of supplying, installing and maintaining a
meter to measure the water so furnished, (ii) the actual cost payable by
Landlord to the municipal or other water supplier for the such water, (iii) the
actual out-of-pocket cost to Landlord of any required pumping or heating of such
water, and (iv) any taxes, sewer rent or other charges that may be imposed by
any governmental agency based upon the quantity of such water the charge
therefor.
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10.16 Exculpation. Landlord shall in no way be liable for any
failure, inadequacy or defect in the character or supply of electric current,
water or steam furnished to the Building.
10.17 Gas. From and after the Delivery Date of the 3rd/4th Floor
Special Purpose Area (i) Tenant shall have the exclusive right to use the gas
supply system of the Building, and (ii) Tenant shall become a direct customer of
ConEd or the gas supplier of Tenant's choice and pay all charges for gas
directly to the supplier thereof.
Article 11. Elevators, Cleaning, Services, etc.
11.1 Definitions. For the purposes of this Lease, "Business Hours"
shall mean 7:00 A.M. to 7:00 P.M. on days other than Saturdays, Sundays and
Holidays. The term "Holidays" mean the holidays prescribed in the contracts for
the Building's labor staff in general (i.e. exclusive of holidays which
individual employees may take at different times). For purposes of this Lease,
"Business Days" shall mean all days other than Saturdays, Sundays and Holidays.
11.2 Passenger Elevator and Escalator Service.
(a) Landlord shall supply passenger elevator service at all times to
each floor of the Building that is served by the Building's passenger elevators
and on which the Premises are, or any portion thereof is, located, and Landlord
shall keep all passenger elevators in service (and available to Tenant) at all
times (except for breakdown and scheduled service, repairs or other work which
shall be subject to Section 11.7).
Landlord shall cause each passenger elevator to conform to the
performance specifications attached hereto as Exhibit L. No passenger elevator
shall, without Tenant's consent, be modified to serve any floor it does not
currently serve or to cease serving any floor it currently serves, except that
(i) Tenant shall have the right, from time to time, to control
whether or not the low-rise and/or the mid-rise and/or the high-rise
elevator bank shall serve the 16th floor and, if either the mid-rise
and/or the high-rise elevator bank shall serve the 16th floor,
whether or not the same shall serve the 16th floor from the lobby,
and
(ii) Tenant shall have the right to install on the 3rd floor
of the Building doors to the low rise elevator shafts and, having
done so, the right from time to control whether the low-rise
elevators serve the 3rd floor of the Building (and Tenant
understands that doing so may increase the average waiting times
experienced throughout the low rise elevator bank).
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Two of the high-rise elevators are configured so that they serve the
plaza level and provide direct exclusive service to selected floors of the
Building, known as executive service (the "Executive Elevators"). Tenant shall
have the right from time to time, limited to special occasions or special
functions, to place one or both of the Executive Elevators into executive
service and to make exclusive use of, and control the floors served by, the
Executive Elevators.
Tenant shall have the right, subject to Article 6 (including the
provisions thereof providing for Landlord's approval of the plans and
specifications), to upgrade and/or modernize the low-rise passenger elevators
("Tenant's Low Rise Elevator Work"). Tenant shall bear all costs of Tenant's Low
Rise Elevator Work, including hard and soft costs ("Tenant's Low Rise Elevator
Work Costs"), except that Landlord shall reimburse Tenant for the first $450,000
of such costs ("Landlord's Low Rise Elevator Cost Contribution"). Landlord shall
disburse Landlord's Low Rise Elevator Cost Contribution in installments. Each
installment shall be due within twenty (20) days of Tenant's request therefor
accompanied by copies of invoices for Tenant's Low Rise Elevator Work Costs paid
by Tenant.
(b) Landlord shall keep in service (and available to Tenant) at all
times (except for breakdown and scheduled service, repairs or other work which
shall be subject to Section 11.7) the two existing shuttle elevators. Except as
otherwise provided by this Section 11.2(b), one of such shuttle elevators shall
be configured to serve only the mezzanine level of the Building and the basement
of the Building and the other shuttle elevator shall be configured to serve only
the mezzanine level of the Building and the plaza level of the Building. If and
for so long as Tenant shall so request:
(i) one or both of such shuttle elevators (as Tenant shall
request) shall be configured to serve or not serve such of the
floors of the Building as it shall be capable of serving (as Tenant
shall request), and/or
(ii) Tenant shall be provided with keys in order to call
and/or operate one or both the shuttle elevators from or to any
floor of the Building it shall be capable of serving;
provided, however, that (a) the shuttle elevators shall be subject to call for
ADA access at all times as required by Applicable Law, and (b) Tenant shall
reimburse Landlord for the actual cost of any additional security necessitated
by any shuttle elevator service requested by Tenant pursuant to clause (i) of
this sentence.
(c) If Landlord shall install any card key or other security system
on any elevator the same shall be compatible with Tenant's key card.
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(d) Landlord shall keep in service (and available to Tenant) at all
times (except for breakdown and scheduled service, repairs or other work which
shall be subject to Section 11.7) (i) two escalators between the plaza level and
the mezzanine level, and (ii) four escalators between the mezzanine level and
the 3rd floor of the Building (the "3rd Floor Escalators"); provided, however,
that
(A) prior to the Delivery Date of the 3rd/4th Floor Special
Purpose Area, Landlord shall not be required to keep the 3rd Floor
Escalators in service when none of the facilities on the 3rd floor
are in use, and
(B) from and after the Delivery Date of the 3rd/4th Floor
Special Purpose Area, (i) Tenant shall have the exclusive right to
use and to control access to and to control the operation and hours
of operation of the 3rd Floor Escalators, including the right to
shutdown one or more of such 3rd Floor Escalators, and (ii) Tenant's
right to use the 3rd Floor Escalators shall be exclusive, and (iii)
Tenant shall reimburse Landlord for the actual cost of the
Building's maintenance contract covering the 3rd Floor Escalators.
(e) From and after the Delivery Date of the 3rd/4th Floor Special
Purpose Area, (i) Landlord shall keep in service (and available to Tenant
exclusively) at all times (except for breakdown and scheduled service, repairs
or other work which shall be subject to Section 11.7) the elevator serving only
the loading dock and the 2nd, 3rd and 4th floors ("Special Purpose Elevator"),
and (ii) Tenant shall reimburse Landlord for the actual cost of the Building's
maintenance contract covering the Special Purpose Elevator.
(f) If for any Renewal Term the Premises shall not include the
3rd/4th Floor Special Purpose Area then (i) the provisions of clause (B) of the
proviso to Section 11.2(d) and the provisions of Section 11.2(e) shall be void,
and (ii) Landlord shall not be required to keep the 3rd Floor Escalators in
service when none of the facilities on the 3rd floor are in use.
11.3 Freight Elevator Service. Landlord shall supply freight elevator
service (including use of the Building loading docks) during the hours of 6:00
am through 8:30 pm on Business Days (the "Freight Elevator Hours") to each floor
that is served by the Building's freight elevators and on which the Premises
are, or any portion thereof is, located.
Except for breakdown and scheduled service, repairs and other work
which shall be subject to Section 11.11, Landlord shall keep both such freight
elevators in service (and available to Tenant) on a non-exclusive basis at all
times during Freight Elevator Hours.
If and for so long as Tenant shall be providing any cleaning under
Section 11.7, Landlord shall also provide freight elevator service during the
hours of 8:30 pm through midnight on Business Days for the purpose of
transporting Tenant's cleaning personnel and equipment.
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Freight, furniture, business equipment, merchandise and packages of
any description shall be delivered to and removed from the Premises only in the
freight elevators and through the service entrances and corridors.
Notwithstanding the foregoing, Tenant shall be permitted to use the
passenger elevators for mail (including inter-office mail) delivery, courier
services (such as Federal Express and UPS) and messengers, provided that, if and
to the extent Tenant shall require the use of carts in connection therewith,
Tenant shall only use carts with bumpers which have been approved by Landlord,
such approval not to be unreasonably withheld, so as not to damage the passenger
elevator cars.
11.4 Heating, Ventilating and Air-Conditioning. Landlord shall
(a) subject to any applicable regulations adopted by any
governmental authority, supply heat to the Premises and the public
portions of the Building during Business Hours when needed for
comfortable occupancy, and
(b) subject to any applicable regulations adopted by any
governmental authority, supply air conditioning and ventilation to
the Premises and the public portions of the Building during Business
Hours throughout the year.
Such heating, ventilating and air-conditioning shall provide:
(a) inside conditions of no more than 76 (+/-2) degrees F.
d.b. (relative humidity of no more than 50%) so long as the outside
conditions are not more than 95 degrees F. d.b. 75 degrees F. w.b.,
except to the extent arising from occupancy of the Premises by more
than one person per 100 usable square foot or average electricity
consumption in the Premises of more than 3 watts (demand) per
useable square foot;
(b) inside conditions of not less than 70 degrees F. d.b. (no
minimum humidity) so long as the outside conditions are not less
than 5 degrees F. d.b; and
(c) at least .87 cfm of conditioned air per useable square
foot (including at least .15 cfm fresh air) supplied at no greater
than 58 degrees F. d.b. at the take-offs on each floor with not less
than 1.25 inches of residual static pressure as measured downstream
of the floor shutoff/isolation dampers on both risers and as
measured when such conditioned air is being provided to all floors
of the Building; provided, however, that when the base building
chiller plant is not in operation Landlord may supply air warmer
than the aforesaid temperature provided that Landlord increases the
quantity of air
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delivered so as to provide equivalent cooling in accordance with
good operating practices.
Landlord shall maintain the heating, ventilation and air conditioning systems to
the Premises in good order and condition, except for damage occasioned by the
act of Tenant, which will be repaired by Landlord at Tenant's expense.
11.5 Supplemental Condenser Water. Landlord shall furnish to Tenant,
at all times, from the Building's condenser water system such condenser water as
Tenant shall from time to time draw for Tenant's supplemental cooling
requirements up to the Tenant's Building Condenser Water Quantity (as
hereinafter defined) of condenser water. Landlord shall furnish such condenser
water at a maximum entering water temperature of 85 degrees Fahrenheit, and
Tenant's condenser water-using equipment may cause such temperature to rise to a
maximum of 100 degrees Fahrenheit. Such condenser water shall be furnished
through the Building's condenser water riser to each floor on which the Premises
are located.
Initially Tenant's Building Condenser Water Quantity shall be 200
tons; provided, however, that by notice to Landlord given from time to time
Tenant may increase or decrease Tenant's Building Condenser Water Quantity;
provided, however, that except for any increase notice of which is given by
Tenant within 180 days of the commencement of the term of this Lease with
respect to any Accepted Offer Space and which is limited to the tonnage of
condenser water being delivered to such Accepted Offer Space prior to Tenant's
leasing the same, any such increase shall be subject to Landlord's having, at
the time of Tenant's notice of increase, such increase available.
Tenant shall pay, as additional rent to Landlord, within thirty (30)
days of being billed therefor, the Applicable Price for each ton of Tenant's
Building Condenser Water Quantity; provided, however, that for the period
commencing on the Term Commencement Date and ending on the date six (6) months
after occupancy for the conduct of business of the last of the Premises
described in Exhibit C to be occupied by Tenant, such charge shall be computed,
rather than by reference to Tenant's Building Condenser Water Quantity, by
reference to the condenser water-using equipment actually installed by Tenant
and serving the portions of the Premises in which Tenant shall have opened for
the conduct of business. There shall be no additional "tap-in" or other fees.
The charges under this paragraph shall be adjusted upon any increase or decrease
in Tenant's Building Condenser Water Quantity (and, during the period described
in the proviso the preceding sentence, upon Tenant commencing to occupy any
Applicable Portion for the conduct of business).
11.6 Cleaning By Landlord. Landlord shall clean the following areas
of the Building in accordance with the cleaning specifications annexed hereto as
Exhibit M:
(a) the common areas of the Building on or below the mezzanine
level of the Building, the fire stairs of the Building, and the
windows of the Building (both the interior and exterior thereof);
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(b) all portions of the Premises (and all common areas of the
Building) that are located on any Partial Premises Floor; and
(c) during any period for which Tenant, in accordance with the
provisions of Section 12.3, has requested that Landlord clean all
portions of the Premises (and all common, service and utility areas
of the Building) that are located on any Full Premises Floor, all
portions of the Premises (and all common, service and utility areas
of the Building that are located on such Full Premises Floor;
provided, however, that Landlord shall not be required to clean (i) any portion
of the Premises below the mezzanine level of the Building, or (ii) any portion
of the Premises that is used for preparing, dispensing or consuming food or
beverages or for storage or as an exhibition area or classroom, or as a shipping
room, mail room or for similar purposes or that is a toilet (other than the
toilets located in the core of the Building) or a shop or that is used for the
operation of computers (other than personal computers or similar equipment),
data processing, reproduction, duplicating or similar equipment or any portion
of the Premises designated by Tenant as a Secure Area under Section 7.1(c) (the
portions referred to in this clause (ii) being herein called the "Excluded
Cleaning Areas")).
With respect to the cleaning provided by Landlord under this Section
11.6, Landlord shall provide to Tenant, not less frequently than quarterly, an
advance schedule of the days on which each of the periodic non-daily cleaning
services referred to in Exhibit M will be furnished to each floor of the
Premises and each portion of the common areas of the Building.
With respect to the cleaning provided by Landlord under this Section
11.6, Tenant shall pay to Landlord, Landlord's actual cost under Landlord's
cleaning contract, of any additional cleaning of the Premises required because
of the carelessness of Tenant.
Upon the conversion of any floor of the Building from a Partial
Premises Floor to a Full Premises Floor (i.e. upon the commencement of the term
of this Lease with respect to the last portion of the leasable area of such
floor) Landlord shall cease to clean such floor, subject to the provisions of
clause (i) of Section 11.7 below.
11.7 Cleaning By Tenant. Subject to the provisions of this Section
11.7, Tenant shall clean (a) all portions of the Premises (and all common areas
of the Building) located on any Full Premises Floor at least in accordance with
the applicable portions of the cleaning specification annexed hereto as Exhibit
M, and (b) all Excluded Cleaning Areas; provided, however, that upon not less
than 90 days prior notice to Landlord from time to time Tenant
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(i) may request that Landlord clean all portions of the
Premises (and all common areas of the Building) on any Full Premises
Floor (and commencing upon the lapse of such 90 days (or such longer
period as shall be provided in Tenant notice under this clause (i))
such floor shall be cleaned pursuant to Section 11.6, rather than
this Section 11.7, and
(ii) may request that Landlord cease to clean all portions of
the Premises (and all common areas of the Building) on any Full
Premises Floor (and commencing upon the lapse of such 90 days (or
such longer period as shall be provided in Tenant's notice under
this clause (ii)) such floor shall again be cleaned pursuant to this
Section 11.7, rather than Section 11.6.
Tenant shall deposit its refuse and rubbish in the freight elevator
lobby of each Full Premises Floor which it is cleaning pursuant to this Section
11.7, and Landlord shall remove such rubbish nightly on Business Days.
11.8 Cooperation in the Selection of Cleaning Contractors. Landlord
and Tenant shall endeavor to cooperate with one another with respect to the
solicitation of bids for cleaning services to be provided by Landlord under
Section 12.2 and Tenant under Section 12.3; provided, however, that each party
shall have (i) the right to control the bidding procedures to be used by it
(and, in the case of Tenant, the right to award the contract without bidding)
and the terms and conditions of the cleaning contract to be entered into by it,
and (ii) to retain the cleaning contractor of its choice subject, in Tenant's
case, to the provision of Section 7.1(e). Subject to the foregoing, Landlord and
Tenant agree to solicit bids for the initial cleaning contract from the cleaning
contractors listed on Exhibit N.
11.9 Rubbish Removal. Landlord shall remove the refuse and rubbish
from each floor of the Premises and the Building nightly on Business Days;
provided, that in the case of any Full Premises Floor being cleaned by Tenant
pursuant to Section 11.7 Tenant shall have placed the same in the freight
elevator lobby. Tenant shall pay to Landlord, Landlord's actual cost under
Landlord's cleaning contract, of the removal from the Premises and the Building
of any of Tenant's refuse and rubbish in excess of that incident to normal
office occupancy, except wastepaper baskets left for emptying as an incident to
Landlord's normal cleaning of the Premises.
11.10 Additional Services. Landlord shall, when and to the extent
requested by Tenant upon advance notice not later than (x) 3:00 P.M., in case of
service on days other than Saturdays, Sundays and Holidays, (y) 12:00 P.M. on
Friday in case of service on Saturdays or Sundays and (z) 12:00 P.M. on the
business day preceding a Holiday in the case of service on a Holiday, furnish
(i) additional freight elevator (and loading dock) service on a dedicated basis,
(ii) additional heating, air conditioning, ventilation services, (iii)
additional cleaning services, and (iv) other additional services as listed on
Exhibit O annexed hereto, and Tenant, within twenty (20) days of Landlord's
bills therefor, shall pay Landlord the Applicable Price therefor. There shall be
no additional charge to Tenant for Tenant's use,
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during Freight Elevator Hours, of the freight elevators to bring in construction
materials for the performance of Alterations or for Tenant's move in to any
portion of the Premises. During construction of Alterations and move-in, Tenant
will have the dedicated use of one (1) freight elevator at such times as Tenant
shall request, to be manned at such times by Landlord's own union labor;
provided, however, that (i) Tenant shall reimburse Landlord for Landlord's
actual out-of-pocket cost of furnishing such Landlord's own union labor, (ii) if
the use of Landlord's own union labor shall result in any labor trouble or
jurisdictional dispute with the union labor of Tenant's contractors, the freight
elevator shall instead be manned by union labor furnished by Tenant's
contractor, and (iii) Tenant shall not be entitled to such dedicated use of one
(1) freight elevator during any periods of breakdown of the Building's other
freight elevator. In addition, during such construction, Tenant may have the
exclusive use of one (1) passenger elevator from each bank for the transport of
its construction personnel only (but not construction materials). Tenant shall
be responsible for daily cleaning and maintenance of such elevator, the public
lobby and any other area of the Building (as opposed to the Premises) affected
thereby. During all other times, if Tenant requests temporarily the dedicated
use of one (1) freight elevator, Landlord shall furnish the same and Tenant
shall pay to Landlord the Applicable Price for such service. During its move-in
Tenant shall have the right to use the passenger elevators in the low rise
elevator bank for its move provided Tenant properly protects such elevators.
Following Tenant's performance of the initial Alterations with respect to any
portion of the Premises, Landlord shall clean such portion of the Premises to
prepare the same for Tenant's occupancy, at no additional cost to Tenant,
provided that such portion is free of construction materials and debris.
11.11 Interruption in Services. Landlord reserves the right, without
any diminution or abatement of rent or any other liability to Tenant, including,
without limitation, for direct or consequential damage, or otherwise, and
without constituting any claim of constructive eviction, to stop any heating,
elevator, escalator, ventilation, air conditioning, electricity, domestic water,
condenser water, cleaning or other service and to interrupt the use of any
Building facilities, when necessary, and for as long as may reasonably be
required, by reason of accidents, strikes, the making of repairs, alterations or
improvements, lockouts, riots, acts of God, governmental preemption in
connection with a national or local emergency, inability to secure a proper
supply of fuel, steam, water, electricity, labor or supplies, laws, orders or
regulations of any governmental authority, Landlord's compliance with any
mandatory governmental energy conservation or environmental protection program
or any voluntary governmental energy conservation program, the request or
consent of Tenant, or by reason of any other cause beyond the reasonable control
of Landlord, subject to the following provisions of this Section 11.11. Landlord
shall not, however, except in an emergency (i) voluntarily effect any shutdown
or reduction of any service without at least ten (10) business days prior notice
to Tenant of the time and duration thereof, or (ii) voluntarily effect or
continue any shutdown or reduction of (x) electricity, domestic water or
condenser water other than during the hours of 8:00 a.m. Saturday through 8:00
p.m. on Sunday, or (y) any other service (excluding cleaning) during Business
Hours. Additionally, except in emergency, Tenant, by notice to Landlord given
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within five (5) business days of its receipt of Landlord's notice pursuant to
clause (i) of the preceding sentence relative to any service shutdown or
reduction, may require Landlord to postpone such service shutdown or reduction
by thirty (30) days. In case of any service shutdown or reduction arising out
of, or the ending of which requires, any work by Landlord, Landlord shall
prosecute such work diligently and continuously so as to minimize the duration
of such service shutdown or reduction. All non-emergency service, repairs and
other work to Building elevators and escalators shall be done outside Business
Hours, except for any extended repairs or other work that requires more than a
single evening; such extended repairs or other work shall be confined to one (1)
elevator or escalator per bank at any time (and the other escalator shall be
configured to run up).
11.12 Damage or Defective Condition. Tenant shall give to Landlord
prompt notice of any damage to, or defective condition in, any part or
appurtenance of the Building's sanitary, electrical, heating, air conditioning,
ventilation or other systems serving, located in, or passing through, the
Premises becoming known to Tenant's director of building operations (exclusive
of any such damage or defective condition to or in any fixtures, equipment,
improvements or installations installed by Tenant) and the damage or defective
condition shall be remedied by Landlord with reasonable diligence, provided,
however, that if the damage or defective condition was caused by, or by the
improper use of any of the systems by, Tenant or its employees, licensees or
invitees and is not coverable by an "all risk" insurance policy, the cost of the
remedy thereof shall be paid by Tenant within twenty (20) days of Landlord's
demand accompanied by appropriate supporting documentation. Tenant shall not be
entitled to claim any damages or offset in Fixed Rent or Additional Rent arising
from any such damage or defective condition, nor shall Tenant be entitled to
claim any eviction by reason of any such damage or defective condition.
11.13 Building Directory. Landlord shall maintain touch-screen
directories of tenants of the Building in the Building atrium at the Maiden Lane
and Pine Street entrances and on the mezzanine level. Landlord shall, at the
request of Tenant, maintain listings on such directories of Tenant and any other
person, firm or corporation in occupancy of the Premises or any part thereof as
permitted hereunder, and the names of any officers or employees of the
foregoing; provided, however, that the number of names so listed shall be in the
same proportion to the capacity of the Building directory as the aggregate
number of rentable square feet of the Premises is to the aggregate number of
rentable square feet of the Building, but in no event less than one per 150
square feet of rentable area of the Premises. The listing of any name other than
that of Tenant, whether on the doors or windows of the Premises, on the Building
directory, or otherwise, shall not operate to vest any right or interest in this
Lease or in the Premises or be deemed to be the consent of Landlord mentioned in
Article 12 below, nor shall it be deemed to be the consent of Landlord to any
assignment or transfer of this Lease or to any sublease of the Premises or to
the use or occupancy thereof by others.
11.14 Operation & Maintenance of the Building. Landlord shall
operate and maintain the Building and provide all services consistent with
standards for a Class A office
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building in downtown Manhattan. Landlord shall maintain in condition befitting a
Class A office building in downtown Manhattan the Building's structure and
shell, all common, service and utility areas and facilities of the Building and
the Building's electrical, heating, ventilating, air-conditioning, plumbing,
sanitary, sprinkler, fire life safety and other systems (excluding any portions
thereof installed by Tenant) (all of the foregoing being herein called the "Base
Building"), and shall make all repairs and replacements to the Base Building
required to keep the same in such condition. Landlord shall clean and police the
Building atrium and shall clean, maintain, repair and replace all personal
property therein as befitting a Class A office building in downtown Manhattan,
including the plants and landscaping therein.
11.15 Accessibility and Security (a) Landlord shall provide a
uniformed guard twenty-four (24) hour a day seven (7) days a week at the Maiden
Lane entrance to the Building for security purposes and to provide ADA
accessibility and assistance as needed.
(b) The provisions of this Section 11.15(b) shall be applicable
during Business Hours.
Persons shall be permitted to enter the Building atrium at the
Maiden Lane and Pine Street entrances and proceed to the mezzanine
level without clearing security.
Landlord shall station security personnel at both the south
security desk on the mezzanine level and the north security desk on
the mezzanine level.
Persons displaying an identification card issued by Tenant (a
"Tenant ID Card") shall be permitted to pass Landlord security at
either the north or south security desk on the mezzanine level.
Persons without a Tenant ID Card seeking to enter the Premises
shall be required to clear Landlord security on the mezzanine level
and Landlord's security personnel will notify Tenant whenever any
such person seeks access to the Premises and shall admit such person
if Tenant authorizes such entry.
Notwithstanding the preceding paragraph (i) Tenant shall have
the right to station its own security personnel at the south
security desk on the mezzanine level (in addition to Landlord's
security personnel at such desk) and (ii) so long as and whenever
Tenant stations its own security personnel at the south security
desk persons without a Tenant ID Card seeking to enter the Premises
shall be processed by Tenant's security personnel rather than
Landlord's security personnel. Tenant's security personnel may issue
a day pass to any such person and, by displaying a current day pass
issued by
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Tenant's security personnel, such person shall be permitted to pass
Landlord security at either the north or south security desk on the
mezzanine level.
(c) The provisions of this Section 11.15(c) shall be applicable
other than during Business Hours.
Persons shall be permitted to enter the Building atrium only
at the Maiden Lane entrance and shall be subject to security at that
location.
Landlord shall station security personnel at the Maiden Lane
entrance.
Persons displaying a Tenant ID Card shall be permitted to pass
Landlord security on the plaza level and proceed to the mezzanine
level.
Persons without a Tenant Employee ID Card seeking to enter the
Premises shall be required to clear security on the plaza level and
Landlord's security personnel will notify Tenant whenever any such
person seeks access to the Premises and shall admit such person if
Tenant authorizes such entry.
Notwithstanding the preceding paragraph (i) Tenant shall have
the right to install and station security personnel at its own
security desk on the plaza level, near the Maiden Lane entrance, and
(ii) so long as and whenever Tenant stations its own security
personnel on the plaza level persons without a Tenant ID Card
seeking to enter the Premises shall be processed by Tenant's
security personnel rather than Landlord's security personnel.
Tenant's security personnel may issue a day pass to any such person
and, by displaying a current day pass issued by Tenant's security
personnel, such person shall be permitted to pass Landlord security
on the plaza level (and proceed to the mezzanine level).
Either party may provide additional security at the mezzanine
level, but any person displaying a Tenant ID Card or a current day
pass issued by Tenant's security personnel shall be permitted to
pass any such additional Landlord security.
(d) Tenant shall furnish Landlord with samples of its Tenant ID Card
and day pass. Landlord shall not be responsible for verifying that any person
displaying a Tenant ID Card or a day pass issued by Tenant is in fact the
authorized holder thereof. Persons displaying a Tenant ID Card or a day pass
issued by Tenant shall not be required by Landlord to sign any register upon
leaving or entering the Building at any time.
(e) Tenant shall have the right to control access to the low-rise
elevator bank (and in the event Tenant shall ever lease all premises served by
the mid-rise elevator bank or the high-rise elevator bank, such additional
elevator bank or banks, as applicable). Tenant
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shall have the right (i) for such purpose to install (A) turnstiles and gates to
the low-rise elevator bank (and in the event Tenant shall ever lease all
premises served by the mid-rise elevator bank or the high-rise elevator bank,
such additional elevator bank or banks, as applicable), and/or (B) to install
partitions to separate any elevator bank to which Tenant has the right to
control access from any elevator bank or other area to which Tenant does not
have the right to control such access, subject, in either case, to Landlord's
prior approval of the plans therefor, which approval shall not be unreasonably
withheld, or (ii) to exercise such control by other means, subject to the
approval of Landlord which approval shall not be unreasonably withheld.
(f) Tenant shall have the right (i) to install computers and
telephones at its security desks and (ii) to run voice, data and/or electrical
conduits from the Premises or Tenant's Shafts to such computers and telephones
and to any equipment installed by Tenant to control access to any elevator bank.
Landlord shall furnish electricity to any such computers, telephones and
equipment.
11.16 Tenant's Car Service Line. Landlord shall (at no cost to
Landlord) cooperate with Tenant's efforts to sign any permit applications
requested by Tenant to enable Tenant to acquire rights to use the area directly
in front of the Maiden Lane entrance for its car service line.
11.17 Applicable Price. The term "Applicable Price" as used with
respect to each item referred to Exhibit O shall mean the price set forth
therefor on Exhibit O (the "Original Applicable Price"); provided, however, that
on January 1, 2000 and on each succeeding January 1, Landlord may adjust the
Applicable Price of each item to reflect increases in the actual cost to
Landlord of providing such item; provided, however, that in no event shall the
Applicable Price for any item any year exceed product of the Original Applicable
Price for such item multiplied by the CPI Factor for such year.
The term "CPI Factor" shall mean for any year the quotient of the
Index for January of such year divided by the Index for January 1999. The term
"Index" shall mean the Revised Consumer Price Index for All Urban Consumers
(i.e., the "CPI-U") published by the Bureau of Labor Statistics of the United
States Department of Labor ("BLS"), for New York-Northern New Jersey-Long
Island, NY-NJ-CT, All Items (1982-84 = 100). IF BLS changes the publication
frequency of Index so that an Index is not available for the month of January to
make any adjustment specified herein, the adjustment in question shall be based
on the percentage difference between the Index for the closest preceding month
for which an Index is available and the Index for the corresponding month in
1999. If BLS changes the base reference period for the Index from 1982-84 = 100,
the adjustments required hereunder shall be determined with the use of such
conversion formula or table as may be published by BLS. If BLS otherwise
substantially revises, or ceases publication of, the Index, then a substitute
index for determining the adjustments required hereunder, issued by BLS or by a
reliable governmental or other nonpartisan publication, shall be reasonably
designated by Landlord.
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11.18 Fire Alarm. Tenant shall have the right to install a new
"state of the art" micro-processor based data gathering panel (DGP) on each
floor for incorporation into the existing base building fire alarm system. The
DGPs shall be microprocessor based, and include distributed amplification and
distributed power supplier. Tenant shall have the right to install a redundant
(second) Fire Alarm System riser cable, connected to the base building system,
to serve Tenant's DGPs. In connection with this work, Tenant may relocate the
existing building fire alarm system due to its location within the CNA Closet.
In performing its work under this Section Tenant shall comply with Applicable
Law, including applicable fire regulations, and shall purchase components from
the manufacturer of the base building system.
Article 12. Assignment and Subletting.
12.1 General. Except as hereinafter provided, Tenant, for itself,
its distributees, administrators, legal representatives, successors and assigns,
expressly covenants that it shall not, directly or indirectly, by operation of
law or otherwise, assign, mortgage or encumber this Lease or any part thereof,
or underlet, or suffer, or permit the Premises or any part thereof to be used or
occupied by others, without the prior written consent of Landlord in each
instance. If this Lease or any part thereof is assigned, or if the Premises or
any part thereof is underlet, used or occupied by anyone other than Tenant,
Landlord may, after default beyond any applicable notice or cure period by
Tenant, collect rent from the assignee, undertenant, user or occupant, and apply
the net amount collected to the rent herein reserved, but no assignment,
underletting, use, occupancy or collection shall be deemed a waiver (except to
the extent Landlord has collected Fixed Rent and Additional Rent) of the
provisions hereof, or the acceptance of the assignee, undertenant, user or
occupant as tenant, or a release of Tenant from the further performance by
Tenant of covenants on the part of Tenant herein contained. The consent by
Landlord to an assignment, mortgage, encumbrance, underletting, use or occupancy
shall not in any way be construed to relieve Tenant or any assignee or subtenant
from obtaining the express consent in writing of Landlord to any further
assignment, mortgage, encumbrance, underletting, use or occupancy to the extent
required by the terms of this Article. Each assignee and each subtenant shall be
bound by the same obligations and entitled to the same rights as Tenant under
this Article 12, including the rights provided by Sections 12.7 and 12.8 except
that (i) the proviso to Section 12.7 shall not be applicable to any subtenant,
and (ii) when applying Section 12.8 to any subtenant the term "Related Party"
shall be defined by reference to such subtenant rather than Tenant. Tenant shall
not include in any advertisement the proposed sublease rental rate.
Notwithstanding any subletting to any subtenant or acceptance of rent or
additional rent by Landlord from any subtenant, Tenant shall and will remain
fully liable for the payment of the Fixed Rent and Additional Rent due and to
become due hereunder and for the performance of a11 the covenants, agreements,
terms, provisions and conditions contained in this Lease on the part of Tenant
to be performed and all acts and omissions of any subtenant or anyone claiming
under or through any subtenant that shall be in violation of any of the
obligations of this Lease, and any violation shall be deemed to be a violation
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by Tenant. Any amendment or modification to a sublease which shall extend the
term thereof or shall expand the premises demised thereby (other than, in either
case, pursuant to the exercise of an option or right set forth therein) shall,
as to such extension or expansion, be deemed to constitute a new sublease to
which the provisions of this Article 12 shall separately apply; any other
amendment or modification of a sublease shall not be deemed a new sublease but
Tenant shall furnish Landlord with a copy thereof prior to the effectiveness
thereof.
12.2 Request for Consent. Each request by Tenant for Landlord's
consent to any assignment of this Lease or any sublease of all or any part of
the Premises shall be accompanied by
(i) a statement of the proposed effective or commencement date
of the proposed assignment or sublease, which shall be not less than
ten (10) business days nor more than one (1) year after the giving
of the notice,
(ii) in the case of a proposed sublease, (x) a description of
the premises proposed to be sublet, including all premises covered
by any expansion rights and options proposed to be included in such
proposed sublease (together, the "Proposed Sublease Premises"), and
(y) a statement of the proposed expiration date of the proposed
sublease, assuming the exercise of any renewal options proposed to
be included in such proposed sublease (the "Proposed Sublease
Expiration Date"),
(iii) a statement setting forth in reasonable detail the
identity of the proposed assignee or subtenant and the nature of its
business,
(iv) a confirmation that the proposed primary use of the
premises to which such assignment or sublease shall relate is office
use or if such proposed primary use is not office use, then a
statement setting forth the proposed primary use of the Premises,
(v) if known to Tenant, a statement of the identity of any
broker who may be entitled to a commission in respect of the
proposed assignment or subletting,
(vi) such financial information with respect to the proposed
assignee or subtenant, as shall have been furnished to Tenant by
such assignee or subtenant (it being agreed, however, that in the
case of a proposed sublease Landlord shall not be entitled to
withhold its consent by reason of the financial condition of the
proposed subtenant), and
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(vii) in the case of a proposed assignment, such other
information reasonably requested by Landlord within five (5) days of
its receipt of the information referred to in the preceding clauses
of this sentence.
12.3 Consent Not to Be Unreasonably Withheld; Conditions. Provided
that Tenant is not in default of any of Tenant's obligations under this Lease
beyond any applicable notice or grace period, Landlord's consent to the proposed
assignment or sublease shall not be unreasonably withheld, provided that the
following conditions are satisfied:
(a) Tenant shall have complied with the provisions of Section
12.2 of this Article;
(b) The proposed assignee or subtenant is engaged in a
business that is in keeping with the standards of the Building;
(c) The proposed assignee or subtenant is a reputable entity
of good character;
(d) The proposed assignee or sublessee is not an entity with
whom Landlord is then negotiating to lease comparable space in the
Building which Landlord has available for a comparable term; and
(e) In the case of a proposed sublease, there shall not be
more than three (3) occupants (including Tenant) of each floor of
the Premises on which all or any portion of the premises proposed to
be subleased shall be located, provided that an entity, together
with its Related Parties, shall be considered a single occupant for
purposes of this Section 12.3(e).
Within ten (10) business days after receipt by Landlord of all
information required by Section 12.3 Landlord shall either (i) grant consent in
the form attached hereto as Exhibit P or (ii) furnish Tenant with a notice that
it withholds consent and of its reasons therefor. If Landlord shall fail timely
to grant such consent or furnish such notice, Landlord shall be deemed to have
granted such consent.
Tenant shall reimburse Landlord, within thirty (30) days of receipt
of an invoice from Landlord therefor, for any actual reasonable out-of-pocket
costs that may be incurred by Landlord to independent third parties in
connection with the considering Tenant's request for consent, including, without
limitation, the costs of making investigations as to the acceptability of the
proposed assignee or subtenant, and reasonable legal costs incurred in
connection with the granting of any requested consent.
If Landlord shall decline to give its consent to any proposed
assignment or sublease, Tenant shall indemnify, defend and hold harmless the
Landlord Indemnitees against and from any and all Claims that may be made
against the Landlord Indemnitees by
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the proposed assignee or sublessee or by any brokers or other persons claiming a
commission or similar compensation in connection with the proposed assignment or
sublease.
12.4 Effect of Consent.
Each consent to assignment issued by Landlord pursuant to Section
12.3 shall be effective with respect to any assignment of this Lease to the
assignee identified in Tenant's request for consent provided that such
assignment (i) is fully-executed and delivered (and a copy thereof delivered to
Landlord) within 270 days of Tenant's request for consent, and (ii) is effective
on a date no earlier than the date set forth in Tenant's request for consent. If
Tenant proposes to enter into any assignment of this Lease not conforming to the
foregoing provisions of this paragraph, Tenant shall again be required to comply
with the foregoing provisions of this Article 12.
Each consent to sublease issued by Landlord pursuant to Section 12.3
shall be effective with respect to any sublease of all or any portion of the
Proposed Sublease Premises identified in Tenant's request for consent to the
subtenant identified in Tenant's request for consent provided that such sublease
(i) is fully-executed and delivered (and a copy thereof delivered to Landlord)
within 270 days of Tenant's request for consent, (ii) commences no earlier than
the proposed commencement date set forth in Tenant's request for consent, and
(iii) expires (assuming the exercise of any renewal options provided for
therein) no later than the Proposed Sublease Expiration Date set forth in
Tenant's request for consent. If Tenant proposed to enter into any sublease of
all or any portion of the Premises not conforming to the foregoing provisions of
this paragraph, Tenant shall again be required to comply with the foregoing
provisions of this Article 12.
Tenant shall deliver to Landlord prior to the effective date of the
assignment or the commencement date of the sublease executed copies of such
assignment or sublease as well as all other agreements, if any, relating to such
assignment or sublease, and, if not fully disclosed thereby, a statement of all
consideration to be received by Tenant for or in connection with the assignment
or sublease and the terms of payment therefor.
12.5 Provisions Applicable to Every Sublease. With respect to each
and every sublease or subletting authorized by Landlord under the provisions of
this Lease or for which Landlord's consent is not required, it is further agreed
that:
(a) No subletting shall be for a term ending later than one
(1) day prior to the Expiration Date of this Lease;
(b) No sublease shall be valid, and no subtenant shall take
possession of the Premises or any part thereof, until an executed
counterpart of the sublease has been delivered to Landlord; and
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(c) Each sublease shall provide that it is subject (to the extent
applicable to the subleased premises and sublease term) and subordinate to
this Lease and to the matters to which this Lease is or shall be
subordinate, and that in the event of termination, re-entry or dispossess
by Landlord under this Lease Landlord may, at its option, take over all of
the right, title and interest of Tenant, as sublessor, under the sublease,
and the subtenant shall, at Landlord's option, attorn to Landlord pursuant
to the executory provisions of the sublease, except that Landlord shall
not (1) be liable for any previous act or omission of Tenant under the
sublease, (2) be subject to any offset, not expressly provided in the
sublease, that theretofore accrued to the subtenant against Tenant, or (3)
be bound by any modification of the sublease made after Landlord's so
taking over such right, title and interest unless Landlord has consented
to such modification or by any previous prepayment of more than one
month's rent.
12.6 Profit-Sharing. If Landlord shall give its consent to any
assignment of this Lease or to any sublease, Tenant shall in consideration
therefor, pay to Landlord, as additional rent:
(a) in the case of an assignment, an amount equal to fifty percent
(50%) of all sums (excluding rent payable under this Lease, which shall be
payable directly to Landlord) and other consideration payable to Tenant by
the assignee for or by reason of the assignment (including, but not
limited to, sums paid for the sale or rental of Tenant's fixtures,
leasehold improvements, equipment, furniture, furnishings or other
personal property, less the net unamortized cost thereof determined on the
basis of generally accepted accounting principles consistently applied)
reduced (but not below zero) by (i) the actual expenses incurred in good
faith by Tenant in connection with such assignment including without
limitation, e.g., lease takeover payments and other tenant allowances,
reasonable attorney's fees, cost of initial alterations made to the
Premises (or portions thereof) for the benefit of the assignee and
brokerage and leasing commissions, and (ii) an amount equal to the Fixed
Rent and Additional Rent payable under this Lease during the period
commencing on the date the Premises was vacated by Tenant through the
effective date of the assignment, but in no event to exceed six (6)
months, payable if, as and when Tenant receives such sums, after
recoupment by Tenant of such actual expenses referred to in clause (i)
above and such amount referred to in clause (ii) above; and
(b) in the case of a sublease, fifty percent (50%) of any rents,
additional charges or other considerations payable under the sublease to
Tenant by the subtenant that are in excess of the Fixed 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 (including, but not limited to, sums paid for
the sale or rental of Tenant's fixtures, leasehold improvements,
equipment, furniture, furnishings or other personal property, less the net
unamortized cost thereof determined on the basis of generally accepted
accounting principles consistently
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applied) reduced (but not below zero) by (i) the actual expenses incurred
in good faith by Tenant in connection with such sublease including,
without limitation, e.g., lease takeover payments and other tenant
allowances, reasonable attorney's fees, cost of initial alterations made
to the subleased space for the benefit of the sublessee and brokerage and
leasing commissions and (ii) an amount equal to Fixed Rent and Additional
Rent payable under this Lease in respect of the subleased space for the
period commencing on the date the subleased space was vacated by Tenant
through the commencement date of the sublease, but in no event to exceed
six (6) months, payable if, as and when Tenant receives such sums, after
recoupment by Tenant of such actual expenses referred to in clause (i)
above and such amount referred to in clause (ii) above.
12.7 Changes in Control; Transactions with Successors. Sections
12.1, 12.2, 12.3, 12.4 and 12.6 of this Article shall apply to a transfer,
directly or indirectly, by one or more transfers (other than transfers of
publicly traded interests in Tenant), of a majority of the beneficial interest
of Tenant only if the primary purpose thereof is the circumvention of the
conditions and restrictions set forth in this Article 12, as if such transfer
were an assignment of this Lease. The first sentence of Section 12.1 and
Sections 12.2, 12.3, 12.4, 12.5 and 12.6 of this Article shall not apply to, and
Landlord's consent shall not be required for, transactions with a corporation or
other entity into or with which Tenant is merged or consolidated or to which all
or substantially all of Tenant's assets are transferred; provided that in either
case (1) the successor to Tenant has a net worth computed in accordance with
generally accepted accounting principles of not less than the product of
eighteen (18) multiplied by the per annum Fixed Rent then payable under this
Lease, and (2) proof reasonably satisfactory to Landlord of such net worth shall
have been delivered to Landlord no later than ten (10) days after the effective
date of the transaction.
12.8 Transactions with Related Parties. The first sentence of
Section 12.1 and Sections 12.2, 12.3, 12.4, 12.5 and 12.6 of this Article shall
not apply to, and Landlord's consent shall not be required for, any assignment
or sublease by Tenant to any Related Party or to the occupancy of any portion of
the Premises by a Related Party without a subletting or assignment. For the
purposes of this Section, a "Related Party" shall mean (x) any corporation,
partnership or other entity which, at the time of the making of such assignment
or sublease or the commencement of such occupancy, is controlled by, controls,
or is under common control with, Tenant, (y) any service provider of Tenant
(such as, for example, any consultant providing services (e.g., travel,
technology, legal or accounting services) to Tenant and/or its employees, but
not to the public) and (z) any entity that acquires one of Tenant's business
units or divisions.
12.9 Miscellaneous Provisions Regarding Assignments. Any assignment
of this Lease (other than an assignment by operation of law in connection with a
merger or consolidation), whether made with Landlord's consent pursuant to
Section 12.1 of this Article, or without Landlord's consent pursuant to Section
12.7 or 12.8 of this Article, shall be made only if, and shall not be effective
until, the assignee shall execute, acknowledge and
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deliver to Landlord an agreement in the form attached hereto as Exhibit Q. No
such assignment shall release any predecessor tenants, including the
original-named Tenant, from liability. The joint and several liability of Tenant
and any assignee or immediate or remote successor in interest of Tenant and the
due performance of the obligations of this Lease on Tenant's part to be
performed or observed shall not be discharged, released or impaired in any
respect by any agreement or stipulation made by Landlord extending the time of,
or modifying any of the obligations of, this Lease, or by any waiver or failure
of Landlord to enforce any of the obligations of this Lease.
Article 13. Damage by Fire, etc.
13.1 If any part of the Premises shall be damaged by fire or other
casualty, Tenant shall give prompt notice thereof to Landlord. If any part of
the Premises or of the Base Building shall be damaged by fire or other casualty
Landlord shall, subject to the provisions of Section 13.2, proceed with
reasonable diligence to repair the damage, and if any part of the Premises shall
be rendered untenantable by reason of such damage to the Premises or the Base
Building, the annual Fixed Rent and the Additional Rent on account of Real
Estate Taxes, Operating Costs and Cleaning Costs payable hereunder, to the
extent that the Fixed Rent and the Additional Rent on account of Real Estate
Taxes, Operating Costs and Cleaning Costs relates to the part of the Premises
that has been rendered untenantable, shall be abated for the period from the
date of the damage to the date when such part of the Premises shall have been
made tenantable or to any earlier date upon which the term of this Lease shall
expire or terminate. As used in this Article, the term "untenantable" shall
mean, with respect to the Premises or any portion thereof, that the same is
unsuitable for use (and is not used) in the normal manner for the purpose for
which leased, by reason of damage or destruction therein or to the Base
Building, or by reason of interruption or diminution in any of the services
otherwise ordinarily provided thereto, or by reason of not being reasonably
accessible. In the event a rent abatement occurs under this Article with respect
to a portion of the Premises then subject to another abatement of rent under
this Lease, the other abatement period shall be extended with respect to such
portion of the Premises one (1) day for each day of the abatement period under
this Article. Landlord shall not be liable for any inconvenience or annoyance to
Tenant or injury to the business of Tenant resulting in any way from any damage
or the repair thereof. Tenant acknowledges that Landlord is not obligated to
carry insurance of any kind on Tenant's goods, furniture or furnishings or on
any fixtures, equipment, improvements, installations or appurtenances installed
by Tenant or removable by Tenant as provided in this Lease, and that Landlord
shall not be obligated to repair any damage thereto or replace the same.
13.2 If repair or restoration of the Building (excluding goods,
furniture or furnishings and any fixtures, equipment, improvements,
installations or appurtenances installed by or for any tenant or removable by
any tenant) reasonably estimated to cost at least fifty percent (50%) of the
full insurable value of the Building (excluding goods, furniture or furnishing
and any fixtures, equipment, improvements, installations or appurtenances
installed by or for any tenant or removable by any tenant) shall be required
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as a result of damage by fire or other casualty (whether or not the Premises
shall have been damaged by fire or other casualty), then this Lease and the term
and estate hereby granted may be terminated by Landlord by its giving to Tenant
within ninety (90) days after the date of the damage a notice specifying a date,
not less than thirty (30) days after the giving of the notice, for the
termination; provided, however, that, at Tenant's election, no such notice of
termination shall be effective unless Landlord shall also simultaneously
terminate all other leases of space in the Building. In the event of the giving
of notice of termination, this Lease and the term and estate hereby granted
shall expire as of the date specified therefor in the notice, with the same
effect as if that date were the Expiration Date, and the Fixed Rent and
Additional Rent payable hereunder shall be apportioned as of the date of
termination, subject to abatement, if any, as and to the extent above provided.
13.3 If because of damage by fire or other casualty more than
twenty-five percent (25%) of the floor area of the Premises shall have been
rendered untenantable, Landlord shall deliver to Tenant within forty-five (45)
days of the date of the fire or other casualty the determination of an
independent architect or engineer selected by Landlord, subject to Tenant's
approval (not to be unreasonably withheld), of the estimated time to complete
the repair and restoration required by Section 13.1 (the "Estimated Repair
Time"). If such independent architect's or engineer's determination of the
Estimated Repair Time is greater than one hundred eighty (180) days from the
date of the fire or other casualty, Tenant may terminate this Lease by giving
notice of termination to Landlord within thirty (30) days after the receipt by
Tenant of notice from Landlord specifying such independent architect's or
engineer's determination of the Estimated Repair Time. If Tenant does not
terminate this Lease as provided above or such independent architect's or
engineer's determination of the Estimated Repair Time was less than one hundred
eighty (180) days, and Landlord fails to complete the repair and restoration
required by Section 13.1 within the Estimated Repair Time plus thirty (30) days,
Tenant may terminate this Lease by giving notice of termination to Landlord
within thirty (30) days after the expiration of the Estimated Repair Time plus
thirty (30) days. If Tenant gives notice to Landlord to terminate this Lease as
provided above, this Lease shall terminate on the date provided for in the
notice by Tenant, but in no event later than twelve (12) months after the giving
of the notice, with the same effect as if the date specified in the notice was
the Expiration Date and the Fixed Rent and Additional Rent payable hereunder
shall be apportioned as of the date of termination, subject to abatement, if
any, as and to the extent above provided.
13.4 Nothing herein contained shall relieve Tenant from any
liability to Landlord in connection with any damage to the Premises or the
Building or Landlord's property therein by fire or other casualty if Tenant
shall be legally liable therefor, except, however, that Landlord hereby releases
Tenant with respect to any liability that Tenant might otherwise have had to
Landlord for any damage to the Premises or the Building or Landlord's property
therein by fire 6r other casualty occurring during the term of this Lease to the
extent arising from a casualty or other event coverable by an "all risk"
insurance policy.
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13.5 This Lease shall be considered an express agreement governing
any case of damage to or destruction of, or any part of, the Building or the
Premises by fire or other casualty, and Section 227 of the Real Property Law of
the State of New York providing for a contingency in the absence of express
agreement, and any other law of like import now or hereafter in force, shall
have no application hereunder.
Article 14. Condemnation.
14.1 In the event that the whole of the Premises shall be lawfully
condemned or taken in any manner for any public or quasi-public use, this Lease
and the term and estate hereby granted shall forthwith cease and terminate as of
the date of vesting of title as a result of the condemnation or taking.
14.2 In the event that only a part of the Premises shall be
condemned or taken, then the term and estate hereby granted with respect to that
part of the Premises shall forthwith cease and terminate as of the date of
vesting of title as a result of the condemnation or taking and the Fixed Rent
and the Additional Rent on account of Real Estate Taxes, Operating Costs and
Cleaning Costs payable hereunder, to the extent that the Fixed Rent and the
Additional Rent on account of Real Estate Taxes, Operating Costs and Cleaning
Costs relate to that part of the Premises, shall be abated for the period from
the date of the vesting of title to the Expiration Date with respect to that
part of the Premises. In the event a rent abatement occurs under this Article
with respect to a portion of the Premises then subject to another abatement of
rent under this Lease, the other abatement period shall be extended with respect
to such portion of the Premises one (1) day for each day of the abatement period
under this Article.
14.3 In the event that only a part of the Building shall be
condemned or taken, then (i) if more than twenty-five percent (25%) of the floor
area of the Building has been condemned or taken (whether or not the Premises
are affected), this Lease and the term and estate hereby granted may be
terminated by Landlord by giving to Tenant, within sixty (60) days following the
date on which Landlord shall have received notice of the vesting of title,
written notice specifying a date, not less than thirty (30) days after the
giving by Landlord of the notice, for the termination, and (ii) if the
condemnation or taking shall be of a substantial part of the Premises or of a
substantial part of the means of access thereto, this Lease and the term and
estate hereby granted may be terminated by Tenant by giving to Landlord, within
sixty (60) days following the date upon which Tenant shall have received notice
of the vesting of title, written notice specifying a date, not less than thirty
(30) days after the giving by Tenant of the notice, for the termination, or
(iii) if neither Landlord nor Tenant elects to terminate this Lease as
aforesaid, this Lease shall be and remain unaffected by the condemnation or
taking, except that this Lease and the term and estate hereby granted with
respect to the part of the Premises so condemned or taken shall expire on the
date of the vesting of title to that part and except that the Fixed Rent and the
Additional Rent payable with respect to Real Estate Taxes, Operating Costs and
Cleaning Costs payable hereunder shall be abated to the extent, if any,
hereinabove provided in this Article. In the event that
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only a part of the Premises shall be condemned or taken and this Lease and the
term and estate hereby granted with respect to the remaining portion of the
Premises are not terminated as hereinabove provided, landlord will proceed with
reasonable diligence to restore the remaining portion of the Premises as nearly
as practicable to the same condition it was in prior to the condemnation or
taking.
14.4 The termination of this Lease and the term and estate hereby
granted in any of the cases hereinabove provided shall be with the same effect
as if the date of the termination were the Expiration Date, and the Fixed Rent
and Additional Rent payable hereunder shall be apportioned as of the date of
termination.
14.5 In the event of any condemnation or taking hereinabove
mentioned of all or a part of the Building, Landlord shall be entitled to
receive the entire award in the condemnation proceeding, including, without
limitation, any award made for the value of the estate vested by this Lease in
Tenant, and Tenant hereby expressly assigns to Landlord any and all right, title
and interest of Tenant now or hereafter arising in or to any award or any part
thereof, and Tenant shall be entitled to receive no part of any award; provided,
however, that nothing herein contained shall be deemed to preclude Tenant from
intervening for Tenant's own interest in any condemnation proceeding to claim or
receive from the condemning authority any compensation to which Tenant may
otherwise lawfully be entitled in respect of property owned by Tenant and
removable by it under Article 9 hereof.
14.6 The provisions of this Article shall not be applicable to any
condemnation or taking for governmental occupancy for a limited period.
Article 15. Compliance with Laws.
15.1 Tenant shall comply with all laws, including without limitation
the Americans with Disabilities Act, and ordinances and all rules, orders,
regulations and requirements of all governmental authorities (collectively,
"Applicable Laws") at any time duly issued and in force requiring compliance in,
to or upon the Premises or any part thereof except that Tenant shall not be
under any obligation to comply with any Applicable Law requiring any structural
Alteration of or to the Premises unless the requirement for compliance arises
out of either (i) a condition that has been created by, or at the instance of,
Tenant, or (ii) a breach of any covenant, agreement, term, provision or
condition hereof on the part of Tenant to be kept, observed or performed.
Landlord shall comply with all Applicable Laws at any time duly
issued and in force (a) requiring compliance in, to or upon the Base Building,
or (b) requiring any structural Alterations of or to the Premises which, by
reason of the exception set forth therein, Tenant is not required by the
preceding paragraph to make.
The provisions of this Section 15.1 shall be applicable to any
requirement for compliance arising out of or being a condition to any
Alterations in or to or use of the
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Premises made or proposed to be made by Tenant, except that if any such
compliance is required in, to or upon the Base Building by reason of Tenant's
using or proposing to use any portion of the Premises for any use not permitted
by the now-existing Certificate of Occupancy for the Building, Tenant shall be
required to effect such compliance; provided, however, that this sentence shall
not be applicable to any circumstance governed by the last paragraph of Section
5.1.
15.2 Landlord represents to Tenant that the Building was built after
the use of asbestos was outlawed. A copy of the most current filed ACP-5 Form
for the Building shall be delivered by Landlord to Tenant prior to the Term
Commencement Date. In the event Tenant discovers any asbestos or any other
hazardous material (as hereinafter defined) in the Premises or in other portion
of the Building in which Tenant is permitted to install property or perform work
or in the common or service areas of the Building, Tenant shall have the right,
upon ten (10) business days prior written notice to Landlord, to remove such
asbestos or other hazardous material and (unless such asbestos or hazardous
material was placed or installed in the Premises or such portion of the Building
by Tenant) Landlord shall within twenty (20) days of demand therefor,
accompanied by appropriate documentation, repay to Tenant the actual cost of
removal incurred by Tenant. The term "hazardous material" as used herein shall
mean any petroleum or petroleum products (including oil, crude oil, natural or
synthetic gas) except as used in accordance with Applicable Law in connection
with fuel tanks and generators installed in the Building by Landlord or Tenant,
radioactive materials, any asbestos or asbestos containing materials, PCBs, any
explosive or flammable materials, or any other hazardous or toxic waste,
material or substance, including, without limitation, any waster, material or
substance now or hereafter included in the definition of "hazardous substances,"
"hazardous waste," "hazardous materials," "toxic substances," "toxic waste" or
"toxic material" or similar term contain in any law or governmental regulation.
Article 16. Mortgage, Subordination, and Attornment.
16.1 This Lease and the term and estate hereby granted are and shall
be subject and subordinate to the lien of each mortgage that may now or at any
time hereafter affect the Building, the Land, or Landlord's interest therein and
to all renewals, modifications, consolidations, replacements and extensions
thereof (each, an "Underlying Mortgage") and any underlying lease that may now
or at any time hereafter affect the Land or Building and to all renewals,
modifications, consolidations, replacements and extensions thereof (each, an
"Underlying Lease"). The foregoing provision for the subordination of this Lease
and the term and estate hereby granted shall be self-operative and no further
instrument shall be required to effect the subordination. Nevertheless, Tenant
shall, upon request by Landlord, at any time or times, execute and deliver any
and all instruments that may be necessary or proper to effect, confirm or
evidence the subordination.
16.2 If Landlord's interest in the Building or the Land shall be
sold or conveyed to any person, firm or corporation upon the exercise of any
remedy provided for
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in any Underlying Mortgage or by law or equity, the person, firm or corporation
and each person, firm or corporation thereafter succeeding to its interest in
the Building or the Land shall not be
(A) liable to pay damages to Tenant caused by any
breach, act, omission or negligence of any prior landlord (including
the then defaulting landlord), but (except for the holder of any
Existing Mortgage) shall nonetheless remain subject to any and all
abatements, deductions, offsets, claims, counterclaims and/or
defenses which shall have accrued to Tenant against any prior
landlord (including the then defaulting landlord) prior to the date
that such person, firm or corporation shall have succeeded to the
rights of the landlord under the Lease, but in any case, provided,
however, such non-liability for damages shall neither diminish such
person, firm or corporation's liability for continuing obligations
of the landlord under the Lease nor diminish Tenant's right under
the Lease with respect to the continuing failure of such person,
firm or corporation to perform the obligations of the landlord under
the Lease after the date that such person, firm or corporation
succeeds to the interest of the landlord under the Lease;
(B) bound by any rent, additional rent or other items of
rental under the Lease which Tenant might have paid for more than
the current month to any prior Landlord (including the then
defaulting Landlord); or
(C) bound by the terms of any agreement amending,
modifying, supplementing or terminating the Lease (except as
contemplated by this Lease) made without the written consent of the
holder of such Underlying Mortgage, unless such consent shall have
been unreasonably withheld.
16.3 Notwithstanding the provisions of Section 16.1,
(i) the subordination of this Lease to (x) the Modified,
Amended and Restated Mortgage, Spreader and Consolidation Agreement,
dated as of January 9, 1989 and recorded on March 22, 1990 in Reel
1677 page 2057 in the Office of the Register of New York County (the
"Register's Office") in favor of the State of California - Public
Employees Retirement System and State of California - State
Teacher's Retirement System as in effect on the date hereof (the
"Existing First Mortgage") and (y) the Modified, Amended and
Restated Mortgage, Spreader and Consolidation Agreement, dated as of
January 9, 1989 and recorded on March 22, 1990 in Reel 1678 page
1918 in the Register's Office, as the same has been assigned, in
favor of First Bank National Association, (successor to the Trustees
of General Electric Pension Trust) as in effect on the date hereof
(the "Existing Second Mortgage" and,
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together with the Existing First Mortgage, the "Existing Mortgages")
shall be upon the terms and conditions set forth in Section 3.06 of
each of the Existing Mortgages and
(ii) the subordination of this Lease (x) to any Underlying
Mortgage other than the Existing Mortgages, (y) to any renewal,
modification, consolidation, replacement or extension of any of the
Existing Mortgages, or (z) to any Underlying Lease shall be subject
to the delivery to Tenant by the mortgagee or lessor, as the case
may be, of a non-disturbance agreement on the form attached hereto
as Exhibit R in any case referred to in clause (x) or (y) above or
an equivalent form in any case referred to in clause (z) above or,
in either case, another form no less favorable to Tenant in any
material respect.
Landlord represents that (a) there are currently no Underlying Mortgages other
than the Existing Mortgages and no Underlying Leases, and (b) Landlord has
repaid the principal of and all interest and prepayment charges on the Existing
First Mortgage (other than any amounts payable under Section 3.05 of the
Existing First Mortgage and Landlord believes that no such amounts are payable).
16.4 Landlord shall, within five (5) days after the full execution
and delivery of this Lease by each party, deliver by certified mail, return
receipt requested, to the mortgagee under each of the Existing Mortgages the
certificate required pursuant to the terms of Section 3.06(b) of each of the
Existing Mortgages, and copies thereof shall be simultaneously delivered to
Tenant. Copies of the signed return receipts from the delivery of the
certificates and all responses received by Landlord from the mortgagees under
the Existing Mortgages shall be immediately delivered to Tenant. If the
mortgagee under either of the Existing Mortgages shall timely reject such
certificate Landlord shall so notify Tenant and Tenant shall have the right, by
notice to Landlord given within thirty (30) days of its receipt of such notice
from Landlord, to terminate this Lease.
Article 17. Conditions of Limitation.
17.1 This Lease and the term and estate hereby granted are subject
to the limitation that:
(a) if Tenant shall default in the payment of any Fixed Rent or
Additional Rent on any date upon which the Fixed Rent or Additional Rent
becomes due and such default shall continue for ten (10) days after
Landlord shall have given to Tenant a notice specifying the default,
provided that Landlord shall not be required to give such notice with
respect to a default in payment of Fixed Rent more than two (2) times in
any twelve (12) month period;
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(b) if Tenant shall default in the due keeping, observance or
performance of any covenant, agreement, term, provision or condition of
this Lease (other than a default of the character referred to in Section
17.1(a)), and if the default shall continue and shall not be remedied by
Tenant within thirty (30) days after Landlord shall have given to Tenant a
notice specifying the default, or, in the case of a default which cannot
with due diligence be cured within the thirty (30) day period, if Tenant
(i) shall not promptly upon the giving of the notice of default give
Landlord notice of Tenant's intention to institute all steps necessary to
remedy the default, (ii) shall not duly institute and thereafter
diligently prosecute to completion all steps necessary to remedy the
default, and (iii) shall not remedy the default within a reasonable time
after the date of the giving of the notice by Landlord; or
(c) in case any event shall occur or any contingency shall arise
whereby this Lease or the estate hereby granted or the unexpired balance
of the term hereof would, by operation of law or otherwise, devolve upon
or pass to any person, firm or corporation other than Tenant, except as
permitted under Article 12 hereof,
then in the event that (a), (b) or (c) occurs, Landlord may give to Tenant a
notice of intention to end the term of this Lease at the expiration of three (3)
days from the date of the giving of the notice, and, in the event the notice is
given, this Lease and the term and estate hereby granted (whether or not the
term shall theretofore have commenced) shall terminate upon the expiration of
the three (3) days with the same effect as if the last of the three (3) days
were the Expiration Date, and Tenant shall remain liable for damages as provided
in this Lease or pursuant to law.
17.2 In addition, this Lease and the term and estate hereby granted
are subject to the limitation that whenever (a) Tenant, or any guarantor of
Tenant's obligations under this Lease (the "Guarantor"), shall commence any
case, proceeding or other action (1) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief entered
with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its debts; or (2)
seeking appointment of a receiver, trustee, custodian or other similar official
for it or for all or any substantial part of its assets, or Tenant or the
Guarantor shall make a general assignment for the benefit of its creditors; or
(b) there shall be commenced against Tenant or the Guarantor any case,
proceeding or other action of a nature referred to in clause (a) above that (1)
results in the entry of an order for relief or any adjudication or appointment
or (2) remains undismissed, undischarged or unbonded for a period of sixty (60)
days; or (c) Tenant or the Guarantor shall take any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of the acts set
forth in clauses (a) and (b) above; or (d) Tenant or the Guarantor shall
generally not, or shall be unable to, or shall admit in writing its inability
to, pay its debts as they become due; then Landlord may give Tenant a notice of
intention to end the term of this Lease at the expiration often (10) days from
the date of service of the notice of intention, and upon the
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expiration of the ten (10) day period this Lease and the term and estate hereby
granted, whether or not the term shall theretofore have commenced, shall
terminate with the same effect as if that day were the Expiration Date, but
Tenant shall remain liable for damages as provided in this Lease or pursuant to
law.
Article 18. Re-entry by Landlord.
18.1 If this Lease shall terminate as provided in Article 17 hereof,
Landlord or Landlord's agents and servants may immediately or at any time
thereafter re-enter the Premises, or any part thereof, either by summary
dispossess proceedings or by any suitable action or proceeding at law, without
being liable to indictment, prosecution or damages therefor, and may repossess
the Premises or any part thereof, and may remove any persons therefrom, to the
end that Landlord may have, hold and enjoy the Premises again as and of its
first estate and interest therein. The words "re-enter", "re-entry" and
"re-entering" as used in this Lease are not restricted to their technical legal
meanings.
18.2 In the event of any termination of this Lease under the
provisions of Article 17 hereof or in the event of the termination of this Lease
by or under any summary dispossess or other proceeding or action or other
measure undertaken by Landlord for the enforcement of its right of re-entry
(herein called a "Default Termination"), Tenant shall thereupon pay to Landlord
the Fixed Rent and Additional Rent up to the time of the Default Termination and
shall pay to Landlord any and all damages that, by reason of the Default
Termination, shall be payable by Tenant under this Lease or pursuant to law. In
the event of a Default Termination, Landlord also shall be entitled to retain
all money, if any, paid by Tenant to Landlord, whether as advance rent or as
security for rent, but the money shall be credited by Landlord against any Fixed
Rent and Additional Rent due from Tenant at the time of the Default Termination
or, at Landlord's option, against any damages payable by Tenant under this Lease
or pursuant to law.
18.3 Tenant, for Tenant, and on behalf of any and all persons, firms
and corporations claiming through or under Tenant, including creditors of all
kinds, does hereby waive and surrender all right and privilege that they or any
of them might have under or by reason of any present or future law to redeem the
Premises or to have a continuance of this Lease for the term hereby demised
after Tenant is dispossessed or ejected therefrom by process of law or under the
terms of this Lease or after the expiration or termination of this Lease as
provided herein or pursuant to law. Tenant also waives (a) the right of Tenant
to trial by jury in any summary dispossess or other proceeding that may
hereafter be instituted by Landlord against Tenant in respect of the Premises or
in any action that may be brought to recover rent, damages or other sums payable
hereunder, and (b) the provisions of any law relating to notice or delay in levy
of execution in case of an eviction or dispossess of a tenant for nonpayment of
rent, and of any other law of like import, now or hereafter in effect. If
Landlord commences any summary dispossess proceeding, Tenant will not interpose
any counterclaim of any nature or description in the proceeding unless Tenant
would by its failure to interpose such counterclaim lose the right to assert
such counterclaim. Landlord
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waives the right of Landlord to trial by jury in any action or proceeding
arising under this Lease.
Article 19. Damages.
19.1 In the event of a Default Termination of this Lease, Tenant
shall pay to Landlord as damages, at the election of Landlord, either:
(a) a sum that, at the time of the Default Termination, represents
the value of the excess, if any, of (i) the present value (using a
discount rate equal to the then current prime rate established by
Citibank, N.A. (the "Prime Rate")) of the aggregate of the Fixed Rent and
the Additional Rent that, had this Lease not terminated, would have been
payable by Tenant for the period commencing with the day following the
date of the Default Termination and ending with the Expiration Date over
(ii) the present value (using a discount rate equal to the then current
Prime Rate) of the aggregate fair market rent of the Premises for the same
period, or
(b) sums equal to the aggregate of the Fixed Rent and the Additional
Rent that would have been payable by Tenant had this Lease not terminated,
payable upon the due dates therefor specified herein following the date of
the Default Termination and ending with the Expiration Date; provided,
however, that if Landlord shall re-let the Premises during said period,
although Landlord shall have no obligation to do so, Landlord shall credit
Tenant with the net rents received by Landlord from such re-letting, such
net rents to be determined by first deducting from the gross rents as and
when received by Landlord from such re-letting the reasonable expenses
incurred or paid by Landlord in terminating this Lease or of re-entering
the Premises and of securing possession thereof, including, without
limitation, reasonable attorneys' fees and costs of removal and storage of
Tenant's property, as well as the reasonable expenses of re-letting,
including repairing, restoring, altering, decorating and preparing the
Premises for new tenants, "buy-out" costs paid by on account of a new
tenant's existing rent in other premises, brokers' commissions,
advertising costs, and all other similar or dissimilar reasonable expenses
chargeable against the Premises and the rental therefrom in connection
with such re-letting, it being understood that any such re-letting may be
for a period equal to or shorter or longer than the remaining term of this
Lease; provided, further, that (i) in no event shall Tenant be entitled to
receive any excess of such net rents over the sums payable by Tenant to
Landlord hereunder, (ii) in no event shall Tenant be entitled in any suit
for the collection of damages pursuant to this Section 19.1(b) to a credit
in respect of any net rents from a re-letting except to the extent such
net rents are actually received by Landlord, and (iii) if the Premises or
part thereof should be re-let in combination with other space, then proper
apportionment on a square foot area basis shall be made of the rent
received from such re-letting and of the expenses of re-letting.
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19.2 Suit or suits for the recovery of any damages payable hereunder
by Tenant, or any installments thereof, may be brought by Landlord from time to
time at its election, and nothing contained herein shall be deemed to require
Landlord to postpone suit until the date when the term of this Lease would have
expired but for a Default Termination. Nothing herein shall be construed as
limiting or precluding the recovery by Landlord against Tenant of any sums or
damages to which, in addition to the damages particularly provided above,
Landlord may lawfully be entitled by reason of any default hereunder on the part
of Tenant.
Article 20. Curing Tenant's Defaults - Additional Rent.
20.1 If Tenant shall default in the keeping, observance or
performance of any covenant, agreement, term, provision or condition herein
contained, Landlord, without thereby waiving the default, may perform the same
for the account and at the expense of Tenant
(a) immediately or at any time thereafter and without prior
notice (but with notice promptly after commencing such performance)
in the case of emergency or in case the default unreasonably
interferes with the use of the Building by any other tenant of any
space in the Building or with the efficient operation of the
Building or will result in a violation of law or cancellation of an
insurance policy maintained by Landlord,
(b) without further notice or lapse of time, in case of any
failure to procure and place any insurance required by this Lease
which has continued after the giving of notice and lapse of time
referred to in Section 22.5, and
(c) in any other case if the default continues after fifteen
(15) days from the date of the giving by Landlord to Tenant of
notice of Landlord's intention to perform the same; provided,
however, that in any case under this clause (c) relative to a
default the curing of which requires in excess of fifteen (15) days,
if within such fifteen (15) days Tenant shall commence such cure and
notify Landlord that it intends to prosecute the same to completion,
such fifteen (15) day period shall be extended so long as Tenant is
prosecuting such remedy continuously and with all due diligence.
20.2 All costs and expenses incurred by Landlord in connection with
any performance by it for the account of Tenant shall be paid by Tenant to
Landlord within twenty (20) days after demand therefor accompanied by
appropriate supporting documentation. If any such cost or expense is not paid
when due and payable above, the same shall become due and payable by Tenant as
Additional Rent hereunder. If any Fixed Rent, Additional Rent or damages payable
hereunder by Tenant to Landlord is not paid when due as provided in this Lease,
the same shall bear interest at the Interest Rate from the due date thereof
until paid and the amount of interest shall be deemed Additional Rent hereunder.
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This late payment charge will constitute liquidated damages and is intended to
compensate Landlord for its administrative costs resulting from Tenant's failure
to pay, and has been agreed upon by Landlord and Tenant, as a reasonable
estimate of the additional administrative costs. The actual cost in each
instance is extremely difficult, if not impossible, to determine.
20.3 In the event of nonpayment by Tenant of any Additional Rent
becoming due hereunder, Landlord, in addition to any other right or remedy,
shall have the same rights and remedies as in the case of default by Tenant in
the payment of the Fixed Rent. Landlord reserves the right, without liability to
Tenant and without constituting any claim of constructive eviction, to suspend
furnishing or rendering to Tenant any property, material, labor, utility or
other service, wherever Landlord is obligated to furnish or render the same at
the expense of Tenant, in the event that (but only as long as) Tenant is in
arrears in paying Landlord therefor at the expiration often (10) days after
Landlord shall have given to Tenant notice demanding the payment of the arrears
and stating that in the absence of such payment Landlord will suspend the
furnishing or rendering of such property, material, labor, utility or other
service.
Article 21. Consents.
Wherever in this Lease either party's consent or approval is
required and such party has expressly agreed in this Lease that its consent or
approval shall not be unreasonably withheld, if such party shall withhold its
consent or approval, the other party shall in no event be entitled to and shall
not make any claim, and such other party hereby waives any claim, for money
damages (including a claim for money damages by way of set-off, counterclaim or
defense) based upon any assertion by such other party that the first party
unreasonably withheld or unreasonably delayed its consent or approval. Such
other party's sole remedies in such circumstance shall be either (i) an action
or proceeding to enforce the provision by way of specific performance,
injunction or declaratory judgment or (ii) an arbitration proceeding in
accordance with Article 35 hereof. Notwithstanding the foregoing (i) Tenant
shall have the right to claim money damages in the event Landlord is found by a
court of competent jurisdiction to have acted in bad faith in withholding its
consent or approval under any provision of this Lease which requires Landlord
not unreasonably to withhold the same (and such finding becomes final subject to
no further appeal), and (ii) Landlord shall have the right to claim money
damages in the event Tenant is found by a court of competent jurisdiction to
have acted in bad faith in withholding its consent or approval under any
provision of this Lease which requires Tenant not unreasonably to withhold the
same (and such finding becomes final subject to no further appeal). Unless
otherwise expressly set forth in this Lease, it is the express intent of the
parties that any consent of either party under this Lease shall be given or
required only in the sole, absolute and unfettered discretion of such party, and
may be withheld for any reason whatsoever. In any instance in which either party
has agreed to not unreasonably withhold its consent or approval:
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(a) if no time period is specified such consent or approval
shall be given or withheld within ten days, and
(b) if such party fails to give or withhold consent or
approval within the time period specified in the applicable time
period (as specified in clause (a) or elsewhere in this Lease as the
case may be), the consent or approval of such party shall be deemed
to have been given.
Article 22. Insurance.
22.1 Tenant shall not violate, or permit the violation of, any
condition imposed by the standard property insurance policy then issued for
office buildings in the City of New York, and shall not do, suffer or permit
anything to be done, or keep, suffer or permit anything to be kept in the
Premises that would increase the property or other casualty insurance rate on
the Building or the property therein over the rate that would otherwise then be
in effect (unless Tenant pays the resulting increased amount of premium as
provided below) or that would result in insurance companies of good standing
refusing to insure the Building or any of the property therein in amounts
reasonably satisfactory to Landlord, provided, however, that Tenant shall not be
subject to any liability or obligation under this paragraph by reason of the
proper use of the Premises for the purposes permitted by Article 5.
22.2 If, by reason of any failure of Tenant to comply with the
provisions of this Lease, the rate of property insurance on the Building or
equipment or other property of Landlord or other tenants shall be higher than it
otherwise would be, Tenant shall reimburse Landlord for that part of the
premiums for property insurance paid by Landlord because of the act or omission
on the part of Tenant, which sum shall be deemed to be Additional Rent due
twenty (20) days after demand therefor accompanied by appropriate supporting
documentation, provided, however, that Tenant shall not be subject to any
liability or obligation under this paragraph by reason of the proper use of the
Premises for the purposes permitted by Article 5.
22.3 In the event that any dispute should arise between Landlord and
Tenant concerning insurance rates, a schedule or make up of rates for the
Building or the Premises, as the case may be, issued by Insurance Service
Office, Inc. or other similar body making rates for property insurance for the
Building or the Premises, shall be presumptive evidence of the facts therein
stated and of the several items and charges in the property insurance rates then
applicable to the Building or the Premises.
22.4 Tenant shall obtain and keep in full force and effect during
the term of this Lease at its own cost and expense the following insurance
coverages:
(a) for the benefit of Tenant as insured and Landlord as an
additional insured a commercial general liability insurance policy, in a
broad form policy, affording
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protection in an amount of not less than $10,000,000 combined single limit
coverage on a per occurrence basis, in respect of any and all claims for
personal injury, death or property damage occurring in, upon, adjacent to,
or connected with the Premises and any part thereof, and
(b) fire and extended coverage in an amount adequate to cover the
replacement of all personal property, fixtures, furnishings, equipment,
improvements and installations, located in the Premises.
The commercial general liability insurance policy required by this Lease to be
maintained by Tenant shall name Landlord, CNA Financial Corporation, The
Continental Corporation and their subsidiaries as additional insureds during the
term of this Lease.
22.5 Each insurance policy required by this Lease to be maintained
by Tenant shall provide that it will not be canceled, except upon thirty (30)
days advance written notice to Landlord. Each such policy shall be written by
insurance companies having a Best's rating of A or better that are admitted to
do business in the State of New York. The original insurance policies or
appropriate certificates evidencing compliance with Section 22.4 shall be
deposited with Landlord upon execution of this Lease and prior to each policy
expiration. In the event Tenant shall fail to procure and place any insurance
required by this Lease, and such failure shall continue for fifteen (15) days
after Landlord shall have given to Tenant a notice specifying such failure,
Landlord may, but shall not be obligated to, procure and place the same, in
which event the amount of the premium paid shall be reimbursed by Tenant to
Landlord upon demand and shall in each instance be collectible on the first day
of the month or any subsequent month following the date of payment by Landlord,
in the same manner as though the sums were additional rent reserved hereunder.
22.6 Each party shall use commercially reasonable efforts to secure
an appropriate clause in, or an endorsement upon, each fire or extended coverage
or all-risk policy carried by it (including any business interruption or rental
loss insurance), pursuant to which the insurance company waives subrogation or
permits the insured, prior to any loss, to agree with a third party to waive any
claim it might have against that third party. If and to the extent that for any
policy period either party (the "procuring party") (i) is unable to secure the
aforesaid waiver or permission, or (ii) can secure the aforesaid waiver or
permission only upon payment of an additional charge, the procuring party shall
notify the other party (including, in any case under clause (ii) above, the
amount of such additional charge). In any case under clause (ii) above, if,
within fifteen (15) days of its receipt of such notice, the other party shall
agree pay the charge the procuring party shall obtain the aforesaid waiver or
permission for such policy period. Within ten (10) days request by either party,
the other party shall confirm to the requesting party whether the fire or
extended coverage or all-risk policy maintained by such other party includes the
waiver or permission referred to in this paragraph.
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Insofar as the insurance policies carried by it include the waiver
or permission referred to above, each party hereby releases the other party and
the agents and employees of the other party from any claim (including a claim
for negligence or a claim under any provision of this Lease) that such party
might otherwise have against the other party or the agents and employees of the
other party for any injury or damage covered by such policies to the Building or
the Premises or any property therein (or for the repair of or the costs of
repairing any such damage) or for any loss of rents or business interruption
covered by such policies.
If either party shall fail to maintain insurance as required by this
Lease to be maintained by it, the aforesaid release shall also include any
injury or damage which would have been covered if such party had maintained
insurance as required by this Lease.
The release set forth in this Section benefitting Tenant and its
agents and employees shall also benefit any subtenant and its agents and
employees provided that such subtenant shall grant to Landlord an equivalent
release.
The release set forth in this Section shall not cover the deductible
portion of any loss; provided, however, that if the deductible limit of the
party suffering such loss exceeds $100,000 then such release shall cover the
portion of such deductible in excess of $100,000.
22.7 Landlord shall obtain and keep in full force and effect during
the term of this Lease the following insurance coverages:
(i) all-risk property insurance insuring the Building and the core
and shell portions of the Premises for an amount equal to at least the
full replacement cost value of the Building (excluding foundation and
excavation costs) and the core and shell portions of the Premises against
loss or damage due to fire and other casualties; and
(ii) for the benefit of Landlord as insured and Tenant as additional
insured a commercial general liability insurance, in a broad form policy,
affording protection in an amount of not less than $10,000,000 combined
single limit coverage on a per occurrence basis, in respect of any and all
claims for personal injury, death or property damage occurring in, upon,
adjacent to, or connected with the Building or any part thereof.
The commercial general liability insurance policy required by this Lease to be
maintained by Landlord shall name Tenant as additional insureds during the term
of this Lease.
22.8 Each insurance policy required by this Lease to be maintained
by Landlord shall provide that it will not be canceled, except upon thirty (30)
days advance written notice to Tenant. Each such policy shall be written by
insurance companies having
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a Best's rating of A or better that are admitted to do business in the State of
New York. Appropriate certificates evidencing compliance with Section 22.7 shall
be deposited with Tenant upon execution of this Lease and prior to each policy
expiration.
22.9 All proceeds of the all-risk insurance required by this Lease
to be maintained by Landlord
(i) shall be applied to the performance of Landlord's repair
and restoration obligations pursuant to Section 13.1, or
(ii) pending such application, shall be held by the holder of
any Underlying Mortgage who shall have entered into with Tenant a
non-disturbance agreement in accordance with clause (ii) of Section
16.3 (or, if there shall be no such holder, by a depositary
acceptable to Tenant) and no such proceeds shall be commingled with
any other funds or applied to any other purpose until such repair
and restoration obligations have been fully performed.
Article 23. Brokerage Commission.
Tenant represents and warrants that neither it nor any of its
partners, officers, employees or agents has dealt with any brokers in connection
with this Lease other than (i) Goldman, Sachs & Co. and The Georgetown Company
(collectively, the "Broker"), (ii) Cushman & Wakefield, Inc. ("C&W") and (iii)
Newmark & Company Real Estate, Inc. ("Newmark").
Landlord shall be responsible for the payment of the commission due
to the Broker in connection with this Lease, specifically including the
commission due under that certain agreement of even date between Landlord and
Goldman, Sachs & Co. ("GS") and, if Landlord shall fail timely to pay any amount
due to GS thereunder, the provisions of Section 39.2 shall be applicable,
mutatis mutandis.
Landlord agrees to indemnify, defend and hold the Tenant Indemnitees
harmless from and against any Claims for a brokerage, finder or other commission
or fee in connection with this Lease asserted against any Tenant Indemnitee by
Broker or C&W.
Tenant represents and warrants that Newmark has waived all rights to
a commission payable by Landlord in connection with this Lease and any renewal,
extension, expansion or termination hereof. Tenant agrees to indemnify, defend
and hold the Landlord Indemnitees harmless from and against any Claims for a
brokerage, finder or other commission or fee in connection with this Lease
asserted against any Landlord Indemnitee by any broker, agent or finder (other
than Broker and C&W) with whom Tenant has dealt in connection with this Lease,
including Newmark.
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Article 24. Satisfaction of Tenant's Remedies.
Tenant shall look only to Landlord's interest and property in the
Building and Land (or the proceeds thereof, including insurance proceeds to
which recourse is available, subject to the rights of the holder of any
Underlying Mortgage or Underlying Lease) for the satisfaction of Tenant's
remedies for the collection of a judgment (or other judicial process) requiring
the payment of money by Landlord in the event of any default by Landlord
hereunder, and no other property or assets of Landlord or its partners or
principals, disclosed or undisclosed, shall be subject to levy, execution, or
other enforcement procedure for the satisfaction of Tenant's remedies under or
with respect to this Lease, the relationship of Landlord and Tenant hereunder or
Tenant's use and occupancy of the Premises.
Article 25. Landlord's Payments to Tenant.
25.1 Landlord shall pay to Tenant with respect to each portion of
the Premises the amounts provided for herein (the "Landlord Monthly Payments").
With respect to each Applicable Portion, a monthly amount, computed
at the following per annum rates: (a) during the initial Term of this Lease,
$1.65 per annum per square foot of rentable area (subject to the provisions of
the next sentence), (b) during the First Renewal Term of this Lease, an amount
per annum per square foot of rentable area equal to the Renewal Term Initial
Cleaning Cost determined pursuant to Article 27 with respect to the First
Renewal Term, and (c) during the Second Renewal Term of this Lease, an amount
per annum per square foot of rentable area equal to the Renewal Term Initial
Cleaning Cost determined pursuant to Article 27 with respect to the Second
Renewal Term. No such payments under clause (a) of this paragraph shall be
required with respect to any Applicable Portion in respect of any period prior
to the Rent Commencement Date with respect to such Applicable Portion.
With respect to each Accepted Offer Space becoming a part of the
Premises during the initial Term of this Lease, a monthly amount, computed at
the following per annum rates: (a) during the balance of such initial Term, an
amount per annum per square foot of rentable area equal to the Offer Space
Initial Cleaning Cost determined pursuant to Article 26 with respect to such
Accepted Offer Space, and (b) during the First Renewal Term of this Lease, an
amount per annum per square foot of rentable area equal to the Renewal Term
Initial Cleaning Cost determined pursuant to Article 27 with respect to the
First Renewal Term, and (c) during the Second Renewal Term of this Lease, an
amount per annum per square foot of rentable area equal to the Renewal Term
Initial Cleaning Cost determined pursuant to Article 27 with respect to the
Second Renewal Term.
With respect to each Accepted Offer Space becoming a part of the
Premises during the First Renewal Term of this Lease, a monthly amount, computed
at the following per annum rates: (a) during the balance of such First Renewal
Term, an amount per annum per square foot of rentable area equal to the Offer
Space Initial Cleaning Cost determined
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pursuant to Article 26 with respect to such Accepted Offer Space, and (b) during
the Second Renewal Term of this Lease, an amount per annum per square foot of
rentable area equal to the Renewal Term Initial Cleaning Cost determined
pursuant to Article 27 with respect to the Second Renewal Term.
With respect to each Accepted Offer Space becoming a part of the
Premises during the Second Renewal Term of this Lease, a monthly amount,
computed at the following per annum rate: during the balance of such Second
Renewal Term, an amount per annum per square foot of rentable area equal to the
Offer Space Initial Cleaning Cost determined pursuant to Article 26 with respect
to such Accepted Offer Space.
25.2 The Landlord Monthly Payments shall be due on the first day of
each month; provided, however, that (a) if the Rent Commencement Date with
respect to any Applicable Portion shall be on other than the first day of a
month, the initial Landlord Monthly Payment with respect to such Applicable
Portion shall be computed on a pro-rata basis and shall be due on such Rent
Commencement Date, and (b) if any Accepted Offer Space shall become a part of
the Premises on other than the first day of a month, the initial Landlord
Monthly Payment with respect to such Accepted Offer Space shall be computed on a
pro-rata basis and shall be due on the day on which such Accepted Offer Space
becomes a part of the Premises.
Landlord shall pay the Landlord Monthly Payment as and when the same
shall become due and payable to Tenant at its office in the United States of
America, or any other place or places in the United States of America as Tenant
shall designate to Landlord, in cash or by check, payable to Tenant in United
States currency, without demand therefor and without any setoff or deduction
whatsoever.
If any Landlord Monthly Payment is not paid when due as provided in
this Lease, (a) the same shall bear interest at the Interest Rate from the due
date thereof until paid, and (b) Tenant shall have the right to set-off the
amount thereof, and such interest, against the Fixed Rent under this Lease.
Article 26. Tenant's Right to Lease Additional Space.
26.1 Landlord shall not hereafter lease any space in the Building
(including by way of renewal, extension or expansion of any lease), other than:
(a) pursuant to the exercise by the tenant under any lease in
effect on the date of this Lease of any renewal, extension or
expansion right or option contained in such lease as of the date of
this Lease;
(b) pursuant to the exercise by the tenant under any lease
subsequently entered into by Landlord of any renewal or extension
right or
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option contained in such lease as of the date of the original
entering into of such lease; or
(c) pursuant to Section 26.4 below.
As used in this Article 26, the term "lease" shall include (i) a license or
other agreement providing for occupancy, and (ii) occupancy by Landlord or any
other person without such a lease, license or other agreement. Landlord
represents and warrants to Tenant that attached hereto as Exhibit S is a true
and accurate schedule of each lease in effect on the date of this Lease, the
premises demised thereby, the expiration date thereof, and all renewal,
extension or expansion rights or options contained therein as of the date of
this Lease.
26.2 Landlord may give one or more Offer Notices (as hereinafter
defined) to Tenant at any time. The term "Offer Notice" as used herein shall
mean a notice (a) referring to this Article 26, (b) describing the premises to
which it relates (the "Offer Space") and, if the Offer Space includes a portion
less than all of the rentable area on any floor, including an outline floor plan
of the Offer Space and a statement of the rentable area thereof in accordance
with Section 26.11, and (c) setting forth the date (which shall be (i) no
earlier than the last day on which, pursuant to Section 26.3, Tenant is entitled
to give an Acceptance Notice (as hereinafter defined) in response to such Offer
Notice and (ii) no later than 270 days after the date of the Offer Notice) on
which, if Tenant exercise its right pursuant to Section 26.3 to lease such Offer
Space, Landlord reasonably believes (on the basis of written agreements then in
effect) it will be able to deliver to Tenant vacant possession thereof (the
"Scheduled Offer Space Delivery Date"). Landlord shall give an Offer Notice with
respect to each portion of the Building no later than 30 days after the date on
which Landlord becomes entitled to do so. If pursuant to the provisions of any
other lease (a "Recapture Provision") Landlord shall become entitled to
recapture any space in the Building in connection with a proposed assignment or
sublease, Landlord shall, within three (3) business days of its receipt of the
notice from the other tenant entitling Landlord to recapture, give to Tenant an
Offer Notice with respect to such space; such Offer Notice shall, in addition to
the information required by the preceding sentence to be included therein,
indicate (a) that it relates to space which Landlord is entitled to recapture
and (b) the last day on which Landlord is permitted by the terms of the
applicable lease to exercise its recapture right (the "Landlord's Exercise
Deadline Date"). Landlord shall not waive or amend any lease so as to eliminate
any Recapture Provision. Each Offer Notice shall constitute (a) an offer by
Landlord to lease the Offer Space covered thereby to Tenant on the terms set
forth in this Article 26, and (b) a representation by Landlord that all leases
covering any of such Offer Space have expired or been terminated or, pursuant to
the terms thereof or other written agreements then in effect, will expire or
terminate on or prior to the Scheduled Offer Space Delivery Date set forth in
such Offer Notice.
26.3 Tenant shall have the right, by notice to Landlord given within
twenty (20) business days of its receipt of any Offer Notice (an "Acceptance
Notice"), to lease all or any portion of the Offer Space covered by such Offer
Notice; provided, however, that
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(a) if Tenant elects to lease and include in its Acceptance
Notice any of such Offer Space on any floor of the Building it shall
elect to lease and include in its Acceptance Notice all of such
Offer Space on such floor of the Building;
(b) if the Offer Space shall include all of three or more full
floors contiguous to one another (a "Multi-Full-Floor Contiguous
Block") and Tenant elects to lease and include in its Acceptance
Notice a portion less than all of such Multi-Full-Floor Contiguous
Block the balance thereof not so leased and included shall be either
(i) one such full floor, or (ii) two or more full floors contiguous
to one another; and
(c) in the case of any Offer Notice given under the second
sentence of Section 26.2, the Acceptance Notice must be given, if at
all, no later than the earlier of (i) the date provided for above in
this Section 26.3 and (ii) the second business day prior to
Landlord's Exercise Deadline Date set forth in the Offer Notice.
Time shall be of the essence with respect to the giving of any Acceptance
Notice. The space as to which Tenant gives a timely Acceptance Notice conforming
to the provisions of this Section 26.3 is herein called an "Accepted Offer
Space".
26.4 If in response to any Offer Notice Tenant shall fail timely to
give an Acceptance Notice then Landlord shall be permitted to lease all or any
portion of the Offer Space covered by such Offer Notice to any person or persons
for delivery no earlier than the Scheduled Offer Space Delivery Date set forth
in such Offer Notice; provided, however, that immediately subsequent to the
original entering into of any such lease the space covered thereby shall again
become subject to this Article 26 such that Landlord shall not (except as
permitted by clause (b) of Section 26.1) subsequently lease such space except
pursuant to the operation of this Section 26.4 with respect to a subsequent
Offer Notice given to Tenant with respect thereto. If in response to any Offer
Notice Tenant shall timely give an Acceptance Notice with respect to less than
all of the Offer Space covered by such Offer Notice then Landlord shall be
permitted to lease all or any portion of the balance of such Offer Space covered
by such Offer Notice to any person or persons for delivery no earlier than the
Scheduled Offer Space Delivery Date set forth in such Offer Notice; provided,
however, that immediately subsequent to the original entering into of any such
lease the space covered thereby shall again become subject to this Article 26
such that Landlord shall not (except as permitted by clause (b) of Section 26.1)
subsequently lease such space except pursuant to the operation of this Section
26.4 with respect to a subsequent Offer Notice given to Tenant with respect
thereto.
26.5 Tenant may only exercise its right to lease any Offer Space,
and an exercise thereof shall only be effective, if at the time of Tenant's
exercise of its right and on the applicable Scheduled Offer Space Delivery Date,
the following conditions are satisfied:
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(i) this Lease is in full force and effect, (ii) no monetary or material
non-monetary default on the part of Tenant continuing beyond any applicable
notice or cure period then exists under this Lease, and (iii) the rentable area
of the Premises then subject to this Lease and not then subject to any sublease
(excluding subleases made under Section 12.7 and 12.8) shall be at least 250,000
square feet of rentable area.
26.6 If Tenant shall timely give an Acceptance Notice then on the
applicable Scheduled Offer Space Delivery Date Landlord shall deliver vacant
possession of the Accepted Offer Space to Tenant and effective upon the later of
(i) such Scheduled Offer Space Delivery Date or (ii) the date of such delivery
(such later date being herein called the "Offer Space Commencement Date") the
Accepted Offer Space shall be included in the Premises, subject to all of the
terms, conditions and provisions of this Lease (including expiration date and
renewal options) except that:
(a) the Fixed Rent for such Accepted Offer Space shall be as
provided in Section 26.9;
(b) Such Accepted Offer Space shall be leased to Tenant in its then
"as is" condition;
(c) The number of rentable square feet of the Accepted Offer Space
shall be determined as provided for in Section 26.11; and
(d) Tenant's liability under Section 4.2(a) and 4.2(b) with respect
to such Accepted Offer Space shall be computed separately and, for
purposes thereof, the Base Year shall be deemed to be the calendar year in
which the Offer Space Commencement Date shall occur.
Within thirty (30) days after the Offer Space Commencement Date, if requested by
either party hereto, Landlord and Tenant shall enter into a written instrument
confirming the terms, conditions and provisions applicable to the lease of the
Accepted Offer Space as determined in accordance with this Article; provided,
however, that the failure of either party to execute such instrument shall not
affect the rights and duties of the parties hereunder.
26.7 If Landlord shall deliver vacant possession of a portion of any
Accepted Offer Space less than all thereof then Tenant shall have the right, by
notice to Landlord given no later than the later of (i) the Scheduled Offer
Space Delivery Date, or (ii) the tenth (10th) day after the day of such delivery
and notice thereof from Landlord to Tenant, to
(a) accept all of such portion or all of such portion on any
one or more floors of the Building (the space which Tenant so
accepts being herein called a "Partial Accepted Offer Space") and
reject the balance of such portion; or
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(b) reject all of such portion.
If Tenant shall give notice under clause (a) above then
(i) Section 26.6 shall be applicable to the Partial Accepted
Offer Space as of the later of (x) the Scheduled Offer Space
Delivery Date, or (y) the day of such delivery, and
(ii) Landlord shall remain obligated to deliver vacant
possession of the balance of such Accepted Offer Space in accordance
with Section 26.6 as soon as Landlord is able to do so (and Section
26.6 shall be separately applicable thereto), subject to Section
26.8 and, in the case of a subsequent delivery of only a portion of
such balance, this Section 26.7.
If Tenant shall give notice under clause (b) above then Landlord
shall remain obligated to deliver vacant possession of such Accepted Offer Space
in accordance with Section 26.6 as soon as Landlord is able to do so (and
Section 26.6 shall be applicable thereto), subject to Section 26.8 and, in the
case of a subsequent delivery of only a portion of such Accepted Offer Space,
this Section 26.7.
26.8 Landlord shall not be subject to any liability for failure to
deliver possession of all or any portion of any Accepted Offer Space in the
event that Landlord is unable to deliver to Tenant possession thereof on the
applicable Scheduled Offer Space Delivery Date by reason of the holding over in
the space by a prior tenant thereof, but Landlord shall use commercially
reasonable efforts, including prosecution of an eviction action, to obtain
possession of the Accepted Offer Space; nor shall such failure affect either the
validity of this Lease or the obligations of Landlord or Tenant hereunder.
Notwithstanding the foregoing, if for any reason Landlord shall fail
to deliver vacant possession of any portion of any Accepted Offer Space on or
before the 60th day following the applicable Scheduled Offer Space Delivery Date
then Tenant shall have the right, by notice to Landlord given at any time prior
to delivery of vacant possession of all of such Accepted Offer Space, to rescind
its Acceptance Notice as to all of such Accepted Offer Space (excluding any
Partial Accepted Offer Space theretofore accepted by Tenant) or as to all of
such Accepted Offer Space (excluding any Partial Accepted Offer Space
theretofore accepted by Tenant) on any one or more floors of the Building.
26.9 The annual Fixed Rent per square foot of rentable area for any
Accepted Offer Space shall be an amount equal to the annual fair market rental
value of such Accepted Offer Space per square foot of rentable area for a term
commencing on the Scheduled Offer Space Delivery Date and ending as provided in
this Article 26 and otherwise on the terms and conditions provided for in
Section 26.6 (the "Offer Space Fair Market Rent"), multiplied by ninety-five
percent (95%).
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The Offer Space Fair Market Rent shall be determined on the basis of
the use of the Accepted Offer Space as offices (in the case of Accepted Offer
Space on or above the mezzanine level) or as lobby or basement space (in the
case of Accepted Offer Space below the mezzanine level) assuming that (i) the
Accepted Offer Space is free and clear of all leases and tenancies, (ii) the
Accepted Offer Space is available in the then rental market for comparable
first-class office buildings in Manhattan, (iii) Landlord has had a reasonable
time to locate a tenant who rents with the knowledge of the uses to which the
Accepted Offer Space can be adapted, (iv) neither Landlord nor the prospective
tenant is under any compulsion to rent and (v) the prospective tenant has the
creditworthiness of Tenant.
If and to the extent that any lease used as a reference (or
"comparable") by the persons determining the Offer Space Fair Market Rent
provides for any payments, costs and concessions by the landlord thereunder
(including by way of example, brokerage commissions, takeover costs,
construction costs, tenant construction allowances and rent abatements), such
persons shall, in determining such Offer Space Fair Market Rent, adjust the base
rent provided for in such lease downward to reflect that in connection with the
leasing of the Offer Space to Tenant the Landlord will incur no such payments,
costs or concessions.
The persons determining the Offer Space Fair Market Rent shall (A)
assume that this Lease (i) requires Landlord to provide office cleaning to the
Accepted Offer Space, and (ii) requires Tenant to bear only the escalation in
the costs thereof in excess of the costs thereof during the calendar year in
which the Offer Space Commencement Date occurs, and (B) also determine the
estimated cost of providing office cleaning to the Accepted Offer Space during
the calendar year in which the Offer Space Commencement Date occurs (the "Offer
Space Initial Cleaning Cost").
26.10 For purposes of determining the Offer Space Fair Market Rent,
the following procedure shall apply:
(a) Landlord and Tenant shall, at the location in the County of New
York and the time on the 20th business day after the day of the Acceptance
Notice specified by Landlord reasonably in advance, exchange their
respective written determinations of (i) the Offer Space Fair Market Rent,
and (ii) the Offer Space Initial Cleaning Cost, each of which shall be
stated as a dollar amount per square foot of rentable area (Landlord's
determination of the Offer Space Fair Market Rent and the Offer Space
Initial Cleaning Cost is referred to as "Landlord's Determination" and
Tenant's determination of the Offer Space Fair Market Rent and the Offer
Space Initial Cleaning Cost is referred to as "Tenant's Determination").
If either party shall fail to tender delivery of its determination on the
date and at the time and location provided for above (or if Landlord shall
fail to so specify such time and location as provided for above), the
other party may withhold its determination and, by notice to the failing
party, may specify a new date, time and location in the County of New York
for such exchange and, if such failing party shall again fail to tender
delivery
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of its determination on such new date and at such new time and location,
then the determination of such other party shall constitute the Offer
Space Fair Market Rent and the Offer Space Initial Cleaning Cost.
(b) If the parties shall have exchanged determinations in accordance
with the foregoing, they shall attempt to agree upon the Offer Space Fair
Market Rent and the Offer Space Initial Cleaning Cost. If, within ten (10)
days after the date of such exchange, they have not so agreed they shall
attempt to agree upon an independent real estate appraiser to act
hereunder. If, within twenty (20) days after the date of such exchange,
they have not so agreed upon such an independent real estate appraiser,
such independent real estate appraiser shall be appointed by the American
Arbitration Association. The independent real estate appraiser so agreed
upon by the parties or so appointed is herein called the "Offer Space
Appraiser". The fee of the Offer Space Appraiser and of the American
Arbitration Association shall be borne equally by Landlord and Tenant.
Each party shall pay its own counsel fees and expenses, if any, in
connection with any determination under this Article.
(c) The Offer Space Appraiser shall conduct such hearings and
investigations as he or she may deem appropriate and shall, within thirty
(30) days of the date of his or her designation, choose
(i) either Landlord's Determination of the Offer Space Fair
Market Rent or Tenant's Determination of the Offer Space Fair Market
Rent, and
(ii) either Landlord's Determination of the Offer Space
Initial Cleaning Cost or Tenant's Determination of the Offer Space
Initial Cleaning Cost
(it being understood that the Offer Space Appraiser may choose Landlord's
Determination of one and Tenant's Determination of the other) and the
choice by the Appraiser shall be conclusive and binding upon Landlord and
Tenant.
(d) The Offer Space Appraiser appointed pursuant to this Article
shall be an independent real estate appraiser with at least ten (10)
years' experience in valuation of properties that are similar in character
to the Building, and a member of the Appraisal Institute (or its
successor). The Offer Space Appraiser shall not have the power to add to,
modify or change any of the provisions of this Lease.
(e) It is expressly understood that any determination of the Offer
Space Fair Market Rent and the Offer Space Initial Cleaning Cost pursuant
to this Article shall be based on the criteria stated in this Article.
26.11 The number of square feet of rentable area of any floor shall
be as set forth on Exhibit B. The number of square feet of rentable area of any
portion of any floor
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less than all thereof shall be determined by allocating of the number of square
feet of rentable area of such floor to the respective usable portions thereof,
so that the aggregate number of square feet of rentable area of all such usable
portions shall equal the number of square feet of rentable area of such floor as
set forth on Exhibit B. Any dispute with respect to the number of square feet of
rentable area of any such portion shall be subject to arbitration pursuant to
Article 35.
26.12 After a determination has been made of the Offer Space Fair
Market Rent and the Offer Space Initial Cleaning Cost for any Accepted Offer
Space, the parties shall execute and deliver to each other an instrument
setting forth the Offer Space Fair Market Rent, the Offer Space Initial Cleaning
Cost and the Offer Space Fixed Rent for such Accepted Offer space as determined
pursuant to this Article; provided however, that failure of either party to
execute a written supplement shall not affect the rights and duties of the
parties hereunder.
26.13 If the final determination of the Offer Space Fair Market Rent
and the Offer Space Initial Cleaning Cost with respect to any Accepted Offer
Space shall not be made on or before the Offer Space Commencement Date with
respect thereto, then pending such determination (and subject to retroactive
adjustment as provided below), payments of Fixed Rent and Landlord Monthly
Payment with respect to the Accepted Offer Space shall be made based upon the
assumption that the Office Space Arbitrator will choose Landlord's Determination
of the Offer Space Fair Market Rent and of the Offer Space Initial Cleaning
Cost. If the Offer Space Arbitrator chooses Tenant's Determination of the Offer
Space Fair Market Rent or the Offer Space Initial Cleaning Cost (or if the Offer
Space Fair Market Rent or Offer Space Initial Cleaning Cost as finally
determined is otherwise different from Landlord's Determination thereof), Tenant
shall be entitled to a credit against the Rent equal to the amount of Tenant's
overpayment of Fixed Rent or Landlord's underpayment of Landlord Monthly
Payment, computed retroactively to the Offer Space Commencement Date. If the
amount of such credit shall exceed $100,000 Landlord shall, if Tenant shall so
request, pay such amount to Tenant with twenty (20) days of such request.
26.14 Tenant shall have the right, upon reasonable notice to
Landlord, to enter any Offer Space at reasonable times for purposes of
inspection and measurement from time to time during the period beginning on the
date of any Offer Notice and ending on the last day on which Tenant is entitled
to give an Acceptance Notice with respect thereto; provided, however, that if
Tenant shall timely give an Acceptance Notice such right shall continue until
the Offer Space Commencement Date. Landlord may accompany Tenant during any such
entry.
Article 27. Renewal Term.
27.1 Tenant shall have the option (the "Renewal Option") to extend
the term of this Lease for two (2) additional periods of five (5) years each
(each a "Renewal Term").
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The first Renewal Term (the "First Renewal Term") shall commence on the date
immediately succeeding the Initial Term Expiration Date and shall end on the
fifth (5th) anniversary of the Initial Term Expiration Date.
The second Renewal Term (the "Second Renewal Term") shall commence
on the date immediately succeeding the fifth (5th) anniversary of the Initial
Term Expiration Date and shall end on the tenth (10th) anniversary of the
Initial Term Expiration Date
Each Renewal Option may be exercised with respect to:
(i) the entire Premises then subject to this Lease; or
(ii) the Base Premises only, if the Base Premises are then
subject to this Lease (whether or not other premises are also then
subject to this Lease); or
(iii) the Base Premises and the Special Purpose Areas then
subject to this Lease only, if the Base Premises and any or all of
the Special Purposes Areas are then subject to this Lease (whether
or not other premises are also then subject to this Lease);
provided, however, that if any Renewal Option is exercised with respect to
either (X) the premises referred to in clause (ii) above or (Y) the premises
referred to in clause (iii) above, then such Renewal Option may also be
exercised with respect to such other portions of the Premises then subject to
this Lease as Tenant shall elect, except that in making its election under this
proviso Tenant shall not exclude from the Renewal Premises any Full Premises
Floor if both the floor immediately above such Full Premises Floor and the floor
immediately below such Full Premises Floor are Full Premises Floors and are
included in such Renewal Premises.
The premises as to which Tenant exercises a Renewal Option are
herein called the "Renewal Premises" with respect to such Renewal Option.
Each Renewal Option shall be exercisable by Tenant delivering to
Landlord notice of Tenant's exercise thereof (a "Renewal Notice"), identifying
the Renewal Premises, at least 18 months prior to the first day of the Renewal
Term in question. Time is of the essence with respect to the giving of the
Renewal Notice. Upon the giving of the Renewal Notice with respect to the Second
Renewal Term, Tenant shall have no further right or option to extend or renew
the term of this Lease or any Renewal Term.
Notwithstanding the foregoing, Tenant may only exercise a Renewal
Option, and an exercise thereof shall only be effective, if at the time of
Tenant's exercise of such Renewal Option and on the day preceding the
commencement of the Renewal Term in question, the following conditions are
satisfied, (i) this Lease is in full force and effect and
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(ii) no monetary or material non-monetary default on the part of Tenant
continuing beyond any applicable notice or cure period then exists under this
Lease.
27.2 If Tenant exercises a Renewal Option, the Renewal Term shall be
upon the same terms, covenants and conditions as those contained in this Lease,
except that
(i) the Fixed Rent with respect to the Office Area being a
part of the Renewal Premises shall be the Office Area Renewal Fixed
Rent as determined pursuant to this Article 27,
(ii) the Fixed Rent with respect to the Special Purpose Areas
being a part of the Renewal Premises shall be 53% percent of the
Office Area Renewal Fixed Rent as determined pursuant to this
Article 27,
(iii) the Fixed Rent with respect to the Non-Office Areas
being a part of the Renewal Premises shall be 50% percent of the
Office Area Renewal Fixed Rent as determined pursuant to this
Article 27,
(iv) the Base Year shall be the calendar year in which the
first day of the Renewal Term occurs, and
(v) the provisions of this Article relative to Tenant's right
to renew the term of this Lease (x) shall be limited during the
First Renewal Term to the right to exercise the Renewal Option with
respect to the Second Renewal Term and (y) shall not be applicable
during the Second Renewal Term.
27.3 For annual Fixed Rent per square foot of rentable area of
Office Area for any Renewal Term (the "Office Area Renewal Fixed Rent") shall be
an amount equal the annual fair market rental value of the Office Area for a
five-year term commencing on the first day of the Renewal Term in question and
otherwise on the terms and conditions applicable to the Office Area provided for
in this Article 27 (the "Renewal Term Fair Market Rent"), multiplied by
ninety-five (95%).
The Renewal Term Fair Market Rent shall be determined on the basis
of the use of the Office Area as offices assuming that (i) the Office Area is
free and clear of all leases and tenancies (including this Lease), (ii) the
Office Area is available in the then rental market for comparable first-class
office buildings in Manhattan, (iii) Landlord has had a reasonable time to
locate a tenant who rents with the knowledge of the uses to which the Office
Area can be adapted, and (iv) neither Landlord nor the prospective tenant is
under any compulsion to rent, and (v) the prospective tenant has the
creditworthiness of Tenant.
If and to the extent that any lease used as a reference (or
"comparable") by the persons determining the Renewal Term Fair Market Rent
provides for any payments, costs and concessions by the landlord thereunder
(including by way of example, brokerage
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commissions, takeover costs, construction costs, tenant construction allowances
and rent abatements), such persons shall, in determining such Renewal Term Fair
Market Rent, adjust the base rent provided for in such lease downward to reflect
that in connection with the renewal of this Lease the Landlord will incur no
such payments, costs or concessions.
The persons determining the Renewal Term Fair Market Rent shall (A)
assume that this Lease (i) requires Landlord to provide office cleaning to the
Premises, and (ii) requires Tenant to bear only the escalation in the costs
thereof in excess of the costs thereof during the calendar year in which the
Renewal Term commences, and (B) also determine the estimated cost of providing
office cleaning to the Premises during the calendar year in which the Renewal
Term commences (the "Renewal Term Initial Cleaning Cost").
27.4 For purposes of determining the Renewal Term Fair Market Rent,
the following procedure shall apply:
(a) Landlord and Tenant shall, at the location in the County of New
York, at the time and on a business day not earlier than 20 months prior
to the first day of the Renewal Term in question and not later than 19
months prior to the first day of the Renewal Term in question specified by
Landlord (by notice to Tenant given at least thirty (30) days prior to the
date set forth therein), exchange their respective written initial
determinations of the Renewal Term Fair Market Rent and the Renewal Term
Initial Cleaning Cost, each of which shall be stated as a dollar amount
per square foot of rentable area of Office Area (Landlord's initial
determination of the Renewal Term Fair Market Rent and the Renewal Term
Initial Cleaning Cost is referred to as "Landlord's Initial Determination"
and Tenant's determination of the Renewal Term Fair Market Rent and the
Renewal Term Initial Cleaning Cost is referred to as "Tenant's Initial
Determination"). If either party shall fail to tender delivery of its
determination on the date and at the time and location provided for above
(or if Landlord shall fail to so specify such date, time and location as
provided for above), the other party may withhold its determination and,
by notice to the other party given at least five (5) days prior to the
date set forth therein, may specify a new date, time and location in the
County of New York for such exchange and, if such failing party shall
again fail to tender delivery of its determination on such new date and at
such new time and location, then the determination of such other party
shall constitute the Renewal Term Fair Market Rent and the Renewal Term
Initial Cleaning Cost.
(b) If the parties shall have exchanged determinations in accordance
with the foregoing, they shall attempt to agree upon the Renewal Term Fair
Market Rent and the Renewal Term Initial Cleaning Cost. If, within ten
(10) days after the date of such exchange, they have not so agreed they
shall attempt to agree upon an independent real estate appraiser to act
hereunder. If, within twenty (20) days after the date of such exchange,
they have not so agreed upon such an independent real estate appraiser,
such independent real estate appraiser shall be appointed by the American
Arbitration Association. The independent real estate appraiser so agreed
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upon by the parties or so appointed is herein called the "Renewal Term
Appraiser". The fee of the Renewal Term Appraiser and of the American
Arbitration Association shall be borne equally by Landlord and Tenant.
Each party shall pay its own counsel fees and expenses, if any, in
connection with any determination under this Article.
(c) The Renewal Term Appraiser, by notice to the parties, shall
establish a date, time and location in the County of New York, no earlier
than 10 days after the date of such notice, at which either party may, if
it elects, deliver to the Renewal Term Appraiser a revised written
determination of the Renewal Term Fair Market Rent and/or the Renewal Term
Initial Cleaning Cost (stated as a dollar amount per square foot of
rentable area of Office Area); provided, however, that
(a) Landlord's revised determination of the Renewal Term Fair
Market Rent shall be no higher than Landlord's Initial Determination
thereof and no lower than 95% of Landlord's Initial Determination
thereof,
(b) Landlord's revised determination of the Renewal Term
Initial Cleaning Cost shall be no lower than Landlord's Initial
Determination thereof and no higher 105% of Landlord's Initial
Determination thereof,
(c) Tenant's revised determination of the Renewal Term Fair
Market Rent shall no lower than Tenant's Initial Determination
thereof and no higher than 105% of Tenant's Initial Determination
thereof
(d) Tenant's revised determination of the Renewal Term Initial
Cleaning Cost shall be no higher than Tenant's Initial Determination
thereof and no lower than 95% of Tenant's Initial Determination
thereof.
If both parties elect to deliver revised determination, they shall do so
simultaneously. The Renewal Term Appraiser shall furnish each party with a
copy of any revised determination delivered by the other. As used herein
the term "Landlord's Final Determination" shall mean (i) if Landlord shall
have delivered a revised determination in accordance with this Section
27.4.3, such revised determination, or (ii) otherwise, Landlord's Initial
Determination. As used herein the term "Tenant's Final Determination"
shall mean (i) if Tenant shall have delivered a revised determination in
accordance with this Section 27.4.3, such revised determination, or (ii)
otherwise, Tenant's Initial Determination.
(d) The Renewal Term Appraiser shall conduct such hearings and
investigations as he or she may deem appropriate and shall, within thirty
(30) days of the date of his or her designation, choose
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(i) either Landlord's Final Determination of the Renewal Term
Fair Market Rent or Tenant's Final Determination of the Renewal
Term. Fair Market Rent and
(ii) either Landlord's Final Determination of the Renewal Term
Initial Cleaning Cost or Tenant's Final Determination of the Renewal
Term Initial Cleaning Cost
(it being understood tat the Renewal Term Appraiser may choose Landlord's
Final Determination of one and Tenant's Final Determination of the other)
and the choice by the Appraiser shall be conclusive and binding upon
Landlord and Tenant.
(e) The Renewal Term Appraiser appointed pursuant to this Article
shall be an independent real estate appraiser with at least ten (10)
years' experience in valuation of properties that are similar in character
to the Building, and a member of the Appraisal Institute (or its
successor). The Renewal Term Appraiser shall not have the power to add to,
modify or change any of the provisions of this Lease.
(f) It is expressly understood that any determination of the Renewal
Term Fair Market Rent and the Renewal Term Initial Cleaning Cost pursuant
to this Article shall be based on the criteria stated in this Article.
27.5 After a determination has been made of the Renewal Term Fair
Market Rent and the Renewal Term Initial Cleaning Cost for any Renewal Term, the
parties shall execute and deliver to each other an instrument setting forth the
Renewal Term Fair Market Rent, the Renewal Term Initial Cleaning Cost and the
Office Area Renewal Fixed Rent for the Renewal Term as determined pursuant to
this Article and, if applicable, the Fixed Rent for the Renewal Term with
respect to the Special Purpose Areas and the Non-Office Areas; provided however,
that failure of either party to execute a written supplement shall not affect
the rights and duties of the parties hereunder.
27.6 If the final determination of the Renewal Term Fair Market Rent
and the Renewal Term Initial Cleaning Cost with respect to any Renewal Term
shall not be made on or before the first day of such Renewal Term, then pending
such final determination (and subject to retroactive adjustment as provided
below), payments of Fixed Rent and Landlord Monthly Payment during the Renewal
Term shall be made based upon the assumption that the Renewal Term Appraiser
will choose Landlord's Determination of the Renewal Term Fair Market Rent and of
the Renewal Term Initial Cleaning Cost. If the Renewal Term Appraiser chooses
Tenant's Determination of the Offer Space Fair Market Rent or of the Renewal
Term Initial Cleaning Cost (or if the Renewal Term Fair Market Rent of Renewal
Term Initial Cleaning Cost as finally determined is otherwise different from
Landlord's Determination thereof), Tenant shall be entitled to a credit against
the Rent equal to the amount of Tenant's overpayment of Fixed Rent or Landlord's
underpayment of Landlord Monthly Payment, computed retroactively to the first
day of such Rental Term. It the
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amount of such credit shall exceed $100,000 Landlord shall, if Tenant shall so
request, refund the same within ten (10) days of such request.
Article 28. Notices.
All notices, demands, requests or other communications provided for
or permitted to be given pursuant to this Lease shall be in writing and shall be
deemed to have been properly given or sewed when sent to the other party at all
required addresses for such party set forth in Article 1 (or, if changed
pursuant to this Article 28, as so changed) by (a) hand delivery or (b)
overnight commercial courier service. Rejection or refusal to accept or the
inability to deliver because of changed address of which no notice was given
shall be deemed to be receipt of the notice, demand, request or other
communication sent. Any method of giving notices, demands, requests or other
communications other than that specifically provided for herein is hereby
precluded. By giving at least thirty (30) days written notice thereof, either
party shall have the right from time to time and at any time during the term of
this Lease to change either or both its respective addresses.
Article 29. Quiet Enjoyment.
If, and as long as, this Lease shall not have been terminated
pursuant to Article 17 or any other provision of this Lease providing for such
termination, Tenant shall quietly enjoy the Premises without hindrance or
molestation by Landlord or by any other person claiming the Premises, subject,
however, to the covenants, agreements, terms, provisions and conditions of this
Lease.
Article 30. Binding Authority.
Each party represents that it has full power and authority to
execute, deliver and perform this Lease. Each party agrees that it has taken all
necessary action required to authorize the execution, delivery and performance
of this Lease by such party, and this Lease has been duly authorized, executed
and delivered by such party and constitutes the legal, valid and binding
agreement of such party, enforceable against such party in accordance with its
terms.
Article 31. Governing Law; Severability.
Irrespective of the place of execution or performance, this Lease
shall be governed by and construed in accordance with the laws of the State of
New York. If any provision of this Lease or the application thereof to any
person or circumstance shall, for any reason and to any extent, be invalid or
unenforceable, the remainder of this Lease and the application of that provision
to other persons or circumstances shall not be affected.
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Article 32. Lease Contains All Agreements - No Waivers.
32.1 This Lease and the Initial Improvements Agreement contains all
of the covenants, agreements, terms, provisions, conditions and understandings
relating to the leasing of the Premises hereunder and Landlord's and Tenant's
obligations in connection therewith and neither party (nor its any agents or
representatives) has made or is making, and the other party in executing and
delivering this Lease is not relying upon, any warranties, representations,
promises or statements whatsoever, except to the extent expressly set forth in
this Lease. All prior understandings and agreements, if any, between the parties
are merged in this Lease, which alone fully and completely expresses the
agreement of the parties.
32.2 The failure of either party to insist in any instance upon the
strict keeping, observance or performance of any covenant, agreement, term,
provision or condition of this Lease or to exercise any election herein
contained shall not be construed as a waiver or relinquishment for the future of
any covenant, agreement, term, provision, condition or election, all of which
shall continue and remain in full force and effect. No waiver or modification by
a party of any covenant, agreement, term, provision or condition of this Lease
shall be deemed to have been made unless expressed in writing and signed by such
party. No surrender of possession of the Premises or of any part thereof or of
any remainder of the term of this Lease shall release Tenant from any of its
obligations hereunder unless accepted by Landlord in writing. The receipt and
retention by Landlord of Fixed Rent or Additional Rent from anyone other than
Tenant shall not be deemed a waiver of the breach by Tenant of any covenant,
agreement, term, provision or condition herein contained, or the acceptance of
any other person as a tenant, or a release of Tenant from further keeping,
observance or performance by Tenant of the covenants, agreements, terms,
provisions and conditions herein contained. The receipt and retention by a party
of any amount payable to such party hereunder by the other party with knowledge
of the breach of any covenant, agreement, term, provision or condition herein
contained by the other party shall not be deemed a waiver of the breach by such
party.
Article 33. Parties Bound.
The covenants, agreements, terms, provisions and conditions of this
Lease shall bind and benefit the respective successors, assigns and legal
representatives of the parties hereto with the same effect as if mentioned in
each instance where a party hereto is named or referred to, except that no
violation of the provisions of Article 12 hereof shall operate to vest any
rights in any successor, assignee or legal representative of Tenant and the
provisions of this Article shall not be construed as modifying the conditions of
limitation contained in Article 17 hereof.
Landlord agrees that none of the partners of Tenant shall have any
personal liability for the obligations of Tenant hereunder.
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The covenants and obligations on the part of Landlord under this
Lease shall not, however, be binding upon any entity now or hereafter having an
ownership interest in the Land or the Building with respect to the period
subsequent to the transfer by such entity of its such interest (the granting of
a lease with an expiration date after the expiration date of the final renewal
term of this Lease shall be deemed such a transfer but only if the lessor
thereunder shall execute and deliver to Tenant a non-disturbance agreement
conform to the requirements of clause (ii) of Section 16.3), and in the event of
such a transfer the covenants and obligations theretofore binding on the
transferor shall thereafter be binding upon the transferee until the next
transfer of the interest.
Article 34. Special Purpose Areas; 16th floor.
34.1 Special Purpose Areas -- General. Each of the following shall
constitute a "Special Purpose Area":
(i) the portion of the 41st floor of the Building now used or
occupied by Continental Club generally as shown on the 4lst floor
plan included in Exhibit D hereto (the "41st Floor Special Purpose
Area");,
(ii) the third floor of the Building and the portion of the
4th floor of the Building now used or occupied as a cafe/kitchen
generally as shown as space C on the 4th floor plan included in
Exhibit D hereto (together "3rd/4th Floor Special Purpose Area");
(iii) the portion of the mezzanine level of the Building now
used or occupied as the Ricker Auditorium or for meeting or
conference facilities generally as shown on the 2nd floor plan
included in Exhibit D hereto (the "2nd Floor Special Purpose Area");
and
(iv) the portion of the basement of the Building now used or
occupied for health and exercise facilities generally as shown as
spaces J and K on the basement plan included in Exhibit D hereto
(the "Basement Special Purpose Area").
Landlord or other persons are now operating in some or all of the Special
Purpose Areas facilities which are available to or used by some or all of the
tenants of the Building.
Landlord represents, warrants, and covenants to Tenant
(a) that no tenant or other person has any right, title or
interest in or to any of the Special Purpose Areas or any portion
thereof or any of the facilities therein, or any right to use or to
require the continued operation of such Special Purpose Area or any
portion thereof or any of the facilities therein (any such right,
title or interest or right to use or to required the
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continued operation being herein called a "Special Purpose Area
Right"), except for
(i) Stroock & Stroock & Lavan LLP ("SSL"),
(ii) the other tenants (excluding MCI and Teleport)
listed on Exhibit S hereto (the "Other Tenants"); and
(iii) any memberships granted to non-tenants in the
facilities located in 41st Floor Special Purpose Area, the
3rd/4th Floor Special Purpose Areas and/or the Basement
Special Purpose Areas all of which are terminable prior to
December 31, 1998;
(b) that SSL's Special Purpose Area Rights are only those set
forth in Article Thirty-Ninth of SSL's lease as in effect on the
date hereof a copy of which is attached hereto as Exhibit CCC (the
"SSL Special Purpose Area Lease Provision"); and
(c) that the Special Purpose Area Rights of the Other Tenants
are only those set forth in the provisions of their respective
leases is in effect on the date hereof copies of which are attached
hereto as Exhibit DDD (each respectively a "Other Special Purpose
Area Lease Provision") and that MCI and Teleport have no Special
Purpose Area Rights.
Prior to the delivery to Tenant of any Special Purpose Area,
Landlord shall
(a) terminate all leases, licenses and other agreements or
arrangements covering such Special Purpose Area and shall, and shall
cause all other persons to, vacate such Special Purpose Area and
shutdown and discontinue the operation of all facilities in such
Special Purpose Area, and
(b) terminate (or, in the case of any memberships referred to
above, cause the termination of) all of the Special Purpose Area
Rights, excluding (i) the Special Purpose Area Rights of SSL under
the SSL Special Purpose Lease Provision with respect to all of the
Special Purpose Areas, (ii) the Special Purpose Area Rights under
the Other Special Purpose Area Lease Provision relative to any
Special Purpose Area of any Other Tenant who shall not have
delivered to Landlord a Waiver with respect to such Special Purpose
Area., and (iii) the Special Purpose Area Rights under any lease
finally expiring on or before January 31, 1999 (the tenant under any
such lease referred to in this clause (iii) being herein called a
"30 Day Tenant").
Landlord represents, warrants and covenants to Tenant that the
leasing of the Special Purpose Areas to Tenant is and shall be free of all
Special Purpose Area Rights
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(other than those referred to in clauses (i), (ii) and (iii) of subparagraph (b)
of the preceding paragraph). Landlord shall indemnify and save harmless the
Tenant Indemnitees from and against any loss, cost, damage or expense arising
out of any tenant or other person having or claiming to have any right, title or
interest in or to any Special Purposes Area or any portion thereof or any of the
facilities therein, or having or claiming to have any right to use or to require
the continued operation of any Special Purpose Area or any portion thereof or
any of the facilities therein, including legal fees and expenses incurred by any
Tenant Indemnitee in the defense of any such claim, other than
(i) any claim under the SSL Special Purpose Area Lease
asserted by SSL, or
(ii) any claim under an Other Special Purpose Area Lease
Provision relative to a Special Purpose Area asserted by any Other
Tenant who shall not have delivered a Waiver with respect to such
Special Purpose Area.
This paragraph shall be applicable whether or not Tenant permits SSL, the
claimant or any other tenant or person to use any Special Purpose Area or any
portion thereof or any of the facilities therein.
Commencing promptly after the execution of this Lease, Landlord
shall endeavor to obtain from each of the Other Tenants (other than the 30 Day
Tenants) a full, complete, unqualified and unconditional waiver and surrender of
all of such Other Tenant's Special Purpose Area Rights (any such full, complete,
unqualified and unconditional waiver and surrender with respect to one or more
of the Special Purpose Areas being herein called "Waiver") and, promptly upon
receiving any such Waiver from any Other Tenant, Landlord shall furnish Tenant
with a copy thereof.
If on December 31, 1998, Landlord shall have obtained and furnished
to Tenant Waivers from fewer than all of (or from none of) the Other Tenants
(other than the 30 Day Tenants) with respect to any Special Purpose Area then
(i) the Scheduled Delivery Date with respect to such Special
Purpose Area shall be postponed until January 31, 1999, and
(ii) Tenant, by notice to Landlord given prior to January 31,
1999, shall have the right to eliminate from the Premises such
Special Purpose Area.
Notwithstanding the provisions of Section 2.3, Landlord shall not have the right
to accelerate the Delivery Date of any Special Purpose Area unless Landlord's
notice under Section 2.3 shall be given on or before November 1, 1998 and shall
be accompanied by Waivers from all of the Other Tenants (including the 30 Day
Tenants whose terms will not have expired by the accelerated Delivery Date).
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If Tenant shall so eliminate such Special Purpose Area from the
Premises then the provisions of Section 34.2, 34.3, 34.4 or 34.5, as the case
may be, shall be applicable.
If Tenant does not so eliminate such Special Purpose Area from the
Premises then the Fixed Rent payable with respect to such Special Purpose Area
shall be reduced to fifty (50%) of the Fixed Rent which would otherwise be
payable with respect thereto as provided for in this Lease; provided, however,
that if Landlord shall subsequently obtain and furnish to Tenant Waivers with
respect to such Special Purpose Area from all of the Other Tenants (other than
the 30 Day Tenants) then (a) the Fixed Rent reduction provided for in this
paragraph shall stop and thereafter the Fixed Rent payable with respect to such
Special Purpose Area shall be such amount as shall be otherwise provided for in
this Lease, and (b) if the stoppage of such reduction shall occur prior to the
Early Termination Date Landlord shall pay to Tenant, an amount equal to the
product of (i) the rentable area of the Special Purpose Area, multiplied by (ii)
$11.25, multiplied by (iii) the fraction the numerator of which is the number of
months from the date of such stoppage to the Early Termination Date and the
denominator of which is 120.
34.2 Continued Operation of 4lst Floor Special Purpose Area. If
pursuant to Section 34.1 or otherwise the Premises shall cease to include or
shall not include the 41st Floor Special Purpose Area then the provisions of
this Section 34.2 shall be effective for the balance of the term of this Lease,
including any renewal terms, subject to Landlord's right to terminate the
operation of and close the dining facility as provided for in the final
paragraph of this Section 34.2.
Landlord shall operate, or cause to be operated, the 41st Floor
Special Purpose Area as a dining facility appropriate for a class A downtown
Manhattan office building. Neither the size nor the operating hours or services
shall hereafter be reduced below the size, operating hours or services in effect
on the date hereof. In no event shall Tenant's rights in, to and with respect to
the dining facility be less, in any respect, than the rights of any other tenant
or other person. Tenant (and, if and to the extent that Tenant so elects, its
subtenants) and their respective employees and guests shall be entitled to use
such dining facility on a non-exclusive basis. Tenant shall be entitled to
separate reserved exclusive rooms and seating areas up to Tenant's Proportionate
Share of the capacity of the dining facility. At Tenant's request, Landlord
shall consult with Tenant with respect all aspects of the dining facility
operation, including menus, quality, service levels, pricing, upkeep and decor
of the facilities. Landlord shall furnish Tenant with copies of, and shall meet
with Tenant to discuss, monthly financial statements, quarterly operational
reviews, periodic (at least quarterly) sanitation reviews and all other
documentation commonly created in connection with the operation of a dining
facility appropriate for a class A office building. Landlord shall comply with
Tenant's directions and requests from time to time with respect to the dining
facility and its operations, and, if Tenant shall so request from time to time,
Landlord shall replace the operator of the dining facility with an operator
acceptable to Tenant provided, however, that (a) Tenant shall not have the right
to require Landlord to replace the operator of the dining facility within one
year of such the operator's having been previously
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replaced at Tenant request, and (b) if any such direction or request or
replacement operator would result in a net increase in Landlord's costs of
operating the dining facility, Landlord shall not be required to comply with
such direction or request or so to replace the operator of the dining facility
unless Tenant agrees to pay such net increase in costs.
Landlord shall have the right, upon not less than 120 days notice to
Tenant, to terminate the operation of and close the dining facility; provided,
however, that Tenant, by notice to Landlord given within sixty (60) days of its
receipt of Landlord's notice, shall have the right to lease the 41st Floor
Special Purpose Area commencing on the day after the closure date set forth in
Landlord's notice subject to all of the terms and conditions provided for in
Section 34.1 with the same force and effect as if Tenant had not excluded the
41st Floor Special Purpose Area from the Premises.
34.3 Continued Operation of 3rd/4th Floor Special Purpose Area. If
pursuant to Section 34.1 or otherwise the Premises shall cease to include or
shall not include the 3rd/4th Floor Special Purpose Area then the provisions of
this Section 34.4 shall be effective for the balance of the term of this Lease,
including any renewal terms, subject to Landlord's right to terminate the
operation of and close the cafeteria as provided for in the final paragraph of
this Section 34.3.
Landlord shall operate, or cause to be operated, the 3rd/4th Floor
Special Purpose Area as a cafeteria appropriate for a class A downtown Manhattan
office building. Neither the size nor the operating hours or services shall
hereafter be reduced below the size, operating hours or services in effect on
the date hereof. Tenant (and, if and to the extent that Tenant so elects, its
subtenants) and their respective employees and guests shall be entitled to use
such cafeteria on a non-exclusive basis. Tenant shall be entitled to separate
reserved exclusive rooms and seating areas up to Tenant's Proportionate Share of
the capacity of the cafeteria. At Tenant's request, Landlord shall consult with
Tenant with respect all aspects of the cafeteria operation, including menus,
quality, service levels, pricing, upkeep and decor of the facilities. Landlord
shall furnish Tenant with copies of, and shall meet with Tenant to discuss,
monthly financial statements, quarterly operational reviews, periodic (at least
quarterly) sanitation reviews and all other documentation commonly created in
connection with the operation of a cafeteria appropriate for a class A office
building. Landlord shall comply with Tenant's directions and requests from time
to time with respect to the dining facility and its operations, and, if Tenant
shall so request from time to time, Landlord shall replace the operator of the
dining facility with an operator acceptable to Tenant; provided, however, that
(a) Tenant shall not have the right to require Landlord to replace the operator
of the dining facility within one year of such the operator's having been
previously replaced at Tenant request, and (b) if any such direction or request
or replacement operator would result in a net increase in Landlord's costs of
operating the cafeteria, Landlord shall not be required to comply with such
direction or request or so to replace the operator of the cafeteria unless
Tenant agrees to pay such net increase in costs.
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Landlord shall have the right, upon not less than 120 days notice to
Tenant, to terminate the operation of and close the cafeteria; provided,
however, that Tenant, by notice to Landlord given within sixty (60) Clays of its
receipt of Landlord's notice, shall have the right to lease the 3rd/4th Floor
Special Purpose Area commencing on the day after the closure date set forth in
Landlord's notice subject to all of the terms and conditions provided for in
Section 34.1 with the same force and effect as if Tenant had not excluded the
3rd/4th Floor Special Purpose Area from the Premises pursuant to Section 34.1.
34.4 Continued Operation of 2nd Floor Special Purpose Area. If
pursuant to Section 34.2 or otherwise the Premises shall cease to include or
shall not include the 2nd Floor Special Purpose Area then the provisions of this
Section 34.4 shall be effective for balance of the term of this Lease, including
any renewal terms, including any renewal terms, subject to Landlord's right to
terminate the operation of and close the conference center as provided for in
the final paragraph of this Section 34.4.
Landlord shall operate, or cause to be operated, the 2nd Floor
Special Purpose Area as a conference center (including the Ricker auditorium)
appropriate for a class A downtown Manhattan office building. Neither the size
nor the operating hours or services shall hereafter be reduced below the size,
operating hours or services in effect on the date hereof. In no event shall
Tenant's rights in, to and with respect to the conference center be less, in any
respect, than the rights of any other tenant or other person. Tenant (and, if
and to the extent that Tenant so elects, its subtenants) and their respective
employees and guests shall be entitled to use such conference center on a
non-exclusive basis. At Tenant's request, Landlord shall consult with Tenant
with respect all aspects of the conference center operation. The facilities of
the conference center shall be subject to reservation by tenants of the Building
on a "first-reserved, first-served" basis; provided, however, that
(i) except for Tenant and SSL no tenant of the Building or
other person shall be permitted to reserve any room or facility
prior to 30 days in advance, and
(ii) Tenant and SSL shall be entitled to reserve any room or
facility as far in advance as either desires.
Landlord shall comply with Tenant's directions and requests from time to time
with respect to the conference center and its operations, and, if Tenant shall
so request from time to time, Landlord shall replace the operator of the
conference center with an operator acceptable to Tenant; provided, however, that
(a) Tenant shall not have the right to require Landlord to replace the operator
of the conference center within one year of such the operator's having been
previously replaced at Tenant request, and (b) if any such direction or request
or replacement operator would result in a net increase in Landlord's costs of
operating the conference center, Landlord shall not be required to comply with
such direction or request or replace the operator of the conference unless
Tenant agrees to pay such net increase in costs.
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Landlord shall have the right, upon not less than 120 days notice to
Tenant, to terminate the operation of and close the conference center; provided,
however, that Tenant, by notice to Landlord given within sixty (60) days of its
receipt of Landlord's notice, shall have the right to lease the 2nd Floor
Special Purpose Area subject to all of the terms and conditions provided for in
Section 34.1 with the same force and effect as if Tenant had not excluded the
2nd Floor Special Purpose Area from the Premises pursuant to Section 34.1.
34.5 Continued Operation of Basement Special Purpose Area. If
pursuant to Section 34.1 or otherwise the Premises shall cease to include or
shall not include the Basement Special Purpose Area then the provisions of this
Section 34.5 shall be effective for the balance of the term of this Lease,
including any renewal terms, including any renewal terms, subject to Landlord's
right to terminate the operation of and close the health and exercise facility
as provided for in the final paragraph of this Section 34.3..
Landlord shall operate, or cause to be operated, the Basement
Special Purpose Area as a health and exercise facility appropriate for a class A
downtown Manhattan office building. Neither the size nor the operating hours or
services shall hereafter be reduced below the size, operating hours or services
in effect on the date hereof. In no event shall Tenant's rights in, to and with
respect to the health and exercise facility be less, in any respect, than the
rights of any other tenant or other person. Tenant (and, if and to the extent
that Tenant so elects, its subtenants) and their respective employees and guests
shall be entitled to use such health and exercise facility on a non-exclusive
basis. At Tenant's request, Landlord shall consult with Tenant with respect all
aspects of the health and exercise facility operation. Landlord shall furnish
Tenant with copies of, and shall meet with Tenant to discuss, monthly financial
statements, quarterly operational reviews, periodic (at least quarterly)
sanitation reviews and all other documentation commonly created in connection
with the operation of a health and exercise facility appropriate for a class A
office building. Landlord shall comply with Tenant's directions and requests
from time to time with respect to the dining facility and its operations, and,
if Tenant shall so request from time to time, Landlord shall replace the
operator of the health and exercise facility with an operator acceptable to
Tenant; provided, however, that (a) Tenant shall not have the right to require
Landlord to replace the operator of the health and exercise facility within one
year of such the operator's having been previously replaced at Tenant request,
and (b) if any such direction or request or replacement operator would result in
a net increase in Landlord's costs of operating the health and exercise
facility, Landlord shall not be required to comply with such direction or
request or so to replace the operator of the health and exercise facility unless
Tenant agrees to pay such net increase in costs.
Landlord shall have the right, upon not less than 120 days notice to
Tenant, to terminate the operation of and close the health and exercise
facility; provided, however, that Tenant, by notice to Landlord given within
sixty (60) days of its receipt of Landlord's notice, shall have the right to
lease the Basement Special Purpose Area subject to all of the terms and
conditions provided for in Section 34.1 with the same force and effect as if
Tenant
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had not excluded the Basement Special Purpose Area from the Premises pursuant
to Section 34.1.
34.6 16th Floor - General. Landlord represents, warrants, and
covenants to Tenant that
(a) no tenant or other person has any right, title or
interest in or to the 16th floor of the Building or any
portion thereof or any of the facilities therein, or any right
to use or to require the continued operation of the 16th floor
of the Building or any portion thereof or any of the
facilities therein (any such right, title or interest or right
to use or to required the continued operation being herein
called a "16th Floor Right"), except for SSL and the Other
Tenants;
(b) that SSL has agreed that Landlord may transfer SSL's
16th Floor Right to any other premises in the Building; and
(c) that Landlord has the right, in connection with the
leasing of the 16th floor to Tenant or otherwise, to terminate
all of the 16th Floor Rights of the Other Tenants.
Prior to the delivery to Tenant of the 16th floor, Landlord shall
(a) terminate all leases, licenses and other agreements or arrangements covering
the 16th floor and shall, and shall cause all other persons to, vacate such 16th
floor and shutdown and discontinue the operation of all facilities on such 16th
floor, (b) terminate all 16th Floor Rights, and (c) demolish all facilities,
improvements, alterations, additions and installations in, to or upon the 16th
floor.
Landlord represents, warrants and covenants to Tenant that the
leasing of the 16th floor to Tenant is and shall be free of all 16th Floor
Rights. Landlord shall indemnify and save harmless the Tenant Indemnitees from
and against any loss, cost, damage or expense arising out of any tenant or other
person (including SSL and any of the Other Tenants) having or claiming to have
any right, title or interest in or to the 16th floor or any portion thereof or
any of the facilities therein, or having or claiming to have any right to use or
to require the continued operation of the 16th floor or any portion thereof or
any of the facilities therein, including legal fees and expenses incurred by any
Tenant Indemnitee in the defense of any such claim. This paragraph shall be
applicable regardless of the use to which Tenant's puts the 16th floor and
regardless of whether Tenant permits the claimant or any other tenant or person
to use the 16th floor or any portion thereof or any of the facilities therein.
Landlord shall perform and satisfy all of the obligations to SSL
under the agreement referred to in clause (b) of the first paragraph of this
Section; provided, however, that if and for so long as the 3rd/4th Floor Special
Purpose Area is part of the Premises,
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Tenant shall permit SSL to use conference facilities therein, or in any other
portion of the Premises designated by Tenant
34.7 Miscellaneous. The rights and remedies specifically provided to
Tenant by this Article are in addition to any rights and remedies available to
Tenant under any other provision of this Lease or under applicable law. Landlord
shall not hereafter grant any Special Purpose Area Rights or any 16th Floor
Rights. Notwithstanding any other provision of this Lease to the contrary,
Tenant shall be entitled to permit any or all of the tenants or occupants of the
Building to use any or all of the Special Purpose Areas.
34.8 Miscellaneous. If Tenant shall lease any Special Purpose Area
pursuant to Section 34.2 through 34.5 prior to the Early Termination Date
Landlord shall pay to Tenant on the date of such leasing an amount equal to the
product of (i) the rentable area of the Special Purpose Area, multiplied by (ii)
$22.50 or $11.25, as applicable, multiplied by (iii) the fraction the numerator
of which is the number of months from the date of such leasing to the Early
Termination Date and the denominator of which is 120.
Article 35. Arbitration.
35.1 No dispute under this Lease shall be subject to arbitration
unless specifically so provided in this Lease. Whenever this Lease shall provide
that a dispute is subject to arbitration, it shall be subject to arbitration in
accordance with the provisions contained in this Article 35. Except to the
extent inconsistent with the provisions of this Article 35, the arbitration
shall be governed by the Commercial Arbitration Rules of the American
Arbitration Association ("AAA").
35.2 The party desiring arbitration shall give notice to the other
party. If the parties shall not have agreed on a choice of an arbitrator within
fifteen (15) days after the service of such notice, either party, on behalf of
both, may request that the New York office of the AAA appoint an arbitrator to
render a resolution of said dispute or to made the determination in question. In
the absence, failure, refusal or inability of AAA to act within twenty (20)
days, then either party, on behalf of both, may apply to a Justice of the
Supreme Court of New York, New York County, for the appointment of an
arbitrator, and the other party shall not raise any question as to the court's
full power and jurisdiction to entertain the application and make the
appointment. In the event of the absence, failure, refusal or inability of an
arbitrator to act, a successor shall be appointed within ten (10) days as herein
before provided. Any arbitrator acting under this Article shall be experienced
in the issue with which the arbitration is concerned and shall have been
actively engaged in such field for a period of at least ten (10) years before
the date of the arbitrator's appointment as arbitrator hereunder.
35.3 All arbitrators chosen or appointed pursuant to this Article
shall (i) be sworn fairly and impartially to perform their respective duties as
such arbitrator, and (ii) not
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be (a) an employee or past employee of Landlord or Tenant or of any other
person, partnership, corporation or other form of business or legal association
or entity that controls, is controlled by or is under common control with
Landlord or Tenant nor (b) anyone that has or has had a business relationship
with Landlord or Tenant Within sixty (60) days after the appointment of an
arbitrator, the arbitrator shall determine the matter in dispute and shall issue
a written decision. The decision of the arbitrator shall be conclusively binding
upon the parties, and judgment upon the decision may be entered in any court
having jurisdiction.
35.4 The arbitrators shall be bound by the provisions of this Lease,
and shall not add to, subtract from or otherwise modify such provisions.
Article 36. Other Installations By Tenant
36.1 Tenant's Generator Plant and Tenant's Cooling Plant. Subject to
the terms and conditions of this Article and Article 6, Tenant shall have the
right to:
(a) construct a new bulkhead enclosure (the "New Bulkhead
Enclosure") above the roof of the existing bulkhead enclosure which
currently houses certain telecommunications equipment (the "Existing
Bulkhead Enclosure");
(b) relocate the Building's three existing emergency
generators and ancillary equipment (the "Existing Building
Generators") from the machine room on the 41st floor (the "41st
Floor Machine Room") to the New Bulkhead Enclosure and remove from
the 41st Floor Machine Room (and dispose of without accountability
to Landlord or any other person) such of the other equipment now
located therein as Tenant shall desire; provided, however, that (i)
in lieu of relocating one or more of the Existing Building
Generators Tenant may replace the same with a new generator of
comparable capacity (including a single generator in replacement for
two or three of the Existing Building Generator provided that such
single generator has a capacity comparable to the two or three
Existing Building Generators being replaced), (ii) Tenant may remove
from the 41st Floor Machine Room (and dispose of without
accountability to Landlord or any other person) any of the Existing
Building Generators so replaced, (iii) if Tenant relocates or
replaces any of the Existing Building Generators (such relocated
Existing Building Generators or replacements therefor being herein
called the "Building Generators") shall extend the Building's fuel
risers to the Building Generators;
(c) install in the New Bulkhead Enclosure additional emergency
generators and ancillary equipment ("Tenant's Generators");
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(d) remove from the Existing Bulkhead Enclosures (and dispose
of without accountability to Landlord or any other person) such of
the equipment now located therein as Tenant shall desire and
install in the Existing Bulkhead Enclosure electrical switches and
switchgear, electrical distribution panels and other electrical
equipment ("Tenant's Electrical Equipment");
(e) install on the roof of the Building a cooling tower
("Tenant's Cooling Tower") and on the roof of the Building a
loadbank ("Tenant's Loadbank");
(f) install in the 41st floor Machine Room chillers and other
mechanical equipment and ancillary equipment ("Tenant's Mechanical
Equipment"); and
(g) to relocate the Building's emergency power distribution
equipment and life safety panel;
all substantially as shown on the plans therefor attached as Exhibits AA, BB,
CC, DD, EE and LL and to install in the Building all ancillary equipment and
appurtenances necessary or appropriate in connection therewith. Tenant shall
dispose of any property removed by pursuant to subparagraph (b) above pursuant
to Applicable Law.
As used in this Lease, the term "Tenant's Generator Plant" shall mean and
refer to Tenant's Generators, Tenant's Electrical Equipment, Tenant's Loadbank,
Tenant's Fuel Tank and all ancillary equipment appurtenances installed by Tenant
pursuant to this Article or pursuant to Article 42.
As used in this Lease, the term "Tenant's Cooling Plant" shall mean and
refer to Tenant's Cooling Tower, Tenant's Mechanical Equipment and all ancillary
or other equipment installed by Tenant pursuant to this Article or pursuant to
Article 42.
Tenant's Generator Plant and Tenants Cooling Plant shall be deemed part of
the Premises for all purposes of this Lease, except for those provisions which
are inappropriate or inapplicable, including, without limitation, Articles 3 and
4 and Sections 11.4, 11.5 and 11.6.
Tenant shall comply with all Applicable Laws at any time duly issued and
in force applicable to, and obtain all permits, licenses and approvals necessary
for, the existence, use, operation or maintenance of the Tenant's Generator
Plant and Tenant's Cooling Plant Landlord shall, within two (2) business days of
Tenant's request, execute any permit, license or approval application or any
similar document required to be executed by Landlord in connection with Tenant's
obtaining any such permit, license or approval.
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If any work by Tenant pursuant to this Section shall invalidate Landlord's
roof warranty (a copy of which is attached hereto as Exhibit T), Tenant shall
take such corrective actions as shall be required to reinstate such roof
warranty or provide equivalent protection to Landlord.
Tenant have the exclusive right, but shall not be obligated, to operate,
maintain, repair and replace Tenant's Generator Plant and Tenant's Cooling
Plant, and Tenant may discontinue operation thereof at any time. Notwithstanding
the foregoing, whether or not Tenant operates or continues to operate Tenant's
Generator Plant or Tenant's Cooling Plant, Tenant shall keep the same in such
condition as shall be required to prevent damage or injury to the Building,
subject nonetheless to the release provisions of Section 22.6.
Landlord shall not take, or suffer or permit to be taken, any action which
will interfere with the proper and efficient operation, maintenance, repair and
replacement by Tenant of Tenant's Generator Plant or Tenant's Cooling Plant.
Tenant shall be permitted continuous access to all portions of Tenant's
Generator Plant and Tenant's Cooling Plant.
Tenant shall be entitled to the entire output of Tenant's Generator Plant
and Tenant's Cooling Plant. Tenant may elect to connect Tenant's Generator Plant
to the Building's electrical distribution system in such a manner that Tenant's
Generator Plant when operating furnishes backup electricity to the entire
Building, including Building systems and portions of the Building not leased to
Tenant. Any backup electricity furnished by Tenant's Generator Plant to Building
systems or portions of the Building not leased to Tenant shall be deemed
furnished solely as an accommodation by Tenant and Tenant shall have no
liability or responsibility to Landlord or any other person or entity for the
quantity or character or reliability of such electricity, or any interruption,
diminution or discontinuation thereof (whether voluntary or otherwise), or for
any notice or warning given or not given in connection therewith, all such
liability and responsibility, including any arising out of Tenant's negligence,
being hereby expressly waived. If Tenant elects to connect Tenant's Generator
Plant to the Building's electrical distribution system in the aforesaid manner
Landlord shall nonetheless remain obligated, as provided by Applicable Law or
the terms of any lease or other contractual obligation to which it is subject,
to provide emergency power to the Building's elevator, exit lighting and fire
life safety systems (and to any other area, system, equipment or facility to
which Landlord is required by Applicable Law or lease or other contractual
obligation to furnish backup electricity), and to operate, maintain, repair and
replace the Building's Generators and ancillary equipment so that upon any
interruption, diminution or discontinuation of electricity being furnished to
the Building's elevators, exit lighting and fire life safety systems by Tenant's
Generators (or to any such area, system, equipment or facility) the Building's
Generators shall furnish backup electricity thereto without interruption and
without any notice from Tenant.
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Tenant shall not sell or otherwise dispose of Tenant's Generator
Plant or Tenant's Cooling Plant other than in connection with an assignment of
this Lease, but this paragraph shall not be deemed to restrict the sale or
otherwise dispose of the output of Tenant's Generator Plant or Tenant's Cooling
Plant.
36.2 Tenant's Antenna Equipment. Subject to the terms and conditions
of this Article, Tenant shall have the right to install dishes and other
antennas, masts and related facilities and equipment (the "Tenant's Antennas")
in the locations and areas shown on Exhibits KK and MM hereto and to install in
the Building all ancillary equipment and appurtenances necessary or appropriate
in connection therewith. Landlord agrees that it shall no place or install, or
suffer or permit the placement or installation of, any equipment or improvements
on the portion of the roof between the two areas shaded on Exhibit KK. The
references in Exhibits KK and MM to "dish antennas" shall not restrict Tenant to
antennas of that type.
As used in this Lease, the term "Tenant's Antenna Equipment" shall mean
and refer to Tenant's Antennas and all ancillary equipment appurtenances
installed by Tenant pursuant to this Article or pursuant to Article 42.
Tenant shall comply with all Applicable Laws at any time duly issued and
in force applicable to, and obtain all permits, licenses and approvals necessary
for, the existence, use, operation or maintenance of the Tenant's Antenna
Equipment. Landlord shall, within two (2) business days of Tenant's request,
execute any permit, license or approval application or any similar document
required to be executed by Landlord in connection with Tenant's obtaining any
such permit, license or approval.
If any work by Tenant pursuant to this Section shall invalidate Landlord's
roof warranty, Tenant shall take such corrective actions as shall be required to
reinstate such roof warranty or provide equivalent protection to Landlord.
Tenant have the exclusive right, but shall not be obligated, to operate,
maintain, repair and replace Tenant's Antenna Equipment, and Tenant may
discontinue operation thereof at any time. Notwithstanding the foregoing,
whether or not Tenant operates or continues to operate Tenant's Antenna
Equipment, Tenant shall keep the same in such condition as shall be required to
prevent damage or injury to the Building, subject nonetheless to the release
provisions of Section 22.6.
Landlord shall not take, or suffer or permit to be taken, any action which
will interfere with the proper and efficient operation, maintenance, repair and
replacement by Tenant of Tenant's Antenna Equipment.
Tenant shall be permitted continuous access to all portions of Tenant's
Antenna Equipment.
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36.3 Tenant's Closed Circuit Television Cameras. Subject to the
terms and conditions of this Article, Tenant shall have the right to install
closed circuit television cameras in (i) such locations as shall be necessary or
appropriate to observe any or all of Tenant's installations pursuant to Article
42, Section 36.1 or Section 36.2, (i) any or all of the elevators of the
Building (unless, with respect to any of the low-rise or mid-rise passenger
elevators, any of the tenants served thereby shall object thereto in which case
Tenant shall not install the same), (iii) the loading dock, and (iv) such other
areas of the Building as Landlord shall approve (such approval not to be
unreasonably withheld) and to install in the Building all ancillary equipment
and appurtenances necessary or appropriate in connection therewith.
As used in this Lease, the term "Tenant's CCTV Equipment" shall mean and
refer to Tenant's closed circuit television cameras and all ancillary equipment
appurtenances installed by Tenant pursuant to this Article or pursuant to
Article 42.
Tenant shall comply with all Applicable Laws at any time duly issued and
in force applicable to, and obtain all permits, licenses and approvals necessary
for, the existence, use, operation or maintenance of the Tenant's Antennas.
Tenant have the exclusive right, but shall not be obligated, to operate,
maintain, repair and replace Tenant's CCTV Equipment, and Tenant may discontinue
operation thereof at anytime. In no event, even if Tenant's CCTV Equipment is in
operation, shall Tenant be obligated to provide security service to or for the
benefit of any tenant or occupant of the Building or any other person. Landlord
specifically acknowledges that Tenant may elect not to monitor or record the
output of Tenant's closed circuit television cameras or if such output is
recorded to destroy the tapes or other records without reviewing them.
Landlord shall not take, or suffer or permit to be taken, any action which
will interfere with the proper and efficient operation, maintenance, repair and
replacement by Tenant of Tenant's CCTV Equipment.
36.4 Window Film and Window Treatment. Neither Landlord nor Tenant
shall apply any film or other substance to the inside or outside of any of the
window glass of the Premises without the consent of the other. Landlord shall
not unreasonably withhold consent to any such film Tenant proposes to install
for purposes of increasing safety.
Tenant shall have the right to install such blinds or other window
treatments on or in the windows of the Premises as it shall elect, subject to
compliance with the preceding paragraph.
36.5 Use of Fire Stairs. Tenant shall have the right to use for
routine access amongst the floors on which the Premises are located either or
both of the fire stairs of the Building and, incident thereto, shall have the
right to install either or both a card-key access system and an alarm system
with respect to the doors providing access between the Premises
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on the fire stairs; provided, however, Tenant's right to use the fire stairs, or
to install any card-key or alarm system, shall be subject to the same being in
compliance with all laws and requirements of public authorities.
36.6 Tenant's Messenger Center. Landlord hereby leases to Tenant,
and Tenant hereby accepts from Landlord, the area labeled "GS&CO." on the plan
attached hereto as Exhibit U ("Tenant's Loading Dock Area") for the purpose of
installing and maintaining a messenger center or other suitable use. Tenant's
Loading Dock Area shall constitute a part of the Premises and shall be subject
to all of the terms and provisions of this Lease applicable to the balance of
the Premises, except for purposes of Articles 3 and 4. Tenant shall perform the
work shown on Exhibit U necessary to constitute Tenant's Loading Dock Area a
separately demised area. The provisions of this Section 36.6 shall continue in
effect during any Renewal Term regardless of whether Tenant refers to Tenant's
Loading Dock Area in its Renewal Notice. Tenant shall be entitled to install
appropriate signage to direct messengers to Tenant's Loading Dock Area, subject
to Landlord's approval not to be unreasonably withheld. Tenant shall have the
right to run voice, data and/or electrical conduits from Tenant's Shafts to
Tenant's Loading Dock Area.
Article 37. Tenant's Right of First Offer to Purchase.
37.1 If, at any time during the term of this Lease, Landlord either
(i) receives an offer from a third party to purchase the Land and/or the
Building that it desires to accept or (ii) desires to offer the Land and/or the
Building for sale by listing with one or more real estate brokers or directly
offering it for sale in writing to one or more principals (each, an "Offer"),
then, in either such instance, provided that Tenant is not in default under this
Lease (after expiration of applicable notice and grace periods, if any),
Landlord shall notify Tenant thereof and furnish Tenant with a copy of the
Offer (the "Landlord's Offer Notice") and shall deliver to Tenant, subject to
the provisions of Section 37.5, material containing such information as is
customarily made available to solicit offers to purchase large Manhattan office
buildings, including, at a minimum the following (the "Property Information"):
(i) complete copies of all leases, license agreements, subleases and
other occupancy agreements,
(ii) audited financial statements for the property for the preceding
three (3) years and, to the extent available, audited or unaudited
financial statements for the portion of the year then elapsed, including
income and expense statements, balance sheets, and source and application
of funds, and
(iii) statements of taxes and operating expenses under tenant leases
for the preceding two (2) years for which annual statements have been
furnished to tenants, including copies of annual escalation billing and
reconciliation for all such tenants for all such years.
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Tenant shall have a period of thirty (30) days from the date it
receives Landlord's Offer Notice and the Property Information within which to
notify Landlord that it desires to purchase the Land and/or Building, as
applicable (such Land and/or Building, the "Property"), at the Offer Price (the
"Tenant's Acceptance"). During such thirty (30) day period Tenant shall have the
right, subject to the terms and conditions of Section 37.5, to examine and copy
all pertinent books and records of Landlord and its managing agent relating to
the Property ("Books and Records").
If Tenant provides Tenant's Acceptance to Landlord, then Landlord
shall sell, and Tenant shall purchase, the Property at the price set forth in
the Offer (the "Offer Price") and otherwise on terms and conditions customary
for sales of large Manhattan office buildings. During the forty-five (45) days
after the date of this Lease, the parties shall endeavor to agree upon and
confirm in writing such terms and conditions, but the failure of the parties so
to agree shall not affect their rights and obligations under this Article 37.
After providing Tenant's Acceptance. Tenant shall have the right to
assign its right to purchase to a wholly-owned affiliate and, in such instance,
Landlord shall convey title to the assignee. If Tenant (or such wholly-owned
affiliate) shall acquire the Land or Building pursuant to this Article 37, it
shall retain title thereto for at least one year after the closing of such
acquisition.
37.2 If Tenant shall fail to give Tenant's Acceptance pursuant to
the terms set forth above, Tenant shall, subject to the last sentence of this
Section 37.2, be deemed to have conclusively waived its right to purchase the
Property at the Offer Price and Landlord shall have the right within one (1)
year of the Offer Notice to sell the Property at a price (considering the value
of other terms and conditions) which is no less favorable to the purchaser than
a sale of the Property for a cash purchase price equal to 92.5 percent of the
Offer Price on the terms and conditions provided for herein (the "Minimum
Price"); provided, however, that
(i) if the Property shall be the Land or the Building, not the
Land and the Building, than such waiver shall not be applicable to
the Building or the Land, whichever shall not be the Property, and
Tenant's rights with respect thereto shall continue in full force
and effect; and
(ii) if Landlord shall desire or propose to sell the Property
at a price (considering the value of other terms and conditions)
more favorable to the purchaser than a sale of the Property for a
cash purchase price equal to the Minimum Price, or shall desire or
propose to sell the Property after such one (1) year period,
Landlord shall be obligated to re-offer the Property to Tenant by
giving to Tenant a new Offer Notice in accordance with Section 37.1
above and to furnish then current Property Information.
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Any such new Offer Notice shall be given effect under Section 37.1 except that
if such new Offer Notice shall be given less than 90 days after the initial
Offer Notice the thirty (30) day period referred to in Section 37.1 shall be
shortened to fifteen (15) days from Tenant's receipt of the new Offer Notice and
the then current Property Information.
37.3 If Tenant provides Tenant's Acceptance to Landlord, Tenant
agrees that it shall concurrently therewith deliver to Landlord a deposit of
five percent of the Offer Price which shall be liquidated damages and,
notwithstanding any other provision of this Lease to the contrary, shall be
Landlord's sole remedy in the case of any default by Tenant under this Article
37 (exclusive of its obligation, having acquired the Property pursuant to this
Article 37, to retain title thereto for one year) or under any obligation to
purchase arising under this Article 37. The closing of such purchase shall be
the first business day which is 60 or more days after the date of Tenant's
Acceptance. Landlord and Tenant agree that closing costs will be paid in
accordance with New York custom.
37.4 Tenant agrees that it shall not disclose any documents and
information regarding the Property which Tenant's receives under this Article 37
except to those assisting Tenant with the analysis of the Property, or Tenant's
lender, if any, and then only upon making such person aware of the obligations
contained in this Section 37.4 and procuring the agreement of such person to
abide by such obligations. In the event Tenant does not purchase the Property
for any reason whatsoever, Tenant shall return to Landlord, or cause to be
returned to Landlord, all such documents and information.
Article 38. Tenant's Termination Right.
Provided that Tenant is not in monetary default under this Lease
beyond any applicable notice or grace period on the date that the Termination
Notice (as defined below) is given, Tenant shall have a one-time option
("Tenant's Termination Option") to terminate this Lease as of the last day of
the calendar month in which shall occur the tenth (10th) anniversary of the day
preceding the Rent Commencement Date of the last to be delivered of the Base
Premises (the "Early Termination Date") with respect to all portions of the
Premises then leased by Tenant other than each Accepted Offer Space leased
pursuant to Article 26 the Scheduled Offer Space Delivery Date of which was
later than the day five (5) years prior to the Early Termination Date (such
excluded portions of the Premises being herein called the "Continuing
Premises")), provided that Tenant shall
(i) give irrevocable notice (the "Termination Notice") to
Landlord of such termination at least eighteen (18) months prior to
the Early Termination Date, and
(ii) pay to Landlord on or before the date thirty (30) days
prior to the Early Termination Date an amount equal to nine (9)
times the excess of (a) the monthly Fixed Rent then payable under
this Lease with respect to the Early Termination Premises (as
defined below) over (b) the Landlord's
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Monthly Payment then payable under this Lease with respect to the
Early Termination Premises (the "Termination Fee").
Notwithstanding the foregoing, if Tenant shall fail to pay the
Termination Fee on or before the date that is thirty (30) days prior to the
Early Termination Date or if on the date thirty (30) days prior to the Early
Termination Date Tenant is otherwise in monetary default under this Lease beyond
any applicable notice or grace period then, at the option of Landlord to be
exercised by notice to Tenant given on or before the date twenty (20) days prior
to the Early Termination Date, the Termination Notice shall be ineffective and
Tenant's option to terminate this Lease under this Article 38 shall thereupon
forever terminate.
Subject to the preceding paragraph, if Tenant shall timely exercise
Tenant's Termination Option and timely pay the Termination Fee then the term of
this Lease with respect to all portions of the Premises other than the
Continuing Premises (the "Early Termination Premises") shall end on the Early
Termination Date with the same force and effect as if such Early Termination
Date were the Expiration Date (and, with respect to the Early Termination
Premises, the parties shall have the same rights and obligations as they would
have had with respect to the Premises upon expiration of this Lease on the
Expiration Date). No such termination shall affect the Continuing Premises and
this Lease shall continue with respect to the Continuing Premises as if Tenant
had not exercised Tenant's Termination Option.
Tenant's failure to comply with the notice provision above shall be
deemed a waiver of all of Tenant's rights under this Article 38 and Tenant's
option to terminate this Lease with respect to the Early Termination Premises
shall thereupon forever terminate.
Article 39. Landlord Defaults - Tenant Right to Cure.
39.1 If
(i) Landlord shall fail to perform any of its obligations
under Article 10,11 or 15,
(ii) Landlord shall fail to make any repairs or alterations
that the Landlord is required to make pursuant to the terms of this
Lease, or
(iii) Landlord shall make any repairs or alterations in or
about the Premises or the Building, and as a result of such repairs
or alterations made by Landlord, it becomes impractical for Tenant
to (and the Tenant does not) conduct its business operations in any
portion of the Premises in substantially the same manner as
theretofore conducted
(any or all of the foregoing hereinafter sometimes referred to as a "Landlord
Failure") and, after notice thereof by Tenant to Landlord (a "Notice of Landlord
Failure"), Landlord does
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not with due diligence commence action promptly (immediately, in the case of
emergency) to remedy such Landlord Failure, or if so commenced, does not remedy
such failure within fifteen (15) days from the date of Tenant's notice or such
longer period as may be provided by the last sentence of this paragraph, then,
provided that at least 50% of the Premises then subject to this Lease shall not
then be subject to any sublease (other than any sublease entered into pursuant
to Section 12.7 or 12.8), Tenant shall have the right (the "Tenant's Self-Help
Right"), upon the giving of five (5) days' written notice to Landlord (or, in
the case of emergency, upon the giving of such notice, oral or written, as may
be reasonable under the circumstances) (the "Tenant's Self-Help Notice"), to
remedy or endeavor to remedy such Landlord Failure and, Landlord shall, within
twenty (20) days after Tenant's submission to Landlord of Tenant's bills
therefor accompanied by copies of the invoices paid by Tenant, reimburse Tenant
for the actual costs incurred by Tenant in so remedying or endeavoring to remedy
such Landlord Failure (plus interest at two percent (2%) above the Prime Rate
from the date(s) such costs were incurred until the date(s) that such costs are
finally reimbursed). Tenant agrees to use due care and good workerlike
procedures in the performance of self-help which affects any portion of the
Building outside of the Premises. With respect to any Landlord Failure the
curing of which requires in excess of fifteen (15) days, if within such fifteen
(15) days Landlord shall commence such cure and notify Tenant that it intends to
prosecute the same to completion, such fifteen (15) day period shall be extended
so long as Landlord is prosecuting such remedy continuously and with all due
diligence.
Except as provided in the next sentence, any bill rendered by Tenant
shall be deemed valid and due and owing and if not paid within the aforesaid
twenty (20) days Tenant shall have the right to set-off the amount thereof
against the Fixed Rent and Additional Rent payable under this Lease. If, by
notice to Tenant within twenty (20) days after Tenant's submission of any bill
to Landlord, Landlord shall dispute Tenant's entitlement to reimbursement
therefor, in whole or in part, then (i) pending resolution of such dispute
Tenant shall not set-off the amount in dispute, and (ii) if the such dispute is
not settled by the parties within ten (10) days of Landlord's notice of dispute,
the same shall be subject to arbitration in accordance with the provisions of
Article 35. If in arbitration it shall be determined that Tenant was not
entitled to exercise Tenant's Self Help Right, (i) Landlord shall not be require
to make any such reimbursement except to the extent of any costs which by virtue
of Tenant's activities under this Article Landlord shall have avoided, and (ii)
if and to the extent that Tenant shall have removed any repair or alteration it
was not entitled to remove, Tenant shall promptly restore the same.
Concurrently with Tenant's giving any Notice of Landlord Failure or
Tenant's SelfHelp Notice, Tenant shall give a copy thereof to the holder of any
Underlying Mortgage or the lessor of any Underlying Lease to whom Landlord has
instructed Tenant to give copies (provided that Tenant shall have been furnished
with the then current address of such holder or lessor). Such holder or lessor
shall have the same rights (but only within the same time limits and subject to
the same obligations) as Landlord to remedy the Landlord Failure to which such
notice relates.
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39.2 Landlord's Failure to Pay Costs of Initial Improvements
(a) If Tenant believes that Landlord has failed timely to pay to the
appropriate party any amount which Landlord is required by Section 4 of the
Initial Improvements Agreement to pay, then (i) Tenant may give Landlord a
notice (a "Section 39.2 Demand Notice") specifying and identifying such amount
(a "Section 39.2 Demand Amount") and containing the following statement in block
capital letters: "THIS NOTICE IS BEING GIVEN UNDER Section 39.2 OF OUR LEASE.
YOUR FAILURE TIMELY TO PAY THE COSTS HEREIN SPECIFIED AND FURNISH EVIDENCE
THEREOF TO TENANT WILL RESULT IN TENANT HAVING THE RIGHT TO PAY SUCH COSTS AND
OFFSET THE AMOUNT SO PAID AGAINST RENT DUE UNDER THE LEASE" and (ii) at any time
on or after the 10th day after the giving of such Section 39.2 Demand Notice
Tenant may pay the Section 39.2 Demand Amount or any portion thereof to the
appropriate party (together with all interest, penalties, late charges and
similar fees thereon or with respect thereto) provided, that if within 10 days
after the giving of the Section 39.2 Demand Notice Landlord notifies Tenant that
Landlord has paid all of such Section 39.2 Demand Amount to the appropriate
party (together with all interest, penalties, late charges and similar fees
thereon or with respect thereto) (which notice shall include evidence of such
payment) and Landlord has actually done so Tenant shall not be entitled to make
payment of the Section 39.2 Demand Amount or any portion thereof and if within
10 days after the giving of such Section 39.2 Demand Notice Landlord notifies
Tenant that Landlord has paid a portion identified and specified in such notice
of the Section 39.2 Demand Amount to the appropriate party (together with all
interest, penalties, late charges and similar fees thereon or with respect
thereto) (which notice shall include evidence of such payment) and Landlord has
actually done so Tenant may pay only the balance of such Section 39.2 Demand
Amount not so paid by Landlord or any portion of such balance to the
appropriate party (together with all interest, penalties, late charges and
similar fees thereon or with respect thereto). The amount paid by Tenant
pursuant to this Section 39.2(a) is called an "Section 39.2 Advance").
(b) If Tenant makes an Section 39.2 Advance in accordance with
Section 39.2(a) then, except as otherwise provided in Section 39.2(c), (i)
Landlord shall reimburse to Tenant within 15 days after Tenant's demand therefor
the amount of the Section 39.2 Advance, together with interest thereon at the
Interest Rate from the date of payment by Tenant to the date on which Landlord
so reimburses Tenant, (ii) if Landlord shall fail timely to make such
reimbursement, Tenant shall have the right to setoff the amount of the Section
39.2 Advance together with such interest thereon against the Rent under this
Lease, and (iii) Landlord shall be deemed to have waived its right to claim that
such setoff was improper or constitutes a failure to pay rent or other default
under this Lease and its right to bring and maintain a separate action against
Tenant to recover all or any portion of the Section 39.2 Demand Amount.
(c) If within l0 days after the giving of the Section 39.2 Demand
Notice, Landlord notifies Tenant (an "Section 39.2 Dispute Notice") that
Landlord believes that all or a portion identified and specified in such Section
39.2 Dispute Notice of the Section 39.2
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Demand Amount is not required by Section 4 of the Initial Improvements Agreement
to be paid by Landlord or is not overdue (in either case all or such identified
and specified portion being herein called the "Disputed Section 39.2 Amount"),
then Landlord shall not be required to reimburse Tenant and Tenant shall not
have a right of set-off with respect to the Disputed Section 39.2 Amount except
to the extent that the dispute with respect thereto is resolved in Tenant's
favor in accordance with the next sentence. Tenant shall have the right, with
respect to any such dispute, to elect by notice to Landlord that such dispute be
resolved by litigation or arbitration pursuant to Article 35, but any such
election shall be irrevocable with respect to the dispute in question.
(d) Each Section 39.2 Advance shall constitute a loan from Tenant to
Landlord and notwithstanding Tenant's having made such Section 39.2 Advance the
Initial Improvements Work to which such Section 39.2 Advance shall relate, shall
nonetheless constitute the property of Landlord, a part of the Premises and
subject to the Lease.
39.3 Successor Liability Notwithstanding the provisions of Article
31, Tenant's rights under this Article 39 shall survive any transfer of any
interest in the Land and/or the Building and after any thereof shall also be
enforceable against the transferee and its transferees (other than the holder of
any Existing Mortgage), notwithstanding that the obligations or amounts to which
such rights relate were originally required to be performed or paid by the
transferor.
Article 40. Miscellaneous.
40.1 If either party shall commence an action or proceeding to
enforce this Lease or any provision thereof, then (except as otherwise
specifically provided elsewhere in this Lease) the prevailing party shall be
reimbursed by the losing party within thirty (30) days after rendering to the
losing party a bill for the reasonable counsel fees and disbursements and court
costs incurred by the prevailing party in such action or proceeding.
40.2 In the event of a breach or threatened breach on the part of
either party hereunder with respect to any of the covenants, agreements, terms,
provisions or conditions on the part of, or on behalf of, such party to be kept,
observed or performed, the other party shall also have the right of injunction.
The specified remedies to which a party may resort hereunder are cumulative and
are not intended to be exclusive of any other remedies or means of redress to
which a party may lawfully be entitled at any time, and a party may invoke any
remedy allowed at law or in equity as if specific remedies were not provided for
herein.
40.3 Whenever any right of Tenant provided for in this Lease is
subject to the condition that the area of the Premises not sublet (other than
under Section 12.7 or 12.8) shall then exceed 250,000 rentable square feet (or
other amount) (e.g. Section 7.1(b), 26.5), (or any similar condition) then for
purposes of determining whether such condition is satisfied all of the space
referred to in Exhibit C of this Lease shall be deemed leased to
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Tenant and included in the Premises on and after the Effective Date of this
Lease, notwithstanding that the Delivery Date may not have commenced with
respect to one or more Applicable Portions.
40.4 Any reference in this Lease to Tenant not being in default
beyond applicable notice and/or cure periods (or any similar reference) shall
refer to applicable notice and/or cure periods provided for in Article 17.
40.5 Whenever this Lease requires either party to pay any amount to
the other, if no other time period is specified, such amount shall be due within
ten (10) days of the other party's demand therefor accompanied by any
documentation required by the terms of this Lease. If any amount due to either
party shall not be paid when due, the same shall bear interest at the Interest
Rate from the due date until paid.
40.6 Whenever, by operation of Article 26 or otherwise, Tenant shall
lease the last usable portion of any Partial Premises Floor such floor shall be
come a Full Premises Floor and there shall be deemed included in the Premises
and leased to Tenant all common and other areas of such floor as shown on the
typical floor plan included in Exhibit B and any other comparable areas not
shown on such plan because of differences between the floor in question and the
typical floor upon which the typical floor plan is based, but the operation of
this Section 40.6 shall not result in any increase in the rentable area of the
Premises.
40.7 Landlord shall consent to any sublease to Tenant of, or any
assignment to Tenant of any lease covering, any space in the Building proposed
to be made by any tenant of any space in the Building, notwithstanding any
prohibition of such sublease or assignment contained in such other tenant's
lease and notwithstanding any provision of such lease entitling Landlord to
withhold consent.
40.8 Each party agrees that it shall not refer to the other party
hereto in any press release, publicity, advertisement or other promotional
material relative to the entering into of this Lease or the Building nor shall
it permit any broker representing it to so refer to the other party.
40.9 The headings of the Articles of this Lease are for convenience
only and are not to be considered in construing the Articles.
40.10 This Lease may be executed in any number of counterparts, and
each counterpart hereof shall be deemed to be an original instrument, but all
counterparts together shall constitute but one agreement.
Article 41. ICIP & LMEP Program
41.1 The Project: the Benefits. The parties agree that, in
connection with any work to be done either by Landlord or Tenant in the Premises
or in the Building in
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connection with Tenant's use and occupancy of the Premises (all such work,
including any Special Installations installed by Tenant, the "Project"), Tenant
intends to avail itself of, and Landlord shall use commercially reasonable
efforts to permit Tenant to avail itself of, the benefits and entitlements
provided by (x) Section 489-bbbb, Subdivision #5 of the Industrial and
Commercial Incentive Program (together with the regulations and requirements of
Sections 11-256 through 11-267 of the Administrative Code of the City of New
York, authorized by Title 2-D of Article 4 of the New York Real Property Tax Law
and all rules and regulations promulgated thereunder, the "ICIP Program"), and
(y) Section 25-bb(a), Subdivision 1 of the Lower Manhattan Energy Program
(together with the regulations and requirements of Article 2-I of the General
City Law and all rules and regulations promulgated thereunder, the "LMEP
Program"). Landlord agrees to use commercially reasonable efforts to comply with
all applicable provisions of the ICIP Program and the LMEP Program with the goal
that the Building will receive the benefits and entitlements provided by both
the ICIP Program (such benefits, the "ICIP Benefits") and the LMEP Program (such
benefits, the "LMEP Benefits"; the ICIP Benefits and the LMEP Benefits being
herein sometimes collectively referred to as the "ICIP/LMEP Benefits").
41.2. Requirements to Obtain Benefits. In accordance with the
requirements of the ICIP Program and the LMEP Program, Landlord and Tenant agree
as follows:
(a) Landlord and Tenant will complete and execute, and Landlord will
file, a preliminary application for the Building (the "Preliminary ICIP
Application") for the ICIP Benefits that may be available in connection with the
Project, as and within the time periods required by the ICIP Program, and prior
to the issuance of a building permit for, or the award of construction contracts
for, or the commencement of, any work comprising part of the Project (the "ICIP
Work").
(b) Landlord and Tenant will complete and execute, and Landlord will
file, a final application for the Building (the "Final ICIP Application") for
the ICIP Benefits that may be available in connection with the Project, as and
within the time periods required by the ICIP Program.
(c) Landlord will complete, execute and file an application for the
Building (the "LMEP Application") for the LMEP Benefits that may be available in
connection with the Project, as required by the LMEP Program, concurrently with
or after the filing of the Preliminary ICIP Application and prior to the
issuance of a building permit for, or the award of construction contracts for,
or the commencement of, any ICIP Work.
(d) Landlord and Tenant will submit any proofs of expenditure,
plans, reports, certificates of continuing use and other submissions that may be
required to qualify for the ICIP/LMEP Benefits that may be available in
connection with the Project (the "ICIP/LMEP Submissions") as and within the time
periods required by the applicable rules and regulations of the City of New York
and as more particularly hereinafter set forth, including without limitation any
ICIP/LMEP Submissions required to be made to the New
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York City Department of Finance ("DOF"), the New York City Department of
Business Services ("DBS") or the New York City Office of Labor Services ("OLS"),
and will attend any meetings required by DOF, DBS or OLS or any other
governmental agency charged with administration or enforcement of the ICIP
Program or LMEP Program.
(e) Landlord shall pay the filing fees imposed in connection with
the filing of the ICIP Preliminary and Final Applications and the LMEP
Application, and any filing fees which may be imposed in connection with any
ICIP/LMEP Submissions the obligation for which is imposed on Landlord, and all
costs incurred by Landlord in connection therewith.
41.3 Requirements in Respect of Contractors. (a) Landlord and Tenant
acknowledge that the ICIP Program imposes certain requirements with respect to
the hiring and training practices, among other matters, of construction
managers, contractors and subcontractors (collectively herein called
"Contractors") engaged to perform work in connection with the Project
Accordingly, in order to reduce the likelihood that actions taken by Contractors
of Landlord or Tenant will cause the Building to fail to qualify for or to lose
the ICIP/LMEP Benefits, Landlord and Tenant, to the extent required by the ICIP
Program, shall use only such Contractors that qualify under the applicable
requirements of the ICIP Program for performance of work comprising part of the
Project.
(b) (1) To the extent required by the ICIP Program, all of the
Contractors of Landlord and Tenant employed in connection with the Project shall
be contractually required by Landlord or Tenant, as the case may be, to comply
with the provisions of the ICIP Program, including without limitation the OLS
requirements applicable to construction projects benefiting from the ICIP
Program. Such compliance, as of the date hereof, includes without limitation the
following: the submission and approval of Construction Employment Report(s), and
other periodic reports, attendance at a pre-construction conference and other
conferences with representatives of the OLS and adherence to the provisions of
Article 22 of the ICIP Rules and Regulations, the provisions of New York City
Charter Chapter 13-B and the provisions of Executive Order No. 50 (1980) and the
regulations promulgated thereunder. If Landlord or Tenant is notified of any
violation of the ICIP Program by the other party's Contractors, such party shall
promptly advise the other party (the "NonCompliant Party") and send a copy of
such notice to the Non-Compliant Party. The Non-Compliant Party will use
commercially reasonable efforts to have violations by its Contractors cured by
its Contractors, and the Non-Compliant Party (x) will have the right to promptly
take all necessary actions to cure such violations, and (y) shall have the right
to contest the determination of non-compliance and/or issuance of a penalty by
the DOF and/or the OLS. At the Non-Compliant Party's request, the other party
shall cooperate with the Non-Compliant Party in any such contest, provided that
the other party shall incur no expense or liability with respect to such
cooperation, unless the Non-Compliant Party agrees to reimburse the other party
for such costs and indemnify, defend and hold harmless the other party from and
against any such liability.
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(2) At Landlord's request, to the extent required to enable Landlord
to file annual certificates of continuing use as required by the ICIP Program
and/or to continue to receive the benefits under the ICIP Program and/or the
LMEP Program, Tenant shall (i) report to Landlord the use of the Premises, the
number of workers permanently engaged in employment in the Premises and the
number of such workers who reside in New York City, (ii) provide access to the
Premises by employees and agents of any governmental agency enforcing the ICIP
Program (including, without limitation, the DOF) at all reasonable times, upon
reasonable notice when requested by Landlord (and, if requested by Tenant, such
employees and agents shall be accompanied by a Tenant representative during such
access) and (iii) enforce the contractual obligations of Tenant's Contractors to
comply with the OLS requirements.
(3) To the extent required to enable Landlord to file annual
certificates of continuing use as required by the ICIP Program and/or to
continue to receive the benefits under the ICIP Program and/or the LMEP Program,
Landlord shall use commercially reasonable efforts to require other tenants in
the Building to (i) report to Landlord the use of the premises demised to such
other tenants, the number of workers permanently engaged in employment in the
premises demised to such other tenants and the number of such workers who reside
in New York City and (ii) provide access to the premises demised to such other
tenants by employees and agents of any governmental agency enforcing the ICIP
Program (including, without limitation, the DOF) at all reasonable times, upon
reasonable notice when requested by Landlord. Landlord shall also include
provisions in any lease renewal or amendment (with an existing tenant) or in any
new lease provisions requiring the tenant to provide to Landlord such materials
and information (generally as described in subparagraph (2) above) as shall be
required in order for Landlord to comply with its requirements under the ICIP
and LMEP Programs.
41.4 Submetering. The parties acknowledge that the LMEP program
requires that all tenants in excess of 10,000 sq. ft., and all full floor
tenants regardless of size, must be submetered. Landlord represents that all of
such tenants are submetered.
41.5 Tenant's Obtaining Direct Electric Service. In the event that
Tenant shall hereafter discontinue obtaining electric energy from Landlord and
shall instead obtain electric energy directly from the public utility furnishing
electric service to the Building or any other supplier for any reason: (i)
Tenant shall at all times have the right, in its sole and absolute discretion,
to determine the source of supply of electricity provided to the Premises, even
if such a determination made by Tenant might eliminate or diminish the LMEP
Benefits available to the Building or the Premises and (ii) Landlord shall
cooperate with Tenant, at no cost or expense to Landlord that is not reimbursed
by Tenant, to transfer to Tenant, if and to the extent then permitted by the
LMEP Program or by agreement with the City of New York, Tenant's Proportionate
Share of the LMEP Benefits then being received by the Building.
Article 42. Tenant's Shafts and Other Areas
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42.1 General. Landlord hereby grants to Tenant the right to use and
install property (including pipes, ducts, risers, conduits and associated
improvements, equipment and facilities) in
(a) the spaces cross-hatched on the plans attached
hereto as Exhibits FF, G6, HH, II and JJ, and
(b) subject to the provisions of Section 42.9 below, the
space not cross-hatched but marked "existing kitchen exhaust
flues" on the plan attached hereto as Exhibit II, including
the space between the existing duct and the core wall (the
"Existing Kitchen Exhaust Space") adjacent to the space
cross-hatched and marked "existing kitchen exhaust flues" on
the plan attached hereto as Exhibit II,
in each case, from the lowest level of the Building to the roof of the Building
(such spaces being herein called "Tenant's Shafts"), and the right to enclose
Tenant's Shafts wherever not now enclosed, the right to core or remove floor
slabs as required and the right to maintain, repair, replace, modify, alter and
remove such installations and enclosures, and the right to enter each floor of
the Building in order to access such spaces. The labels of and notations on the
plans attached hereto as Exhibits FF, GG, HH, II and JJ shall not limit the
types of installations for which Tenant may use any of Tenant's Shafts. Tenant's
right to install property in Tenant's Shafts shall be subject to compliance by
Tenant with the provisions of Article 6.
Landlord represents to Tenant that
(a) attached hereto as Exhibit AAA are the provisions of each
lease of space in the Building pertaining to Landlord's right to
enter the premises demised thereby (the "Entry Provisions");
(b) attached hereto as Exhibit BBB are the provisions of each
lease of space in the Building pertaining to Landlord's rights to
make changes or perform work (including the erection of pipes, ducts
and conduits) in the premises demised thereby (the "Pipe Erection
and Other Work Provisions");
(c) no part of the Cartlift Room (as hereinafter defined) on
any floor is leased to any tenant except on floors 36, 35, 34, 33,
32, 28, 27, 26, 21, 19 and 18 (such floors being herein called the
"Cartlift Room Leased Floors" and the applicable leases being herein
called the "Cartlift Room Leases"); and
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(d) no part of the freight elevator lobby is leased to any
tenant except on floors 36, 35, 34, 33, 32, 27, 18 and 17 (such
floors being herein called the "Freight Elevator Lobby Leased
Floors" and the applicable leases being herein called the "Freight
Elevator Lobby Leases").
42.2 CNA Closet. Tenant's right to use and install property in the
former CNA communications closet shown crosshatched on Exhibit FF (such closet
being herein called the "CNA Closet") shall be exclusive (and Tenant shall have
the right to remove and dispose of without accountability or liability to
Landlord or any other person any installations in the CNA Closet) except that:
(i) unless and until Tenant shall have relocated the
base building fire alarm riser and BMS equipment (the "Base
Building Closet Installations") from the CNA Closet, Tenant's
right to use and install property in the CNA Closet shall be
subject to the continued presence in the CNA Closet of the
Base Building Closet Installations; and
(ii) until the Last Delivery Date, Tenant's right to use
and install property in the CNA Closet shall be subject to the
continued presence in the CNA Closet of installations serving
Landlord as occupant of the Building (the "CNA Closet
Installations").
Tenant shall have the right to
(i) rearrange within the CNA Closet any or all of the
Base Building Closet Installations, or
(ii) relocate any or all of the Base Building Closet
Installations from the CNA Closet to either of the other
communications closets in the Building and to rearrange within
such other closets the existing installations in such other
closets in order to accommodate such relocation;
provided, however, that Tenant shall not, in connection with such rearrangement
or relocation, adversely affect the operation of the installations being
rearranged or relocated.
Until the Last Delivery Date, Tenant shall share use of, and access
to, the CNA Closet with Landlord as occupant of the Building and Landlord and
Tenant agree to cooperate and coordinate their use of and access to the CNA
Closet. During the period of such shared use and access, Tenant shall have the
right
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(i) to rearrange within the CNA Closet any or all of the
installations in the CNA Closet serving Landlord as occupant
of the Building, or
(ii) relocate any or all of the installations in the CNA
Closet serving Landlord as occupant of the Building to either
of the other communications closets in the Building and to
rearrange within such other closets the existing installations
in such other closets in order to accommodate such relocation;
provided, however, that Tenant shall not, in connection with such rearrangement
or relocation, adversely affect the operation of the installations being
rearranged or relocated.
Tenant shall have the right to access and enter the CNA Closet
through the door thereto on each floor of the Building; provided, however, that
Tenant's right to enter floors 39, 38, 36, 35, 34, 33, 32, 27, 25, 24, 23, 18
and 17 (the "Single Tenant Floors") for such purpose shall be subject to
compliance with the applicable Entry Provisions.
Tenant shall have the right to control access and entry to the CNA
Closet (and, in that connection, to install and/or change locks and/or
monitoring devices); provided, however, that (a) unless and until Tenant shall
have relocated the Base Building Closet Installations, Tenant shall, upon
Landlord's request, provide Landlord with reasonable access and entry to the CNA
Closet for purposes related to the Base Building Closet Installations, and (b)
until the Last Delivery Date Tenant shall, upon Landlord's request, provide
Landlord with reasonable access and entry to the CNA Closet for purposes related
to the installations therein serving Landlord as occupant of the Building.
42.3 Freight Elevator Lobby Space. Tenant's right to use and install
property in the freight elevator lobby space shown crosshatched on Exhibit FF
(such space being herein called the "Freight Elevator Lobby Space") shall be
exclusive (and Tenant shall have the right to remove and dispose of without
accountability or liability to Landlord or any other person any equipment or
installations in the Freight Elevator Lobby Space) except that Tenant's right to
use and install property in the Freight Elevator Lobby Space on any Freight
Elevator Lobby Leased Floor shall, if and for so long as such Freight Elevator
Lobby Space shall be leased under such Freight Elevator Lobby Lease (unless the
tenant under the Freight Elevator Lobby Lease shall otherwise agree), be limited
to Landlord's rights under the Pipe Erection and Other Work Provisions and the
Entry Provisions of such Freight Elevator Lobby Lease.
Landlord shall cooperate with Tenant's efforts to obtain, and shall
accept without charge, (i) the surrender of the Freight Elevator Lobby Space or
the freight elevator lobby by the tenant under any Freight Elevator Lobby Lease,
or (ii) any other agreement with the tenant under any Freight Elevator Lobby
Lease pursuant to which such tenant's rights in and to the Freight Elevator
Lobby Space or the freight elevator lobby are restricted or
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reduced or Tenant's rights in and to the Freight Elevator Lobby Space are
expanded or increased.
Landlord shall not hereafter lease (including by way of renewal,
extension or expansion of any lease) the Freight Elevator Lobby Space or the
freight elevator lobby on any floor, and shall not modify, expand, amend, renew
or extend any Freight Elevator Lobby Lease unless such modification, expansion,
amendment, renewal or extension provides for the surrender of the Freight
Elevator Lobby Space; provided, however, that this paragraph shall not be deemed
to prohibit the exercise by any tenant of any renewal or extension option now
contained in such tenant's lease.
Tenant shall have the right to access and enter the Freight Elevator
Lobby Space from the freight elevator lobby on each floor of the Building;
provided, however, that Tenant's right to enter the Single Tenant Floors and the
Freight Elevator Lobby Leased Floors for such purposes shall be subject to
compliance with the applicable Entry Provisions. Tenant shall have the right to
install in the wall facing the freight elevator lobby a door to the Freight
Elevator Lobby Space on each floor of the Building extending for substantially
all of the height and width of the Freight Elevator Lobby Space (or smaller if
Tenant shall so elect).
Tenant shall have the right to control access and entry to the
Freight Elevator Lobby Space (and, in that connection, to install and/or change
locks and/or monitor devices).
42.4 Cartlift Room. Tenant's right to use and install property in
the cartlift room (excluding the shaft now used for the cartlift conveyor
referred to in Section 41.4) shown crosshatched on Exhibit GG (such room,
excluding such shaft, being herein called the "Cartlift Room") shall be
exclusive (and Tenant shall have the right to remove and dispose of without
accountability or liability to Landlord or any other person any equipment or
installations in the Cartlift Room) except that Tenant's right to use and
install property in the Cartlift Room on any Cartlift Room Leased Floor shall,
if and for so long as such Cartlift Room shall be leased under such Cartlift
Room Lease (unless the tenant under the Cartlift Room Lease shall otherwise
agree), be limited to Landlord's rights under the Pipe Erection and Other Work
Provisions and the Entry Provisions of such Cartlift Room Lease.
Landlord shall cooperate with Tenant's efforts to obtain, and shall
accept without charge, (i) the surrender of any Cartlift Room by the tenant
under any Cartlift Room Lease, or (ii) any other agreement with the tenant under
any Cartlift Room Lease pursuant to which such tenant's rights in and to the
Cartlift Room are restricted or reduced or Tenant's rights in and to the
Cartlift Room are expanded or increased.
Landlord shall not hereafter lease (including by way of renewal,
extension or expansion of any lease) the Cartlift Room on any floor, and shall
not modify, expand, amend, renew or extend any Cartlift Room Lease unless such
modification, expansion, amendment,
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renewal or extension provides for the surrender of the Cartlift Room; provided,
however, that this paragraph shall not be deemed to prohibit the exercise by any
tenant of any renewal or extension option now contained in such tenant's lease.
Tenant shall have the right to access and enter the Cartlift Room
from the freight elevator lobby on each floor of the Building; provided,
however, that Tenant's right to enter the Single Tenant Floors and the Cartlift
Room Leased Floors for such purposes shall be subject to compliance with the
applicable Entry Provisions.
Tenant shall have the right to control access and entry to the
Cartlift Room (and, in that connection, to install and/or change locks and/or
monitoring devices); provided, however, that Tenant shall not have the right to
control access or entry to the Cartlift Room on any Cartlift Room Leased Floor
so long as such Cartlift Room Lease shall remain in effect and cover the
Cartlift Room, unless the tenant under the Cartlift Room Lease shall otherwise
agree.
42.5 Cartlift Conveyor Shaft. Tenant's right to use and install
property in the shaft now used for the cartlift conveyor located within the
Cartlift Room shown crosshatched on Exhibit GG (such shaft being herein called
the "Cartlift Conveyor Shaft") shall be exclusive (and Tenant shall have the
right to remove and dispose of without accountability or liability to Landlord
or any other person any equipment or installations in the Cartlift Conveyor
Shaft).
Tenant shall have the right to access and enter the Cartlift
Conveyor Shaft from the Cartlift Room on each floor of the Building; provided,
however, that Tenant's right to enter the Single Tenant Floors and the Cartlift
Room Leased Floors for such purpose shall be subject to compliance with the
applicable Entry Provisions.
Tenant shall have the right to control access and entry to the
Cartlift Conveyor Shaft (and, in that connection, to install and/or change locks
and/or monitoring devices).
42.6 Fuel Oil Riser Shaft. Tenant's right to use and install
property in the shafts shown crosshatched on Exhibit HH (such shafts being
herein called the "Fuel Oil Riser Shaft") shall be exclusive (and Tenant shall
have the right to remove and dispose of without accountability or liability to
Landlord or any other person any equipment or installations in the Fuel Oil
Riser Shaft) except that Tenant's right to use and install property in the Fuel
Oil Riser Shaft shall be subject to the continued presence of the base building
fuel oil risers.
Tenant shall have the right to access and enter the Fuel Oil Riser
Shaft from the Cartlift Room on each floor of the Building; provided, however,
that Tenant's right to enter the Single Tenant Floors and the Cartlift Room
Leased Floors for such purpose shall be subject to compliance with the
applicable Entry Provisions.
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Tenant shall have the right to control access and entry to the Fuel
Oil Riser Shaft (and, in that connection, to install and/or change locks and/or
monitor devices); provided, however, that Tenant shall, union Landlord's
request, provide Landlord with reasonable access and entry to the Fuel Oil Riser
Shaft for purposes related to the base building fuel oil risers.
42.7 Pine Space. Tenant's right to use and install property in the
shaft adjacent to SE#2 shown crosshatched on Exhibit II (such shaft being herein
called the "Pipe Space") shall be exclusive (and Tenant shall have the right to
remove and dispose of without accountability or liability to Landlord or any
other person any equipment or installations in the Pipe Space) except that
unless and until Tenant shall have relocated the base building pipes (the "Base
Building Pipes") from the Pipe Space, Tenant's right to use and install property
in the Pipe Space shall be subject to the continued presence of the Base
Building Pipes.
Tenant shall have the right to
(i) rearrange within the Pipe Space any or all of the
Base Building Pipes, or
(ii) relocate any or all of the Base Building Pipes from
the Pipe Space either to (a) any other location within
Tenant's Shafts or (b) subject to Landlord's approval not to
be unreasonably withheld, any other location in the Building's
core.
Tenant shall have the right to access and enter the Pipe Space
through either (as Tenant shall so elect) the long wall (opposite SE#2) or the
short wall (adjacent to the freight elevator lobby); provided, however, that
Tenant's right to enter the Single Tenant Floors and the Freight Elevator Lobby
Leased Floors for such purpose shall be subject to compliance with the
applicable Entry Provisions. Tenant shall have the right to install in either
(as Tenant shall so elect) the long wall (opposite SE#2) or the short wall
(adjacent to the freight elevator lobby) a door to the Pipe Space on each floor
of the Building extending for substantially all of the height and width of the
Pipe Space (or smaller if Tenant shall so elect).
Tenant shall have the right to control access and entry to the Pipe
Space (and, in that connection, to install and/or change locks and/or monitoring
devices); provided, however, that unless and until Tenant shall have relocated
the Base Building Pipes, Tenant shall, upon Landlord's request, provide
Landlord with reasonable access and entry to the Pipe Space for purposes related
to the Base Building Pipes.
42.8 Unused Exhaust Space. Tenant's right to use and install
property in the shaft adjacent to the Cartlift Room shown crosshatched on
Exhibit II (such shaft being herein called the "Unused Exhaust Space") shall be
exclusive (and Tenant shall have the
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right to remove and dispose of without accountability or liability to Landlord
or any other person any equipment or installations in the Unused Exhaust Shaft).
Tenant shall have the right to access and enter the Unused Exhaust
Shaft through (as Tenant shall so elect) any of the walls thereto (except for
the wall bounding the Existing Kitchen Exhaust Space unless Tenant shall have
the right to use the same pursuant to Section 42.9); provided, however, that
Tenant's right to enter the Single Tenant Floors, the Cartlift Room Leased
Floors and the Freight Elevator Lobby Leased Floors for such purpose shall be
subject to compliance with the applicable Entry Provisions. Tenant shall have
the right to install in any such wall (as Tenant shall so elect) (except as
aforesaid) a door to the Unused Exhaust Space on each floor of the Building
extending for substantially all of the height and width of the Unused Exhaust
Shaft (or smaller if Tenant shall so elect).
Tenant shall have the right to control access and entry to the
Unused Exhaust Space (and, in that connection, to install and/or change locks
and/or monitoring devices).
42.9 Existing Kitchen Exhaust Space. Tenant's right to use and
install property in the Existing Kitchen Exhaust Space shall not become
effective unless and until Tenant shall have either (i) relocated the existing
kitchen exhaust from the Existing Kitchen Exhaust Space to any other location
within Tenant's Shafts or otherwise in the Building's core, or (ii) ceased
operation of the kitchen facilities requiring such exhaust. Tenant shall have
right to relocate the existing kitchen exhaust from the Existing Kitchen Exhaust
Space to any other location within Tenant's Shafts or, subject to Landlord's
approval not to be unreasonably withheld, any other location in the Building's
core; provided, however, that Tenant shall not effect such relocation into the
Cartlift Room unless and until, with respect to each Cartlift Room Leased Floor,
either the tenant under the Cartlift Room Lease shall have consented thereto or
the Cartlift Room Lease shall have expired or been terminated.
From and after the effectiveness of Tenant's right to use and
install property in the Existing Kitchen Exhaust Space:
Tenant's right to use and install property in the Existing
Kitchen Exhaust Space shall be exclusive (and Tenant shall have the
right to remove and dispose of without accountability or liability
to Landlord or any other person any equipment or installations in
the Unused Exhaust Shaft).
Tenant shall have the right to access and enter the Existing
Kitchen Exhaust Shaft through either (as Tenant shall so elect) any
of the walls thereto; provided, however, that Tenant's right to
enter the Single Tenant Floors, the Cartlift Room Lease Floors and
the Freight Elevator Lobby Leased Floors for such purpose shall be
subject to compliance with the applicable Entry Provisions. Landlord
grants to Tenant the right to install in any such wall (as Tenant
shall so elect) a door to the Existing Kitchen Exhaust Space on each
floor of the Building extending for substantially all
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of the height and width of the Existing Kitchen Exhaust Space (or
smaller if Tenant shall so elect).
Tenant shall have the right to control access and entry to the
Existing Kitchen Exhaust Space (and, in that connection, to install
and/or change locks and/or monitoring devices).
42.10 Fire Stair Riser Space. Tenant's right to use and install
property in the shafts shown on Exhibit HH (such shafts being herein called the
"Fire Stair Riser Space") shall be exclusive (and Tenant shall have the right to
remove and dispose of without accountability or liability to Landlord or any
other person any equipment or installations in the Fire Stair Riser Shaft).
Tenant shall have the right to access and enter the Fire Stair Riser
Space through the fire stairs.
Tenant shall have the right to control access and entry to the Fire
Stair Riser Space (and, in that connection, to install and/or change locks
and/or monitoring devices).
42.11 Relocations by Tenant. Whenever pursuant to the foregoing
provisions of this Article 42, Tenant is authorized to make any relocation
Tenant shall have the right to enter the floors of the Building for such
purpose, subject to Tenant's compliance with the applicable Entry Provisions.
42.12 Other Provisions. Landlord represents to Tenant that Landlord
has the right, power and authority to grant to Tenant the rights provided for
above in this Article 42, subject to compliance by Tenant with the applicable
Entry Provisions and Pipe Erection and Other Work Provisions as provided above.
Landlord shall, within two (2) business days of Tenant's request,
give such notices and take such other actions as Tenant shall from time to time
request in order to confirm, perfect and provided for Tenant's exercise and
enjoyment of the rights provided for above in this Article 42.
Without limiting the foregoing, if Tenant shall so request,
Landlord, within two (2) business days of Tenant's request shall exercise the
rights reserved to Landlord under the Entry Provisions and/or the Pipe Erection
and Other Work Provisions as Tenant shall from time to time request, including,
if Tenant shall so request, retaining any contractors designated by Tenant to
perform any work designated by Tenant, at Tenant's cost and expense (subject to
compliance with the provisions of this Article and Article 6).
Landlord shall be entitled to a key to Tenant's Shafts for emergency
access thereto.
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If due to limitations in the Entry Provisions or the Pipe Entry or
Other Work Provisions or other reasons Tenant's rights under this Article are
insufficient for Tenant's needs, Landlord shall cooperate with Tenant's in
identifying and providing additional riser space for Tenant, in the manner
most-cost effective to Tenant.
42.13 Telecommunications Points of Entry. Landlord hereby grants to
Tenant the right (i) to create, in the locations shown on Exhibit EE, two (2)
new communication points of entry in the lower level of the Building, and (ii)
to install conduits in such lower level from such points of entry to Tenant's
Shafts, and the right to maintain, repair, replace, modify, alter and remove
such installations, and the right to enter the basement and other areas of the
Building in order to access such installations.
42.14 Tenant's Fuel Tank. Landlord hereby grants to Tenant the right
(i) to install a fuel tank or tanks (up to the maximum size permitted by
applicable law) and associated improvements, equipment and facilities in any
part of the basement of the Building included in the Premises, and (ii) to
install supply and return pipes and conduits from such tank to Tenant's Shafts
and feed and vent pipes from such tank to the street or other fuel supply point,
and the right to maintain, repair, replace, modify, alter and remove such
installations, and the right to enter the basement and other areas of the
Building in order to access such installations. Whether or not Tenant operates
or continues to operate Tenant's Generator Plant, Tenant shall keep any fuel
tank installed by it in such condition as shall be required to prevent damage or
injury to the Building, subject nonetheless to the release provisions of Section
22.6.
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IN WITNESS WHEREOF Landlord and Tenant have duly executed this
Lease as of the day and year first above written.
LANDLORD:
TCC ACQUISITION CORP.,
AS AGENT
By: /s/ [signature]
----------------------------------------
Name: [name]
Title: Group Vice President
TENANT:
THE GOLDMAN SACHS GROUP, L.P.
By: /s/ Edward F. Markiewicz
----------------------------------------
Name: Edward F. Markiewicz
Title: Attorney in Fact
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Exhibit A
Landlord
--------
BOSTON OLD COLONY INSURANCE COMPANY
THE BUCKEYE UNION INSURANCE COMPANY
COMMERCIAL INSURANCE COMPANY OF NEWARK, N.J.
THE CONTINENTAL INSURANCE COMPANY
THE CONTINENTAL INSURANCE COMPANY OF NEWARK, NEW JERSEY
THE FIDELITY AND CASUALTY COMPANY OF NEW YORK
FIREMEN'S INSURANCE COMPANY OF NEWARK, NEW JERSEY
THE GLENS FALLS INSURANCE COMPANY
KANSAS CITY FIRE AND MARINE INSURANCE COMPANY
THE MAYFLOWER INSURANCE COMPANY, LTD.
NATIONAL-BEN FRANKLIN INSURANCE COMPANY OF ILLINOIS
NIAGARA FIRE INSURANCE COMPANY
<PAGE> 140
Exhibit C
Premises
--------
<PAGE> 141
EXHIBIT "C"
<TABLE>
<CAPTION>
Scheduled
Portion Floor Area RSF Delivery Date
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Part 41st Floor 22,233 1/1/99
Entire 40th Floor 28,821 11/1/98
Entire 37th Floor 29,040 1/1/99
Entire 31st Floor 29,011 10/1/98
Entire 30th Floor 29.011 10/1/98
Entire 29th Floor 27,846 {15,616} Immediate
{1,208} 9/1/98
"B" {11,022} 1/1/99
Part 28th Floor "D" 6,212 9/1/98
"C" 1,208 Immediate
Part 26th Floor "C" 8,809 3/1/99
"A" 1,219 Immediate
Entire 22nd Floor 27,725 9/1/98 (1)
Part 21st Floor "E" 4,684 7/1/98 (1)
"B" 3,035 1/1/99
"D" 355 Immediate
Part 21St Floor "A" 19,368 7/1/00
"C" 338 7/1/00
Entire 20th Floor 27,780 2/1/99
Part 19th Floor "A" 17,512 {17,094} Immediate
"D" {418} 1/1/99
Entire 16th Floor 27,169 3/1/99
Entire 6-15th Floor 26,959 ea(2) 3/1/99 (3)
Entire 4th Floor "A" "B" 15,437 3/1/99
"C" 10,721 1/1199
Entire 3rd Floor 27,078 1/1/99
Part Mezzanine 8,111 1/1/99
Part Basement "I" 10,751 3/1/99
Part Basement "G" 1,406 10/1/98
Part Basement "M" 1,394 Immediate
Basement "K" 10,028 1/1/99
"J" 517 1/1/99
- -----------------------------------------------------------------------------------
TOTAL 666,409 Rentable sq. ft.
</TABLE>
(1) Subject to lease termination/buyout
(2) The RSF is for each of floors 6-15
(3) The Scheduled Delivery Date for floors 10 and 12 is Immediate
<PAGE> 142
Exhibit I
Building Rules and Regulations
1. The rights of Tenant in the sidewalks, entrances, corridors,
elevators and escalators of the Building are limited to ingress in and egress
from the Premises for Tenant and its employees, licensees and invitees and
Tenant shall not use or permit the use of said sidewalks, entrances, corridors,
elevators or escalators for any other purpose. Tenant shall not invite to the
Premises or permit the visit thereto by persons in such numbers or under such
conditions as to interfere with the use and enjoyment by others of the
sidewalks, entrances, corridors, elevators, escalators or any other facilities
of the Building. Fire exits and stairways are for emergency use only and they
shall not be used for any other purpose by Tenant, its employees, licensees or
invitees. Landlord shall have the right to regulate the use of and operate the
public portions of the Building as well as portions furnished for the common use
of Tenants in such manner as it deems best for the benefit of Tenants generally.
2. Outside of ordinary business hours, Landlord may refuse admission
to the Building to any person not having a pass issued or approved by Landlord
or not accompanied by a person presenting such a pass or not properly identified
and may require all persons admitted to or leaving the Building outside of
ordinary business hours to register. Tenant shall be responsible for all persons
for whom a pass shall be issued or approved at the request of Tenant and shall
be liable for all acts of such persons. Anything to the contrary
notwithstanding, any person whose presence in the Building at any time shall, in
the judgment of Landlord be prejudicial to the safety, character, reputation and
interests of the Building or of its tenants may be denied access to the Building
or may be ejected therefrom. In case of emergency, invasion, public excitement
or other commotion Landlord may prohibit all access to the Building during the
continuance of the same, by closing doors or otherwise, for the safety of
Tenants or protection of property in the Building. Landlord may require any
person leaving the Building with any package or other object to exhibit a pass
from the Tenant from whose Premises the package or object is being removed, but
the establishment or enforcement of such requirement shall not impose any
responsibility on Landlord for the protection of Tenant against the removal of
property from the Premises of Tenant.
3. Except in the case of a shop, no lettering, sign, advertisement,
trademark, emblem, notice or object shall be displayed in or on the windows or
doors, or on the outside of the Premises, or at any point inside the Premises
where the same might be visible outside the Premises (other than from the
elevators on the floors of the Premises) except that, on any divided floor, the
name and/or symbol of Tenant may be displayed on or adjacent to the entrance
door of the Premises and/or in or so as to be visible from the common areas on
such floor, subject to the approval of Landlord as to the locations, size, color
and style of such display (which approval shall not be unreasonably withheld).
1
<PAGE> 143
4. No awnings or other projections of any kind over or around the
outside of the windows or entrances of the Premises shall be installed by Tenant
and only such window blinds and shades as are approved or supplied by Landlord
shall be used in the Premises.
5. Tenant's right to install safes and other objects of excessive
weight in the Premises shall be conditioned upon Tenant's either (i)
distributing the concentrated weight of the safe or other heavy object or (ii)
reinforcing the floor, subject to prior notice to and consent of Landlord, in
either case (which consent shall not unreasonably be withheld). No safe or other
object whose weight exceeds the lawful load for the area upon which it would
stand shall be brought into or kept upon the Premises other than in accordance
with the preceding sentence. If it is necessary to distribute the concentrated
weight of any safe or heavy object or reinforce the floor, the work involved in
such work shall be done by Tenant at its expense in such manner as Landlord
shall approve (such approval not to be unreasonably withheld). No machines,
machinery or electrical or electronic equipment or appliances of any kind shall
be placed or operated so as to disturb other tenants.
6. No noise, including the playing of any musical instrument, radio
or television which, in the judgment of Landlord, might disturb other tenants in
the Building shall be made or permitted by Tenant. No animal shall be brought on
the Premises, except seeing eye dogs. No dangerous, inflammable, combustible or
explosive object or material shall be brought into or kept in the Building by
Tenant or with the permission of Tenant, except as permitted by law and the
insurance companies insuring the Building or the property therein or except as
is necessary or appropriate for or in connection with Tenant's permitted
activities in the Building. Any cuspidors or containers or receptacles used as
such in the Premises or for garbage or similar refuse shall be emptied, cared
for and cleaned by Tenant.
7. All entrance doors in the Premises shall be kept locked by Tenant
when the Premises are not in use.
2
<PAGE> 1
Exhibit 10.5
DATED 2nd April 1998
(1) JC No. 3 (UK) LIMITED
and FLEET STREET SQUARE
MANAGEMENT LIMITED
trading as FLEET STREET
PARTNERSHIP
(2) GOLDMAN SACHS INTERNATIONAL
(3) RESTAMOVE LIMITED
(4) THE GOLDMAN SACHS GROUP, L.P.
(5) ITOCHU CORPORATION
-------------------------------
AGREEMENT FOR LEASE
relating to the development and
leasing of
120 Fleet Street,
London EC4
-------------------------------
CLIFFORD CHANCE
200 Aldersgate Street
London EC1A 4JJ
Tel: 0171-600 1000
Fax: 0171-600 5555
Ref: AMW/C1536/839/RMRM
Doc. Name: AMW$03L8.07
<PAGE> 2
INDEX
Clause PAGE
1. DEFINITIONS, INTERPRETATION AND CONDITIONALITY ....................... 1
1.1 Definitions ................................................... 1
"1927 Act Notice" ............................................. 1
"Agreement for Lease Measurement Plans" ....................... 2
"Approvals" ................................................... 2
"Base Building" ............................................... 2
"Base Building Architects" .................................... 2
"Base Building Consultants" ................................... 2
"Base Building Contracting Team" .............................. 2
"Base Building Contract" ...................................... 2
"Base Building Contractor" .................................... 3
"Base Building M&E Engineers" ................................. 3
"Base Building Plans" ......................................... 3
"Base Building Project Managers" .............................. 3
"Base Building Quantity Surveyors" ............................ 3
"Base Building Specification" ................................. 3
"Base Building Structural Engineers" .......................... 3
"Base Building Works" ......................................... 3
"Base Rate" ................................................... 4
"Basement to Level 4 Lease" ................................... 4
"Building" .................................................... 4
"Building Systems" ............................................ 4
"Category A Works" ............................................ 4
"CAR Policy" .................................................. 4
"CDM Regulations" ............................................. 4
"Certificate of Completion of Fit Out Works" .................. 4
"Certifying Officer" .......................................... 4
"Code of Measuring Practice" .................................. 5
"Commissioning Engineer" ...................................... 5
"Completion of the Fit Out Works" ............................. 5
"Critical Date" ............................................... 5
"Defects Period" .............................................. 5
"Demised Premises" ............................................ 5
"Demolition Works" ............................................ 5
"Demolition Works Specification" .............................. 5
"Developer's Commitment" ...................................... 6
"Development Site" ............................................ 6
"Development Site Plan" ....................................... 6
"Event of Default" ............................................ 6
"Expert" ...................................................... 7
"Extension Event" ............................................. 7
"Extension Period" ............................................ 7
"Fit Out Building Contractor" ................................. 8
<PAGE> 3
"Fit Out Category A Works" .................................... 8
"Fit Out Category B Works" .................................... 8
"Fit Out Professional Firms" .................................. 8
"Fit Out Quantity Surveyor" ................................... 8
"Fit Out Works" ............................................... 8
"Force Majeure" ............................................... 9
"Group Company" ............................................... 9
"Independent Person" .......................................... 10
"Independent Measurer" ........................................ 11
"Inherent Defect" ............................................. 11
"Initial Rent" ................................................ 11
"Lease" ....................................................... 11
"Lease Insurance Date" ........................................ 11
"Letter of Opinion" ........................................... 12
"Level 5 Lease" ............................................... 12
"Level 6 Lease" ............................................... 12
"Level 7 Lease" ............................................... 12
"Level 8 Lease" ............................................... 12
"Licence for Alterations" ..................................... 12
"Liquidated Damages" .......................................... 12
"Longstop Date" ............................................... 12
"Management Deed" ............................................. 12
"Maximum Damages" ............................................. 12
"Method Statement" ............................................ 12
"Minimum Standard Fitting Out Works" .......................... 13
"Net Internal Area" ........................................... 13
"Planning Permission" ......................................... 13
"Prescribed Interest Rate" .................................... 13
"Professional Appointment" .................................... 13
"Prohibited Materials" ........................................ 14
"Quarter Day" ................................................. 14
"Rent Commencement Date" ...................................... 14
"Retail Unit" ................................................. 14
"Shell & Core Substantial Completion" ......................... 15
"Shell & Core Substantial Completion Date" .................... 15
"Shell & Core Works Certificate" .............................. 15
"Site Regulations" ............................................ 15
"Stage D" ..................................................... 15
"Stage E" ..................................................... 15
"Stage E Design Works" ........................................ 16
"Target Date" ................................................. 16
"Tenant" ...................................................... 16
"Tenant's Delay" .............................................. 16
"Tenant's Proposed Modifications" ............................. 17
"Tenant's Representative" ..................................... 17
"Tenant's Requested Modifications" ............................ 17
"TRM Delay" ................................................... 17
"TRM Specifications" .......................................... 17
<PAGE> 4
"Tunnel Agreement" ............................................ 17
"Warranty" .................................................... 17
"Working Day" ................................................. 18
1.2 Interpretation ................................................ 18
2. CLADDING ............................................................. 19
3. STOPPING UP .......................................................... 19
4. STAGE E .............................................................. 20
4.1 Upgrade to Stage E ............................................ 20
4.2 Key Stage E Design Packages ................................... 21
4.3 Reference to Independent Expert ............................... 23
4.4 Confirmatory Memorandum ....................................... 23
4.5 Risers ........................................................ 24
5. BASE BUILDING WORKS .................................................. 24
5.1 Approvals ..................................................... 24
5.2 Warranties .................................................... 24
5.3 Millennium Compliance ......................................... 25
5.4 Carrying out of Base Building Works ........................... 25
5.5 Method of Completion .......................................... 25
5.6 Expiry of Developer's Liability ............................... 27
5.7 Tenant's release of adjoining property rights ................. 27
5.8 Quantification of Extension Periods ........................... 27
5.9 Developer to hold harmless .................................... 28
5.10 Payment of Connection Charges ................................. 28
6. SITE VISITS AND MEETINGS AND SUPPLY OF INFORMATION ................... 29
6.1 Entry on to Site to view Base Building Works .................. 29
6.2 Opening Up .................................................... 29
6.3 Progress Meetings ............................................. 30
6.4 Provision of Information ...................................... 31
6.5 Documents to be supplied to Tenant ............................ 32
7. BASE BUILDING PROFESSIONAL FIRMS AND BUILDING
CONTRACTOR ........................................................... 33
7.1 Collateral Deeds of Warranty .................................. 33
7.2 Substitute Appointments ....................................... 33
7.3 Developer to procure performance of contracts ................. 34
7.4 Developer not to terminate contracts .......................... 34
7.5 Novation of appointments of Building Consultants .............. 34
7.6 Construction Documentation .................................... 34
8. DEVELOPER'S VARIATIONS TO BASE BUILDING WORKS ........................ 37
8.1 Detailing of' Base Building Works ............................. 37
8.2 Variations required by law etc. ............................... 37
8.3 Variations requiring approval ................................. 38
<PAGE> 5
8.4 Disputes ...................................................... 39
9. TENANT'S REQUESTED MODIFICATIONS ..................................... 40
9.1 Tenant's request for change ................................... 40
9.2 Approval of modifications ..................................... 40
9.3 Preparation of Modification Plans ............................. 42
9.4 Developer's Estimates ......................................... 42
9.5 Tenant's response to Developer's estimates . .................. 43
9.6 Tenant not proceeding with modifications ...................... 44
9.7 Tenant accepting the Developer's Estimate . ................... 44
9.8 TRM Costs ..................................................... 44
9.9 Cost and Time Savings for Tenant's Requested Modifications .... 45
9.10 Developer's handling fee ...................................... 46
9.11 Disputes as to TRM Costs ...................................... 46
9.12 Approvals ..................................................... 46
9.13 Time of the essence ........................................... 46
10. COPYRIGHT ............................................................ 46
10.1 Licence to use drawings etc ................................... 46
10.2 Restrictions on copyright to be observed ...................... 47
10.3 Fit Out Category A Works ...................................... 47
11. BASE BUILDING WORKS - ISSUE OF CERTIFICATES .......................... 47
11.1 Inspections, representations and issue of certificates ........ 47
11.2 Fit Out Architect's Duty of Care Deed ......................... 50
11.3 Certificates under building contracts ......................... 50
11.4 Time of the essence ........................................... 50
12. RIGHT TO RESCIND ..................................................... 50
12.1 Tenant's Rescission Notice .................................... 50
12.2 Tenant's Termination Notice ................................... 51
12.3 Agreed grace periods .......................................... 51
12.4 Developer's Request to Extend Longstop Date ................... 52
12.5 Tenant's request to terminate Agreement ....................... 52
12.6 Time of the essence ........................................... 53
13. COMMISSIONING OF PLANT AND MACHINERY ................................. 53
13.1 Commissioning by Commissioning Engineer ....................... 53
13.2 Testing and representations ................................... 53
13.3 Definition of Testing ......................................... 54
13.4 Parties to co-operate as to testing ........................... 54
13.5 Building Systems .............................................. 54
13.6 Testing after fitting-out and occupation ...................... 54
13.7 Carrying out works prior to commissioning ..................... 55
14. DEFECTS .............................................................. 55
14.1 Making good initial defects ................................... 55
14.2 Making good defects at final completion ....................... 55
<PAGE> 6
14.3 Defects Period ................................................ 55
14.4 Inherent Defects .............................................. 56
14.5 Millennium Compliance rent pay-back ........................... 57
14.6 Maintenance agreements ........................................ 57
14.7 Access by Developer to make good defects ...................... 57
14.8 Damages in respect of a Relevant Defect ....................... 58
14A. FIT OUT WORKS ........................................................ 60
15. FIT OUT PLANS ........................................................ 61
15.1 Preparation of drawings ....................................... 61
15.2 Fit Out Plans/Interface with Building Systems ................. 61
15.3 Detail of Fit Out Plans ....................................... 61
15.4 Restrictions on Fit Out Works ................................. 61
15.5 Documents to be supplied ...................................... 62
15.6 Approval of Fit Out Works ..................................... 62
15.7 Amendment of Fit Out Plans .................................... 63
15.8 Approvals ..................................................... 63
16. ENTRY FOR THE TENANT'S FIT OUT WORKS
AND SUBSEQUENT OCCUPATION ............................................ 63
16.1 Access for Tenant's Fit Out Works ............................. 63
16.2 Design of Fit Out Works ....................................... 63
16.3 Compliance with Site Regulations .............................. 64
16.4 Approval of Fit Out Method Statement .......................... 64
16.5.1 Compliance by Tenant with certain requirements ................ 65
16.5.2 CDM Regulations ............................................... 66
16.6 Observance of Lease covenants ................................. 66
16.7 Developer's right to inspect .................................. 66
16.8 Responsibility for claims ..................................... 66
16.9 Responsibility for delay ...................................... 67
16.10 Collateral Deeds of Warranty .................................. 67
16.11 Early Access .................................................. 67
17. COMPLETION OF TILE FIT OUT WORKS ..................................... 68
17.1 Inspection, representations and issue of certificate .......... 68
17.2 Certificate to be binding ..................................... 69
17.3 Failure to complete Fit Out Category A Works .................. 69
18. ANCILLARY PROVISIONS AS TO TENANT'S FIT OUT WORKS .................... 69
18.1 Documents to be supplied ...................................... 69
18.2 Tenant's indemnity ............................................ 70
19. ENTRY BY THE DEVELOPER AFTER THE SHELL & CORE
SUBSTANTIAL COMPLETION DATE .......................................... 70
20. DEVELOPER'S FIT OUT WORKS ............................................ 71
20.1 Developer's Fit Out Works ..................................... 71
<PAGE> 7
20.2 Developer's Cap not reached ................................... 72
21. AGREEMENT AS TO OPERATION OF LANDLORD
AND TENANT ACT 1927 .................................................. 73
21.1 Effect of Service of 1927 Act Notice .......................... 73
21.2 Disputes as to Cost ........................................... 73
22. INSURANCE ............................................................ 73
22.1 Insurance of Base Building Works .............................. 73
22.2 Destruction of Base Building Works/Developer's Fit Out Works .. 74
22.3 Fit Out Works - notification of reinstatement cost ............ 74
22.4 Insurance of Fit Out Works .................................... 75
22.5 Frustration of re-instatement ................................. 75
22.6 Fit Out Works insurance cost .................................. 75
22.7 Production and inspection of insurance policies ............... 76
23. MEASUREMENT, GRANT OF LEASES, RENT AND OTHER TERMS ................... 76
23.1 Joint Measurement ............................................. 76
23.2 Grant of Leases ............................................... 77
23.3 Calculation of rent and commencement date ..................... 77
23.4 Licence fees pending grant of Lease ........................... 80
23.5 Retail Unit ................................................... 80
23.6 Extension of Rent Commencement Date ........................... 82
23.7 Letter of Opinion ............................................. 82
24. TITLE ................................................................ 82
24.1 Title deduced ................................................. 82
24.2 Developer's Land Certificate to be put on deposit ............. 83
25. CONDITIONS AFFECTING THE GRANT OF THE LEASES ......................... 83
25.1 Leases granted subject to certain matters ..................... 83
25.2 Variations to plans ........................................... 84
25.3 No representations ............................................ 84
25.4 All terms incorporated ........................................ 84
26. EVENT OF DEFAULT ..................................................... 85
26.1 Circumstances giving rise to an Event of Default .............. 85
26.2 Right to determine ............................................ 86
26.3 Repayments .................................................... 86
27. CAPITAL ALLOWANCES ................................................... 86
27.1 Allocation .................................................... 86
27.2 The Contributor's entitlement to capital allowances ........... 87
27.3 The Contributee's claim for capital allowances ................ 87
28. VAT .................................................................. 88
28.1 Definitions ................................................... 88
28.2 All sums exclusive of VAT ..................................... 89
<PAGE> 8
28.3 VAT on supplies ............................................... 89
28.4 Repayment of amounts .......................................... 89
28.5 Reimbursements and VAT ........................................ 90
29. GUARANTEE OF PERFORMANCE OF TENANT'S OBLIGATIONS ..................... 90
29.1 Covenants by Tenant's Surety .................................. 90
29.2 Successor Tenant's Surety ..................................... 91
30. GUARANTEE OF PERFORMANCE OF DEVELOPER'S OBLIGATIONS .................. 92
31. CONFIDENTIALITY PROVISIONS ........................................... 93
31.1 Non-disclosure ................................................ 93
31.2 Notification of permitted Disclosures ......................... 93
31.3 Non-disclosure period ......................................... 94
31.4 Exceptions .................................................... 94
32. DISPUTES ............................................................. 94
32.1 Determination by an Independent Person ........................ 94
32.2 Appointment of Independent Person ............................. 94
32.3 New appointments .............................................. 94
32.4 Power of Independent Person to bring in specialist advice ..... 94
32.5 Arbitration ................................................... 95
32.6 Expert ........................................................ 95
32.7 Independent Person to determine delays ........................ 96
33. NOTICES .............................................................. 96
33.1 Meaning of "Address" .......................................... 96
33.2 Delivery of Notices ........................................... 96
33.3 Addresses for Notices ......................................... 96
34. SENIOR MANAGERS AND TENANT'S AGENTS' AUTHORITY ....................... 97
34.1 Designation of Senior Managers ................................ 97
34.2 Initial designation ........................................... 97
34.3 Ability to rely upon Senior Managers .......................... 97
34.4 Ability to change designation ................................. 97
35. CONTINUANCE AND NON-MERGER ........................................... 97
36. NO ASSIGNMENT/PERSONAL OBLIGATIONS ................................... 98
36.1 Tenant's interest personal .................................... 98
36.2 Developer's interest personal ................................. 98
36.3 Implied covenants excluded .................................... 98
36.4 Novation of obligations to ITOCHU ............................. 99
37. EXCLUSION OF DEVELOPER'S LIABILITY ................................... 99
37.1 No liability beyond this Agreement ............................ 99
37.2 No liability for consequential loss ........................... 99
<PAGE> 9
38. GENERAL PROVISIONS ................................................... 99
38.1 Interest on late payments ..................................... 99
38.2 Invalidity of certain provisions .............................. 99
38.3 Proper Law and Jurisdiction ................................... 100
38.4 Immunity from Suit ............................................ 100
38.5 Examination by Tenant ......................................... 100
38.6 Key Man Requirements .......................................... 100
38.7 Shoe Lane Protocol ............................................ 101
39. TUNNEL AND BRIDGES ................................................... 101
40. DEFERRAL OF PAYMENTS ................................................. 102
<PAGE> 10
INDEX OF ANNEXURES AND EXHIBITS
<TABLE>
<CAPTION>
ANNEXURE CLAUSE REFERENCE
<S> <C>
1. Basement to Level 4 Lease
2. Level 5 Lease
3. Level 6 Lease
4. Level 7 Lease
5. Level 8 Lease
6. Management Deed
7. Licence for alterations
8. Base Building Specification and Plans "Base Building Speciflcation"
"Base Building Plans"
9. Development Site Plan "Building" and
"Development Site Plan"
10. Agreement for Lease Measurement Plans "Agreement for Lease
Measurement Plans"
11. Critical Dates "Critical Dates"
12. Demolition Works Specification "Demolition Works
Specification"
13. Minimum Standard Fitting Out Works Specification "Minimum Standard Fitting
Out Works"
14. Base Building Architects Appointment and Warranty Clause 7.1.1
15. Base Building M&E Engineer Appointment and Warranty Clause 7.1.2
16. Base Building Structural Engineer Appointment and Warranty Clause 7.1.3
17. Base Building Contract and Contractor's Warranty Clause 7.1.5
18. Tenant's Proposed Modifications Clause 9.2.3
19. Letter of Opinion Clause 23.7
20. Novation Deed Clause 36.4
21. Shoe Lane Protocol Clause 38.7
</TABLE>
<PAGE> 11
<TABLE>
<S> <C>
22. Stopping Up Plan Clause 3
23. Tunnel Agreement Clause 39
24. Risers Plan Clause 4.6
</TABLE>
<PAGE> 12
THIS AGREEMENT is made as a deed the 2nd day of April One thousand nine hundred
and ninety-eight
BETWEEN:--
(1) JC No. 3 (UK) LIMITED and FLEET STREET SQUARE MANAGEMENT LIMITED trading as
FLEET STREET PARTNERSHIP ("THE DEVELOPER") BOTH OF 76 SHOE LANE, London
EC4A 3JB
(2) GOLDMAN SACHS INTERNATIONAL ("GSI" which expression shall be deemed to
include its successors in title) of Peterborough Court, 133 Fleet Street,
London EC4A 2BB;
(3) RESTAMOVE LIMITED (Company Registration Number 01429809) ("Levels 5-8
TENANT") which expression shall be deemed to include its successors in
title) whose registered office is at Peterborough Court, 133 Fleet Street,
London EC4A 2BB;
(4) THE GOLDMAN SACHS GROUP L.P. of 85 Broad Street New York New York 10004
("THE TENANT'S SURETY");
(8) ITOCHU CORPORATION ("ITOCHU") of 5-1, Kita-Aoyama 2-chome, Minato-ku, Tokyo
107-8077, Japan.
WHEREBY IT IS AGREED as follows:-
1. DEFINITIONS, INTERPRETATION AND CONDITIONALITY
1.1 DEFINITIONS
In this Agreement unless the context requires otherwise the following words
and expressions shall have the meanings respectively ascribed to them:--
"1927 ACT NOTICE" means a notice served by the Tenant pursuant to Section 3
of the Landlord and Tenant Act 1927 and as specified in Clause 21
"AFFILIATE" of any specified person means any other person directly or
indirectly controlled or controlled by or under common control with such
specified person (for the purposes of this paragraph "control" (including
"control by" or under "common control with") shall mean the power to direct
management and policies directly or indirectly whether through the
ownership of voting securities or equity interests by contract or
otherwise);
- 1 -
<PAGE> 13
"AGREEMENT FOR LEASE MEASUREMENT PLANS" are the plans annexed hereto and
entitled as such at ANNEXURE 10
"APPROVALS" means the Planning Permission, listed building consent and all
other consents, licences, permissions and approvals of any local or other
competent authority which may from time to time be necessary to enable the
Developer or the Tenant lawfully to commence and thereafter carry out the
Base Building Works or the Fit Out Works (as appropriate) (together with
any conditions respectively thereof) including, if the same are destroyed
or damaged, the reinstatement of the Base Building Works or the Fit Out
Works (as appropriate) and any other approvals whether of a public or
private nature which may be required including any projection licences for
highway overhangs and the term "APPROVAL" shall be construed accordingly
"ASSOCIATED COMPANY" means a company corporation or partnership which is a
subsidiary or Affiliate of another and a company corporation or partnership
shall be taken to be associated if both are subsidiaries or Affiliates of a
third company corporation or partnership
"BASE BUILDING" means subject to the provisions of this Agreement the
building described in the Base Building Specification and the Base Building
Plans but (for the avoidance of doubt otherwise than as provided for in
Clause 39.4 hereof) excluding the Bridge Works (as defined in the Bridges
Agreement) and the Tunnel Works (as defined in the Tunnel Agreement)
"BASE BUILDING ARCHITECTS" means Hurley Robertson & Associates of 146
Grosvenor Road London SW1V 3JY or such other firm of architects as shall
with the approval of the Tenant (such approval not to be unreasonably
withheld) be appointed by the Developer
"BASE BUILDING CONSULTANTS" means the Base Building Architects, the
Certifying Officer, the Base Building Project Managers, the Base Building
Quantity Surveyors, the Base Building Structural Engineers and the Base
Building M&E Engineers
"BASE BUILDING CONTRACTING TEAM" means the Base Building Contractor and the
sub-contractors with material design responsibilities appointed by the Base
Building Contractor to carry out the Base Building Works (or any part
thereof)
"BASE BUILDING CONTRACT" means the contract entered into by the Developer
in accordance with Clause 7.6.2 providing for the execution of the Base
Building Works as the same may be amended or modified from time to time in
accordance with this Agreement
- 2 -
<PAGE> 14
"BASE BUILDING CONTRACTOR" means Kajima U.K. Engineering Limited and Taylor
Woodrow Construction Limited acting in joint venture or an alternative
building contractor appointed with the approval of the Tenant (such
approval not to be unreasonably withheld) from time to time
"BASE BUILDING M&E ENGINEERS" means Ove Arup & Partners, Consulting
Engineers, of 13 Fitzroy Street London W1P 6BQ or such other firm of
mechanical and electrical engineers as shall with the approval of the
Tenant (such approval not to be unreasonably withheld subject to Clause
7.2.2) be appointed by the Developer
"BASE BUILDING PLANS" means subject to the provisions of this Agreement the
Base Building Plans as annexed hereto identified in ANNEXURE 8 and all
other plans drawings and specifications for the Base Building Works (as the
same may be updated or varied in accordance with this Agreement from time
to time)
"BASE BUILDING PROJECT MANAGERS" means Gleeds Management Services of 123
Regent Street London W1R 8TB or such other firm as shall with the approval
of the Tenant (such approval not to be unreasonably withheld subject to
Clause 7.2.2) be appointed by the Developer
"BASE BUILDING QUANTITY SURVEYORS" means Gleeds of 123 Regent Street London
W1R 8TB or such other firm of quantity surveyors as shall with the approval
of the Tenant (such approval not to be unreasonably withheld subject to
Clause 7.2.2) be appointed by the Developer
"BASE BUILDING SPECIFICATION" means subject to the provisions of this
Agreement the specification for the Base Building as described in the
document entitled "Base Building Specification" (including the agreed
amendment schedule) (as the same may be updated or varied in accordance
with this Agreement from time to time) at ANNEXURE 8
"BASE BUILDING STRUCTURAL ENGINEERS" means Ove Arup & Partners, Consulting
Engineers, of 13 Fitzroy Street London W1P 6BQ or such other firm of
structural engineers as shall with the approval of the Tenant (such
approval not to be unreasonably withheld subject to Clause 7.2.2) be
appointed by the Developer
"BASE BUILDING WORKS" means the aggregate of the Demolition Works and the
construction of the Base Building in accordance with the Base Building
Specification and the Base Building Plans (but excluding (for the avoidance
of doubt otherwise than as provided for in Clause 39.4) the Bridge Works
(as defined in the Bridge Agreement) and the Tunnel Works
- 3 -
<PAGE> 15
(as defined in the Tunnel Agreement) and omitting the Category A Works but
including any Tenant's Requested Modifications which are to be carried out
by the Developer pursuant to Clause 9) as the same may be varied from time
to time under Clause 8
"BASE RATE" means the base rate for the time being of Midland Bank PLC or
some other London Clearing Bank nominated from time to time by the
Developer, or in the event of such base rate ceasing to exist, such other
comparable rate of interest as the Developer shall reasonably specify
"BASEMENT TO LEVEL 4 LEASE" means the draft lease annexed hereto as
ANNEXURE 1
"BRIDGES AGREEMENT" means an agreement substantially in the form of the
Tunnel Agreement with such amendments as may be approved by the Developer
(such approval not to be unreasonably withheld) and in the event of dispute
as shall be determined by the Independent Person
"BUILDING" means the building to be known as 120 Fleet Street, London EC4
and situate within the red edging on the Development Site Plan and (for the
avoidance of doubt excluding the proposed bridges and tunnel which may
connect the Building to Peterborough Court, 133 Fleet Street London)
"BUILDING SYSTEMS" means the mechanical, electrical, sanitary, heating,
ventilating, life safety, air conditioning, fire or other systems in the
Building
"CATEGORY A WORKS" means the works described in the Minimum Standard
Fitting Out Works Specification (these being works which the Developer will
be omitting from the Base Building Works with the intention that such works
will be replaced by works comprised within the Fit Out Category A Works)
"CAR POLICY" means the Building Contractor's all risks policy as revised
from time to time
"CDM REGULATIONS" means the Construction (Design and Management)
Regulations 1994
"CERTIFICATE OF COMPLETION OF FIT OUT WORKS" means the certificate to be
issued by the Fit Out Architect in accordance with Clause 17 signifying
that Completion of the Fit Out Works has occurred
"CERTIFYING OFFICER" means Andrew Matthewman of Gleeds (or such other
person as the Developer shall from time to time appoint with the approval
of the Tenant such approval
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not to be unreasonably withheld subject to Clause 7.2.2 as employer's agent
or contract administrator or other person having responsibility for
certification of practical completion or the giving of a written statement
of practical completion or a certificate of completion or any analogous
certification under any Base Building Contract and/or this Agreement)
"CODE OF MEASURING PRACTICE" means the Code of Measuring Practice prepared
by the Royal Institution of Chartered Surveyors and the Incorporated
Society of Valuers and Auctioneers (Fourth Edition dated November 1993)
"COMMISSIONING ENGINEER" means the commissioning engineer to be appointed
by the Developer or the Base Building Contractor (with the approval of the
Tenant such approval not to be unreasonably withheld) to commission the
plant and machinery the supply or fixing of which is included in the Base
Building Works and the Developer's Fit Out Works and which the Tenant shall
also simultaneously appoint to perform the same function in relation to the
Tenant's Fit Out Works in accordance with the provisions of and to carry
out the functions referred to in Clause 13
"COMPLETION OF THE FIT OUT WORKS" means the practical completion of the Fit
Out Works as certified by the Fit Out Architect
"CRITICAL DATE" means in respect of various categories of Works the later
of (a) the relevant date identified in the Schedule of Critical Dates at
ANNEXURE 11 and (b) five (5) Working Days after the date when Full Details
in respect of the relevant category of Works have first been provided to
the Tenant in accordance with Clause 4.1.2
"DEFECTS PERIOD" means the period or periods determined in accordance with
the provisions of Clause 14
"DEMISED PREMISES" means the totality of the premises to be demised by the
Leases (subject to revision in accordance with the provisions of Clause
25.2)
"DEMOLITION WORKS" means the works of demolition described in the
Demolition Works Specification
"DEMOLITION WORKS SPECIFICATION" means the specification with that title
attached as ANNEXURE 12
"DEVELOPER'S CAP" shall be determined in accordance with the following:
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DC = Eighteen million two hundred and eighty eight thousand three hundred
pounds (Pounds Sterling 18,288,300) + TRMS - TRMC - NI
Where:
DC means the Developer's Cap;
TRMS means the aggregate amount of all cost savings agreed or determined in
accordance with Clause 9.9.1 less the aggregate of (i) the amount of
any such cost saving paid to the Tenant in accordance with that Clause
and (ii) the amount of any such cost saving in respect of which an
election is made by the Tenant in accordance with Clause 9.9.2;
TRMC means the aggregate of all TRM Costs actually incurred or suffered by
the Developer together with notional interest thereon (which shall be
compounded quarterly) at 9.5% per annum from the date each element of
TRM Cost is incurred or suffered until 15 November 2000; and
NI means notional interest (which shall be compounded quarterly) at 9.5%
per annum from the date each payment is made to GSPM under clause 5.6
of the Procurement Contract until the date which is nine (9) months
after Shell and Core Substantial Completion
and reduced from time to time in accordance with Clause 20.1B;
"DEVELOPER'S COMMITMENT" means Twelve million one hundred and nine thousand
three hundred and twenty four pounds (Pounds Sterling) 12,109,324) as
reduced from time to time in accordance with Clause 20.1A
"DEVELOPER'S FIT OUT WORKS" shall have the meaning set out in the
Procurement Contract
"DEVELOPER'S PROGRAMME" means the programme for the design and construction
of the Base Building Works annexed hereto as updated by the Developer and
notified to the Tenant from time to time in accordance with this Agreement
"DEVELOPMENT SITE" means the area shown edged red on the Development Site
Plan
"DEVELOPMENT SITE PLAN" means the plan with that title annexed to this
Agreement at ANNEXURE 9
"EVENT OF DEFAULT" shall have the meaning set out in Clause 26
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"EXPERT" means an Independent Person acting as an expert pursuant to Clause
32.6
"EXTENSION EVENT" means the events, matters and occurrences set out in the
definition of "Extension Period"
"EXTENSION PERIOD" means the overall period of delay to the Base Building
Works actually incurred as a result of any of the following:-
(A) any extensions of time properly awarded under any Base Building
Contract;
(B) Force Majeure; or
(C) the carrying out by a local authority, statutory undertaker, or
utility company of work in pursuance of its statutory obligations
affecting any work to be carried out in connection with the
Development or the failure to carry out such work or (where there is a
change in law or regulations) any requirement of any such
organisations or bodies for design or specification changes or the
taking down of works which have already been carried out;
(D) any material variation to the design of the Building required as a
result of the failure to have stopped-up pursuant to an Order granted
under section 246 of the Town and Country Planning Act 1990 the land
shown hatched black on the plan forming ANNEXURE 22
(E) the insolvency of the Base Building Contractor or the Base Building
Architects or the Base Building Project Managers or the Base Building
Quantity Surveyors or the Base Building Structural Engineers or the
Base Building M&E Engineers (but not due to any negligent act or
omission caused by negligence of the Developer or any failure of the
Developer to pay such persons); and
(F) Tenant's Delay;
as agreed or determined in accordance with Clause 5.8.3 Provided That (a)
for the avoidance of doubt when calculating the overall period of any delay
for the purposes of this Agreement there shall also be included any period
or periods of delay consequential upon any of the above-mentioned events
and (b) there shall be no double counting of any such periods of delay
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"FIT OUT ARCHITECT" means T.P. Bennett Partnership of 262 High Holborn
London WC1V 7DU or such other firm of architects as shall with the approval
of the Developer (such approval not to be unreasonably withheld) be
appointed by or on behalf of the Tenant or any Group Company
"FIT OUT BUILDING CONTRACTOR" means the main building contractor,
management contractor or construction manager as the case may be and
appointed in or on behalf of the Tenant or any Group Company in connection
with the carrying out of the Fit Out Works (in the case of the Tenant's Fit
Out Works, with the prior written approval of the Developer such approval
not to be unreasonably withheld or delayed provided that such approval
shall be given within 10 Working Days of a written request or any objection
notified within such time limit and any failure to respond shall mean that
the Developer is deemed to have accepted such appointment)
"FIT OUT CATEGORY A WORKS" means the works of completing the installation
connection and commissioning of services to and the initial fitting out of
the Demised Premises to the extent necessary to render the Demised Premises
suitable and ready for occupation for the use permitted by the Lease and
shall comprise the Minimum Standard Fitting Out Works or such other works
in substitution therefor as approved by the Developer pursuant to Clause
15.6
"FIT OUT CATEGORY B WORKS" means the works (if any) (in addition to the Fit
Out Category A Works) which are undertaken for the purposes of the fitting
out of the Demised Premises and which are approved in accordance with the
provisions of this Agreement
"FIT OUT PLANS" shall have the meaning ascribed to them in Clause 15.2
"FIT OUT PROFESSIONAL FIRMS" mean the architects, quantity surveyors,
engineers and other professionals or sub-contractors providing services or
advice to the Tenant or any Group Company acting on its behalf in or about
the Fit Out Works
"FIT OUT QUANTITY SURVEYOR" means Bernard Williams Associates of King's
House 32-40 Widmore Road Bromley Kent BR1 1RY or such other firm of
quantity surveyors as may from time to time be appointed in respect of the
Fit Out Works
"FIT OUT WORKS" means collectively the Fit Out Category A Works and (if
any) the Fit Out 03 Category B Works or any of them as the context so
requires
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"FORCE MAJEURE" means any of fire, storm, tempest, other extreme adverse
weather conditions, war, hostilities, rebellion, revolution, insurrection,
military or usurped power, civil war, national strikes, riot, terrorist
action, commotion, disorder, decree of government, non availability of
labour, materials or equipment (to the extent the same are not readily
obtainable elsewhere) and (without prejudice to the generality of the
foregoing) any other cause or circumstances which are beyond the
Developer's reasonable control and which adversely affects the performance
by the Developer or anyone acting on its behalf of the terms and provisions
of this Agreement
Provided that each and every such cause or circumstance shall only count to
the extent that it:-
(i) adversely affects the performance of the Developer or anyone acting
on its behalf in relation to the terms and provisions of this
Agreement; and
(ii) cannot reasonably be avoided or provided against by the Developer
and/or the Base Building Consultants and/or the Base Building
Contracting Team without any undue cost; and
(iii) is not due to the wilful or deliberate act default or negligent act
or omission of the Developer
"FULL DETAILS" means the level of design detail which in the proper opinion
of the Base Building Architect is required to achieve Stage E together with
as incidental thereto such calculations drawings specifications and other
information as have been made available to the Developer as part of the
Stage E Detail Design
"GROUP COMPANY" means:
(i) in relation to the Developer any company which is for the time being:-
(a) a subsidiary of the Developer or
(b) the holding company or parent company of the Developer or
(c) another subsidiary of the holding company or parent company of
the Developer (whether or not that subsidiary may itself be a
parent or holding company of a sub-group of companies within the
whole group),
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<PAGE> 21
in each case within the meaning of Sections 258, 259 and 736 of the
Companies Act 1985, as amended by the Companies Act 1989; and
(ii) in relation to the Tenant any company within the same group of
companies as the Tenant as set out below:-
(a) any two companies shall be taken to be members of a group if one
is the subsidiary of the other or both are subsidiaries of a
third company;
(b) In determining whether any company is a subsidiary of another
company the word subsidiary bears the meaning assigned to it by
Section 736 of the Companies Act 1985 as originally enacted;
(c) In determining whether any corporation (which shall be construed
in accordance with Section 740 of the Companies Act 1985 as
originally enacted) is a subsidiary of another corporation or of
a company or whether any company is a subsidiary of a corporation
the word subsidiary bears the meaning assigned to it by section
736 of the Companies Act 1985 as originally enacted but modified
only so that `company' includes `corporation' for this purpose;
(d) A partnership (which shall be construed as including a
partnership under the laws of the United Kingdom or elsewhere)
shall be taken to be a subsidiary of another partnership or of a
company or corporation if that other partnership or company or
corporation is entitled to more than one half of the assets or
more than one half of the income of the first mentioned
partnership;
(e) A company or corporation shall be deemed to be a subsidiary of a
partnership if that partnership controls the composition of the
board of directors of the company or corporation or holds more
than half in nominal value of the issued equity share capital of
the company or corporation;
"GSPM" means Goldman Sachs Property Management
"INDEPENDENT PERSON" means the independent person appointed to act as
specified in Clause 32.5 or Clause 32.6 (as applicable)
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<PAGE> 22
"INDEPENDENT MEASURER" means Plowman Craven Associates of 141 Lower Luton
Road Batford Harpenden Herts AL5 5EQ or such other firm with expertise in
measuring floors in buildings of a nature similar to the Building as the
parties may agree (or as may in default of agreement be nominated by the
President for the time being of the Royal Institute of Chartered Surveyors
as (or his deputy) on the application of any party);
"INHERENT DEFECT" means any latent or inherent defect attributable to
breach of the Developer's warranty in Clause 5.5 and/or present in the Base
Building Works as originally designed and/or constructed and/or varied by
Tenant's Proposed Modifications or Tenant's Requested Modifications and
which is attributable to or connected with the design workmanship tests
investigation or supervision of the Base Building Works (varied as
aforesaid) or attributable to the materials used therein having been
defective inadequate unsuitable or incomplete or otherwise substandard or
is an occurrence of damage or disrepair caused by or consequent on any such
defect judged in accordance with the standards of professional practice and
any codes of practice usual (in the case of design) at the time when the
relevant part of the Base Building Works (varied as aforesaid) was designed
and usual (in the case of workmanship) at the time when the relevant work
was done but (in the case of design subject further as provided in Clause
5.5.2 and in each case) to the extent only in all cases that any defect is
not caused or aggravated (whether directly or indirectly) by failure by the
Tenant (in circumstances where the Tenant knew or ought reasonably to have
known of the relevant defect) to comply (or procure compliance by others)
with its obligations in this Agreement or any relevant Lease or any
documents ancillary or supplemental to any of them or (where the defect has
come to the attention of the Tenant) any unreasonable actions or omissions
or works which the Tenant or any undertenant or other occupiers or licensee
(or persons acting for or on behalf or any of them or under their control)
may do or make or carry out
"INITIAL RENT" shall have the meaning ascribed thereto in the Leases and in
respect of each Lease shall be the relevant amount specified in Clause 23.3
"LEASE" means any one (as the context shall admit) of the leases comprising
the Basement to Level 4 Lease, Level 5 Lease, Level 6 Lease, Level 7 Lease
and Level 8 Lease as the case may be (with such additions or amendments as
are provided for in this Agreement) to be granted to the Tenant on the
terms prescribed by Clause 23 and "Leases" shall be construed accordingly
"LEASE INSURANCE DATE" means the date of completion of the grant of the
Lease
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<PAGE> 23
"LETTER OF OPINION" means a letter of opinion in the form of the draft
annexed as ANNEXURE 19 but amended so as to relate to the Leases the
Licence for Alterations the Management Deed the Bridges Agreement and the
Tunnel Agreement at the time of their respective grants
"LEVEL 5 LEASE" means the draft lease annexed hereto as ANNEXURE 2
"LEVEL 6 LEASE" means the draft lease annexed hereto as ANNEXURE 3
"LEVEL 7 LEASE" means the draft lease annexed hereto as ANNEXURE 4
"LEVEL 8 LEASE" means the draft lease annexed hereto as ANNEXURE 5
"LICENCE FOR ALTERATIONS" mean the licence regulating and approving the
manner of execution of the Tenant's Fit Out Works in the form of the draft
annexed as ANNEXURE 7
"LIQUIDATED DAMAGES" means liquidated and ascertained damages payable at
the rate of one hundred thousand pounds (Pounds Sterling 100,000) per week
and pro rata for any part of a week
"LONGSTOP DATE" means (subject to postponement by the number of days of any
Tenant's Delay) 25 December 2003
"MANAGEMENT DEED" means the management deed in the form of the draft
annexed as ANNEXURE 6
"MAXIMUM DAMAGES" means a total of Liquidated Damages not to exceed five
million two hundred thousand pounds (Pounds Sterling 5,200,000)
"METHOD STATEMENT" means the method statement to be provided by the Tenant
in accordance with Clause 16.4
"MILLENNIUM COMPLIANT" means the ability of plant machinery and equipment
and related computer systems and/or related hardware and/or software to
provide those of the following functions to the levels which are required
in order properly to operate the Base Building for the period up to and
including 1 January 2001:-
(a) handle date information before, during and after January 1, 2000,
including, but not limited to, accepting date input, providing date
output taking account of leap years after 1999 and performing
calculations on dates or portions of dates;
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<PAGE> 24
(b) function accurately and without interruption before, during and after
January 1, 2000, without any change in operations associated with the
advent of the year 2000 and the new century
"MINIMUM STANDARD FITTING OUT WORKS" means the works described in the
specification annexed to this Agreement as ANNEXURE 13 and entitled
"Minimum Standard Fitting Out Works Specification"
"NET INTERNAL AREA" means the net internal area expressed in square feet
and square metres (but so that for the avoidance of doubt all figures
relating to rent appearing in or to be calculated pursuant to this
Agreement shall relate to square feet and not square metres) of those parts
of the Demised Premises shown edged red on the Agreement for Lease
Measurement Plans and measured for the purposes of ascertaining the Initial
Rent under each of the Leases in accordance with the Code of Measuring
Practice but so that notwithstanding the provisions of the Code of
Measuring Practice the areas shown cross-hatched red or cross-hatched
yellow or cross-hatched blue or cross-hatched green on the Measurement
Plans and the risers referred to in Clause 4.5 shall in any event be deemed
to constitute Net Internal Area for the purposes of this Agreement and for
the avoidance of doubt in the case of conflict between:-
(a) this definition; and
(b) the application of the said code;
the former shall prevail provided that the storage areas comprised in any
set of Demised Premises shall, if not counted as Net Internal Area for the
purposes of the Code of Measuring Practice, be measured in accordance with
surveyors' normal practice for such areas and shall also be included in the
calculation of the Initial Rent
"PLANNING PERMISSION" means the permission granted on the 9 December 1997
by the Corporation of London under reference number P30926
"PRESCRIBED INTEREST RATE" means two per cent (2%) per annum above Base
Rate
"PROCUREMENT CONTRACT" means the contract of even date herewith for the
carrying out by GSPM on behalf of the Developer of certain elements of the
Fit Out Works
"PROFESSIONAL APPOINTMENT" means the appointment by the Developer of each
of the Base Building Consultants which in the case of those known of at the
date hereof shall be
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<PAGE> 25
materially in the form of the respective consultancy appointments annexed
hereto and in all other cases as provided for in Clause 7.6.1
"PROHIBITED MATERIALS" means:-
(a) any materials where it is known at the time the Base Building Works
are being carried out that such materials might in themselves or as a
result of the manner of their use pose a hazard to health and in
particular to the health of the personnel involved in the construction
or maintenance of the Development or to the eventual occupants
thereof;
(b) any materials which are notified by the Tenant to the Developer prior
to commencement of construction of the Base Building Works as being
prohibited in relation to the Base Building Works and which at the
time the Base Building Works are being carried out are generally
accepted of:-
(i) being deleterious in themselves;
(ii) becoming deleterious when used in a particular situation or in
combination with other materials;
(iii) becoming deleterious with passage of time;
(iv) becoming deleterious as a result of poor workmanship during
construction;
(v) being damaged by or causing damage to the structure in which
they are incorporated or to which they are affixed;
"QUARTER DAY" means each of the 25th day of March, 24th day of June, 29th
day of September and 25th day of December in any year
"RENT COMMENCEMENT DATE" means (subject as set out in Clause 23.3.8) the
date specified in Clause 23.3 (as extended if appropriate pursuant to
Clause 23.6)
"RETAIL UNIT" means the retail accommodation at lower ground and ground
floor levels shown edged and hatched brown on the Measurement Plans
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<PAGE> 26
"SHELL & CORE SUBSTANTIAL COMPLETION" means the practical completion of the
Base Building (save for any openings in the external envelope provided for
in the Base Building Specification or requested as Tenant's Requested
Modifications and save for any items of the Base Building Works which
remain incomplete with the approval of or at the request of the Tenant or
by reason of hoisting or site and other like facilities made available to
the Tenant as requested or approved by the Tenant such approval not to be
unreasonably withheld and excluding the Retail Unit (save for the shell
thereof)) and the installation of the utilities and all facilities, systems
and services of the Base Building which are comprised within the Base
Building Definition all as certified by the Certifying Officer or agreed or
determined in accordance with Clause 11 subject to such matters as are
included in any snagging list Provided that (save as requested or approved
by the Tenant as aforesaid) none of the matters left outstanding (whether
individually or cumulatively) are of such consequence as to prevent or be
reasonably likely to prevent the commencement and/or continuation and/or
completion of the Fit Out Works in a reasonably programmed orderly and
continuous manner without material interruption obstruction interference or
restriction beyond that resulting from the usual making good of snagging
items and defects
"SHELL & CORE SUBSTANTIAL COMPLETION DATE" means the date of completion of
the construction of the works referred to in the Shell & Core Substantial
Completion definition as certified or agreed or determined in accordance
with Clause 11
"SHELL & CORE WORKS CERTIFICATE" means the certificate evidencing Shell &
Core Substantial Completion issued in accordance with this Agreement
"SHOE LANE PROTOCOL" means the protocol annexed to this Agreement as
ANNEXURE 21
"SITE REGULATIONS" means such reasonable regulations as may be promulgated
by or on behalf of the Developer from time to time for the efficient
running of the Development Site Provided that such regulations shall not
prevent the commencement, continuation and completion of the Fit Out Works
in accordance with the provisions of this Agreement in a reasonably
programmed orderly and continuous manner without material interruption
obstruction or restriction
"STAGE D" means Stage D Scheme Design as described in paragraph 01 of Stage
D Scheme Design in Schedule 2 of the Standard Form of Agreement for the
Appointment of an Architect SFA/92, 1996 Revision
"STAGE E" means in relation to services to be carried out by the Base
Building Architects Stage E Detail Design as described in paragraph 01 of
Stage E Detail Design in Schedule 2
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<PAGE> 27
of the Standard Form of Agreement for the Appointment of an Architect
SFA/92, 1996 Revision and in relation to other services to be performed by
other members of the Base Building Consultants means in the proper opinion
of the Base Building Architects design to an equivalent level of detail
"STAGE E DESIGN WORKS" means the design works necessary in order to achieve
Stage E
"STAGE E DRAWINGS AND SPECIFICATIONS" means the drawings and specifications
required to take the Base Building Plans and Base Building Specification to
Stage E
"TARGET DATE" means (subject to postponement day for day by any Extension
Period) 24 June 2000
"TENANT" means together GSI and the Level 5-8 Tenant and any obligation on
the part of the Tenant shall be a joint and several obligation of each of
them unless otherwise expressly stated in this Agreement
"TENANT'S DELAY" means any actual delay to the Base Building Works or any
part or item of them to the extent that it arises out of any act or
omission or requirement of the Tenant or the Tenant's Consultants or its
agents, servants or contractors or other event for which the Tenant or
those acting on its behalf is or are directly or indirectly responsible
including delays resulting from and properly attributable to any
circumstances (or any combination of circumstances) including but not
limited to the following:-
(i) any express request by the Tenant that the Developer delay the
preparation for, commencement or completion of any work comprising
any part of the Base Building Works for any reason (or any
requirement for delay resulting from such request);
(ii) any TRM Delay or delay which pursuant to the Bridges Agreement or
Tunnel Agreement is deemed the equivalent of a TRM Delay or Tenant
Delay;
(iii) any breach by the Tenant of any of the terms of this Agreement; or
(iv) any other delay expressly specified or referred to in this Agreement
as a Tenant's Delay
and so that for the avoidance of doubt (a) in calculating the overall
period of any Tenant's Delay there shall also be included the full amount
of any period or periods of delay
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<PAGE> 28
consequential on any delays caused by any (or any combination) of the above
events and (b) there shall be no double counting of any such periods of
delay but so that in calculating any Tenant's Delay regard shall be had to
the Developer's Programme
"TENANT'S FIT OUT WORKS" shall have the meaning set out in the Procurement
Contract;
"TENANT'S PROPOSED MODIFICATIONS" means the Tenant's proposed modifications
to the Base Building Works which have already been submitted to the
Developer by the Tenant and which the parties have agreed shall be treated
as having formed the subject of a TRM Application and which are detailed in
the Schedule marked "Tenant's Proposed Modifications" annexed as ANNEXURE
18
"TENANT'S REPRESENTATIVE" means the Fit Out Architect or such other firm of
architects as the Tenant may from time to time procure GSPM to appoint in
writing (but so that there shall never be more than one Fit Out
Representative at any one time) with the approval of the Developer (such
approval not to be unreasonably withheld or delayed) Provided That such
approval shall be given within 10 Working Days of a written request or any
objection notified within such time limit and any failure to respond shall
mean that the Developer is deemed to have accepted such appointment and
provided further that the Developer shall be entitled to refuse approval
in its absolute discretion where any proposed replacement Fit Out
Representative does not enter into a deed with the Developer having the
same substantive effect as that previously entered into by the prior Fit
Out Representative
"TENANT'S REQUESTED MODIFICATIONS" means such works of addition, omission
or alteration to the Base Building Works and such other additional works as
are more particularly described in Clause 9.1
"TRM DELAY" means the total of all periods of delay to the Base Building
Works or any part of them resulting (whether directly or indirectly) from
the implementation of Tenant's Requested Modifications provided there shall
be no double counting of such periods
"TRM SPECIFICATIONS" means any plans and specifications for Tenant's
Requested Modifications which are prepared in accordance with Clause 9
"TUNNEL AGREEMENT" means the agreement a draft of which is annexed to this
Agreement as ANNEXURE 23
"WARRANTY" means any warranty to be given to the Developer or Tenant
hereunder
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<PAGE> 29
"WORKING DAY" means any day (other than a Saturday or a Sunday) upon which
clearing banks in the United Kingdom are open to the public for the
transaction of business
1.2 INTERPRETATION
In this Agreement unless the context otherwise requires:
1.2.1 words importing the masculine gender only shall include the feminine
gender and neuter meaning and vice versa and words importing the
singular number shall include the plural number and vice versa and
all references to a Clause or Schedule shall mean a Clause or
Schedule of this Agreement and terms or phrases beginning with upper
case letters which are not referred to in Clause 1.1 or elsewhere in
this Agreement shall have the meanings ascribed to them in the
Lease;
1.2.2 references to drawings and documents annexed hereto shall include
the drawings and documents initialled for identification on behalf
of the parties hereto for the purposes of this Agreement (whether
individually or as part of an agreed bundle or bound volume or
otherwise);
1.2.3 titles and headings to Clauses are for convenience only and shall
not be construed in or affect the interpretation of this Agreement;
1.2.4 words importing persons shall include firms, companies and
corporations and vice versa;
1.2.5 any covenant by any party not to do any act or thing shall include
an obligation not to permit or suffer such act or thing to be done
and any reference to consent or approval not being unreasonably
withheld shall be deemed to include reference to its not being
unreasonably delayed;
1.2.6 any reference to a statute (whether specifically named or not) shall
include any amendment or re-enactment of it for the time being in
force, and all instruments, orders, notices, regulations,
directions, bye-laws, permissions and plans for the time being made,
issued or given under it, or deriving validity from it
(collectively, "CHANGES") provided that where any design has been
carried out or work commenced under this Agreement and any relevant
Change takes place then the Developer may (insofar as to do so would
not place it in breach of statute) carry out the Base Building Works
or perform any of its other obligations hereunder as if such Change
had not taken place;
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<PAGE> 30
1.2.7 the words "including" "include" "excluding" and "exclude" shall be
deemed to be followed by the words "without limitation";
1.2.8 any reference to a Clause or Schedule shall mean a Clause or
Schedule of this Agreement; and
1.2.9 covenants given by the Developer where the Developer comprises more
than one person shall be construed as made by all such persons
jointly and severally
2. CLADDING
2.1 The Tenant hereby confirms to the Developer (but without reducing the
Developer's responsibility for the proper physical implementation thereof
and design development thereof) that the specification of the bomb blast
elements of the cladding system forming part of the Base Building
Specification has been approved by the Tenant as suitable for its purposes
2.2 The specification for the cladding system and bomb blast elements thereof
require design development and the Tenant has agreed to make the Tenant's
Representative and the Tenant's bomb blast specialist fully available as
reasonably necessary to the Developer in order to work alongside the Base
Building Consultants in preparation of the detailed design thereof such
that the same can be finalised and approved by the Developer and the Tenant
within the period shown on the Developer's Programme
2.3 The Tenant shall procure that the Tenant's Representative and the Tenant's
bomb blast specialist and the Developer shall procure that the Base
Building Architect work respectively expeditiously and efficiently in order
to seek to finalise the detailed design within the period referred to in
Clause 2.2
2.4 The Developer and the Tenant have agreed that the cladding system and bomb
blast elements thereof to the extent of the scope of cladding works and
bomb blast elements annexed hereto will not constitute a Tenant's Requested
Modification but changes to the scope of the cladding works and bomb blast
elements forming part of the Base Building Specification requested by the
Tenant will be treated as Tenant's Requested Modifications for the purposes
of this Agreement
3. STOPPING UP
If the Developer is unable to have stopped-up pursuant to an Order granted
under section 247 of the Town and Country Planning Act 1990 the land shown
hatched black on the plan forming ANNEXURE 22 on or before 29 September
1998 then the Developer shall propose
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a variation to the design of the Building which shall first avoid any
requirement to incorporate the relevant piece of land within the
Development Site and second shall seek to maintain materially the same
overall design for the resulting Building as proposed pursuant to the
Planning Permission and submit the same to the Tenant for its approval such
approval not to be unreasonably withheld or delayed. The Tenant shall
consider the Developer's proposals promptly and with a view to maintaining
the development programme current at that point and upon the Tenant
approving such variation in the design:-
(a) the revised plans and specifications shall be substituted as necessary
for the relevant parts of the Base Building Plans and the Base
Building Specification annexed to this Agreement; and
(b) any consequential alterations to
(i) Net Internal Area
(ii) a pro-rata reduction in the Developer's Commitment based upon
reduction in Net Internal Area
(iii) the Rent payable pursuant to the Leases to be granted hereunder
and so on and so forth shall be made
4. STAGE E
4.1 UPGRADE TO STAGE E
4.1.1 The parties acknowledge that the Base Building Plans and the Base Building
Specification annexed to this Agreement have been approved by the Tenant
but will require further detail and design development to be incorporated
before Stage E is achieved
4.1.2 Subject to Clause 4.1.4 the Developer shall forthwith following the date
hereof and in consultation with the Building Contractor and the Base
Building Consultants continue, complete and provide to the Tenant for its
review and as appropriate pursuant to Clause 4.2.1 for its approval, to
the extent not contained within the Base Building Plans and the Base
Building Specification annexed hereto, Full Details of the Stage E
Drawings and Specifications in accordance with Clause 4.1.4 and Provided
That such Full Details should be made progressively available on a rolling
basis in defined packages in sufficient time to allow the Tenant a
reasonable period to review, comment on and return them to the Developer
without any programme impact on the elements of the Base Building Works
design, manufacture, construction or installation to which such Full
Details refer
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4.1.3 The Developer shall in conjunction with the preparation of the Stage E
Drawings and Specifications also prepare or procure the preparation of the
Employer's Requirements and the Contractor's Proposals and shall submit
the same to the Tenant for its approval (such approval not to be
unreasonably withheld) but so that such approval shall not provide the
Tenant with any wider or additional rights to approve the Stage E Drawings
and Specifications beyond those set out in Clause 4.2 and so that such
approval or a written and reasoned refusal shall be given within ten (10)
Working Days of a written request for approval and any failure to respond
shall mean that the Tenant is deemed to have approved the relevant matter
4.1.4 In or about such continuation, completion and provision of the documents
set forth in Clauses 4.1.2 and 4.1.3 hereof the Developer shall use all
reasonable endeavours to procure that the same (1) conform, comply and are
consistent with the Base Building Plans and the Base Building
Specification (2) are consistent with the standards of a high quality
building and (3) are provided to the Tenant's Representative in a timely
and co-ordinated manner consistent with the Developer's Programme and (4)
deal with the comments made in the agreed amendment schedule forming part
of the Base Building Specification and which are agreed as not
constituting Tenant's Requested Modifications
4.1.5 Notwithstanding the other provisions of Clauses 4.1 and 4.2 it is agreed
(for the avoidance of doubt) that the Developer may always elect to
provide the Tenant with drawings and specifications which reflect a stage
of design beyond Stage E and that provision of these drawings and
specifications will satisfy the Developer's obligation to produce Full
Details of the Stage E Drawings and Specifications
4.2 KEY STAGE E DESIGN PACKAGES
4.2.1 Of the Stage E Drawings and Specifications supplied to the Tenant pursuant
to Clause 4.1.2 the Tenant (subject to Clause 4.2.2) shall be entitled on
a rolling basis to approve (such approval not to be unreasonably withheld)
pursuant to Clause 4.2.2 Full Details of the Stage E Drawings and
Specifications relating to the following packages (the "KEY STAGE E DESIGN
PACKAGES"):-
(a) concrete work;
(b) steelwork (including specific identification of pinch point areas
where the structure is likely to impinge into the clear service
zones identified in the Base Building Plans and Base Building
Specifications annexed hereto);
(c) cladding (including external cleaning requirements);
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(d) mechanical and electrical and public health installation (including
the pinch points described above);
(e) lift installation; and
(f) finishes (including materials specifications locations and
workmanship specifications to the level consistent with Stage E)
and when doing so the Developer shall notify the Tenant of the period
within which it properly and reasonably requires the Tenant's approval in
order to maintain the Developer's Programme then current
4.2.2 The Tenant's approval pursuant to Clause 4.2.1 shall only be required in
relation to those elements of the Key Stage E Design Packages:-
(i) which are inconsistent with or which address matters not dealt with
to Stage E Detail Design by the Base Building Specification or Base
Building Plans (as amended by any approved Tenant's Requested
Modifications) and
(ii) in each case which have not previously been approved by the Tenant
4.2.3 Once the Key Stage E Design Packages have been or are deemed to have been
approved by the Tenant no further approvals shall be required from the
Tenant in relation to any further detailing of the Base Building works
save any which may be required pursuant to Clause 8
4.2.4 The Tenant shall and shall procure that the Tenant's professional firms
and consultants shall provide (with a view to maintaining the Developers
Programme then current and having regard to any preliminary details of the
particular Key Stage E Design Packages already seen or provided) all
approvals required pursuant to Clause 4.2 (including the provision of
written explanations providing full details and reasons for any refusal)
as reasonably expeditiously as possible according to the nature and extent
of the particular Key Stage E Design Package under consideration
4.2.5 The Tenant shall procure that approvals and refusals are delivered in
writing and deal with each relevant Key Stage E Design Package or part
thereof (as the case may be according to the whether the whole or part has
been submitted) and to the extent that the Tenant only approves or refuses
an element or elements of a particular submitted Package the Tenant shall
be treated as having approved the balance of the relevant Package which
has been submitted and in respect of which no specific objection has been
made
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4.3 REFERENCE TO INDEPENDENT EXPERT
4.3.1 If the Tenant objects to any element of a Key Stage E Design Package or
does not respond with an approval or reasoned refusal of such matters
within the required time period for approval specified by the Developer as
being necessary to maintain the Developers Programme, the Developer shall
be entitled to refer the matter to an Independent Person in accordance
with Clause 32 who shall determine whether the relevant Key Stage E Design
Package required an approval pursuant to Clause 4.2 and (if so) whether a
Tenant Delay has arisen as a result of the Tenant in breach of its
obligations in Clause 4.2.4 refusing or failing to approve the relevant
Key Stage E Design Package within the relevant period or raising an
unreasonable objection
4.3.2 If the Independent Person determines that the relevant Key Stage E Design
Package did not require an approval pursuant to Clause 4.2 the relevant
Key Stage E Design Package shall be deemed approved by the Tenant and the
costs of appointing the Independent Person and his costs and disbursements
in connection with his duties under this Agreement shall be the Tenant's
4.3.3 If the Independent Person determines that the Tenant has failed to act in
accordance with Clause 4.2.4 and that such failure has caused or will
cause delay to the Base Building Works, the Independent Person at the
appropriate time shall determine the actual period of delay and the period
so determined shall be treated as Tenant's Delay and the decision of the
Independent Person in this regard shall be final and binding
4.3.4 If the Independent Person determines that the relevant Key Stage E Design
Package requires approval pursuant to Clause 4.2 but that the Tenant has
so far acted in accordance with its obligations in Clause 4.2.4 in
relation to approval of that Key Stage E Design Package then no Tenant's
Delay shall be treated as having been caused in relation to approval of
that Key Stage E Design Package up to that point and the costs of
appointing the Independent Person and his costs and disbursements in
connection with his duties under this Agreement shall be the Developer's
but all the provisions of this Clause 4 shall in all respects continue to
apply to that Key Stage E Design Package and (for the avoidance of doubt)
the Developer shall remain entitled to refer the same matter to an
Independent Person for further determination according to the
circumstances at a later date
4.4 CONFIRMATORY MEMORANDUM
As soon as reasonably practicable after the Tenant has approved the Stage
E Drawings and Specifications, the Employer's Requirements and the
Contractor's Proposals (which may be approved in any number of sections or
packages) (or such approval has been deemed to have taken place) the
Developer and the Tenant shall sign a memorandum confirming that the
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approved Stage E Drawings and Specifications shall for the purposes of
this Agreement be substituted for the Base Building Plans and Base
Building Specifications annexed to this Agreement at the date of this
Agreement and so that (i) such Stage E Drawings and Specifications shall
thereafter be treated as the Base Building Plans and the Base Building
Specification and (ii) as each Key Stage E Design Package is approved (or
deemed approved) the Base Building Plans and Base Building Specification
shall be treated as updated accordingly
4.5 RISERS
The Developer and the Tenant agree that the plan forming ANNEXURE 24
identifies the number and broadly the location of risers which will be for
the exclusive use of the tenant of the Basement to Level Four Lease. The
Developer and the Tenant agree to use reasonable endeavours precisely to
identify the location of the risers following the settling of the layout
of the core of the Building pursuant to this Clause 4, and for the matter
to be referred on default of agreement to the Independent Expert pursuant
to Clause 32 hereof and, for the avoidance of doubt, the riser areas which
would otherwise reduce Net Internal Area shall be shown as part of the
demise on the relevant lease plans and rentalised to the same rent per
square foot as office premises on the relevant floor.
5. BASE BUILDING WORKS
5.1 Approvals
The Developer shall take all reasonable and practical measures (and the
Tenant shall without having to incur material cost promptly lend such
assistance and support as is reasonably required to obtain the Approvals
as soon as may be reasonably practicable) to enable it to commence and
thereafter save to the extent delayed by the occurrence of any of the
Extension Events, proceed with and complete the Base Building Works.
5.2 Warranties
The Developer hereby warrants to the Tenant that:
5.2.1 the ground and soil conditions of the land on which the Building is
to be constructed have been and the existing structure and frame of
the Daily Express Building (the "SITE") will be appropriately
investigated and tested;
5.2.2 to the extent reasonably prudent it has on the basis of professional
advice from appropriately qualified professionals carried out or
will carry out on in and under the Site such works of soil or
materials removal (whether or not being Prohibited Materials) as
will render the Site thoroughly prepared and ready for the carrying
out of the Base Building Works;
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5.2.3 (unless otherwise agreed by the parties hereto) it has or will
remove from the Site and dispose of any containers or tanks of
Prohibited Materials or other potentially hazardous materials and
their contents referred to in the report dated August 1997 prepared
by Waterman Environmental which were left on the Site by previous
owners or occupiers and that such removal and disposal shall be
undertaken by appropriately qualified and competent persons in a
safe and controlled way and in compliance with all relevant laws,
licences and regulations;
5.2.4 the Developer is not aware of any ground or soil substance or
condition at the Site which will prejudice the Tenant or delay the
issue of the Shell & Core Substantial Completion Certificate;
5.2.5 the design of the Base Building Works respects the sub-ground
condition of the Site;
5.3 MILLENNIUM COMPLIANCE
The Developer will use all reasonable endeavours to specify that all plant
and equipment and machinery forming part of the Base Building Works shall
be Millennium Compliant.
5.4 CARRYING OUT OF BASE BUILDING WORKS
The Developer shall, save to the extent delayed by the occurrence of the
Extension Events, proceed diligently and expeditiously with the execution
of the Base Building Works following the obtaining of all relevant
Approvals and shall use its reasonable endeavours to achieve Shell & Core
Substantial Completion by the Target Date.
5.5 METHOD OF COMPLETION
The Developer shall procure the execution and completion of the Base
Building Works save to the extent delayed by any of the Extension Events:-
5.5.1 in a good and workmanlike manner according to good building practice
generally accepted at the date hereof;
5.5.2 according to the standards of good design practice for high class
City of London office buildings provided that if the Building is
constructed in accordance with the Stage E Drawings and
Specifications referred and/or approved in conformity with the
provisions of Clause 4 hereof as incorporated within the Base
Building Plans and the Base Building Specification then the
Developer shall have no further liability pursuant to this
Sub-Clause 5.5.2 in respect of design matters properly incorporated
in the Base Building Plans and the Base Building Specification;
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5.5.3 using (save insofar as may be specified otherwise by the Tenant in
relation to Tenant's Requested Modifications) good quality materials
goods and equipment of their several kinds selected by the Developer
acting reasonably without using Prohibited Materials;
5.5.4 in accordance with:-
(a) the Base Building Plans and the Base Building Specification
and any TRM Specifications;
(b) the Approvals relevant to the Base Building Works;
(c) all relevant Acts of Parliament now or hereafter passed (which
shall include any instrument or order regulation code of
practice or other subordinate legislation deriving validity
from any such Act which shall affect the execution and
carrying out of the Base Building Works including fire
officer's requirements but not where this is an obligation of
the Tenant under this Agreement including, without limitation,
Clause 16.2.5);
(d) the Building Regulations 1991, the CDM Regulations and
statutory requirements of the Health and Safety at Work
Executive and the appropriate EHO and such other mandatory
rules and regulations as govern site and works safety and are
applicable to the Development;
(e) all relevant codes of practice and regulations (taking account
of any changes which have already been announced or which will
be implemented during the construction period) and
recommendations of professional institutes to which any member
of the Base Building Consultants (named in the definition of
that term) shall belong and which are at the time of execution
of the relevant works properly regarded in the UK construction
industry as constituting prudent professional practice; and
(f) the terms of this Agreement.
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5.6 EXPIRY OF DEVELOPER'S LIABILITY
The Developer shall not have any liability in respect of any claims for
breach of the Developer's obligations set out in Clause 5.2 and in Clauses
5.5.1 to 5.5.4 (inclusive) in respect of any matter which manifests itself
and which is made or notified in writing to the Developer at its address
defined in Clause 33 after the fifth anniversary of Shell & Core
Substantial Completion.
5.7 TENANT'S RELEASE OF ADJOINING PROPERTY RIGHTS
The Tenant in its capacity as leaseholder of the neighbouring property
known as Peterborough Court waives and releases (and will use reasonable
endeavours to procure that any Group Company Affiliate and Associated
Company and that any superior landlord of the Tenant in relation to such
neighbouring property waives and releases) all rights of light and air (if
any) benefitting Peterborough Court which might otherwise inhibit the
Development.
5.8 QUANTIFICATION OF EXTENSION PERIODS
5.8.1 If, in the Developer's opinion, at any time during the course of the
execution of the Base Building Works, the Developer has been or is
being or is likely to be delayed in its ability to commence or
continue with the carrying out of the Base Building Works or to
complete the same in accordance with the provisions of this
Agreement by reason of any Extension Period properly allowable under
this Agreement then the Developer shall notify the Tenant
accordingly giving the Tenant as much early warning of such delay or
potential delay as reasonably practicable.
5.8.2 The Developer and the Tenant shall discuss the best methods for
minimising any such delay or potential delay and mitigating its
effects and shall wherever practicable (acting reasonably) seek to
agree upon a plan or strategy for minimising the same and mitigating
such effects and (subject always to Clause 5.8.4) both the Developer
and the Tenant shall (acting reasonably) assist each other to
overcome and/or minimise and/or mitigate the same with all due
speed.
5.8.3 The Developer and the Tenant shall together seek to agree a fair and
reasonable period for each Extension Period and when each such
Extension Period has been agreed or (in the event of dispute)
determined by an Independent Person acting as an expert in
accordance with Clause 32 each such Extension Period shall be
granted to the Developer and all the dates and periods in this
Agreement which are expressed to be extendable by reason of such
delay shall be treated as deferred (or
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further deferred if prior Extension Periods have already been
granted) by such agreed or determined Extension Period and so that
if the Developer fails to comply with its obligations to achieve the
matters the subject of this Agreement by the date specified in this
Agreement referrable to such matters but would have so complied but
for Tenant's Delay and/or (but only where applicable) Force Majeure,
then for the purposes of this Agreement the Developer shall be
treated as having so complied with such obligation but without
prejudice to the Developer's obligations hereunder to achieve the
matters the subject of this Agreement by the date specified in this
Agreement referrable to such matters as extended by agreement or
determination under this Clause 5.8.3.
5.8.4 The Developer shall constantly (but without being obliged to incur
any additional expenditure (unless and to the extent the Tenant
agrees in writing to reimburse the Developer for the same)) use all
reasonable endeavours to mitigate delays caused by Extension Events.
5.8.5 The Tenant shall constantly (but without being obliged to incur any
additional expenditure (unless and to the extent that the Developer
agrees in writing to reimburse the Tenant for the same) use all
reasonable endeavours to mitigate delays caused by Extension Events.
5.9 DEVELOPER TO HOLD HARMLESS
The Developer shall hold harmless the Tenant (with the intention of
putting the Tenant in the same after-tax position it would have been in
had the matter giving rise to the indemnification not arisen) from and
against all actions proceedings claims demands damages losses liabilities
costs charges penalties fines fees and expense whatsoever arising out of
or by reason of or incidental to any interference with or disturbance to
the access or light or air or other easements or rights enjoyed by the
owners or occupiers of any adjoining property caused by the execution of
the Base Building Works otherwise than resulting from the effect of Clause
5.7
5.10 PAYMENT OF CONNECTION CHARGES
The Developer shall pay all connection charges which may be payable to any
relevant authority or undertaker for the connection of services the
provision of which forms part of the Base Building Works and any fees or
charges payable under any statute or to any statutory undertaker in
respect of the Base Building Works and the Developer shall at its own cost
comply with all requirements of any water gas electricity and
telecommunications authorities in relation to the Base Building Works.
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6. SITE VISITS AND MEETINGS AND SUPPLY OF INFORMATION
6.1 ENTRY ON TO SITE TO VIEW BASE BUILDING WORKS
The Developer shall permit the Tenant and its advisers (but limited to
such number of people as is reasonable in the circumstances) at all
reasonable times (including access out of normal site working hours
subject to the Tenant bearing the proper cost incurred by the Developer
of enabling such access out of normal site working hours) to enter the
Development Site (accompanied by a representative of the Developer if the
Developer shall so require) to view the progress and state of the Base
Building Works and the materials used or intended for use therein and for
the purpose of tendering the Fit Out Works (but so that entry may be
denied on any occasion when such entry would cause delay to the execution
of any Base Building Works other than to a de minimis extent) and subject
nevertheless to:-
6.1.1 reasonable prior notice being given to the Base Building Project
Managers save where such inspections shall have been arranged to
occur on a regular basis and such shall be known to the Base
Building Project Managers;
6.1.2 the Tenant and others as aforesaid reporting to the works offices
at the Development Site before making any inspection and acting in
accordance with the reasonable instructions of the Base Building
Project Managers and complying also with the reasonable
requirements (if any) of the Base Building Contracting Team and
Site Regulations;
6.1.3 compliance with such reasonable safety and security precautions
and insurance requirements as may be in force from time to time in
or in respect of the Development Site;
6.1.4 the Tenant and others as aforesaid not giving instructions or
making representations to the persons engaged in the carrying out
of such works; and
6.1.5 no material delay being caused thereby to the Base Building Works.
Provided that the Tenant shall be entitled to make observations in
writing to the Base Building Project Manager or to the Developer (with a
copy to the other) concerning progress and standards of workmanship.
6.2 OPENING UP
The Tenant may where there are reasonable grounds to apprehend that some
part of the Base Building Works or materials used or to be used in them
are not in accordance with the terms of this Agreement require that:-
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6.2.1 The relevant part of the Base Building Works be opened up or the
materials be submitted for testing;
6.2.2 If the relevant part of the Base Building Works or the materials
proved to be defective or unsuitable they be replaced and that the
cost of the process of opening up the Base Building Works testing
and replacement including the cost of the delay attributable to
the process shall be borne entirely by the Developer and in case
of dispute the matter shall be referred to an Independent Person
acting as an expert in accordance with Clause 32
but if the result of the test is negative in all materials respects so
that no remedial action need be taken the Tenant will itself bear the
cost of the process and any consequential delay shall be Tenant's Delay.
6.3 PROGRESS MEETINGS
6.3.1 From the date hereof until the final making good of defects has
been achieved there shall be regular progress meetings relating to
the Base Building Works arranged for that purpose between the Base
Building Project Managers the Base Building Consultants the Tenant
the Base Building Contractor and representatives from the
appropriate Fit Out Professional Firms to review the progress of
the Base Building Works such meetings to be as frequent as may be
requisite and in any event not less frequently than monthly.
6.3.2 One representative of the Tenant shall also be entitled to attend
as an observer (but not to speak) at the regular monthly
monitoring meetings between the Developer and the Base Building
Consultants and the Base Building Contractor at which all
materially important matters shall be discussed.
6.3.3 The Developer shall have proper regard to (but not be bound by)
any representations made by or on behalf of the Tenant in
connection with the Base Building Works and the progress thereof
considered during such progress meetings as are mentioned in
Sub-Clause 6.3.1 provided that nothing in this Sub-Clause 6.3.3
shall interfere in any way with the rights of the Developer under
the Base Building Contract or to deal with or give instructions to
the Base Building Contracting Team or any other advisors or
consultants and provided further that no representations shall be
made by the Tenant to any member of the Base Building Contracting
Team or the Developer's Architects or any other consultant or
party involved in the design, carrying out or construction of the
Base Building Works;
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6.3.4 The Developer shall give to the Tenant appropriate notice of and
copies of the agenda and minutes of all meetings referred to in
Sub-Clauses 6.3.1 and 6.3.2
6.3.5 The Developer shall if it has not already done so procure and
promptly send to the Tenant or the relevant person acting on its
behalf as soon as practicable after the date hereof such
information relating to the Base Building Works as the Tenant may
reasonably require and, as the Developer acting reasonably is
willing to provide, including copies of the following:-
(a) copies of the Base Building Contracts and Professional
Appointments (with financial details edited) and any
variations thereof;
(b) all applications for and Approvals and permissions and
licences of the town planning local and other statutory
authorities obtained by the Developer for the execution of
the Base Building Works;
(c) details of the Developer's Programme and any changes
thereto;
(d) minutes of all progress meetings referred to in this Clause
6.3. The Tenant shall procure that any disagreement as to
the accuracy or completeness of such minutes is
communicated to the Base Building Project Manager as soon
as reasonably practicable following receipt of those
minutes and giving full details of (and reasons for) any
alleged inaccuracy;
(e) Copies of all reports required to be produced by the Base
Building Contractor to the Developer pursuant to the Base
Building Contract.
6.4 PROVISION OF INFORMATION
6.4.1 The Developer shall provide to the Tenant such information relating to
the Base Building Works as the Tenant may reasonably require in order to
plan and design and tender for the Fit Out Works or in connection with
the subsequent repair and maintenance of the Building provided that the
provision of such information does not interfere with or delay the
execution of the Base Building Works.
6.4.2 The Developer shall use reasonable endeavours to maintain until the
Tenant is supplied with all the documents referred to in Clause 6.5 on
the Site an information room (which may be the Developer's site office)
and up to such date keep available for inspection by the Tenant and its
advisers a register and copies of (a) appropriately sized copies of all
drawings plans
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and specifications (including working drawings) produced by the Base
Building Consultants or any other person from time to time in relation to
the Base Building Works or any part thereof (b) working details for
specialist package contractors and (c) other technical information
relating to the Base Building Works necessary to enable the Tenant to
plan and execute the Fit Out Works.
6.4.3 The Developer shall make available on or within 200 metres of the
Development Site for the use (by arrangement on a shared basis with the
Developer and the Developer's team) of the Tenant and its advisers an
appropriately furnished meeting room.
6.5 DOCUMENTS TO BE SUPPLIED TO TENANT
At Shell & Core Substantial Completion the Developer shall supply the
Tenant with as much of the following as is then available and as soon as
reasonably possible after Shell & Core Substantial Completion and in any
event within six months thereof, the Developer shall, at its own cost,
supply the Tenant with the following:-
6.5.1 four complete sets of the final "as-built" scale drawings of the
Base Building Works and one set of DXF files on computer disk (or
in such other format as the Tenant reasonably requests and as can
be produced at no material additional cost) showing the same;
6.5.2 a complete reproducible set of "as-built" scale drawings of the
mechanical, electrical and other installations and services of the
Base Building Works and one set of DXF files (or such other format
as the Tenant reasonably requires and as can be produced at no
material additional cost) on computer disk showing the same;
6.5.3 one copy of the Health and Safety file for the Premises together
with a copy on optical disk; and
6.5.4 three complete bound sets of operating and maintenance manuals
(including copies of all test certificates and commissioning
reports) for the lifts air-conditioning ventilating heating and
other plant apparatus and equipment;
6.5.5 copies of all warranties given to the Developer by manufacturers
in respect of all Building Systems;
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6.5.6 a schedule listing the names and addresses of all contractors and
principal sub-contractors and suppliers who have been involved in
or concerned with the Base Building Works;
6.5.7 copies of all Approvals and all contracts agreements and other
documents in the Developer's control relating to or affecting the
maintenance or operation of the Building.
7. BASE BUILDING PROFESSIONAL FIRMS AND BUILDING CONTRACTOR
7.1 COLLATERAL DEEDS OF WARRANTY
As soon as reasonably practicable after the date of the execution of this
Agreement and in any event within six (6) months of the date of this
Agreement, the Developer shall procure the execution and delivery to the
Tenant of a collateral deed of warranty in relation to each set of
premises which is to be the subject of a Lease:-
7.1.1 in substantially the form set out as ANNEXURE 14 duly executed by
the Base Building Architects;
7.1.2 in substantially the form set out as ANNEXURE 15 duly executed by
the Base Building M & E Engineer;
7.1.3 in substantially the form set out as ANNEXURE 16 duly executed by
the Base Building Structural Engineer;
7.1.4 a form of warranty duly executed by the Base Building Project
Managers; and
7.1.5 in substantially the form set out as ANNEXURE 17 duly executed by
the Base Building Contractors;
7.1.6 a form of warranty duly executed by the Certifying Officer;
or in the case of any of the forms of collateral deeds of warranty set
out above with such amendments as or in such form as the Developer
reasonably requests and the Tenant approves (such approval not to be
unreasonably withheld or delayed).
7.2 SUBSTITUTE APPOINTMENTS
7.2.1 The Developer shall, prior to any substituted appointment of any of the
Base Building Consultants or the Base Building Contractors, procure that
Collateral Deeds of Warranty are
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executed respectively by the persons who are appointed in substitution in
substantially the same forms (mutatis mutandis) as those referred to in
Clause 7.1.
7.2.2 If the Tenant's approval is required under the terms of this Agreement
for the appointment of any member of the Base Building Contracting Team
the form of any appointment, collateral warranty or building contract or
any amendment of any of them or any waiver compromise or termination of
any of them then such approval shall be given within ten (10) days of a
written request or any objection notified within such time limit and any
failure to respond shall mean that the Tenant is deemed to have accepted
such relevant matters.
7.3 DEVELOPER TO PROCURE PERFORMANCE OF CONTRACTS
The Developer shall diligently take all steps reasonably necessary to
seek to procure and to enforce the due performance by the Base Building
Project Manager, the Base Building Contractors or any of the Base
Building Consultants of their respective obligations to the Developer.
7.4 DEVELOPER NOT TO TERMINATE CONTRACTS
The Developer shall not, without (a) good cause and (b) the prior written
approval of the Tenant (such approval not to be unreasonably withheld or
delayed) terminate or suspend nor do, or omit to do, any act or thing
which would entitle the Base Building Project Manager, the Base Building
Contractors or any of the Base Building Consultants to regard as
terminated the Base Building Contracts or their contracts for services
respectively.
7.5 NOVATION OF APPOINTMENTS OF BUILDING CONSULTANTS
The Developer shall not novate or allow the novation of the appointments
of the Base Building Consultants at any time prior to the Tenant's
approval or deemed approval to all Key Stage E Design Packages pursuant
to Clause 4.
7.6 CONSTRUCTION DOCUMENTATION
7.6.1 The appointments of the Base Building Consultants shall be in
substantially the form of the draft annexed to this Agreement or
if not so annexed or materially different in form shall be
approved by the Tenant such approval not to be unreasonably
withheld and shall in any case
(a) be terminable by the Developer in the event of the
insolvency of or material default by the relevant Base
Building Consultant
(b) provide for the relevant Base Building Consultant to
maintain appropriate professional indemnity insurance of
not less than (pounds)10 million and require
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the relevant Base Building Consultant to produce evidence
that such insurance is in force from time to time
(c) in the case of the Certifying Officer set out the matters
stated in the definition in this Agreement of "Shell & Core
Substantial Completion" as pre-conditions to the issue of
the Shell & Core Works Certificate and the Developer shall
instruct the Certifying Officer to take such matters fully
into account when considering whether to issue the Shell &
Core Works Certificate
7.6.2 The form of the Base Building Contract shall be substantially in the form
of the draft annexed to this Agreement or if materially different in such
other form as the Tenant shall approve such approval not to be
unreasonably withheld and shall in any case:-
(a) provide for the Building to be designed and completed in
accordance with the Base Building Specification and the Base
Building Plans
(b) require Shell & Core Substantial Completion to be achieved on or
before the Target Date
(c) provide for termination of the employment of the Base Building
Contractor in the event of the insolvency of or material default
by the Base Building Contractor
(d) require the Base Building Contractor to give a warranty to the
Tenant in accordance with the provisions of this Agreement and to
use reasonable endeavours to procure that sub-contractors with
significant design responsibility are obliged to give warranties
to the Tenant substantially in the form annexed to this Agreement
or if materially different in such other form as shall be approved
by the Tenant such approval not to be unreasonably withheld
(e) require the Base Building Contractor to hold a sub-contractor's
certificate
(f) require the Base Building Contractor to provide a parent company
guarantee of the warranty in favour of the Tenant if reasonably
required by the Tenant
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(g) require the Base Building Contractor to accommodate any Tenant's
Requested Modifications if so instructed by the Developer
7.6.3 The Developer shall consult fully with and obtain the approval of the
Tenant such approval not to be unreasonably withheld as to the selection
of any replacement Base Building Contractor or any other one of the Base
Building Consultants and shall appoint substitute Base Building
Contractors or Base Building Consultants as soon as reasonably
practicable in the event of their insolvency
7.6.4 The Developer shall obtain the prior written consent of the Tenant (which
shall not be unreasonably withheld) to:-
(a) any material amendments to the Base Building Contract or the
Professional Appointments
(b) any waiver or compromise of any of the Developer's rights under
the Base Building Contract or the Professional Appointments
7.6.5 The Developer shall
(a) use all reasonable endeavours to enter into the Base Building
Contract and any outstanding Professional Appointments as soon as
reasonably practicable
(b) ensure that the Base Building Contractor and the Base Building
Consultants are aware of the terms of this Agreement which are
relevant to or have an impact on the design carrying out and
completion of the Base Building Works and require them to perform
their own obligations so as not to cause a breach of those terms.
7.6.6 There is annexed hereto the current Developer's Programme for the design
and construction of the Base Building in such a manner as to achieve
Shell & Core Substantial Completion by the date specified therein (but so
that no contractual obligation is owed to the Tenant in relation to
achievement of that date so long as earlier than the Target Date pursuant
to this Agreement) and on or before the Target Date
7.6.7 The Developer will not change the Developer's Programme otherwise than in
a way consistent with the acts of a reasonable and prudent owner seeking
to achieve
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Shell & Core Substantial Completion of the Base Building to the standards
required by this Agreement
8. DEVELOPER'S VARIATIONS TO BASE BUILDING WORKS
8.1 DETAILING OF BASE BUILDING WORKS
Save as provided in Clause 4.2, no consent from the Tenant shall be
required for any detailing of the Base Building Works or other adjustment
which does not comprise a material variation thereof provided that such
further detailing or adjustment shall in all material respects be
consistent with and in conformity with the Base Building Specification
and/or the TRM Specification as relevant.
8.2 VARIATIONS REQUIRED BY LAW ETC.
8.2.1 The Developer may also make alterations additions or variations to
the Base Building Works without obtaining the prior approval of
the Tenant where:-
(a) such are lawfully required by any competent authority;
(b) such are required as a result of unforeseen ground
conditions or obstructions in the Development Site which
could not reasonably have been foreseen;
(c) such are a variation of or an alteration to the Base
Building Specification which is not material;
(d) such are necessary as a result of any actual or proposed
Tenant's Requested Modifications or a proposed Tenant's
Requested Modification for which a Developer's Estimate has
been accepted pursuant to Clause 9.5; or
(e) such are otherwise required pursuant to the express
provisions of this Agreement.
8.2.2 Notwithstanding the provisions of Clause 5.5, if any materials
specified in the Base Building Specification or other
specifications relating to the Base Building Works are in short
supply or are or become unobtainable, turn out to be defective,
damaged or unsatisfactory or an adequate supply cannot be
guaranteed or are subject to delay or anticipated delay or
uncertainty and if awaited would or may impede materially the
progress of the Base Building Works the Developer may use
alternative materials of a similar type character design and
quality to those
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specified subject to the Tenant's approval not to be unreasonably
withheld and Provided That such approval shall be given within
seven (7) Working Days of a written request or any objection
notified within such time limit and any failure to respond shall
mean the Tenant is deemed to accept such alternative materials and
PROVIDED that such alternative materials shall not in any case be
of a lesser quality to those of the materials originally
specified.
8.2.3 The Developer shall supply to the Tenant full details of any
variation alteration addition or alternative materials referred to
in Clause 8.2.1 and 8.2.2 and reasons for the changes together
with copies of any plans drawings and specifications relating
thereto.
8.3 VARIATIONS REQUIRING APPROVAL
8.3.1 The Developer shall make application to the Tenant for consent to
all alterations additions or variations to the Base Building Works
which are material, which consent the Tenant shall not
unreasonably withhold or delay. For the purposes of this Clause 8
"material" shall mean any alteration addition or variation to the
Base Building Works which is adverse to the Tenant (whether long
term, or in respect of the fitting out programme) and:-
(a) involves any change (other than immaterial or de minimis
changes having no practical effect on the running and
maintenance of the Building) to the exterior of the
Building including its height or projection; or
(b) involves any change (other than immaterial or de minimis
changes) to the overall size of the core or central systems
in the Building or to the layout of all the common areas
all as proposed by the Base Building Specification as would
have a material adverse impact on the Tenant (whether long
term or in respect of the Tenant's fitting out programme);
(c) materially prejudices or is likely materially to prejudice
the beneficial occupation and use of the Building by the
Tenant or any underlessee for the purposes permitted by the
Lease; or
(d) causes or is likely to cause any material increase in the
cost which would otherwise have been incurred and borne by
the Tenant in the carrying out of the Tenant's Fit Out
Works or the running costs of the Building; or
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(e) causes or is likely to cause any material increase in the
time which would otherwise have been taken in the carrying
out of the Tenant's Requested Modifications or the Fit Out
Works; or
(f) reduces the quality of the Building below the quality
contemplated by this Agreement; or
(g) is likely to reduce the performance or life-span of any
element of the Building or any of the plant and machinery
to be installed in the Building comprised in the Base
Building Works below the performance or life-span which it
would be reasonable to expect having regard to the Base
Building Specification;
8.3.2 Any application for consent to make any alteration addition or
variation to the Base Building Works for which the Tenant's
consent shall be required shall be sent to the Tenant in writing
by the Developer (or on its behalf) together with copies of any
plans drawings and specifications relating thereto and the reasons
therefor and attaching copies of any relevant reports received by
the Developer in that regard and shall be responded to by the
Tenant in writing (either giving the Tenant's approval or refusing
such approval but if refusing approval stating a properly and
fully reasoned basis for refusing and attaching copies of any
reports received by the Tenant in that regard) within ten (10)
Working Days. In the absence of the receipt of any acceptance or
fully reasoned rejection from the Tenant within ten (10) Working
Days from the receipt by the Tenant of the request as aforesaid
the alteration or variation shall be deemed to be approved by the
Tenant provided that if the Tenant provides within the said period
of ten (10) Working Days a properly and fully reasoned statement
as to why it needs a longer period to give or refuse approval then
the said period of ten (10) Working Days shall be extended by a
further period of ten (10) Working Days.
8.4 DISPUTES
In the event of dispute as to whether or not the Tenant or the Developer
is acting reasonably in connection with any approval sought pursuant to
this Clause 8 then either party may refer the matter for decision to the
Independent Person (acting as an Expert) pursuant to the provisions of
Clause 32 hereof.
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9. TENANT'S REQUESTED MODIFICATIONS
9.1 TENANT'S REQUEST FOR CHANGE
Subject to the other provisions of this Clause the Tenant shall be
entitled from time to time by application in writing to the Developer to
request changes ("TENANT'S REQUESTED MODIFICATIONS") to the Base Building
Works in accordance with the provisions of this Clause 9.
9.2 APPROVAL OF MODIFICATIONS
9.2.1 The Tenant shall furnish with any such application (A "TRM
APPLICATION") the reasons for it and full and sufficient
information to enable the Developer to determine the precise
extent and scope of the Tenant's Requested Modifications and any
proposed changes to lettable area and to consider any impact on
the Developer's Programme. The Developer shall not be obliged,
where it has given initial consideration to a TRM Application but
has found that any such information has not been provided, to give
further consideration to the TRM Application until the Tenant has
(following request from the Developer, which the Developer shall
give within ten (10) Working Days) provided the information. The
Developer may, if it shall so reasonably require and subject to
the Tenant's prior approval of the cost thereof such approval not
to be unreasonably withheld, instruct the relevant Base Building
Consultants to undertake at the Tenant's cost a feasibility study
in connection with any proposed Tenant's Requested Modifications
(the Developer instructing its relevant advisers to carry out the
feasibility study within ten (10) Working Days). The Developer
shall (subject to the conditions set out in Clause 9.2.2) where
implementation of the request contained within the TRM Application
is practicable and where such feasibility study undertaken by the
Developer confirms that the Tenant's Requested Modifications are
reasonably capable of being implemented (including the proposed
works, omissions or other matters comprised in the Tenant's
Requested Modifications) decide whether to approve such Tenant's
Requested Modifications (such approval not to be unreasonably
withheld or delayed) and communicate its decision to the Tenant
within five (5) Working Days of receipt of the feasibility study
or within ten (10) Working Days following the Tenant's request if
no feasibility study is undertaken.
9.2.2 Notwithstanding any other provisions in this Agreement the
Developer shall always be entitled to refuse in its absolute
discretion approval to any Tenant's Requested Modifications:-
(i) which would necessitate a new planning permission or
materially delay any approval of reserved matters; or
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(ii) which would affect the exterior of the Building other than
to an immaterial extent; or
(iii) which would reduce the lettable area of any part of the
Development (other than to an immaterial extent); or
(iv) which would negate or adversely affect the validity or
enforceability of, or the availability or quantum of
remedies or damages under, any Warranty unless the Tenant
accepts that the Developer's liability to the Tenant as to
Inherent Defects is similarly reduced; or
(v) the TRM Costs of which (when taken together with other
Tenant's Requested Modifications) would (in the Developer's
reasonable opinion) cause the Developer's Cap to be a
negative number if such TRM Costs were taken into account
in the determination of the Developer's Cap; or
(vi) which, if implemented and the cost of which is borne in
accordance with the provisions of this Agreement, would (in
the Developer's reasonable opinion) result in any grant of
the Building to be made by the Developer for VAT purposes
being or becoming a grant giving rise to an exempt supply
or exempt supplies by virtue of the application of
paragraph 2(3AA) of Schedule 10 to the Value Added Tax Act
1994
and in any event the Developer may refuse approval to a Tenant's
Requested Modification if it is requested after the Critical Date
and would inevitably lead to a Tenant's Delay.
9.2.3 The Developer warrants to the Tenant that each of the Tenant's
Proposed Modifications set forth in ANNEXURE 18:-
(i) has been approved in principle by the Developer subject to
the completion of feasibility studies;
(ii) are not in the absence of circumstances unforeseen at the
date of this Agreement but on the basis of the information
currently available estimated as likely to lead to a
Tenant's Delay and the Developer in respect thereof will to
the extent not already provided within 28 days of the date
of this Agreement provide the Tenant with a non-binding
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estimate of the TRM Costs relating thereto in accordance
with Clause 9.4.1(a)
9.2.4 The Tenant agrees with the Developer that if the Tenant after the
date of this Agreement were to elect not to implement any of the
Tenant's Proposed Modifications set out in numbers 3, 4, 5 and 7
of ANNEXURE 18 then that may cause delay to the Base Building
Works with the result that any actual delay will be treated as
Tenant's Delay
9.3 PREPARATION OF MODIFICATION PLANS
If the Developer approves a TRM Application it shall at its option (the
Tenant meeting the Developer's reasonable and proper cost and expense)
either (i) as soon as reasonably practicable and in any event within
twenty (20) Working Days unless it is not reasonably practicable to do so
prepare scaled and dimensioned architectural and engineering working
drawings and specifications showing in detail and in scope the accepted
Tenant's Requested Modifications for the Tenant's approval such approval
not to be unreasonably withheld or delayed or (ii) require the Tenant to
prepare such items (which items are hereinafter called the "TRM PLANS")
and the Developer shall confirm when it gives approval under Clause 9.2.1
whether or not it requires the Tenant to prepare the TRM Plans. If the
Developer requires the Tenant to prepare the TRM Plans they shall be
subject to the Developer approving same, such approval not to be
unreasonably withheld or delayed.
9.4 DEVELOPER'S ESTIMATES
9.4.1 Following preparation of approved TRM Plans the Developer will
within ten (10) Working Days provide the Tenant with:
(a) a reasonably detailed statement with reasonable supporting
information (the "DEVELOPER'S ESTIMATE") being the
Developer's non-binding estimate of the additional costs
and expenses (including all costs arising from delay)
incurred or likely to be incurred or suffered by the
Developer as a result of or in connection with the Tenant's
Requested Modifications including (without limitation)
costs properly incurred by the Developer in connection with
the obtaining of Approvals and those for reviewing the
Tenant's Requested Modifications, carrying out any
feasibility study, preparing TRM Plans and any changes
thereto, preparing the Developer's Estimate and
implementing the relevant works and any relevant
preparatory works (the "TRM COSTS") including a non binding
estimate of the amount of any direct loss and/or expense
not included in any other estimate which results from the
regular progress of
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the Base Building Works or any part thereof being affected
by the implementation of the Tenant's Requested
Modification;
(b) a non-binding estimate of any Tenant's Delay which is
likely to result from the implementation of such Tenant's
Requested Modifications; and
(c) details of any necessary alterations additions or
variations as referred to in Clause 8.2.1(d) and any impact
on the matters referred to in Clause 9.2.2(iv) in each case
of which the Developer is already aware.
9.4.2 The Developer's Estimate will be calculated on the basis (if same
can be agreed which the Developer shall use all reasonable
endeavours to achieve) of an agreed fixed price with the relevant
Base Building Contractor in accordance with the relevant Base
Building Contract, plus fixed fee quotations from the Base
Building Consultants and with appropriate allowances for
reasonable and proper expenses, other charges, delay costs, and
any other costs which may arise from considering and implementing
the Tenant's Requested Modifications. If fixed prices cannot be
agreed then the Developer will use non binding estimated figures.
9.5 TENANT'S RESPONSE TO DEVELOPER'S ESTIMATES
If within ten (10) Working Days after the Developer gives notice to the
Tenant of the Developer's Estimate the Tenant countersigns and returns a
copy of the Developer's Estimate to the Developer the Developer's
Estimate shall be binding and irrevocable against the Tenant and the
Tenant shall be deemed to have agreed that any delay reasonably incurred
in the completion of the Base Building Works occasioned by the
implementation of the Tenant's Requested Modifications shall constitute a
Tenant's Delay
PROVIDED THAT
(a) During such period of ten Working Days the Tenant's advisors may
make representations to the Developer and following such
representations the Developer shall be entitled (but not obliged)
to vary the Developer's Estimate in agreement with the Tenant but
no such variation shall be effective unless agreed in writing by
and between the Developer and the Tenant.
(b) The Developer shall at the Tenant's cost provide the Tenant with
such quotations estimates costings and similar information which
the Tenant's advisors shall reasonably require in order to assess
on behalf of and advise the Tenant upon the fairness and
reasonableness of the Developer's Estimate.
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9.6 TENANT NOT PROCEEDING WITH MODIFICATIONS
The failure or refusal of the Tenant to countersign and return to the
Developer a copy of the Developer's Estimate within ten (10) Working Days
after receipt of the Developer's Estimate or ten (10) Working Days after
any determination pursuant to Clause 9.11 shall be deemed to be a
withdrawal by the Tenant of the relevant TRM Application.
9.7 TENANT ACCEPTING THE DEVELOPER'S ESTIMATE
If the Tenant shall countersign the Developer's Estimate and return it to
the Developer pursuant to Clause 9.5 within the specified timescale the
Developer (subject as referred to in Clause 9.12) shall give appropriate
instructions to the Base Building Contractor to carry out and complete
the Tenant's Requested Modifications as part of the programme under the
Base Building Contract and for the avoidance of doubt (subject as
referred to in Clause 9.12) the Tenant's Requested Modifications shall
thereafter form part of the Base Building Works and the Developer and the
Tenant shall be bound by all their respective obligations set out herein
in relation thereto.
9.8 TRM COSTS
Subject always to Clause 9.9 the Developer shall deliver to the Tenant on
request and without request at monthly intervals a statement or
statements specifying all TRM Costs actually incurred or suffered by the
Developer in connection with the Tenant's Requested Modifications
(whether or not the same are approved, withdrawn or implemented). The
Developer shall have sole responsibility for all, and the Tenant shall
have no responsibility for any proper TRM Costs actually incurred. The
Developer shall not agree any TRM Costs chargeable by third parties which
exceed those which are reasonable and proper and shall if the Tenant so
requests but at the Tenant's cost in all respects take any necessary
steps which are reasonably available to contest such costs unless they
are fixed price costs not previously objected to by the Tenant. The
Developer shall not be entitled to delay or cease execution of any
aspects of the Base Building Works and/or the preparation of designs or
specifications or the placing or negotiation of any contracts orders or
other matters (together, "IMPLEMENTATION") following submission of a TRM
Application pending the Tenant countersigning and returning the copy of
the Developer's Estimate as referred to in Clause 9.5 (unless the
Developer and the Tenant shall otherwise agree) notwithstanding that the
Developer acting reasonably may consider that the matters referred to in
the TRM Application mean that any matter relevant to Implementation would
or might stand to be wasted or need to be repeated or changed in the
event of the relevant TRM Plans being prepared or the TRMs being
implemented. Provided that, if the Developer and the Tenant do agree to
such delay or cessation of Implementation, the Tenant shall indemnify the
Developer (with the intention of putting the Developer in the same
after-tax position it would have been in had the matter giving rise to
the indemnification not arisen) against the
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costs so incurred by the Developer and any such delay or cessation and
all delays consequential thereon shall be deemed a Tenant's Delay.
9.9 COST AND TIME SAVINGS FOR TENANT'S REQUESTED MODIFICATIONS
9.9.1 If the implementation of a Tenant's Requested Modification is agreed by
the Developer and the Tenant (or in the event of dispute determined in
accordance with Clause 32) to have resulted in a cost saving to the
Developer then the amount of such saving shall at the Tenant's option be
paid to the Tenant on the date when the amount is agreed or determined in
accordance with Clause 32. If the implementation of a Tenant's Requested
Modification is agreed by the Developer and the Tenant or in the event of
a dispute referred for decision to the Independent Person (acting as an
Expert) pursuant to the provisions of Clause 32 hereof to have resulted
in a time saving to the Developer then the amount of such time saving
shall be credited against the total of Tenant's Delay.
9.9.2 If a Tenant's Requested Modification consists of an agreed omission from
the Base Building Works and:
(i) it is agreed or determined in accordance with Clause 9.9.1 that
such omission has resulted in a cost saving to the Developer; and
(ii) the relevant item omitted is subsequently installed or carried out
as part of the Fit Out Works ("AN IMPLEMENTED TRM"); and
(iii) such item is not an item comprised in the Developer's Fit Out
Works which is implemented by the Developer (or on its behalf),
then the Tenant may elect by notice given in writing to the Developer
within ten (10) Working Days of the Developer having agreed to the
Tenant's Requested Modification (or such matter having been determined
pursuant to Clause 32) that instead of having such cost saving taken into
account in the calculation of the Developer's Cap, the Developer shall
pay to the Tenant the Tenant's proper and reasonable costs of installing
the relevant Implemented TRM. The payment for the Implemented TRM shall
be made to the Tenant within fourteen (14) Working Days after the later
of:-
(a) the date when the Developer and the Tenant have agreed the cost to
the Tenant of installing or carrying out the Implemented TRM or in
the event of a dispute referred for decision to the Independent
Person (acting as an Expert) pursuant to the provisions of Clause
32 hereof the date when such cost is determined by such
Independent Person; and
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(b) the date of issue of the Certificate of Completion of the Fit Out
Works.
9.10 DEVELOPER'S HANDLING FEE
The Tenant will pay to the Developer a handling fee of three (3) per cent
of all TRM Costs such fee to be paid in the case of each Tenant's
Requested Modification within ten (10) Working Days of demand following
the final determination of the relevant TRM Costs.
9.11 DISPUTES AS TO TRM COSTS
The Developer and the Tenant shall procure that the Base Building
Quantity Surveyors and the Fit Out Quantity Surveyors use all reasonable
endeavours to agree the TRM Costs but in the event of disagreement either
party may at any time refer the matter in dispute to an Independent
Person (acting as an Expert) in accordance with the provisions of Clause
32.
9.12 APPROVALS
The implementation of any Tenant's Requested Modifications (but not the
fact that any delays relating to Tenant's Requested Modifications shall
be counted a Tenant's Delay) shall be conditional on all necessary
Approvals being obtained. The Tenant shall be responsible for obtaining
all such Approvals unless the parties agree that the Developer shall
obtain them at the Tenant's cost. The obtaining of any such Approvals and
any delay relating thereto shall be at the Tenant's risk in all respects
and the Developer shall have no responsibility where the Approvals are
not forthcoming or are late (save where the Developer has agreed to
obtain the Approvals and, having been supplied with all necessary
information required to be provided by the Tenant and application fees,
has failed to do so). Where delay is caused by the need to wait for
Approvals or Approvals not being forthcoming this shall be deemed a
Tenant Delay (save as aforesaid). The Developer shall not be obliged to
implement any Tenant's Requested Modifications unless and until any
necessary Approvals have been obtained.
9.13 TIME OF THE ESSENCE
Time shall be of the essence for all purposes of this Clause 9.
10. COPYRIGHT
10.1 LICENCE TO USE DRAWINGS ETC.
Insofar as the copyright to any drawings or other intellectual property
relevant to the Base Building Works is owned by the Developer or that
relevant to those of the Fit Out Works which do not relate to information
technology is owned by the Tenant (or the Developer or the Tenant
respectively have power without incurring liability for payment of money
or otherwise to grant licence to use or reproduce the same) the Developer
and the Tenant
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hereby irrevocably grant to each other non-exclusive licence to use and
reproduce the same for the purposes set forth in Clause 10.2 below.
10.2 RESTRICTIONS ON COPYRIGHT TO BE OBSERVED
The Developer and the Tenant undertake that they shall observe all
restrictions on copyright and other intellectual property rights
applicable to and treat as supplied in confidence all drawings plans
specifications cost information trade contract documents and calculations
supplied by the other, their contractors consultants or agents in
connection with or related to the Base Building Works or those of the Fit
Out Works which do not relate to information technology as the case may
be and will not use or permit to be used any of the same otherwise than
exclusively in connection with the planning and execution of the Fit Out
Works or the Base Building Works as the case may be and that each of them
will use all reasonable endeavours to procure compliance with this Clause
10 by their contractors consultants and agents or any third party engaged
instructed or retained by them in connection with the Base Building Works
or Fit Out Works or matters provided for in this Agreement.
10.3 FIT OUT CATEGORY A WORKS
The Tenant shall procure for the Developer prior to commencement of the
Fit Out Category A Works royalty free irrevocable licences from all
relevant parties to use and reproduce all drawings designs calculations
and other intellectual property relating to such Fit Out Category A
Works.
11. BASE BUILDING WORKS - ISSUE OF CERTIFICATES
11.1 INSPECTIONS, REPRESENTATIONS AND ISSUE OF CERTIFICATES
11.1.1 The Developer will keep the Tenant regularly informed of the
progress of the Base Building Works and in particular of the
anticipated date of Shell & Core Substantial Completion and of any
changes to it and the Developer will procure that in the three
months prior to the anticipated issue of the Shell & Core Works
Certificate arrangements are made for weekly meetings and
inspections by the Certifying Officer and the Fit Out Architect in
order to identify defects and other matters which would or might
preclude the issue of the same.
11.1.2 The weekly meetings referred to in Clause 11.1.1 shall be attended
by representatives of the Base Building Consultants and the Base
Building Contractor as well as the Certifying Officer and the Fit
Out Architect and at such meetings the then current snagging items
shall be discussed and reviewed.
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11.1.3 The Developer shall procure that the Fit Out Architect shall be
given not less than five (5) Working Days' notice of the intention
of the Certifying Officer to pre-inspect the Base Building Works
with a view to the eventual issue of the Shell & Core Works
Certificate and shall provide the Fit Out Architect with the then
current draft of the list of snagging items (if any) which the
Certifying Officer proposes at that time to annex to the Shell &
Core Works Certificate.
11.1.4 Within five (5) Working Days after the Developer gives such notice
to the Tenant of the pre-inspection the Tenant shall procure that
the Fit Out Architect and other relevant Tenant's Consultants
accompany the Certifying Officer on a "rehearsal" inspection of
the Base Building Works to ascertain whether Shell & Core
Substantial Completion has been achieved during which inspection
the Developer and the Fit Out Architect shall use all reasonable
endeavours to agree a preliminary list of any alleged defects in
the Base Building Works or matters requiring further work or
remedy (A "PRELIMINARY SNAG LIST") such list (which is to be
divided into (i) snagging items which the parties agree will not
be an impediment to the issue of the Shell & Core Works
Certificate and (ii) more serious defects which would constitute
such an impediment) to be prepared by the Certifying Officer
during the course of the inspection and countersigned by the
Tenant by way of agreement and the Tenant shall not be entitled to
raise at a later date any alleged defects in the Base Building
Works or matters requiring further work or remedy which were not
raised and put on the Preliminary Snag List at the time of the dry
run inspection, save that the Tenant will be entitled to raise
issues arising:
(a) from alleged unsatisfactory carrying out of snagging works
or other remedying of defects; or
(b) after the date of the "rehearsal" inspection.
11.1.5 The Developer shall procure that the Fit Out Architect shall be
given not less than five (5) Working Days' notice in writing of
the intention of the Certifying Officer to inspect the Base
Building Works with a view to the issue of the Shell & Core Works
Certificate. Such notice shall state the proposed date and time
of such inspection and the Tenant and/or the Fit Out Architect
will be permitted to accompany and make representations to the
Certifying Officer on such inspection. The Certifying Officer
shall be instructed by the Developer to have regard to (but shall
not be bound by) any representations made by the Developer and/or
the
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Tenant and/or the Fit Out Architect during such inspection or
made forthwith in writing thereafter as to the state and
condition of the Base Building Works.
11.1.6 The Certifying Officer shall at the same time give notice to the
Developer and the Tenant certifying the date on which the Shell &
Core Works Certificate would have been issued but for Tenant's
Delay and but for Extension Periods in each case taking account
of any periods quantified pursuant to Clause 5.8 ("DELAY
NOTICE").
11.1.7 The Developer shall forthwith supply to the Tenant a copy of the
Shell & Core Works Certificate together with the Delay Notice
when issued. The Certificate may be issued subject to a list of
snagging items additional to the matters detailed in the
Preliminary Snag List.
11.1.8 The Shell & Core Works Certificate shall be final and binding on
the parties hereto but without prejudice to any claims against
the Certifying Officer.
11.1.9 If the Tenant disputes the correctness of the Delay Notice the
Tenant may serve a Counter-Notice (hereinafter called the
"TENANT'S COUNTER-NOTICE") in writing upon the Developer within
fifteen (15) Working Days after the receipt by the Tenant of the
Delay Notice specifying the respects in which in the opinion of
the Tenant the Delay Notice is incorrect and giving full written
reasons for any such contentions by the Tenant and attaching
copies of all notes, reports, memoranda or other matters in the
possession of or available to the Tenant and which are relevant
to its contentions.
11.1.10 If the Developer (by notice in writing to the Tenant within five
(5) Working Days after the Tenant's Counter-Notice) disputes the
correctness of the Tenant's Counter-Notice giving full written
reasons for any such contentions by the Developer and attaching
copies of all notes reports memorandum or other matters in the
possession of or available to the Developer and which are
relevant to its contentions the dispute shall be referred for
settlement to an Independent Person who shall act as an Expert
who shall be requested forthwith to determine whether the Delay
Notice is correct and, if not, what steps are necessary to
correct the Delay Notice and the Expert shall consider (inter
alia) any representations made to him by the Developer and/or the
Tenant and/or the Fit Out Representative but shall not be bound
thereby.
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11.2 FIT OUT ARCHITECT'S DUTY OF CARE DEED
The Tenant will procure that as soon as reasonably practicable after the
date of this Agreement the Fit Out Architect enters into an appointment
and provides a duty of care deed to the Developer in the form approved by
the Developer (such approval not to be unreasonably withheld).
11.3 CERTIFICATES UNDER BUILDING CONTRACTS
None of the provisions of this Clause 11 shall place any obligations on
the Developer or the Certifying Officer in connection with the issue or
refusal of any certificate under a Base Building Contract (whether or not
with a snagging or defects list) and the Developer and Certifying Officer
shall have complete discretion in that regard.
11.4 TIME OF THE ESSENCE
Time shall be of the essence in this Clause 11.
12. RIGHT TO RESCIND
12.1 TENANT'S RESCISSION NOTICE
12.1.1 If Shell & Core Substantial Completion has not occurred by the date which
is twelve (12) months after the Target Date then, subject to Clause 12.3,
the Tenant may by not less than twenty (20) Working Days written notice
to the Developer served before the expiry of twenty (20) Working Days
following the Target Date (a "RESCISSION NOTICE") rescind this Agreement
(in which event the Developer shall have no further liability hereunder
save as provided in Clause 12.1.2) but if no such notice is served within
such time limit then the Tenant shall not thereafter be entitled to serve
a Rescission Notice.
12.1.2 Where a Rescission Notice has been served if the parties agree or in the
event of a dispute referred for decision to the Independent Person
(acting as an Expert) pursuant to the provisions of Clause 32 hereof it
is determined that any part of the failure to achieve Shell & Core
Substantial Completion by the Target Date is attributable to the neglect
and default of the Developer, then the Developer shall pay to the Tenant
Liquidated Damages (which are recognised as a genuine and realistic
assessment of the Tenant's prospective losses) for each period of delay
attributable to the Developer's neglect and default but only up to and
not exceeding the Maximum Damages and subject to payment the Developer
shall have no other liability to the Tenant on termination of this
Agreement other than as provided in this Sub-Clause 12.1.2.
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12.2 TENANT'S TERMINATION NOTICE
12.2.1 If Shell & Core Substantial Completion has not occurred by the Longstop
Date then, subject to Clause 12.3, the Tenant may by not less than twenty
(20) Working Days' written notice to the Developer served at any time
before Shell & Core Substantial Completion has occurred (a "TERMINATION
NOTICE") rescind this Agreement in which event the Developer shall have
no further liability hereunder save as provided in Clause 12.2.2.
12.2.2 Where a Termination Notice has been served if the parties agree or in the
event of a dispute referred for decision to the Independent Person
(acting as an Expert) pursuant to the provisions of Clause 32 hereof it
is determined that any part of the failure to achieve Shell & Core
Substantial Completion by the Longstop Date is attributable to the
neglect and default of the Developer, then the Developer shall pay to the
Tenant Liquidated Damages (which are recognised as a genuine and
realistic assessment of the Tenant's prospective losses) for each period
of delay attributable to the Developer's neglect and default but only up
to and not exceeding the Maximum Damages and the Developer shall have no
other liability to the Tenant on termination of this Agreement other than
as provided in this sub-Clause 12.2.2.
12.3 AGREED GRACE PERIODS
If the Tenant serves a Rescission Notice pursuant to Clause 12.1.1 or a
Termination Notice pursuant to Clause 12.2.1 and the Developer notifies
the Tenant within ten (10) Working Days following receipt of the relevant
notice that it considers that only works which are reasonably likely to
be substantially completed within a period of not longer than three (3)
months ("OUTSTANDING WORKS") still remain to be carried out in order to
achieve Shell & Core Substantial Completion then if the Tenant agrees
that the Outstanding Works are reasonably likely to be substantially
completed within a period of not longer than three months ("THE GRACE
PERIOD") or in the event of a dispute it is determined by an Independent
Person (acting as an Expert) pursuant to the provisions of Clause 32
hereof that the Outstanding Works are reasonably likely to be
substantially completed within the grace period then the Rescission
Notice or the Termination Notice (as the case may be) shall be suspended
for the grace period (as agreed or determined) to allow the Outstanding
Works to be completed. If the Outstanding Works have not been
substantially completed at the end of the grace period then the
Rescission Notice or the Termination Notice (as the case may be) shall
become effective from the day after the expiry of the grace period and
the Tenant may rescind this Agreement in accordance with the provisions
of Clause 12.1 or Clause 12.2 but otherwise the Recision Notice or the
Termination Notice (as the case may be) shall be treated as ineffective.
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12.4 DEVELOPER'S REQUEST TO EXTEND LONGSTOP DATE
If it becomes evident that the Developer will not achieve Shell & Core
Substantial Completion by the Longstop Date then it may request the
Tenant by a notice in writing (an "EXTENSION REQUEST NOTICE") served not
earlier than 24 June 2002 to confirm within three (3) months of the date
of the service of the Extension Request Notice whether it is prepared to
agree to extend the Longstop Date by an additional period to a reasonable
revised date (the "EXTENDED LONGSTOP DATE") as reasonably proposed by the
Developer in its notice. The Tenant shall unequivocally and in writing
agree or refuse within three months the request set out in the Extension
Request Notice. If the Tenant refuses the request (or fails to respond
unequivocally in writing as to whether the Developer's proposal is
accepted or rejected) in such three months timescale then the Developer
may determine this Agreement by serving written notice (a "DEVELOPER'S
RESCISSION NOTICE") on the Tenant. Any such termination will be without
prejudice to any right of action or other remedy any party may have in
respect of any antecedent breach of this Agreement but if the parties
agree or in the event of a dispute referred for decision to the
Independent Person (acting as an Expert) pursuant to the provisions of
Clause 32 hereof it is determined that any part of the failure to achieve
Shell & Core Substantial Completion by the Target Date is attributable to
the neglect and default of the Developer, then the Developer shall pay to
the Tenant Liquidated Damages (which are recognised as a genuine and
realistic assessment of the Tenant's prospective losses) for each period
of delay attributable to the Developer's neglect and default but subject
to the Maximum Damages and subject to payment the Developer shall have no
other liability to the Tenant on termination of this Agreement other than
as provided in this Sub-Clause 12.4. If the Tenant agrees to the
Extension Request Notice then for the purposes of this Agreement the
Extended Longstop Date shall be substituted for the Longstop Date.
12.5 TENANT'S REQUEST TO TERMINATE AGREEMENT
12.5.1 If the Tenant is concerned that the Developer cannot possibly achieve
Shell & Core Substantial Completion by the Longstop Date then it may by a
notice in writing served not earlier than 24 June 2002 notify the
Developer that it does not consider that Shell & Core Substantial
Completion can possibly be achieved by the Longstop Date and the Tenant
may serve any number of such notices. If the Developer agrees with the
Tenant's Notice, or if the Developer disagrees and subject to it having
been determined by an Independent Person (acting as an Expert) in
accordance with the provisions of Clause 32 hereof that it is impossible
(notwithstanding every effort being made to accelerate the programme) to
achieve Shell & Core Substantial Completion by the Longstop Date then the
Tenant may within twenty (20) Working Days of such agreement or
determination as aforesaid determine this Agreement by not less than
twenty (20) Working Days notice in writing to the Developer
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12.5.2 If the parties have agreed or it has been determined that Shell & Core
Substantial Completion cannot possibly be achieved by the Longstop Date
and the Tenant has determined this Agreement in accordance with Clause
12.5.1 then if the parties agree or in the event of a dispute referred
for decision to the Independent Person (acting as an Expert) pursuant to
the provisions of Clause 32 hereof it is determined that any part of the
failure to achieve Shell & Core Substantial Completion by the Longstop
Date is attributable to the neglect and default of the Developer, then
the Developer shall pay to the Tenant Liquidated Damages (which are
recognised as a genuine and realistic assessment of the Tenant's
prospective losses) for each period of delay attributable to the
Developer's neglect and default but subject to the Maximum Damages and
subject to payment the Developer shall have no other liability to the
Tenant on termination of this Agreement save that either party shall be
liable to the other in respect of any breaches occurring prior to the
termination of the Agreement pursuant to Clause 12.5.1.
12.6 TIME OF THE ESSENCE
Time shall be of the essence for the purpose of this Clause 12.
13. COMMISSIONING OF PLANT AND MACHINERY
13.1 COMMISSIONING BY COMMISSIONING ENGINEER
The Developer and the Tenant shall (each at its own cost) appoint or
procure the appointment of the Commissioning Engineer to document witness
and validate the commissioning and performance testing process, in
accordance with the specifications relating thereto, all plant and
machinery the supply or fixing of which is included (in the case of the
Developer's appointment) in the Base Building Works and (in the case of
the Tenant's appointment) the Fit Out Works respectively both separately
and together and the Commissioning Engineer shall be appointed on terms
whereby in each case the Commissioning Engineer owes an equal duty of
care to both the Developer and the Tenant and whereby the Commissioning
Engineer is instructed to issue copies of all certificates issued by him
to both the Developer and the Tenant.
13.2 TESTING AND REPRESENTATIONS
The Developer and the Tenant shall each procure that the other is given
not less than five (5) Working Days' notice of the proposed commencement
of any procedures for documenting witnessing and validating the
commissioning and performance testing process and/or commissioning any of
the plant and machinery and the party to which such notice is given and
its advisers shall be entitled to be present at any such test and to make
representations to the Commissioning Engineer and the party instructing
the Commissioning Engineer for the purpose of such test shall procure
that he has due regard to such representations (though he shall not be
bound thereby).
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13.3 DEFINITION OF TESTING
For the purpose of this Clause "testing" shall mean static rotation and
continuity testing of individual items of equipment and commissioning and
performance testing of systems against the specified requirements and
whatever the Commissioning Engineer can reasonably carry out in order to
check whether plant and machinery is Millennium Compliant provided always
that it is agreed that Millennium Compliance shall not be a pre-condition
to Shell & Core Substantial Completion
13.4 PARTIES TO CO-OPERATE AS TO TESTING
The Developer and the Tenant shall co-operate so as to procure the
efficient testing and commissioning of the plant and machinery in cases
where the functioning of plant and machinery installed as part of the
Base Building Works is dependent upon plant and machinery installed as
part of the Fit Out Works and vice versa.
13.5 BUILDING SYSTEMS
In relation to those portions of the Fit Out Works which involve any
connection to or interface with or affect the Building Systems, the
Tenant shall give to the Developer not less than five (5) Working Days'
notice of the proposed works and allow the Developer to be present at the
carrying out of such work Provided that if the Tenant elects not to use
the members of the Base Building Contracting Team or Base Building
Consultants or other advisors who are or were responsible for the design
and/or installation of such systems with which the connection or
interface is being made the Developer will have no liability for any
defects which arise to the extent that (and always subject to the Tenant
having been provided with copies of relevant warranties) the warranties
of such persons have been rendered wholly or partially invalid due to the
Tenant electing not to instruct such persons to make such connection or
interface.
13.6 TESTING AFTER FITTING-OUT AND OCCUPATION
Where any plant or machinery the supply or fixing of which is included in
the Base Building Works needs to be commissioned or to be tested or
balanced after fitting-out and occupation of the Demised Premises or any
part thereof, the Developer shall arrange for the commissioning testing
and balancing but with the Developer being responsible for costs so far
as they relate to the Base Building Works the Tenant being responsible
for the costs so far as they relate to Fitting Out Works and the
Developer and the Tenant being jointly responsible in equal shares for
the costs so far as they relate to the interface between the Base
Building Works and the Fitting Out Works.
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13.7 CARRYING OUT WORKS PRIOR TO COMMISSIONING
The Developer shall be responsible for carrying out any works which prove
to be necessary to enable any plant and machinery or installations
forming part of the Base Building Works to be initially commissioned and
the Tenant shall be responsible for procuring the carrying out of any
works which require to be done in order to enable any plant or machinery
or installations forming part of the Fit Out Works to be commissioned. To
the extent however that any works connected with or arising from the Fit
Out Works lead to a need for commissioning, rebalancing, alteration of or
adjustment to any plant or other items which would otherwise be the
Developer's responsibility, the Developer shall carry out any necessary
works but at the cost of the Tenant in all respects.
14. DEFECTS
14.1 MAKING GOOD INITIAL DEFECTS
The Developer shall as soon as reasonably practicable (or immediately in
case of emergency) remedy or cause to be remedied those omissions
imperfections defects or other faults specified in the Schedule annexed
to the Shell & Core Works Certificate as issued agreed or determined in
accordance with Clause 32.
14.2 MAKING GOOD DEFECTS AT FINAL COMPLETION
Without prejudice to the foregoing the Developer shall procure that the
Certifying Officer prepares a schedule in accordance with the terms of
the Base Building Contract listing any omissions defects shrinkages or
other faults appearing in the Base Building Works or any part thereof and
supply a copy thereof to the Fit Out Representative not later than
seventeen (17) Working Days before the expiry of the relevant Defects
Period and the Tenant shall procure that not later than fifteen (15)
Working Days after the receipt of such schedule the Fit Out Architect and
the Fit Out Professional Firms (as appropriate) list any omissions
defects shrinkages or other faults which they have observed and the
Developer shall procure that the Certifying Officer has regard to the
same and if appropriate adds them to the list to be notified to the Base
Building Contractor for completion and the Developer shall as soon as
reasonably practicable make good or procure to be made good all such
omissions defects shrinkages or other faults. Any disagreement as to the
extent or nature of any omissions defects shrinkages or other faults
shall be referred to the Independent Person acting as an Expert under
Clause 32.
14.3 DEFECTS PERIOD
For the purposes of Clause 14.2 the relevant Defects Period means that
specified in the Base Building Contract.
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14.4 INHERENT DEFECTS
Without prejudice to any other rights and remedies of the Tenant under
this Agreement (subject to Clause 5.5.2) if any Inherent Defect manifests
itself or the Building or any part thereof is damaged by an Inherent
Defect and such Inherent Defect is notified to the Developer and has
manifested itself during the period of five years commencing on the date
of Shell & Core Substantial Completion (the "ID PERIOD") then the
Developer and the Tenant shall agree a method and programme for carrying
out any necessary remedial work and the Developer shall procure the
carrying out any necessary works to remedy the Inherent Defect and any
damage thereby caused provided always that:-
14.4.1 Where the Developer carries out any works the Tenant shall give
and procure all reasonably necessary access for that purpose
subject to the provisions of Clause 14.6;
14.4.2 The Developer shall not be liable for the remedy of defects
(whether under this Clause 14.4 or otherwise and howsoever
arising) to the extent that the existence of any Inherent Defect
results from acts or omissions of the Tenant in breach of this
Agreement or any subsequent Fit Out Works or alterations carried
out by the Tenant or any subtenant, licensee, occupier, person
sharing possession with the Tenant result in any claims by the
Developer in relation to any relevant contract, appointment,
warranty, duty of care deed, or insurance policy the terms of
which in each case have previously been notified to the Tenant
being defeated, vitiated or avoided or in the Inherent Defect
being worsened and in such case the Developer shall allow the
Tenant all access to the Building which is necessary to enable the
Tenant to carry out the remedial work itself; and
14.4.3 Notwithstanding Clause 14.4 and to the extent that it will not
result in any claims by the Developer in relation to any relevant
contract appointment warranty duty of care deed or insurance
policy the terms of which in each case have previously been
notified to the Tenant being defeated vitiated or avoided the
Tenant may elect to carry out remedial works which the Developer
is liable to carry out itself where entry by the Developer is
likely to interfere materially with the Fit Out Works and if the
Tenant makes such election the reasonable and proper costs and
expenses (excluding any part thereof which represents VAT in
respect of which the Tenant is entitled to credit or repayment
from H M Customs & Excise) of the remedial works including
professional fees (excluding any part thereof which represents VAT
in respect of which the Tenant is entitled to credit or repayment
from H M Customs & Excise) shall be paid by the Developer to the
Tenant within five (5)
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Working Days of demand accompanied by such bills receipts and
invoices as are reasonably necessary to evidence payment by the
Tenant.
14.5 MILLENNIUM COMPLIANCE RENT PAY-BACK
To the extent that the premises demised by any of the Lease or any part
thereof are at any time prior to 31 January 2001 rendered incapable of
use and occupation as high class offices by reason of any plant machinery
and equipment and related computer systems and/or related hardware and/or
software (together the "MILLENNIUM ITEMS") not being Millennium
Compliant, then the Developer as liquidated and ascertained damages
(which are recognised as a genuine and realistic assessment of the
Tenant's prospective losses) shall pay to the Tenant while the relevant
part(s) of the said premises remain incapable of such use and occupation
within ten (10) days of a proper demand a sum being a rateable or due
proportion (depending on the use and extent of the part of the said
premises affected) of the rent payable under Clause 4.1.1 of the relevant
Lease or (if the rent free period has not expired) which would have been
payable if the rent free period had expired (or an equivalent sum due
under the terms of this Agreement if the Leases have not then been
granted) and subject to the Developer making such payment the Developer
shall have no other liability to the Tenant and Provided Always that the
Developer shall have no further liability under this Clause 14.5 after 31
January 2001 except to the extent the Tenant has notified the Landlord in
writing prior to that date that the premises or the relevant part of the
premises is incapable of use and occupation as aforesaid by reason of a
Millennium Item not being Millennium Compliant.
14.6 MAINTENANCE AGREEMENTS
The Tenant shall with effect from Shell & Core Substantial Completion and
until Completion of the Fit Out Works enter into such maintenance
agreements as are reasonably necessary to enable the Developer to obtain
extended warranties from the Base Building Contractors and appropriate
sub-contractors in respect of all plant and machinery.
14.7 ACCESS BY DEVELOPER TO MAKE GOOD DEFECTS
In circumstances where the Developer has liability to remedy defects or
carry out works:-
14.7.1 The Tenant shall whether before or following the grant of the
Leases or any underleases permit the Developer the Base Building
Architects and the Base Building Contractors and all persons
reasonably authorised by them at all reasonable times and on
giving reasonable prior written notice (except in an emergency
where access shall be available at any time and no notice shall be
required) and complying with the Tenant's reasonable requirements
to have access
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to all relevant common parts of the Building in order to remedy
any defects and to enjoy all facilities necessary for carrying out
such works; and
14.7.2 Where the Developer requires access to other parts of the Building
in order to remedy any defects therein the Developer shall make
prior arrangements with the Tenant as to the times of access and
the Developer and the Tenant shall endeavour to agree a programme
for carrying out any such remedial works. The Tenant shall be
entitled to require such works to be carried out outside usual
business hours. Each such person so entering shall:-
(a) cause the minimum amount of interference and disruption as
is reasonably possible to the carrying out of the Fit Out
Works or any other works by the Tenant in the Building and
to the Tenant's business;
(b) comply with any reasonable directions and security
precautions for the Building so long as these shall not
prevent the carrying out of the relevant works or
inspection;
(c) be accompanied if the Tenant so requires by a
representative of the Tenant; and
(d) make good as soon as reasonably practicable to the
reasonable satisfaction of the Tenant any loss damage or
injury thereby caused to the Building the Fit Out Works or
the property of the Tenant or any sub-tenant or other
lawful occupiers or visitors in the Building
but so that neither the Developer nor anyone acting on its behalf
shall be liable for any consequential loss (or diminution) of
business, whether actual or prospective.
14.8 DAMAGES IN RESPECT OF A RELEVANT DEFECT
14.8.1 In this Clause 14.8.1 the expression "Damages" means all amounts actually
recovered by the Developer in respect of any Relevant Defect (less any
part of such amounts paid in respect of any tax payable by the Developer
in respect of such amounts) from all or any parties to the Base Building
Contract or the Base Building Contracting Team or the Base Building
Consultants responsible in whole or in part for the Relevant Defect
pursuant to any action or proceedings brought against such parties under
this Clause 14.8.1 or pursuant to a settlement of a claim whether before
or after such proceedings are commenced and "Relevant Defect" means any
defect in the Base Building Works which is due to or arises from a breach
by the Developer of its obligations contained in Clause 14.8.2 and which
the
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Developer is not obliged to make good pursuant to Clauses 14.2 and/or
14.4 and which manifests itself within twelve (12) years of the date
hereof
14.8.2 The Developer hereby agrees to indemnify the Tenant (with the intention
of putting the Tenant in the same after-tax position it would have been
in had the matter giving rise to the indemnification not arisen) against
the cost of making good a Relevant Defect by contributing to the same by
way of payment for services pursuant to the Lease or pursuant to the
Tenant's repairing covenants contained in the Lease PROVIDED ALWAYS that
the liability of the Developer to the Tenant under this Clause 14.8.2
shall be limited to the Damages actually recovered by the Developer and
as between the lessees from time to time of each of the Leases the amount
of the Damages actually recovered by the Developer shall be pro-rated
between the lessees according to the proportion which the Net Internal
Area of the premises demised by the relevant lessee's lease bears to the
aggregate Net Internal Area of the Lettable Areas within the Building as
a whole
14.8.3 In respect of any Relevant Defect the Developer will at the request of
the Tenant and subject to the Developer receiving:-
(a) an indemnity from the Tenant satisfactory to the Developer acting
reasonably in respect of all proper costs losses and expenses
incurred by the Developer in any such actions (including costs
awarded against it and any other costs or losses of any nature
incurred in connection with or as a result of any of the
provisions of this Clause 14.8 which exceed those recovered by the
Developer) and such security for costs and expenses as the
Developer shall reasonably require; and
(b) (if so requested by the Developer and upon the Developer supplying
to the Tenant full information concerning the Relevant Defect) a
written opinion of Leading Counsel who shall have been approved by
the Developer and the instructions to whom shall have been
approved by the Developer (in each case such approval not to be
unreasonably withheld) that any such action is reasonably likely
to succeed and that action by the Tenant itself would be unlikely
to succeed
enforce for the benefit of the Tenant and Developer and any other
relevant person or persons any warranties guarantees or other rights or
remedies which the Developer may have under any of the Base Building
Contracts in respect of such Relevant Defects;
14.8.4 The Developer shall be entitled in relation to any claim or proceedings
brought by the Developer pursuant to Clause 14.8.3 to negotiate terms for
settlement if advised by Leading Counsel that the terms proposed for
settlement are prudent and reasonably satisfactory
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the context of the amount of the claim the likelihood of recovery of
additional sums the time and costs involved in proceeding further and all
other relevant considerations Provided that the Tenant shall be consulted
by the Developer (but so that the Developer shall not be bound by its
views) and shall be entitled to make representations to such Leading
Counsel prior to such settlement being concluded
14.8.5 The Developer shall apply the Damages in paying or reimbursing the
following amounts in the order set out and pro rata in the event that
the Damages shall be insufficient to fully discharge the total amount
under any head:-
(a) firstly all amounts paid or incurred by the Developer and
(following discharge of any such amounts) all amounts paid or
incurred by the Tenant and/or any other parties contributing to
the costs incurred by the Developer in any action or proceedings
brought against any parties to the Base Building Contract or the
Base Building Consultants or the Base Building Contracting Team
brought against such parties under this Clause 14.8 (save to the
extent that the same shall be recovered from the party in default)
together with interest thereon at Base Rate from the date of
payment of such amounts until repayment
(b) secondly all amounts paid by the Tenant the Developer and/or any
other party in making good the Relevant Defect in question
whether by a contribution to the same by way of payment for
services or pursuant to repairing covenants and
(c) thirdly any balance shall be divided between the Developer and
Tenant and any other party or parties in such fair proportions as
shall be determined by the Developer (who shall be required to
act reasonably and promptly) having regard to the losses in
respect of the Relevant Defect in question suffered by the Tenant
the Developer and such other party or parties (whether or not a
claim has actually been made by the Tenant the Developer or such
other party or parties at the time when the Damages are
recovered).
References in this Clause 14.8.5 to amounts paid or incurred by any
person do not include a reference to such part of such amounts as
represents VAT input tax in respect of which such person is entitled to
credit or repayment from H M Customs & Excise.
14A. FIT OUT WORKS
The Tenant is not obliged to but may elect for the Fit Out Works to be
carried out. If it does so elect, the Fit Out Works shall be carried out
in accordance with the provisions of this Agreement.
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15. FIT OUT PLANS
15.1 PREPARATION OF DRAWINGS
The Tenant shall not later than two (2) months before the anticipated
Shell & Core Substantial Completion Date at its cost and expense cause to
be prepared and submitted to the Developer details of the Fit Out Works
for approval including (but without limitation):-
15.1.1 architectural working drawings and specifications; and
15.1.2 structure and services engineering working drawings and
specifications; and
15.1.3 separate schedules setting out those items which in the Tenant's
reasonable opinion constitute Fit Out Category A Works (the "FIT
OUT CATEGORY A SCHEDULE") and those which will constitute Fit Out
Category B Works (the "FIT OUT CATEGORY B SCHEDULE")
in respect of the design materials and work for the various elements of
the Fit Out Works. The Fit Out Works shall not be commenced until the
Developer's prior approval has been obtained in accordance with Clause
15.6.
15.2 FIT OUT PLANS/INTERFACE WITH BUILDING SYSTEMS
The drawings and specifications caused to be prepared by the Tenant and
any changes therein permitted under this Clause 15 are herein
collectively called "FIT OUT PLANS".
15.3 DETAIL OF FIT OUT PLANS
The Fit Out Plans shall be fully co-ordinated by the Tenant with the
plans comprised within the Base Building Specification (as varied or
modified) and shall incorporate all reasonable information which may be
required to let all contracts required for the performance of the Fit Out
Works including the details of all such Fit Out Works and the dimensioned
locations thereof with reference to the building column centre line or
the face of finished column enclosures. The plans of Fit Out Works shall
consist of all details reasonably required by the Developer, including
without limitation a CAD disk and scaled and dimensioned architectural
and engineering working drawings and specifications showing all of the
Fit Out Works which architectural and engineering working drawings and
specifications shall contain sufficient detail to enable the Developer to
determine whether or not the Fit Out Works both as a whole and in their
individual parts are acceptable and comply with the provisions of Clause
15.4;
15.4 RESTRICTIONS ON FIT OUT WORKS
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The Fit Out Works (including any changes thereto) shall not contain
proposals for or refer to materials or work which if implemented would:-
(a) require any changes in the Base Building Works other than those
arising from such Tenant's Requested Modifications as are to be
actually implemented; or
(b) alter the external dimensions of the Building; or
(c) be matters which the landlord under the Lease would be absolutely
entitled to withhold consent for (save that the Fit Out Works may
include works to areas outside the demises granted to the Tenant)
or involve the use of Prohibited Materials; or
(d) adversely affect the Building Systems otherwise than to an
immaterial extent or the cost of operating the Building Systems
Provided that the proposed use of floors as trading floors shall
not be a ground for withholding approval under this sub-Clause; or
(e) violate any laws or the requirements of any Approvals (unless the
Tenant obtains a revised Approval) or the reasonable requirements
from time to time of the insurers of the Building notified to the
Tenant (or its representatives or advisors) or be such that any
Approval or any insurance to be effected by the Developer pursuant
to this Agreement is reasonably likely to be unobtainable on
reasonable terms or made materially more expensive; or
(f) comprise or contain any works which are not at least equivalent in
scope and quality to those described in the Minimum Standard
Fitting Out Works Specification.
15.5 DOCUMENTS TO BE SUPPLIED
One set of transparencies and three full size prints of each plan and
specifications and one set of DXF files on computer disk showing the same
shall be submitted to the Developer on each occasion that the Tenant
supplies details of its proposals to the Developer for approval.
15.6 APPROVAL OF FIT OUT WORKS
The Developer shall not unreasonably withhold or delay its approval to
any of the Fit Out Works save that the Developer shall be entitled to
withhold approval to any of the items mentioned in Clause 15.4.
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15.7 AMENDMENT OF FIT OUT PLANS
If the Developer shall on reasonable grounds disapprove of any aspects of
the applicable drawings and specifications then the Developer shall
within ten (10) Working Days give notice in writing specifying the
grounds for such disapproval and the Tenant shall return to the Developer
appropriate corrections thereto as soon as reasonably practicable after
receipt of such notice. If the Developer shall still decline to approve
the Tenant's plans as amended either party may refer the matter or
matters in dispute to the Independent Person (acting as an Expert) for a
decision in accordance with the provisions of Clause 32.
15.8 APPROVALS
The Tenant shall use all reasonable endeavours and the Developer shall
(without obligation to incur cost unless reimbursed by the Tenant) lend
such assistance and support as is reasonably required to obtain all
necessary Approvals required for the Fit Out Works (and the Tenant shall
not implement them or procure their implementation unless and until such
Approvals are granted) and the Tenant shall promptly provide copies of
any such Approvals to the Developer.
16. ENTRY FOR THE TENANT'S FIT OUT WORKS AND SUBSEQUENT OCCUPATION
16.1 ACCESS FOR TENANT'S FIT OUT WORKS
Subject to the other relevant provisions of this Agreement the Developer
shall grant the Tenant its contractors agents advisers workmen and others
engaged in the execution of the Tenant's Fit Out Works access to the
Demised Premises by way of licence only in common with the Developer and
others at all times (subject as hereinafter mentioned) with effect from
Shell & Core Substantial Completion Date for the purpose of the
commencement and execution (where all necessary consents and Approvals
have been obtained) of the Tenant's Fit Out Works and for the Tenant's
subsequent occupation and use for the purposes of its business.
16.2 DESIGN OF FIT OUT WORKS
The Fit Out Works shall be designed with reasonable skill and care and
the Tenant's Fit Out Works if carried out shall be carried out and
completed:-
16.2.1 in a good substantial and workmanlike manner in accordance with
the plans, drawings and specifications approved by the Developer
and according to good building practice as generally accepted at
the date of the works being carried out according to standards of
good design practice as at the date of design of the works;
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16.2.2 using materials goods and equipment as set out in any
specifications relating to the Fit Out Works and otherwise using
good quality materials (if not so specified);
16.2.3 in accordance with any relevant Approvals, the relevant terms of
this Agreement and all relevant codes of practice and regulations
of relevant professional institutes applying at the time of
carrying out of the Tenant's Fit Out Works;
16.2.4 in respect of the Fit Out Category A Works comprised in the
Tenant's Fit Out Works on the Basement level through to Level 4
(inclusive) within 24 months of the Shell & Core Substantial
Completion Date and in respect of such Fit Out Category A Works on
the higher Levels within 48 months of such Date; and
16.2.5 so that the Tenant obtains a Fire Certificate for the Demised
Premises.
16.3 COMPLIANCE WITH SITE REGULATIONS
The Tenant shall itself, and shall use all reasonable endeavours to
procure that the Fit Out Professional Firms and the Fit Out Building
Contractor and all other parties instructed by or acting for the Tenant
comply with the Site Regulations.
16.4 APPROVAL OF FIT OUT METHOD STATEMENT
As soon as reasonably practicable and in any event not less than one
month prior to the anticipated Shell & Core Substantial Completion Date
and not less than one month prior to commencement of the Tenant's Fit Out
Works the Tenant after consultation with the Developer shall submit to
the Developer for and obtain the Developer's approval to the detailed
method statement (a "METHOD STATEMENT") in writing (which approval shall
not be unreasonably withheld or delayed). The Method Statement shall
contain the following information:-
16.4.1 details of the Fit Out Professional Firms the Fit Out Building
Contractor and the Fit Out "Principal Contractor" (as defined in
the CDM Regulations) for the design overseeing and carrying out of
each part of the Tenant's Fit Out Works;
16.4.2 details of the manner in which the Tenant will structure the
responsibilities of the professional team and contractors and
sub-contractors engaged in connection with the carrying out of the
Tenant's Fit Out Works;
16.4.3 proposals for liaison co-ordination and co-operation between the
Developer, the Developer's Senior Managers, the Base Building
Contracting Team, and the Fit
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Out Professional Firms and the Fit Out Building Contractor and the
Tenant's Senior Managers; and
16.4.4 proposals for the storage on-site of the materials and equipment
intended for incorporation in the Tenant's Fit Out Works.
Provided That the Developer shall be entitled to refuse entry or access
to the Demised Premises pursuant to the access to be granted under Clause
16.1 until the Method Statement shall have been approved as aforesaid by
the Developer.
16.5.1 COMPLIANCE BY TENANT WITH CERTAIN REQUIREMENTS
Upon entering the Demised Premises or any other part of the Development
Site the Tenant will itself and will use all reasonable endeavours to
procure that its contractors agents advisers and workmen will at all
times:-
16.5.1.1 comply in all respects with the provisions of the Method
Statement approved pursuant to the provisions of Sub-Clause 16.4
of this Clause as the same may be added to amended or varied
from time to time as permitted by this Agreement;
16.5.1.2 keep free and unobstructed all escape routes in relation to the
Development Site and instruct vehicles visiting it in connection
with the Tenant's Fit Out Works to go directly to designated
unloading points and leave the Development Site promptly upon
unloading being completed;
16.5.1.3 where appropriate consult and thereafter comply in all proper
respects with the proper requirements of the Police and all
relevant statutory authorities in respect of the delivery of
materials for use in connection with the Tenant's Fit Out Works;
16.5.1.4 comply in all respects and for all purposes with the safety and
floor loading requirements comprised in the Base Building
Specification;
16.5.1.5 (save to the extent approved by reason of the Developer's
approval of the Fit Out Works) not to damage or cause or permit
its servants agents or contractors or any other persons to
damage the Base Building Works and not to make or instruct to be
made by any such persons any connections with or to any
installation forming part of the Base Building Works (other than
any which form part of the Tenant's Fit Out Works and then in
conformity with the other provisions of this Agreement) without
the prior approval of the Developer to such connections (which
approval shall not be unreasonably withheld or delayed); and
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16.5.1.6 comply in all respects with any relevant insurers and
legislation in respect of safety health and welfare and the
reasonable safety requirements of the Developer.
16.5.2 CDM REGULATIONS
16.5.2.1 The Tenant acknowledges that it or GSPM shall act as and shall
be regarded as the only client for the purposes of the
Construction (Design and Management) Regulations 1994 (the "CDM
REGULATIONS") in relation to the Fit Out Works and shall make
the necessary written declaration (in accordance with paragraph
4(4) of the CDM Regulations) to the Health and Safety Executive
that it so acts.
16.5.2.2 Without prejudice to the generality of Clause 16.5, the Tenant
shall comply or shall procure that GSPM shall comply with all
its obligations as client under the CDM Regulations.
16.5.2.3 The Tenant shall or shall procure that GSPM shall provide access
to a copy of the Health and Safety Plan and the Health and
Safety File as defined under the CDM Regulations to the
Developer throughout the duration of the Fit Out Works and on
completion of the Fit Out Works shall deliver a copy of the
Health and Safety File to the Developer.
16.6 OBSERVANCE OF LEASE COVENANTS
From the Shell & Core Substantial Completion Date until the date of
completion of each of the Leases the Developer and Tenant shall (subject
to the terms of this Agreement) be subject to and shall observe and
perform and be bound by the covenants conditions and provisions in the
Leases notwithstanding that the same have not been executed.
16.7 DEVELOPER'S RIGHT TO INSPECT
The Tenant shall at all reasonable times permit the Developer and its
nominated representative to inspect the progress and manner of execution
of the Tenant's Fit Out Works on reasonable prior notice and subject to
the reasonable and proper safety and security requirements imposed by the
Tenant and/or the Fit Out Building Contractor.
16.8 RESPONSIBILITY FOR CLAIMS
If any action claim demand or similar matter (each a "CLAIM") is brought
made or asserted by any person in respect of any noise dust vibration
nuisance disturbance loss of amenity interference with access or egress
connected with the Development Site or the carrying out of works or
otherwise then as between the Developer and the Tenant:-
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16.8.1 the party receiving notice of a Claim shall provide the other with
full details and shall take all reasonable steps to defend the
Claim;
16.8.2 neither the Developer nor the Tenant shall settle or compromise
any Claim whilst both the Base Building Works and the Fit Out
Works are proceeding without the prior approval of the other (such
approval not to be unreasonably withheld);
16.8.3 if the Base Building Works and the Fit Out Works are both
proceeding at the time of such claim the Developer and the Tenant
shall as between themselves share rateably in any liability
according to their relative contributions to the matter complained
of; and
16.8.4 if only the Tenant's Fit Out Works are proceeding at the time of
such claim the Tenant shall be solely liable and the Tenant shall
indemnify the Developer (with the intention of putting the
Developer in the same after-tax position it would have been in had
the matter giving rise to the indemnification not arisen) for any
claim against it provided that the Developer shall not settle
compromise or admit liability for such a claim without the
Tenant's prior written consent (such consent not to be
unreasonably withheld or delayed).
16.9 RESPONSIBILITY FOR DELAY
The Tenant hereby covenants with the Developer that it will use its
reasonable endeavours not to do anything (beyond exercising its rights
hereunder to request Tenant's Requested Modifications) which would hinder
or delay the carrying out of the Development Works
16.10 COLLATERAL DEEDS OF WARRANTY
As soon as reasonably practicable, the Tenant shall use all reasonable
endeavours to procure the execution and delivery to the Developer of a
collateral deed of warranty from the Fit Out Building Contractor, the Fit
Out Architect the Fit Out M & E Engineer and the Fit Out Project Manager
and any sub-contractor with any material design responsibility in a form
negotiated by the Tenant and approved by the Developer such approval not
to be unreasonably withheld.
16.11 EARLY ACCESS
Notwithstanding the provisions of this Clause 16 if by the Target Date
the Developer shall not have achieved Shell & Core Substantial Completion
but in respect of computer areas plant areas and other areas reasonably
requested by the Tenant the Base Building Works are complete in
accordance with the normal standards applied by architects except for
items omitted at the request of the Tenant the Developer shall (subject
to the Tenant paying in full
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the Developer's associated costs) facilitate the early access for initial
Tenant's Fit Out Works by the Tenant in such areas upon such terms as to
access (other than the payment of rent which shall remain as provided for
in Clause 23.3.4) as shall be reasonably determined by the Developer.
Provided that the Tenant will
(i) not damage or cause or permit its servants agents or contractors
or any other persons to damage the Base Building Works and in
particular not to interfere with or permit such persons to
interfere with or do or permit to be done by any such persons any
act or thing which may adversely affect the carrying out or
completion of the Base Building Works
(ii) comply in all respects with the reasonable safety requirements of
the Developer
and provided further that the Developer's liability to pay Liquidated
Damages pursuant to the terms of this Agreement shall be reduced by the
same proportion which the areas to which the Tenant is allowed early
access bear to the total Net Internal Area of the Demised Premises.
17. COMPLETION OF THE FIT OUT WORKS
17.1 INSPECTION, REPRESENTATIONS AND ISSUE OF CERTIFICATE
The Tenant shall procure that:-
17.1.1 the Developer shall be given not less than five (5) Working Days'
notice of the intention of the Fit Out Architects to inspect the
Fit Out Works with a view to the issue of the Certificate of
Completion of Fit Out Works (or any part thereof);
17.1.2 that the Developer and such of its consultants as it may wish
shall be given the opportunity to accompany the Fit Out Architects
on the final inspection prior to the issue of the Certificate of
Completion of Fit Out Works (or part thereof) in order that the
Developer may (but shall not be bound to) make whatever
representations to the Fit Out Architects which the Developer
thinks fit as to whether or not the Fit Out Works or the relevant
part shall have been practically completed;
17.1.3 the Fit Out Architects will have regard to (but shall not be bound
by) any representations made pursuant to Sub-Clause 17.1.2; and
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17.1.4 the Tenant shall supply to the Developer a copy of the Certificate
of Completion of Fit Out Works or part thereof when issued
together with any snagging list and subject to Clause 17.2 the
date specified in the Certificate of Completion of Fit Out Works
or part thereof shall be the date of practical completion of the
Fit Out Works or the relevant part thereof for the purposes of
this Agreement. The Tenant shall procure the prompt and effective
remedy of all defects or other items referred to in any snagging
or similar list or schedule to the Certificate of Completion of
Fit Out Works and shall keep the Developer fully informed and up
to date in that regard.
17.2 CERTIFICATE TO BE BINDING
The Certificate of Completion of Fit Out Works shall be final and binding
on the parties hereto but without prejudice to any claim against the Fit
Out Architect.
17.3 FAILURE TO COMPLETE FIT OUT CATEGORY A WORKS
If at the expiration of the period specified in Clause 17.2.4 (subject to
extension by Force Majeure) the Tenant has not completed the Fit Out
Category A Works comprised in the Tenant's Fit Out Works on the relevant
floor or floors then the Developer shall be entitled (without prejudice
to its other remedies under this Agreement) to enter the Demised Premises
in order to carry out or cause to be carried out the relevant Fit Out
Category A Works or any part thereof comprised in the Tenant's Fit Out
Works in accordance with the provisions of Clause 16 and all costs and
expenses thereby incurred (or such payment on account of the same as the
Developer may specify) shall be paid by the Tenant to the Developer upon
demand.
18. ANCILLARY PROVISIONS AS TO TENANT'S FIT OUT WORKS
18.1 DOCUMENTS TO BE SUPPLIED
As soon as practicable (but within six (6) months in any event) following
the Certificate of Completion of Fit Out Works:-
18.1.1 the Tenant shall supply to the Developer four complete sets of the
final as-built drawings showing the works actually carried out
together with a set of DXF files on computer disk showing the
same;
18.1.2 the Developer and the Tenant shall each sign and exchange the
Licence annexing the relevant marked up or as-built plans for the
purpose of recording the Fit Out Works;
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18.1.3 the Tenant shall give to the Developer a copy of the revised
health and safety file (taking account of all the Tenant's Fit Out
Works) compiled pursuant to the CDM Regulations; and
18.1.4 the Tenant shall give to the Developer a copy of all warranties
given by manufacturers in respect of all plant and machinery.
18.2 TENANT'S INDEMNITY
The Tenant shall in respect of the Fit Out Works and without prejudice to
any other obligation on its part herein keep the Developer fully and
effectually indemnified (with the intention of putting the Developer in
the same after-tax position it would have been in had the matter giving
rise to the indemnification not arisen) against:-
18.2.1 any breach by the Tenant or its servants or agents of the
conditions or requirements imposed or implied by the Approvals and
any other permission or licence granted (on the application of or
on behalf of the Tenant) for or otherwise pursuant to the terms of
this Agreement for the execution of the Fit Out Works; and
18.2.2 all claims actions damages demands losses expenses costs and other
liabilities whatsoever suffered by the Developer which arise out
of the carrying out of the Fit Out Works
and will make good forthwith to the satisfaction of the Developer any
damage or injury caused by the Tenant (or by anyone for whom the Tenant
is responsible) to the Building or the Demised Premises or to the Base
Building Works any other part of the Development Site or to the property
of the Developer or any of its servants agents licensees or workmen.
19. ENTRY BY THE DEVELOPER AFTER THE SHELL & CORE SUBSTANTIAL COMPLETION DATE
The Tenant shall whether before or following the grant of any Lease (the
Tenant acknowledging that certain works may take place after Leases are
granted) permit the Developer and/or the Base Building Contractor and all
persons authorised by them subject to the conditions set out in Clause
14.7 to enter the Demised Premises in order first to perform any
unperformed obligations of the Developer and second to examine the state
and condition of the Demised Premises and any plant machinery or
mechanical and electrical services therein.
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20. DEVELOPER'S FIT OUT WORKS
20.1 DEVELOPER'S FIT OUT WORKS
The Developer shall procure the carrying out of the Developer's Fit Out
Works Provided
That:
(i) the total cost (excluding any part thereof which represents VAT)
to be incurred by the Developer in respect of items comprised in
the Fit Out Category A Works which are included in the Developer's
Fit Out Works shall not exceed the Developer's Commitment (and,
for the avoidance of doubt, the Developer shall not be obliged to
procure the implementation of any further item comprised in the
Fit Out Category A Works once such total cost is equal to the
Developer's Commitment); and
(ii) the total cost (excluding any part thereof which represents VAT)
to be incurred by the Developer in respect of items comprised in
the Fit Out Category B Works which are included in the Developer's
Fit Out Works shall not exceed the Developer's Cap (and, for the
avoidance of doubt, the Developer shall not be obliged to procure
the implementation of any further item comprised in the Fit Out
Category B Works once such total cost is equal to the Developer's
Cap).
For the avoidance of doubt, all Fit Out works invoiced to or paid
for by the Developer shall be the property of the Developer and
(if appropriate) form part of the Demised Premises and be subject
to the Lease.
20.1A If, at any time:-
(i) the VAT-exclusive cost of any item comprised in the Fit Out
Category A Works which would, but for this Clause 20.lA, be
included in the Developer's Fit Out Works is an amount which, if
incurred in full by the Developer, would cause the total cost
(excluding any part thereof which represents VAT) to be incurred
by the Developer in respect of items comprised in the Fit Out
Category A Works to exceed the Developer's Commitment; and
(ii) there is no other item comprised in the Fit Out Category A Works
which can be included in the Developer's Fit Out Works (with the
Developer incurring the full VAT-exclusive cost thereof) without
causing the total cost (excluding any part thereof which
represents VAT) to be incurred by the Developer in respect of
items comprised in the Fit Out Category A Works to exceed the
Developer's Commitment,
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then such item shall be excluded from the Developer's Fit Out Works, in
which case the Tenant may include such item in the Tenant's Fit Out
Works, and if it does, the Developer shall within ten (10 Working Days
pay the Tenant a sum equal to the aggregate of (a) the difference between
the Developer's Commitment and the total cost (excluding any part thereof
which represents VAT) to be incurred by the Developer in respect of items
comprised in the Fit Out Category A Works as a contribution towards the
cost of such item and (b) the amount of VAT chargeable on the supply for
which such sum is (wholly or partly) the consideration for VAT purposes,
and the Developer's Commitment shall be reduced by the amount of the
difference referred to in (a)
20.1B If, at any time:
(i) the VAT-exclusive cost of any item comprised in the Fit Out
Category B Works which would, but for this Clause 20.lB, be
included in the Developer's Fit Out Works is an amount which, if
incurred in full by the Developer, would cause the total cost
(excluding any part thereof which represents VAT) to be incurred
by the Developer in respect of items comprised in the Fit Out
Category B Works to exceed the Developer's Cap; and
(ii) there is no other item comprised in the Fit Out Category B Works
which can be included in the Developer's Fit Out Works (with the
Developer incurring the full VAT-exclusive cost thereof) without
causing the total cost (excluding any part thereof which
represents VAT) to be incurred by the Developer in respect of
items comprised in the Fit Out Category B Works to exceed the
Developer's Cap,
then such item shall be excluded from the Developer's Fit Out Works, in
which case the Tenant may include such item in the Tenant's Fit Out
Works, and if it does, the Developer shall within ten (10) Working Days
pay the Tenant a sum equal to the aggregate of (a) the difference between
the Developer's Cap and the total cost (excluding any part thereof which
represents VAT) to be incurred by the Developer in respect of items
comprised in the Fit Out Category B Works as a contribution towards the
cost of such item and (b) the amount of VAT chargeable on the supply for
which such sum is (wholly or partly) the consideration for VAT purposes,
and the Developer's Cap shall be reduced by the amount of the difference
referred to in (a).
20.2 DEVELOPER'S CAP NOT REACHED
In the event that the aggregate cost incurred by the Developer in
implementing such items comprised in the Fit Out Category B Works which
are included in the Developer's Fit Out Works is less than the
Developer's Cap, then the amount by which such cost is less than the
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Developer's Cap shall be paid to the Tenant on the date which is ten (10)
Working Days following the date of issue of the Certificate of Completion
of Fit Out Works as a contribution in connection with the Tenant's
general expenses of moving into the Building.
21. AGREEMENT AS TO OPERATION OF LANDLORD AND TENANT ACT 1927
21.1 EFFECT OF SERVICE OF 1927 ACT NOTICE
The Tenant hereby agrees with the Developer that if the Tenant serves a
1927 Act Notice upon the Developer in relation to the Fit Out Works or
any part or parts thereof the Tenant shall within twenty-eight (28) days
following the service of the 1927 Act Notice or within seven days after
determination of the cost (hereinafter called "THE COST") to the Tenant
of the carrying out of the works and alterations the subject of the 1927
Act Notice (time being of the essence) pay to the Developer a sum equal
to One hundred and five per cent. (105%) of the Cost.
21.2 DISPUTES AS TO COST
The Developer and the Tenant shall use all reasonable endeavours to agree
the Cost but in default of written agreement between them as to the
amount of the Cost then either party may at any time following the
expiration of a period of fourteen (14) days following the service of the
1927 Act Notice refer the matter for settlement to an Independent Person
pursuant to the provisions of Clause 32.
22. INSURANCE
22.1 INSURANCE OF BASE BUILDING WORKS
As soon as reasonably practicable following the date hereof until the
Lease Insurance Date the Developer shall insure or cause to be insured
the Base Building Works in accordance with the following provisions:-
22.1.1 the insurance shall include cover for the Base Building Works the
Building and all on site fixtures plant machinery and apparatus
intended for incorporation within the Base Building Works;
22.1.2 the sum insured shall not be less than the aggregate of:-
(a) the full reinstatement rebuilding and replacement cost (as
appropriate) for the time being of the Base Building Works;
(b) professional fees as may be incurred in connection with the
reinstatement and rebuilding of the Base Building Works;
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(c) the cost of demolition shoring up and site clearance; and
(d) irrecoverable value added tax on such items;
22.1.3 the insured risks shall (subject to Clause 22.1.4) be fire storm
tempest lightning explosion riot civil commotion malicious damage
impact flood bursting or overflowing of water tanks burst pipes
discharge from sprinklers aircraft and other aerial devices or
articles dropped therefrom terrorist risks earthquake heave
landslip subsidence and such other risks as the Developer may
reasonably require;
22.1.4 all the Developer's obligations in respect of insurance shall be
subject to the risks being insurable in the London insurance
market on reasonable terms and at reasonable rates and subject to
insurers' requirements and such exclusions excesses limitations
terms and conditions as may be contained in any relevant policy;
22.1.5 the insurance shall provide for the interest of the Tenant to be
noted on the policy; and
22.1.6 the Developer shall use all reasonable endeavours to procure that
the insurers issue a letter waiving rights of subrogation against
the Tenant.
22.2 DESTRUCTION OF BASE BUILDING WORKS/DEVELOPER'S FIT OUT WORKS
Subject to the other provisions of this Clause 22, if the Base Building
Works or Developer's Fit Out Works are destroyed or damaged by an Insured
Risk during the course of construction and (in the case of the Base
Building Works) prior to the Lease Insurance Date then the Developer
shall rebuild and reinstate the Base Building Works so destroyed or
damaged (but not necessarily to provide accommodation identical in
layout, specification or finish so long as the same is not materially
less commodious unless otherwise agreed by the Tenant) the Developer
making good any shortfall in the insurance monies save to the extent that
such shortfall arises by reason of any act or default of the Tenant or
any of its contractors, agents, invitees or persons under its control.
22.3 FIT OUT WORKS - NOTIFICATION OF REINSTATEMENT COST
The Tenant shall or shall procure that GSPM shall advise the Developer
from time to time in writing of the full reinstatement cost of the Fit
Out Works including professional fees costs of debris removal and VAT
where applicable and the Developer shall be entitled to rely without
further enquiry on such cost notified from time to time in effecting any
relevant insurance of the Fit Out Works pursuant to the provisions set
out below. If the Tenant or GSPM fails to provide the necessary
information the Developer shall have no liability to the
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extent that it transpires that such estimate was too low and the Tenant
shall indemnify the Developer (with the intention of putting the
Developer in the same after-tax position it would have been in had the
matter giving rise to the indemnification not arisen) in respect of any
losses suffered in that respect, including in relation to averaging or as
a result of any policy being wholly or partly vitiated or avoided.
22.4 INSURANCE OF FIT OUT WORKS
The Developer shall also keep insured or cause to be kept insured
(subject to the provisions of Clause 22.1.4) the Fit Out Works against
loss or damage by the risks referred to in 22.1.3. In the event of
destruction or damage to the Fit Out Works by an insured risk during the
course of construction and prior to the Lease Insurance Date then the
Developer shall (where reinstatement is actually to take place and so
long as this Agreement shall at that time still subsist and no Rescission
Notice, Termination Notice or Developer's Rescission Notice shall have
been served or be about to be served and no grounds exist for either
party terminating this agreement) hand over to the Tenant (so long as the
Tenant proceeds with reinstatement and to the extent that cover has not
been vitiated or reduced due to any act or default of the Tenant or
anyone acting on its behalf) against receipt of invoices in connection
with the actual reinstatement of the Tenant's Fit Out Works, such
proportion of the insurance monies as relates to the relevant Tenant's
Fit Out Works (any dispute on the apportionment being referred to an
Independent Person in accordance with Clause 32).
22.5 FRUSTRATION OF RE-INSTATEMENT
Where (due to whatever cause) reinstatement is impossible or is
frustrated (or this Agreement shall have ceased to subsist or a
Developer's Rescission Notice, Rescission Notice or Termination Notice
shall have been issued) the Developer shall hand to the Tenant the
insurance proceeds attributable to any parts of the Tenant's Fit Out
Works and shall otherwise be under no obligation to apply any insurance
proceeds in any particular fashion and (save as aforesaid) shall be
entitled to retain as its absolute and unencumbered property all
insurance proceeds.
22.6 FIT OUT WORKS INSURANCE COST
The Tenant shall pay to the Developer from time to time within ten (10)
Working Days of demand (against a copy of the relevant invoice or other
satisfactory written evidence) the cost incurred or to be incurred by the
Developer in insuring the Fit Out Works or any part thereof and otherwise
complying with Clause 22.4.
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22.7 PRODUCTION AND INSPECTION OF INSURANCE POLICIES
The Developer shall at the request of the Tenant from time to time supply
to the Tenant a copy of the insurance policy or policies maintained under
this Clause 22 and satisfactory evidence of the payment of any premium
due thereunder.
23. MEASUREMENT, GRANT OF LEASES, RENT AND OTHER TERMS
23.1 JOINT MEASUREMENT
23.1.1 On or after Shell & Core Substantial Completion when the Developer
reasonably considers the Demised Premises is capable of
measurement the Developer and the Tenant shall jointly instruct
the Independent Measurer to measure and certify to the Developer
and the Tenant the Net Internal Area thereof and the square
footage of any storage area in accordance with the Code of
Measuring Practice (but subject always to Clause 23.1.2) and so as
to show both the Net Internal Area of the whole of the Demised
Premises and the Net Internal Area for the premises to be demised
pursuant to each Lease.
23.1.2 In measuring the Net Internal Area the Independent Measurer shall
be instructed to:-
(a) assume that the Base Building has been completed in
accordance with the Base Building Specification as the same
existed or would have existed had all Tenant's Requested
Modifications not been carried out;
(b) assume that the Tenant's Requested Modifications have not
been carried out;
(c) assume that the Category A Works have been carried out;
(d) assume that any Fit Out Works (including those equivalent
to Category A Works) and any other works carried out by or
on behalf of the Tenant or on its behalf have not been
carried out; and
(e) (subject as aforesaid) take into account any changes to the
Agreement for Lease Measurement Plans as a result of the
actual final layout of the Premises.
23.1.3 The Independent Measurer's Certificate shall be final and binding
on the parties save in the case of manifest error.
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23.1.4 The parties agree that the appointment of the Independent Measurer
shall be on terms reasonably satisfactory to all parties
(including provision of a duty of care warranty under seal).
23.2 GRANT OF LEASES
Within ten (10) Working Days following the later of:-
(a) the date upon which Shell & Core Substantial Completion is
achieved (or deemed or determined as achieved); and
(b) the date upon which the Net Internal Area of all parts of the
relevant set of Demised Premises have been finally agreed or
determined pursuant to Clause 23.1
the Developer (or its successor in title) shall cause to be delivered to
the Tenant the relevant executed Lease and the Management Deed and the
Tenant (meaning whichever is the relevant one of GSI or Restamove Limited
only) and the Tenant's Surety (here meaning The Goldman Sachs Group L.P.
and (but in the case only of the Leases of Levels 5 - 8 inclusive) GSI
only) shall forthwith accept and execute and deliver the relevant
counterparts thereof to the Developer (or its successor in title) and
completion of the Leases and Management Deed shall take place at the
offices of the Developer's (or its successor in title's) solicitors or at
such other place in the United Kingdom as the Developer (or its successor
in title) shall reasonably require.
23.3 CALCULATION OF RENT AND COMMENCEMENT DATE
The following provisions shall apply to the computation and the
commencement date for payment of the rents payable under and the
calculation of the commencement and length of the term of the Leases:-
23.3.1 The contractual term of the Leases shall be a period of
twenty-five years from the Shell & Core Substantial Completion
Date with review dates thereafter at every fifth anniversary of
that date;
23.3.2 The VAT exclusive amount of the Initial Rent under the Basement to
Level 4 Lease shall be the aggregate of:-
(a) for the Net Internal Area of the Upper Ground to Level 4
and Part Level 5 office areas which form part of the
Demised Premises and are shown edged red on the Measurement
Plans (the resulting Net Internal Area being hereinafter
referred to
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as "THE NET UPPER GROUND AND UPPER FLOORS OFFICE AREA") the
product of multiplying the Net Upper Ground and Upper
Floors Office Area (expressed in square feet) by
(pounds)40.00; plus
(b) for the Net Internal Area of the ground floor office areas
edged yellow on the Measurement Plans (the resulting Net
Internal Area being hereinafter referred to as the "GROUND
FLOOR OFFICE AREA") the product of multiplying the Ground
Floor Office Area (expressed on square feet) by
(pounds)35.00; plus
(c) for the Net Internal Area of the upper ground floor office
areas edged and hatched purple on the Measurement Plans
(the resulting Net Internal Area being hereinafter referred
to as the "ST BRIDE STREET FACING UPPER GROUND FLOOR AREA")
the product of multiplying the St Bride Street Facing Upper
Ground Floor Area (expressed in square feet) by
(pounds)27.50; plus
(d) for the Net Internal Area of the upper ground floor office
areas edged blue (in the Daily Express Building) (the
resulting Net Internal Area being hereinafter referred to
as the "DAILY EXPRESS AREA") the product of multiplying the
Daily Express Area (expressed in square feet) by
(pounds)20; plus
(e) for the Net Internal Area of the lower ground office areas
edged blue on the Measurement Plans ("THE NET LOWER GROUND
FLOOR OFFICE AREA") the product of multiplying the Net
Lower Ground Floor Office Area (expressed in square feet)
by (pounds)20.00; plus
(f) for the Net Internal Area of the storage areas edged green
on the Measurement Plans the product of multiplying such
Net Internal Area (expressed in square feet) by
(pounds)12.50; plus
(g) (pounds)93,500 (being the product of multiplying 34 car
parking spaces by (pounds)2,750).
For the avoidance of doubt (subject as set out in Clause
23.1.2) all edgings and hatchings on the Measurement Plans
shall be deemed changed and adjusted to conform with the
actual "as built" dimensions and configuration of the
Demised Premises.
23.3.3 The VAT exclusive amount of the Initial Rent under each of the Part Level
5 Lease, the Level 6 Lease, the Level 7 Lease and the Level 8 Lease shall
be the aggregate of the Net
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Internal Area of the relevant set of Demised Premises shown edged red on
the Measurement Plans (expressed in square feet) multiplied by
(pounds)40.00 plus:
(a) in the case of the Level 5 Lease (pounds)13,750 (being the product
of multiplying 5 car parking spaces by(pounds)2,750)
(b) in the case of the Level 6 Lease (pounds)11,000 (being the product
of multiplying 4 car parking spaces by(pounds)2,750)
(c) in the case of the Level 7 Lease (pounds)8,250 (being the product
of multiplying 3 car parking spaces by(pounds)2,750)
(d) in the case of the Level 8 Lease (pounds)5,500 (being the product
of multiplying 2 car parking spaces by (pounds)2,750).
23.3.4 The Initial Rent shall become payable under the Lease with effect from
and including the date which is nine (9) months after whichever is the
earlier of (a) the date on which Shell & Core Substantial Completion is
achieved (or deemed or determined as achieved) and (b) the date on which
the Tenant first takes possession of the Demised Premises or any part
thereof (other than as referred to in Clause 16.11) for the purposes of
fitting out or otherwise.
23.3.5 Any Additional Rent (as defined in the Lease) shall be reserved under the
Lease payable from the Shell & Core Substantial Completion Date.
23.3.6 Value Added Tax shall be reserved and become payable as rent under the
Lease on all of the other Rents as described in the Lease.
23.3.7 The Insurance Rent as reserved in the Lease shall be reserved under the
Lease with effect from and including the date of Shell & Core Substantial
Completion.
23.3.8 In computing all periods and dates any period or date shall be calculated
and adjusted to accord with the position which would have been achieved
had no Tenant's Delay occurred. All periods and dates shall be deemed to
be that or those which would have occurred or have been achieved but for
Tenant's Delay all to the intent and effect that no Tenant's Delay shall
entitle the Tenant to delay completion of any Lease or the commencement
of any rents or other payments due under it or the commencement of any
rent free or reduced rent period (but so that if completion of any Lease
is in fact delayed by reason of any such matters the Tenant shall
immediately pay to the Developer sums equivalent to all rents and other
monies
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which would have been due under the relevant Lease, had it been granted,
on the dates they would then have been due).
23.4 LICENCE FEES PENDING GRANT OF LEASE
Where in consequence of the calculations made under Sub-Clause 23.3 sums
and amounts become due and payable by the Tenant to the Developer as rent
in respect of any period or periods prior to commencement of the term of
the Lease or completion of the Lease such sums and amounts shall instead
be due and shall commence to be paid by the Tenant as licence fees under
the terms of this Agreement until the Lease has been completed.
23.5 RETAIL UNIT
The Retail Unit is excluded from the Leases and retained by the Developer
and it is agreed that:-
(a) The Developer and its successors in title shall not use or allow
the use of the Retail Unit for the following uses:-
Betting Office, Undertakers, Pet Shop, Hairdressers, Charity Shop,
Sex Shop, Newsagents, Ticket Agency, Music Centre, Sale of
secondhand goods, Sandwich bar (not extending to operations like
Boots)
Any use involving formal exhibitions open to the public or
entertainment
Government department offices visited by members of the public
PROVIDED THAT Newsagents of the like of WH Smith, Ticket Agencies
of the like of Thomas Cook and Music Centres of the like of HMV
will be permitted so long as their proposed level of use of the
loading bay is not so excessive as to unduly fetter the Tenant's
(or other occupiers of the offices) use of the loading bay or
offices and so long as the relevant Retail Unit tenant agrees to
be bound by the initial rules and regulations governing use of the
loading bay (and any reasonable replacements) Provided Further
that if the Retail Unit is let by way of a single letting to a
Newsagents, Ticket Agency or Music Centre of the type described
above then so long as the relevant Retail Unit tenant agrees to be
bound by the initial rules and regulations governing use of the
loading bay (and any reasonable replacements) and to act
reasonably in relation to such use of the loading bay then such
user shall be permitted
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(b) The Developer shall impose obligations upon (and if so reasonably
requested by the Tenant and at the Tenant's cost take steps to
enforce those obligations) the occupiers of the Retail Unit
requiring that they shall
(i) at all times maintain a high quality display in the windows
of the Retail Unit
(ii) cover no more than 15% of the windows (other than those
required to be obscured pursuant to the Lease) with trade
placards, posters or advertisements
(iii) not wilfully to do anything within the Retail Unit which
would be likely to be a nuisance or cause damage to the
Tenant
(iv) ensure that no music or machinery noise can be heard
outside the Retail Unit
(v) not deposit rubbish outside the Building
(vi) not to erect any external additions to the Retail Unit
other than shop fascia approved by the planning authority
and signage and projections approved by the Tenant (such
approval not to be unreasonably withheld)
(c) The Developer shall not allow the use of the Retail Unit for any
use other than retail sales and ancillary uses (including storage)
and not for the sale of food and drink for consumption on the
premises or of hot food for consumption off the premises save that
the basement may be used as a high class winebar subject to
compliance with the following conditions
(A) The operator of the winebar shall have no right to use the
loading bay at the Building otherwise than at specified
times (if any) confirmed by the Tenant
(B) The proposed access for deliveries to the winebar, the
method of providing kitchen extracts and exhausts, the
method of managing smells and noise, how public access
would be given and all matters relating to fire
precautions, safety and security shall all be approved by
the Tenant such approval not to be unreasonably withheld
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23.6 EXTENSION OF RENT COMMENCEMENT DATE
If Shell & Core Substantial Completion has not occurred by the date which
is twenty-eight (28) days after the Target Date then the Developer shall,
at its option, either:-
23.6.1 pay to the Tenant Liquidated Damages (which are recognised as a genuine
and realistic assessment of the Tenant's prospective losses) for each
period of delay not attributable to Tenant's Delay but up to and not
exceeding the Maximum Damages and Provided that the damages payable shall
only continue for a period up to the date when the Tenant becomes
entitled to serve a Rescission Notice pursuant to Clause 12.1.1 and
subject to payment of such Liquidated Damages the Developer shall have no
other liability to the Tenant other than as provided in this Sub-Clause
23.6; or
23.6.2 extend the Rent Commencement Date by the number of additional days
produced by application of the following formula:-
A + (B/365) = number of additional days of rent free
period
Where:
"A" = the sum of the Liquidated Damages which (if Clause 23.6.1
were to operate) would be payable to the Tenant by the
Developer pursuant to Clause 23.6.1
"B" = the aggregate annual Initial Rent payable pursuant to the
Leases as ascertained pursuant to Clause 23.3
23.7 LETTER OF OPINION
The Tenant's Surety (here meaning The Goldman Sachs Group, L.P. only)
shall provide to the Developer (or its successor in title) on completion
of each of the Leases a Letter of Opinion in relation to the Leases the
Management Deed, the Licence for Alteration, the Bridges Agreement and
the Tunnel Agreement.
24. TITLE
24.1 TITLE DEDUCED
The Developer's title to grant the Lease having been deduced to the
Tenant prior to the date hereof the Tenant shall raise no objection or
requisition in respect thereof save in respect of matters arising after
the date hereof.
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24.2 DEVELOPER'S LAND CERTIFICATE TO BE PUT ON DEPOSIT
The Developer shall place its Land Certificates in respect of its
interest in the Demised Premises (once issued) on deposit at H.M. Land
Registry and shall notify the Tenant or its solicitors of the deposit
number allocated thereto for the purposes of enabling the Tenant to
register a notice of the Tenant's interest arising out of this Agreement
relating to the Demised Premises.
24.3 The Tenant shall raise no objection to the Developer entering into any
agreements with adjoining landowners on reasonable terms regarding mutual
rights of air or light or the oversailing of cranes to the extent that
such agreements are reasonably necessary for the carrying out of the
Development provided that in the case of crane oversailing licences which
permit oversailing of Peterborough Court or the Base Building the
Tenant's approval (not to be unreasonably withheld) shall be required
24.4 The Tenant shall raise no objection to the Developer granting leases to
the relevant utility company of electricity substations that are
reasonably necessary in connection with the Development in locations
agreed by the Tenant such agreement not to be unreasonably withheld.
24.5 The Tenant shall raise no objection to the Developer entering into
licences or consents with the Corporation of London in respect of
overhead apparatus over along or across the highway vaults or cellars or
projections over the highway.
25. CONDITIONS AFFECTING THE GRANT OF THE LEASES
25.1 LEASES GRANTED SUBJECT TO CERTAIN MATTERS
The Leases will be granted subject to:-
25.1.1 all charges, notices, orders, directions, regulations, restrictions and
other matters whatsoever arising under the Town and Country Planning Act
1990, the Planning Listed Buildings and Conservation Areas) Act 1990, the
Planning (Hazardous Substances) Act 1990, the Planning (Consequential
Provisions) Act 1990, the Planning and Compensation Act 1991 and any
subsequent legislation of a similar nature and the Tenant shall be deemed
to accept the Leases with full knowledge thereof and of the authorised
use of the Building and the Development Site for the purpose of such Acts
and shall not raise any requisition enquiry or objection with regard
thereto; and
25.1.2 the matters contained or referred to in the deeds or documents referred
to in the Sixth Schedule to the Leases.
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25.2 VARIATIONS TO PLANS
The parties hereto acknowledge that the plans in the Leases or entries in
the Sixth Schedule thereto may need to be varied to reflect the final
design of the Building or any rights to which the Site and the Building
becomes subject as and when the same has been fully constructed provided
that the Tenant has first approved (a) the plans and (b) the rights. In
the event that the Developer reasonably requests the Tenant to agree to
any such variation the Tenant shall not unreasonably withhold or delay
such agreement and then the parties hereto shall use all reasonable
endeavours to agree the terms and document such proposed variation and
any related provisions and in the event of dispute as to the content of
any such variations or provisions such dispute may be referred for
settlement by either party to an Independent Person in accordance with
Clause 32 and the parties shall execute any deed or do any other thing
necessary to give effect to any variation agreed or settled as aforesaid.
25.3 NO REPRESENTATIONS
The Tenant hereby admits that no representation whether oral or written
(save in any written reply by the Developer's solicitors or by Field
Fisher Waterhouse on behalf of the Developer to written preliminary
enquiries raised by the Tenant's solicitors or contained in this
Agreement) has been made to the Tenant prior to the execution hereof by
or on behalf of the Developer concerning the Development Site, the
Building or the Base Building Works or any part thereof which has
influenced induced or persuaded the Tenant to enter into or which forms
part of this Agreement or of any agreement collateral herewith.
25.4 ALL TERMS INCORPORATED
The parties acknowledge that:-
25.4.1 this Agreement; and
25.4.2 the Procurement Contract; and
25.4.3 any plan, inventory or agreed form of document, or other instrument
referred to in this Agreement, and either annexed to this Agreement or
signed or initialled for identification with, and on or before the
entering into of, this Agreement (whether individually or as part of a
bundle or volume so signed or initialled); and
25.4.4 any additional provision or variation of any term of this Agreement
agreed in writing between the parties (or, with their authority, their
respective solicitors) on or before the entering into of this Agreement
(any such additional provision or variation being incorporated into this
Agreement by this provisions)
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contain all of the terms of the contract agreed between the parties and
between some of the parties and GSPM
26. EVENT OF DEFAULT
26.1 CIRCUMSTANCES GIVING RISE TO AN EVENT OF DEFAULT
An Event of Default shall occur in any of the following circumstances:-
26.1.1 if the Tenant or the Tenant's Surety (being a body corporate) passes a
winding-up resolution (other than a resolution for the purposes of an
amalgamation or reconstruction resulting in a solvent corporation meeting
the criteria referred to in Clause 19.2.2 of the Lease) or resolves to
present its own winding-up petition or is wound-up or the directors of
the Tenant or the Tenant's Surety resolve to present a petition for an
administration order in respect of the Tenant or an Administrative
Receiver or a Receiver or a Receiver and Manager is appointed in respect
of the property or any part thereof of the Tenant or the Tenant's Surety
or the Tenant or the Tenant's Surety otherwise becomes insolvent;
26.1.2 if the Tenant or the Tenant's Surety (being a body corporate) calls or a
nominee calls on its behalf a meeting of its creditors or any of them or
makes an application to the Court under Section 425 of the Companies Act
1985 other than an application for the purposes of an amalgamation or
reconstruction resulting in a solvent corporation or submits to its
creditors or any of them a proposal pursuant to Part I of the Insolvency
Act 1986 or enters into any arrangement, scheme, compromise, moratorium
or composition with its creditors or any of them (whether pursuant to
Part I of the Insolvency Act 1986 or otherwise);
26.1.3 if any event analogous to those described in Clause 26.1.1 or 26.1.2
above occurs in relation to the Tenant or the Tenant's Surety in any
jurisdiction;
26.1.4 if the Tenant or the Tenant's Surety ceases for any reason to maintain
its corporate existence;
26.1.5 if the Tenant or the Tenant's Surety shall irremediably breach this
Agreement or (if the breach is capable of remedy) shall fail to remedy
such breach as soon as possible but in any event within 10 Working Days
of being required in writing by the Developer so to do;
26.1.6 if the Tenant or the Tenant's Surety shall cease for any other reason to
be or to remain liable under this Agreement.
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26.2 RIGHT TO DETERMINE
If prior to the grant of the Lease an Event of Default occurs then the
Developer may at any time thereafter while such Event of Default still
subsists but before the Lease is granted by notice in writing to the
Tenant forthwith determine this Agreement (but without prejudice to any
right of action by either party in respect of any antecedent breach of
any of the obligations on the part of the other herein contained).
26.3 REPAYMENTS
26.3.1 Where this Agreement is determined due to the default of the Tenant or
the occurrence of an Event of Default the Tenant shall pay to the
Developer within five (5) Working Days a sum equal to:
(i) the aggregate of all TRM Costs actually incurred or suffered by
the Developer up to that date; and
(ii) the aggregate of all sums which the Developer shall have paid or
incurred (including, without limitation, all sums paid on account)
prior to that date pursuant to the Procurement Contract
26.3.2 Where this Agreement is determined for any reason other than default of
the Tenant or the occurrence of an Event of Default the Tenant shall pay
to the Developer within five (5) Working Days an amount equal to the
aggregate of the Developer's Commitment and the Developer's Cap less the
cost of all Developer's Fit Out Works implemented by the Developer (or on
its behalf) up to the date of termination (such cost to be ascertained as
at such date)
26.3.3 Where this Agreement is terminated in circumstances where any insurance
monies payable in respect of the Fit Out Works have been refused or
withheld as a result of any act or omission by the Tenant or a person on
its behalf or directly or indirectly as a result of any breach by the
Tenant of its obligations under this Agreement then the Tenant shall pay
to the Developer within five Working Days the difference between any
insurance monies actually received by the Developer in respect of the Fit
Out Works (if any) and the amount that would have been received but for
the Tenant's or other person's act or omission or the Tenant's breach of
its obligations under this Agreement
27. CAPITAL ALLOWANCES
27.1 ALLOCATION
In the event that the Developer (here the "CONTRIBUTOR") makes a
contribution (the "CONTRIBUTION") towards the cost incurred or to be
incurred by the Tenant (the
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"CONTRIBUTEE") in respect of any item (the "SHARED ITEM") comprised in
the Fit Out Works in accordance with the provisions of Clause 20.lA or
20.1B, the amount of such contribution shall be allocated to such item
and such item only.
27.2 THE CONTRIBUTOR'S ENTITLEMENT TO CAPITAL ALLOWANCES
The Developer and the Tenant agree that:
(i) the Contributor's entitlement to capital allowances in respect of
any Shared Item shall be restricted to the amount of the relevant
Contribution; and
(ii) subject to Clause 27.3, the Contributee shall not claim capital
allowances in respect of any of its expenditure on any Shared Item
to the extent that the Contributor is treated as having made a
contribution to, or otherwise met, such expenditure pursuant to
Clause 20.lA, 20.lB or this Clause 27.
27.3 THE CONTRIBUTEE'S CLAIM FOR CAPITAL ALLOWANCES
The Contributor shall as soon as reasonably practicable notify the
Contributee upon any claim by the Contributor for capital allowances in
respect of any Contribution (or any part of it) being disallowed or
disputed by the Inland Revenue in whole or in part, and shall keep the
Contributee informed of the progress or any appeal against such
disallowance and of the details of any correspondence or communication or
other relevant matter relating to such dispute.
Where any part of the Contribution which the Contributor is treated as
having made pursuant to Clause 20.lA, 20.lB or this Clause 27 is
treated by the Inland Revenue as not giving rise to capital allowances
for the Contributor, or the eligibility to capital allowances in respect
of such part (or the allocation thereof) is denied by the Inland Revenue,
the Contributee may make a further claim for capital allowances in
respect of the expenditure to which such part of the Contribution has
been allocated in accordance with Clause 27.1, and the Contributor shall
supply the Contributee with such information and documents as the
Contributee may reasonably request from time to time in connection with
the making of such further claim PROVIDED THAT the Contributee may only
make such further claim where:
(i) it has first received written notification from the Contributor
that the Contributor does not intend, or is unable, to pursue a
claim for capital allowances in respect of such expenditure; or
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(ii) if such further claim were not made by the Contributee, it would
subsequently be barred from making such further claim by statutory
time limits PROVIDED THAT, in such a case:
(a) such further claim shall be made on a protective basis
only, and confirmation shall be given by the Contributee to
the Inland Revenue that in the event of agreement being
reached between the Contributor and the Inland Revenue to
the effect that the Contributor is entitled to capital
allowances in respect of such expenditure, such further
claim shall be withdrawn; and
(b) the Contributee shall take no action (other than the making
of such further claim) which may undermine the claim made
(or any claim which may in the future be made) by the
Contributor.
27.4 Nothing herein shall constitute a statement, warranty or representation
that the Developer or the Tenant shall be or become entitled to any
capital allowances in respect of any expenditure or contribution to
expenditure incurred or made under this Agreement.
27.5 Except where Clause 20.lA or 20.lB applies the Developer shall not
make (and is not obliged to make), and shall not purport to make, any
contribution towards any of the costs incurred or to be incurred by
the Tenant in respect of any item comprised in the Tenant's Fit Out
Works.
27.6 The Tenant shall not make (and is not obliged to make), and shall not
purport to make, any contribution towards any of the costs incurred
or to be incurred by the Developer in respect of any item comprised
in the Developer's Fit Out Works.
28. VAT
28.1 DEFINITIONS
References in this Agreement to:
(i) the "Developer" shall (where appropriate) be deemed to include a
reference to the representative member of the group of companies
of which the Developer is treated as a member for the purposes of
section 43 of the Value Added Tax Act 1994; and
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(ii) the "Tenant" shall (where appropriate) be deemed to include a
reference to the representative member of the group of companies
of which the Tenant is treated as a member for the purposes of
section 43 of the Value Added Tax Act 1994.
28.2 ALL SUMS EXCLUSIVE OF VAT
All sums payable under this Agreement by any party to any other party
shall be deemed to be exclusive of any VAT which is chargeable on the
supply made by such other party for which such sums are (the whole or
part of) the consideration for VAT purposes.
28.3 VAT ON SUPPLIES
Where, pursuant to the terms of this Agreement, any party (the
"SUPPLIER") makes a supply to any other party (the "RECIPIENT") for VAT
purposes and VAT is chargeable on such supply, the Recipient shall pay to
the Supplier (in addition to any other consideration for such supply) a
sum equal to the amount of such VAT, such payment to be made (subject to
the provisions in Clauses 9.10, 20. lA and 20.1B) no later than three (3)
Working Days before the last day (as notified to the Recipient by the
Supplier in writing) on which the Supplier can account to H M Customs &
Excise for such VAT without incurring any interest or penalties, and the
Supplier shall provide the Recipient with a valid tax invoice for VAT
purposes.
28.4 REPAYMENT OF AMOUNTS
If either party (the "PAYER") has paid any amount in respect of VAT under
this Clause 28 to the other party (the "PAYEE") on the basis that:
(i) the transaction in respect of which such amount was paid gave rise
to a supply made by the Payee to the Payer for VAT purposes; and
(ii) such supply was a taxable supply for VAT purposes,
and it subsequently transpires that no supply was made, or that such
supply was not a taxable supply, for VAT purposes, the Payee shall
forthwith repay such amount to the Payer PROVIDED THAT, if the Payee has
already accounted to H M Customs & Excise for VAT in respect of the said
transaction on the basis that such transaction gave rise to a taxable
supply for VAT purposes, the Payee shall only be obliged to repay such
amount to the Payer if and to the extent that it is able to obtain
repayment or credit from H M Customs & Excise in respect of the VAT it
has accounted to them, and in such a case, the Payee shall use all
reasonable endeavours to obtain such repayment or credit from H M Customs
& Excise, and the Payee shall only be obliged to repay such amount to the
Payer as aforesaid within three (3) Working Days following receipt by the
Payee of the said
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repayment from H M Customs & Excise or three (3) Working Days following
the date on which the Payee has fully utilised the said credit (as the
case may be).
28.5 REIMBURSEMENTS AND VAT
Where any party (the "REIMBURSING PARTY") is required by the terms of
this Agreement to reimburse any other party (the "OTHER PARTY") for the
costs or expenses of any supplies made to the Other Party, the
Reimbursing Party shall also at the same time pay and indemnify the Other
Party against all VAT input tax incurred by the Other Party on such
supplies save to the extent that the Other Party is entitled to repayment
or credit in respect of such VAT input tax from H M Customs & Excise.
29. GUARANTEE OF PERFORMANCE OF TENANT'S OBLIGATIONS
29.1 COVENANTS BY TENANT'S SURETY
The Tenant's Surety in consideration of the Developer entering into this
Agreement at the request of the Tenant's Surety unconditionally and
irrevocably agrees with and in favour of the Developer, as a primary
obligation, as follows:-
29.1.1 that the Tenant shall duly perform and observe all the obligations on the
part of the Tenant contained in this Agreement in the manner and at the
times specified in it and (but not so as to provide the Developer with a
greater claim than it would have enjoyed in such circumstances if the
Tenant's Surety had instead been the Tenant) indemnifies the Developer
(with the intention of putting the Developer in the same after-tax
position it would have been in had the matter giving rise to the
indemnification not arisen) against all claims, demands, losses, damages,
liability, costs, fees and expenses whatsoever sustained by the Developer
by reason of, or arising in any way directly or indirectly out of, any
default by the Tenant in the performance and observance of any of its
obligations.
29.1.2 None of the following, or any combination of them, shall release,
determine, discharge or in any way lessen or affect the liability of the
Tenant's Surety as principal obligor under this Agreement or otherwise
prejudice or affect the right of the Developer to recover from the
Tenant's Surety to the full extent of this guarantee:-
(a) any neglect, delay or forbearance of the Developer in endeavouring
to obtain payment of any of the amounts required to be paid by the
Tenant or in enforcing the performance or observance of any of the
obligations of the Tenant under this Agreement;
(b) any extension of time given by the Developer to the Tenant;
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(c) any variation of the terms of this Agreement or the Lease or the
transfer of the Developer's interests in this Agreement;
(d) any change in the constitution, structure or powers of either the
Tenant, the Tenant's Surety or the Developer or the liquidation,
administration or bankruptcy (as the case may be) of either the
Tenant or the Tenant's Surety;
(e) any legal limitation, or any immunity, disability or incapacity of
the Tenant (whether or not known to the Developer) or the fact
that any dealings with the Developer by the Tenant may be outside,
or in excess of, the powers of the Tenant;
(f) any other act, omission, matter or thing whatsoever whereby, but
for this provision, the Tenant's Surety would be exonerated either
wholly or partly (other than a release executed and delivered as a
deed by the Developer).
29.1.3 If any of the acts or events specified in Clauses 29.2.3 to 29.2.6 of the
Lease shall occur in relation to the Tenant and the liquidator or trustee
in bankruptcy (as the case may be) shall disclaim this Agreement, then
the Tenant's Surety shall, if the Developer gives written notice to the
Tenant's Surety within ninety (90) days after such disclaimer so
requires, take up and complete the Lease in its own name in substitution
for the Tenant.
29.2 SUCCESSOR TENANT'S SURETY
The Tenant's Surety may not assign its rights nor delegate its
obligations under this Guarantee, in whole or in part, without the prior
written consent of the Developer and any purported assignment or
delegation absent such consent is void, except for an assignment and
delegation of all the Tenant's Surety's rights and obligations hereunder
in whatever form the Tenant's Surety determines may be appropriate to a
partnership, corporation, trust or other organisation in whatever form
(the "Successor") that succeeds to all or substantially all of the
Tenant's Surety's assets and business and that assumes such obligations
by contract, operation of law or otherwise. Upon any such delegation and
assumption of obligations, and subject to the Developer having received
in a form reasonably satisfactory to the Developer, a deed executed by
the Successor (accompanied by a legal opinion from a reputable firm of
lawyers confirming due execution) confirming to the Developer that the
Successor assumes all obligations of the Tenant's Surety under this
Agreement whether by operation of law or by virtue of such deed, the
Tenant's Surety shall be relieved of and fully discharged from all
obligations hereunder, whether such obligations arose before or after
such delegation and assumption.
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30. GUARANTEE OF PERFORMANCE OF DEVELOPER'S OBLIGATIONS
30.1 COVENANTS BY ITOCHU
ITOCHU in consideration of the Tenant entering into this Agreement at the
request of ITOCHU unconditionally and irrevocably agrees with and in
favour of the Tenant, as a primary obligation, as follows:-
30.1.1 that the Developer shall duly perform and observe all the obligations on
the part of the Developer contained in this Agreement in the manner and
at the times specified in it and (but not so as to provide the Tenant
with a greater claim than it would have enjoyed in such circumstances if
ITOCHU had instead been the Developer) indemnifies the Tenant (with the
intention of putting the Tenant in the same after-tax position it would
have been in had the matter giving rise to the indemnification not
arisen) against all claims, demands, losses, damages, liability, costs,
fees and expenses whatsoever sustained by the Tenant by reason of, or
arising in any way directly or indirectly out of, any default by the
Developer in the performance and observance of any of its obligations and
it is agreed that such obligations of Itochu shall survive any assignment
of this Agreement by the Developer but not any determination of this
Agreement (save for antecedent breaches of the Developer's obligations)
30.1.2 None of the following, or any combination of them, shall release,
determine, discharge or in any way lessen or affect the liability of
ITOCHU as principal obligor under this Agreement or otherwise prejudice
or affect the right of the Tenant to recover from ITOCHU to the full
extent of this guarantee:-
(a) any neglect, delay or forbearance of the Tenant in endeavouring to
obtain payment of any of the amounts required to be paid by the
Developer or in enforcing the performance or observance of any of
the obligations of the Developer under this Agreement;
(b) any extension of time given by the Tenant to the Developer;
(c) any variation of the terms of this Agreement or the Lease or the
transfer of the Tenant's interests in this Agreement;
(d) any change in the constitution, structure or powers of either the
Tenant, ITOCHU or the Developer or the liquidation, administration
or bankruptcy (as the case may be) of either the Developer or
ITOCHU;
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(e) any legal limitation, or any immunity, disability or incapacity of
the Developer (whether or not known to the Tenant) or the fact
that any dealings with the Tenant by the Developer may be outside,
or in excess of, the powers of the Developer;
(f) any other act, omission, matter or thing whatsoever whereby, but
for this provision, ITOCHU would be exonerated either wholly or
partly (other than a release executed and delivered as a deed by
the Tenant).
31. CONFIDENTIALITY PROVISIONS
31.1 NON-DISCLOSURE
None of the parties to this Agreement shall without the prior written
consent of all the other parties to this Agreement disclose or publish
("DISCLOSURE") or permit or cause Disclosure of any financial or other
details whatsoever naming the parties hereto or otherwise relating to the
transaction hereby effected save that the following shall be permitted:-
31.1.1 Disclosure of any particular extracts or details which must be the
subject of Disclosure in order to comply with any order of the court or
law or any Stock Exchange or statutory requirements or the lawful
requirements of any regulatory bodies;
31.1.2 Disclosure to professional advisers and key employees of each of the
parties and their Group Companies and affiliates who need to know such
details;
31.1.3 Disclosure to the current (and any potential) bankers funders and lenders
of any of the parties;
31.1.4 Disclosure of matters already in the public domain; and
31.1.5 Disclosure to their respective contractors and consultants responsible
for the carrying out of the Development.
31.2 NOTIFICATION OF PERMITTED DISCLOSURES
In the case of a party wishing to make Disclosure as permitted pursuant
to the provisions of Clause 31.1 that party shall first submit details of
the proposed text of the Disclosure to the other parties to this
Agreement and shall act reasonably in taking full account of all
representations and comments made by such other parties upon the text.
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31.3 NON-DISCLOSURE PERIOD
This Clause 31 shall remain in effect until the date of Shell and Core
Substantial Completion.
31.4 EXCEPTIONS
This Clause 31 shall not apply to Disclosure by or on behalf of any party
to this Agreement to any third parties and/or their professional advisers
in pursuance of bona fide negotiations relating to the Development Site
or the whole or part of their interest in the Development Site or the
disposal of either the Developer or the Tenant or any Group Company of
either of them.
32. DISPUTES
32.1 DETERMINATION BY AN INDEPENDENT PERSON
If any dispute or difference shall arise between the parties hereto as to
the construction or meaning of this Agreement or their respective rights
duties and obligations hereunder or as to any matter arising out of or in
connection with the subject matter of this Agreement such dispute or
difference shall (unless this Agreement otherwise expressly provides) if
any party hereto so requires at any time by notice served on the others
("THE DETERMINATION NOTICE") be referred to and determined by an
independent person ("THE INDEPENDENT PERSON") who shall have been a
project manager for development projects in Central London of not less
than ten years standing
32.2 APPOINTMENT OF INDEPENDENT PERSON
The Independent Person shall be Chris Watts of Project Management
International 10-11 Charterhouse Square, London EC1M 6EH or such other
person appointed by the Developer with the approval of the Tenant, such
approval not to be unreasonably withheld
32.3 NEW APPOINTMENTS
Where the Independent Person (whether acting as arbitrator or expert)
dies, refuses to act or is unable to act or fails to proceed with
reasonable speed to discharge his duties, the procedure contained in
Clause 32.2 for the appointment of the Independent Person may be repeated
as often as necessary until a decision is obtained
32.4 POWER OF INDEPENDENT PERSON TO BRING IN SPECIALIST ADVICE
The Independent Person shall have the power in relation to any dispute
referred to him pursuant to Clause 32.1 which he considers to be of a
specialist nature to seek specialist advice from a third party or
parties (as appropriate), who shall have been qualified in respect of the
subject matter of the dispute or difference in question for not less than
ten
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years and who shall be a specialist in relation to the whole or part of
such subject matter (each a "Specialist Person")
32.5 ARBITRATION
32.5.1 Except as mentioned in Clause 32.6 the Independent Person appointed under
this Clause shall act as an arbitrator in accordance with the provisions
of the Arbitration Act 1996.
32.5.2 The parties agree that the Independent Person appointed pursuant to
Clause 32.4.1 shall not have the powers set out in S.48(5) of the
Arbitration Act 1996.
32.6 EXPERT
Whenever the parties have agreed in writing prior to his appointment that
the Independent Person shall act as an expert or this Agreement expressly
so provides then the following provisions shall have effect:-
32.6.1 the Independent Person shall act as an expert and not as an arbitrator
and his decision shall be final and binding upon the parties hereto;
32.6.2 the Independent Person shall consider (and make available to any
Specialist Person) (inter alia) any written representations made on
behalf of any party (if made reasonably promptly) but shall not be bound
thereby;
32.6.3 the parties hereto shall use all reasonable endeavours to procure that
the Independent Person (with the assistance of any Specialist Person(s))
shall give his decision as speedily as possible;
32.6.4 the costs of appointing the Independent Person (and any Specialist
Person(s)) and his costs and disbursements in connection with his duties
under this Agreement shall be shared between the parties to the dispute
in such proportions as the Independent Person shall determine or in the
absence of such determination then equally between the parties; and
32.6.5 if the Independent Person (or Specialist Person) shall be or become
unable or unwilling to act then the procedure herein before contained for
the appointment of an expert may be repeated as often as necessary until
a decision is obtained.
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32.7 INDEPENDENT PERSON TO DETERMINE DELAYS
Where the dispute or difference between the parties which was the subject
of the Determination Notice shall have resulted in delay to the carrying
out of the Fit Out Works or the Base Building Works, the Independent
Person shall be entitled (inter alia) to award such extension of time for
the fulfilment of the obligation in question in respect of such delay as
shall in all the circumstances be fair and reasonable.
33. NOTICES
33.1 MEANING OF "ADDRESS"
"Address" means the address of the party in question shown on the first
page of this Agreement or such other address as the party in question may
from time to time notify in writing to the other parties to this
Agreement as being its address for service for the purposes of this
Agreement.
33.2 DELIVERY OF NOTICES
Any notice, approval, election or other communication given or made in
accordance with this Agreement shall be in writing and shall be:
33.2.1 sent by registered or recorded delivery post to the relevant party at
such party's Address and, if so sent, shall be deemed to have been
delivered, given or made on the date occurring 72 hours after the date it
was sent;
33.2.2 transmitted by telex to the telex number for the party in question shown
on the first page of this Agreement (or such other telex number as the
party in question may from time to time notify in writing to the other
parties to this Agreement as being its telex number for the purposes of
this Agreement) and, if so transmitted, shall be deemed to have been
delivered, given or made on the date of transmission; or
33.2.3 shall be personally delivered to the relevant party at such party's
Address as defined in this Clause and, if so delivered, shall be deemed
to have been delivered, given or made on the date of delivery.
33.3 ADDRESSES FOR NOTICES
33.3.1 Notices to the Tenant shall be marked for the attention of The Facilities
Manager -Goldman Sachs International at 133 Peterborough Court, London
EC4A 2BB with a further copy to General Counsel Legal Department Goldman
Sachs International at 133 Peterborough Court, London EC4A 2BB.
33.3.2 Notices to the Developer shall be marked for the attention of Managing
Director JC No 3 (UK) Limited at c/o ITOCHU Europe PLC, International
Press Centre Building, 76 Shoe
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Lane, London EC4A 3JB with a further copy to General Counsel, Legal
Department ITOCHU at 5-1, Kita-Aoyama 2-chome, Minato-Ku, Tokyo 107-8077,
Japan.
33.3.3 Notices to the Tenant's Surety shall be marked for the attention of
General Counsel the Legal Department Goldman Sachs & Co., 85 Broad
Street, New York New York 10004.
34. SENIOR MANAGERS AND TENANT'S AGENTS' AUTHORITY
34.1 DESIGNATION OF SENIOR MANAGERS
Each of the Developer and the Tenant shall by notice in writing given to
the other designate not more than three (3) senior managers (each being
herein referred to as a "Senior Manager" which expression shall include
any persons appointed in place of the initial persons so designated) each
of whom shall have authority to approve all matters requiring the
approval of the relevant party pursuant to this Agreement.
34.2 INITIAL DESIGNATION
It is hereby acknowledged that the Tenant has designated Roger Kitchener,
Ivan Hodgson and Ian King as its Senior Managers and the Developer has
designated Kenzo Sato, Takashi Ogata and Masahito Namura as its Senior
Managers.
34.3 ABILITY TO RELY UPON SENIOR MANAGERS
Each party acknowledges and represents that the other may rely upon the
communications statements representations and directions of not less than
two of its Senior Managers acting together and that such persons have
authority to act on its behalf and to it in connection with this
Agreement. Directions and other communications given to or received from
any two or more of the Senior Managers shall be deemed given to and
received from all of the Senior Managers.
34.4 ABILITY TO CHANGE DESIGNATION
Either party may by written notice to the other at any time hereafter
change its designation of any of the Senior Managers appointed by it with
effect from the date of such notice.
35. CONTINUANCE AND NON-MERGER
This Agreement shall remain in full force and effect in respect of any of
the provisions hereof which remain to be completed satisfied or fulfilled
on the grant of the Lease.
36. NO ASSIGNMENT/PERSONAL OBLIGATIONS
36.1 TENANT'S INTEREST PERSONAL
Pending the grant of the Leases the benefit of the Tenant's interest in
this Agreement shall be personal to the Tenant and it shall not assign
underlet mortgage or charge the benefit of this Agreement or any part
thereof other than to a Group Company or Affiliate or Associated Company
and only in circumstances where the Leases are still to be taken in the
names of the Tenant. Provided That the Tenant may notwithstanding the
foregoing enter
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into agreements to underlet on terms permitted by the Lease subject to
the prior approval of the Developer such approval not to be unreasonably
withheld or delayed.
36.2 DEVELOPER'S INTEREST PERSONAL
Pending Shell & Core Substantial Completion, the benefit of the
Developer's interest in this Agreement shall (save as provided below) be
personal to the Developer and (save as provided below) it shall not
assign mortgage or charge the benefit of the Agreement or any part
thereof without the prior consent of the Tenant (such approval not to be
unreasonably withheld or delayed) Provided Always that nothing herein
contained shall prevent or restrict:-
36.2.1 the Developer from dealing with its interest in and with the
benefit of this Agreement in order to seek and obtain financing
for the purposes of enabling it to perform its obligations
pursuant to this Agreement and/or for the purposes of entering
into finance leasing arrangements and/or for the purposes of
introducing a joint venture partner or partners and/or from
agreeing to deal with its interest in and with the benefit of this
Agreement once Shell & Core Substantial Completion has occurred;
or
36.2.2 a Developer's mortgagee, chargee or assignee by way of security of
the benefit of this Agreement from assigning the benefit of this
Agreement following enforcement of its security.
36.3 IMPLIED COVENANTS EXCLUDED
The obligations of the Developer under this agreement are personal to the
Developer and will not bind successors in title save for the obligation
to grant the Leases in Clause 23.2 and provide approvals in relation to
the Fit Out Works.
36.4 NOVATION OF OBLIGATIONS TO ITOCHU
After Shell & Core Substantial Completion the Developer may novate such
obligations contained in this Agreement (other than the obligation to
grant the Leases) as it reasonable requires to ITOCHU and the Tenant will
enter into a deed in a form annexed as ANNEXURE 20 at the request of the
Developer.
37. EXCLUSION OF DEVELOPER'S LIABILITY
37.1 NO LIABILITY BEYOND THIS AGREEMENT
37.1.1 The Developer's obligations and duties in respect of the design
supervision carrying out and completion of the Base Building Works and
the fitness of the Base Building Works and the fitness of the Base
Building Works for the purposes of the Tenant shall be expressly limited
to the express contractual obligations contained in this Agreement and
any other right of action by the Tenant its successors in title or
persons deriving title under it against the Developer whether in tort or
otherwise is hereby excluded
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37.1.2 The Tenant agrees that if the Developer shall appoint GSPM to carry out
the Developer's Fit Out Works pursuant to the Procurement Contract and
shall perform its obligations thereunder then the Developer shall have no
liability to the Tenant in relation to and is hereby released from all
liability for the Developer's Fit Out Works
37.2 NO LIABILITY FOR CONSEQUENTIAL LOSS
The Tenant hereby waives all of its rights (if any) in respect of claims
for consequential losses arising from any breach by the Developer of its
obligations contained in this Agreement.
38. GENERAL PROVISIONS
38.1 INTEREST ON LATE PAYMENTS
If and so often as any of the sums payable hereunder by either party to
the other shall be unpaid after becoming due and payable the party from
whom such payment shall be due shall pay on demand interest on such
unpaid sums from the due date until payment in cleared funds at the
Prescribed Rate.
38.2 INVALIDITY OF CERTAIN PROVISIONS
If any term of this Agreement or the application thereof to any person or
circumstances shall to any extent be invalid or unenforceable the same
shall be severable from the remainder of this Agreement and the remainder
of this Agreement or the application of such term or provision to persons
or circumstances other than those as to which it is held invalid or
unenforceable shall not be affected thereby and each term and provision
of this Agreement shall be valid and be enforced to the fullest extent
permitted by the law.
38.3 PROPER LAW AND JURISDICTION
This Agreement shall be governed by and construed in accordance in all
respects with English law and the parties hereto hereby submit to the
non-exclusive jurisdiction of the High Court of Justice of England in
relation to any claim, dispute or difference which may arise hereunder
and in relation to the enforcement of any judgment rendered pursuant to
any such claim dispute or difference and, for the purpose of Order 10
Rule 3 of the Rules of the Supreme Court of England (or any modification
or re-enactment thereof), the Tenant hereby irrevocably agrees that any
process may be served on it by leaving a copy thereof at its Address (as
determined pursuant to Clause 33).
38.4 IMMUNITY FROM SUIT
To the extent that the Tenant, the Developer, the Tenant's Surety or
ITOCHU is entitled to any right of immunity from any judicial
proceedings, from the granting of any form of relief in any proceedings,
from attachment of its property or assets, or from execution of judgment,
on the ground of sovereignty diplomatic immunity or otherwise in respect
of any matter arising out of or relating to its obligations under this
Agreement, the Tenant, the Developer, the Tenant's Surety and ITOCHU each
hereby and will irrevocably waive such
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right for the benefit of the other relevant parties and agree not to
invoke such right and consent to the giving of any such relief or the
issue of any such proceeding or process of attachment or execution by the
other relevant party.
38.5 EXAMINATION BY TENANT
Neither any approval given by the Tenant pursuant to this Agreement nor
any examination by the Tenant of any plans or other details supplied by
the Developer in connection with the Base Building Works nor any failure
by the Tenant to examine information supplied to it nor any examination
or inspection on or off site with regard to the carrying out or design of
the Base Building Works shall in any way relieve the Developer from its
obligations in connection with the design and carrying out of the Base
Building Works.
38.6 KEY MAN REQUIREMENTS
38.6.1 The Developer shall use all reasonable endeavours to procure that the key
persons named below shall be allocated by the Developer and/or the Base
Building Contractor and/or the Base Building Architects (as appropriate)
to the carrying out of the Base Building Works and to procure that each
such person shall continue to perform their responsibilities until Shell
and Core Substantial Completion or until such persons are removed or
replaced pursuant to Sub-Clause 38.6.3
KEY PERSONS
(a) Mr M Namura of ITOCHU
(b) Mr T Davis of the Base Building Contractor
(c) Mr J Robertson of Hurley Robertson
38.6.2 The Developer shall use all reasonable endeavours to ensure that each of
the Key Persons identified above unless he is removed or replaced
pursuant to Sub-Clause 38.6.3 shall at all times give to the performance
of his duties so much of his time and attention as is required for the
proper and effective carrying out of the Base Building Works in
accordance with the Developer's programme.
38.6.3 The Developer shall use reasonable endeavours to procure that none of the
Key Persons identified above shall be dismissed without the Tenant's
prior approval, such approval not to be unreasonably withheld or delayed.
In the event that any Key Person ceases to be employed by his current
employer the Developer shall seek to procure that he is replaced by a
person who shall have been previously approved by the Tenant, such
approval not to be unreasonably withheld or delayed.
38.6.4 The Tenant shall be entitled to receive on request full details of the
curriculum vitae of any Key Person's proposed replacement.
38.7 SHOE LANE PROTOCOL
The Developer and the Tenant shall use all reasonable endeavours to
procure that their respective contractors (as appropriate) sign up to and
observe the Shoe Lane Protocol.
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39. TUNNEL AND BRIDGES
The Tenant wishes to link Peterborough Court with the Building by tunnel
and bridges so soon as all relevant consents have been obtained by the
Tenant and subject to that the Landlord is prepared to enter into
agreements permitting this on terms substantially as set out in the draft
Tunnel Agreement and Bridges Agreement. Accordingly:-
39.1 So soon after the Tenant shall have secured and produced to the Developer
for its approval (not to be unreasonably withheld) all relevant approvals
and consents for the carrying out of the Tunnel Works to be implemented
by the Tunnel Agreement (as such works are therein defined) and the
Bridges Works to be implemented by the Bridges Agreement (as such works
are therein defined) and upon the Tenant requiring by written notice to
that effect served on the Developer the Developer and Itochu shall
execute the Tunnel Agreement and the Bridges Agreement and when the other
parties to those Agreements have also executed them then the Tunnel
Agreement and the Bridges Agreement will be completed and implemented
with immediate effect;
39.2 The form of the Tunnel Agreement shall be substantially in the form of
the draft annexed hereto and the form of the Bridge Agreement shall be
substantially in the form of the Tunnel Agreement with such amendments
thereto as each of the parties reasonably shall approve;
39.3 The Developer will co-operate and liaise with the Tenant in good faith
with a view to the early implementation of the Tunnel Agreement and the
Bridges Agreement and an early start to the Tunnel Works and the Bridge
Works and in the meantime the Developer (to the extent reasonably so
requested by the Tenant) will take all requisite steps and at the
reasonable and proper cost of the Tenant to assist the Tenant to complete
the preparation of all plans specifications designs contracts and other
matters in readiness for a start on site in respect of each of the Tunnel
Works and the Bridge Works as if in all practical effect such aforesaid
Agreements had already been implemented;
39.4 Without prejudice to the provisions of Clause 39.3 the Developer shall in
the design and carrying out of the Base Building Works make due allowance
for the design and implementation of portals to facilitate the
construction of the Tunnel Works and cladding panels and openings to
facilitate construction of the Bridge Works in such a manner as the
Tenant shall reasonably require and as will allow the Developer to adhere
to the Developer's Programme and the same shall constitute Tenant's
Requested Modifications for the purposes of this Agreement
40. DEFERRAL OF PAYMENTS
Notwithstanding the other provisions of this Agreement as to the timing
of payments and without prejudice to the Tenant's liability to make any
payment pursuant to this Agreement, it is hereby agreed that, save to the
extent otherwise required by the Developer, all payments to be made by
the Tenant to the Developer pursuant to this Agreement shall be
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postponed until, and shall be made on (i) the day falling 30 days after
the day on which the Lease is granted or (ii) (if this Agreement is
terminated) the day of termination.
IN WITNESS whereof the parties have executed this Agreement as a deed and intend
the same to be delivered on the day and year first before written
Executed as a Deed by
JC NO. 3 (UK) LIMITED
acting by:
Director [ILLEGIBLE]
Director [ILLEGIBLE]
Executed as a Deed by
FLEET STREET SQUARE
MANAGEMENT LIMITED
acting by:
Director [ILLEGIBLE]
Director [ILLEGIBLE]
By [ILLEGIBLE]
------------------------------------------
Executive Vice President
For and on behalf of ITOCHU CORPORATION
<PAGE> 114
<TABLE>
<CAPTION>
INDEX OF ANNEXURES AND EXHIBITS
ANNEXURE CLAUSE REFERENCE
<S> <C>
1. Basement to Level 4 Lease
2. Level 5 Lease
3. Level 6 Lease
4. Level 7 Lease
5. Level 8 Lease
6. Management Deed
7. Licence for alterations
8. Base Building Specification and Plans "Base Building Specification"
"Base Building Plans"
9. Development Site Plan "Building" and
"Development Site Plan"
10. Agreement for Lease Measurement Plans "Agreement for Lease
Measurement Plans"
11. Critical Dates "Critical Dates"
12. Demolition Works Specification "Demolition Works
Specification"
13. Minimum Standard Fitting Out Works Specification "Minimum Standard Fitting
Out Works"
14. Base Building Architects Appointment and Warranty Clause 7.1.1
15. Base Building M&E Engineer Appointment and Warranty Clause 7.1.2
16. Base Building Structural Engineer Appointment and Warranty Clause 7.1.3
17. Base Building Contract and Contractor's Warranty Clause 7.1.5
18. Tenant's Proposed Modifications Clause 9.2.3
19. Letter of Opinion Clause 23.7
20. Novation Deed Clause 36.4
21. Shoe Lane Protocol Clause 38.7
</TABLE>
<PAGE> 115
<TABLE>
<CAPTION>
<S> <C>
22. Stopping Up Plan Clause 3
23. Tunnel Agreement Clause 39
24. Risers Plan Clause 4.6
</TABLE>
<PAGE> 1
Exhibit 10.6
ANNEXURE 1
This is the Basement to Level 4 Lease referred to as Annexure 1 to the Agreement
relating to the development and leasing of 120 Fleet Street, London EC4 dated 2
April 1998 and made between JC No. 3 (UK) Limited and Fleet Street Square
Management Limited trading as Fleet Street Partnership (1), Goldman Sachs
International (2) Restamove Limited (3) The Goldman Sachs Group LP (4) and
Itochu Corporation (5)
/s/[signature]
- --------------------------------- ----------------------------------------
For and on behalf of For and on behalf of
GOLDMAN SACHS INTERNATIONAL JC NO.3 (UK) LIMITED
and
FLEET STREET SQUARE MANAGEMENT LIMITED
trading as FLEET STREET PARTNERSHIP
/s/[signature]
- --------------------------------- ----------------------------------------
For and on behalf of For and on behalf of
RESTAMOVE LIMITED ITOCHU CORPORATION
- ---------------------------------
For and on behalf of
GOLDMAN SACHS GROUP LP
<PAGE> 2
DATED 19
____________________________________
(1) Landlord:
JC NO. 3 (UK) LIMITED AND
FLEET STREET SQUARE MANAGEMENT LIMITED
TRADING AS FLEET STREET PARTNERSHIP
(2) Tenant:
GOLDMAN SACHS INTERNATIONAL
(3) Guarantor:
THE GOLDMAN SACHS GROUP L.P.
____________________________________
OCCUPATIONAL LEASE
- of -
Basement, Lower Ground, Ground, Upper Ground
and First to Fourth Floors including Part Fifth Floor
120 Fleet Street London EC4
____________________________________
CLIFFORD CHANCE
200 Aldersgate Street
London EClA 4JJ
Tel: 0171-600 1000
Fax: 0171-600 5555
Ref: AMW/C1536/839/RMRM
<PAGE> 3
INDEX
CLAUSE PAGE
SECTION 1
DEFINITIONS AND INTERPRETATION
1. DEFINITIONS ........................................................ 1
2. INTERPRETATION ..................................................... 11
SECTION 2
GRANT OF LEASE
3. GRANT, RIGHTS AND OTHER MATTERS .................................... 12
3.1 DEMISE AND TERM ............................................ 12
3.2 EXCEPTIONS AND RESERVATIONS ................................ 12
3.3 RIGHTS ..................................................... 12
3.4 THIRD PARTY RIGHTS ......................................... 12
3.5 NO IMPLIED EASEMENTS ....................................... 12
3.6 COVENANTS AFFECTING REVERSION .............................. 12
3.7 ENCROACHMENTS AND EASEMENTS ................................ 12
3.8 COVENANTS RELATING TO OTHER PROPERTY ....................... 13
3.9 RIGHTS OF ENTRY BY LANDLORD ................................ 13
3.10 TERMS OF ENTRY BY LANDLORD ................................. 13
3.11 LANDLORD'S COVENANTS ....................................... 14
SECTION 3
FINANCIAL PROVISIONS
4. RENTS .............................................................. 14
4.1 TENANT'S OBLIGATION TO PAY ................................. 14
4.2 DATES OF PAYMENT OF PRINCIPAL RENT ......................... 15
4.3 METHOD OF PAYMENT OF PRINCIPAL RENT ........................ 15
4.4 DATES OF PAYMENT OF INSURANCE RENT, ADDITIONAL
RENT AND COMMON EXPENSES ................................... 15
4.5 DATES OF PAYMENT OF SERVICE CHARGE ......................... 15
4.6 NO RIGHT OF SET-OFF ........................................ 15
5. RENT REVIEW ........................................................ 15
5.1 DEFINITIONS ................................................ 15
5.1.1 "OPEN MARKET RENT" ................................. 15
5.1.2 "ASSUMED PREMISES" ................................. 16
5.1.3 "ASSUMPTIONS" ...................................... 16
5.1.4 "DISREGARDED MATTERS" .............................. 17
5.1.5 "REVIEW SURVEYOR" .................................. 18
5.2 RENT REVIEWS ............................................... 19
<PAGE> 4
5.3 AGREEMENT OR DETERMINATION OF THE REVIEWED RENT ............ 19
5.4 APPOINTMENT OF REVIEW SURVEYOR ............................. 19
5.5 FUNCTIONS OF REVIEW SURVEYOR ............................... 19
5.6 APPOINTMENT OF NEW REVIEW SURVEYOR ......................... 19
5.7 INTERIM PAYMENTS PENDING DETERMINATION ..................... 20
5.8 RENT RESTRICTIONS .......................................... 20
5.9 MEMORANDA OF REVIEWED RENT ................................. 20
5.10 TIME NOT OF THE ESSENCE .................................... 21
6. INTEREST ........................................................... 21
6.1 INTEREST ON LATE PAYMENTS .................................. 21
7. OUTGOINGS .......................................................... 21
7.1 TENANT'S OBLIGATION TO PAY ................................. 21
7.2 CONTESTS AND APPEALS ....................................... 22
7.3 COSTS OF UTILITIES, ETC .................................... 22
8. VALUE ADDED TAX .................................................... 22
8.1 DEFINITIONS ................................................ 22
8.2 SUMS EXCLUSIVE OF VAT ...................................... 22
8.3 PAYMENT OF VAT ............................................. 23
8.4 REPAYMENT OF AMOUNTS ....................................... 23
8.5 VAT INCURRED BY LANDLORD ................................... 23
9. LANDLORD'S COSTS ................................................... 24
SECTION 4
REPAIRS, ALTERATIONS AND SIGNS
10. REPAIRS, DECORATION ETC ............................................ 24
10.1 REPAIRS .................................................... 24
10.2 DAMAGE BY THE INSURED RISKS ................................ 25
10.3 DECORATIONS ................................................ 25
10.4 PLANT AND MACHINERY ........................................ 25
10.5 PLANNED MAINTENANCE ........................................ 26
10.6 CLEANING ................................................... 26
10.7 CARPETING AND FLOOR COVERINGS .............................. 26
11. YIELD UP ........................................................... 26
11.1 REINSTATEMENT OF PREMISES .................................. 26
11.2 YIELDING UP IN GOOD REPAIR ................................. 27
12. COMPLIANCE WITH NOTICES ............................................ 27
12.1 TENANT TO REMEDY BREACHES OF COVENANT ...................... 27
12.2 FAILURE OF TENANT TO REPAIR ................................ 28
<PAGE> 5
13. ALTERATIONS ........................................................ 28
13.1 NO STRUCTURAL ALTERATIONS .................................. 28
13.2 NO ALTERATIONS TO LANDLORD'S FIXTURES ...................... 28
13.3 NON-STRUCTURAL ALTERATIONS ................................. 28
13.4 DEMOUNTABLE PARTITIONING ................................... 28
13.5 COVENANTS BY TENANT ........................................ 29
14. SIGNS AND ADVERTISEMENTS ........................................... 29
SECTION 5
USE
15. USE OF PREMISES .................................................... 29
15.1 PERMITTED USE .............................................. 29
15.2 TENANT NOT TO LEAVE PREMISES UNOCCUPIED .................... 29
15.3 DETAILS OF KEYHOLDERS ...................................... 29
16. USE RESTRICTIONS AND REGULATIONS ................................... 30
17. EXCLUSION OF WARRANTY AS TO USER ................................... 30
17.1 NO WARRANTY BY LANDLORD .................................... 30
17.2 TENANT'S ACKNOWLEDGEMENT ................................... 30
17.3 TENANT TO REMAIN BOUND ..................................... 30
SECTION 6
DISPOSALS ............................. 30
18. GENERAL RESTRICTIONS ............................................... 30
18.1 ALIENATION GENERALLY ....................................... 30
18.2 SHARING WITH A GROUP COMPANY ............................... 31
18.3 DIPLOMATIC IMMUNITY ........................................ 31
19. ASSIGNMENT OF WHOLE ................................................ 31
19.1 PROHIBITION ON ASSIGNMENT .................................. 31
19.2 CIRCUMSTANCES IN WHICH ASSIGNMENT NOT ALLOWED .............. 32
19.3 CONDITIONS FOR ASSIGNMENT .................................. 33
19.4 AUTHORISED GUARANTEE AGREEMENT ............................. 33
19.5 CONSENT FOR ASSIGNMENT ..................................... 34
20. UNDERLETTING ........................................................ 34
20.1 SUBLETTING UNIT ............................................ 34
20.2 UNDERLETTING OF PART ....................................... 35
20.3 UNDERLETTING OF THE WHOLE .................................. 36
20.4 UNDERLETTING RENT .......................................... 36
20.5 DIRECT COVENANTS FROM UNDERTENANT .......................... 36
20.6 CONTENTS OF UNDERLEASE ..................................... 37
20.7 TENANT TO OBTAIN LANDLORD'S CONSENT ........................ 39
<PAGE> 6
20.8 REVIEW OF UNDERLEASE RENT .................................. 39
20.9 NO VARIATION OF TERMS ...................................... 39
20.10 NO REDUCTION IN RENT ....................................... 39
20.11 COVENANTS BY ASSIGNEE AND ASSIGNOR OF UNDERLEASE ........... 39
21. MORTGAGING AND CHARGING ............................................ 40
22. REGISTRATION OF DISPOSITIONS ....................................... 40
SECTION 7
LEGAL REQUIREMENTS
23. STATUTORY REQUIREMENTS ............................................. 40
23.1 TENANT TO COMPLY WITH STATUTES ............................. 40
23.2 TENANT TO EXECUTE NECESSARY WORKS .......................... 41
24. PLANNING ACTS ...................................................... 41
24.1 TENANT'S OBLIGATION TO COMPLY .............................. 41
24.2 NO APPLICATION FOR PLANNING PERMISSION WITHOUT CONSENT ..... 41
24.3 TENANT TO OBTAIN ALL PERMISSIONS ........................... 41
24.4 TENANT TO PAY PLANNING CHARGES ............................. 41
24.5 NO IMPLEMENTATION OF PERMISSION WITHOUT APPROVAL ........... 41
24.6 TENANT TO CARRY OUT WORKS BEFORE END OF TERM ............... 42
24.7 PLANS, ETC., TO BE PRODUCED ................................ 42
24.8 PLANNING CONDITIONS ........................................ 42
24.9 PLANNING REFUSAL ........................................... 42
25. STATUTORY NOTICES .................................................. 43
26. FIRE PRECAUTIONS AND EQUIPMENT ..................................... 43
26.1 COMPLIANCE WITH REQUIREMENTS ............................... 43
26.2 FIRE FIGHTING APPLIANCES TO BE SUPPLIED .................... 43
26.3 ACCESS TO BE KEPT CLEAR .................................... 43
27. DEFECTIVE PREMISES ................................................. 44
SECTION 8
INSURANCE
28. INSURANCE PROVISIONS ............................................... 44
28.1 LANDLORD TO INSURE ......................................... 44
28.2 COMMISSIONS AND RESTRICTION ON TENANT INSURING ............. 45
28.3 FULL REINSTATEMENT COST .................................... 45
28.4 LANDLORD'S FIXTURES ........................................ 45
28.5 LANDLORD TO PRODUCE EVIDENCE OF INSURANCE .................. 45
28.6 INSURANCE VALUATIONS ....................................... 45
28.7 DAMAGE TO THE BUILDING ..................................... 46
<PAGE> 7
28.8 OPTION TO DETERMINE ........................................ 46
28.9 WHERE REINSTATEMENT IS PREVENTED ........................... 47
28.10 ALLOCATION OF INSURANCE MONIES ............................. 47
28.11 PAYMENT OF INSURANCE MONEY REFUSED ......................... 48
28.12 SUSPENSION OF RENT PAYMENTS ................................ 48
28.13 BENEFIT OF OTHER INSURANCES ................................ 48
28.14 INSURANCE BECOMING VOID .................................... 48
28.15 REQUIREMENTS OF INSURERS ................................... 49
28.16 NOTICE BY TENANT ........................................... 49
28.17 NOTING OF TENANT'S INTEREST ................................ 49
SECTION 9
DEFAULT OF TENANT AND RIGHTS OF RE-ENTRY
29. DEFAULT OF TENANT .................................................. 49
29.1 RE-ENTRY ................................................... 49
29.2 EVENTS OF DEFAULT .......................................... 49
SECTION 10
LANDLORD'S SERVICES AND SERVICES CHARGE
30. LANDLORD'S SERVICES ................................................ 51
30.1 PROVISION OF SERVICES ...................................... 51
30.2 VARIATION OF SERVICES ...................................... 53
30.3 FAILURE BY LANDLORD TO PROVIDE SERVICES .................... 54
30.4 EXCLUSION OF LANDLORD'S LIABILITY .......................... 54
30.5 EXCLUSION OF LANDLORD'S LIABILITY FOR CONDUITS ............. 54
30.6 BUSINESS HOURS ............................................. 54
31. SERVICE CHARGE ..................................................... 54
31.1 DEFINITIONS ................................................ 54
31.2 ACCOUNT OF EXPENDITURE ..................................... 56
31.3 ADVANCE PAYMENT ............................................ 56
31.4 BALANCING PAYMENT .......................................... 57
31.5 OMISSIONS .................................................. 57
31.6 ALTERATION OF SERVICE CHARGE PERCENTAGE .................... 57
31.7 CONTINUING APPLICATION OF PROVISIONS ....................... 58
31.8 RETAIL UNIT ................................................ 58
31.9 DISPUTES ................................................... 58
SECTION 11
MISCELLANEOUS
32. QUIET ENJOYMENT .................................................... 58
33. RELETTING NOTICES .................................................. 58
<PAGE> 8
34. DISCLOSURE OF INFORMATION .......................................... 59
35. INDEMNITY .......................................................... 59
36. REPRESENTATIONS .................................................... 59
37. EFFECT OF WAIVER ................................................... 59
38. NOTICES ............................................................ 60
38.1 NOTICES TO TENANT OR GUARANTOR ............................. 60
38.2 NOTICES TO LANDLORD ........................................ 60
39. APPLICABLE LAW AND JURISDICTION .................................... 60
40. INVALIDITY OF CERTAIN PROVISIONS ................................... 60
41. GUARANTOR'S COVENANTS .............................................. 60
42. NEW TENANCY ........................................................ 61
43. TENANT'S OPTION TO DETERMINE ....................................... 61
44. RETAIL UNIT ........................................................ 61
45. SIGNAGE ON THE BUILDING ............................................ 63
46. RETAIL UNIT OPAQUE COVERING ........................................ 63
SCHEDULE 1
EXCEPTIONS AND RESERVATIONS ............................................... 64
SCHEDULE 2
RIGHTS GRANTED ............................................................ 66
SCHEDULE 3
USE RESTRICTIONS .......................................................... 69
SCHEDULE 4
COVENANTS BY GUARANTOR .................................................... 71
SCHEDULE 5
AUTHORISED GUARANTEE AGREEMENT TO BE GIVEN BY
TENANT/UNDERTENANT PURSUANT TO CLAUSES 19.4 AND 20.12.2 ................... 75
SCHEDULE 6
DEEDS AND DOCUMENTS CONTAINING MATTERS
TO WHICH THE PREMISES ARE SUBJECT ......................................... 86
<PAGE> 9
SCHEDULE 7
ITEMS OF EXPENDITURE AS REFERRED TO IN CLAUSE 31 .......................... 87
<PAGE> 10
THIS LEASE is made on the day of 19
BETWEEN:-
(1) JC NO. 3 (UK) LIMITED and FLEET STREET SQUARE MANAGEMENT LIMITED TRADING
as FLEET STREET PARTNERSHIP, both of 76 Shoe Lane, London EC4A 3JB (the
"Landlord");
(2) GOLDMAN SACHS INTERNATIONAL (Company registration number 2263951) whose
registered office is at Peterborough Court, 133 Fleet Street, London EC4A
2BB (the "Original Tenant"); and
(3) THE GOLDMAN SACHS GROUP, L.P. of 85 Broad Street, New York, New York
10004 (the "Guarantor")
NOW THIS DEED WITNESSES as follows:-
It is hereby recorded that this Lease was not granted in pursuance of either an
agreement, option or right of pre-emption entered into before 1 January 1996
(the date of the coming into force of the Landlord and Tenant (Covenants) Act
1995) or an order of a Court made before that date, and accordingly this Lease
constitutes a new tenancy for the purposes of the Landlord and Tenant
(Covenants) Act 1995.
SECTION 1
DEFINITIONS AND INTERPRETATION
1. DEFINITIONS
In this Lease, unless the context requires otherwise, the following
expressions shall have the following meanings:-
1.1 "1927 ACT" means the Landlord and Tenant Act 1927 as amended prior to
(but not after) the date of this Lease;
1.2 "1995 ACT" means the Landlord and Tenant (Covenants) Act 1995;
1.3 "ADDITIONAL RENT" means all sums referred to in clause 6, and all sums
which are recoverable as rent in arrear or stated in this Lease to be due
to the Landlord;
- 1 -
<PAGE> 11
1.4 "ADJOINING PROPERTY" means any land and/or buildings adjoining or
neighbouring the Premises;
1.5 "AFFILIATE" of any specified person means any other person directly or
indirectly controlled or controlled by or under common control with such
specified person (for the purposes of this paragraph `control' (including
`control by' or under `common control with') shall mean the power to
direct management and policies directly or indirectly whether through the
ownership of voting securities or equity interests by contract or
otherwise);
1.6 "AGREEMENT FOR LEASE" means the agreement for lease dated [ o ] made
between (1) JC No. 3 (UK) Limited and Fleet Street Square Management
Limited trading as Fleet Street Partnership, (2) Goldman Sachs
International, (3) Restamove Limited, (4) The Goldman Sachs Group L.P.,
(5) Itochu Corporation;
1.7 "APPLICATION TO ASSIGN" means an application made by the Tenant to assign
this Lease pursuant to clause 19;
1.8 "ASSOCIATED COMPANY" means a company corporation or partnership which is
a subsidiary or Affiliate of another and a company corporation or
partnership shall be taken to be associated if both are subsidiaries or
Affiliates of a third company corporation or partnership;
1.9 "ATRIUM" means the atrium shown outlined and hatched in purple on the
Lease plans;
1.10 "BASE BUILDING SYSTEMS" means the mechanical, electrical, sanitary,
heating, ventilating, life safety, air conditioning, fire or other
systems in the Building;
1.11 "BASE RATE" means the base rate for the time being of Barclays Bank PLC
or some other London clearing bank nominated from time to time by the
Landlord or, in the event of base rate being abolished, such other
comparable rate of interest as the Landlord shall reasonably specify;
1.12 "BUILDING" means the land situated at 120 Fleet Street London EC4
together with the building erected on it or on part of it and known as
120 Fleet Street and for the purpose of identification only shown edged
red on Plan 1 as the same are registered at H.M. Land Registry under
title number NGL 729721 and each and every part of the land and building,
including:-
- 2 -
<PAGE> 12
(a) any Conduits in, on, under or over and exclusively serving them,
except those of any utility company;
(b) all landlord's fixtures, fittings, plant, machinery, apparatus and
equipment now or after the date of this Lease in or upon the same
including (without limitation) any lifts, lift shafts and lift
machinery, any boilers and central heating and air conditioning
plant, any sprinklers and the water and sanitary apparatus; and
(c) any additions, alterations and improvements;
1.13 "BUSINESS HOURS" means the usual business or working hours of the
Building which shall be 7.30 a.m. to 7.30 p.m. on Mondays to Fridays
(inclusive) (excluding Christmas Day, Good Friday and all usual bank or
public holidays) and such additional hours as the Landlord may, from time
to time, reasonably determine having regard to the interests of the
tenants and occupiers of the Building;
1.14 "COMMON PARTS" means any entrance halls, corridors, passages, lobbies,
atria, landings, staircases, lifts, lavatories, pedestrian ways,
courtyards, forecourts, risers, car parks, service areas and loading bays
and any other amenities in, or forming part of, the Building which are
intended for common use by the tenants and occupiers of the Building and
all persons expressly or by implication authorised by them but excluding
the Lettable Areas;
1.15 "CONDUITS" means all drains, pipes, gullies, gutters, sewers,
watercourses, ducts, mains, channels, subways, wires, cables, conduits,
trunking, ducting, flues, boilers pumps and other plant and equipment for
the provision of water gas electricity telephone communications heating
cooling ventilation sprinkler systems fire alarm systems and other
services and any other conducting media of whatsoever nature now or
during the Term laid or constructed in through over or under the
Building;
1.16 "CURRENT TENANT" means the person or persons in whom this Lease is vested
at the date of the relevant Application to Assign;
1.17 "DAILY EXPRESS BUILDING" means that part of the Premises edged and
hatched yellow on the lease plans.
1.18 "DECORATION YEAR" means the year ending [o Note: this will be the date
five years from Shell & Core Completion] and every subsequent fifth year
after that date;
- 3 -
<PAGE> 13
1.19 "DEVELOPMENT" means development as defined in section 55 of the Town and
Country Planning Act 1990;
1.20 "FORCE MAJEURE" means any of fire, storm, tempest, other extreme adverse
weather conditions, war, hostilities, rebellion, revolution,
insurrection, military or usurped power, civil war, national strikes,
riot, terrorist action, commotion, disorder, decree of government, non
availability of labour, materials or equipment (to the extent the same
are not readily obtainable elsewhere) and (without prejudice to the
generality of the foregoing) any other cause or circumstances which are
beyond the Landlord's reasonable control and which adversely affects the
performance by the Landlord or anyone acting on its behalf of the terms
and provisions of this Lease
Provided that each and every such cause or circumstance shall only count
to the extent that it:-
(i) adversely affects the performance of the Landlord or anyone acting
on its behalf in relation to the terms and provisions of this
Lease; and
(ii) cannot reasonably be avoided or provided against by the Landlord
without any undue cost; and
(iii) is not due to the wilful or deliberate act default or negligent
act or omission of the Landlord;
1.21 "GROUP COMPANY" means any company within the same group of companies as
the Tenant as set out below:-
(i) Any two companies shall be taken to be members of a group if one
is the subsidiary of the other or both are subsidiaries of a third
company;
(ii) In determining whether any company is a subsidiary of another
company the word subsidiary bears the meaning assigned to it by
Section 736 of the Companies Act 1985 as originally enacted;
(iii) In determining whether any corporation (which shall be construed
in accordance with Section 740 of the Companies Act 1985 as
originally enacted) is a subsidiary of another corporation or of a
company or whether any company is a subsidiary of a corporation
the word subsidiary bears the meaning assigned to it by section
- 4 -
<PAGE> 14
736 of the Companies Act 1985 as originally enacted but modified
only so that 'company' includes 'corporation' for this purpose;
(iv) A partnership (which shall be construed as including a partnership
under the laws of the United Kingdom or elsewhere) shall be taken
to be a subsidiary of another partnership or of a company or
corporation if that other partnership or company or corporation is
entitled to more than one half of the assets or more than one half
of the income of the first mentioned partnership;
(v) A company or corporation shall be deemed to be a subsidiary of a
partnership if that partnership controls the composition of the
board of directors of the company or corporation or holds more
than half in nominal value of the issued equity share capital of
the company or corporation;
1.22 "GUARANTOR" means the party (if any) named as 'Guarantor' in this Lease
and includes the person from time to time guaranteeing the obligations of
the Tenant under this Lease and, in the case of an individual, includes
his personal representatives;
1.23 "INITIAL RENT" means the sum of [ o ] pounds sterling (pound o ) per
annum exclusive;
[NOTE: TO BE INSERTED ONCE FLOOR AREAS AGREED AND INDIVIDUAL LEASES
CREATED]
1.24 "INSURANCE RENT" means:-
(a) a due proportion (to be fairly and properly determined by the
Landlord or the Surveyor) of the sums which the Landlord pays from
time to time for insuring the Building against the Insured Risks
pursuant to clause 28.1.1 and the other items referred to in
clause 28.1.3 and 28.1.4 all at such competitive rates as are
reasonably obtainable in the London insurance market;
(b) all sums which the Landlord pays from time to time for insuring
against loss of the Principal Rent and the Service Charge pursuant
to clause 28.1.2;
1.25 "INSURED RISKS" means (to the extent that any of the same are insurable
in the London insurance market) fire, storm, tempest, flood, earthquake,
lightning, explosion, impact, aircraft (other than hostile aircraft) and
other aerial devices and articles dropped from them, riot, civil
commotion and malicious damage including damage resulting from terrorism,
bursting or overflowing of water tanks, apparatus or pipes, and such
other risks as the Landlord may, in its discretion from time to time,
determine, subject to such normal
- 5 -
<PAGE> 15
exclusions, excesses, limitations, terms and conditions as may be
contained in any policy taken out by the Landlord (but not so as to
exclude terrorist risk if cover is available);
1.26 "LANDLORD" means the person for the time being entitled to the reversion
immediately expectant on the determination of the Term;
1.27 "THIS LEASE" means this Lease and any document which is supplemental to
it, whether or not it is expressly stated to be so;
1.28 "LETTABLE AREAS" means those parts of the Building leased or intended to
be leased to occupational tenants;
1.29 "NET INTERNAL AREA" means the total floor area expressed in square feet
measured in accordance with the Code of Measuring Practice published on
behalf of the Royal Institution of Chartered Surveyors and the
Incorporated Society of Valuers and Auctioneers current at the date upon
which reference is made to such Code (ignoring any works carried out by
or on behalf of any tenant or occupier prior to or during the subsistence
of this Lease in existence at the time of such measurement which would
reduce such total floor area);
1.30 "ORDER" means the Town and Country Planning (Use Classes) Order 1987 only
and not any amendment or re-enactment of the Order after the date of this
Lease;
1.31 "ORIGINAL GUARANTOR" means the guarantor (if any) of the Original Tenant;
1.32 "ORIGINAL TENANT" means the Tenant to whom this Lease was first granted;
1.33 "PERMITTED USE" means high class offices within paragraph (a) of Class B1
(Business) of the Order and purposes ancillary to such uses including a
travel agency providing services only to the Tenant, restaurant, fitness
centre, medical centre, sleeping accommodation and franchised food
outlets not open to the public (but excluding offices for a turf
accountancy, pools promoter, estate agency, travel agency, staff agency,
employment agency, job centre and any government department which are in
any case open to the public without appointment and any other use to
which the Landlord may reasonably object on the grounds of good estate
management);
1.34 "PLANS" means the plans annexed to this Lease;
1.35 "PLANNING ACTS" means the Town and Country Planning Act 1990, the
Planning (Listed Buildings and Conservation Areas) Act 1990, the Planning
(Hazardous Substances) Act
- 6 -
<PAGE> 16
1990, the Planning (Consequential Provisions) Act 1990, the Planning and
Compensation Act 1991 and the Town and Country Planning (Control of
Advertisements) Regulations 1992 and any other town and country planning
or related legislation;
1.36 "PREMISES" means the floors of the Building shown edged red on Plans 2 to
11 including:-
(a) the internal plaster surfaces and finishes of any structural or
load bearing walls and columns in or which enclose them, but not
any other part of such walls and columns;
(b) the entirety of any non-structural or non-load bearing walls and
columns in them;
(c) the inner half (severed medially) of any internal non-load bearing
walls which divide them from any other part of the Building;
(d) the floor finishes of them and all carpets but the lower limit of
the Premises shall not extend to anything below the floor
finishes;
(e) the ceiling finishes of them, including suspended ceilings (if
any) and light fittings but the upper limit of the Premises shall
not extend to anything above the ceiling finishes;
(f) all internal window frames and window furniture and all glass in
the windows and all doors, door furniture and door frames;
(g) all sanitary and hot and cold water apparatus and equipment and
any radiators in them and all fire fighting equipment and hoses in
them;
(h) all Conduits in them and exclusively serving the same, except
those of any utility company;
(i) all landlord's fixtures, fittings, plant, machinery, apparatus and
equipment at any time in or on them and exclusively serving the
same (but not any air conditioning units, sprinklers and ducting
and ancillary plant, machinery, apparatus or equipment); and
(j) any additions, alterations and improvements;
1.37 "PRESCRIBED RATE" means four per cent (4%) per annum above the Base Rate;
- 7 -
<PAGE> 17
1.38 "PRESIDENT" means the President for the time being of the Royal
Institution of Chartered Surveyors and if the President is unavailable
includes the duly appointed deputy of the President or any person
authorised by the President to make appointments on his behalf;
1.39 "PRINCIPAL RENT" means the rent payable under clause 4.1.1;
1.40 "PROPERTY MANAGEMENT AGREEMENT" means the property management agreement
dated [ o ] entered into between (1) o [FSP] (2) o [Goldman Sachs
Property Management and (3) o [Tenants] relating to 120 Fleet Street;
1.41 "PROPOSED ASSIGNEE" means the person stated in the Application to Assign
as being the person to whom the Tenant wishes to assign this Lease under
clause 19 and, where such Application to Assign states that such person
will be guaranteed by another person (other than the Tenant), includes
the prospective guarantor;
1.42 "PROPOSED ASSIGNMENT" means the proposed assignment of this Lease by the
Current Tenant to the Proposed Assignee described in the Application to
Assign;
1.43 "PROPOSED GUARANTOR" means the person who will guarantee to the Landlord
the obligations of the Proposed Assignee but this expression shall not
include the Current Tenant;
1.44 "REGULATIONS" means the reasonable regulations set out in a manual which
has been made available to the Tenant and which may be updated from time
to time and such substituted or additional reasonable Regulations as the
Landlord may from time to time notify in writing to the Tenant for the
general management oversight and security of the Premises, the Building,
the Common Parts and other areas used or to be used in common with others
provided that if there be a direct inconsistency between the terms of
this Lease and such regulations, the terms of this Lease shall prevail;
1.45 "REINSTATEMENT SCHEDULE" means the schedule annexed and marked Tenant
Reinstatement Obligations;
1.46 "RENT COMMENCEMENT DATE" means [ o to be determined pursuant to Agreement
for Lease];
1.47 "RENTS" means the sums payable by the Tenant under clause 4;
1.48 "RETAIL UNIT" means the area shown hatched brown on the plans of the
ground and lower ground floor of the Building annexed hereto;
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1.49 "RETAINED PARTS" means all parts of the Building which do not comprise
Lettable Areas, including:-
(a) the Common Parts;
(b) office and residential or other accommodation which may, from time
to time, be reserved in the Building for staff;
(c) any parts of the Building reserved by the Landlord for the housing
of plant, machinery or equipment, or otherwise in connection with,
or required for, the provision of services;
(d) all Conduits in, on, over or under, or exclusively serving the
Building, except any that form part of the Lettable Areas;
(e) the main structure of the Building, including the roof and its
structural parts, the foundations, all external walls, any
internal structural or load bearing walls and columns, the
structural slabs of the ceilings and floors, any party structures,
boundary walls, railings and fences, and all exterior parts of the
Building and any pavements, pavement lights, roads and car parking
areas (if any) which form part of the Building;
1.50 "REVIEW DATE" means [o to be determined pursuant to Agreement for Lease]
and every fifth anniversary of that date during the Term and "RELEVANT
REVIEW DATE" shall be construed accordingly;
1.51 "SERVICE CHARGE" has the meaning given to that expression in clause 31;
1.52 "STRUCTURE" means all structural or load bearing parts of the Building
and includes:-
(a) the foundations including any piles, pile caps and retaining or
membrane walls;
(b) all structural columns, supports and walls (including any atria);
(c) all parts of the roof and exterior of the Building;
(d) the structure of all floors within the Building;
(e) any pavements, pathways or similar areas within the curtilage of
the Building
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but excludes;
(f) the plaster, suspended ceilings or other internal decorative
finishes to such structural parts of the Building;
(g) all doors, window frames and glass (including any patent or double
glazing) in the external walls of the Building.
1.53 "SURVEYOR" means any person appointed by the Landlord to perform the
function of a surveyor or an accountant for any purpose of this Lease and
includes any employee of the Landlord or of a Group Company of the
Landlord appointed for that purpose and any person appointed by the
Landlord to collect the rents or to manage the Building but does not
include the Review Surveyor as defined in clause 5.
1.54 "TENANT" means the party named as "ORIGINAL TENANT" in this Lease and
includes the Tenant's successors in title and assigns and, in the case of
an individual, his personal representatives;
1.55 "TENANT'S WORKS" means the Fit Out Works as defined in the Agreement for
Lease;
1.56 "TERM" means the term of years specified in clause 3.1 and includes the
period of any holding over or any extension or continuation, whether by
statute or common law;
1.57 "TERM COMMENCEMENT DATE" means [0 to be determined pursuant to Agreement
for Lease];
1.58 "UTILITIES" means water, soil, steam, air, electricity, radio,
television, telegraphic, telephone, telecommunications and other services
and supplies of whatsoever nature;
1.59 "VALUE ADDED TAX" means value added tax as defined in the Value Added Tax
Act 1994 and any tax of a similar nature substituted for, or levied in
addition to, such value added tax;
1.60 "WORKING DAY" means any day, other than a Saturday or Sunday, on which
clearing banks in the United Kingdom are open to the public for the
transaction of business.
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2. INTERPRETATION
Unless there is something in the subject or context inconsistent with the
same:-
2.1 every covenant by a party comprising more than one person shall be deemed
to be made by such party jointly and severally;
2.2 words importing persons shall include firms, companies and corporations
and vice versa;
2.3 any covenant by any party not to do any act or thing shall include an
obligation not to permit or suffer such act or thing to be done;
2.4 any reference to the right of the Landlord to have access to, enter or
call for information on the Premises shall be construed as extending to
all persons authorised by it, including servants, agents, professional
advisers, contractors, workmen and others;
2.5 any reference to a statute (whether specifically named or not) shall
include any amendment or re-enactment of it for the time being in force,
and all instruments, orders, notices, regulations, directions, bye-laws,
permissions and plans for the time being made, issued or given under it,
or deriving validity from it;
2.6 all agreements and obligations by any party contained in this Lease
(whether or not expressed to be covenants) shall be deemed to be, and
shall be construed as, covenants by such party;
2.7 the words "including" and "include" shall be deemed to be followed by the
words "without limitation";
2.8 the titles or headings appearing in this Lease are for reference only and
shall not affect its construction;
2.9 any reference to a clause or schedule shall mean a clause or schedule of
this Lease;
2.10 references to any party not withholding consent or approval shall be
deemed to be references to consent or approval also not being delayed and
any obligation or reference to a party not withholding or delaying
consent shall be deemed to be a covenant by that party to that effect;
and
2.11 all references to notices, demands or requests shall be deemed to be
references to notices demands or requests in writing.
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SECTION 2
GRANT OF LEASE
3. GRANT, RIGHTS AND OTHER MATTERS
3.1 DEMISE AND TERM
In consideration of the rents, covenants and agreements reserved by, and
contained in, this Lease to be paid and performed by the Tenant, the
Landlord leases the Premises to the Tenant from and including the Term
Commencement Date for the term of twenty-five (25) years subject to the
Tenant paying the Rents to the Landlord in accordance with clause 4.
3.2 EXCEPTIONS AND RESERVATIONS
There are excepted and reserved out of this Lease the rights and
easements set out in SCHEDULE 1.
3.3 RIGHTS
This Lease is granted together with the rights and easements set out in
SCHEDULE 2.
3.4 THIRD PARTY RIGHTS
This Lease is granted subject to any matters contained or referred to in
SCHEDULE 6 so far as any of them relate to the Premises and are still
subsisting and capable of taking effect;
3.5 NO IMPLIED EASEMENTS
Nothing contained in this Lease shall confer on, or grant to, the Tenant
any easement, right or privilege, other than any expressly granted by
this Lease.
3.6 COVENANTS AFFECTING REVERSION
The Tenant shall perform and observe the agreements, covenants,
restrictions and stipulations contained or referred to in the deeds and
documents listed in SCHEDULE 6 so far as any of them relate to the
Premises and are still subsisting and capable of taking effect.
3.7 ENCROACHMENTS AND EASEMENTS
The Tenant shall not:-
3.7.1 stop up or obstruct any of the windows or lights belonging to the
Premises and shall not permit any new window, light, opening,
doorway, passage, Conduit or other encroachment or easement to be
made or acquired into, on or over the Premises or any part of
them. If any person shall attempt to make or acquire any
encroachment or easement whatsoever, the Tenant shall give written
notice of that fact to the Landlord promptly after it shall come
to the notice of the Tenant and,
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at the request of the Landlord but at the joint cost of the
Landlord and the Tenant, adopt such means as may be reasonably
required by the Landlord for preventing any encroachment or the
acquisition of any easement.
3.7.2 give to any person any acknowledgement that the Tenant enjoys the
access of light to any of the windows or openings of the Premises
by the consent of such person;
3.7.3 pay any sum of money or enter into any agreement with any person
for the purpose of inducing or binding such person to abstain from
obstructing the access of light to any of the windows or openings
of the Premises and in the event of any person doing or
threatening to do anything which obstructs the access of light to
any of the windows or openings of the Premises promptly to notify
the Landlord of the same.
3.8 COVENANTS RELATING TO OTHER PROPERTY
Nothing contained in, or implied by, this Lease shall give the Tenant the
benefit of, or the right to enforce or prevent the release or
modification of, any covenant or agreement entered into by any tenant of
the Landlord in respect of any property not comprised in this Lease.
3.9 RIGHTS OF ENTRY BY LANDLORD
The Tenant shall permit the Landlord with all necessary materials and
appliances to enter and remain on the Premises:-
3.9.1 to examine the state of repair and condition of the Premises and
to take details of the landlord's fixtures and fittings in them;
and
3.9.2 to exercise any of the rights excepted and reserved by this Lease
Provided that the Landlord shall not exercise any right of entry unless
it is impracticable or unreasonably expensive to carry out the relevant
work otherwise than by entry onto the Premises.
3.10 TERMS OF ENTRY BY LANDLORD
In exercising any of the rights mentioned in clause 3.9, the Landlord or
the person exercising the right shall:-
3.10.1 give to the Tenant reasonable prior notice that the right is to be
exercised and shall only exercise it outside the hours of 9 a.m.
to 6 p.m. (inclusive) on Working Days
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and by prior written arrangement with the Tenant (except in an
emergency, when no notice need be given and when it can be
exercised at any time);
3.10.2 cause as little inconvenience as reasonably practicable to the
Tenant or any other permitted occupier of any part of the
Premises;
3.10.3 make good, as soon as reasonably practicable and to the reasonable
satisfaction of the Tenant, any damage caused to the Premises and
the Tenant's and any permitted occupier's property; and
3.10.4 comply with the Tenant's security requirements and allow the
Landlord's representatives or workmen to be accompanied at all
times by a representative of the Tenant.
3.11 LANDLORD'S COVENANTS
Covenants on the part of the Landlord are covenants to do or not to do
that which is covenanted for so long only as the Landlord remains
entitled to the reversion immediately expectant on the determination of
the Term.
SECTION 3
FINANCIAL PROVISIONS
4. RENTS
4.1 TENANT'S OBLIGATION TO PAY
The Tenant covenants to pay to the Landlord at all times during the Term
or until released pursuant to the Landlord and Tenant (Covenants) Act
1995:-
4.1.1 yearly, and proportionately for any fraction of a year, the
Initial Rent and from and including each Review Date, such yearly
rent as shall become payable under clause 5;
4.1.2 the Insurance Rent;
4.1.3 the Service Charge;
4.1.4 the Additional Rent; and
4.1.5 any Value Added Tax chargeable in respect of the Principal Rent;
the Insurance Rent, the Service Charge and the Additional Rent.
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4.2 DATES OF PAYMENT OF PRINCIPAL RENT
The Principal Rent and any Value Added Tax chargeable on it shall be paid
in four (4) equal instalments in advance on each of 25th March, 24th
June, 29th September and 25th December in every year, the first payment,
being a proportionate sum in respect of the period from and including the
Rent Commencement Date to the day before the quarter day following the
Rent Commencement Date, to be made on the Rent Commencement Date.
4.3 METHOD OF PAYMENT OF PRINCIPAL RENT
The Principal Rent and any Value Added Tax chargeable on it shall be paid
in such manner as to ensure that the Landlord shall receive full value in
cleared funds on the date when payment is due.
4.4 DATES OF PAYMENT OF INSURANCE RENT, ADDITIONAL RENT AND COMMON EXPENSES
The Insurance Rent, the Additional Rent and any Value Added Tax
chargeable on any of them shall be paid within five working days of
demand.
4.5 DATES OF PAYMENT OF SERVICE CHARGE
The Service Charge and any Value Added Tax chargeable on it shall be paid
within five working days of demand in accordance with clause 31;
4.6 NO RIGHT OF SET-OFF
The Tenant shall pay the Rents without any deduction, set-off,
counterclaim or abatement whatsoever save such (if any and then only the
minimum) as the Tenant may by law be required to make.
5. RENT REVIEW
5.1 DEFINITIONS
In this clause, the following expressions shall have the following
meanings:-
5.1.1 "OPEN MARKET RENT" means the full yearly rent which would
reasonably be expected to be payable in respect of the Assumed
Premises after the expiry of any rent free period, concessionary
rent and/or after the giving of any other inducement (whether by
means of a capital payment or otherwise) given in each case solely
in connection with the fitting out of the Assumed Premises by the
incoming tenant of such length or of such amount or nature as
would normally be negotiated in the open market between a willing
landlord and a willing tenant (to the intent that no discount,
reduction or allowance shall be made in ascertaining the Open
Market Rent to reflect such rent free period, concessionary rent
or other inducement as would be negotiated as aforesaid or to
compensate the Tenant for
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<PAGE> 25
its absence) upon a letting of the Assumed Premises by one lease
in the open market with vacant possession at the Relevant Review
Date by a willing landlord to a willing tenant and without the
landlord receiving any premium or any other consideration for the
grant of the lease for a term of years commencing on the Relevant
Review Date and equal to the longer of (a) the residue of the Term
remaining unexpired on the Relevant Review Date and (b) fifteen
(15) years and otherwise on the terms and conditions and subject
to the covenants and provisions contained in this Lease (other
than the amount of the rent payable under this Lease but including
the provisions for the review of rent contained in this clause)
and making the Assumptions but disregarding the Disregarded
Matters;
5.1.2 "ASSUMED PREMISES" means the Premises on the assumptions (if not
facts) that:-
5.1.2.1 the Building has been constructed, fitted-out, equipped
and completed in accordance with the drawings and
specification annexed hereto entitled "BASE BUILDING
DEFINITION" at the Landlord's expense;
[NOTE: THIS WILL BE THE AGGREGATE OF THE BASE BUILDING
AS-BUILT PLANS AND BASE BUILDING SPECIFICATION (EXCLUDING
TRM'S) TOGETHER WITH THE CATEGORY `A' WORKS SPECIFICATION]
5.1.2.2 (to the extent not the same as the works described in the
Base Building Definition) the Tenant's Works have not been
carried out;
5.1.2.3 all tenant's fixtures have been removed and any damage
caused by such removal has been made good and the Premises
(constructed and fitted out as aforesaid) comprise clear
space;
5.1.2.4 if the Premises or the Building or any part of them or any
access to or amenities, services or facilities for them
have been destroyed, damaged or otherwise adversely
affected, they have been fully rebuilt, reinstated and
restored; and
5.1.2.5 the Premises enjoy all necessary rights in relation to the
Common Parts to enable their proper use and enjoyment.
5.1.3 "ASSUMPTIONS" means the following assumptions (if not facts) at
the Relevant Review Date:-
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5.1.3.1 that no work has been carried out by or on behalf of the
Tenant or any undertenant or any other occupier or their
respective predecessors in title or any Group Company of
any of them prior to or during the Term, which has
diminished the rental value of the Premises or adversely
affected the Assumed Premises;
5.1.3.2 that all the covenants contained in this Lease have been
fully performed and observed and that any Landlord's
covenants which have been delegated by the Landlord to the
Tenant pursuant to any management arrangements which are
still subsisting at the Relevant Review Date have been
fully performed and observed; and
5.1.3.3 that the Assumed Premises comply with all statutory and
regulatory requirements and may lawfully be used for the
purposes permitted by this Lease.
5.1.3.4 that, notwithstanding the actual use, all car parking
spaces referred to in Schedule 2 of this Lease are fully
available for the Tenant's use as car parking spaces
5.1.3.5 that the Assumed Premises have the benefit if required of
sufficient additional contiguous office space within the
Building to properly support the trading floor levels
within the Premises
5.1.3.6 that the areas shown hatched red on Plans 2, 3, 4, 6, 7
and 9 are let at the same rent per square foot as is
awarded as open market rent for the office areas on the
relevant floor
5.1.3.7 that the areas shown hatched green on Plan 11 are let at
the same rent per square foot as is awarded as open market
rent for storage areas on the relevant floor] [o Note:
Basement to Fourth Floor Lease only]
5.1.3.8 that the areas shown [o ] on Plans [ o ] annexed hereto
marked Riser Plan are let at the same rent per square foot
as is awarded as open market rent for the office areas on
the relevant floor [o Note: Plan to be prepared showing
Tenant's Exclusive Risers on ALL floors]
5.1.4 "DISREGARDED MATTERS" means:-
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5.1.4.1 any effect on rent of the fact that the Tenant or any
permitted undertenant or their respective predecessors in
title or any Group Company of any of them may have been in
occupation of the Premises;
5.1.4.2 any goodwill attached to the Premises by reason of the
business then carried on at the Premises by the Tenant or
any permitted undertenant or other permitted occupier;
5.1.4.3 any effect on rent attributable to the existence, at the
Relevant Review Date, of any improvement to the Premises
carried out after the date of this Lease with all
necessary consents (where required) by the Tenant or any
permitted undertenant and without any liability on the
Landlord's part to pay any compensation in respect thereof
otherwise than in pursuance of an obligation to the
Landlord or its predecessors in title or at the Landlord's
expense;
5.1.4.4 any effect on rent attributable to any occupation by the
Tenant of, or any physical link between the Premises and
the adjoining premises known as Peterborough Court, Fleet
Street, London EC4;
5.1.4.5 any special bid which the Tenant might make by reason of
its occupation of any other parts of the Building and/or
Peterborough Court; and
5.1.4.6 the obligation of the Tenant contained in clauses 11.1 and
11.2 to reinstate at the end of the term the following
items:-
(a) the secondary entrance at upper ground floor level
(b) the installation of 4 standby generators
(c) plant installed in the basement of the Premises
(d) the bridge and tunnel links
5.1.5 "REVIEW SURVEYOR" means a Member of the Royal Institution of
Chartered Surveyors based in the City of London who is an
independent chartered surveyor with not less than ten (10) years'
experience of valuing and leasing property similar in nature and
location to the Premises and who is well acquainted with the
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market in the area in which the Premises are located appointed
from time to time under this clause 5 to determine the Open Market
Rent.
5.2 RENT REVIEWS
The Principal Rent shall be reviewed at each Review Date in accordance
with the provisions of this clause and from and including each Review
Date the Principal Rent shall equal the higher of:-
5.2.1 the Principal Rent contractually payable immediately before the
Relevant Review Date (or which would be payable but for any
suspension of rent under this Lease); and
5.2.2 the Open Market Rent for the Assumed Premises on the Relevant
Review Date as agreed or determined pursuant to this clause;
5.3 AGREEMENT OR DETERMINATION OF THE REVIEWED RENT
The Open Market Rent for the Assumed Premises at any Review Date may be
agreed in writing at any time between the Landlord and the Tenant but if
they have not been so agreed, either party may by notice in writing to
the other require the Open Market Rent to be determined by the Review
Surveyor.
5.4 APPOINTMENT OF REVIEW SURVEYOR
In default of agreement between the Landlord and the Tenant on the
appointment of the Review Surveyor, the Review Surveyor shall be
appointed by the President on the written application of either party,
such application to be made not earlier than one (1) month before the
Relevant Review Date.
5.5 FUNCTIONS OF REVIEW SURVEYOR
The Review Surveyor shall (unless the parties shall otherwise agree) act
as an arbitrator in accordance with the Arbitration Act 1996.
5.6 APPOINTMENT OF NEW REVIEW SURVEYOR
If the Review Surveyor dies, is unwilling to act, or becomes incapable of
acting, or if, for any other reason, he is unable to act, the Landlord
or the Tenant may request the President to discharge the Review Surveyor
and appoint another surveyor in his place to act in the same capacity,
which procedure may be repeated as many times as necessary.
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5.7 INTERIM PAYMENTS PENDING DETERMINATION
If the amount of the reviewed rent has not been agreed or determined by
the Relevant Review Date (the date of agreement or determination being
called the "DETERMINATION DATE"), then:-
5.7.1 in respect of the period (the "INTERIM PERIOD") beginning with the
Relevant Review Date and ending on the day before the quarter day
following the Determination Date, the Tenant shall pay to the
Landlord the Principal Rent at the yearly rate payable immediately
before the Relevant Review Date; and
5.7.2 on the Determination Date, the Tenant shall pay to the Landlord as
arrears of rent the amount by which the reviewed rent exceeds the
rent actually paid during the Interim Period (apportioned on a
daily basis) together with interest on such amount at four per
cent (4%) per annum below the Prescribed Rate, such interest to be
calculated on the amount of each quarterly shortfall on a
day-to-day basis from the date on which it would have been payable
if the revised rent had then been agreed or determined to the date
of actual payment.
5.8 RENT RESTRICTIONS
If, at any time during the Term, restrictions are imposed by any statute
for the control of rent which prevent or prohibit wholly or partly the
operation of the rent review provisions contained in this clause or which
operate to impose any limitation, whether in time or amount, on the
collection and retention of any increase in the Principal Rent or any
part then and in each case respectively:-
5.8.1 the operation of the rent review provisions contained in this
clause shall be postponed to take effect on the first date on
which such operation may occur;
5.8.2 the collection of any increase in the rent shall be postponed to
take effect on the first date on which such increase may be
collected and/or retained in whole or in part and on as many
occasions as shall be required to ensure the collection of the
whole increase
and, until such restrictions shall be relaxed either wholly or partially,
the Principal Rent shall be the maximum sum from time to time permitted
by such restrictions.
5.9 MEMORANDA OF REVIEWED RENT
Within ten (10) Working Days after the amount of any reviewed rent has
been agreed or determined, memoranda recording that fact shall be
prepared by the Landlord or its
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solicitors and shall be signed by or on behalf of the Landlord and the
Tenant and any Guarantor and annexed to this Lease and its counterpart.
The parties shall each bear their own costs in relation to the
preparation and signing of such memoranda.
5.10 TIME NOT OF THE ESSENCE
For the purpose of this clause, time shall not be of the essence.
6. INTEREST
6.1 INTEREST ON LATE PAYMENTS
Without prejudice to any other right, remedy or power contained in this
Lease or otherwise available to the Landlord, if any of the Rents
(whether formally demanded or not) or any other sum of money payable to
the Landlord by the Tenant under this Lease shall not be paid so that the
Landlord receives full value in cleared funds:-
6.1.1 in the case of the Principal Rent and any Value Added Tax
chargeable on it, on the date when payment is due (or, if the due
date is not a Working Day, the next Working Day after the due
date); or
6.1.2 in the case of any other Rents or sums, within five (5) Working
Days of the date when payment is due
the Tenant shall pay interest on such Rents and/or sums at the Prescribed
Rate from and including the date when payment was due to the date of
payment to the Landlord (both before and after any judgment).
7. OUTGOINGS
7.1 TENANT'S OBLIGATION TO PAY
The Tenant shall pay, or indemnify the Landlord against, all existing and
future rates, taxes, duties, charges, assessments, impositions and other
outgoings whatsoever (whether parliamentary, parochial, local or of any
other description and whether or not of a capital or non-recurring nature
or of a wholly novel character) which are now or may at any time during
the Term be charged, levied, assessed or imposed upon, or payable in
respect of, the Premises or upon the owner or occupier of them (excluding
any tax payable by the Landlord occasioned by any actual or deemed
disposition of, or actual or deemed dealing with, the reversion of this
Lease and any tax other than VAT chargeable in respect of the rents) and,
in the absence of a direct assessment on the Premises, shall pay to the
Landlord a fair proportion (to be reasonably determined by the Landlord)
of any such outgoings.
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7.2 CONTESTS AND APPEALS
Neither the Landlord nor the Tenant shall raise any objection to the
Landlord or the Tenant contesting any outgoings referred to in clause 7.1
or appealing any assessments related thereto or withdrawing any such
contest or appeal or agreeing with the relevant authorities on any
settlement, compromise or conclusion in respect thereof and shall
co-operate with the other party in respect of any such contest or appeal
and shall supply to the other party forthwith upon receipt copies of any
such assessments and make available to the other party such information
in respect thereof as the other party requests and shall execute
forthwith on request all consents, authorisations or other documents as
the other party requests to give full effect to the provisions of this
clause 7.2.
7.3 COSTS OF UTILITIES, ETC.
The Tenant shall:-
7.3.1 pay all charges for electricity, gas (if any) and water and other
services and all sewage and environmental charges consumed in the
Premises, including any connection and hiring charges and meter
installation costs and rents; and
7.3.2 perform and observe all present and future regulations and
requirements of the electricity, gas and water, telecommunications
and other service supply companies or boards in respect of the
supply and consumption of relevant services on the Premises.
8. VALUE ADDED TAX
8.1 DEFINITIONS
References in this Clause 8 to:-
(i) The "Landlord" shall (where appropriate) be deemed to include a
reference to the representative member of the group of companies
of which the Landlord is treated as a member for the purposes of
Section 43 of the Value Added Tax Act 1994; and
(ii) the "Tenant" shall (where appropriate) be deemed to include a
reference to the representative member of the group of companies
of which the Tenant is treated as a member for the purposes of
Section 43 of the Value Added Tax Act 1994.
8.2 SUMS EXCLUSIVE OF VAT
All sums payable under this Lease by the one party to the other (with the
exception of the rent reserved in clause 4.1.5) shall be deemed to be
exclusive of Value Added Tax.
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8.3 PAYMENT OF VAT
Where pursuant to the terms of this Lease any party (the "Supplier")
makes a supply to any other party (the "Recipient") for VAT purposes and
Value Added Tax is payable in respect of such supply, the Recipient shall
pay to the Supplier:-
(i) on the date of such supply against delivery of a valid value added
tax invoice a sum equal to the amount of Value Added Tax so
payable; and
(ii) on demand any penalty or interest incurred by the Supplier for any
late payment of such Value Added Tax where the penalty or interest
arises following a failure of the Recipient to pay the sum on that
date.
8.4 REPAYMENT OF AMOUNTS
If either party (the "Payer") has paid any amount in respect of VAT under
this clause 8 to the other party (the "Payee") on the basis that:-
(i) the transaction in respect of which such amount was paid gave rise
to a supply made by the Payee to the Payer for VAT purposes; and
(ii) such supply was a taxable supply for VAT purposes
and it subsequently transpires that no supply was made or that such
supply was not a taxable supply for VAT purposes the Payee shall
forthwith repay such amount to the Payer PROVIDED THAT if the Payee has
already accounted to H.M. Customs & Excise for VAT in respect of the said
transaction on the basis that such transaction gave rise to a taxable
supply for VAT purposes the Payee shall only be obliged to repay such
amount to the Payer if and to the extent that it is able to obtain
repayment or credit from H.M. Customs & Excise in respect of the VAT
which it has accounted for to them and in such a case the Payee shall use
all reasonable endeavours to obtain such repayment or credit from H.M.
Customs & Excise and the Payee shall only be obliged to repay such amount
to the Payer as aforesaid within three Working Days following receipt by
the Payee of the said repayment from H.M. Customs & Excise or three
Working Days following the date on which the Payee has fully utilised the
said credit (as the case may be).
8.5 VAT INCURRED BY LANDLORD
Where the Tenant is required by the terms of this Lease to reimburse the
Landlord for the costs or expenses of any supplies made to the Landlord,
the Tenant shall also at the same time pay or, as the case may be,
indemnify the Landlord against all Value Added Tax input
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tax incurred by the Landlord in respect of those supplies save to the
extent that the Landlord is entitled to repayment or credit in respect of
such Value Added Tax input tax.
9. LANDLORD'S COSTS
Within ten (10) Working Days of written demand, the Tenant shall pay, or
indemnify the Landlord against, all reasonable and proper costs, fees,
charges, disbursements and expenses incurred by them, (which shall be
reasonable and properly incurred), including those payable to solicitors,
counsel, surveyors, architects and bailiffs:-
9.1 in relation to, or in reasonable contemplation of, the preparation
and service of a notice under section 146 of the Law of Property
Act 1925 or any proceedings under section 146 or section 147 of
that Act (whether or not any right of re-entry or forfeiture has
been waived by the Landlord or a notice served under section 146
is complied with by the Tenant or the Tenant has been relieved
under the provisions of that Act and even though forfeiture may be
avoided otherwise than by relief granted by the court);
9.2 in relation to, or in reasonable contemplation of, the preparation
and service of all notices and schedules relating to any wants of
repair, whether served during or after the expiration of the Term
(but relating in all cases only to such wants of repair which
accrued not later than the expiration or earlier determination of
the Term);
9.3 in connection with the recovery or attempted recovery of arrears
of rent or other sums due from the Tenant, or in procuring the
remedying of the breach of any covenant by the Tenant; and
9.4 in relation to any application for consent required or made
necessary by this Lease (such costs to include reasonable
management and monitoring fees and expenses) whether or not it is
granted (except in cases where the Landlord is obliged not to
withhold its consent unreasonably and the withholding of its
consent is held to be unreasonable), or the application is
withdrawn.
SECTION 4
REPAIRS, ALTERATIONS AND SIGNS
10. REPAIRS, DECORATION ETC.
10.1 REPAIRS
Subject to clause 10.2, the Tenant shall:-
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10.1.1 repair and keep in good and substantial repair and condition the
Premises and, as often as may be reasonably necessary in order to
do so, rebuild reconstruct or replace the whole or any part of
them; and
10.1.2 as and when necessary, replace any of the landlord's fixtures and
fittings within and exclusively serving the Premises which may be
or become beyond repair with new ones which are similar or better
in type and quality.
10.2 DAMAGE BY THE INSURED RISKS
There shall be excepted from the obligations contained in clause 10.1 any
damage caused by the Insured Risks save to the extent that payment of the
insurance moneys shall be withheld by reason of any act, neglect or
default of the Tenant, any undertenant or occupier or any of their
respective servants, agents, licensees, visitors or contractors or any
person under the control of any of them.
10.3 DECORATIONS
The Tenant shall:-
10.3.1 in every Decoration Year and also in the last three (3) months of
the Term (whether determined by passage of time or otherwise)
prepare and decorate with at least two coats of good quality paint
all previously painted areas and otherwise treat, as appropriate,
all parts of the Premises in a good and workmanlike manner in
accordance with the instructions of the manufacturers of the
products used, such decorations and treatment in the last year of
the Term to be executed in such colours and materials as the
Landlord may reasonably require;
10.3.2 as often as may be reasonably necessary, wash down all washable
surfaces.
Provided that the Tenant shall not paint or otherwise treat surfaces
within the Premises not previously painted or treated without the
Landlord's prior written consent, such consent not to be unreasonably
withheld.
10.4 PLANT AND MACHINERY
The Tenant shall keep all plant, machinery, apparatus and equipment
forming part of the Premises properly maintained, in good working order
and condition and in all respects in accordance with any relevant
operating and maintenance manuals and manufacturers' recommendations and
for that purpose shall:
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10.4.1 employ and monitor the performance of such reputable contractors
as may be approved by the Landlord, such approval not to be
unreasonably withheld, regularly to inspect, maintain and service
them and supply to the Landlord upon request copies of any
contracts entered into by the Tenant in respect thereof and any
reports prepared by such contractors following an inspection of
the plant and machinery described above Provided that the
Landlord's approval to such reputable contractors shall not be
required during such time when the Property Management Agreement
remains in full force and effect;
10.4.2 renew or replace all working and other parts as and when
necessary; and
10.4.3 use all reasonable endeavours to ensure, by directions to the
Tenant's staff and otherwise, that such plant and machinery is
properly operated.
10.5 PLANNED MAINTENANCE
The Tenant shall ensure that at all times there are adequate planned
maintenance and other contracts in place for repair, maintenance,
cleansing and upkeep of the plant and machinery described in clause 10.4
above.
10.6 CLEANING
The Tenant shall:-
10.6.1 keep the Premises in a clean and tidy condition and employ only
competent and respectable persons as cleaners;
10.6.2 as often as may be necessary properly clean the inside of the
windows or window frames and all other glass in the Premises and
any glass on the interior of any atrium.
10.7 CARPETING AND FLOOR COVERINGS
The Tenant shall maintain the carpets and other floor coverings laid in
the Premises to a standard appropriate to a high quality office building
in the City of London and, when necessary, replace them with new carpets
or floor coverings of at least equivalent quality and value.
11. YIELD UP
11.1 REINSTATEMENT OF PREMISES
Immediately prior to the expiration or earlier determination of the Term,
the Tenant shall at its cost:-
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11.1.1 replace any of the landlord's fixtures and fittings which shall be
missing, damaged or destroyed, with new ones of similar or better
kind and quality;
11.1.2 remove from the Premises any sign, writing or painting of the name
or business of the Tenant or any occupier of them and all tenant's
fixtures, fittings, furniture and effects (including any
demountable or dry wall partitioning installed by or on behalf of
the Tenant) and make good, to the reasonable satisfaction of the
Landlord, all damage caused by such removal;
11.1.3 in accordance with the Reinstatement Schedule, (unless the Tenant
has by notice in writing served at least nine (9) months prior to
the expiry of the Term requested that reinstatement of one or more
items is not required and the Landlord has within one month of
such notice agreed to such a request) remove such works and parts
of the Premises and such fixtures and fittings in the Premises as
are necessary and well and substantially to put the Premises in
the state and condition described in the Reinstatement Schedule to
the Landlord's reasonable satisfaction
Provided that the Tenant shall not be obliged so to reinstate:-
(a) any plant in the Building which is of a better specification than
that described in the Reinstatement Schedule; and
(b) any plant in the Building which has supplemented or enhanced the
Base Building Systems
11.2 YIELDING UP IN GOOD REPAIR
Without prejudice to Clause 11.1, at the expiration or earlier
determination of the Term, the Tenant shall quietly yield up the Premises
to the Landlord in good and substantial repair and condition and in
accordance with the covenants by the Tenant contained in this Lease.
12. COMPLIANCE WITH NOTICES
12.1 TENANT TO REMEDY BREACHES OF COVENANT
Whenever the Landlord shall give written notice to the Tenant of any
wants of repair or breaches of covenant, the Tenant shall as soon as
reasonably possible following receipt of such notice, make good such
wants of repair and remedy the breach of covenant to the reasonable
satisfaction of the Landlord.
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12.2 FAILURE OF TENANT TO REPAIR
If the Tenant shall fail within twenty (20) Working Days of such notice,
or as soon as reasonably possible in the case of emergency, to commence
and then diligently and expeditiously to continue to comply with such
notice, the Landlord may (without prejudice to the right of re-entry
contained in this Lease) enter the Premises and carry out, or cause to be
carried out, any of the works referred to in such notice and all
reasonable costs and expenses (including without limitation those of the
Landlord's surveyor) properly incurred as a result shall be paid by the
Tenant to the Landlord on demand and, in default of payment, shall be
recoverable as rent in arrear.
13. ALTERATIONS
13.1 NO STRUCTURAL ALTERATIONS
Subject to Schedule 2, the Tenant shall not alter, cut into or remove any
of the principal or loadbearing walls, floors, beams or columns in or
enclosing the Premises other than minor structural alterations for
boreholes for pipes, wires and minor Conduits and fixings which may be
carried out subject to the prior written consent of the Landlord (such
consent not to be unreasonably withheld or delayed and to be in the form
of the licence to alter annexed hereto).
13.2 NO ALTERATIONS TO LANDLORD'S FIXTURES
Subject to Schedule 2, the Tenant shall not make any alteration or
addition to any of the landlord's fixtures or to any centrally controlled
systems in the Premises or to any of the Conduits in the Premises unless
such Conduits exclusively serve the Premises and any other floors of the
Building leased to the Tenant
13.3 NON-STRUCTURAL ALTERATIONS
The Tenant shall not make any alteration or addition of a non-structural
nature to the Premises without the prior written consent of the Landlord
(such consent not to be unreasonably withheld and to be the form of the
licence to alter annexed hereto)
13.4 DEMOUNTABLE PARTITIONING
The Tenant may install, alter or remove demountable partitioning raised
floors and suspended ceilings and carry out associated minor alterations
to mechanical and electrical services which do not involve any works to
or affecting any structural parts of the Premises (other than simple
affixation) or which do not materially adversely affect the operation of
any of the mechanical, electrical, sanitary, heating, ventilating, life
safety, air-conditioning or other service systems within the Premises or
within the Building and which do not block-up or obstruct any windows of
the Premises without having to obtain the Landlord's consent but the
Tenant shall:-
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13.4.1 comply with all statutory requirements applicable to the works
being carried out; and
13.4.2 supply the Landlord on demand (but not more frequently than four
times in each calendar year) with a set of plans showing the
layout and detailing works carried out under this clause 13.4
13.5 COVENANTS BY TENANT
The Tenant shall enter into such covenants as the Landlord may reasonably
require regarding the execution of any works to which the Landlord
consents under this clause, and the reinstatement of the Premises at the
end or earlier determination of the Term.
14. SIGNS AND ADVERTISEMENTS
Except as permitted hereunder the Tenant shall not affix or display or
suffer to be affixed any placard, plate, sign, billboard, writing or
advertisement on the frontage of the Premises and the Tenant shall not
erect or display on the remainder of the exterior of the Premises or in
the windows of them so as to be visible from the exterior, any
advertisement, poster, notice, pole, flag, aerial, satellite dish or any
other sign or thing.
SECTION 5
USE
15. USE OF PREMISES
15.1 PERMITTED USE
The Tenant shall not use the Premises or any part of them except for the
Permitted Use.
15.2 TENANT NOT TO LEAVE PREMISES UNOCCUPIED
The Tenant shall not leave the Premises or any part of them continuously
unoccupied for more than thirty (30) days without notifying the Landlord
and providing, or paying for, such caretaking or security arrangements as
the Landlord shall reasonably approve in order to protect the Premises
from damage, vandalism, theft or unlawful occupation or to deal with any
emergency.
15.3 DETAILS OF KEYHOLDERS
The Tenant shall ensure that, at all times, the Landlord has particulars
of the name, home address and home telephone number of at least two
keyholders of the Premises.
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16. USE RESTRICTIONS AND REGULATIONS
16.1 The Tenant shall perform and observe the obligations set out in SCHEDULE
3.
16.2 The Tenant shall itself comply or use reasonable endeavours to procure
compliance by others with the Regulations.
17. EXCLUSION OF WARRANTY AS TO USER
17.1 NO WARRANTY BY LANDLORD
Nothing contained in this Lease, or in any consent or approval granted by
the Landlord under this Lease, shall imply or warrant that the Premises
may be used under the Planning Acts for the purpose permitted by this
Lease or any purpose subsequently permitted.
17.2 TENANT'S ACKNOWLEDGEMENT
The Tenant acknowledges that neither the Landlord nor any person acting
on behalf of the Landlord has at any time made any representation or
given any warranty that any use permitted by this Lease is, will be, or
will remain, a use authorised under the Planning Acts.
17.3 TENANT TO REMAIN BOUND
Even though any such use may not be a use authorised under the Planning
Acts, the Tenant shall remain fully liable to the Landlord in respect of
the obligations undertaken by the Tenant in this Lease without being
entitled to any compensation, recompense or relief of any kind.
SECTION 6
DISPOSALS
18. GENERAL RESTRICTIONS
18.1 ALIENATION GENERALLY
The Tenant shall not assign, underlet or part with possession or share
the occupation of, or permit any person to occupy, or create any trust in
respect of the Tenant's interest in, the whole or any part or parts of
the Premises, nor agree to do so, except by way of:-
18.1.1 (subject to and in accordance with clause 18.2) a sharing of
possession;
18.1.2 (subject to and in accordance with clause 19) an assignment of the
whole; and
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18.1.3 (subject to and in accordance with clause 20) an underletting of
the whole or an underletting of a Subletting Unit.
18.2 SHARING WITH A GROUP COMPANY
Nothing in this clause or clauses 19 and 20 shall prevent the Tenant from
sharing occupation of the whole or any part of the Premises with any
company which is, for the time being, a Group Company an Associated
Company or an Affiliate of the Tenant subject to:-
18.2.1 the Tenant giving to the Landlord written notice of the sharing of
occupation and the name of the Group Company an Associated Company
or an Affiliate concerned within five (5) Working Days after the
sharing begins;
18.2.2 the Tenant and that Group Company Associated Company or Affiliate
remaining in the same relationship whilst the sharing lasts;
18.2.3 the sharing ceasing immediately upon the relevant company ceasing
to be a Group Company Associated Company or Affiliate of the
Tenant; and
18.2.4 the sharing not creating the relationship of landlord and tenant
between the Tenant and that Group Company Associated Company or
Affiliate.
Provided That where this Lease is held as a partnership asset but the
Tenant comprises one only of the members of the partnership all members
of that partnership and any associated company corporation or partnership
of such partnership may also share occupation as if they were Group
Companies.
18.3 DIPLOMATIC IMMUNITY
The Tenant shall not, by assignment, charging, underletting, sharing or
otherwise, permit the occupation of the Premises by any person or entity
who has or will have the right to claim diplomatic immunity or exemption
from liability for the breach of any of the covenants contained in this
Lease, unless such diplomatic immunity or exemption from liability is
effectively and irrevocably waived, disclaimed or negated beforehand, or
a suitable guarantee or other satisfactory security in respect of the
performance of the covenants in this Lease is provided to the reasonable
satisfaction of the Landlord.
19. ASSIGNMENT OF WHOLE
19.1 PROHIBITION ON ASSIGNMENT
Not to assign the whole of the Premises without complying with or
fulfilling the circumstances and conditions set out in this clause 19.
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19.2 CIRCUMSTANCES IN WHICH ASSIGNMENT NOT ALLOWED
For the purposes of Section 19(1A) of the 1927 Act it is agreed that, in
addition to any other circumstance in which consent to assignment may
lawfully be withheld, the Landlord may withhold consent to an assignment
by the Tenant of the whole of the Premises in the circumstances set out
in clauses 19.2.1 to 19.2.6 (inclusive). In this clause 19.2 references
to the Proposed Assignee shall be interpreted so that where it is
proposed that a Proposed Guarantor shall act as a guarantor for the
liabilities of the Proposed Assignee the criteria set out below need
apply to the Proposed Guarantor (mutatis mutandis) only and not the
Proposed Assignee itself.
19.2.1 Where the Proposed Assignee is a person or entity who has the
right to claim diplomatic or sovereign immunity or exemption from
liability for the breach of the covenants contained in this Lease,
unless such diplomatic or sovereign immunity or exemption from
liability is effectively waived, disclaimed or negated beforehand;
or
19.2.2 Where the Proposed Assignee is not of such financial standing in
relation to the Tenant's obligations under this Lease as would be
generally acceptable to a reasonable and prudent institutional
landlord having regard to maintenance of the investment value of
the reversion immediately expectant on the Term and the London
property investment market and to usual criteria for judging
financial standing adopted by institutional landlords at the
relevant time;
19.2.3 Where the Application to Assign is not accompanied by:-
(a) copies of the Proposed Assignee's and the Proposed
Guarantor's audited accounts (or the equivalent thereof
where the Proposed Assignee or Proposed Guarantor is not a
company incorporated in England and Wales or a person or
partnership subject to English tax rules or (where there is
no direct equivalent which gives as full and fair a
reflection of the financial worth and stability of the
Proposed Assignee) a comprehensive statement (together with
complete copies of all relevant documents) as to the
financial worth and stability of the Proposed Assignee and
Proposed Guarantor) for each of the three (3) completed
financial years immediately preceding the date of the
Application to Assign; and
(b) such other information relating to the financial affairs
and position of the Proposed Assignee and the Proposed
Guarantor as the Landlord may reasonably require.
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19.2.4 Where the Proposed Assignee is an entity in relation to whom any
of the events mentioned in clause 29.2 would have occurred if that
person or entity were the Tenant under this Lease.
19.2.5 If the Landlord, acting as a reasonable institution investing in
United Kingdom real estate making the assumption (whether or not
it is the case) that the Current Tenant has either a long term
credit rating issued by Standard & Poors of A + or Moody's of Al,
reasonably takes the view that the investment value of the
Building would be adversely affected if the Proposed Assignment
takes place.
19.2.6 (If the Property Management Agreement remains in full force and
effect) where the Proposed Assignee has not executed and released
for completion the Direct Deed in the form annexed to the Property
Management Agreement.
19.3 CONDITIONS FOR ASSIGNMENT
For the purposes of Section 19(1A) of the 1927 Act it is further agreed
that, in addition to any other conditions subject to which licence or
consent may be granted for the Proposed Assignment, any consent of the
Landlord shall be subject to the following conditions:-
19.3.1 that the Current Tenant shall, prior to completion of the Proposed
Assignment, procure that the Proposed Assignee enters into a
direct covenant with the Landlord to pay the Rents reserved by and
to perform the covenants by the Tenant contained in this Lease;
and
19.3.2 that, if the Landlord shall reasonably so require, the Current
Tenant shall obtain an acceptable guarantor for the Proposed
Assignee and shall procure that such guarantor shall execute and
deliver to the Landlord a deed containing covenants by that
guarantor (or, if more than one, joint and several covenants) with
the Landlord, as a primary obligation, in the terms contained in
SCHEDULE 4 (with necessary changes) or in such other terms as the
Landlord may reasonably require.
19.4 AUTHORISED GUARANTEE AGREEMENT
19.4.1 For the purposes of Section 19(1)(A) of the 1927 Act and Section 16 of
the 1995 Act it is agreed that any consent of the Landlord to an
assignment of the whole of the Premises shall be subject to a condition
that the Current Tenant shall, prior to such assignment being completed,
execute and deliver to the Landlord a Deed which shall be prepared by the
Landlord's Solicitors containing covenants on the part of the Current
Tenant in the form of those set out in SCHEDULE 5 with any necessary
changes.
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19.4.2 For the purposes of Section 19(1)(A) of the 1927 Act and Section 16 of
the 1995 Act and as a separate and severable obligation from that set out
in Clause 19.4.1 it is agreed further that any consent of the Landlord
to an assignment of the whole of the Premises shall be subject to a
condition that any Guarantor of the Current Tenant shall, prior to such
assignment being completed, execute and deliver to the Landlord the Deed
to be entered into by the Current Tenant pursuant to Clause 19.4.1.
19.5 CONSENT FOR ASSIGNMENT
Without prejudice to the foregoing provisions of this clause 19 the
Tenant shall not assign the whole of the Premises without the prior
written consent of the Landlord and, save in relation to (i) the
circumstances set out in clause 19.2 and (ii) the conditions mentioned in
clause 19.3 and (iii) the conditions mentioned in clauses 19.3.2 and 19.4
(which shall have effect in accordance with Section 19 of the 1927 Act
and with the 1995 Act), such consent shall not unreasonably be withheld
or delayed provided that the parties hereby agree that in considering
whether or not the Landlord is reasonably withholding such consent due
and proper regard shall be had to the provisions and effect of the 1995
Act.
20. UNDERLETTING
20.1 SUBLETTING UNIT
For the purposes of this clause:-
"SUBLETTING UNIT" means each separate unit of accommodation which
comprises either:-
20.1.1 the whole of the Net Internal Area of a complete floor or any
combination of contiguous complete floors of the Premises
together, unless the underlease contains an agreement authorised
beforehand by the Court excluding Sections 24 to 28 of the
Landlord and Tenant Act 1954 in relation to such underlease, with
the right to use a pro rata number of car parking spaces; or
20.1.2 any part of a complete floor of the Premises which is configured
(having due regard to the position of the core and the available
means of escape) and capable of being occupied and used as a
separate and self-contained office unit (albeit with shared toilet
facilities) with all necessary and proper services;
20.1.3 The Daily Express Building.
together, if so required by the Tenant, with storage space in the
basement of the Building and, the right to use a pro rata number of car
parking spaces.
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20.2 UNDERLETTING OF PART
The Tenant shall not underlet any part of the Premises without on each
occasion procuring that:-
20.2.1 the Premises shall not at any time be in the occupation of more
than 8 persons, the Tenant and any Group or Associated Company or
Companies or Affiliates which is or are permitted to share
occupation under clause 18.2 counting as one;
20.2.2 any underletting of part of a floor may only be on terms that the
underlease incorporates an agreement, authorised beforehand by the
Court, excluding sections 24 to 28 of the Landlord and Tenant Act
1954 in relation to such underlease;
20.2.3 the part of the Premises to be underlet shall comprise a
Subletting Unit only;
20.2.4 if the Landlord shall reasonably so require, the Tenant obtains an
acceptable guarantor for any proposed undertenant and that such
guarantor executes and delivers to the Landlord a deed containing
covenants by that guarantor (or, if more than one, joint and
several covenants) with the Landlord, as a primary obligation, in
the terms contained in SCHEDULE 4 (with any necessary changes) or
in such other terms as the Landlord may reasonably require;
20.2.5 the underlease contains provisions whereby the Tenant as landlord
thereunder has a valid and unconditional option to determine the
underlease at the same times and in the same manner as the
Tenant's option to determine contained in this Lease; and
20.2.6 no separate floor may be underlet in part so as to create more
than the number of Subletting Units set out below:
Fifth Floor - One
Fourth Floor - Three
Mezzanine Floor - One
Third Floor - Three
Second Floor - Three
First Floor Three
Upper Ground Floor Three
Ground Floor - Two
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Lower Ground Floor - Three
(Provided that any such subletting is in conjunction with a
subletting of an upper floor)
Basement - None
Provided that if the Daily Express Building is let as serviced
offices that will be treated as one underletting and the Daily
Express Building may be further subunderlet in parts as required
by the serviced office operator
20.3 UNDERLETTING OF THE WHOLE
The Tenant shall not underlet the whole of the Premises other than on
condition that if the Landlord shall reasonably so require, the Tenant
obtains an acceptable guarantor for any proposed undertenant and such
guarantor shall execute and deliver to the Landlord a deed containing
covenants by that guarantor (or, if more than one, joint and several
covenants) with the Landlord, as a primary obligation, in the terms
contained in SCHEDULE 4 (with any necessary changes) or in such other
terms as the Landlord may reasonably require.
20.4 UNDERLETTING RENT
The Tenant shall not underlet the whole or any part of the Premises:-
20.4.1 at a fine or premium or at a rent which is less than the open
market rent of the Premises to be demised; or
20.4.2 on terms whereby any rent free or concessionary rent period or
financial inducement given is materially less than that which it
is customary at the time in the open market.
20.5 DIRECT COVENANTS FROM UNDERTENANT
Prior to the grant of any permitted underlease, the Tenant shall procure
that the undertenant enters into the following direct covenants with the
Landlord:-
20.5.1 an unqualified covenant by the undertenant not to assign or charge
any part of the premises to be underlet;
20.5.2 (in the case of any undertenant of less than the complete Net
Internal Area of a floor of the Premises) an unqualified covenant
by the undertenant not to underlet any part of the premises to be
underlet nor (save by way of an assignment of the whole of the
premises to be underlet) part with possession or share the
occupation of the whole or any part of the premises to be underlet
or permit any person to
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occupy them and that any underletting of the whole of the premises
to be underlet shall contain an agreement authorised beforehand by
the Court excluding Sections 24 to 28 of the Landlord and Tenant
Act 1954 in relation to such underlease and such underlease shall
contain a provision whereby the undertenant as landlord thereunder
has a valid and unconditional option to determine the underlease
at the same times and in the same manner as the Tenant's option to
determine contained in this Lease;
20.5.3 (in the case of any undertenant of more than the whole of the Net
Internal Area of a complete floor or floors of the Premises) an
unqualified covenant by the undertenant not to underlet any part
of the premises to be underlet which does not comprise a
Subletting Unit and not to underlet any part comprising a
Subletting Unit without incorporating an agreement authorised
beforehand by the Court, excluding Sections 24 to 28 of the
Landlord and Tenant Act 1954 in relation to such underlease and
such underlease shall contain a provision whereby the undertenant
as landlord thereunder has a valid and unconditional option to
determine the underlease at the same times and in the same manner
as the Tenant's option to determine contained in this Lease and a
covenant by the undertenant not to underlet any part comprising a
Subletting Unit without the prior written consent of the Landlord,
such consent not to be unreasonably withheld;
20.5.4 a covenant by the undertenant not to assign or charge or underlet
the whole without the prior written consent of the Landlord, such
consent not to be unreasonably withheld;
20.5.5 a covenant by the undertenant to perform and observe all the
tenant's covenants contained in:-
(a) this Lease (other than the payment of the Rents) so far as
the same are applicable to the premises to be underlet; and
(b) the permitted underlease.
20.6 CONTENTS OF UNDERLEASE
Every permitted underlease (a final copy of which shall be supplied to,
and approved by, the Landlord prior to its grant, such approval not to be
unreasonably withheld) shall contain the following lawful and enforceable
provisions:-
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20.6.1 provisions for the review of the rent payable under it on an
upwards only basis corresponding as to terms and dates with the
rent review provisions in this Lease (a "Corresponding Underlease
Rent Review") save for:-
20.6.1.1 an underletting entered into not more than two (2) years
before the first Review Date being [o date to be
determined pursuant to Agreement for Lease] in which
case the underlease need not require a Corresponding
Underlease Rent Review until the next Review Date being
[o date to be determined pursuant to Agreement for
Lease].
20.6.1.2 an underletting of less than (10) years incorporating
an agreement authorised beforehand by the Court
excluding Sections 24 to 28 of the Landlord and Tenant
Act 1954 in relation to such underletting.
PROVIDED ALWAYS that the Tenant shall not be entitled to use the
rent payable by any undertenant which has not been settled
pursuant to a Corresponding Underlease Rent Review as comparable
evidence for the purposes of rent review under this Lease.
20.6.2 a covenant by the undertenant prohibiting the undertenant from
doing or suffering any act or thing on, or in relation to, the
premises underlet inconsistent with, or in breach of, this Lease;
20.6.3 a condition for re-entry on breach of any covenant by the
undertenant;
20.6.4 a covenant by the undertenant prohibiting the undertenant from
assigning the whole of the premises demised by the Underlease
without the prior written consent of the Tenant and of the
Landlord under this Lease;
20.6.5 a provision to the effect that for the purposes of Section 19(1A)
of the 1927 Act and Section 16 of the 1995 Act any consents to an
assignment of the underlease shall be subject to a condition that
the undertenant under the underlease shall prior to such
assignment being completed execute and deliver to the Tenant and
to the Landlord under this Lease a Deed containing covenants on
the part of the then undertenant with the Tenant and separately
with the Landlord in the form set out in SCHEDULE 5 (with any
necessary changes); and
20.6.6 subject to clauses 20.6.4 and 20.6.5 (and save as to any
underletting of the Daily Express Building) the same or greater
restrictions as to assignment, underletting,
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charging and parting with or sharing the possession or occupation
of the premises underlet, and the same provisions for direct
covenants and registration, as are in this Lease (with any
necessary changes).
20.7 TENANT TO OBTAIN LANDLORD'S CONSENT
Without prejudice to the other provisions of this clause, the Tenant
shall not underlet the whole of the Premises or underlet a Subletting
Unit, without the prior written consent of the Landlord, such consent not
to be unreasonably withheld.
20.8 REVIEW OF UNDERLEASE RENT
The Tenant Shall:
20.8.1 procure that the rent under any permitted underlease is reviewed
in accordance with its terms so as to achieve the open market rent
at that time; and
20.8.2 notify the Landlord in writing in advance of any application to an
independent person to determine the rent under the underlease and
consult with the Landlord and have regard to the Landlord's
reasonable views in making representations as to the rent payable
under that underlease to such independent person;
20.9 NO VARIATION OF TERMS
The Tenant shall not vary the terms, or accept any surrender (whether of
whole or part) of any permitted underlease, without the prior written
consent of the Landlord, such consent not to be unreasonably withheld.
20.10 NO REDUCTION IN RENT
The Tenant shall procure that the rent payable under any permitted
underlease is not commuted or made payable more than one quarter in
advance (or affected by arrangements between the underlessee and the
underlessor or any persons connected with them so that the effective
return to the underlessor is reduced) and shall not permit any reduction
of that rent.
20.11 COVENANTS BY ASSIGNEE AND ASSIGNOR OF UNDERLEASE
Prior to the assignment of any permitted underlease the Tenant shall
procure that there are delivered:-
20.11.1 to the Landlord a Deed containing covenants by the assignee with
the Landlord in such form as the Landlord may reasonably require
to perform and observe all the
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tenant's covenants in and conditions of the Underlease during the
residue of the term of the Underlease (including any continuation
thereof); and
20.11.2 to the Landlord and separately to the Tenant a Deed containing
covenants by the assignor in the form of the Deed set out in
SCHEDULE 5 if the Landlord's consent to such assignment is
subject to a condition that the undertenant shall enter into such
a Deed as contemplated by clause 20.6.5.
21. MORTGAGING AND CHARGING
The Tenant shall not mortgage or charge part only of the Premises, and
shall not mortgage or charge the whole of the Premises save at arm's
length to a bona fide bank or other substantial financial institution;
and then only with the prior written consent of the Landlord (such
consent not to be unreasonably withheld or delayed)
22. REGISTRATION OF DISPOSITIONS
22.1 Within fifteen (15) Working Days after every assignment, transfer,
assent, underlease, assignment of underlease, mortgage, charge or any
other disposition, whether mediate or immediate, of or relating to the
Premises or any part, the Tenant shall give written notice thereof to the
Landlord and provide the Landlord or its solicitors with a copy
(certified as true) of the deed, instrument or other document evidencing
or effecting such disposition and, on each occasion, shall pay to the
Landlord or its solicitors a fee of Twenty-five pounds ((Pounds) 25.00)
together with VAT thereon or such larger sum as may be reasonable.
22.2 From time to time on demand during the Term but not more than twice in
any one year on request to furnish the Landlord with full particulars of
all derivative interests of or in the Premises however remote or inferior
including particulars of the rents payable in respect of such derivative
interests and such further particulars as the Landlord may require.
SECTION 7
LEGAL REQUIREMENTS
23. STATUTORY REQUIREMENTS
23.1 TENANT TO COMPLY WITH STATUTES
The Tenant shall, at its expense, comply in all respects with every
statute now in force or which may, after the date of this Lease, be in
force and any other obligation imposed by law and all regulations laws or
directives made or issued by or with the authority of The European
Commission and/or The Council of Ministers relating to the Premises or
their use, including without limitation the Offices, Shops and Railway
Premises Act 1963, the Fire Precautions Act 1971, the Defective Premises
Act 1972, the Health and Safety at Work etc.
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Act 1974, the Environmental Protection Act 1990 and the Construction
(Design and Management) Regulations 1994.
23.2 TENANT TO EXECUTE NECESSARY WORKS
The Tenant shall execute all works and provide and maintain all
arrangements on or in respect of the Premises or their use which are
required by any statute now in force or which may after the date of this
Lease be in force or by any government department, local, public or other
competent authority or court of competent jurisdiction acting under or in
pursuance of any statute, whether any of the same are required to be
carried out by the landlord, tenant or occupier, and shall indemnify the
Landlord against all costs, charges, fees and expenses of, or incidental
to, the execution of any works or the provision or maintenance of any
arrangements so required.
24. PLANNING ACTS
24.1 TENANT'S OBLIGATION TO COMPLY
The Tenant shall comply with the Planning Acts and with any planning
permission in each case relating to, or affecting, the Premises, and
indemnify the Landlord against all actions, proceedings, claims, demands,
losses, costs, expenses, damages and liability whatsoever in respect of
any non-compliance.
24.2 NO APPLICATION FOR PLANNING PERMISSION WITHOUT CONSENT
The Tenant shall not make any application for planning permission or for
other consents required under the Planning Acts in respect of the
Premises or for certificates or determinations as to lawful use without
the prior written consent of the Landlord, such consent not to be
unreasonably withheld where under the other relevant provisions of this
Lease the consent of the Landlord is not required or cannot be
unreasonably withheld in respect of the matters the subject of the
application.
24.3 TENANT TO OBTAIN ALL PERMISSIONS
The Tenant shall, at its expense, obtain and, if appropriate, renew any
necessary planning permission and any other consent and serve all
necessary notices required for the carrying out by the Tenant of any
operations or the commencement or continuance of any use on the Premises.
24.4 TENANT TO PAY PLANNING CHARGES
The Tenant shall pay and satisfy any charge or levy imposed under the
Planning Acts in respect of any Development by the Tenant on the
Premises.
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24.5 NO IMPLEMENTATION OF PERMISSION WITHOUT APPROVAL
The Tenant shall not implement any planning permission or consent
required under the Planning Acts before the same have been produced to,
and approved in writing by, the Landlord, such approval not to be
unreasonably withheld but the Landlord may refuse to approve such
planning permission or consent on the grounds that any term or condition
contained in it, or anything omitted from it, or the period referred to
in it, would, in the reasonable opinion of the Landlord, be prejudicial
to the Landlord's respective interests in the Premises or the Building
whether during or following the expiration or earlier determination of
the Term.
24.6 TENANT TO CARRY OUT WORKS BEFORE END OF TERM
Unless the Landlord shall otherwise direct in writing, the Tenant shall
carry out and complete before the expiration or earlier determination of
the Term:-
24.6.1 any works required to be carried out to the Premises as a
condition of any planning permission granted during the Term and
implemented by the Tenant whether or not the date by which the
planning permission requires such works to be carried out is
within the Term; and
24.6.2 any Development begun upon the Premises in respect of which the
Landlord may be or become liable for any charge or levy under the
Planning Acts.
24.7 PLANS, ETC., TO BE PRODUCED
The Tenant shall produce to the Landlord on demand all plans, documents
and other evidence as the Landlord may reasonably require in order to
satisfy itself that this clause has been complied with.
24.8 PLANNING CONDITIONS
Where a planning permission has been granted subject to conditions, the
Landlord shall be entitled, where it is reasonable to do so, to require
the Tenant to provide security for compliance with such conditions, and
the Tenant shall not implement the planning permission until security
shall have been provided to the reasonable satisfaction of the Landlord.
24.9 PLANNING REFUSAL
24.9.1 The Tenant shall give notice of any refusal of planning permission to the
Landlord within fourteen (14) days of receipt of such refusal.
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24.9.2 If reasonably required by the Landlord but at the cost of the Tenant, the
Tenant shall appeal against any refusal of planning permission or the
imposition of any condition in a planning permission relating to the
Premises following an application made by the Tenant.
25. STATUTORY NOTICES
The Tenant shall:-
25.1 within ten (10) Working Days (or sooner if necessary having regard
to the requirements of the notice or order in question or the time
limits stated in it) of receipt of any notice or order or proposal
for a notice or order given to the Tenant and relevant to the
Premises or any occupier of them by any government department,
local, public or other competent authority or court of competent
jurisdiction, provide the Landlord with a true copy of it and any
further particulars required by the Landlord;
25.2 without delay, take all necessary steps to comply with the notice
or order so far as the same is the responsibility of the Tenant;
and
25.3 at the request of the Landlord but at the joint cost of the
Landlord and the Tenant, make or join with the Landlord in making
such objection, complaint, representation or appeal against or in
respect of any such notice, order or proposal as the Landlord
shall deem expedient.
26. FIRE PRECAUTIONS AND EQUIPMENT
26.1 COMPLIANCE WITH REQUIREMENTS
The Tenant shall comply with the requirements of the fire authority and
the insurers of the Building and the reasonable requirements of the
Landlord in relation to fire precautions affecting the Premises.
26.2 FIRE FIGHTING APPLIANCES TO BE SUPPLIED
The Tenant shall keep the Premises equipped with such fire fighting
appliances as shall be required by any statute, the fire authority or the
insurers of the Building and the Tenant shall keep such appliances open
to inspection and maintained to the reasonable satisfaction of the
Landlord.
26.3 ACCESS TO BE KEPT CLEAR
The Tenant shall not obstruct the access to, or means of working, any
fire fighting appliances or the means of escape from the Premises or the
Building in case of fire or other emergency.
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27. DEFECTIVE PREMISES
Promptly upon becoming aware of the same, the Tenant shall give written
notice to the Landlord of any defect in the Premises which might give
rise to an obligation on the Landlord to do, or refrain from doing, any
act or thing so as to comply with any duty of care imposed on the
Landlord under the Defective Premises Act 1972, and shall display and
maintain in the Premises all notices which the Landlord may, from time to
time, reasonably require to be displayed in relation to any such matters.
SECTION 8
INSURANCE
28. INSURANCE PROVISIONS
28.1 LANDLORD TO INSURE
The Landlord shall (during the period while it is the Landlord and
without liability in respect of any subsequent period) insure and keep
insured in the joint names of the Landlord and any Mortgagee with some
substantial publicly quoted insurance company (or a subsidiary of a
publicly quoted company) or with Lloyd's underwriters or other suitable
insurers and through such agency as the Landlord may, from time to time,
reasonably determine, subject to such normal exclusions, excesses,
limitations, terms and conditions as may be contained in any policy taken
out by the Landlord (but not so as to exclude terrorist risk if cover is
available):-
28.1.1 the Building (other than plate glass and items in the nature of
tenant's and trade fixtures and fittings) in its Full
Reinstatement Cost against loss or damage by the Insured Risks;
28.1.2 the loss of the Principal Rent and Service Charge from time to
time payable, or reasonably estimated to be payable, under this
Lease, taking account of any review of the rent which may become
due under this Lease, for six (6) years or such longer period as
the Landlord may, from time to time, reasonably deem to be
necessary;
28.1.3 explosion and sudden and unforeseen damage or breakdown of any
engineering and electrical plant and machinery in the Building to
the extent that the same is not covered by clause 28.1.1;
28.1.4 property owner's liability; and
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28.1.5 such other insurances in respect of the Building as the Landlord
may, from time to time, reasonably deem necessary to effect of a
type normal for a building of a similar size and location.
28.2 COMMISSIONS AND RESTRICTION ON TENANT INSURING
28.2.1 Neither the Landlord nor any company related to or associated with the
Landlord shall be entitled to any commission attributable to the placing
of such insurance and the payment of any insurance sums
28.2.2 The Tenant shall not take out any insurance in respect of the Premises or
in respect of any other matters which the Landlord is required to insure
under clause 28.1
28.3 FULL REINSTATEMENT COST
In this clause 28, "FULL REINSTATEMENT COST" means the full cost of
reinstating the Building at the time when such reinstatement is likely to
take place, having regard to any possible increases in building costs,
and including the cost of demolition, shoring up, site clearance,
ancillary expenses and architects', surveyors' and other professional
fees, any necessary Value Added Tax and any other relevant matters.
28.4 LANDLORD'S FIXTURES
The Tenant shall notify the Landlord in writing of the Full Reinstatement
Cost of any fixtures and fittings installed at any time by the Tenant and
which become landlord's fixtures and fittings for the purpose of enabling
the Landlord to effect adequate insurance cover for them.
28.5 LANDLORD TO PRODUCE EVIDENCE OF INSURANCE
At the request of the Tenant to produce evidence of insurance, the
Landlord shall produce to the Tenant a copy of the insurance policy and
evidence of the fact that the policy is subsisting and in effect and the
premium paid.
28.6 INSURANCE VALUATIONS
The Tenant shall pay on demand the costs from time to time of any
insurance valuations carried out by or for the Landlord in respect of the
Premises at such periods as the Landlord may reasonably consider
appropriate but which shall not (unless occasioned by the Tenant having
carried out works which would reasonably require an insurance valuation)
occur more frequently than once a year.
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28.7 DAMAGE TO THE BUILDING
If the Building or any part of it shall be damaged or destroyed by any of
the occurrences listed in the definition of "Insured Risks" (regardless
of whether the Landlord has actually insured against them) so as to
render the Premises unfit for use and occupation or inaccessible then:-
28.7.1 save to the extent that payment of the insurance moneys shall be
refused wholly or partly by reason of any act or default of the
Tenant, any undertenant or occupier of any part of the Premises or
any of their respective agents, licensees, invitees or contractors
or any person under the control of any of them; and
28.7.2 subject to the Landlord being able to obtain any necessary
planning permission and all other necessary licences, approvals
and consents, which the Landlord shall use reasonable endeavours
to obtain; and
28.7.3 unless the relevant damage or destruction shall have resulted from
an occurrence which is in fact uninsured and the Landlord shall
prior to the expiry of the period of eighteen (18) months after
the date of such damage or destruction notify the Tenant in
writing that it does not intend to reinstate the Premises and the
Building in which event this Lease may be determined at any time
thereafter with immediate effect by either the Landlord or the
Tenant serving written notice to that effect upon the other.
the Landlord shall with due diligence and speed and, subject to clause
28.7.1 making good any shortfall out of its own monies, reinstate and
rebuild the part of the Building so damaged or destroyed in substantially
the same form as prior to any such damage or destruction being materially
no less commodious or convenient for the Tenant (but not so as to provide
identical accommodation identical in layout if it would not be reasonably
practical to do so) and so that the Landlord may make changes to take
account of modern first class office specifications at the relevant time.
28.8 OPTION TO DETERMINE
If, during the last three (3) years of the Term, the Premises or the
Building shall be so damaged or destroyed by any of the Insured Risks as
to render them substantially unfit for use and occupation or
inaccessible, and if the Landlord does not wish to reinstate or rebuild
them, then (unless the Tenant has either taken steps to renew this Lease
at the expiry of the Term under the Landlord and Tenant Act 1954 or any
statutory renewal or replacement thereof and is continuing to pursue such
a renewal or has bona fide indicated to the Landlord in writing that it
wishes to negotiate a renewal of this Lease in which case the
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<PAGE> 56
parties shall negotiate the terms of such renewal lease as if (if such be
not the case) the Tenant had been entitled to make and had made an
application for a new tenancy pursuant to such Act) either the Landlord
or the Tenant may determine this Lease by giving to the other not less
than six (6) months' written notice to be given at any time within twelve
(12) months after such damage or destruction but such determination shall
be without prejudice to any claim which the Landlord may have against the
Tenant or any Guarantor or which the Tenant may have against the Landlord
for any previous breach of covenant or sum previously accrued due. If
this Lease shall be so determined, the Landlord shall not be required to
lay out any of the insurance moneys which the parties hereby agree shall
(notwithstanding that the policy shall be in joint names) belong solely
to the Landlord.
28.9 WHERE REINSTATEMENT IS PREVENTED
If following damage or destruction so as to render the Premises
substantially unfit for use and occupation or inaccessible:-
28.9.1 for any reason whatsoever, the Landlord has not commenced (and is
not continuing) reinstating or rebuilding the Building, having
used all reasonable endeavours to obtain all planning permissions,
approvals and consents necessary for such purpose, by the expiry
of a period of two (2) years and six months after the date of the
damage or destruction; or
28.9.2 the Landlord has not completed reinstatement and rebuilding to the
level described as the "Assumed Premises" in Clause 5.1.2 by the
expiry of a period of six (6) years from such date
then either party may, at any time after the expiry of such period of two
(2) years and six months or six (6) years (as the case may be), determine
this Lease by giving written notice to the other but such determination
shall be without prejudice to any claim which any party may have against
any other Provided that such period of six years may be extended by any
period of delay in reinstating caused by Force Majeure and in respect of
which the Landlord shall have notified the Tenant.
28.10 ALLOCATION OF INSURANCE MONIES
Upon determination pursuant to clause 28.9 above the insurance monies
paid to the Landlord insofar as they relate to alterations or
improvements in respect of the Premises (excluding tenant's and trade
fixtures and fittings) carried out by or for the Tenant or funded by the
Tenant or any undertenant shall forthwith be paid by the Landlord to the
Tenant Provided always that the Landlord shall be entitled to such
proportion of the monies which would be
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attributable to the Category A works had the same been carried out in
accordance with the Base Building Definition (as defined in Clause
5.1.2.1).
28.11 PAYMENT OF INSURANCE MONEY REFUSED
If payment of any insurance money is refused as a result of some act or
default of the Tenant, any undertenant or occupier of any part of the
Premises or any of their respective agents, licensees or contractors or
any person under the control of any of them, the Tenant shall pay to the
Landlord, on written demand, the amount so refused with interest on that
amount at the Prescribed Rate from and including the date of such refusal
to the date of payment by the Tenant.
28.12 SUSPENSION OF RENT PAYMENTS
If the Premises or the Building or any means of access thereto or any
part of them shall be damaged or destroyed by any of the Insured Risks so
as to render the Premises unfit for use and occupation or inaccessible,
the Principal Rent, and the Service Charge or a fair proportion of them
according to the nature and extent of the damage sustained, shall be
suspended until the Premises or the Building or the means of access or
the part damaged or destroyed shall be again rendered fit for use and
occupation and accessible or until the expiration of the period of six
years (as extended by any period of delay referred to in clause 28.9
above) from the date of damage (whichever is the earlier). Such
suspension of rent shall not operate to the extent that the insurance has
been vitiated or payment of the policy moneys refused as a result of some
act or default of the Tenant, any undertenant or occupier of any part of
the Premises or any of their respective agents, licensees or contractors
or any person under the control of any of them. Any dispute regarding the
suspension of payment of the Principal Rent or the Service Charge shall
be referred to a single arbitrator to be appointed, in default of
agreement, upon the application of either party, by the President in
accordance with the Arbitration Act 1996.
28.13 BENEFIT OF OTHER INSURANCES
If the Tenant shall become entitled to the benefit of any insurance
covering any part of the Premises which is not effected or maintained in
pursuance of the obligations contained in this Lease, the Tenant shall
apply any money received from such insurance (in so far as it extends) in
making good the loss or damage in respect of which it shall have been
received.
28.14 INSURANCE BECOMING VOID
The Tenant shall not do, or omit to do:-
28.14.1 anything which could cause any policy or policies of insurance
covering the Premises or the Building to become wholly or partly
void or voidable; or
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28.14.2 anything whereby any abnormal or loaded premium may become
payable in respect of such policies, unless the Tenant has
previously notified the Landlord and agreed to pay the increased
premium
28.15 REQUIREMENTS OF INSURERS
The Tenant shall, at all times, comply with any requirements and
recommendations of the insurers of the Building so far as the same are
known by the Tenant.
28.16 NOTICE BY TENANT
The Tenant shall give notice to the Landlord promptly on the happening of
any event or thing which might in the Tenant's reasonable opinion affect
any insurance policy relating to the Premises or the Building.
28.17 NOTING OF TENANT'S INTEREST
The Landlord shall procure that the Tenant's interest is noted on the
insurance policy or policies and shall use all reasonable endeavours to
obtain a letter from the insurers waiving rights of subrogation against
the Tenant.
SECTION 9
DEFAULT OF TENANT AND RIGHTS OF RE-ENTRY
29. DEFAULT OF TENANT
29.1 RE-ENTRY
Without prejudice to any other right, remedy or power contained in this
Lease or otherwise available to the Landlord, on or at any time after the
happening of any of the events mentioned in clause 29.2, the Landlord may
re-enter the Premises or any part of them in the name of the whole, and
the Term shall then end, but without prejudice to any claim which any
party may have against any other for any previous breach of covenant or
sum previously accrued due.
29.2 EVENTS OF DEFAULT
The events referred to in clause 29.1 are the following:-
29.2.1 if the Rents or any part of them shall be unpaid for ten (10)
Working Days after becoming payable (whether formally demanded
or not); or
29.2.2 if any of the covenants by the Tenant contained in this Lease
shall not be performed and observed; or
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29.2.3 if the Tenant, for the time being, and/or the Guarantor (if any)
(being a body corporate):-
29.2.3.1 calls, or a nominee on its behalf calls, a meeting of
any of its creditors; or makes an application to the
Court under Section 425 of the Companies Act 1985; or
submits to any of its creditors a proposal under Part
I of the Insolvency Act 1986; or enters into any
arrangement, scheme, compromise, moratorium or
composition with any of its creditors (whether under
Part I of the Insolvency Act 1986 or otherwise); or
29.2.3.2 has an administrative receiver or a receiver or a
receiver and manager appointed in respect of the
Tenant's or the Guarantor's property or assets or any
part; or
29.2.3.3 resolves or the directors or shareholders resolve to
present a petition for an administration order in
respect of the Tenant or the Guarantor (as the case
may be); or an administrator is appointed; or
29.2.3.4 has a winding-up petition or petition for an
administration order presented against it; or passes
a winding-up resolution (other than a voluntary
winding-up whilst solvent for the purposes of an
amalgamation or reconstruction); or calls a meeting
of its creditors for the purposes of considering a
resolution that it be wound-up voluntarily; or
resolves to present its own winding-up petition; or
is wound-up (whether in England or elsewhere); or has
a liquidator or provisional liquidator appointed; or
29.2.3.5 shall cease for any reason to maintain its corporate
existence; or is struck off the register of
companies; or otherwise ceases to exist; or
29.2.4 if the Tenant, for the time being, and/or the Guarantor (if any)
(being an individual, or if more than one individual, then any
one of them) makes an application to the Court for an interim
order under Part VIII of the Insolvency Act 1986; or convenes a
meeting of, or enters into any arrangement, scheme, compromise,
moratorium or composition with, any of his creditors (whether
under Part VIII of the Insolvency Act 1986 or otherwise); or
has a bankruptcy petition presented against him or is adjudged
bankrupt (whether in England or elsewhere); or has a receiver
appointed in respect of the Tenant's or the Guarantor's property
or assets or any part; or
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29.2.5 if analogous proceedings or events to those referred to in this
clause shall be instituted or occur in relation to the Tenant, for
the time being, and/or the Guarantor (if any) elsewhere than in
the United Kingdom; or
29.2.6 if the Tenant, for the time being, and/or the Guarantor (if any)
suffers any distress or execution to be levied on the Premises
which is not discharged in full within twenty one (21) days after
the levy has been made; or becomes unable to pay its debts as and
when they fall due.
SECTION 10
LANDLORD'S SERVICES AND SERVICES CHARGE
30. LANDLORD'S SERVICES
30.1 PROVISION OF SERVICES
Subject to the Tenant paying the Service Charge unless the same shall be
the subject of a bona fide dispute in which case for the duration of the
dispute this condition shall be deemed to be satisfied, the Landlord
covenants with the Tenant that it shall (during the period while it is
the Landlord, and without liability in respect of any subsequent period)
provide the following services in accordance with the principles of good
estate management and to a standard commensurate with high class offices
in the City of London unless prevented by industrial disputes
unavailability of materials inevitable accident or any other matter
outside the control of the Landlord:-
30.1.1 REPAIRS
To keep the Retained Parts in good repair and condition and in a
good and appropriate state of decoration;
30.1.2 COMMON PARTS
To keep clean and maintained in a proper manner and in a good and
appropriate state of decoration the Common Parts, including their
windows, and any lavatory of which the Tenant has the use, and to
keep them adequately lighted during Business Hours (and during
such additional hours as the Tenant shall request at the sole cost
of the Tenant);
30.1.3 LIFT(S)
During Business Hours, (and during such additional hours as the
Tenant shall request at the sole cost of the Tenant), to provide a
lift service by the operation of all the lifts now installed in
the Building or by such substituted lifts of equal or
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superior quality as the Landlord may, in its reasonable
discretion, from time to time install;
30.1.4 HOT AND COLD WATER
To provide an adequate supply of hot water and cold water to the
wash basins in any lavatory in the Building;
30.1.5 HEATING
30.1.5.1 During Business Hours, (and during such additional
hours as the Tenant shall request at the sole cost of
the Tenant) to provide to the Premises heating to such
temperature as shall be appropriate and for such periods
of the year as shall be necessary; and
30.1.5.2 During Business Hours, (and during such additional
hours as the Tenant shall request at the sole cost of
the Tenant) to provide to the Common Parts heating to
such temperature as shall be appropriate and for such
periods of the year as shall be necessary
30.1.6 AIR CONDITIONING
During Business Hours (and during such additional hours as the
Tenant shall request at the sole cost of the Tenant), to provide
air conditioning to the Premises to such standard as the air
conditioning system was designed to achieve;
30.1.7 STAFF
To employ such staff as the Landlord may reasonably deem necessary
to enable it to provide any of the services in the Building and
for its general management and security;
30.1.8 NAME BOARDS
To provide name boards of such size and design as the Landlord may
reasonably determine in the entrances to the Building and at such
other locations as the Landlord may reasonably consider desirable;
30.1.9 OPEN AREAS
To repair and maintain those parts of the Building which are not
built on, and keep them clear of all rubbish and free from weeds,
and to provide and maintain such Go plants, shrubs, trees or
garden or grassed areas as may be reasonably appropriate, and to
keep them planted, free from weeds and the grass cut.
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30.1.10 COMMON PARTS
To keep the Common Parts appropriately furnished carpeted and
equipped.
30.1.11 EXTERNAL WINDOWS
To clean the outside of all external windows.
30.1.12 LANDSCAPING
To provide and maintain appropriate plants and landscaping in
the Common Parts.
30.1.13 REFUSE BINS
To provide refuse bins and operate a refuse storage and
collection service.
30.1.14 SIGNAGE
To provide signs nameboards and other suitable or necessary
notices in the Common Parts.
30.1.15 WATER AND SEWERAGE
To procure the provision of water and sewerage services to the
Building.
30.1.16 SECURITY AND SAFETY SYSTEMS
To provide operate repair renew clean and maintain:
(a) fire alarms sprinkler fire prevention and fire fighting
equipment and ancillary apparatus; and
(b) appropriate security alarms systems and apparatus (and
to provide appropriate security staff and guards);
(c) appropriate emergency systems.
30.2 VARIATION OF SERVICES
The Landlord may, at its discretion, add to, extend or vary (but not
withhold) from time to time any of the services referred to in this
clause if the Landlord shall reasonably consider it desirable to do so
in accordance with principles of good estate management for the more
efficient management, operation or security of the Building, or for the
comfort of the tenants in the Building.
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30.3 FAILURE BY LANDLORD TO PROVIDE SERVICES
The Landlord shall not be liable to the Tenant in respect of any failure
by the Landlord to perform any of the services referred to in this clause
unless the Landlord knew or ought reasonably to have known of the failure
or the Tenant has given to the Landlord written notice of the failure in
question and the Landlord has failed within a reasonable time to remedy
it.
30.4 EXCLUSION OF LANDLORD'S LIABILITY
The Landlord shall not incur any liability for any failure or
interruption in any of the services to be provided by the Landlord or for
any inconvenience or injury to person or property arising from that
failure or interruption, in either case due to any mechanical breakdown
or any cause or circumstance beyond the control of the Landlord, but the
Landlord shall use reasonable endeavours to cause the service in question
to be reinstated with the minimum of delay.
30.5 EXCLUSION OF LANDLORD'S LIABILITY FOR CONDUITS
The Landlord may subject prior arrangement with the Tenant (except in the
case of emergency) and for the minimum period reasonably necessary take
out of service for repair replacement or modernisation any of the
Conduits and other mechanical and electrical installations serving the
Premises and shall not thereby be liable to the Tenant or to the Tenant's
employees or those claiming through or under the Tenant for such taking
out of service or for the failure or breakdown of any such Conduits or
other mechanical or electrical installations Provided that the Landlord
procures the reinstatement thereof as soon as reasonably possible and
provides temporary alternative Conduits or installations approved by the
Tenant (such approval not to be unreasonably withheld).
30.6 BUSINESS HOURS
During such time as the Property Management Agreement remains in full
force and effect, the obligation to provide certain of the services
referred to in Clause 30.1 during Business Hours only shall not apply and
the Landlord will provide such services in the manner prescribed in
Clause 30.1 at all times.
31. SERVICE CHARGE
31.1 DEFINITIONS
In this Lease:-
31.1.1 "ADVANCE PAYMENT" means the Service Charge Percentage of the
Estimated Expenditure and the total cost reasonably estimated by
the Landlord as the cost of complying with its covenants at
sub-clauses 30.1.5.1 and 30.1.6 or providing the
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services outside Business Hours listed at sub-clause 30.1.2,
30.1.3, 30.1.5.2 and 30.1.6 which shall be based on a budget
prepared by the Landlord and submitted to the Tenant and includes
for the Financial Year in question any revised estimate of the
budget of such costs for that Financial Year which shall be
provided to the Tenant with an explanation of any such revision;
31.1.2 "ESTIMATED EXPENDITURE" means, for any Financial Year during the
Term, such sum as the Landlord may, from time to time, reasonably
specify as being a fair and reasonable estimate of the Expenditure
for the current Financial Year based on a budget prepared by the
Landlord and submitted to the Tenant, and includes, for the
Financial Year in question, any revised budget of the Landlord's
estimate of the Expenditure for that Financial Year which shall be
provided to the Tenant with an explanation of any such revision;
31.1.3 "EXPENDITURE" means the aggregate of all costs, expenses and
outgoings whatsoever incurred by the Landlord in complying with
its covenants under clause 30 (other than sub-clauses 30.1.5.1 and
30.1.6) and in respect of the items set out in SCHEDULE 7, whether
the Landlord is obliged by this Lease to incur them or not but
there shall be deducted from the foregoing any contributions to
such costs, expenses and outgoings recoverable in the relevant
Financial Year under leases or agreements for leases relating to
the Retail Unit.
31.1.4 "FINANCIAL YEAR" means the period from [ o ] in every year to
[preceding day] of the following year, or such other period of
twelve months as the Landlord may reasonably from time to time
determine;
31.1.5 "SERVICE CHARGE" means the aggregate of:-
(a) the Service Charge Percentage of the Expenditure and the
proper costs, expenses and outgoings properly incurred by
the Landlord in complying with its covenants under
sub-clauses 30.1.5.1 and 30.1.6; and
(b) a fair proportion of the proper costs expenses and
outgoings properly incurred by the Landlord in providing to
those tenants of premises within the Building who have
requested the provision by the Landlord of the services
listed at sub-clauses 30.1.2, 30.1.3, 30.1.5 and 30.1.6
outside of Business Hours (such costs expenses and
outgoings hereinafter referred to as the "ADDITIONAL
COSTS") provided that in the event no other tenant of
premises within the Building requests such services
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outside of Business Hours the fair proportion to be borne
by the Tenant in respect of such Additional Costs shall be
one hundred percent (100%);
31.1.6 "SERVICE CHARGE PERCENTAGE" means the figure calculated as follows
(subject to adjustment under this Clause 31):-
X
--- x 100
Y
where:-
X = the Net Internal Area of the Premises;
Y = the aggregate Net Internal Area of Lettable Areas within
the Building used or intended to be used for office
purposes or uses ancillary thereto.
31.1.7 "SERVICE CHARGE COMMENCEMENT DATE" means [ o 199 ];
[NOTE: TO BE CALCULATED IN ACCORDANCE WITH THE AGREEMENT FOR LEASE
: DATE OF POSSESSION]
31.1.8 "PROVISIONAL QUARTERLY SERVICE CHARGE PAYMENT" means (pound)[ ]
31.2 ACCOUNT OF EXPENDITURE
The Landlord shall, as soon as practical after the end of each Financial
Year and in any event within six months, prepare an account showing the
Expenditure and the Additional Costs for that Financial Year and
containing a fair summary of the various items comprising the Expenditure
and the Additional Costs, and such account shall be audited and certified
by an independent chartered or certifying accountant and a copy of it
supplied to the Tenant, it shall be conclusive evidence, for the purposes
of this Lease, of all matters of fact referred to in the account.
31.3 ADVANCE PAYMENT
The Tenant shall pay to the Landlord on account of the Service Charge:-
31.3.1 for the period beginning on the Service Charge Commencement Date
to the end of the Financial Year current at the date of this Lease
the Advance Payment for that Financial Year; and
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31.3.2 for each Financial Year following that current at the date of this
Lease the Advance Payment,
all such payments to be made by equal quarterly payments in advance on
the same dates as the Principal Rent is payable and to be subject to
adjustment if the Estimated Expenditure is revised as contemplated by its
definition or the Additional Costs amount is revised as contemplated, the
first instalment, being a proportion of the Provisional Quarterly Service
Charge Payment for the period beginning on the Service Charge
Commencement Date and ending on the day before the quarter day following
the Service Charge Commencement Date, to be made on [o NOTE: TO BE DEALT
WITH IN THE AGREEMENT FOR LEASE]
31.4 BALANCING PAYMENT
If the Service Charge for any Financial Year:-
31.4.1 shall exceed the Advance Payment for that Financial Year, the
excess shall be paid by the Tenant to the Landlord within ten
working days of written demand; or
31.4.2 shall be less than the Advance Payment for that Financial Year,
the overpayment shall be credited to the Tenant against the next
quarterly payment of the Service Charge, or, if there is none,
refunded to the Tenant within 10 Working Days with interest at
four per cent below the Prescribed Rate.
31.5 OMISSIONS
Any omission by the Landlord to include in the account of the Expenditure
in any Financial Year a sum expended or a liability incurred in that
Financial Year shall not preclude the Landlord from including that sum or
the amount of that liability in the next following Financial Year
31.6 ALTERATION OF SERVICE CHARGE PERCENTAGE
If, at any time during the Term, the Net Internal Area of the Lettable
Areas within the Building used or intended to be used for office purposes
or uses ancillary thereto shall change or any other circumstances shall
arise which make the calculation of the Service Charge Percentage
(whether or not relating to individual items of Expenditure) unreasonable
or inequitable, the Landlord shall be entitled to alter the Service
Charge Percentage to such other percentage as is fair and reasonable in
the circumstances.
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31.7 CONTINUING APPLICATION OF PROVISIONS
This clause shall continue to apply notwithstanding the expiration or
earlier determination of the Term but only in respect of the period down
to such expiration or earlier determination, the Service Charge for that
Financial Year for that period being apportioned on a daily basis.
31.8 RETAIL UNIT
The Landlord covenants that the tenant of the Retail Unit (or if there be
no such tenant the Landlord) shall bear a proper proportion of all
relevant Expenditure and that the Landlord shall provide the Tenant with
all or any matters necessary to explain and calculate such apportionment.
31.9 DISPUTES
If any dispute arises in relation to the amount of the Estimated
Expenditure or the Expenditure or the Service Charge the Tenant shall be
required to pay the amounts requested by the Landlord. If following any
such dispute it is agreed between the parties or determined that the
Service Charge paid by the Tenant on account of any Financial Year is in
excess of the amount agreed or determined to be properly payable by the
Tenant during that Financial Year the Landlord shall repay to the Tenant
or credit against the next payment of Estimated Expenditure the excess
amount together with interest at four per cent below the Prescribed Rate
on such excess amount for the period from the date when the excess was
received by the Landlord until the date of repayment to the Tenant or
credit against the next payment of Estimated Expenditure as appropriate.
SECTION 11
MISCELLANEOUS
32. QUIET ENJOYMENT
The Landlord (in respect of the period during which it is the Landlord,
and without liability in respect of any subsequent period) covenants with
the Tenant that the Tenant, paying the Rents and performing and observing
the covenants on the part of the Tenant contained in this Lease, shall
and may peaceably hold and enjoy the Premises during the Term without any
interruption by the Landlord or any person lawfully claiming through,
under, or in trust for it or by title paramount.
33. RELETTING NOTICES
The Tenant shall permit the Landlord, at all reasonable times during the
last six (6) months of the Term, to enter the Premises and affix and
retain, without interference, on any suitable parts of them (but not so
as to affect the access of light or air to the Premises) notices for
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reletting them and the Tenant shall not remove or obscure such notices
and shall permit all persons with the written authority of the Landlord
to view the Premises at all reasonable hours in the daytime, upon prior
appointment having been made.
34. DISCLOSURE OF INFORMATION
Upon making any application or request in connection with the Premises or
this Lease, the Tenant shall disclose to the Landlord such information
relating to the Premises or the application or request as the Landlord
may reasonably require.
35. INDEMNITY
The Tenant shall keep the Landlord fully indemnified from and against all
actions, proceedings, claims, demands, losses, costs, expenses, damages
and liability arising in any way directly or indirectly out of:-
35.1 any act, omission, neglect or default of the Tenant or any persons
in the Premises expressly or impliedly with the Tenant's authority
which the Tenant knows or ought reasonably to have known would
cause damage to the Landlord's reversion; or
35.2 any breach of any covenant by the Tenant contained in this Lease
subject to the Landlord using all reasonable endeavours to mitigate its
losses.
36. REPRESENTATIONS
The Tenant acknowledges that this Lease has not been entered into in
reliance, wholly or partly, on any statement or representation made by,
or on behalf of, the Landlord, except any such statement or
representation that is expressly set out in this Lease or in the
Agreement for Lease which preceded it or in written replies to enquiries
given by solicitors acting for the Landlord.
37. EFFECT OF WAIVER
Each covenant by the Tenant shall remain in full force even though the
Landlord may have waived or released it temporarily or waived or
released (temporarily or permanently, revocably or irrevocably) a similar
covenant affecting other property belonging to the Landlord.
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38. NOTICES
38.1 NOTICES TO TENANT OR GUARANTOR
Any demand or notice required to be made, given to, or served on, the
Tenant or the Guarantor (if any) under this Lease shall be duly and
validly made, given or served if addressed to the Tenant or the Guarantor
respectively (and, if there shall be more than one of them, then any one
of them) and delivered personally, or sent by pre-paid registered or
recorded delivery mail, or sent by fax addressed (in the case of a
company) to its registered office, or (in the case of a notice to the
Tenant) the Premises and while Goldman Sachs International [Restamove
Limited] remains the tenant marked for the attention of The Facilities
Manager.
38.2 NOTICES TO LANDLORD
Any notice required to be given to, or served on, the Landlord shall be
duly and validly given or served if sent by pre-paid registered or
recorded delivery mail, or sent by fax addressed to the Landlord and if
there be more than one of them, then to any one of them at the registered
office of the Landlord (if a company) Provided That if the Landlord be
domiciled or registered outside England and Wales it shall at all times
procure that the Tenant is informed of an address for service in England
and Wales.
39. APPLICABLE LAW AND JURISDICTION
This Lease shall be governed by and construed in all respects in
accordance with the Laws of England and proceedings in connection
therewith shall be subject (and the parties hereby submit) to the
non-exclusive jurisdiction of the English Courts and for the purposes of
Order 10 Rule 3 of the Rules of the Supreme Court of England and any
other Rules thereof the Landlord the Tenant and the Guarantor hereby
irrevocably agree that any process may be served upon them by leaving a
copy addressed to each of them at their respective address stated above
or at such other address for service within England and Wales as may be
notified in writing from time to time to the other provided that such
notification refers expressly to this clause of this Lease.
40. INVALIDITY OF CERTAIN PROVISIONS
If any term of this Lease or the application thereof to any person or
circumstances shall to any extent be invalid or unenforceable the same
shall be severable and the remainder of this Lease or the application of
such term to persons or circumstances other than those as to which it is
held invalid or unenforceable shall not be affected thereby and each term
and provision of this Lease shall be valid and be enforced to the fullest
extent permitted by law
41. GUARANTOR'S COVENANTS
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In consideration of this Lease having been granted at its request, the
Guarantor covenants in the terms contained in SCHEDULE 4.
42. NEW TENANCY
This Lease constitutes a new tenancy for the purposes of the Landlord and
Tenant (Covenants) Act 1995.
43. TENANT'S OPTION TO DETERMINE
If the Tenant shall desire to determine the Term on [o Note: this will be
the date 20 years after Shell & Core Practical Completion] (the "BREAK
DATE") it shall give to the Landlord (time to be of essence) not less
than thirteen months' written notice (a "NOTICE") of such desire expiring
on the relevant Break Date and upon the expiry of the Notice the Term
shall immediately cease and determine subject to:-
43.1 the Tenant having paid in full the Principal Rent and any other sums
properly due and demanded pursuant to this Lease up to and including the
Break Date; and
43.2 there being yielded up all of the office premises within the Building
with vacant possession of the whole of those premises to the Landlord on
the Break Date and at the same time there being determined the Term of
all the other office leases within the Building but without prejudice to
any rights and remedies which may then have accrued to the Landlord or
the Tenant in respect of any antecedent breach of any of the covenants in
this Lease.
44. RETAIL UNIT
44.1 The Landlord shall not use or allow the use of the Retail Unit for the
following uses:
Betting Office
Undertakers
Pet Shop
Hairdressers
Charity Shop
Newsagents
Ticket Agency
Sex Shop
Music Centre
Sale of secondhand goods
Sandwich bar (not extending to operations like Boots)
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Any use involving formal exhibitions open to the public or entertainment
Government department offices visited by members of the public
Sale of food or drink for consumption on the premises or of hot food for
consumption off the premises
PROVIDED THAT Newsagents of the like of WH Smith, Ticket Agencies of the
like of Thomas Cook and Music Centres of the like of HMV will be
permitted so long as their proposed level of use of the loading bay is
not so excessive as to unduly fetter the Tenant's (or other occupiers of
the offices) use of the loading bay or offices and so long as the
relevant Retail Unit tenant agrees to be bound by the initial rules and
regulations governing use of the loading bay (and any reasonable
replacements) Provided Further that if the Retail Unit is let by way of a
single letting to a Newsagents, Ticket Agency or Music Centre of the type
described above then so long as the relevant Retail Unit tenant agrees to
be bound by the initial rules and regulations governing use of the
loading bay (and any reasonable replacements) and to act reasonably in
relation to such use of the loading bay then such user shall be permitted
44.2 The Landlord shall impose obligations upon (and if so reasonably
requested by the Tenant and at the Tenant's cost take steps to enforce
those obligations) the occupiers of the Retail Unit requiring that they
shall
44.2.1 at all times maintain a high quality display in the windows of the
Retail Unit
44.2.2 cover no more than 15% of the windows (other than those required
to be obscured pursuant to the Lease) with trade placards, posters
or advertisements
44.2.3 not wilfully to do anything within the Retail Unit which would be
likely to be a nuisance or cause damage to the Tenant
44.2.4 ensure that no music or machinery noise can be heard outside the
Retail Unit
44.2.5 not deposit rubbish outside the Building
44.2.6 not to erect any external additions to the Retail Unit other than
shop fascia approved by the planning authority and signage and
projections approved by the Tenant (such approval not to be
unreasonably withheld)
44.3 The Landlord shall not allow the use of the Retail Unit for any use other
than retail sales and ancillary uses (including storage) and not for the
sale of food or drink for consumption
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on the premises or of hot food for consumption off the premises save that
the basement may be used as a high class winebar subject to compliance
with the following conditions
44.3.1 The operator of the winebar shall have no right to use the loading
bay at the Building otherwise than at specified times (if any)
confirmed by the Tenant
44.3.2 The proposed access for deliveries to the winebar, the method of
providing kitchen extracts and exhausts, the method of managing
smells and noise, how public access would be given and all matters
relating to fire precautions, safety and security shall all be
approved by the Tenant such approval not to be unreasonably
withheld
45. SIGNAGE ON TILE BUILDING
During such period as the Property Management Agreement remains in full
force and effect the Landlord shall not affix or display on any exterior
part of the Building any placard plate sign bill board writing notice or
advertisement or erect any aerial mast or flagpole in upon the Building
which materially affects the appearance of the Building nor place on the
frontage of the Building any nameplate or fascia other than in a form
approved by the Tenant such approval not to be unreasonably withheld or
delayed.
46. RETAIL UNIT OPAQUE COVERING
The Landlord shall procure that no placard sign board writing notice
advertisement nameplate or fascia shall be placed on the area shown edged
turquoise on Plan 3 (the "retail frontage") so as to be visible from the
office entrance and that such retail frontage shall at all times be
covered by an opaque covering so that the interior of the Retail Unit is
not visible.
IN WITNESS whereof this Deed has been executed by the parties and is intended to
be and is hereby delivered on the date first written above.
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SCHEDULE 1
EXCEPTIONS AND RESERVATIONS
1. There are excepted and reserved to the Landlord and the owners, tenants
and occupiers of the Building and all other persons authorised by the
Landlord or having similar rights:-
1.1 the right to the passage connection and running of (i) the Conduits and
(ii) the Utilities through any relevant Conduits which (in either case)
are now, or may at any time be in, under, or over the Premises other than
those within or exclusively serving the Premises;
1.2 the right to install, retain and use ducting, trunking and associated
louvres or extract systems through the Structure serving ventilation,
plant and to intake and expel fumes through such ducting, trunking and
associated equipment.
1.3 the right to maintain connections or (if necessary) to connect (a)
appropriate Conduits to any communication equipment provided for the use
of the tenants of all Lettable Areas by the Landlord which are now or may
be at any time in under or over the Premises (b) to any sprinkler system
which is now or may at any time be in under or over the Premises serving
the Premises in common with other Lettable Areas (c) to any fire alarm
system within the Premises (d) to any soil and vent pipe and any
associated drains and sewers which are now or may be in under or over the
Premises and provided by the Landlord for use by occupiers of the
Lettable Areas;
1.4 the right subject to compliance with Clause 3.10 to enter the Premises in
order to:-
1.4.1 inspect, clean, maintain, repair, connect, remove, lay, renew,
relay, replace, alter or execute any works whatsoever to, or in
connection with, any of the Conduits or any other services;
1.4.2 execute repairs, decorations, alterations or any other works, and
to make installations to the Premises, the Building or to any
Adjoining Property;
1.4.3 repair or maintain the atrium and clean any interior windows of
any atrium; or
1.4.4 do anything which the Landlord may do or covenants to do under
this Lease;
1.5 the right to erect scaffolding for the purpose of repairing or cleaning
the Building, or in connection with the exercise of any of the rights
mentioned in this Schedule even though
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such scaffolding may temporarily restrict the access to, or enjoyment or
use of, the Premises;
1.6 any rights of support, protection and shelter or other easements and
rights now, belonging to, or enjoyed by, other parts of the Building;
1.7 full right and liberty at any time after the date of this Lease to raise
the height of, or make any alterations or additions or execute any other
works to the Building or any buildings on any Adjoining Property, or to
erect any new buildings of any height on any Adjoining Property in such
manner as the Landlord or the person exercising the right shall think fit
and even though they may obstruct, affect or interfere with the passage
of light and air to the Premises, but not so that the Tenant's use and
occupation of them is materially affected;
1.8 subject to Clause 45 the right to affix or display on any exterior part
of the Building any placard plate sign bill board writing notice or
advertisement and to erect any pipe wire aerial mast or other apparatus
whatsoever in or upon the Building or any part thereof and to place on
the frontage of the Building name plates or fascia
2. Any rights or easements excepted and reserved in paragraph 1 over
anything which is not in being at the date of this Lease shall be
effective only in relation to any such thing which comes into being
before the expiry of eighty (80) years from today, which shall be the
perpetuity period applicable to this Lease.
______________
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SCHEDULE 2
RIGHTS GRANTED
1. Subject to any existing or future reasonable regulations made by the
Landlord and to any temporary interruption for repairs, alterations or
replacements, the right for the Tenant and all persons expressly or by
implication authorised by the Tenant (in common with the Landlord and all
persons having a similar right) to use the Common Parts for all proper
purposes in connection with the use and enjoyment of the Premises.
2. Subject to any temporary interruption for repairs, alterations or
replacements, the right to the passage of any of the Utilities to and
from the Premises through any relevant Conduits and the right subject to
the provisions of Clause 3.10 to connect into such Conduits which are now
or (within a period of 80 years after the date of this Lease) may be in,
under, or over any other part of the Building, in each case so far as any
of the same are necessary for the reasonable use and enjoyment of the
Premises;
3. The right of support and protection from all other parts of the Building
as is now enjoyed by the Premises;
4. The right for the Tenant or other permitted occupier to have displayed on
any name board provided by the Landlord in the main and other entrances
to the Building the name and location within the Building of the offices
of the Tenant or other permitted occupier and to have its name displayed
on a sign in the house style of the Tenant or other permitted occupier in
the lift lobby of each floor of the Premises;
5. The right to use that part of the Building so designated by the Landlord
for the deposit of all rubbish and refuse in proper receptacles for
collection by or on behalf of the local authority
6. The exclusive right to use the floor of the Atrium for such reasonable
purposes as the Tenant may require including use as a seating area for a
staff restaurant and/or the installation of accommodation staircases and
the right to hang artwork appropriate for high class offices in the
Atrium (including suspending such artwork from the roof of the Atrium).
7. The right to enter any other parts of the Building at all reasonable
times and (except in case of emergency) upon reasonable notice for the
purpose of inspecting maintaining cleaning repairing renewing and
replacing any Conduits and connections thereto which exclusively
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serve the Premises (and to exercise any of the rights hereby granted or
to comply with its obligations hereunder (including suspending such
artwork from the roof of the Atrium).
8. The right in common with other occupiers of the Building to install
maintain inspect repair renew and replace plant and equipment on the roof
of the Building in such locations as the Tenant may reasonably require
together with all necessary rights of access thereto.
9. The exclusive right (save for access needed by the Landlord for
maintenance and services) to use the roof areas/balconies edged and
hatched yellow on the plans for any reasonable purpose ancillary to the
Tenant's use of the Premises, but not to carry out any additions or
alterations to such areas without the Landlord's prior written consent,
not to be unreasonably withheld.
10. The exclusive right to use the risers shown coloured [ o ] on Plan [ o ].
[NOTE: BASEMENT TO FOURTH FLOOR LEASE ONLY] [NOTE: PLAN TO BE AGREED
PURSUANT TO PROVISIONS IN AGREEMENT FOR LEASE]
11. The right to install inspect renew repair maintain and use bridge and
tunnel links to Peterborough Court constructed in accordance with the
provisions of the [o Tunnel and Bridges Agreement] or such other bridge
or tunnel links to Peterborough Court as the Landlord may approve such
approval not to be unreasonably withheld.
12. The right to install and connect to new or existing Conduits above or
below ground level and where necessary to make holes in floor slabs or
the Structure to do so and to retain Conduits in or under or over the
Retained Parts.
13. The right subject to obtaining the Landlord's prior consent such consent
not to be unreasonably withheld to infill one or more floors of either or
both of the atria and to use the same as if it had been part of the
original demise of the relevant floor.
14. The right to make openings in the slab in the soft spots shown coloured
[ o ] on plan [ o ] to use the same for purposes connected to the
Tenant's use and occupation of the Premises including the creation of
accommodation staircases.
[NOTE: TO BE DEALT WITH AS PART OF TRAIL PROCESS UNDER AGREEMENT FOR
LEASE]
15. The right to make openings in and alterations to the floor slabs the roof
slabs and the Retained Parts of the Building to link services and/or to
create accommodation staircases between the Premises and/or the roof
and/or other floors of the Building and to link services
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and/or to provide accommodation staircases between different floors
comprised within the Premises and/or to facilitate alterations being
carried out to the Premises.
16. The exclusive right to park 34 motor cars in the basement car park of the
Building provided it is acknowledged that the areas shown hatched [ o ]
on plan [ o ] are occupied by plant.
[NOTE: PLAN TO SHOW ANY SUCH AREAS UPON GRANT OF LEASE]
__________
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SCHEDULE 3
USE RESTRICTIONS
1. DANGEROUS MATERIALS AND USE OF MACHINERY
The Tenant shall not:-
1.1 bring into the Building or keep in the Premises any article or
thing which is or may become combustible, dangerous, explosive,
inflammable, offensive or radioactive, or which might increase the
risk of fire or explosion, other than usual office supplies and
equipment and reasonable quantities of oil required for the
operation of any boiler, plant, machinery, equipment and apparatus
which shall be stored in accordance with the requirements of any
statute affecting the Premises and of any insurer of them;
1.2 keep or operate in the Premises any machinery which is unduly
noisy or causes vibration, or which is likely to annoy or disturb
any owner or occupier of the Building.
2. OVERLOADING FLOORS AND SERVICES
The Tenant shall not:-
2.1 overload the floors of the Premises or the Building nor suspend
any excessive weight from any ceiling, roof, stanchion, structure
or wall of the Building nor overload any Utility in or serving it;
2.2 do anything which may subject the Premises or the Building to any
strain beyond that which they are designed to bear (with due
margin for safety);
2.3 exceed the weight limits prescribed for any lift in the Building;
2.4 overload any plant and equipment beyond any design level which it
is intended to bear.
3. DISCHARGES INTO CONDUITS
The Tenant shall not discharge into any Conduit any oil or grease or any
noxious or deleterious effluent or substance which may cause an
obstruction or might be or become a source of danger, or which might
damage any Conduit or the drainage system of the Building or any
Adjoining Property.
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4. DISPOSAL OF REFUSE
The Tenant shall not deposit on any part of the Premises any refuse,
rubbish or trade empties of any kind other than in proper receptacles,
and shall not burn any refuse or rubbish on the Premises.
5. OBSTRUCTION OF COMMON AREAS
The Tenant shall not do anything as a result of which the Common Parts or
other area over which the Tenant may have rights of access or use may be
damaged, or their fair use by others may be obstructed in any way and
shall not park any vehicle on any road or open area forming part of the
Building other than in any approved parking or loading/unloading area.
6. PROHIBITED USES
The Tenant shall not use or permit the use of the Premises for any public
or political meeting, or public exhibition or public entertainment, show
or spectacle; or for any dangerous, noisy, noxious or offensive business,
occupation or trade; or for any illegal or immoral purpose; or for
residential purposes; or for betting, gambling, gaming or wagering; or as
a betting office; or as a club; or for the sale of any beer, wines or
spirits; or for any auction or as an undertakers.
7. NUISANCE
The Tenant shall not:-
7.1 do anything in the Premises or the Building which may be or become
a nuisance to, the Landlord or any other tenant or occupier in the
Building or any owner or occupier of any Adjoining Property;
7.2 play any musical instrument, or use any loudspeaker, radio, tape
recorder, record or compact disc player or similar apparatus in
such a manner as to be audible outside the Premises;
7.3 place outside the Premises or in the Common Parts or expose from
any window of the Premises any articles, goods or things of any
kind.
__________
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SCHEDULE 4
COVENANTS BY GUARANTOR
1. COVENANTS AND INDEMNITY BY GUARANTOR
The Guarantor:-
1.1 covenants with the Landlord, as a primary obligation, that the
Tenant (in this Schedule meaning Goldman Sachs International only)
shall, at all times during the Term (including any continuation or
renewal or extension of this Lease) or (if earlier) until the
Tenant is released pursuant to the 1995 Act, duly perform and
observe all the covenants on the part of the Tenant contained in
this Lease, including the payment of the Rents and all other sums
payable under this Lease in the manner and at the times specified
in this Lease; and
1.2 (but not so as to provide the Landlord with a greater claim than
it would have enjoyed in such circumstances if the Guarantor had
been the Tenant) indemnifies, as a primary obligation, the
Landlord against all claims, demands, losses, damages, liability,
costs, fees and expenses whatsoever sustained by the Landlord by
reason of or arising in any way directly or indirectly out of any
default by the Tenant in the performance and observance of any of
its obligations or the payment of any rent and other sums.
2. WAIVER BY GUARANTOR
The Guarantor waives any right to require the Landlord to proceed against
the Tenant before proceeding against the Guarantor.
3. POSTPONEMENT OF CLAIMS BY GUARANTOR AGAINST TENANT
The Guarantor further covenants with the Landlord that the Guarantor
shall:-
3.1 not claim in any liquidation, bankruptcy, composition or
arrangement of the Tenant in competition with the Landlord;
3.2 not exercise any right or remedy in respect of any amount paid or
any liability incurred by the Guarantor in performing or
discharging its obligations contained in this Schedule, or claim
any contribution from any other guarantor.
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4. POSTPONEMENT OF PARTICIPATION BY GUARANTOR IN SECURITY
The Guarantor shall not be entitled to participate in any security held
by the Landlord in respect of the Tenant's obligations to the Landlord
under this Lease or to stand in the place of the Landlord in respect of
any such security until all the obligations of the Tenant or the
Guarantor to the Landlord under this Lease have been performed or
discharged.
5. NO RELEASE OF GUARANTOR
None of the following, or any combination of them, shall release,
determine, discharge or in any way lessen or affect the liability of the
Guarantor as principal obligor under this Lease or otherwise prejudice or
affect the right of the Landlord to recover from the Guarantor to the
full extent of this guarantee:-
5.1 any neglect, delay or forbearance of the Landlord in endeavouring
to obtain payment of the Rents or the amounts required to be paid
by the Tenant or in enforcing the performance or observance of any
of the obligations of the Tenant under this Lease;
5.2 any refusal by the Landlord to accept rent tendered by or on
behalf of the Tenant at a time when the Landlord was entitled (or
would after the service of a notice under Section 146 of the Law
of Property Act 1925 have been entitled) to re-enter the Premises;
5.3 any extension of time given by the Landlord to the Tenant;
5.4 any reviews of the rent payable under this Lease and (subject to
Section 18 of the 1995 Act) any variation of the terms of this
Lease or the transfer of the Landlord's reversion or the
assignment of this Lease;
5.5 any change in the constitution, structure or powers of either the
Tenant, the Guarantor or the Landlord or the liquidation,
administration or bankruptcy or analogous matters (as the case may
be) of either the Tenant or the Guarantor;
5.6 any legal limitation, or any immunity, disability or incapacity of
the Tenant (whether or not known to the Landlord) or the fact that
any dealings with the Landlord by the Tenant may be outside, or in
excess of, the powers of the Tenant;
5.7 (without prejudice to the generality of the foregoing and so as to
reflect the express intentions of the parties to this Lease) any
other deed, act, omission, failure, matter or thing whatsoever as
a result of which, but for this provision, the
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Guarantor would be exonerated either wholly or partly (other than
a release executed and delivered as a deed by the Landlord) but so
that this sub-clause 5.7 shall not provide the Landlord with a
greater claim than it would have enjoyed in such circumstances if
the Guarantor had been the Tenant.
6. DISCLAIMER OR FORFEITURE OF LEASE
The Guarantor further covenants with the Landlord that:-
6.1 if the Crown or a liquidator or trustee in bankruptcy or analogous
person shall disclaim or surrender this Lease or take any
analogous action; or
6.2 if this Lease shall be forfeited; or
6.3 if the Tenant for the time being shall cease to exist
the Guarantor shall, if the Landlord by notice in writing given to the
Guarantor within six (6) months after such disclaimer or other event so
requires, accept from, and execute and deliver to, the Landlord a
counterpart of a new lease of the Premises for a term commencing on the
date of the disclaimer or other event and continuing for the residue then
remaining unexpired of the Term, such new lease to be at the cost of the
Guarantor and to be at the same Rents and subject to the same covenants
and provisions as are contained in this Lease.
7. GUARANTOR TO PAY SUM EQUAL TO RENTS
If the Landlord shall not require the Guarantor to take a new lease
pursuant to paragraph 8, the Guarantor shall nevertheless upon demand pay
to the Landlord a sum equal to the Rents and other sums that would have
been payable under this Lease but for the disclaimer or other event in
respect of the period from and including the date of such disclaimer or
other event until the expiration of six (6) months from such date or
until the Landlord shall have granted a lease of the Premises to a third
party (whichever shall occur first).
8. GUARANTOR TO JOIN IN AUTHORISED GUARANTEE AGREEMENT
The Guarantor covenants with the Landlord, and as a separate covenant
with the Tenant, that the Guarantor will join in, and execute and deliver
to the Landlord, any Deed which the Tenant is required to execute and
deliver to the Landlord pursuant to clause 19.4, so as to give the
covenants on the part of the Guarantor therein contained.
9. The Guarantor may not assign its rights nor delegate its obligations
under this Guarantee, in whole or in part, without the prior written
consent of the Landlord, and any purported assignment or delegation
absent such consent is void, except for an assignment and
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delegation of all of the Guarantor's rights and obligations hereunder in
whatever form the Guarantor determines may be appropriate to a
partnership, corporation, trust or other organisation in whatever form
(the "Successor") that succeeds to all or substantially all of the
Guarantor's assets and business and that assumes such obligations by
contract, operation of law or otherwise. Upon any such delegation and
assumption of obligations, and subject to the Landlord having received in
a form reasonably satisfactory to the Landlord, a deed executed by the
Successor (accompanied by a legal opinion from a reputable firm of
lawyers confirming due execution) confirming to the Landlord that the
Successor assumes all obligations of the Guarantor under the Agreement
for Lease, whether by operation of law or by virtue of such deed, the
Guarantor shall be relieved of and fully discharged from all obligations
hereunder, whether such obligations arose before or after such delegation
and assumption.
__________
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SCHEDULE 5
AUTHORISED GUARANTEE AGREEMENT TO BE GIVEN BY
TENANT/UNDERTENANT PURSUANT TO CLAUSES 19.4 AND 20.12.2
THIS DEED is made the day of 19
BETWEEN:-
(1) [ ] whose registered office is at
[ ] (registered number: ) (the "TENANT")
[and]
(2) [ ] whose registered office is at
[ ] (registered number: ) (the "LANDLORD")
[and
(3) [ ] whose registered office is at [ ]
(registered number: ) (the "GUARANTOR")]
WHEREAS:
(A) This Agreement is made pursuant to the lease/underlease briefly described
in Schedule 1 (the "LEASE"/"UNDERLEASE") which expression shall include
(where the context so admits) all deeds and documents supplemental to the
said lease/underlease (whether expressed to be so or not) relating to the
Premises briefly described in Schedule 2 (the "PREMISES").
(B) The Tenant/Undertenant holds the Premises under the Lease/Underlease and
wishes to assign the Lease/Underlease to the prospective assignee briefly
described in Schedule 3 (the "ASSIGNEE"), and pursuant to the
Lease/Underlease the consent of the Landlord/of the Landlord and of the
Tenant is required to such assignment (the "ASSIGNMENT") and such consent
is/consents are given subject to a condition that the Tenant/Undertenant
is to enter into a Deed in the form of this Deed [and pursuant to
[paragraph [___] of Schedule [_____]/Clause [ ] to/of the Lease/Licence
to Assign/Licence to Underlet made the ___ day of _______ 199_ between
(1) [the Landlord] (2) [the Tenant] and (3) the Guarantor the Guarantor
has agreed to enter into this Deed].
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NOW THIS DEED WITNESSES as follows:-
1. AUTHORISED GUARANTEE
Pursuant to the said condition the Tenant/Undertenant covenants with the
Landlord,/with the Landlord, and separately with the Tenant, as a primary
obligation [in each case], that the Assignee or the Tenant/Undertenant
shall, at all times during the period (the "GUARANTEE PERIOD") from the
completion of the Assignment until the Assignee shall have ceased to be
bound by the TENANT COVENANTS (which in this Deed shall have the meaning
attributed thereto by section 28(1) of the Landlord and Tenant
(Covenants) Act 1995 (the "1995 ACT")) contained in the Lease/Underlease
(including the payment of the rents and all other sums payable under the
Lease/Underlease in the manner and at the times specified in the
Lease/Underlease), duly perform and observe the tenant covenants.
2. TENANT'S/UNDERTENANT'S LIABILITY
2.1 The Tenant/Undertenant agrees that the Landlord [and the Tenant], in the
enforcement of its [their respective] rights under this Deed, may proceed
against the Tenant/Undertenant as if the Tenant/Undertenant were the sole
or principal debtor in respect of the tenant covenant in question.
2.2 For the avoidance of doubt, notwithstanding the termination of the
Guarantee Period the Tenant/Undertenant shall remain liable under this
Deed in respect of any liabilities which may have accrued prior to such
termination.
2.3 For the avoidance of doubt the Tenant/Undertenant shall be liable under
this Deed for any costs and expenses incurred by the Landlord in
enforcing the Tenant's/Undertenant's obligations hereunder.
3. DISCLAIMER OF LEASE
[3.1] The Tenant/Undertenant further covenants with the Landlord [and
separately with the Tenant], that if the Crown or a liquidator or trustee
in bankruptcy shall disclaim the Lease/Underlease during the Guarantee
Period the Tenant/Undertenant shall, if the Landlord/Tenant by notice in
writing given to the Tenant/Undertenant within six (6) months after such
disclaimer so requires, accept from, and execute and deliver to, the
Landlord/Tenant a counterpart of a new lease/underlease of the Premises
for a term commencing on the date of the disclaimer and continuing for
the residue then remaining unexpired of the term of the Lease/Underlease,
such new lease/underlease to be at the same rents and subject to the same
covenants and provisions as are contained in the Lease/Underlease.
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4. SUPPLEMENTARY PROVISIONS
By way of provision incidental or supplementary to Clauses 1, 2 and 3
hereof:-
4.1 POSTPONEMENT OF CLAIMS BY TENANT
The Tenant/Undertenant further covenants with the Landlord [and
separately with the Tenant] that the Tenant/Undertenant shall:-
4.1.1 not claim in any liquidation, bankruptcy, composition or
arrangement of the Assignee in competition with the Landlord [or
the Tenant] and shall remit to the Landlord [Tenant, or if and to
the extent that the Landlord may be entitled to the same, the
Landlord] the proceeds of all judgments and all distributions it
may receive from any liquidator, trustee in bankruptcy or
supervisor of the Assignee; and
4.1.2 not exercise any right or remedy in respect of any amount paid or
any liability incurred by the Tenant/Undertenant in performing or
discharging its obligations contained in this Deed, or claim any
contribution from any other guarantor.
4.2 POSTPONEMENT OF PARTICIPATION BY TENANT/UNDERTENANT IN SECURITY
The Tenant/Undertenant shall not be entitled to participate in any
security held by the Landlord/Tenant in respect of the Assignee's
obligations to the Landlord/Tenant under the Lease/Underlease or to stand
in the place of the Landlord/Tenant in respect of any such security until
all the obligations of the Tenant/Undertenant or the Assignee to the
Landlord/Tenant under the Lease/Underlease have been performed or
discharged.
4.3 NO RELEASE OF TENANT/UNDERTENANT
None of the following, or any combination of them, shall release,
determine, discharge or in any way lessen or affect the liability of the
Tenant/Undertenant as principal obligor under this Deed or otherwise
prejudice or affect the right of the [Tenant or of the Landlord] Landlord
to recover from the Tenant/Undertenant to the full extent of this
guarantee:-
4.3.1 any neglect, delay or forbearance of the [Tenant or the] Landlord
in endeavouring to obtain payment of any rents or other amounts
required to be paid by the Assignee or in enforcing the
performance or observance of any of the obligations of the
Assignee under the Lease/Underlease;
4.3.2 any refusal by the Landlord [Tenant or (where applicable) the
Landlord] to accept rent tendered by or on behalf of the Assignee
at a time when the Landlord [Tenant or (as the case may be) the
Landlord] was entitled (or would after the service of
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a notice under Section 146 of the Law of Property Act 1925 have
been entitled) to re-enter the Premises;
4.3.3 any extension of time given by the Landlord [Tenant or the
Landlord] to the Assignee;
4.3.4 any reviews of the rent payable under the Lease/Underlease and
(subject to Section 18 of the 1995 Act) any variation of the terms
of the Lease/Underlease or the transfer of the Landlord's
[Landlord's or the Tenant's] reversion;
4.3.5 any change in the constitution, structure or powers of the
Tenant/Undertenant, the Tenant, the Assignee or the Landlord or
the liquidation, administration or bankruptcy (as the case may be)
of either the Tenant/the Undertenant, the Tenant or the Assignee;
4.3.6 any legal limitation, or any immunity, disability or incapacity of
the Assignee (whether or not known to the Landlord [Tenant or the
Landlord]) or the fact that any dealings with the Landlord [Tenant
or the Landlord] by the Assignee may be outside, or in excess of,
the powers of the Assignee;
4.3.7 any other deed, act, omission, failure, matter or thing whatsoever
as a result of which, but for this provision, the
Tenant/Undertenant would be exonerated either wholly or partly
(other than a release executed and delivered as a deed by the
Landlord/Tenant (or, where applicable, the Landlord) or a release
effected by virtue of the 1995 Act).
4.4 COSTS OF NEW LEASE
The Landlord's/Tenant's reasonable costs in connection with any new
lease/underlease granted pursuant to Clause 3 of this Deed shall be borne
by the Tenant/Undertenant and paid to the Landlord/Tenant (together with
Value Added Tax thereon) upon completion of such new lease/underlease.
[5. GUARANTEE
[Note: See the Guarantor's covenants in the Lease (or Licence to Assign)
as to the Guarantor's obligation to enter into the Authorised Guarantee
Agreement.]
5.1 COVENANT AND INDEMNITY BY GUARANTOR
The Guarantor:-
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5.1.1 covenants with the Landlord, [and separately with the Tenant] as a
primary obligation, that the Tenant/Undertenant or the Guarantor
shall, so long as the Tenant/Undertenant shall be liable for
performance and observance of the same, duly perform and observe
all the covenants on the part of the Tenant/Undertenant contained
in this Deed;
5.1.2 (but not so as to provide the Landlord with a greater claim than
it would have enjoyed in such circumstances if the Guarantor had
been the Tenant) indemnifies, as a primary obligation, the
Landlord [and separately with the Tenant] against all claims,
demands, losses, damages, liability, costs, fees and expenses
whatsoever sustained by the Landlord [or the Tenant] by reason of
or arising in any way directly or indirectly out of any default by
the Tenant/Undertenant in the performance and observance of any of
such obligations (including but without limitation any costs and
expenses incurred by the Landlord [and/or the Tenant] in enforcing
the Tenant's/Undertenant's and/or the Guarantor's obligations
hereunder).
5.2 WAIVER BY GUARANTOR
The Guarantor waives any right to require the Landlord [or the Tenant] to
proceed against the Tenant/Undertenant or to pursue any other remedy
whatsoever which may be available to the Landlord [or the Tenant] before
proceeding against the Guarantor.
5.3 POSTPONEMENT OF CLAIMS BY GUARANTOR AGAINST TENANT/UNDERTENANT
The Guarantor further covenants with the Landlord [and separately with
the Tenant] that the Guarantor shall:-
5.3.1 not claim in any liquidation, bankruptcy, composition or
arrangement of the Tenant/Undertenant in competition with the
Landlord [and the Tenant] and shall remit to the Landlord/Tenant
the proceeds of all judgments and all distributions it may receive
from any liquidator, trustee in bankruptcy or supervisor of the
Tenant/Undertenant;
5.3.2 not exercise any right or remedy in respect of any amount paid or
any liability incurred by the Guarantor in performing or
discharging its obligations contained in this Deed, or claim any
contribution from any other guarantor.
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5.4 POSTPONEMENT OF PARTICIPATION BY GUARANTOR IN SECURITY
The Guarantor shall not be entitled to participate in any security held
by the Landlord/Undertenant in respect of the Tenant's obligations to the
Landlord under this Deed/Assignee's obligations to the Tenant under the
Underlease or to stand in the place of the Landlord/Undertenant in
respect of any such security until all the obligations of the
Tenant/Undertenant or the Guarantor to the Landlord under this Deed have
been performed or discharged.
5.5 NO RELEASE OF GUARANTOR
None of the following, or any combination of them, shall release,
determine, discharge or in any way lessen or affect the liability of the
Guarantor as principal obligor under this Deed or otherwise prejudice or
affect the right of the Landlord/Tenant or of the Landlord to recover
from the Guarantor to the full extent of this guarantee:-
5.5.1 any neglect, delay or forbearance of the Landlord/Tenant or the
Landlord in endeavouring to obtain payment of the Rents or the
amounts required to be paid by the Tenant/Assignee or the
Undertenant or in enforcing the performance or observance of any
of the obligations of the Tenant/Undertenant under this Deed;
5.5.2 any refusal by the Landlord/Tenant or (where applicable) the
Landlord to accept rent tendered by or on behalf of the
Tenant/Assignee or the Undertenant at a time when the
Landlord/Tenant or (as the case may be) the Landlord was entitled
(or would after the service of a notice under Section 146 of the
Law of Property Act 1925 have been entitled) to re-enter the
Premises;
5.5.3 any extension of time given by the Landlord to the Tenant/by the
Tenant or the Landlord to the Assignee or the Undertenant;
5.5.4 any reviews of the rent payable under the Lease/Underlease and
(subject to Section 18 of the 1995 Act) any variation of the terms
of this Deed or of the Lease/Underlease or the transfer of the
Landlord's reversion [or the Tenant's reversion];
5.5.5 any change in the constitution, structure or powers of [the
Undertenant,] the Tenant, [the Assignee,] the Guarantor or the
Landlord or the liquidation, administration or bankruptcy (as the
case may be) of either [the Undertenant,] the Tenant[, the
Assignee] or the Guarantor;
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5.5.6 any legal limitation, or any immunity, disability or incapacity of
the Tenant/Undertenant (whether or not known to the Landlord [or
the Tenant]) or the fact that any dealings with the Landlord [or
the Tenant] by the Tenant/Undertenant may be outside, or in excess
of, the powers of the Tenant/Undertenant;
5.5.7 any other deed, act, omission, failure, matter or thing whatsoever
as a result of which, but for this provision, the Guarantor would
be exonerated either wholly or partly (other than a release
executed and delivered as a deed by the Landlord [the Tenant (or,
where applicable, the Landlord)] or a release effected by virtue
of the 1995 Act) but so that this sub-clause 5.5 shall not provide
the Landlord with a greater claim than it would have enjoyed in
such circumstances if the Guarantor had been the Tenant.
5.6 SUCCESSOR GUARANTOR
The Guarantor may not assign its rights nor delegate its obligations
under this Guarantee, in whole or in part, without the prior written
consent of the Landlord, and any purported assignment or delegation
absent such consent is void, except for an assignment and delegation of
all the Guarantor's rights and obligations hereunder in whatever form the
Guarantor determines may be appropriate to a partnership, corporation,
trust or other organisation in whatever form (the "Successor") that
succeeds to all or substantially all of the Guarantor's assets and
business and that assumes such obligations by contract, operation of law
or otherwise. Upon any such delegation and assumption of obligations, and
subject to the Landlord having received in a form reasonably satisfactory
to the Landlord, a deed executed by the Successor (accompanied by a legal
opinion from a reputable firm of lawyers confirming due execution)
confirming to the Landlord that the Successor assumes all obligations of
the Guarantor under this Agreement whether by operation of law or by
virtue of such deed, the Guarantor shall be relieved of and fully
discharged from all obligations hereunder, whether such obligations arose
before or after such delegation and assumption.
6. GUARANTOR TO JOIN IN NEW LEASE
If the Tenant/Undertenant shall be required to take up a new
lease/underlease pursuant to Clause 3 of this Deed, the Guarantor shall
join in, and execute and deliver to the Landlord/Tenant a counterpart of,
such new lease/underlease in order to guarantee the obligations of the
Tenant/Undertenant thereunder in the terms of Schedule [__] to the
Lease/Underlease.]
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IN WITNESS whereof this deed has been executed by the Tenant/Undertenant [and
the Guarantor] and is intended to be and is hereby delivered on the date first
above written.
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SCHEDULE 1
THE LEASE
Date:
Parties:
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SCHEDULE 2
THE PREMISES
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SCHEDULE 3
THE ASSIGNEE
Name:
Registered Office:
Registered Number:
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SCHEDULE 6
DEEDS AND DOCUMENTS CONTAINING MATTERS
TO WHICH THE PREMISES ARE SUBJECT
1. All documents contained and referred to in the Property and Charges
Register of Title Number NGL 729721 as shown on office copies dated 10
March 1998.
2. [o List documents to be entered into pursuant to clauses 24.3, 24.4 and
24.5 of the Agreement for Lease.]
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SCHEDULE 7
ITEMS OF EXPENDITURE AS REFERRED TO IN CLAUSE 31
1. REPAIRS AND MAINTENANCE
1.1 Repairing, maintaining, decorating and (where appropriate) cleaning,
lighting, heating, servicing and (and as often as may be reasonably
necessary in order to do so) to rebuild, reinstate or replace each part
of the Retained Parts; and
1.2 Carpeting, furnishing and equipping the Retained Parts as appropriate,
including providing floral decorations, desks, tables, chairs and other
fixtures and fittings in the main entrance halls and lift lobby areas.
2. PLANT AND MACHINERY
Providing, maintaining, repairing, operating, inspecting, servicing,
cleaning, lighting and (as and when necessary) renewing or replacing any
plant, machinery, apparatus and equipment in the Retained Parts,
including:-
(i) the Conducting Media (insofar as the same do not exclusively serve
and form part of any demised part of the Building)
(ii) any pipes and associated drains or sewers provided by the Landlord
within the Building or the Retained Parts for the use of the
Premises in common with other Lettable Areas; and
(iii) any boiler, chillers, air handling plant and items relating to the
ventilation, heating, air conditioning and hot and cold water
systems, any building management systems, any lift, lift shaft and
lift motor room,
together with in each case any fuel and electricity for them and any
necessary maintenance contracts and insurance in respect of them.
3. SECURITY AND EMERGENCY SYSTEMS
Providing, maintaining, repairing, operating, inspecting, servicing,
cleaning and (as and when necessary) renewing or replacing any security
or emergency systems for the Building, including alarm systems, internal
telephone systems, closed circuit television systems, generators,
emergency lighting, fire detection or prevention systems, sprinkler
systems, any fire escapes for the Building and fire fighting and fire
prevention equipment and appliances (other than those for which a tenant
is responsible) and any traffic barriers, car park and traffic control
and security systems.
- 87 -
<PAGE> 97
4. STAFF AND MANAGEMENT ACCOMMODATION
Providing staff (including a permanent building manager or managers and
such direct or indirect labour as are reasonably appropriate) for the
day-to-day running of the installations and plant in, and the provision
of other services to, the Building and for its general management,
operation and security and all other incidental expenditure, including:-
4.1 insurance, health, pension, welfare, severance and other appropriate
payments, contributions and premiums at reasonable levels;
4.2 providing uniforms, working clothes, tools, appliances, materials and
equipment (including telephones) for the proper performance of the duties
of any such staff;
4.3 providing, maintaining, repairing, decorating and lighting any
accommodation and facilities for staff, including any management areas in
the Building or residential accommodation for staff employed in the
Building, and any rates, gas or electricity charges in respect of it, and
any actual or notional rent for such accommodation.
5. SIGNS ETC.
Providing, maintaining and renewing name boards and signs in the main
entrance halls, lift lobby areas and any other parts of the Building, and
any directional signs and fire regulation notices and any flags, flag
poles, television and radio aerials and satellite dishes (which are not
the sole responsibility of any tenant).
6. REFUSE
Providing and (when necessary) renewing or replacing any paladins,
compactors or other receptacles for refuse for the Building and the cost
of collecting, storing and disposing of refuse.
7. LANDSCAPING
Providing and maintaining floodlighting and any plants, shrubs, trees
areas in the Retained Parts.
8. WINDOWS AND CLADDING
The reasonable and proper cost of cleaning the external cladding and the
exterior and (save where the responsibility of a tenant) the interior or
all windows and window frames in the Retained Parts and of providing and
maintaining cradles runways, carriages and other access systems as
necessary in connection with such cleaning
- 88 -
<PAGE> 98
9. MISCELLANEOUS ITEMS
Leasing or hiring any of the items referred to in this Schedule.
10. INSURANCE
10.1 Works reasonably required to the Building in order to satisfy the
requirements of any insurer of the Building.
10.2 Third party liability and employer's liability and such other insurances
of a type normal for a building of similar size and location to the
Building as the Landlord may, from time to time, reasonably determine.
10.3 Any amount which may be deducted or disallowed by any insurer of the
Building under any reasonable excess provision in the insurance policy on
settlement of any claim by the Landlord.
11. COMMON FACILITIES
Making, laying, repairing, maintaining, rebuilding, decorating, cleaning
and lighting (as the case may require) any roads, ways, forecourts,
passages, pavements, party walls or fences, party structures, Conduits or
other conveniences and easements whatsoever which may belong to, or be
capable of being used or enjoyed by, the Building in common with any
Adjoining Property.
12. OUTGOINGS
All utility charges (including telephone, gas and electricity) (other
than initial connection fees for which the Landlord is to be responsible)
and all existing or future rates (including water rates) taxes, duties,
charges, assessments, impositions and outgoings whatsoever (whether
parliamentary, parochial, local or of any other description and whether
or not of a capital or non-recurring nature or of a wholly novel
character) payable by the Landlord in respect of the Retained Parts or
any part of them.
13. STATUTORY REQUIREMENTS
Carrying out any works to the Building reasonably required to comply with
any statute (other than works for which any tenant or occupier is
responsible).
14. REPRESENTATIONS
Taking any steps which are necessary or in the interests of the tenants
of the Building for complying with, making representations against, or
otherwise contesting liability under, any statute concerning town
planning, public health, highways, streets, drainage and any other
- 89 -
<PAGE> 99
matters relating or alleged to relate to the Building or any part of it
for which any tenant is not directly responsible.
15. MANAGEMENT
15.1 The proper and reasonable fees, costs, expenses and disbursements of the
Surveyor or any other person reasonably and properly employed or retained
by the Landlord for, or in connection with, surveying and accounting
functions, the performance of the services and any other duties in and
about the Building or any part of it, and relating to the general
management, administration, security, maintenance, protection and
cleanliness of the Building.
15.2 The proper and reasonable fees and expenses of the Landlord or a Group
Company of the Landlord in connection with the management of the Building
and any of the functions and duties referred to in paragraph 15.1 that
may be undertaken by the Landlord or that Group Company, such fees and
expenses to include overheads and profits commensurate with current
market practice of property companies providing management services but
to be subject at all times to a maximum of 10% of the Service Charge.
16. GENERALLY
Any other reasonable and proper costs and expenses which the Landlord
reasonably and properly incurs in providing such other services and in
carrying out such other works as are desirable or necessary for the
benefit of the tenants or occupiers of the Building, and in the interest
of good estate management.
17. VALUE ADDED TAX
Value Added Tax in respect of any item of expenditure referred to in this
Schedule to the extent that it is not otherwise recoverable by the
Landlord.
----------
- 90 -
<PAGE> 100
Executed as a Deed by
JC NO.3 (UK) LIMITED
acting by
Director
Secretary
Executed as a Deed by
FLEET STREET SQUARE
MANAGEMENT LIMITED
acting by
Director
Secretary
Executed as a Deed by
GOLDMAN SACHS
INTERNATIONAL
acting by
Director
Secretary
Executed as a Deed by
THE GOLDMAN SACHS GROUP, L.P.
by the GOLDMAN SACHS CORPORATION
by
Executive Vice President
- 91 -
<PAGE> 101
120 FLEET STREET LONDON EC4
LOWER GROUND FLOOR PLAN
[GRAPHIC--FLOOR PLAN]
PLAN 2
<PAGE> 102
120 FLEET STREET LONDON EC4
GROUND FLOOR PLAN
[GRAPHIC--FLOOR PLAN]
PLAN 3
<PAGE> 103
120 FLEET STREET LONDON EC4
UPPER GROUND FLOOR PLAN
[GRAPHIC--FLOOR PLAN]
PLAN 4
<PAGE> 104
120 FLEET STREET LONDON EC4
FIRST FLOOR PLAN
[GRAPHIC--FLOOR PLAN]
PLAN 5
<PAGE> 105
120 FLEET STREET LONDON EC4
SECOND FLOOR PLAN
[GRAPHIC--FLOOR PLAN]
PLAN 6
<PAGE> 106
120 FLEET STREET LONDON EC4
THIRD FLOOR PLAN
[GRAPHIC--FLOOR PLAN]
PLAN 7
<PAGE> 107
120 FLEET STREET LONDON EC4
MEZZANINE LEVEL PLAN
[GRAPHIC--FLOOR PLAN]
PLAN 8
<PAGE> 108
120 FLEET STREET LONDON EC4
FOURTH FLOOR PLAN
[GRAPHIC--FLOOR PLAN]
PLAN 9
<PAGE> 109
120 FLEET STREET LONDON EC4
FIFTH FLOOR PLAN
[GRAPHIC--FLOOR PLAN]
PLAN 10
<PAGE> 110
120 FLEET STREET LONDON EC4
BASEMENT PLAN
[GRAPHIC--FLOOR PLAN]
PLAN 11
<PAGE> 111
120 FLEET STREET, LONDON EC4
CATEGORY 'A' WORKS - SPECIFICATION
PART BASEMENT, LOWER GROUND, GROUND, UPPER GROUND, LEVELS 1-4 AND LEVEL 5 OF THE
DAILY EXPRESS BUILDING
1.0 INTRODUCTION
The following specification represents the minimum standard for the works
to be undertaken by the tenant in finishing the usable office and dealing
floors and represents the Lessee's Category A works.
2.0 FLOOR FINISHES
Raised access flooring will be provided for all of the usable offices
from lower ground floor to level 4 (and level 5 of the Daily Express
building). An allowance will be made in the structure for medium grade
suspended flooring systems throughout the building with depths of
(including the floor tiles):- 200mm on typical office floors (including
lower ground floor); 300mm on the dealing floors at levels 1 & 2, and
250mm in The Daily Express building. Medium grade raised access floors
shall consist of 600mm x 600mm fully accessible panels laid onto floor
jacks.
Proprietary heavy contract antistatic carpet tiles will be supplied and
will consist of 500mm x 500mm modified polymer, bitumen-backed, cut pile
tiles.
Floor boxes to be provided at one per 10 m2 of net lettable office area
incorporating two small power, two small voice and one data outlets with
the tenant wiring the boxes.
All necessary cavity barriers, fire breaks and perimeter closure details
will be provided where required.
3.0 CEILINGS
The suspended ceiling shall comprised of polyester powder coated
perforated pressed metal tiles fixed into a non-visible clip-in
suspension system with sound absorbent mineral wool padding.
The ceiling system will be compatible with a 1.5m x 1.5m grid.
The abutment of the suspended ceiling and external wall will be formed by
a painted perimeter strip of suspended dry lining incorporating an air
diffuser slot.
The ceiling void acts as a return air plenum for the air conditioning
system.
Plenum smoke barriers will be provided where required.
<PAGE> 112
4.0 LIGHTING
Recessed air handling fluorescent luminaires with high frequency ballasts
will be provided. The lighting shall be designed to comply with all
statutory regulations and be suitable for the intensive use of computer
terminals. Emergency lighting will be provided by the use of self
contained battery packs within the office luminaires.
5.0 AIR CONDITIONING
It will be assumed that the air conditioning system to be installed on
the floors as part of the Category A works will comprise:
a) An overhead four-pipe fancoil unit air conditioning system with
ducted overhead outside air supply to the typical offices and
Levels 2 & 3 (the dealing floors).
b) Fancoil terminal units for both the typical offices and The Daily
Express offices will be located at 4.5m centres around the
building perimeter and at no greater than 81m(2) intervals
internally. In the areas to be used for dealing floor purposes on
levels 2 & 3 the fancoil terminal units will be located at 4.5m
centres around the building perimeter and at no greater than
40.5m(2) intervals internally.
c) Fancoil units will comprise low noise centrifugal fan units, coils
and mesh filter. All units will be connected to condensate drains
and fitted with control valves and return air sensors.
d) Dampered and balanced outside air supply ducts to DW142 will
terminate in each 9m by 9m structural bay. Exhaust air will be
drawn through the ceiling plenum to each riser core.
e) Low temperature hot water and chilled water pipework will be black
heavy weight steel to BS1387 with mineral wool insulation and
aluminium foil finish/vapour barrier.
f) Air supply diffusers will be aluminium slot at the perimeter or
louvre face diffusers in central office areas.
6.0 WALL FINISHES
All exposed surfaces of drylining shall receive:
PLASTERBOARD CEILINGS/BULKHEADS
a) One coat of primer sealer
b) Two coats of emulsion
<PAGE> 113
PLASTERBOARD WALLS
a) One coat of primer sealer
b) Two coats of emulsion
TRIM
a) One coat of enamel underbody
b) Two coats of satin eggshell
7.0 SPRINKLER/FIRE PROTECTION
The fit-out of the office areas will comprise sprinkler protection with
flush mounted sprinkler heads to allow for distribution levels of one
sprinkler head per 10m2 for open plan offices.
8.0 STATUTORY SIGNS/TENANTS SIGNS
Internal signs to exit and hose reels shall be installed as necessary to
comply with statutory and local authority requirements.
9.0 PART UPPER GROUND FLOOR (OUTLINED AND HATCHED IN TURQUOISE ON THE LEASE
PLAN)
It will be assumed that the standard of finishes will be as set out in
this schedule except that:
a) The raised floor depth (including tile) will be 100mm.
b) The air conditioning will be provided by a slim line four pipe dry
fan coil ceiling mounted system to fit within a 350mm void.
20 MARCH 1998
<PAGE> 114
DATED 199
----------------------------------------------
(1) Landlord:
[FSP]
(2) Tenant:
[ ]
[(3) Guarantor: ]
----------
LICENCE TO ALTER
relating to
[Basement, Lower Ground, Ground, Upper Ground
and First to Fourth Floors and Part Fifth Floor]
[Part Fifth Floor] [Sixth Floor] [Seventh Floor]
[Eighth Floor] 120 Fleet Street, London EC4
----------
CLIFFORD CHANCE
200 Aldersgate Street
London EClA 4JJ
Telephone: 0171-600 1000
Fax: 0171-600 5555
Telex: 887847 LEGIS G
Ref: AMW/C1536/839/RMRM
<PAGE> 115
LICENCE TO ALTER
PARTICULARS
- --------------------------------------------------------------------------------
DATE : 199
- --------------------------------------------------------------------------------
PARTIES
(1) Landlord : [FSP]
(Company Registration No. )
(2) Tenant : [ ]
(Company Registration No. )
[(3) Guarantor :
(Company Registration No. )]
- --------------------------------------------------------------------------------
LEASE
Date :
Parties :
Term :
<PAGE> 116
Demised Premises :
- --------------------------------------------------------------------------------
WORKS : the works proposed to be carried
out to the Demised Premises [and to
the property referred to in Clause
5.10 of this Licence, in each case]
by the Tenant and shown on the
drawings numbered [ ] [and described
in the specification dated ] annexed
to this Licence
- --------------------------------------------------------------------------------
<PAGE> 117
1. DEFINITIONS
In this Licence, unless the context otherwise requires:-
"CDM REGULATIONS" means the Construction (Design and Management)
Regulations 1994;
"DEMISED PREMISES" means the premises demised by the Lease and as briefly
described in the Particulars;
["GUARANTOR" means the party named as Guarantor in the Particulars, and,
in the case of an individual, includes any personal representative of
such individual;]
"LANDLORD" means the party named as Landlord in the Particulars, and
includes any person for the time being entitled to such party's
reversionary interest in the Demised Premises;
"LEASE" means the Lease the details of which are set out in the
Particulars, and includes any instrument supplemental thereto;
"PARTICULARS" means the matters appearing on the preceding page(s) headed
"Particulars";
"PLANNING ACTS" means the Town and Country Planning Act 1990, the
Planning (Listed Buildings and Conservation Areas) Act 1990, the Planning
(Hazardous Substances) Act 1990, the Planning (Consequential Provisions)
Act 1990 and the Planning and Compensation Act 1991, and includes any
other applicable town and country planning legislation;
"TENANT" means the party named as Tenant in the Particulars, and includes
any successor in title or assign of such party and, in the case of an
individual, any personal representative of such individual;
"TERM" means the term of years created by the Lease, and includes the
period of any holding over or any continuation thereof (whether by
statute or common law); and
"WORKS" means the Works referred to in the Particulars, and includes the
reinstatement and restoration of the Demised Premises as mentioned in
this Licence.
<PAGE> 118
2. INTERPRETATION
2.1 The headings used in this Licence do not affect its construction.
2.2 This Licence is supplemental to the Lease.
2.3 In this Licence, unless the context otherwise requires:-
(a) Any covenant by a party comprising more than one person is joint
and several;
(b) Any word importing an individual includes a company and vice
versa; and
(c) Any reference to a statute or statutory instrument (whether
specifically named or not) includes any amendment or re-enactment
thereof for the time being in force, and any instrument, order,
notice, regulation, bye-law, direction, plan or permission for the
time being issued, made or given thereunder or deriving validity
therefrom.
3. TITLE TO DEMISED PREMISES
3.1 The Landlord is entitled to the immediate reversionary interest in the
Demised Premises.
3.2 The Tenant is entitled to the Demised Premises for the residue of the
Term.
4. CONSENT TO WORKS
The Landlord consents to the execution of the Works by the Tenant [,and
further consents to the Tenant:-
(a) entering the other property referred to in Clause 5.10 of this
Licence for the purpose and subject to the conditions therein
mentioned, and
(b) retaining thereon, maintaining, inspecting, repairing and renewing
(so far as renewal does not amount to a further alteration
requiring consent under the Lease) during the Term the part of the
Works referred to in that Clause, subject as mentioned in Clause 7
of this Licence.]
5. TENANT'S COVENANT
The Tenant covenants with the Landlord as follows:-
5.1 Before commencing the Works:-
<PAGE> 119
(a) At the expense of the Tenant, to obtain from the relevant planning
authority under the Planning Acts and any other competent
authority under any other applicable statute, any necessary
permission or consent required for the carrying out of the Works,
and to deliver to the Landlord a copy of such permission or
consent so obtained forthwith on receipt by the Tenant;
(b) To obtain the approval in writing of the Landlord of any planning
permission granted in respect of the Works, such approval not to
be unreasonably withheld;
5.2 To give to the Landlord written notice of the commencement of the Works
forthwith on such commencement, and again immediately they have been
completed;
5.3 To pay any increased or additional premium payable to the insurers of the
Demised Premises in consequence of the Works or the execution thereof,
and to comply with any requirement of such insurers regarding the Works;
5.4 To comply with the terms and conditions laid down by the Institution of
Electrical Engineers and with the regulations of the electricity supply
authority, in each case insofar as any of the Works relate to any
alteration or addition to any electrical installation;
5.5 To procure that the Works are carried out only by reputable contractors
and in accordance with current codes of building practice;
5.6 To carry out and complete the Works:-
(a) in a good and workmanlike manner,
(b) with good quality materials of their several kinds,
(c) in compliance with any permission, consent, licence or approval
required to be obtained for the Works,
(d) in accordance with the Planning Acts and any other applicable
statute,
(e) in accordance with the said drawings and specification, and
(f) to the reasonable satisfaction of the Landlord;
<PAGE> 120
5.7 To afford to the Landlord and the Landlord's Surveyors any necessary
facility for inspecting the progress of the Works and the quality of the
materials and workmanship used therein Provided That the Tenant may
require that any such inspection takes place outside normal business
hours;
5.8 To take any necessary step to prevent the execution of the Works from
causing any actionable nuisance or disturbance to the Landlord or any
owner, tenant or occupier of any other property;
5.9 To make good or procure the making good promptly of any damage to the
Demised Premises or any other property and which arises out of or
incidental to the Works, in each case to the reasonable satisfaction of
the Landlord;
[5.10 Where the execution of any part of the Works involves any necessary entry
on, or any alteration of or addition to, any other property in the
ownership or under the control of the Landlord:-
(a) not to effect such entry without first giving to the Landlord not
less than [one week's] prior notice that such entry is required,
(b) not to carry out that part of the Works except during such period
or periods and at such time or times as are first agreed by the
Landlord (such agreement not to be unreasonably withheld, regard
being had, in particular, to the safety, comfort and convenience
of any occupier of the property thereby affected), and]
(c) in any event to carry out that part of the Works as quickly and
quietly as reasonably possible, and under the reasonable direction
and supervision of the Landlord or the Landlord's Surveyors;]
5.11 To make good any breach of any covenant contained in this Licence and of
which written notice is given by the Landlord to the Tenant, in each case
within one month commencing on the giving of such notice, or sooner if
requisite, and in default to permit the Landlord and any person
authorised by the Landlord to enter the Demised Premises to take such
steps and carry out such works as may be necessary in that regard, and to
pay on demand any cost or expense thereby incurred by the Landlord;
5.12 As a continuing obligation, to indemnify the Landlord against any action,
claim, demand, loss, damage, liability, cost, fee or expense arising
(directly or indirectly) out of:-
- 95 -
<PAGE> 121
(a) the execution or existence of the Works,
(b) any breach of any covenant contained in this Licence, or
(c) any act or default of the Tenant or any person under the Tenant's
control in relation to the Works.
5.13 To pay any reasonable and proper cost, charge, expense or fee and any
Value Added Tax thereon, of the Landlord and the Landlord's Solicitors
and Surveyors arising out of or incidental to:-
(a) the instructions for, and the preparation and completion of, this
Licence, and
(b) the approval and inspection of the Works.
5.14 (a) To act as and be regarded as the only client for the purposes of
the CDM Regulations in relation to the Works and to make the
necessary declaration (in accordance with paragraph 4(4) of the
CDM Regulations) to the Health and Safety Executive that it so
acts.
(b) To comply with all its obligations as client under the CDM
Regulations.
(c) To provide access to a copy of the Health and Safety Plan and the
Health and Safety File as defined under the CDM Regulations to the
Landlord throughout the duration of the Works and on completion of
the Works to deliver a copy of the Health and Safety Plan and the
Health and Safety File to the Landlord.
[5.15 By the expiration or sooner determination of the Term to reinstate the
other property referred to in Clause 5.10 of this Licence and restore it
to the same state and condition as it was prior to the execution of such
works, such reinstatement and restoration to be carried out:-
(i) at the cost of the Tenant;
(ii) in a good and workmanlike manner;
(iii) with good quality materials of their several kinds; and
(iv) to the reasonable satisfaction of the Landlord.]
<PAGE> 122
6. NO RELEASE OR REPRESENTATION
Nothing contained in this Licence or in any approval of the Works:
(a) releases the Tenant or the Guarantor from any covenant on their
respective parts contained in the Lease, or
(b) constitutes any representation or warranty by the Landlord as to
the suitability of the Works for the Demised Premises [or any
other property thereby affected]
7. APPLICATION OF COVENANTS
The covenants on the part of the Tenant and the Guarantor respectively,
and the provisions and conditions contained in the Lease shall apply to
the Demised Premises in their altered state after completion of the Works
[, and (with any necessary changes) to the part of the Works referred to
in Clause 5.10 of this Licence].
8. CONDITION FOR RE-ENTRY
The condition for re-entry contained in the Lease shall be exercisable on
any breach of any covenant contained in this Licence as well as on the
happening of any of the events specified in that regard in the Lease.
9. RESTRICTION ON CONSENT
The consent granted by this Licence is restricted to the particular works
authorised, and does not authorise any further or other variation of the
terms of the Lease, which otherwise remains in full force and effect.
10. THIRD PARTY RIGHTS
The consent granted by this Licence is subject to the rights of any
owner, tenant or occupier of any other property, and any other interested
person.
11. RENT REVIEW
For the purposes of the provisions for the review of rent contained in
the Lease and of Section 34(2) of the Landlord and Tenant Act 1954, the
Works shall not be deemed to be improvements carried out by the Tenant
pursuant to an obligation to the Landlord, and shall be disregarded for
such purposes.
12. INVALIDITY OF CERTAIN PROVISIONS
If any term of this Licence or the application thereof to any person or
circumstances shall to any extent be invalid or unenforceable the same
shall be severable and the remainder
<PAGE> 123
of this Licence or the application of such term to persons or
circumstances other than those as to which it is held invalid or
unenforceable shall not be affected thereby and each term and provision
of this Licence shall be valid and be enforced to the fullest extent
permitted by law.
13. GUARANTEE OF PERFORMANCE OF TENANT'S OBLIGATIONS
13.1 COVENANTS BY GUARANTOR
The Guarantor unconditionally and irrevocably agrees with and in favour
of the Landlord, as a primary obligation, as follows:-
(a) that the Tenant shall duly perform and observe all the obligations
on the part of the Tenant contained in this Licence in the manner
and at the times specified in it and indemnifies the Landlord
against all claims, demands, losses, damages, liability, costs,
fees and expenses whatsoever sustained by the Landlord by reason
of, or arising in any way directly or indirectly out of, any
default by the Tenant in the performance and observance of any of
its obligations.
(b) None of the following, or any combination of them, shall release,
determine, discharge or in any way lessen or affect the liability
of the Guarantor as principal obligor under this Licence or
otherwise prejudice or affect the right of the Landlord to recover
from the Guarantor to the full extent of this guarantee:-
(i) any neglect, delay or forbearance of the Landlord in
endeavouring to obtain payment of any of the amounts
required to be paid by the Tenant or in enforcing the
performance or observance of any of the obligations of the
Tenant under this Licence;
(ii) any extension of time given by the Landlord to the Tenant;
(iii) any variation of the terms of this Licence or the Lease or
the transfer of the Landlord's interests in this Licence;
(iv) any change in the constitution, structure or powers of
either the Tenant, the Guarantor or the Landlord or the
liquidation, administration or bankruptcy (as the case may
be) of either the Tenant or the Guarantor;
<PAGE> 124
(v) any legal limitation, or any immunity, disability or
incapacity of the Tenant (whether or not known to the
Landlord) or the fact that any dealings with the Landlord
by the Tenant may be outside, or in excess of, the powers
of the Tenant;
(vi) any other act, omission, matter or thing whatsoever
whereby, but for this provision, the Guarantor would be
exonerated wither wholly or partly (other than a release
executed and delivered as a deed by the Landlord).
IN WITNESS of which this Licence has been executed by the Landlord, the Tenant
and the Guarantor, and is intended to be and is hereby delivered on the date
first before written.
<PAGE> 125
120 FLEET STREET, LONDON EC4
TENANT REINSTATEMENT OBLIGATIONS
PART BASEMENT, LOWER GROUND, GROUND, UPPER GROUND, LEVELS 1-4 AND PART LEVEL 5
(I.E. LEVEL 5 IN DAILY EXPRESS BUILDING)
1. GENERAL
o Remove all tenants' riser enclosures which reduce the net internal
floor areas and make good all newly exposed walls and redecorate.
Fill in all holes with decking and concrete on all floors.
o Remove tenant's kitchen risers adjacent to core 3 (if installed)
and make good.
2. BASEMENT
o Fill tenant tunnel with concrete or other method approved by City
Corporation/Crown Estate.
o Remove fire shutter, scissor lift, steps and mass concrete at
entrance to tunnel; fill in scissor lift pit with concrete; seal
off entrance to tunnel and build cavity block wall and internal
wall and doorway to form storage area.
3. LOWER GROUND FLOOR
o Remove block wall enclosure to ventilation void above 4 no
tenant's generators (hatched red on lower ground floor plan),
reinstate floors, line external wall with dry lining.
o Remove tenant's kitchen equipment (if installed) and make good
floors and walls, if applicable.
o Remove tenant's artwork, fittings and fixtures in atrium (if
installed).
o Reinstate kitchen (if applicable) to normal office environment.
4. GROUND FLOOR
o Remove block wall enclosure to ventilation void above 4 no
tenant's generators (hatched red on ground floor plan), construct
floors, line external wall with dry lining.
o Remove external louvres to ventilation void above 4 no tenant's
generators; install new glazed external cladding.
o Remove steps to entrance and reinstate external wall and reinstate
area outlined in blue on ground floor lease plan to provide
Category A office space (as defined in point 7).
<PAGE> 126
5. UPPER GROUND FLOOR
o Remove block wall enclosure to ventilation void above 4 no
tenant's generators (hatched red on upper ground floor plan),
construct floors, line external wall with dry lining.
o Remove external louvres to ventilation void above 4 no tenant's
generators; install new glazed external cladding.
o Remove tenant's external entrance steps, disabled platform lift,
external entrance screen and revolving door' reinstate floor slab,
install new glazed external cladding.
o Reinstate area outlined in blue on upper ground floor lease plan
to provide Category A office space (as defined in point 7).
6. LEVELS 1, 2,3, MEZZANINE, 4 AND LEVEL 5 IN THE DAILY EXPRESS BUILDING
o Remove link bridges, associated fire shutters and ramps; install
new external cladding and reinstate areas hatched red to provide
Category A offices (as defined in point 7).
o Remove tenant's accommodation stair between the dealer floors (if
installed).
o Remove tenant's stair, artwork, fittings and fixtures in atrium
(if installed).
7. ALL OFFICE FLOORS
o The Lessee will reinstate the demised useable offices including
the areas affected by this reinstatement schedule (entrance from
Shoe Lane and 4 no tenant's generators etc) to provide Category
`A' offices as defined in the Category `A' Works specification
subject to the paragraph set out below.
o Only if, but not otherwise, the tenant installs a chilled
beam/perimeter heating system, the Lessor will have the option of
choosing between this system or a four pipe fan coil system (see
Category 'A' specification) provided, that at the time of
reinstatement it is apparent, that fan coil systems are still a
generally accepted form of air conditioning and more speculative
City developments of a similar size are adopting four pipe fan
coil systems than chilled beam/perimeter heating systems.
8. TENANT UPGRADES TO THE BASE SHELL AND CORE BUILDING SPECIFICATION
o The Lessee will not have to reinstate any improvements made to the
base shell and core building specification by the Lessee provided
that such improvements have been agreed in advance with the
Lessor.
10 MARCH 1998
<PAGE> 1
Exhibit 10.7
DATED 2nd April 1998
JC No 3 (UK) LIMITED and
FLEET STREET SQUARE MANAGEMENT LIMITED
- and -
GOLDMAN SACHS PROPERTY MANAGEMENT
- and -
ITOCHU CORPORATION
- and -
THE GOLDMAN SACHS GROUP, L.P.
AGREEMENT
relating to Developer's Fit Out
Works to be carried out
at 120 Fleet Street
London
LINKLATERS & PAINES
One Silk Street
London EC2Y 8HQ
TEL: (+44) 171 456 2000
Ref:AM
<PAGE> 2
THIS AGREEMENT is made the 2nd day of April 1998
BETWEEN:-
(1) JC No 3 (UK) LIMITED and FLEET STREET SQUARE MANAGEMENT LIMITED together
trading as FLEET STREET PARTNERSHIP ("FSP") both of 76 Shoe Lane London
EC4A 3JB
(2) GOLDMAN SACHS PROPERTY MANAGEMENT whose registered office is at
Peterborough Court 133 Fleet Street London EC4A 2BB ("GSPM")
(3) ITOCHU CORPORATION of 5-1, Kita-Aoyama 2-chome, Minato-ku, Tokyo
107.8077, Japan ("Itochu"); and
(4) THE GOLDMAN SACHS GROUP, L.P. of 88 Broad Street New York New York 10004
("GSGLP")
WHEREBY IT IS AGREED AS FOLLOWS:-
WHEREAS:
(A) FSP is to carry out the Developer's Fit Out Works at its own cost and in
accordance with the provisions of the Agreement for Lease and this
Agreement.
(B) The Tenant is to carry out the Tenant's Fit Out Works at its own cost and
subject to and in accordance with the provisions of the Agreement for
Lease and this Agreement.
(C) FSP has agreed that the Tenant is to provide the design for the Fit Out
Works in accordance with the provisions of the Agreement for Lease.
(D) FSP has agreed to employ GSPM as its contractor to carry out the
Developer's Fit Out Works.
1 DEFINITIONS AND INTERPRETATION
1.1 In this Agreement (including the Recitals) unless the context otherwise
requires expressions defined in the Agreement for Lease (as defined
below) shall have the same meanings herein and additionally the following
words or expressions shall have the following meanings:-
1.1.1 AGREEMENT FOR LEASE means the Agreement for Lease of even date
herewith made between FSP (1) Goldman Sachs International (2)
Restamove Limited (3) GSGLP (4) and Itochu (5);
1.1.2 DEVELOPER'S FIT OUT WORKS shall have the meaning ascribed thereto
in Clause 2.2;
1.1.3 TENANT'S FIT OUT WORKS means (i) Fit Out Works which are not
Developer's Fit Out Works and (ii) other Fit Out Works which are
not implemented by FSP (or on its behalf);
1.1.4 MAXIMUM SUM means the amount which equals the aggregate of the
Developer's Commitment and the Developer's Cap;
1.2 In this Agreement unless the context otherwise requires:-
1.2.1 The words importing the masculine gender only shall include the
feminine gender and neuter meaning and vice versa and words
importing the singular number shall include the plural number and
vice versa and all references to a Clause or Schedule shall mean a
Clause or Schedule of this Agreement;
1.2.2 Title and headings to Clauses are for convenience only and shall
not be construed in or affect the interpretation of this
Agreement;
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1.2.3 Words importing persons shall include firms companies and
corporations and vice versa;
1.2.4 Covenants given by FSP where FSP comprises more than one person
shall be construed as made by all such persons jointly and
severally.
2 FIT OUT WORKS
2.1 FSP hereby appoints GSPM and GSPM hereby agrees to implement for FSP the
installation of:
(i) items comprised in the Fit Out Category A Works which are
included in the Developer's Fit Out Works up to a cost not
exceeding to the Developer's Commitment (as reduced from
time to time in accordance with Clause 20.1A of the
Agreement for Lease); and
(ii) items comprised in the Fit Out Category B Works which are
included in the Developer's Fit Out Works up to a cost not
exceeding the Developer's Cap (as reduced from time to time
in accordance with Clause 20.1B of the Agreement for
Lease).
In determining whether the Developer's Commitment or the Developer's Cap
is reached for the purposes of (i) or (ii) above, any part of the cost of
the items referred to in (i) or (ii) which represents VAT shall be
disregarded.
2.2 Developer's Fit Out Works shall include the following items
FIT OUT CATEGORY A WORKS
(i) items costing no more in aggregate than the Developer's
Commitment being
(a) items comprised in the Fit Out Category A Works
which constitute fixtures for the purposes of
Chapter VI, Part II of the Capital Allowances Act
1990;
(b) (if the aggregate cost of all the items referred to
in (i)(a) above is less than the Developer's
Commitment) items (costing no more in aggregate than
the difference) comprised in the Fit Out Category A
Works, not being items which fall within (i)(a)
above, which constitute machinery or plant for
capital allowances purposes; or
(c) (if the aggregate cost of all the items referred to
in (i)(a) and (i)(b) above is less than the
Developer's Commitment) items (costing no more in
aggregate than the difference) comprised in the Fit
Out Category A Works which do not fall within (i)(a)
or (i)(b) above; and
FIT OUT CATEGORY B WORKS
(ii) items costing no more in aggregate than the Developer's Cap
being:
(a) items comprised in the Fit Out Category B Works, not
being furniture or IT infrastructure, which
constitute fixtures for the purposes of Chapter VI,
Part II of the Capital Allowances Act 1990;
(b) (if the aggregate cost of all the items referred to
in (ii)(a) above is less than the Developer's Cap)
items (costing no more in aggregate than the
difference) comprised in the Fit Out Category B
Works, not being items which fall within (ii)(a)
above or furniture or IT infrastructure, which
constitute machinery or plant for capital allowances
purposes; or
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<PAGE> 4
(c) (if the aggregate cost of all the items referred to
in (ii)(a) and (ii)(b) above is less than the
Developer's Cap) items (costing no more in aggregate
than the difference) comprised in the Fit Out
Category B works, not being furniture or IT
infrastructure, which do not fall within (ii)(a) or
(ii)(b) above.
References to the "cost" of any item referred to in this Clause
2.2 do not include a reference to any part of such cost which
represents VAT.
3 DEVELOPER'S FIT OUT WORKS
3.1 ACCESS FOR DEVELOPER'S FIT OUT WORKS
Subject to the other relevant provisions of this Agreement and the
Agreement for Lease FSP shall grant GSPM its contractors agents advisers
workmen and others engaged in the execution of the Developer's Fit Out
Works access to the Building by way of licence only in common with FSP
and others at all times (subject as hereinafter mentioned) with effect
from Shell & Core Substantial Completion Date for the purpose of the
commencement and execution (where all necessary consents and Approvals
have been obtained) of the Developer's Fit Out Works.
3.2 DESIGN OF DEVELOPER'S FIT OUT WORKS
GSPM shall procure that the Developer's Fit Out Works shall be designed
with reasonable skill and care and if carried out shall be carried out
and completed:-
3.2.1 in a good substantial and workmanlike manner in accordance with
the plans, drawings and specifications approved by FSP and
according to good building practice as generally accepted at the
date of the works being carried out according to standards of good
design practice as at the date of design of the works;
3.2.2 using materials goods and equipment as set out in any
specifications relating to the Developer's Fit Out Works and
otherwise using good quality materials (if not so specified);
3.2.3 in accordance with any relevant Approvals, the relevant terms of
this Agreement and all relevant codes of practice and regulations
of relevant professional institutes applying at the time of
carrying out of the Developer's Fit Out Works.
3.2.4 in respect of the Fit Out Category A Works which are included in
the Developer's Fit Out Works to be implemented for FSP on the
floors to be let pursuant to the Basement to Level 4 Lease within
24 months of the Shell & Core Substantial Completion Date and in
respect of the Fit Out Category A Works on the floors to be let
pursuant to the Level 5 Lease, the Level 6 Lease, the Level 7
Lease and the Level 8 Lease within 48 months of such Date; and
3.2.5 so that the Tenant obtains a Fire Certificate for the Demised
Premises.
3.3 COMPLIANCE WITH SITE REGULATIONS
GSPM shall itself, and shall use all reasonable endeavours to procure
that the Fit Out Professional Firms and the Fit Out Building Contractor
and all other parties instructed by or acting for GSPM in relation to the
Developer's Fit Out Works comply with the Site Regulations.
3.4 APPROVAL OF FIT OUT METHOD STATEMENT
As soon as reasonably practicable and in any event not less than one
month prior to the anticipated Shell & Core Substantial Completion Date
and not less than one month prior to commencement of the Developer's Fit
Out Works GSPM after consultation with FSP shall submit to FSP for and
obtain FSP's approval to the detailed method statement (a "METHOD
STATEMENT")
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<PAGE> 5
in writing (which approval shall not be unreasonably withheld or
delayed). The Method Statement shall contain the following information;
3.4.1 details of the Fit Out Professional Firms the Fit Out Building
Contractor and the Fit Out "Principal Contractor" (as defined in
the CDM Regulations) for the design overseeing and carrying out of
each part of the Developer's Fit Out Works;
3.4.2 details of the manner in which GSPM will structure the
responsibilities of the professional team and contractors and
sub-contractors engaged in connection with the carrying out of the
Developer's Fit Out Works;
3.4.3 proposals for liaison co-ordination and co-operation between FSP,
the Deveoper's Senior Managers, the Base Building Contracting
Team, and the Fit Out Professional Firms and the Fit Out Building
Contractor and the Tenant's Senior Managers; and
3.4.4 proposals for the storage on-site of the materials and equipment
intended for incorporation in the Developer's Fit Out Works.
Provided that FSP shall be entitled to refuse entry or access to the
Demised Premises pursuant to the access to be granted under Clause 4.1
until the Method Statement shall have been approved as aforesaid by FSP.
3.5 COMPLIANCE BY GSPM WITH CERTAIN REQUIREMENTS
Upon entering the Demised Premises or any other part of the Development
Site GSPM will itself and will use all reasonable endeavours to procure
that its contractors agents advisers and workmen will at all times:-
3.5.1 comply in all respects with the provisions of the Method Statement
approved pursuant to the provisions of Sub-Clause 3.4 of this
Clause as the same may be added to amended or varied from time to
time as permitted by this Agreement;
3.5.2 keep free and unobstructed all escape routes in relation to the
Development Site and instruct vehicles visiting it in connection
with the Developer's Fit Out Works to go directly to designated
unloading points and leave the Development Site promptly upon
unloading being completed;
3.5.3 where appropriate consult and thereafter comply in all proper
respects with the proper requirements of the Police and all
relevant statutory authorities in respect of the delivery of
materials for use in connection with the Developer's Fit Out
Works;
3.5.4 comply in all respects and for all purposes with the safety and
floor loading requirements comprised in the Base Building
Specification;
3.5.5 (save to the extent approved by reason of FSP's approval
of the Fit Out Works) not to damage or cause or permit its
servants agents or contractors or any other persons to damage the
Base Building Works and not to make or instruct to be made by any
such persons any connections with or to any installation forming
part of the Base Building Works (other than any which form part
of the Developer's Fit Out Works and then in conformity with the
other provisions of the Agreement for Lease and this Agreement
without the prior approval of FSP to such connections (which
approval shall not be unreasonably withheld or delayed); and
3.5.6 comply in all respects with any relevant insurers and legislation
in respect of safety health and welfare and reasonably safety
requirements of FSP.
3.5.7 comply in all respects with all the obligations on the part of the
Tenant contained in the Agreement for Lease relating to the
Developer's Fit Out Works
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<PAGE> 6
3.6 DEVELOPER'S RIGHT TO INSPECT
GSPM shall at all reasonable times permit FSP and its nominated
representative to inspect the progress and manner of execution of the
Developer's Fit Out Works on reasonable prior notice and subject to the
reasonable and proper safety requirements imposed by GSPM and/or the Fit
Out Building Contractor.
3.7 RESPONSIBILITY FOR CLAIMS
If any action claim demand or similar matter (each a "CLAIM") is brought
made or asserted by any person in respect of any noise dust vibration
nuisance disturbance loss of amenity interference with access or egress
connected with the Development Site or the carrying out of works or
otherwise then as between FSP and GSPM;
3.7.1 the party receiving notice of a Claim shall provide the other with
full details and shall take all reasonable steps to defend the
Claim;
3.7.2 neither FSP nor GSPM shall settle or compromise any Claim whilst
both the Base Building Works and the Developer's Fit Out Works are
proceeding without the prior approval of the other (such approval
not to be unreasonably withheld);
3.7.3 if the Base Building Works and the Developer's Fit Out Works are
both proceeding at the time of such Claim FSP and GSPM shall as
between themselves share rateably in any liability according to
their relative contributions to the matter complained of: and
3.7.4 if only the Developer's Fit Out Works are proceeding at the time
of such Claim GSPM shall be solely liable and GSPM shall indemnify
FSP (with the intention of putting FSP in the same after-tax
position it would have been in had the matter giving rise to the
indemnification not arisen) for any claim against it provided that
FSP shall not settle compromise or admit liability for such claim
without GSPM's prior written consent (such consent not to be
unreasonably withheld or delayed.
3.8 EARLY ACCESS
Notwithstanding the provisions of this Clause 3 if by the Target Date FSP
shall not have achieved Shell & Core Substantial Completion but in
respect of computer areas plant areas and other areas reasonably
requested by the Tenant the Base Building Works are complete in
accordance with the normal standards applied by architects except for
items omitted at the request of the Tenant FSP shall (subject to payment
in full by GSPM or the Tenant of FSP's associated costs in accordance
with Clause 40 of the Agreement for Lease) facilitate the early access
for initial fitting out by GSPM in such areas upon such terms as to
access as are set out in clause 16.11 of the Agreement for Lease
4 GSPM INDEMNITY
GSPM shall in respect of the Developer's Fit Out Works and without
prejudice to any other obligation on its part herein contained keep FSP
fully and effectually indemnified (with the intention of putting FSP in
the same after-tax position it would have been in had the matter giving
rise to the indemnification not arisen) against:-
4.1 any breach by GSPM or its servants or agents of the conditions or
requirements imposed or implied by the Approvals and any other permission
or licence granted (on the application of or on behalf of the Tenant) for
or otherwise pursuant to the terms of this Agreement for the execution of
the Developer's Fit Out Works; and
4.2 all claims actions damages demands losses expenses costs and other
liabilities whatsoever suffered by FSP which arise out of the carrying
out of the Developer's Fit Out Works (other than FSP's obligations to
make payments under this Agreement);
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<PAGE> 7
and will make good forthwith to the satisfaction of FSP any damage or
injury caused by GSPM (or by anyone for whom GSPM is responsible) to the
Building or the Demised Premises or to the Base Building Works any other
part of the Development Site or to the property of FSP or any of its
servants agents licencees or workmen.
5 PAYMENTS BY FSP
5.1 GSPM shall not later than six months after the issue of the Certificate
of Completion of Fit Out Works produce to FSP a statement (the
"STATEMENT") showing (inter alia) the VAT-exclusive cost of each item
comprised in the Fit Out Works. The Statement shall contain a reasonably
detailed breakdown of such items.
5.2 The format and level of detail to be provided in the Statement shall be
agreed between GSPM and FSP as if part of the process under which the
Tenant is to obtain the Developer's approval of the Fit Out Works in
accordance with clause 15 of the Agreement for Lease and as if such
clause applied (mutatis mutandis) to this Agreement for such purposes.
5.3 FSP shall no later than [25] Working Days after receipt of the Statement
serve a notice (the "DEVELOPER'S NOTICE") on GSPM confirming all items
included in the Developer's Fit Out Works which have been implemented by
GSPM for FSP.
5.4 Subject to the provisions of Clause 2.1 and 5.5, the consideration
payable by FSP to GSPM for implementing the Developer's Fit Out Works for
FSP is an amount equal to the aggregate VAT-exclusive cost set out in the
Statement against the items referred to in the Developer's Notice.
5.5 For the avoidance of doubt:
(i) the consideration payable by FSP to GSPM for implementing
items comprised in the Fit Out Category A Works which are
included in the Developer's Fit Out Works shall not exceed
the Developer's Commitment (as reduced from time to time in
accordance with Clause 20.1A of the Agreement for Lease);
and
(ii) the consideration payable by FSP to GSPM for implementing
items comprised in the Fit Out Category B Works which are
included in the Developer's Fit Out Works shall not exceed
the Developer's Cap (as reduced from time to time in
accordance with Clause 20.1 B of the Agreement for Lease).
5.6 With effect from the Shell & Core Substantial Completion Date until the
day when all the Developer's Fit Out Works which GSPM has been appointed
to implement for FSP are completed or the aggregate of all sums
(excluding any part thereof which represents VAT) paid under this Clause
5.6 is equal to the Maximum Sum (whichever is the earlier), FSP shall on
the first Working Day of each month pay GSPM on account of the
consideration payable by FSP to GSPM under Clause 5.4 the sum of
(pound)3,000,000 (except that, in the case of the last such payment, the
sum shall be such amount as equals the difference between the aggregate
of all sums (excluding any part thereof which represents VAT) then paid
under this Clause 5.6 and the Maximum Sum).
5.7 GSPM shall within 15 Working Days of service of the Developer's Notice
issue a final invoice (the "INVOICE") to FSP showing (inter alia) the
total VAT-exclusive amount (which for the avoidance of doubt shall not
exceed the Maximum Sum) charged to FSP in respect of all the items
referred to in the Developer's Notice. The Invoice shall show the cost
breakdown of the items covered at the level of detail shown in the
Statement.
5.8 To the extent that the total VAT-exclusive amount shown in the Invoice is
in excess of the aggregate of all sums (excluding any part thereof which
represents VAT) previously paid by FSP to GSPM under Clause 5.6 then (and
subject always to the provisions of Clauses 2.1 and 5.5) FSP shall within
10 Working Days of the date of the Invoice pay to GSPM an amount equal to
the
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excess. To the extent that the aggregate of all sums (excluding any part
thereof which represents VAT) previously paid by FSP to GSPM under Clause
5.6 is in excess of the total VAT-exclusive amount shown in the Invoice,
then GSPM shall on issuing the Invoice repay to FSP (or pay to such
person as FSP shall direct) an amount equal to the excess. For the
avoidance of doubt, no payment shall be made by either party if and to
the extent that the total VAT-exclusive amount shown in the Invoice is
equal to the aggregate of all sums (excluding any part thereof which
represents VAT) previously paid by FSP to GSPM under Clause 5.6.
5.9 Nothing herein shall constitute a statement, warranty or representation
that FSP shall be or become entitled to any capital allowances in respect
of any of its expenditure incurred or made under this Agreement.
6 VAT
6.1 All sums payable under this Agreement by FSP to GSPM or by GSPM to FSP
shall be deemed to be exclusive of any VAT which is chargeable on the
supply made by GSPM or FSP (as the case may be) for which such sums are
(the whole or part of) the consideration for VAT purposes.
6.2 Where, pursuant to the terms of this Agreement, either party (the
"SUPPLIER") makes a supply to the other party (the "RECIPIENT") for VAT
purposes and VAT is chargeable on such supply, the Recipient shall pay to
the Supplier (in addition to, and at the same time as providing, any
other consideration for such supply) a sum equal to the amount of such
VAT, and the Supplier shall on receipt of such payment immediately
provide the Recipient with a valid tax invoice for VAT purposes.
6.3 If either party (the "PAYER") has paid any amount in respect of VAT under
this Clause 6 to the other party (the "PAYEE") on the basis that:
(i) the transaction in respect of which such amount was paid
gave rise to a supply made by the Payee to the Payer for
VAT purposes; and
(ii) such supply was a taxable supply for VAT purposes.
and it subsequently transpires that no supply was made, or that such
supply was not a taxable supply, for VAT purposes, the Payee shall
forthwith repay such amount to the Payer and provide the Payer with an
appropriate credit note for VAT purposes Provided That, if the Payee has
already accounted to H M Customs & Excise for VAT in respect of the said
transaction on the basis that such transaction gave rise to a taxable
supply for VAT purposes, the Payee shall only be obliged to repay such
amount to the Payer if and to the extent that it is able to obtain
repayment or credit from H M Customs & Excise in respect of the VAT it
has accounted to them, and in such a case, the Payee shall use all
reasonable endeavours to obtain such repayment or credit from H M Customs
& Excise, and the Payee shall only be obliged to repay such amount to the
Payer as aforesaid within 3 Working Days following receipt by the Payee
of the said repayment from H M Customs & Excise or 3 Working Days
following the date on which the Payee has fully utilised the said credit
(as the case may be).
6.4 Where either party (the "REIMBURSING PARTY") is required by the terms of
this Agreement to reimburse the other party (the "OTHER PARTY") for the
costs or expenses of any supplies made to the Other Party, the
Reimbursing Party shall also at the same time pay and indemnify the Other
Party against all VAT input tax incurred by the Other Party on such
supplies save to the extent that the Other Party is entitled to repayment
or credit in respect of such VAT input tax from H M Customs & Excise.
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7 OWNERSHIP OF FIT OUT
7.1 For the avoidance of doubt all Developer's Fit Out Works invoiced to or
paid for by FSP shall, upon being attached to or built into the Building,
become and remain the property of FSP and (if appropriate) a part of the
Demised Premises and subject to the Lease.
7.2 The parties hereby acknowledge that no Goldman Sachs Group Company shall
have any liability to, and no such Group Company shall, pay for any
Developer's Fit Out Works which are implemented by FSP (or on its behalf)
and that FSP shall have no liability to, and shall not, pay for any
Tenant's Fit Out Works.
8 CDM REGULATIONS
8.1 GSPM acknowledges that it shall act as and shall be regarded as the only
client for the purposes of the CDM Regulations in relation to the
Developer's Fit Out Works and shall make the necessary declaration (in
accordance with paragraph 4(4) of the CDM Regulations) to the Health and
Safety Executive that it so acts.
8.2 GSPM shall comply with all its obligations as client under the CDM
Regulations.
8.3 GSPM shall provide access to a copy of the Health and Safety Plan and the
Health and Safety File as defined under the CDM Regulations to FSP
throughout the duration of the Developer's Fit Out Works and on
completion of the Developer's Fit Out Works shall deliver a copy of the
Health and Safety File to FSP.
9 GUARANTEE OF PERFORMANCE OF GSPM'S OBLIGATIONS
9.1 COVENANTS BY GSGLP
GSGLP in consideration of FSP entering into this Agreement at the request
of GSGLP unconditionally and irrevocably agrees with and in favour of
FSP, as a primary obligation, as follows:-
9.1.1 that GSPM or GSGLP shall duly perform and observe all the
obligations on the part of GSPM contained in this Agreement in the
manner and at the times specified in it and (but not so as to
provide the Developer with a greater claim than it would have
enjoyed in such circumstances if GSGLP had instead been the
Tenant) indemnifies FSP (with the intention of putting FSP in the
same after-tax position it would have been in had the matter
giving rise to the indemnification not arisen) against all claims,
demands, losses, damages, liability, costs, fees and expenses
whatsoever sustained by FSP by reason of, or arising in any way
directly or indirectly out of, any default by GSPM in the
performance and observance of any of its obligations.
9.1.2 None of the following, or any combination of them, shall release,
determine, discharge or in any way lessen or affect the liability
of GSGLP as principal obligor under this Agreement or otherwise
prejudice or affect the right of FSP to recover from GSGLP to the
full extent of this guarantee:
(a) any neglect, delay or forbearance of FSP in endeavouring to
obtain payment of any of the amounts required to be paid by
GSPM on in enforcing the performance or observance of any
of the obligations of GSPM under this Agreement or the
Agreement for Lease;
(b) any extension of time given by FSP to GSPM;
(c) any variation of the terms of this Agreement or the
Agreement for Lease or the transfer of FSP's interests in
this Agreement;
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(d) any change in the constitution, structure or powers of
either GSPM, GSGLP or FSP or the liquidation,
administration or bankruptcy (as the case may be) of either
GSPM or GSGLP;
(e) any legal limitation, or any immunity, disability or
incapacity of GSPM (whether or not known to FSP) or the
fact that any dealings with FSP by GSPM may be outside, or
in excess of, the powers of GSPM;
(f) any other act, omission, matter or thing whatsoever
whereby, but for this provision GSGLP would be exonerated
either wholly or partly (other than a release executed and
delivered as a deed by FSP).
9.3.3 GSGLP may not assign its rights nor delegate its obligations under
this Guarantee, in whole or in part, without the prior written
consent of FSP, and any purported assignment or delegation absent
such consent is void, except for an assignment and delegation of
all of the GSGLP's rights and obligations hereunder in whatever
form GSGLP determines may be appropriate to a partnership,
corporation, trust or other organisation in whatever form (the
"Successor") that succeeds to all or substantially all of GSGLP's
assets and business and that assumes such obligations by contract,
operation of law or otherwise. Upon any such delegation and
assumption of obligations, and subject to FSP having received in a
form reasonably satisfactory to FSP, a deed executed by the
Successor (accompanied by a legal opinion from a reputable firm of
lawyers confirming due execution) confirming to FSP that the
Successor assumes all obligations of GSGLP under this Agreement,
whether by operation of law or by virtue of such deed, GSGLP shall
be relieved of and fully discharged from all obligations
hereunder, whether such obligations arose before of after such
delegation and assumption.
10 GUARANTEE OF PERFORMANCE OF DEVELOPER'S OBLIGATIONS
10.1 COVENANTS BY ITOCHU
Itochu in consideration of GSPM entering into this Agreement at the
request of ltochu unconditionally and irrevocably agrees with and in
favour of GSPM as a primary obligation, as follows:-
10.1.1 that FSP or Itochu shall duly perform and observe all the
obligations on the part of FSP contained in this Agreement in the
manner and at the times specified in it and (but not so as to
provide GSPM with a greater claim than it would have enjoyed in
such circumstances if Itochu had been FSP) indemnifies GSPM (with
the intention of putting GPSM in the same after-tax position it
would have been in had the matter giving rise to the
indemnification not arisen) against all claims, demands, losses
damages, liability, costs fees and expenses whatsoever sustained
by GSPM by reason of, or arising in any way directly or indirectly
out of, any default by FSP in the performance and observance of
any of its obligations and it is agreed that such obligations of
Itochu shall survive any determination of this Agreement and any
assignment of this Agreement by FSP;
10.1.2 None of the following, or any combination of them, shall release,
determine, discharge or in any way lessen or affect the liability
of Itochu as principal obligor under this Agreement or otherwise
prejudice or affect the right of GSPM to recover from Itochu to
the full extent of this guarantee:-
(a) any neglect delay or forbearance of GSPM in endeavouring
to obtain payment of any of the amounts required to be paid
by FSP or in enforcing the
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9
<PAGE> 11
performance or observance of any of the obligations of FSP
under this Agreement;
(b) any extension of time given by GSPM to FSP;
(c) any variation of the terms of this Agreement or the
Agreement for Lease or the transfer of GSPM interests in
this Agreement;
(d) any change in the constitution, structure or powers of
either GSPM Itochu or FSP or the liquidation,
administration or bankruptcy (as the case may be) or either
FSP or Itochu;
(e) any legal limitation, or any immunity, disability or
incapacity of FSP (whether or not known to GSPM) or the
fact that any dealings with GSPM by FSP may be outside, or
in excess of, the powers of FSP;
(f) any other act, omission, matter or thing whatsoever
whereby, but for this provision, Itochu would be exonerated
either wholly or partly (other than a release executed and
delivered as a deed by GSPM).
11 CONFIDENTIALITY
The provisions of Clause 31 of the Agreement for Lease shall (mutatis
mutandis) apply to the provisions of this Agreement.
12 DISPUTES
The provisions of Clause 32 of the Agreement for Lease shall (mutatis
mutandis) apply to this Agreement.
13 NOTICES INCLUDING REQUESTS FOR PAYMENT/MEANING OF "ADDRESS"
"Address" means the address of the party in question shown on the first
page of this Agreement or such other address as the party in question may
from time to time notify in writing to the other parties to this
Agreement as being its address for service for the purposes of this
Agreement.
13.1 DELIVERY OF NOTICES
Any notice, approval, election or other communication given or made in
accordance with this Agreement shall be in writing and shall be:
13.1.1 sent by registered or recorded delivery post to the relevant party
at such party's Address and, if so sent, shall be deemed to have
been delivered, given or made on the date occurring 72 hours after
the date it was sent
13.3.2 shall be personally delivered to the relevant party at such
party's Address as defined in this Clause and, if so delivered,
shall be deemed to have been delivered, given or made on the date
of delivery.
13.4 ADDRESSES FOR NOTICES
13.4.1 Notices to the Tenant or GSPM shall be marked for the attention of
The Facilities Manager - Goldman Sachs International at 133
Peterborough Court, London EC4A 2BB with a further copy to General
Counsel Legal Department Goldman Sachs International at 133
Peterborough Court, London EC4A 2BB.
13.3.2 Notices to FSP shall be marked for the attention of Managing
Director JC No 3 (UK) Limited at c/o ITOCHU Europe PLC,
International Press Centre Building, 76 Shoe Lane,
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<PAGE> 12
London EC4A 3JB with a further copy to General Counsel, Legal
Department ITOCHU at 5-1, Kita-Aoyama 2-chome, Minato-Ku, Tokyo
107-8077, Japan.
13.3.3 Notices to GSGLP shall be marked for the attention of General
Counsel the Legal Department Goldman Sachs & Co., 85 Broad Street,
New York New York 10004.
14 SUB-CONTRACTOR'S CERTIFICATE
GSPM confirms that it will be applying for a certificate issued under
section S561 of the Income and Corporation Taxes Act 1988 and will notify
FSP if it does not hold such a certificate at the dates on which payments
are to be made.
15 INTEREST ON LATE PAYMENTS
If and so often as any of the sums payable hereunder by either party to
the other shall be unpaid after becoming due and payable the party from
whom such payment shall be due shall pay on demand interest on such
unpaid sums from the due date until payment in cleared funds at the
Prescribed Interest Rate.
16 PROPER LAW AND JURISDICTION
This Agreement shall be governed by and construed in accordance in all
respects with English law and the parties hereto hereby submit to the
non-exclusive jurisdiction of the High Court of Justice of England in
relation to any claim, dispute or difference which may arise hereunder
and in relation to the enforcement of any judgment rendered pursuant to
any such claim dispute or difference and, for the purpose of Order 10
Rule 3 of the Rules of the Supreme Court of England (or any modification
or re-enactment thereof), the parties hereby irrevocable agrees that any
process may be served on it by leaving a copy thereof at its address (as
referred in to Clause [30] of the Agreement for Lease).
17 IMMUNITY FROM SUIT
To the extent that any party is entitled to any right of immunity from
any judicial proceedings, from the granting of any form of relief in any
proceedings, from attachment of its property or assets, or from
execution of judgment, on the ground of sovereignty diplomatic immunity
or otherwise in respect of any matter arising out of or relating to its
obligations under this Agreement, the parties each hereby and will
irrevocably waive such right for the benefit of the other relevant
parties and agree not to invoke such right and consent to the giving of
any such relief or the issue of any such proceeding or proceeding or
process of attachment or execution by the other relevant party.
18 INTEREST
If and so often as any of the sums payable hereunder by either party to
the other shall be unpaid after becoming due and payable the party from
whom such payment shall be due shall pay on demand interest on such
unpaid sums from the due date until payment in cleared funds at 2% above
Base Rate.
19 TERMINATION
This Agreement will automatically determine upon the determination for
whatever reason of the Agreement for Lease but without prejudice to the
rights of any party against another in respect of any antecedent breach.
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11
<PAGE> 13
IN WITNESS whereof this document has been executed as a Deed the day and year
first before written.
Executed as a Deed by
JC NO.3 (UK) LIMITED
acting by:
Director /s/ [signature]
Director /s/ [signature]
Executed as a Deed by
FLEET STREET SQUARE
MANAGEMENT LIMITED
acting by:
Director /s/ [signature]
Director /s/ [signature]
By
Executive Vice President
For and on behalf of ITOCHU CORPORATION
/s/ [signature]
Executed as a Deed by
GOLDMAN SACHS PROPERTY
MANAGEMENT acting by:
Director
Director
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12
<PAGE> 14
THE GOLDMAN SACHS GROUP, LP.
By the GOLDMAN SACHS CORPORATION
By
Executive Vice President
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13
<PAGE> 1
EXHIBIT 10.8
DATED 25TH MARCH 1998
BRITEL FUND TRUSTEES LIMITED
and
GOLDMAN SACHS INTERNATIONAL
and
THE GOLDMAN SACHS GROUP, L.P.
and
ENGLISH PROPERTY CORPORATION plc
and
MEPC plc
AGREEMENT
relating to
One Carter Lane
London EC4
<PAGE> 2
THIS AGREEMENT made the Twenty Fifth day of March 1998
BETWEEN:
(1) BRITEL FUND TRUSTEES LIMITED (Company number 1687513) whose registered
office is at Standon House 21 Mansell Street London E1 8AA (the "LANDLORD");
(2) ENGLISH PROPERTY CORPORATION plc (Company number 640408) whose registered
office is at 12 St James's Square London SW1Y 4LB (the "DEVELOPER");
(3) GOLDMAN SACHS INTERNATIONAL (Company number 2263951) whose registered office
is at Peterborough Court 133 Fleet Street London EC4A 2BB (the "TENANT");
(4) THE GOLDMAN SACHS GROUP, L.P. whose office is at 85 Broad Street New York
New York 10004 (the "GUARANTOR"); and
(5) MEPC plc (Company number 420575) whose registered office is at 12 St
James's Square London SW1Y 4LB (the "DEVELOPER'S GUARANTOR").
WITNESSES as follows:
1 DEFINITIONS
In this Agreement unless the context otherwise requires:
CATEGORY A SPECIFICATION means the specification annexed to this Agreement
at Appendix A;
COMPLETION DATE means the date which is ten working days after the SL
Completion Date;
CONSTRUCTION MANAGER means Mace Limited of 7 Plough Yard London EC4;
COLLATERAL WARRANTIES means deeds of warranty in the form annexed to this
Agreement at Appendix B;
DEFECT means:-
(i) items or matters set out or referred to in the Snagging List;
(ii) omissions defects shrinkage or other faults arising in the Works
within twelve months of Practical Completion which are not in
accordance with the Works Specification or this Agreement;
(iii) any other defect attributable to defective design workmanship testing
investigations construction or supervision of the Works or the
materials used therein having been defective inadequate unsuitable or
incomplete or otherwise not in accordance with the Works Specification
or this Agreement;
(iv) any latent or inherent defect attributable to a breach of Clause
3.2.6;
DEVELOPMENT AGREEMENT means an agreement dated 31 July 1996 and made between
(1) the Landlord (2) the Developer and (3) the Developer's Guarantor in
respect of the Premises;
DEVELOPMENT OBLIGATIONS means the obligations on the part of the Developer
contained or referred to in Clauses 3, 4, 5, 6, and 7 (except 7.9 and 7.11)
of the Development Agreement a copy of which clauses together with the
relevant definitions, Clause 23 and Schedules 1, 2, 3, 6 and 7 are annexed
to this Agreement at Appendix C provided that as a result of modifications
and alterations during the course of the project the Approved Plans and
Specifications referred to in definition 1.1.2 have become the Works
Specifications.
FIT OUT AGREEMENT means an agreement of even date between the parties to
this Agreement and Goldman Sachs Property Management relating to the
carrying out of the Fit Out Works;
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<PAGE> 3
FIT OUT CATEGORY A WORKS means the works of completing the installation
connection and commissioning of services to and the initial fitting out of the
Premises to the extent necessary to render the Premises suitable and ready for
occupation for the use permitted by the Lease and shall comprise the Category A
Specification or such other works in substitution therefor as approved by the
Landlord pursuant to this Agreement or the Fit Out Agreement or the Licence for
Fit Out Works.
FIT OUT CATEGORY B WORKS means the works which are undertaken for the purposes
of fitting out the Premises and which are approved in accordance with the
provisions of this Agreement or the Fit out Agreement or the Licence for Fit Out
Works.
FIT OUT PLANS means the drawings and specifications annexed to this Agreement at
Appendix D setting out in outline the Tenant's proposed fitting out works.
FIT OUT WORKS means collectively the Fit Out Category A Works and the Fit Out
Category B Works or any of them as the context so requires.
LEASE means the lease of the Premises to be granted in accordance with this
Agreement in the form annexed to this Agreement at Appendix E.
LICENCE FOR FIT OUT WORKS means a licence in the form annexed to this Agreement
at Appendix F to be entered into pursuant to Clause 4.4.
MILLENNIUM COMPLIANT means the ability of plant machinery and equipment and
related computer systems and/or related hardware and/or software to provide all
the following functions:
(a) handle date information before, during and after January 1, 2000,
including, but not limited to, accepting date input, providing date
output, handling leap years after 1999 and performing calculations on
dates or portions of dates;
(b) function accurately and without interruption before, during and after
January 1, 2000, without any change in operations associated with the
advent of the year 2000 and the new century;
(c) respond to two-digit year input in a way that resolves the ambiguity as
to century in a disclosed, defined and predetermined manner;
(d) process two-digit year date information in ways that are similarly
unambiguous as to century; and
(e) store and provide output of date information in ways that are similarly
unambiguous as to century.
PRACTICAL COMPLETION DATE means 12 December 1997.
PREMISES means One Carter Lane London EC4 more particularly described in the
Lease as the Premises;
PROFESSIONAL APPOINTMENTS means the appointments of the Professional Team;
PROFESSIONAL TEAM means the professional advisers appointed in connection with
the Works and listed in Part 2 of the Schedule;
PROHIBITED MATERIALS means such materials as were required by the terms of the
Trade Contracts or the appointments of the Professional Team not to be used in
the Works save as mentioned in a letter from Rolfe Judd to the Developer a copy
of which is annexed to this Agreement at Appendix G
2
<PAGE> 4
RENT COMMENCEMENT DATE means the date 15 months after 19 March 1998;
SITE means the land on which the Works have been constructed;
SL COMPLETION DATE means the date of completion of the Superior Lease as
defined in the Lease;
SNAGGING LIST means the list of omissions imperfections defects or other
faults annexed to this Agreement at Appendix H;
TENANT'S FIT OUT WORKS means the works defined as such in the Fit Out
Agreement;
TRADE CONTRACTS means the contracts with the Trade Contractors;
TRADE CONTRACTORS means the trade contractors appointed in connection with
the Works and listed in Part 1 of the Schedule;
VAT means Value Added Tax and any similar tax substituted for it or levied
in addition to it;
WORKS means the works which have been carried out by the Developer to
construct the Premises;
WORKS SPECIFICATION means the specifications and drawings (as listed)
describing the Works all as annexed to this Agreement at Appendix I and
provided by the Developer to the Tenant pursuant to Clause 3.5.
2 INTERPRETATION
In this Agreement unless the context otherwise requires:
2.1 Any reference to a statute includes any modification, extension or
re-enactment of it and any orders, regulations, directions, schemes and
rules made under it;
2.2 Any covenant by the Tenant not to do any act or thing includes an
obligation not to permit or suffer such act or thing to be done;
2.3 The clause headings in this Agreement are for ease of reference only;
2.4 The TENANT means the person so named in the Particulars and includes its
successors in title;
2.5 References to Clauses Schedules or Appendices are to clauses schedules or
appendices of this Agreement.
3 THE WORKS
3.1 DELIVERY OF COLLATERAL WARRANTIES AND CERTIFICATES
3.1.1 The Developer shall within three months of the date of this Agreement
procure the delivery of Collateral Warranties from the Trade
Contractors and Professional Team.
3.1.2 The Developer shall with the delivery of the Collateral Warranties
referred to in Clause 3.1.1 deliver to the Tenant certificates from
each member of the Professional Team addressed to the Tenant
certifying that the Works were constructed without Prohibited
Materials.
3.2 DEVELOPER'S WARRANTIES
The Developer hereby warrants to the Tenant that:-
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<PAGE> 5
3.2.1 the ground and soil conditions of the Site were appropriately
investigated and tested and prior to the Commencement of the Works
the Site was thoroughly prepared and made ready for the carrying out
of the Works;
3.2.2 the Developer is not aware of any ground or soil substance or
condition which might have prejudiced the Works;
3.2.3 the Works were constructed without Prohibited Materials provided
that the Tenant shall rely on any certificate produced by the
Developer pursuant to Clause 3.1.2 in relation to that element of
the Works the subject of such certificate instead of relying on the
Developer's warranty contained in this Clause 3.2.2;
3.2.4 so far as the Developer is aware having made due and careful enquiry
all plant and machinery forming part of the Works is and will remain
Millennium Compliant;
3.2.5 the Developer has performed and will continue to perform its duties
to the Landlord under the Development Obligations;
3.2.6 the Works set out in the Works Specification were designed in
accordance with the standards of design practice required by the
appointments of the Professional Team and the Trade Contracts.
3.3 REMEDYING OF DEFECTS
3.3.1 The Developer shall free of cost to the Tenant as soon as reasonably
practicable (or immediately in case of emergency) and using its best
endeavours to complete the same by 31 March 1998 remedy or cause to
be remedied the items or matters set out or referred to in the
Snagging List.
3.3.2 Without prejudice to the foregoing the Developer shall procure the
preparation of a schedule as provided for under the relevant Trade
Contracts listing any omissions defects shrinkages or other faults
appearing in the Works or any part thereof within 12 months after
the Practical Completion Date and promptly supply a copy thereof to
the Tenant and the Tenant shall procure that within seven days after
the expiry of the relevant defects period it shall provide the
Developer with a list of any omissions defects shrinkages or other
faults which it has observed and the Developer shall free of cost to
the Tenant as soon as reasonably practicable make good or procure to
be made good all such omissions defects shrinkages or other faults.
3.3.3 Without prejudice to any other rights or remedies of the Tenant
under this Agreement if any Defect manifests itself and is notified
in writing by the Tenant to the Developer by the third anniversary
of the Practical Completion Date then the Developer and the Tenant
shall agree a method and programme for carrying out remedial work in
accordance with Clause 3.3 and the Developer shall free of cost to
the Tenant procure the carrying out of such works as may be
necessary to remedy such Defect and any physical damage thereby
caused in accordance with such method and programme.
3.3.4 If any remedial works referred to in this Clause 3.3 are in the
reasonable opinion of the Tenant urgently required having regard to
the programme for the Tenant's Fit Out Works or the Tenant's
occupation of the Premises then the Tenant and the Developer shall
promptly consult as to the most expeditious means of remedying the
same and the Developer shall take such reasonable steps as are
within its control to make good or procure the same to be made good
where appropriate in the case of emergency as urgently as possible
provided that notwithstanding the foregoing the Tenant may, by using
the Trade Contractors and with the consent of the Landlord and the
Developer (which consents shall not be respectively unreasonably
withheld), carry out itself such
4
<PAGE> 6
of the remedial works which the Developer is liable to procure under
this Clause 3.3.4 where entry by the Developer is likely to
interfere materially with the Fit-Out Works subject to the Tenant
indemnifying the Developer and the Landlord in respect of such
carrying out against any losses or claims which may arise in
relation to a breach of the warranties given by any of the Trade
Contractors or against any defences set offs or counterclaims which
the Trade Contractors may have in connection with such remedial
works.
3.3.5 The provisions of this Clause 3.3 shall apply mutatis mutandis in
respect of the Additional Works (as defined in the Development
Obligations) and without limitation the Developer shall carry out
such maintenance or other works as may be required in relation
thereto.
3.4 ACCESS TO REMEDY DEFECTS
In circumstances where the Developer has liability to remedy Defects in
accordance with Clause 3.3:
3.4.1 The Developer shall make prior arrangements with the Tenant as to
the times of access and the Developer and the Tenant shall endeavour
to agree a programme for carrying out any such remedial works.
3.4.2 The Tenant shall be entitled to request such works to be carried out
outside usual business hours and (subject to the Tenant indemnifying
the Developer in respect of any reasonable and proper additional
cost in respect of such request) the Developer shall comply with
such request.
3.4.3 The Developer shall manage and instruct each person so entering to:
(i) cause the minimum amount of interference and disruption as is
reasonably possible to the carrying out of the Fit Out Works
or any other works by the Tenant in the Premises and to the
Tenant's business;
(ii) comply with any reasonable directions and security precautions
for the Premises so long as these shall not prevent the
carrying out of the relevant works; and
(iii) be accompanied if the Tenant so requires by a representative
of the Tenant;
3.4.4 The Developer shall procure that each person so entering shall make
good as soon as reasonably practicable to the reasonable
satisfaction of the Tenant any loss damage of injury thereby caused
to the Premises the Fit Out Works or the property of the Tenant or
any other lawful occupiers or visitors in the Premises.
3.5 HANDOVER
The Developer shall as soon as reasonably practicable following the date
hereof at its own cost supply the Tenant with the following:
3.5.1 one complete reproducible set of the final as-built scale drawings
of the Works and one set of files on computer disc (where
available);
3.5.2 full and complete sets of all manuals maintenance documents product
guarantees and other information relating to all mechanical and
electrical equipment comprised within the Premises and the Works;
and
3.5.3 a full and complete copy of the health and safety file for the Works
prepared in accordance with the CDM Regulations.
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<PAGE> 7
3.6 COPYRIGHT
In so far as the copyright to any drawings or other intellectual property
relevant to the Works is owned by the Developer the Developer hereby
irrevocably grants to the Tenant a non-exclusive licence to use and
reproduce the same.
3.7 VACANT POSSESSION
The Developer will ensure that:
3.7.1 all furniture and carpets from the fourth floor marketing suite are
removed from the Premises within 5 days of the date of this
Agreement; and
3.7.2 the existing contractor's site accommodation in the basement and
ground floors of the Premises is left in situ (provided that the
Tenant shall make available one office for the Construction Manager
to use in connection with clearing snagging items)
and that otherwise the Premises shall be handed to the Tenant on the date
of this Agreement with vacant possession.
4 FIT OUT WORKS
4.1 The Tenant has provided the Landlord with the Fit Out Plans and the
Landlord has approved in principle the categories (but not the details) of
those of the Fit Out Works shown in them.
4.2 The Tenant or one of its Group Companies (as defined in the Lease) shall at
its own cost prepare and submit to the Landlord further details of the
proposed Fit Out Works for approval (such approval not to be unreasonably
withheld if and to the extent that such further details shall in all
material respects be consistent with and in conformity with the Fit Out
Plans).
4.3 APPROVAL AND LICENCE
4.3.1 The Tenant shall not commence any part of the Tenant's Fit Out Works
until the details in relation to that part have been approved under
Clause 4.2;
4.3.2 The Tenant shall observe and perform its obligations set out in the
Licence for Fit Out Works pending its completion pursuant to Clause
4.4.
4.4 The Landlord the Tenant and the Guarantor shall enter into a Licence for
Fit Out Works:
4.4.1 within one month after practical completion of the Fit Out Works or
4.4.2 (if later) on the Completion Date or
4.4.3 (if such practical completion shall not have arisen 12 months after
the date of this Agreement) upon written demand by the Landlord
and four sets of as built approved plans and specifications for the Fit Out
Works shall be supplied by the Tenant to the Landlord and annexed thereto.
4.5 If Clause 4.4.3 applies, a further licence in the same form shall be
entered into by the same parties once the outstanding Fit Out Works have
been brought to practical completion.
4.6 AGREEMENT AS TO OPERATION OF LANDLORD AND TENANT ACT 1927
4.6.1 EFFECT OF SERVICE OF 1927 ACT NOTICE
The Tenant hereby agrees with the Landlord that if the Tenant services a
notice pursuant to Section 3 of the Landlord and Tenant Act 1927 ("Section
3 Notice") upon the Landlord in relation to the Fit Out Works or any part
or parts thereof the Tenant shall within 28 days following the service of
the Section 3 Notice or (if later) within 7 days after determination of the
cost (hereinafter
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<PAGE> 8
called "the Cost") of the carrying out of the works and alterations the
subject of the Section 3 Notice pay to the Landlord a sum equal to 105% of
the Cost.
4.6.2 DISPUTES AS TO THE COST
The Landlord and the Tenant shall use all reasonable endeavours to agree
the Cost but in default of agreement between them as to the amount of the
Cost then either party may at any time following the expiration of a period
of 14 days following the service of a Section 3 Notice refer the matter for
settlement to an independent expert appointed at the request of either
party by the President of the Royal Institution of Chartered Surveyors and
the costs of the parties and of such expert shall be in his award.
5 AGREEMENT TO GRANT LEASE
5.1 The Landlord shall grant and the Tenant shall accept the Lease on the
Completion Date but if the Completion Date shall not take place by six
months after the date hereof other than due to the default of the Tenant
the grant shall be made forthwith by the Developer out of its leasehold
interest in the Premises and the provision of Clauses 4, 5 and 6 shall
apply as if the Developer had been named therein as Landlord.
5.2 Completion shall take place at the London Offices of the Landlord's
solicitor and the Landlord (or the Developer as the case may require)
shall deliver the duly executed Lease to the Tenant and the Tenant shall
deliver a duly executed counterpart of the Lease to the Landlord (or the
Developer as aforesaid).
5.3 The Term Commencement Date under the Lease shall be the date of this
Agreement.
5.4 Rent due under the Lease shall be payable on and from the Rent Commencement
Date.
5.5 The Landlord and the Developer shall place their Land Certificates in
respect of the Premises on deposit at H M Land Registry for the purpose of
enabling the Tenant to register a notice of its interest in the Premises
arising under this Agreement.
6 OCCUPATION OF THE PREMISES
6.1 The Landlord shall allow the Tenant to take occupation of the Premises
on the date of this Agreement.
6.2 The Tenant shall pay to the Landlord:
6.2.1 a licence fee on and from Rent Commencement Date equal to the
Principal Rent; and
6.2.2 a licence fee on and from the date of this Agreement equal to the
insurance premiums, which would have been payable by the Tenant if
the Lease had been completed and the term granted by the Lease had
commenced;
6.2.3 sums at the same times and in the same manner as would have been
payable under Clause 6.2 of the Lease if it had been completed and
the term granted by it had commenced.
6.3 Any amount paid to the Landlord under Clause 6.2 shall be deducted by the
Landlord following the grant of the Lease from the rents or insurance
premiums (as the case may be) which would otherwise have been due under the
Lease in respect of the same period.
6.4 The Tenant shall occupy the Premises subject to the provisions contained in
the Lease and Licence for Fit Out Works as if the Lease and Licence for
Fit Out Works had been granted. Each
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<PAGE> 9
party shall comply with the convenants on its part contained in the Lease
and shall be entitled to all remedies by distress, action or otherwise for
recovering rent in arrear and for any breach of the other's obligations as
if the Lease had been granted and the licence fees were rent.
6.5 Until the grant of the Lease the Tenant shall be a licensee only.
7 VAT
7.1 Where pursuant to the terms of this Agreement, any party (the "SUPPLIER")
makes a supply to any other party (the "RECIPIENT") for VAT purposes and
VAT is chargeable on such supply, the Recipient shall pay to the Supplier
(in addition to any other consideration for such supply) a sum equal to the
amount of such VAT, such payment to be made no later than three working
days before the last day (as notified to the Recipient by the Supplier in
writing) on which the Supplier can account to H M Customs & Excise for such
VAT without incurring any interest or penalties, and the Supplier shall
provide the Recipient with a valid tax invoice for VAT purposes.
7.2 Any obligation to reimburse or pay another party's expenditure extends to
irrecoverable VAT on that expenditure and the person liable to pay shall
also reimburse or pay such VAT.
7.3 If either party (the "PAYER") has paid any amount in respect of VAT under
this Clause 7 to the other party (the "PAYEE") on the basis that:
7.3.1 The Transaction in respect of which such amount was paid gave rise
to a supply made by the Payee to the Payer for VAT purposes; and
7.3.2 such supply was a taxable supply for VAT purposes
and it subsequently transpires that no supply was made, or that such supply
was not a taxable supply, for VAT purposes, the Payee shall forthwith repay
such amount to the Payer PROVIDED THAT, if the payee has already accounted
to H M Customs & Excise for VAT in respect of the said transaction on the
basis that such transaction gave rise to a taxable supply for VAT purposes,
the Payee shall only be obliged to repay such amount to the Payer if and to
the extent that it is able to obtain repayment or credit from H M Customs &
Excise in respect of the VAT it has accounted to them, and in such a case,
the Payee shall use all reasonable endeavours to obtain such repayment or
credit from H M Customs & Excise, and the Payee shall only be obliged to
repay such amount to the Payer as aforesaid within three working days
following receipt by the Payee of the said repayment from H M Customs &
Excise or three working days following the date on which the Payee has
fully utilised the said credit (as the case may be).
8 INTEREST ON OVERDUE SUMS
If the person entitled so to do does not receive any sum due to it by the
due date the person liable to pay it shall pay on demand interest on such
sum at 4 per cent above the current base rate of Barclays Bank Plc from the
due date until payment (both before and after any judgment).
9 NOTICES
Section 196 of the Law of Property Act 1925 shall apply to any notice which
may be served under this Agreement as if the final words of Section 196(4)
"and that service........ be delivered" were deleted and replaced by "and
that service shall be deemed to be made on the third Working Day after
posting".
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10 ENTIRE AGREEMENT
10.1 The Tenant acknowledges that it has not relied on any representation other
than any given by the Landlord's Solicitors or the Developer's Solicitors
in any written reply to any enquiry made by the Tenant's or the
Developer's solicitors before the date of this Agreement.
10.2 The parties acknowledge that:-
10.2.1 this Agreement;
10.2.2 the Fit Out Agreement; and
10.2.3 any plan or other documents referred to in this Agreement and/or
annexed to it
contain all the terms of the contract agreed between the parties and
between some of the parties and Goldman Sachs Property Management
11 DEVELOPER'S GUARANTEE
11.1 The Developer's Guarantor covenants with the Tenant as principal debtor
that:
11.1.1 The Developer will pay the sums due from it under and perform its
obligations contained in this Agreement.
11.2 The liability of the Developer's Guarantor shall not be affected by:
11.2.1 Any time given to the Developer or any failure by the Tenant to
enforce compliance with the Developer's covenants and obligations
11.2.2 Any variation of the terms of this Agreement
11.2.3 Any change in the constitution structure or powers of the
Developer's Guarantor or the Developer or the administration
liquidation or bankruptcy of the Developer or the Developer's
Guarantor
11.2.4 Any act which is beyond the powers of the Developer
11.2.5 The transfer of the reversion expectant on the term to be granted
by the Lease
11.2.6 Any other act or thing by which (but for this provision) the
Developer's Guarantor would have been released
12 THE GUARANTOR
12.1 The Guarantor covenants with the Landlord as principal debtor that:
12.1.1 The Tenant will pay the sums due from it under and perform its
obligations contained in this Agreement
12.1.2 If within 21 days after the Completion Date the Tenant has failed
to take up the lease the Guarantor will either duly execute and
deliver a counterpart and accept a lease in the same form but with
the Guarantor named as tenant therein or procure the execution of
a counterpart by another company in the Goldman Sachs group of
companies as tenant with the Guarantor guaranteeing the Tenant's
obligations contained in the Lease provided that the Landlord
shall first have approved in writing the identity of such
alternative company such approval not to be unreasonably withheld
and the Landlord shall take account of the guarantee in
considering such alternative within 21 days after written demand
and at the cost in all respects of the Guarantor
9
<PAGE> 11
12.2 The liability of the Guarantor shall be no greater than it would have been
if the Guarantor had been the Tenant (except for additional costs arising
from the enforcement of the guarantee) but shall not be affected by:
12.2.1 Any time given to the Tenant or any failure by the Landlord to
enforce compliance with the Tenant's covenants and obligations
12.2.2 Any variation of the terms of this Agreement
12.2.3 Any change in the constitution structure or powers of the
Guarantor the Tenant or the Developer or the administration
liquidation or bankruptcy of the Tenant the Guarantor or the
Developer
12.2.4 Any act which is beyond the powers of the Tenant
12.2.5 The transfer of the reversion expectant on the term to be granted
by the Lease
12.2.6 Any other act or thing by which (but for this provision) the
Guarantor would have been released
12.3 The Guarantor may not assign its rights or delegate its obligations under
this Guarantee in whole or in part (and any purported assignment or
delegation is void) except for an assignment and delegation of all of the
Guarantor's rights and obligations hereunder in whatever form the
Guarantor determines may be appropriate to a partnership, corporation,
trust or other organisation in whatever form (the "SUCCESSOR") that
succeeds to all or substantially all of the Guarantor's assets and
business and that assumes such obligations by contract, operation of law
or otherwise. Upon any such assignment and or assumption of obligations
the Guarantor shall give written notice thereof to the Landlord and
subject to the Landlord having received in a form reasonably satisfactory
to the Landlord, a deed executed by the Successor (accompanied by a legal
opinion in a form reasonably satisfactory to the Landlord addressed to the
Landlord from a reputable firm of lawyers in the relevant jurisdiction
confirming inter alia enforceability and due execution) whereby the
Successor assumes and covenants with the Landlord to perform all
outstanding and future obligations of the Guarantor under this Agreement,
whether such assumption is by operation of law or by virtue of such deed,
the Guarantor shall be relieved of and fully discharged from all
obligations hereunder, whether such obligations arose before or after such
delegation and assumption, but without prejudice to any antecedent breach.
13 LANDLORD'S LIABILITY
13.1 The Landlord shall be under no liability or obligation under or pursuant
to this Agreement as the other parties hereto each admit and acknowledge
save only the express obligations on the part of the Landlord contained in
or resulting from this Agreement.
13.2 The obligations of the Tenant and the Guarantor to the Landlord shall not
be affected by any breach by the Developer.
14 TENANT'S LIABILITY
To the extent that any want of repair arises from a Defect for which the
Developer is responsible to the Tenant under this Agreement the Landlord,
subject to the provisions of this Clause 14 agrees that it and its
successors in title will at the written request of the Tenant, defer
taking action to enforce the Tenant's repairing obligations contained in
the Lease in relation to that want of repair provided that:
14.1 Such deferral shall subsist only for so long as the Tenant is actively
pursuing and enforcing its rights and remedies against the Developer under
this Agreement.
10
<PAGE> 12
14.2 The Landlord shall not be obliged to defer such action or continue any such
deferral in the event that the Superior Landlord (as defined in the Lease)
shall require the Landlord either to take such action or to remedy the want
of repair and the Developer shall (subject always to the provisions of
Clause 15) indemnify the Landlord from and against all liability from
claims by the Superior Landlord and the tenant of the Restaurant in
relation to such want of repair and/or deferral.
14.3 The Landlord shall not be obliged to defer such action or continue such
deferral if the want of repair requires urgent attention or where any
deferral would or would be likely to materially adversely affect the
Premises.
14.4 The Tenant shall keep the Landlord fully informed in writing as to the
progress of its pursuit and enforcement of its rights against the Developer
at regular intervals as required by the Landlord.
14.5 Throughout the period of such deferral the Tenant shall keep the Landlord
fully informed in writing as to any deterioration in the Premises arising
as a result of the defect or such deferral.
14.6 No such deferral nor any time composition release or indulgence afforded to
the Tenant by the Landlord following the commencement of such deferral
shall constitute or be deemed to constitute any waiver or release by the
Landlord or its successors in title of any of its or their rights and
remedies against the Tenant or the Guarantor under the Lease or prejudice
the exercise by the Landlord or its successors of any other right and
remedies available to it under the Lease.
14.7 Immediately upon cessation of such deferral, the Tenant shall remedy the
want of repair in question with all due speed and to the reasonable
satisfaction of the Landlord and such liability shall not be limited
reduced or negated nor shall the Landlord's rights and remedies be
adversely affected by any failure by the Tenant to obtain judgment against
or otherwise recover from the Developer to the full extent of its claim.
14.8 The Landlord notwithstanding that the Tenant may be actively pursuing and
enforcing its rights against the Developer may cease such deferral and take
action to enforce the Tenant's repairing obligations, for the purpose of
preventing the Landlord's claim against the Tenant being barred by
limitation in the last year of any period for claim.
15 LIMIT OF DEVELOPER'S LIABILITY
15.1 The Developer shall be under no liability or obligation to the Tenant or
the Guarantor or any other Tenant pursuant to Clause 12.1.2 or its or their
successors in title under or pursuant to this Agreement or in respect of
the Works or the Premises save only the express obligations on the part of
the Developer contained in or resulting from this Agreement.
15.2 The liability of the Developer to the Tenant under this Agreement or in
respect of the Works or the Premises shall be limited to:
15.2.1 claims notified in writing to the Developer before the third
anniversary of the Practical Completion Date;
15.2.2 the cost of carrying out such works in such reasonable manner and
to such reasonable standards as shall be reasonably required so
that any Defect in the Works shall be remedied.
15.3 Without prejudice to any of the foregoing the Developer shall not be liable
to the Tenant or the Guarantor or any other Tenant pursuant to Clause
12.1.2 or its or their successors in title for any losses of an indirect or
consequential nature arising as a result of breach of the provisions of
this Agreement in addition to the cost of remedying any Defect in the
Works.
11
<PAGE> 13
16 FIT OUT AGREEMENT
16.1 For the avoidance of any doubt the parties to this Agreement and to the Fit
Out Agreement acknowledge that the Developer has no liability under or in
respect of the Fit Out Agreement except for the payment of the Maximum Sum.
16.2 The Tenant shall promptly provide or procure to be provided as soon as
practicable and in any event within 3 months of practical completion of the
Fit Out Works a reasonably detailed statement setting out the items
installed with a view to the Developer claiming the benefit of such capital
allowances for plant and machinery as are generated in respect of the
payment by the Developer of the Maximum Sum pursuant to the Fit Out
Agreement.
16.3 The Guarantor and the Tenant shall procure that no claim shall be made by
them or by Goldman Sachs Property Management or any of the Tenant's Group
Companies (as defined in the Lease) in respect of capital allowances for
plant and machinery forming part of the Developer's Fit Out Works as
defined in the Fit Out Agreement.
17 JURISDICTION AND SERVICE
The provisions of Clause 7.11 of the Lease shall apply mutatis mutandis to
this Agreement.
SIGNED by the parties or their duly authorised representatives the day and
year first before written
12
<PAGE> 14
THE SCHEDULE
TRADE CONTRACTORS AND PROFESSIONAL TEAM
PART 1 - TRADE CONTRACTORS
Coverite Limited - Waterproofing
PC Harrington Contractors Limited - Concrete Structure
Swift Structures Limited - Structural Steelwork
Cooperative Industriale Romagnola - Cladding Supply
S.C.A.R.L.
Sabrecastle - Cladding installation
T W Ide Limited - Entrance Glazing and Canopy
Coverite Limited - Roof Finishes
Irvine Whitlock Limited - Masonry
B R Hodgson Limited - Dry lining
H L Smith Construction Limited - Toilet Fit Out
R Glazzard (Dudley) Limited - Metalwork
Henderson Bostwick Limited - Metal Doors, Roller Shutters
A Davies Limited - Entrance Hall Fit Out
H L Smith Construction Limited - Marketing Suite Fit Out
Facade Hoists Limited - Facade Maintenance Equipment
Andrews Weatherfoil plc - Mechanical Services
Sychronised Systems Limited - Controls/BMS
Abbey Thermal Insulation Limited - Thermal Insulation and Fire Stopping
N G Bailey Limited - Electrical Services
R C Cutting Limited - Lightning protection
McNicholas plc - Hard landscaping
Otis plc - Lifts
Cerberus Limited - Fire detection/alarm
PART 2 - PROFESSIONAL TEAM
Mace Limited - Construction Manager
Rolfe Judd Architecture Limited - Architects
Ove Arup & Partners - Services
Ove Arup & Partners - Structural engineers
Charles Funke Associates - Landscape consultants
13
<PAGE> 15
Appendix A: Category A Specification
Appendix B: Forms of Collateral Warranty
Appendix C: Development Obligations
Appendix D: Fit Out Plans
Appendix E: Lease
Appendix F: License for Fit Out Works
Appendix G: Prohibited Materials Letter
Appendix H: Snagging List
Appendix I: Works Specification
SIGNED by on } /s/ [signature]
behalf of the Landlord ---------------------------
Authorised Signing Officer
SIGNED by [name] on } /s/ [signature]
behalf of the Developer
SIGNED by on }
behalf of the Tenant
SIGNED by on }
behalf of the Guarantor
- -------------------------------------------------------------------------------
14
<PAGE> 16
SIGNED by [name] on } /s/ [signature]
behalf of the Developer's Guarantor
- -------------------------------------------------------------------------------
15
<PAGE> 17
ANNEX A
<PAGE> 18
ONE CARTER LANE
at Petershill, London
CATEGORY A SPECIFICATION
1.1 Internal Finishes
Ceilings
500mm x 500mm perforated metal tile system with concealed grid; CAPL
Ceiling System 120 or equivalent. Plasterboard perimeter margin
incorporating continuous 3 slot diffusers and blind box.
Raised Floor
Fully accessible medium grade raised floor system with nominal depth of
150mm (inclusive of panel) and 600mm by 600mm tiles. Raised floor tiles of
corrosion resistant steel with cementitious infill supported on adjustable
pedestals. Complete with all required barriers or fire breaks.
Walls
Plasterboard column casings, polyester powder coated skirtings and
emulsion paint to all walls.
Carpets
Medium grade carpet tiles to all office areas; Firth Carpets Degas ref
170/T261.
Blinds
Polyester powder coated narrow venetian blinds fixed in front of all
office windows.
1.2 LPHW Installation
Primary Heat Distribution Systems
Distribution pipework from riser to floor distribution serving FCU's flow
and return including all associated fittings, valves, connections,
insulation, etc.
LPHW pipework will follow the established base-build routes, with all
materials and workmanship matching the existing.
1
<PAGE> 19
1.3 CHW Installation
Primary/Secondary Cooling Distribution Systems
Distribution pipework from riser to floor distribution serving FCU's flow
and return including all associated fittings, valves, connections,
insulation, etc.
Chilled water pipework will follow the established base-build routes, with
all materials and workmanship matching the existing.
1.4 Fan Coil Units
Fan Coil Air Conditioning System
FCU's, (1 per 4.5m of perimeter) airside control, including installation
of controls. Intelligent controllers. Condensate drain; 32mm diameter
UPVC.
FCU's shall be of no lesser standard to those installed within the
Marketing Suite, being capable of control via the Building Management
System. Each unit shall be individually controlled to local conditions.
The quantities and locations of the units, designed to suit the floor
arrangement.
1.5 Ductwork Installation
General/Supply Extract Systems
Supply ductwork terminating in stub ducts with automatic volume control
units.
Ductwork 200mm diameter from FCUs via flexible connections to plenum boxes
including all associated fittings etc.
Slot grille diffusers and plenum boxes 1.2m long to perimeter zones.
Square grille diffusers to inner zone.
Smoke/fire barrier dampers.
Extract ductwork connects into the service riser which is utilised as the
return air shaft to the extract fans. These stub ducts collect air from
the ceiling void and a path for the return air to these ducts must be
maintained.
1.6 BMS Controls
DDC controlled BMS installation, comprising Trend equipment and software,
designed and installed by a Trend systems house.
BMS Controls will incorporate a BMS front end operators station,
intelligent
2
<PAGE> 20
unitary controllers to fan coil units and constant air volume terminal
boxes, motorised control centres and a Modem Auto Dialler.
The installation shall be compatible with the microprocessor hardware
operator station, printer, graphics and outstation software within the
Base Building Specification.
Both fan coil units and constant air volume terminal box controllers
incorporate Trend intelligent unitary controllers connected to a Local
Area Network (LAN) and in turn to the BMS network via gateways to enable
full interrogation and adjustment of parameters and set points from the
operators station.
The Intelligent Unitary Controllers for the fan coil units are located
within an enclosure, together with an isolator, contactor, transformer and
fuses within a factory fitted unit fixed to the fan coil unit by the
manufacturer.
1.7 LV Distribution
LV distribution will terminate at the distributions boards for connection
by the tenants for lighting and power via underfloor power track and above
the ceiling for lighting.
1.8 Lighting Installation
General Lighting
Office lighting to achieve 500 lux average illuminance from LG3 Category 2
luminaires, 500mm by 500mm, high frequency regulated ballasts, including
modular wiring system and switching to luminaires, 2No circuits per floor;
lighting installation via marshalling boxes to provide interface with
lighting control system by occupier. Dimming installation to adjust
lighting level; each circuit dimmed separately. Luminaire nett return air
slots.
The lighting to a typical floor shall be divided into four zones, each
zone controlled by a four button master switch plate which sets the levels
achievable from the office light switches. The master switches are linked
into the floor central controller and the transmitter floor controller,
located within the electrical riser cupboard.
1.9 Emergency Lighting
Emergency lighting installation to BS5266 by way of self contained battery
luminaires.
3
<PAGE> 21
1.10 Fire Alarms
Fire alarms shall comply with BS5839 and be linked into a single zone
evacuation house system. The system may be a separate installation or one
using the limited number of spare ways within the house system.
1.11 Base Building Specification Design Parameters
The Base Building Specification design parameters are as follows:
Occupancy: 1 person per 10m2
IT Cooling Load: 25 + 10 W/m2
Fresh air to Office Areas: 1.31 l/s/m2
Air Change Rate to Toilets: 6 per hour
Chiller Capacity: 1500 KW
Outside Design Conditions: Summer 28 degrees C dry bulb,
21 degrees C wet bulb
Winter -5.5 degrees C wet bulb
Office Design Conditions: Summer 22 degrees C +/- 2 degrees C
Winter 20 degrees C +/- 2 degrees C
Noise Criteria: NR35
Overall Cooling Capacity: 35 W/m2
2.0 Lobbies to Staircases
2.1 Suspended ceiling, raised floor and/or screed, paint to walls, skirtings
and carpet or vinyl floor finish.
4
<PAGE> 22
APPENDIX B
<PAGE> 23
APPENDIX B
Warranties:
Consultants:
Architects: Rolfe Jodd Architecture Ltd
Structural Engineer: Ove Arup & Partners
Services Engineer: Ove Arup & Partners
Landscape Consultant: Charles Funke Associates
Construction Manager: Mace Ltd
Trade Contractors:
2160 Waterproofing Coverite Ltd
2380 Concrete Structure P C Harrington Contractors Ltd
2800 Steelwork Swift Structures Ltd
3210 Cladding supply Cooperation Industrial Romagnola s.c.a.r.l.
3210 Cladding install Subsecastle Ltd
3600 Roof finishes Coverite Ltd
3700 Masonry Irvine Whitlock Ltd
3800 Dry lining BR Hodgson Ltd
4200 Toilet fit out H L Smith Construction Ltd
4500 Metalwork Glazzards Ltd
4575 Roller shutters Henderson Bostwick Ltd
4750 Entrance Hall A Davies Ltd
4755 Marketing suite H L Smith Construction Ltd
5500 Facade system Facade Hoists Ltd
3220 Entrance glazing T W Ide Ltd
6300 Mechanical Services Andrew Weatherfoil plc
6700 BMS/Controls Synchronised Systems Ltd
6900 Thermal Insulation Abbey Insulation Ltd
7050 Fire Detection/Alarm Cerberus Ltd
7300 Lightning Protection R C Cutting Ltd
7400 Lifts Otis plc
8100 Hard Landscaping McNicholas plc
All of the above Trade Contractors are obliged to provide a warranty in the
standard form
except
3210 CIR whose warranty recognises their contract as being a "supply contract".
A specimen collateral warranty form is contained in Appendix B, together with
CIR's supply contract.
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1
<PAGE> 24
DEED OF COLLATERAL WARRANTY - CONSULTANT
DATED 1997
1.1 Employer English Property Corporation plc
of
12 St James's Square London SW1Y 4LB
1.2 Consultant Rolfe Judd Architecture Limited
of
27 Blandford Street, London W1
1.3 Third Party Goldman Sachs International
of
Peterborough Court, 133 Fleet Street, London EC4A 2BB
1.4 Consultancy Dated 14 October 1993 as amended by a Supplemental
Appointment Agreement dated 7 June 1996 whereby the Employer
appointed the Consultant as Architects in connection
with the Project
1.5 Property One Carter Lane London EC4
1.6 Project Petershill, London EC4
To be developed as commercial offices with ancillary
retail and car parking
1.7 Relevant Parties Construction Manager Mace Limited
Architects Rolfe Judd Architecture
Limited
Services engineers Ove Arup & Partners
Structural engineers Ove Arup & Partners
Landscape consultants Charles Funke Associates
Hard Landscaping McNicholas plc
Waterproofing Coverite Limited
Concrete Structure PC Harrington Contractors
Limited
Structural Steelwork Swift Structures Limited
Cladding Cooperative Industriale
Romagnola s.c.a.r.l.
Cladding installation Sabrecastle Limited
Entrance Glazing and Canopy T W Ide Limited
Roof Finishes Coverite Limited
Masonry Irvine Whitlock Limited
Drylining B R Hodgson Limited
Toilet Fit Out H L Smith Construction
Limited
Metalwork R Glazzard (Dudley)
Limited
Metal Doors, Roller Shutters Henderson Bostwick Limited
- --------------------------------------------------------------------------------
1
<PAGE> 25
Entrance Hall Fit Out A Davies Limited
Marketing Suite Fit Out H L Smith Construction
Limited
Facade Maintenance Equipment Facade Hoists Limited
Mechanical Services Andrews Weatherfoil plc
Controls/BMS Sychronised Systems
Limited
Thermal Insulation and Fire Abbey Thermal Insulation
Stopping Limited
Electrical Services N G Bailey Limited
Lightning protection R C Cutting & Co Ltd
Fire Detection and Alarms Cerberus Limited
Lifts Otis plc
2
2.1 The Consultant warrants that it has performed and will continue to perform
its duties to the Employer under the Consultancy Appointment provided that
the Consultant shall have no greater liability to the Third Party by
virtue of this Deed than it would have had if the Third Party had been the
Employer under the Consultancy Appointment.
2.2 If any of the Relevant Parties would have been liable to the Third Party
under contractual undertakings similar to this Deed (if such undertakings
had been provided), the amount of the Consultant's liability under this
agreement shall be limited to the amount which the Consultant would have
been ordered to contribute under the Civil Liability (Contribution) Act
1978 had there been judgement for the Third Party against all the Relevant
Parties against whom judgement could have been ordered and those
judgements had been enforced and payment received in satisfaction of them.
2.3 The Third Party shall be entitled to recover from the Consultant only the
actual or anticipated reasonable cost to the Third Party of remedying
physical or design defects to the Project caused by the Consultant's
failure to perform its duties to the Employer under the Consultancy
Appointment (which cost shall, for the avoidance of doubt, be taken to
include professional fees in respect thereof and any liability at law to
any third parties in connection therewith). The Third Party shall not be
entitled to recover other losses howsoever arising from the Consultant.
3 The Third Party has no authority to issue any direction or instruction to
the Consultant in relation to performance of the Consultant's duties under
the Consultancy Appointment.
4 The Third Party shall enjoy the same rights in respect of all drawings,
design, plans, reports, specifications, bills of quantities, photographs
and brochures, calculations and other documents provided by the Consultant
in connection with the Project as are enjoyed by the Employer under the
Consultancy Appointment. The Consultant shall not be responsible for any
use of the materials for any purpose other than that for which they were
originally prepared.
5 Whenever reasonably requested to do so by the Third Party the Consultant
shall produce for inspection documentary evidence that its professional
indemnity insurance is being maintained.
6 The benefit of this Deed may be assigned by the Third Party by way of
absolute legal assignment to a party acquiring the entire interest of the
Third Party without the consent of the Employer or the Consultant being
required and such assignment shall be effective upon written notice
thereof being given to the Employer and to the Consultant provided always
that such a Deed to a party providing
- --------------------------------------------------------------------------------
2
<PAGE> 26
development finance shall only be capable of assignment in favour of a
further party providing development finance and shall take place prior to
Practical Completion. No further assignment of benefit or rights is
permitted.
7 Any notice to be given by the Consultant hereunder shall be deemed to be
duly given if it is delivered by hand at or sent by registered post or
recorded delivery to the Third Party at its registered office and any
notice to be given by the Third Party hereunder shall be deemed to be duly
given if it is addressed to "Managing Director" and delivered by hand at
or sent by registered post or recorded delivery to the above mentioned
address of the Consultant or to the principal business address of the
Consultant for the time being and any such notices sent by registered post
or recorded delivery shall be deemed to have been received forty-eight
hours after being posted. Any notice either by Consultant or Third Party
shall be copied to the Employer at its registered office.
8 Notwithstanding the date hereof the Consultant shall have no liability
hereunder after the expiry of whichever is the sooner of 10 years from the
date of the Certificate of Completion of Making Good Defects or 12 years
from the date of the Certificate of Practical Completion of the relevant
section of the Project.
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3
<PAGE> 27
IN WITNESS whereof this document has been executed as a Deed the day and year
first before written
{ THE COMMON SEAL of
{ ROLFE JUDD ARCHITECTURE
{ LIMITED
{ was hereunto affixed in the presence of:
Director
Secretary
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4
<PAGE> 28
DEED OF COLLATERAL WARRANTY - CONSULTANT
DATED 1997
1.1 Employer English Property Corporation plc
of
12 St James's Square London SW1Y 4LB
1.2 Consultant Charles Funke Associates
of
5 Mill Pool House, Mill Lane, Godalming, Surrey GU7 1EY
1.3 Third Party Goldmans Sachs International
of
Peterborough Court, 133 Fleet Street, London EC4A 2BB
1.4 Consultancy Dated 17 January 1995 whereby the Employer appointed the
Appointment Consultant as Landscape Consultants in connection with
the Project
1.5 Property One Carter Lane London EC4
1.6 Project Petershill, London EC4
To be developed as commercial offices with ancillary
retail and car parking
1.7 Relevant Parties Construction Manager Mace Limited
Architects Rolfe Judd Architecture
Limited
Services engineers Ove Arup & Partners
Structural engineers Ove Arup & Partners
Landscape consultants Charles Funke Associates
Hard Landscaping McNicholas plc
Waterproofing Coverite Limited
Concrete Structure PC Harrington Contractors
Limited
Structural Steelwork Swift Structures Limited
Cladding Cooperative Industriale
Romagnola s.c.a.r.l.
Cladding installation Sabrecastle Limited
Entrance Glazing and Canopy T W Ide Limited
Roof Finishes Coverite Limited
Masonry Irvine Whitlock Limited
Drylining B R Hodgson Limited
Toilet Fit Out H L Smith Construction
Limited
Metalwork R Glazzard (Dudley)
Limited
Metal Doors, Roller Shutters Henderson Bostwick Limited
Entrance Hall Fit Out A Davies Limited
- --------------------------------------------------------------------------------
1
<PAGE> 29
Marketing Suite Fit Out H L Smith Construction
Limited
Facade Maintenance Equipment Facade Hoists Limited
Mechanical Services Andrews Weatherfoil plc
Controls/BMS Sychronised Systems
Limited
Thermal Insulation and Fire Abbey Thermal Insulation
Stopping Limited
Electrical Services N G Bailey Limited
Lightning protection R C Cutting & Co Ltd
Fire Detection and Alarms Cerberus Limited
Lifts Otis plc
2
2.1 The Consultant warrants that it has performed and will continue to perform
its duties to the Employer under the Consultancy Appointment provided that
the Consultant shall have no greater liability to the Third Party by
virtue of this Deed than it would have had if the Third Party had been the
Employer under the Consultancy Appointment.
2.2 If any of the Relevant Parties would have been liable to the Third Party
under contractual undertakings similar to this Deed (if such undertakings
had been provided), the amount of the Consultant's liability under this
agreement shall be limited to the amount which the Consultant would have
been ordered to contribute under the Civil Liability (Contribution) Act
1978 had there been judgement for the Third Party against all the Relevant
Parties against whom judgement could have been ordered and these
judgements had been enforced and payment received in satisfaction of them.
2.3 The Third Party shall be entitled to recover from the Consultant only the
actual or anticipated reasonable cost to the Third Party of remedying
physical or design defects to the Project caused by the Consultant's
failure to perform its duties to the Employer under the Consultancy
Appointment (which cost shall, for the avoidance of doubt, be taken to
include professional fees in respect thereof and any liability at law to
any third parties in connection therewith).
3 The Third Party has no authority to issue any direction or instruction to
the Consultant in relation to performance of the Consultant's duties under
the Consultancy Appointment.
4 The Third Party shall enjoy the same rights in respect of all drawings,
design, plans, reports, specifications, bills of quantities, photographs,
brochures, calculations, CAD materials and other documents provided by the
Consultant in connection with the Project as are enjoyed by the Employer
under the Consultancy Appointment.
5 Whenever reasonably requested to do so by the Third Party the Consultant
shall produce for inspection documentary evidence that its professional
indemnity insurance is being maintained.
6 The benefit of this Deed may be assigned by the Third Party by way of
absolute legal assignment to a party acquiring the entire interest of the
Third Party without the consent of the Employer or the Consultant being
required and such assignment shall be effective upon written notice
thereof being given to the Employer and to the Consultant.
7 Any notice to be given by the Consultant hereunder shall be deemed to be
duly given if it is delivered by hand at or sent by registered post or
recorded delivery to the Third Party at its registered office and any
notice to be given by the Third Party hereunder shall be deemed to be
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2
<PAGE> 30
duly given if it is addressed to "The Senior Party"/"the Managing
Director" and delivered by hand at or sent by registered post or recorded
delivery to the above mentioned address of the Consultant or to the
principal business address of the Consultant for the time being and any
such notices sent by registered post or recorded delivery shall be deemed
to have been received forty-eight hours after being posted. All notices
given under this Deed shall be copies simultaneously to the Employer.
8 If the Consultant is a partnership each partner shall be jointly and
severally liable.
9 Notwithstanding the date of this Deed the Consultant shall have no
liability hereunder in respect of claims notified to the Consultant after
the expiry of 12 years from the date of the Certificate of Practical
Completion of the relevant section of the Project.
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3
<PAGE> 31
IN WITNESS whereof this document has been executed as a Deed the day and year
first before written
{ THE COMMON SEAL of
{ CHARLES FUNKE ASSOCIATES
{ LIMITED
{ was hereunto affixed in the presence of:
Director
Secretary
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4
<PAGE> 32
DEED OF COLLATERAL WARRANTY - CONSULTANT
DATED 1997
1.1 Employer English Property Corporation plc
of
12 St James's Square London SW1Y 4LB
1.2 Consultant Ove Arup & Partners
of
13 Fitzroy Street, London W1P 6BQ
1.3 Third Party Goldman Sachs International
of
Peterborough Court, 133 Fleet Street, London EC4A 2BB
1.4 Consultancy Two deeds, both dated 28 July 1994 (as supplemented by a
Appointments deed dated 7 November 1997 and 20 November 1997) whereby
the Employer appointed the Consultant as Services and
Structural Engineers in connection with the Project
1.5 Property One Carter Lane London EC4
1.6 Project Petershill, London EC4
To be developed as commercial offices with ancillary
retail and car parking
1.7 Relevant Parties Construction Manager Mace Limited
Architects Rolfe Judd Architecture
Limited
Services engineers Ove Arup & Partners
Structural engineers Ove Arup & Partners
Landscape consultants Charles Funke Associates
Hard Landscaping McNicholas plc
Waterproofing Coverite Limited
Concrete Structure PC Harrington Contractors
Limited
Structural Steelwork Swift Structures Limited
Cladding Cooperative Industriale
Romagnola s.c.a.r.l.
Cladding installation Sabrecastle Limited
Entrance Glazing and Canopy T W Ide Limited
Roof Finishes Coverite Limited
Masonry Irvine Whitlock Limited
Drylining B R Hodgson Limited
Toilet Fit Out H L Smith Construction
Limited
Metalwork R Glazzard (Dudley)
Limited
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<PAGE> 33
Metal Doors, Roller Shutters Henderson Bostwick Limited
Entrance Hall Fit Out A Davies Limited
Marketing Suite Fit Out H L Smith Construction
Limited
Facade Maintenance Equipment Facade Hoists Limited
Mechanical Services Andrews Weatherfoil plc
Controls/BMS Sychronised Systems
Limited
Thermal Insulation and Fire Abbey Thermal Insulation
Stopping Limited
Electrical Services N G Bailey Limited
Lightning protection R C Cutting & Co Ltd
Fire Detection and Alarms Cerberus Limited
Lifts Otis plc
2
2.1 The Consultant hereby confirms that in respect of such matters as lie
within the scope of the Consultancy Appointments it has exercised and will
continue to exercise reasonable skill, care and diligence and shall be
liable for the reasonable costs including professional fees in respect
thereof incurred by the Third Party in repairing any defect in the
Property or physical damage to the Property which is caused by any failure
by the Consultant in exercising such skill and care.
PROVIDED THAT
(i) The Consultant shall have no liability for any damages, costs,
losses or expenses other than the reasonable cost of repairs
referred to above; and
(ii) The Consultant's liability for such a breach shall be limited
to the proportion which it would be just and equitable to
require the Consultant to pay having regard to the extent of
the Consultant's responsibility for the loss or damage in
question and on the basis that the other Relevant Parties
shall be deemed to have provided contractual undertakings to
the Third Party in respect of the performance of their
services in connection with the Project and shall be deemed to
have paid to the Third Party such proportion which it would be
just and equitable for them to pay having regard to the extent
of their responsibility for the loss or damage in question;
and
(iii) Notwithstanding any rule of law to the contrary the Third
Party may bring claims against the Consultant at any time up
to 10 years after the date upon which the Development was
practically completed as certified in a Certificate of
Practical Completion under the Building Contract but the
Consultant shall have no liability in any legal proceedings
commenced more than 10 years after the date upon which the
Development was practically completed as certified by a
Certificate of Practical Completion under the Building
Contract; and
(iv) The Consultant shall be entitled to the same rights of set-off
against and deductions from any liability to the Third Party
as it may have against the Developer.
3 The Third Party has no authority to issue any direction or instruction to
the Consultant in relation to performance of the Consultant's duties under
the Consultancy Appointments.
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4 The Third Party shall enjoy the same rights in respect of all drawings,
design, plans, reports, specifications, bills of quantities, photographs
and other similar documents provided by the Consultant in connection with
the Project as are enjoyed by the Employer under the Consultancy
Appointments Provided that the Consultant shall not be responsible for any
use of the materials for any purpose other than that for which they were
originally prepared by the Consultant.
5 Whenever reasonably requested to do so by the Third Party the Consultant
shall produce for inspection documentary evidence that its professional
indemnity insurance is being maintained.
6 The benefit of this Deed may be assigned by the Third Party to its
immediate successor by way of absolute legal assignment without the
consent of the Employer or the Consultant being required and such
assignment shall be effective upon written notice thereof being given to
the Employer and to the Consultant. No further assignment of benefit or
rights is permitted.
7 Any notice to be given by the Consultant hereunder shall be deemed to be
duly given if it is delivered by hand at or sent by registered post or
recorded delivery to the Third Party at its registered office and any
notice to be given by the Third Party hereunder shall be deemed to be duly
given if it is addressed to "The Senior Party"/"the Managing Director" and
delivered by hand at or sent by registered post or recorded delivery to
the above mentioned address of the Consultant or to the principal business
address of the Consultant for the time being and any such notices sent by
registered post or recorded delivery shall be deemed to have been received
forty-eight hours after being posted.
8 If the Consultant is a partnership each person shall be jointly and
severally liable.
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IN WITNESS whereof this document has been executed as a Deed the day and year
first before written
{ THE COMMON SEAL of
{ OVE ARUP & PARTNERS
{ was hereunto affixed in the presence of:
Director
Secretary
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<PAGE> 36
DEED OF COLLATERAL WARRANTY - CONSULTANT
DATED 1997
1.1 Client English Property Corporation plc
of
12 St James's Square London SW1Y 4LB
1.2 Consultant Mace Limited
of
Acre House, 11-15 William Road, London, NW1 3ER
1.3 Third Party Goldman Sachs International
of
Peterborough Court, 133 Fleet Street, London EC4A 2BB
1.4 Consultancy Dated 30 April 1996 whereby the Client appointed the
Appointment Consultant as Construction Manager in connection with
the Project
1.5 Property One Carter Lane London EC4
1.6 Project Petershill, London EC4
To be developed as commercial offices with ancillary
retail and car parking
1.7 Relevant Parties Construction Manager Mace Limited
Architects Rolfe Judd Architecture
Limited
Services engineers Ove Arup & Partners
Structural engineers Ove Arup & Partners
Landscape consultants Charles Funke Associates
Hard Landscaping McNicholas plc
Waterproofing Coverite Limited
Concrete Structure PC Harrington Contractors
Limited
Structural Steelwork Swift Structures Limited
Cladding Cooperative Industriale
Romagnola s.c.a.r.l.
Cladding installation Sabrecastle Limited
Entrance Glazing and Canopy T W Ide Limited
Roof Finishes Coverite Limited
Masonry Irvine Whitlock Limited
Drylining B R Hodgson Limited
Toilet Fit Out H L Smith Construction
Limited
Metalwork R Glazzard (Dudley)
Limited
Metal Doors, Roller Shutters Henderson Bostwick Limited
Entrance Hall Fit Out A Davies Limited
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1
<PAGE> 37
Marketing Suite Fit Out H L Smith Construction
Limited
Facade Maintenance Equipment Facade Hoists Limited
Mechanical Services Andrews Weatherfoil plc
Controls/BMS Sychronised Systems
Limited
Thermal Insulation and Fire Abbey Thermal Insulation
Stopping Limited
Electrical Services N G Bailey Limited
Lightning protection R C Cutting & Co Ltd
Fire Detection and Alarms Cerberus Limited
Lifts Otis plc
2
2.1 The Consultant warrants that it has performed and will continue to perform
its duties to the Client under the Consultancy Appointment provided that
the Consultant shall have no greater liability to the Third Party by
virtue of this Deed than it would have had if the Third Party had been the
Client under the Consultancy Appointment.
2.2 If any of the Relevant Parties would have been liable to the Third Party
under contractual undertakings similar to this Deed (if such undertakings
had been provided), the amount of the Consultant's liability under this
agreement shall be limited to the amount which the Consultant would have
been ordered to contribute under the Civil Liability (Contribution) Act
1978 had there been judgement for the Third Party against all the Relevant
Parties against whom judgement could have been ordered and these
judgements had been enforced and payment received in satisfaction of them.
2.3 The Third Party shall be entitled to recover from the Consultant only the
actual or anticipated reasonable cost to the Third Party of remedying
physical or design defects to the Project caused by the Consultant's
failure to perform its duties to the Client under the Consultancy
Appointment (which cost shall, for the avoidance of doubt, be taken to
include professional fees in respect thereof and any liability at law to
any third parties in connection therewith).
3 The Third Party has no authority to issue any direction or instruction to
the Consultant in relation to performance of the Consultant's duties under
the Consultancy Appointment.
4 The Third Party shall enjoy the same rights in respect of all drawings,
design, plans, reports, specifications, bills of quantities, photographs,
brochures, calculations, CAD materials and other documents provided by the
Consultant in connection with the Project as are enjoyed by the Client
under the Consultancy Appointment.
5 Whenever reasonably requested to do so by the Third Party the Consultant
shall produce for inspection documentary evidence that its professional
indemnity insurance is being maintained.
6 The benefit of this Deed may be assigned by the Third Party by way of
absolute legal assignment on a maximum of two occasions to a party
acquiring the entire interest of the Third Party without the consent of
the Client or the Consultant being required and such assignment shall be
effective upon written notice thereof being given to the Client and to the
Consultant.
7 Any notice to be given by the Consultant hereunder shall be deemed to be
duly given if it is delivered by hand at or sent by registered post or
recorded delivery to the Third Party at its registered office and any
notice to be given by the Third Party hereunder shall be deemed to be
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<PAGE> 38
duly given if it is addressed to "The Senior Party"/"the Managing
Director" and delivered by hand at or sent by registered post or recorded
delivery to the above mentioned address of the Consultant or to the
principal business address of the Consultant for the time being and any
such notices sent by registered post or recorded delivery shall be deemed
to have been received forty-eight hours after being posted. All notices
given under this Deed shall be copied simultaneously to the Client.
8 If the Consultant is a partnership each partner shall be jointly and
severally liable.
9 Notwithstanding the date of this Deed the Consultant shall have no
liability hereunder in respect of claims notified to the Consultant after
the expiry of 12 years from the date of the Certificate of Practical
Completion of the relevant section of the Project.
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<PAGE> 39
IN WITNESS whereof this document has been executed as a Deed the day and year
first before written
{ THE COMMON SEAL of
{ MACE LIMITED
{ was hereunto affixed in the presence of:
Director
Secretary
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<PAGE> 40
SUPPLY CONTRACT
FOR USE IN CONNECTION WITH A PROJECT AT
PETERSHILL, LONDON EC4
Client
ENGLISH PROPERTY CORPORATION PLC
Construction Manager
MACE LIMITED
Designer
ROLFE JUDD GROUP PRACTICE LIMITED
Supply Contractor
C.I.R. COOPERATIVA INDUSTRIALE ROMAGNOLA S.C.A.R.L.
Works Package Description
SUPPLY ONLY CLADDING
Works Package Number
3210
<PAGE> 41
Part 2: Collateral Warranty to the Purchaser/Tenant
THIS DEED is made the day of 199
BETWEEN:-
(1) C.I.R. Cooperativa Industriale Romagnola s.c.a.r.l. whose registered
office is at Via Bicocca, 14/c, 40026 Imola, Italy (hereinafter called
"C.I.R.")
and
(2) [ ] whose registered office is at [ ] (hereinafter called
"the Purchaser"/"the Tenant")
WHEREAS:-
A. By a contract ("the Supply Contract") dated day of 199 C.I.R. has
undertaken with [ ] ("the Employer") to execute and complete the Works as
defined in the Contract upon the terms set out in the Supply Contract.
B. The Purchaser/Tenant has agreed to purchase from the Employer the Project
as defined in the Supply Contract or part thereof and/or will occupy the
Project or part thereof when completed.
NOW IT IS HEREBY AGREED as follows:-
1. C.I.R. hereby warrants to and covenants with the Purchaser/Tenant that he
has carried out and that he will continue to carry out each and all the
obligations, duties and undertakings of C.I.R. in connection with the
Project all in accordance with the terms of the Supply Contract, provided
that C.I.R. shall have no greater liability to the Purchaser/Tenant by
virtue of this agreement than it would have had if the Purchaser/Tenant
had been named as the "Client" under the Supply Contract and provided
further that C.I.R. shall have no liability to the Purchaser/Tenant by
virtue of this Agreement in respect of any delay in completion of the
Project
2. The Purchaser/Tenant may assign the benefit of this agreement once only to
any person acquiring the whole or part of its interest in the Project. No
further assignment shall be permitted.
3. The English courts shall have jurisdiction over any dispute or difference
which shall arise between the parties to this Agreement arising out of or
in connection with this Agreement. The law of England shall be the proper
law of this Agreement. C.I.R. hereby appoints Laytons, Solicitors, Saint
Bartholomews, Lewins Mead, Bristol BS1 2NH to be agents for the service of
process.
45
<PAGE> 42
IN WITNESS whereof C.I.R. has executed this agreement as a Deed the day and year
first before written.
Signed as a deed on behalf of C.I.R. Cooperativa Industriale Romagnola
S.C.A.R.L. (a company incorporated in Italy)
by ________________________________________
and _______________________________________
being persons who, in accordance with the laws of Italy are acting under
the authority of the company
Signatory _________________________________
Signatory _________________________________
Director
(Purchaser/Tenant)
Secretary
(Purchaser/Tenant)
46
<PAGE> 43
Part 2: Collateral Warranty to the Purchaser/Tenant
THIS DEED is made the day of 199
BETWEEN:-
(1) [ ] whose registered office is at
[ ] (hereinafter called "the Trade Contractor")
and
(2) [ ] whose registered office is at
[ ] (hereinafter called "the Purchaser"/"the Tenant")
WHEREAS:-
A. By a contract ("the Trade Contract") dated day of 199 the Trade
Contractor has undertaken with [ ] ("the Employer") to execute and
complete the Works as defined in the Contract upon the terms set out in
the trade Contract.
B. The Purchaser/Tenant has agreed to purchase from the Employer the Project
as defined in the Trade Contract or part thereof and/or will occupy the
Project or part thereof when completed.
NOW IT IS HEREBY AGREED as follows:-
1. The Trade Contractor hereby warrants to and covenants with the
Purchaser/Tenant that he has carried out and that he will continue to
carry out each and all the obligations, duties and undertakings of the
Trade Contractor in connection with the Project all in accordance with the
terms of the Trade Contract, provided that the Trade Contractor shall have
no greater liability to the Purchaser/Tenant by virtue of this agreement
than it would have had if the Purchaser/Tenant had been named as the
"Employer" under the Trade Contract and provided further that the Trade
Contractor shall have no liability to the Purchaser/Tenant by virtue of
this Agreement in respect of any delay in completion of the Project.
2. The Purchaser/Tenant may assign the benefit of this agreement once only to
any person acquiring the whole or part of its interest in the Project. No
further assignment shall be permitted.
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<PAGE> 44
IN WITNESS whereof the Trade Contractor has executed this agreement as a Deed
the day and year first before written.
Director
(Trade Contractor)
Secretary
(Trade Contractor)
Director
(Purchaser/Tenant)
Secretary
(Purchaser/Tenant)
48
<PAGE> 45
Appendix C
<PAGE> 46
APPENDIX C
A copy of Clauses 3, 4, 5, 6 and 7 (except 7.9 and 7.11) of the Development
Agreement together with the relevant definitions, Clause 23 and Schedules 1, 2,
3, 6 and 7
1.1.1 "the Additional Works"
the works (if any) to be carried out pursuant to the Third
Party Agreements (to the extent that such works do not form
part of the Building Works or are not to be undertaken at the
same time as the Building Works)
1.1.2 "the Approved Plans and Specifications"
the plans and specifications listed in the Fifth Schedule with
such additions modifications or variations from time to time
as are authorised in accordance with the provisions of this
Agreement
1.1.3 "the Architect"
the firm or company named as such in Clause 1.1.14 and any
substitute appointed by the Developer in accordance with the
provisions of this Agreement
1.1.6 "the Building Works"
the construction of buildings and structures on the Site
comprising office and restaurant accommodation with ancillary
storage and having the minimum Net Internal Area as set out in
the column headed "Floor Areas" in the Sixth Schedule subject
to a tolerance of 2% together with basement parking for not
less than 17 cars all in accordance with the Approved Plans
and Specifications incorporating such changes as may be
permitted in accordance with this Agreement and all works
required to be carried out within the Site pursuant to
conditions 09, 13 and 23 of the Planning Permission as a
pre-condition to occupation of the Site and all other works
required to comply with the provisions of paragraphs 1 and 2
of the First Schedule
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<PAGE> 47
1.1.11 "the Consents"
all permissions consents approvals authorities licences
certificates and permits in legally effectual form (and where
the Developer has a discretion to accept alternative terms in
terms acceptable to the Pension Fund subject to clause 1.2) as
may be necessary lawfully to carry out maintain and complete
the Building Works and to use and enjoy the same when
practically completed as intended by the parties including
(but without limitation) the approval of any reserved matters
still outstanding under the detailed planning permission at
the date of this Agreement building regulations consents and
bye-law approvals the requirements of all competent statutory
authorities regulating the Building Works and/or the use of
the Site and the consents of all parties who by the lawful
exercise of their rights or powers in the absence of such
consent could prevent or impede the carrying out or progress
of the Building Works or its use and enjoyment following
practical completion of the Building Works
1.1.12 "the Construction Manager"
the firm or company named as such in Clause 1.1.14 and any
substitute appointed by the Developer in accordance with the
provisions of this Agreement
1.1.13 "the Consultancy Agreements"
the agreements entered into with the Consultants by the
Developer in relation to the Building Works and/or the
Category A Works and/or the Additional Works
1.1.14 "the Consultants"
Rolfe Judd Architecture Limited (architects) Ove Arup &
Partners (services engineer) Ove Arup & Partners (structural
engineers) Cyril Sweett and Partners Limited (quantity
surveyors) Mace Limited (construction managers and the
planning supervisor for the purpose of the Construction
(Design and Management) Regulations 1994) and Charles Funke
(landscape consultants) and all other firms and consultants
who may at any time hereafter be engaged by the Developer in a
consultative capacity for the purposes of a material element
of the design and construction of the Building Works and/or
the Category A Works and/or the Additional Works
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<PAGE> 48
1.1.15 "the Consultants Warranty"
the document which is substantially in the form of that
attached as Annexure C and initialled by the parties and
identified as such or with such substantial amendments thereto
as the Pension Fund may approve (subject to Clause 1.2)
1.1.16 "the Corporation"
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<PAGE> 49
1.1.17 "the Corporation Agreement"
the building agreement dated 18th October 1995 made between
the Corporation (1) the Developer (2) and the Guarantor (3) as
varied by a Deed of Consent dated 31 July 1996
1.1.30 "Net Internal Area"
shall be calculated in accordance with the Code of Measuring
Practice issued jointly by the Royal Institution of Chartered
Surveyors and the Incorporated Society of Valuers and
Auctioneers (Fourth Edition) for the areas shown edged red on
the plans attached at the Ninth Schedule as measured pursuant
to Clause 7.9 and expressed in square feet
1.1.38 "the Pension Fund's Surveyor"
Mr. K. Bugden or such other Chartered Surveyor or firm of
surveyors as may be nominated from time to time by the Pension
Fund by notice in writing to the Developer and who shall be
instructed by the Pension Fund to carry out his functions
under this Agreement in a proper and professional manner and
promptly having regard to the circumstances and the matter in
issue
1.1.39 "the Planning Permission"
the detailed planning permission for the Building Works
granted on 24 March 1995 by the Corporation under reference
number P28341
1.1.40 "Practical Completion"
the practical completion of the Building Works for the
purposes of this Agreement in accordance with Clause 7.8 and
"Practically Completed" shall be construed accordingly
1.1.41 "Practical Completion Date"
the date when Practical Completion takes place [ILLEGIBLE]
1.1.44 "the Site"
ALL THAT piece of land situate at One Carter Lane and 2 Old
Change Court Petershill London EC4 which is the subject of the
Corporation Agreement
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1.1.46 "the Sub-Contractors"
all firms or companies engaged as Trade Contractors in respect
of the Building Works or the Category A Works or the
Additional Works who have some material design responsibility
in relation thereto or who have responsibility for carrying
out a significant part of the construction of the Building
Works or the Category A Works or the installation of a
significant item of plant or machinery and including the Trade
Contractors engaged in the following Trade Packages:-
Waterproofing
Concrete Structure
Structural Steelwork
Restaurant Cladding
Cladding
Roof Finishes
Masonry
Dry Lining
Toilet Fit Out
Metalwork
Metal Doors/Roller Shutters/Louvres
Entrance Hall Fit Out
Facade Maintenance Equipment
Mechanical Services
Controls/BMS
Thermal Insulation and Fire Stopping
Electrical Services
Fire Detection/Alarms
Lightning Protection
Lifts
Hard Landscape
Soft Landscape
Marketing Suite Fit Out including floor coverings, decs.
1.1.47 "the Sub-Contractors Warranty"
the document which is substantially in the form of that
attached as Annexure D and initialled by the parties and
identified as such or with such substantial amendments thereto
as the Pension Fund may approve (subject to Clause 1.12)
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<PAGE> 51
1.1.50 "the Third Party Agreements"
the Agreements specified in the Seventh Schedule and any other
agreements affecting the Site and relating to or in connection
with the Building Works (other than the Headlease the EPC
Lease the Underlease and Occupation Leases) entered into after
the date hereof and prior to the Practical Completion Date by
either party hereto with the consent of the other which
consent shall not be unreasonably withheld or delayed on the
part of the Developer and shall be subject to Clause 1.2 in
the case of the Pension Fund
1.1.51 "Trade Contract"
a contract entered into by the Developer with any of the Trade
Contractors for construction works pursuant to Clause 6
1.1.52 "Trade Contractor"
any building contractor appointed by the Developer in
accordance with the provisions of Clause 6 for any part of the
Building Works and/or the Category A Works and/or Additional
Works
1.1.53 "Trade Package"
such part of the Buildings Works and/or the Category A works
and/or Additional Works comprised therein as are to be carried
out by a Trade Contractor pursuant to a Trade Contract
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1.3 WHERE any consent agreement or approval of the Pension Fund is required
under the provisions of this Agreement the giving of such consent
agreement or approval shall be conditional upon the consent of each tenant
under an Occupation Lease and the Corporation under the Corporation
Agreement and the Headlease also being obtained so far as may be required
by the provisions of the relevant Occupation Lease or the Corporation
Agreement or the Headlease
1.4 WITHOUT prejudice to any right or remedy of the Developer the time for
performance of any obligation of the Developer under this Agreement shall
be extended (in cases where the consent agreement or approval of the
Pension Fund or the Pension Fund's Surveyor is not to be unreasonably
withheld or delayed) to the extent of any unreasonable withholding or
delay of the Pension Fund or the Pension Fund's Surveyor in relation to
the subject matter of the obligation
1.5 ANY reference in this Agreement to an enactment (whether generally or
specifically) shall be construed as a reference to that enactment as
amended extended re-enacted or applied by or under any other enactment and
shall include all instruments orders plans regulations and permissions and
directions made or issued thereunder or deriving validity therefrom
1.6 ANY reference to a Clause sub-clause Recital or Schedule shall be
construed (unless the context otherwise requires) as a reference to the
relevant Clause or sub-clause of or Recital or Schedule to this Agreement
1.7 NEITHER the index to this Agreement nor the headings to the Clauses of
this Agreement shall in any way affect the construction or interpretation
of this Agreement
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<PAGE> 53
3. PLANS
3.1 THE Developer shall from time to time cause to be prepared such
plans drawings working drawings specifications and bills of
quantities materially in addition to or substitution for the
Approved Plans and Specifications as may be or become necessary for
the carrying out of the Building Works in sufficient time (having
regard to the need to obtain all necessary approvals and consents
including that of the Pension Fund thereto) so as to avoid delays in
the carrying out of the Building Works and in sufficient detail to
enable the Building Works to be carried out in accordance with the
Approved Plans and Specifications
3.2 SO soon as such plans drawings or specifications incorporating
changes materially in addition to or substitution for the Approved
Plans and Specifications have been prepared as aforesaid the
Developer shall submit the
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<PAGE> 54
same to the Pension Fund's Surveyor and such of his consultants as
have been notified to the Developer and are relevant to such
application for approval (and the supply to the Pension Fund's
Surveyor and his said consultants of copy documentation by way of
circulations shall be deemed to be application for approval) such
approval:-
3.2.1 not to be unreasonably delayed and in any event to be given or
refused within 5 working days of receipt by the Pension Fund's
Surveyor and his said consultants of any specific application
for approval specifically identifying the changes to which
approval is sought accompanied by such supporting information
as shall be reasonably necessary to give a decision on such
application and within 10 working days of receipt by the
Pension Fund's Surveyor and his said consultants of any other
application accompanied by such supporting information as
aforesaid and
3.2.2 not to be withheld (subject to Clause 1.2) unless the giving
of such approval would result in the area layout design access
servicing user type or quality of materials used in or method
of construction of the Building Works being materially and
adversely affected and
3.2.3 which approval may be given subject to such conditions or
variations as shall be reasonable but not any such which are
likely to increase the cost of the Building Works or the
length of the programme of the whole or any part of the
Building Works
3.3 PLANS drawings or specifications prepared as mentioned in this
Clause 3 shall form part of the Approved Plans and Specifications
unless any approval required pursuant to this Clause shall not have
been given or any condition or
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<PAGE> 55
variation reasonably imposed by such approval (where required) shall
not be complied with
4. CONSENTS
4.1 THE Developer shall (insofar as it has not already done so) obtain
the Consents from time to time as may be required
4.2 IF any of the Consents shall be refused or granted subject to
conditions which are reasonably and properly regarded by either the
Developer or the Pension Fund's Surveyor as being unacceptable
having regard to the requirements and interests of the Developer and
the Pension Fund in relation to the Site and the Building Works the
Developer shall forthwith take such action as may be reasonably
required to obtain such consents or procure the removal or
modification of such conditions
5. CONSULTANTS AND DESIGN
5.1 THE Developer hereby confirms and undertakes to the Pension Fund
that the Developer has managed and instructed and will within its
powers continue to manage and instruct each of the Consultants and
each of the Sub-Contractors with a view to their using and
continuing to use the standard of skill, care, attention and
diligence required by the form of Consultant's or (as the case may
be) Sub-Contractor's Warranty in the design and/or supervision of
the construction of the Building Works (including the commissioning
of any heating and ventilating systems and other mechanical and
electrical equipment) and the selection of materials and goods and
(so far as their duties relate thereto) the Additional Works and
generally in the performance of their respective duties under the
Consultancy Agreements or the relevant Trade Contract
5.2.1 UNLESS the Pension Fund shall otherwise agree (subject to Clause
1.2) all consultants engaged by the Developer after the date hereof
shall be appointed on terms substantially the same (except as to
duties and fees) as those
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<PAGE> 56
applicable to the Consultants appointed at the date hereof (when in
substitution for existing Consultants)
5.2.2 THE Developer shall ensure that all Consultants engaged by the
Developer after the date hereof provide to the Pension Fund
collateral warranties executed as a deed in the form of the
Consultants' Warranty on or as soon as practicable after the date of
their respective appointments
5.3 IF any collateral warranty provided to the Pension Fund under Clause
5.2 shall refer to any Relevant Parties (as defined in the form of
Consultants' Warranty) then Clause 5.2 or (in the case of Relevant
Parties who are Trade Contractors) Clause 6.4 shall apply in respect
of such Relevant Parties
6. TRADE CONTRACTS
6.1 AS and when appropriate for the timely carrying out of the Building
Works the Developer shall invite tenders for any further Trade
Package which may be required from such building contractors as may
be appropriate PROVIDED that before accepting any tender the
Developer may enter into negotiations with one or more Trading
Contractors invited to tender with a view to entering into a
contract with such or one such Trade Contractor for the carrying out
of the relevant Trade Package and the Developer shall consult with
the Pension Fund during the course of such negotiations and have due
regard to the views expressed by the Pension Fund in relation to
Sub-Contractors and shall inform the Pension Fund of the outcome of
such negotiations with all Trade Contractors
6.2 AS soon as practicable after acceptance of a tender or (as the case
may be) a decision to award the contract following negotiations but
in any event so far as possible prior to the commencement of the
relevant Trade Package the Developer shall enter into a Trade
Contract executed as a deed with the Trade Contractor whose tender
is accepted or (as the case may be) who has been awarded the
contract as aforesaid
11
<PAGE> 57
6.3 IF it shall at any time become necessary or convenient for an
alternative or additional Trade Contractor to be engaged for any
Trade Package then unless otherwise agreed by the Pension Fund
(subject to Clause 1.2) and the Developer the same procedures shall
be followed as set out in the preceding sub-clauses of this Clause
6.4.1 ALL tender documents submitted by the Developer shall require that
each of the Sub-Contractors will on acceptance of its tender execute
as a deed and deliver to the Pension Fund a collateral warranty in
the form of the Sub-Contractor's Warranty relating to the relevant
Sub-Contractor's performance of its duties under the relevant Trade
Contract and any tender excluding or modifying or purporting to
exclude or modify such requirement shall not be accepted
notwithstanding any other provision of this Clause
6.4.2.THE Developer shall ensure that all Sub-Contractors provide such
warranties on or as soon as practicable after the date of their
respective appointments or (if later) as soon as practicable after
the date of this Agreement
7. DEVELOPMENT OBLIGATIONS
SUBJECT to the provisions of this Agreement the Developer shall:-
7.1 CAUSE the Building Works to be constructed by the Trade Contractors
in a good substantial and workmanlike manner using good quality
materials with all due diligence in all respects in accordance with
the Consents all relevant statutory and byelaw regulations and
relevant current codes of practice the Third Party Agreements the
Corporation Agreement the Occupation Leases so far as relevant and
all conditions to which the same or any of them are subject the
Approved Plans and Specifications the Trade Contracts and the
provisions of the First Schedule
12
<PAGE> 58
7.2 PROPERLY manage and instruct the Consultants and the Trade
Contractors and supply them with such information as they may
reasonably require from the Developer to perform efficiently their
respective functions
7.3 WITHOUT prejudice to Clauses 5 or 6 use all reasonable endeavours to
obtain for the benefit of the Pension Fund all appropriate
guarantees normally available from suppliers and sub-contractors in
connection with the Building Works in such forms and on such terms
as are normally provided by them
7.4 PROPERLY manage and instruct the Consultants to liaise with all
relevant statutory undertakers and utilities including the postal
and telecommunication authorities to ensure that the Units will be
fully provided with all necessary services in accordance with the
Approved Plans and Specifications such services being brought within
the Units and terminated or capped to enable the tenant or occupier
to connect to the supply on compliance with the requirement of the
relevant undertaker or utility provided that (1) for
telecommunications services these will be provided to the buildings
but ducts only will be provided to the Units (2) there will be no
gas supply to the Units within the office building (3) there will be
no electricity supplied to the restaurant building but only incoming
ducts to enable the supply to be procured by the relevant occupier
7.5 AS soon as reasonably practicable after the Practical Completion
Date supply to the Pension Fund's Surveyor for use for all purposes
in connection with the Building Works and/or the Category A Works
three complete sets of drawings of the Building Works shown on the
last set issued for construction but incorporating all material
design changes made after such issue and drawings to an appropriate
level of detail of and maintenance information and operating manuals
for the mechanical electrical and other installations and services
in and to the Building Works and the Site
13
<PAGE> 59
7.6 PROMPTLY upon the same becoming available to the Developer and
whenever requested and at all other appropriate times supply the
Pension Fund's Surveyor with the relevant copy documents and
information as specified in the Second Schedule PROVIDED ALWAYS that
the supplying to and receipt by the Pension Fund's Surveyor or the
Pension Fund of such documents and information shall not in itself
imply approval thereof or relieve the Developer of any obligation or
liability to the Pension Fund in respect of the Building Works or
otherwise
7.7 NOT do nor knowingly permit to be done any of the things specified
in the Third Schedule without first obtaining the Pension Fund's
Surveyor's written consent such consent in each case (except in the
case of Paragraph 2) to be subject to Clause 1.2 and any dispute in
connection therewith to be referred to an expert in accordance with
Clause 23
7.8.1 NOT less than twenty working days before the anticipated date on
which the Building Works are reasonably expected to be Practically
Completed inform the Pension Fund's Surveyor thereof (confirmed in
writing) and afford all necessary facilities to enable the Pension
Fund's Surveyor to inspect the same together with the Construction
Manager and the parties shall each instruct and procure that such
inspection shall take place as soon as reasonably practicable and in
any event within five working days of such notice and both the
Pension Fund's Surveyor and the Construction Manager shall be
instructed to liaise with one another in connection with the
preparation of a list of outstanding and/or defective work and the
standards of work and materials required in respect of any such work
and which items therein can properly be regarded as snagging items
to be carried out and/or remedied after Practical Completion
provided that in the event that the Pension Fund's Surveyor and the
Construction Manager do not agree such list within three working
days of such inspection the matter may be referred by either party
to the determination of an expert under Clause 23
14
<PAGE> 60
7.8.2 NOT less than three working days before the date on which the
Construction Manager proposes to inspect the Building Works with a
view to issuing his certificate of Practical Completion inform the
Pension Fund's Surveyor thereof (confirmed in writing) and afford
all necessary facilities to enable the Pension Fund's Surveyor to
inspect the same together with the Construction Manager and in the
event that the Construction Manager shall not issue the certificate
of Practical Completion following such inspection the procedures in
this sub-clause shall be repeated (but subject to no less than two
working day's notice) until a certificate of Practical Completion is
issued. The Pension Fund's Surveyor may make representations to the
Construction Manager as to whether he considers the Building Works
are Practically Completed and the Construction Manager shall be
instructed to have due regard to such representations but the
Construction Manager shall be instructed to issue his certificate of
Practical Completion no earlier than the date when in his
professional opinion the items on the list referred to in Clause
7.8.1 (save for snagging items) and any other items which he
considers require to be completed before Practical Completion have
been completed to the agreed or determined standard PROVIDED that
the Building Works shall not be treated as being practically
complete for the purposes of this Agreement unless and until:-
7.8.2.1 the last practical completion certificate (subject to
snagging items as aforesaid) has been issued under all
of the Trade Contracts and under the Corporation
Agreement in respect in each case of the Building Works
7.8.2.2 the buildings forming part of the Building Works are
wind and water tight as required by the Approved Plans
and Specifications
7.8.2.3 (to the best of the knowledge information and belief of
the Developer) the Consents for the Building Works have
been
15
<PAGE> 61
obtained and are subsisting and compliance has been
reported to the Developer or the Construction Manager
with all conditions therein PROVIDED that this paragraph
shall not apply to the issue of the certificate of
completion by the building inspector where he has
completed his final inspection and he has not indicated
that the certificate will not be issued unconditionally
or subject only to conditions which would not materially
interfere with a tenant's fitting out or to any other
Consents which cannot then be obtained by reason of a
tenant not having carried out in a proper manner or at
all its fitting out of any Unit
7.8.2.4 all plant equipment and building services comprised in
the Building Works have been fully tested and
commissioned in accordance with procedures specified in
the Approved Plans and Specifications as required for
practical completion
7.8.3 IF notwithstanding the issue of the certificate of Practical
Completion the Pension Fund's Surveyor shall reasonably consider
that there are still outstanding items (save for those identified as
snagging items) on the list agreed or determined under Clause 7.8.1
which have not been satisfactorily completed to the agreed or
determined standard or cannot then reasonably be regarded as
snagging items he shall within five working days of the date of
Practical Completion deliver to the Developer a list of such
outstanding items (except any snagging items) and the Developer
shall procure the carrying out of such outstanding works (except
snagging items) in accordance with the provisions of this Agreement
within twenty working days or such longer period as shall be
reasonable PROVIDED that in the event of any dispute between the
parties in respect of any matters arising under this Clause 7.8.3 or
the proviso to Clause 7.8.2 either party may refer the same to the
determination of an expert under Clause 23
16
<PAGE> 62
7.10 Cause the Additional Works to be constructed by the Trade
Contractors in a good substantial and workmanlike manner in
accordance with the Approved Plans and Specifications and any
Consents relating thereto and the Third Party Agreements and so that
in any event the same are practically completed no later than the
date for completion thereof (subject to extension of time) required
by the relevant Third Party Agreement and generally perform and
observe all the terms and conditions binding on the Developer or (as
successor in title) the Pension Fund under the Third Party
Agreements
17
<PAGE> 63
7.12 PROCURE that the Building Works be insured and kept insured until
the Practical Completion Date thereof in the joint names of the
Pension Fund and the Developer
7.12.1 for the full reinstatement value thereof
7.12.2 with an insurance office of good repute
7.12.3 in a policy or on terms
in each case subject to the approval of the Pension Fund subject to
Clause 1.2
7.13 IN the event of the Building Works or any part thereof at any time
being destroyed or damaged by fire or other insured risks prior to
the Practical Completion Date then and as often as the same may
happen (but subject to the terms of the Loan Agreement) ensure that
all necessary monies payable by virtue of such insurance shall be
laid out in repairing rebuilding and otherwise reinstating the
Building Works in a good and substantial manner in accordance with
the provisions of this Agreement and so far as such insurance policy
permits until any such monies shall be laid out and applied as
aforesaid they shall be deposited with the Pension Fund to be
released in payment of applications for payment in accordance with
the Loan Agreement as the works of reinstatement proceed and in the
case of any deficiency in the insurance monies forthwith to make
good the same out of the Developer's own monies
7.14 NOT do or permit or suffer to be done upon the Site or any part
thereof any thing which may render the policy of insurance void or
voidable
18
<PAGE> 64
7.15 WITHOUT prejudice to any other provision of this Agreement but
subject to performance by the Fund of its obligations in this
Agreement and the Loan Agreement in connection with the relevant
matter fulfil comply with and perform its obligations and duties
under or deriving from statute common law or contained in the Trade
Contracts the Consultancy Agreement the agreements for Occupation
Lease the Third Party Agreements and the EPC Lease and so perform
the obligations and duties under this Agreement in such manner that
the Pension Fund shall not as a result be or become in breach or
default of any of its obligations and/or duties under or deriving
from statute or common law or the Third Party Agreements or any
agreement for Occupation Lease or the Corporation Agreement in
relation to the Site or the Building Works or the Category A Works
or the Additional Works prior to the Practical Completion Date or
(in the case of the Category A Works and the Additional Works) the
practical completion date thereof
19
<PAGE> 65
THE FIRST SCHEDULE referred to in Clause 7.1
1. The Building Works shall include all works that may be reasonable or
necessary for the repair and maintenance of all party or boundary walls so
far as such repair and maintenance ought to be undertaken by the Developer
in carrying out the Building Works
2. The Building Works shall include the making good of any damage to roads
pavements or adjoining property and any services therein arising out of or
in the course of or by reason of the execution of the Building Works
3. The Building Works shall be carried out subject to the taking of all
precautions as may be reasonable or necessary to avoid any injury
inconvenience loss danger or interference to or with the public the
occupiers of adjoining or neighbouring property or any other persons and
to property arising out of in the course of or by reason of the execution
of the Building Works
64
<PAGE> 66
THE SECOND SCHEDULE referred to in Clause 7.6
(Copy documents and information relating to the Site
or the Building Works to be supplied to the Pension Fund)
1. The Trade Contracts and any variations or modifications thereof
2. All certificates and instructions issued by the Construction Manager or
the Developer or statement made or approved by the Developer (as the case
may be) under the provisions of the Trade Contracts
3. The Consultancy Agreements and any supplemental agreements recording
additional duties undertaken by any of the Consultants thereunder
4. All references to arbitration and appointments of arbitrators under the
Trade Contracts
5. All awards and certificates made or given by any arbitrators appointed
under the provisions of the Trade Contracts
6. All the Consents and all refusals or revocations of any of the Consents or
applications therefor and the reason(s) given for any such refusal or
revocation and the action proposed as a consequence thereof
7. Without prejudice to any consent of the Pension Fund which may be required
hereunder all variations or modifications of or to the Approved Plans and
Specifications
8. Such drawings designs sketch plans specifications programmes contracts
quotations costings valuation dockets certificates bills records and all
other like material (in every such case) under the control of the
Developer however stored or kept which the Pension Fund may reasonably
require in order fully and effectively to exercise its rights and perform
its obligations hereunder to the intent that the Pension Fund shall
65
<PAGE> 67
be entitled to monitor the progress of the Building Works and keep itself
fully informed in relation thereto
9. All insurance policies effected or procured by the Developer hereunder in
relation to the Site or the Building Works in accordance with this
Agreement or evidence of the terms thereof reasonably acceptable to the
Pension Fund and receipts for the current year's premium and (not later
than the Practical Completion Date) a fire insurance valuation
10. The Third Party Agreements
11. All approvals consents certificates and authorisations given and notices
served under or pursuant to any of the Third Party Agreements
12. Copies of the Executive Reports to the Policy Meeting to include action
notes arising from regular monthly Site and Project Meetings relating to
the Building Works and minutes notes or other written record (if any) of
those meetings
13. Reports (if any) and test certificates relating to any mechanical and
electrical installations forming part of or serving the Building Works or
the Site
14. Minutes of Letting Meetings relating to the Units
15. The agreements or letters appointing the Letting Agents including the
terms of such appointments
16. All approvals consents certificates and authorisations given and notices
served under or pursuant to the agreement(s) for Occupation Lease whether
by or on behalf of the tenant the Developer or any of the Consultants but
without prejudice to any consent of the Pension Fund which may be required
hereunder
66
<PAGE> 68
THE THIRD SCHEDULE referred to in Clause 7.7
(Matters relating to the Site or the Building Works
requiring the Pension Fund's Surveyor's written consent)
1. Appoint any other consultant who is intended to have responsibility for
the design of any material part of the Building Works in place of or in
addition to those named in this Agreement
2. Cause or permit the Building Works to be carried out otherwise than
materially in accordance with the Approved Plans and Specifications
3. Save in the circumstances envisaged in Clause 19.3 assign mortgage charge
or otherwise deal with the benefit of or the Developer's rights under any
of the Trade Contracts or any of the Consultancy Agreements
4. Agree or permit any material amendment alteration modification addition or
deletion of any of the terms of any of the Trade Contracts with the
Sub-Contractors or any of the Consultancy Agreements or any of the Third
Party Agreements or any of the agreements for Occupation Lease with any of
the parties to such documents in such a manner as materially to prejudice
the rights of the Pension Fund in relation to the Building Works
5. Discharge or permit the discharge otherwise than by performance of any of
the Trade Contracts or any of the Consultancy Agreements or any of the
Third Party Agreements or any of the agreements for Occupation Lease or
waive or release any claims or rights arising thereunder against the other
party or parties thereto
6. Allow access to any tenant for fitting out purposes or allow any tenant to
commence business otherwise than in accordance with the terms of the
relevant agreement for lease
67
<PAGE> 69
7. Issue or permit the issue of the Final Certificate under any of the Trade
Contracts until all known defects have been remedied and made good to the
reasonable satisfaction of the Pension Fund's Surveyor (except where the
Developer is compelled to do so by a court or arbitrator following the
proper and diligent conduct by the Developer of the relevant proceedings
PROVIDED that this paragraph shall not require the Developer to establish
or defend legal proceedings in circumstances where the Final Certificate
ought properly to be issued having regard to all relevant circumstances
8. Give express approval to the level of professional indemnity insurance
required to be maintained by any Consultant or Sub-Contractor in relation
to the Building Works
9. Agree or permit the repositioning of the statue referred to in the Licence
specified in paragraph 3.4 of the Seventh Schedule except in a position
approved by the Pension Fund (subject to Clause 1.2)
68
<PAGE> 70
THE SIXTH SCHEDULE referred to in Clause 1.1.6
Office Building
<TABLE>
<CAPTION>
Unit Floor Areas Use
- ---- ----------- ---
<S> <C> <C>
Ground Floor 861 Reception
Ground floor 16,448 Offices
First floor 17,664 Offices
Second floor 18,353 Offices
Third floor 18,396 Offices
Fourth floor 17,072 Offices
Fifth floor 8,095 Offices
Lower ground floor 17,050 Offices
Basement 12,658 Storage
----------------------------------------------
Total 126,597 Square feet Net Internal
==========================================
</TABLE>
Restaurant Building
<TABLE>
<CAPTION>
Unit Floor Areas Use
- ---- ----------- ---
<S> <C> <C>
Ground floor 2,473 Restaurant
Lower Ground floor 1,440 Restaurant
Basement 2,291 Storage
----------------------------------------------
Total 6,204 Square feet Net Internal
========================================
</TABLE>
73
<PAGE> 71
THE SEVENTH SCHEDULE referred to in Clause 1.1.50
The Third Party Agreements
1. All agreements if any affecting the Site made pursuant to Section 106 of
the Town and Country Planning Act 1990 or Section 33 of the Local
Government (Miscellaneous Provisions) Act 1982 or Sections 38 or 177 or
278 of the Highways Act 1980 or any statutory amendment or re-enactment
thereof for the time being in force
2. All agreements if any affecting the Site made pursuant to Sections 41 42
98 99 or 104 of the Water Industry Act 1991
3. 3.1 All agreements relating to the oversailing of projections of
buildings on the Site over the highway or City Walkway
3.2 The Deed of Grant of Easement to be entered into between the
Developer (1) and Thames Water Utilities Limited (2) relating to the
retention of a sewer under the Site
3.3 All electricity sub-station leases relating to the Site
3.4 Licence dated 24th September 1991 made between the Corporation (1)
the Developer (2) and the Trustees of the Blitz Memorial Statue (3)
74
<PAGE> 72
23. DISPUTES
WHEREVER it is provided in this Agreement that this Clause shall have
effect in relation to any disagreement between the Pension Fund and the
Developer the following provisions of this Clause shall have effect:-
23.1 EITHER of the said parties may refer the matter for adjudication and
the said parties shall as soon as practicable after such reference
agree upon the appointment of some independent and fit person being
a Chartered Surveyor having substantial and recent experience of
office development projects and matters of the same kind as those in
dispute and the matter shall be decided by such Chartered Surveyor
who shall act and be deemed to act as an expert and not as an
arbitrator.
23.2 IN the event of failure to agree the identity of such Chartered
Surveyor the matter shall be decided by a Chartered Surveyor who
shall act and be deemed to act as an expert not as an arbitrator and
who shall be appointed on the application of either of the said
parties by the President for the time being of the Royal Institution
of Chartered Surveyors.
23.3 THE decision of such Chartered Surveyor shall be final and binding
on the parties hereto and the fees payable to the President and to
any such Chartered Surveyor shall be borne and paid by the said
parties in such shares and in such manner as shall be determined by
such Chartered Surveyor and failing such determination and subject
thereto in equal shares in each case without reimbursement from the
other of the said parties by virtue of any of the terms of this
Agreement.
23.4 IF the said Chartered Surveyor refuses to or shall become incapable
of acting or continuing to act then another person shall be
appointed in his place in accordance with the provisions of Clauses
23.1 and 23.2.
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<PAGE> 73
23.5 EACH of the said parties shall be entitled to make representations
to the Chartered Surveyor who shall also be obliged to ask for
counter-representations and who shall be bound to have regard to
such representations and counter-representations but without
fettering his discretion as an expert to make such determination as
he thinks fit.
<PAGE> 74
Appendix D
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[LETTERHEAD OF TP BENNETT PARTNERSHIP]
RAB/DW/dr/3005/350/a
13 March 1998
Phil Coombs
CPC
6-8 Standard Place
Rivington Street
London EC2A 3BE
Dear Phil
PROJECT ST PAULS
Please find enclosed copies of the following as construction issue:
Drawings:-
3005 G 100 D G.F. Gen. Arrgt (partitions) --------------------
3005 G 101 A 1st F. Gen. Arrgt (partitions) 13 MAR 1998
3005 G 102 A 2nd F. Gen. Arrgt (partitions) --------------------
3005 G 103 A 3rd F. Gen. Arrgt (partitions) ACTION
3005 G 104 A 4th F. Gen. Arrgt (partitions) --------------------
3005 G 105 D 5th F. Gen. Arrgt (partitions)
--------------------
3005 P 100 C G.F. Raised floor layout --------------------
3005 P 101 A 1st F. Raised floor layout --------------------
3005 P 102 A 2nd F. Raised floor layout
3005 P 103 A 3rd F. Raised floor layout
3005 P 104 A 4th F. Raised floor layout
3005 P 105 C 5th F. Raised floor layout
3005 N 100 B G.F. Suspended ceiling layout
3005 N 101 B 1st F. Suspended ceiling layout
3005 N 102 B 2nd F. Suspended ceiling layout
3005 N 103 B 3rd F. Suspended ceiling layout
3005 N 104 B 4th F. Suspended ceiling layout
3005 N 105 C 5th F. Suspended ceiling layout
3005 M 200 Core A (risers)
3005 M 201 Core B (risers)
3005 M 202 Core C (risers)
3005 M 203 GF comms room and risers
<PAGE> 104
TP BENNETT
3005 T 101 Toilet layout (typical 1st-4th)
3005 P 200 Raised floor details
3005 N 200 Suspended ceiling details
3005 L 200 Partition details sheet 1
3005 L 201 Partition details sheet 2
Specifications
3005/K41B Raised access flooring
3305/K40 Suspended Ceilings
3005/K31 Plasterboard partitions
Yours sincerely
/s/ David Williams
David Williams
For T P BENNETT PARTNERSHIP
Enc.
Cc I. Hodgson - GSI + copies of drawings and spec
C. Morris - TS + copies of drawings and spec
D. Satchesll - OAP + copies of drawings and spec
R. Stone - BWA + copies of drawings and spec
D. Norman - Tolent Construction + 2 copies of drawings and spec
<PAGE> 105
PROJECT ST. PAUL'S
RAISED ACCESS FLOORS
3005/K41
--------------------
13 MAR 1998
--------------------
ACTION
--------------------
--------------------
--------------------
--------------------
TP Bennett Partnership
262 High Holborn
London
WC1V 7DU
Tel: 0171 405 9277
Fax: 0171 4053568
[LOGO]
BENNETT INTERIOR DESIGN
RevB
<PAGE> 106
K41 RAISED ACCESS FLOORS
To be read with Preliminaries/General conditions.
TYPE(S) OF FLOOR
130 RAISED ACCESS FLOOR TO COMMS AND DATA ROOMS
- Drawing reference(s): t.b.a.(P Series)
- Subfloor: Concrete slab
Preparation: Apply sealer as clause 280.
- Flooring system: Heavy Grade cementitious core metal faced panel system,
Solidfeet, as manufactured by:
Manufacturer and reference: Donn (USG(UK) Ltd; 1 Swan Road, S.W. Ind.
Estate, Peterlee Co. Durham SR8 2HS).
- Finished floor height above subfloor (nominal): 450mm o/a (including floor
tiles)
- Floor finish: Factory bonded Anti-static Laminate, to all vertical and
horizontal faces as manufactured by: Polyrey -- Type Polyrey Oversil,
colour and design t.b.a.
- Accessories: i) Cut panels, trimming and bridging including
factory-formed cut out panels to accommodate cable
entries etc.
ii) Full support at perimeters and cut edges by
stringers or other means.
iv) Steps to be provided in locations shown on the
drawings. Provide powder coated nosings (colour to
CA's approval) to edges.
- Other requirements: Floor system to incorporate captivated screws.
131 RAISED ACCESS FLOOR: OFFICE FLOORS
- Drawing References: t.b.a. (P series)
- Subfloor: Concrete Slab
- Preparation: As clause 280
- Flooring system: Metal faced, cementitious core raised access floor,
medium grade system (to conform to PSA MOB PF2Pa: 1990) -- Donn DSFZ or
equal approved, Solid feet.
- Finished floor height above subfloor (nominal): 150mm
- Pedestal grid centres: 600 x 600mm
- Other requirements
- all cut tiles to be fully supported
- sealing of cut panels to be as clause 341.
- allow for factory-formed cut outs, fitted on site with floor boxes
supplied by electrical services contractor No. and location of outlets as
indicated on electrical consultants drawings, or t.b.a; allow at a nominal
rate of 1:10.m/2/
GENERALLY/PRELIMINARY WORK
210 REFERENCES TO THE AUTHORITY: For the purposes of this specification all
references to the Authority in MOB PF2 PS/SPU are deemed to be to the
Employer.
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240 CO-ORDINATION WITH OTHERS: Liaise with the Main Contractor and other
subcontractors to ensure:
- Correct location of pedestals and services. Where considered necessary
indelibly mark positions of pedestals in advance of services
installations.
- Related work is suitably co-ordinated and can proceed without damage to
the floor. Protect as necessary.
- Before commencing work, ensure that fixtures around which panels are to be
cut or over which supports are to bridge are completed.
250 ENVIRONMENTAL CONDITIONS:
- Areas for storage and installation must be clean, dry, ventilated and free
from both excessive or rapid variations of temperature and humidity. RH
must not exceed 75%.
- No part of the subfloor or surrounding walls must show readings of more
than 75% RH when tested for moisture content using an accurately
calibrated hygrometer in accordance with BS 8201, Appendix A. Subfloor
temperatures must be maintained above 5 degC.
- Notwithstanding the above, delivery of materials and installation of the
raised access floor will be taken as joint acceptance by the Main
Contractor and Flooring Contractor of the suitability of the environmental
conditions.
270 EXISTING CONCRETE SUBFLOORS:
- If the Flooring Contractor proposes to use adhesive only fixing of
pedestal bases, but the MOB PF2 PS/SPU site pedestal fixing test shows
that this is inadequate, mechanical fixing must be used.
- If the test failure is shown to the satisfaction of the CA to be due to
the nature of the concrete subfloor, including the presence of excessive
laitance, the extra cost of mechanical fixing will be paid to the Flooring
Contractor. A provisional item for the extra cost of such mechanical
fixing is to be included in the tender.
280 DUSTPROOFING:
- Ensure that surfaces to be sealed are clean, dry and free from dust,
grease and other contaminants.
- Apply two coats of colour tinted sealer, recommended by the raised access
floor manufacturer, to all concrete and masonry surfaces within the floor
void to prevent dusting throughout the life of the installation.
- The first coat to be applied before the pedestals are erected and the
second coat, with a different colour tint, towards the end of the floor
installation.
INSTALLATION
310 WORKMANSHIP GENERALLY:
- Store and install floor components in dry, well ventilated conditions not
subject to extremes of temperature or humidity.
- Ensure that the subfloor is clean before installation commences and that
cleanliness is maintained throughout the installation.
- Install the floor, accessories, finishes, etc. to achieve specified levels
of performance.
- The completed installation to be level, clean, stable, firm and free from
bounce, squeaks, vibration and lipping between panels.
- Adequately protect from dirt, stains, damage and overloading until
Practical Completion.
320 PEDESTAL STRUCTURE AND FIXING TESTS:
- Test pedestals to MOB PF2 PS/SPU, test T42.00, to prove the need or
otherwise for mechanical fixing to the subfloor and for site quality
control. Tests to be carried out in the presence of the CA.
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<PAGE> 108
- Where an adhesive fixing fails as a result of subfloor failure, arrange
for the Main Contractor to make good the subfloor. Refix using mechanical
fixings and retest.
- If any pedestal structure fails, replace the pedestal and retest.
330 SETTING OUT: Where not shown otherwise set out floor system and/or use
oversize panels to ensure that cut panels are not less than half in width,
particularly at doorways, thresholds, etc.
340 SEALING OF CUT PANELS: Seal all exposed cut edges of panels which
incorporate moisture sensitive or combustible cores with Class 0 rated
aluminium foil self adhesive tape, neatly trimming at top corner to avoid
tape being visible on those panels with factory-bonded laminate finish.
All other panels to have tape lapped over edge onto top surface.
350 PERIMETERS:
- Ensure that the installed system has sufficient lateral stability to
enable it to be independent of abutting elements.
- Provide a suitable constraint expansion gap at all abutments (3mm - 5mm)
and fill with a resilient closed cell filler before fixing skirtings,
cover strips, etc.
360 CAVITY BARRIERS: to locations as shown on drawings, t.b.a (to comply with
Local Authority requirements)
- Material: Rockwool Access Floor Fire Stops or equal approved.
Fire resistance to BS 476:Part 20.
Integrity/insulation (minutes): t.b.a.
- Access panels above cavity barriers and generally throughout to be screwed
down.
370 CHANGES OF LEVEL:
- Construct to approved details to achieve performance requirements
specified for the associated raised access floor.
390 ELECTRICAL CONTINUITY AND EARTH BONDING:
- All substantial metal parts of the floor to be electrically continuous and
fully earth bonded in accordance with BS 7671 (The IEE Wiring
Regulations).
- Liaise with the electrical subcontractor to agree the number and location
of earth bonding connection points. Supply connectors as necessary for use
by the electrical subcontractor.
- After completion of the floor and associated services, arrange for tests
to demonstrate that the floor is electrically continuous and fully earth
bonded. Points chosen for testing to include randomly selected pedestals,
stringers, tops and bottoms of panels, etc.
- Notify the CA to enable him to witness the testing. Submit a test report
to the CA.
400 TESTING ELECTRICAL RESISTANCE: Arrange for a qualified electrician to test
the floor to verify compliance with MOB PF2 PS/SPU, clause P9.01. Notify
the CA to enable him to witness the testing. Submit a test report to the
CA.
410 PROTECTION: Ensure that no part of the floor installation is:
- Used as a platform for storage of equipment and materials.
- Subjected to static or dynamic loads which exceed those for which it is
designed. Adequate precautions, including the use of spreader plates, must
be taken during installation of equipment and any work on other elements,
e.g. ceilings.
- Walked on within 48 hours following the use of adhesives to fix pedestals
to the subfloor.
- Left unprotected prior to Practical Completion. Supply and lay a
protective covering of 3mm hardboard to all pre-bonded laminate areas.
420 PANEL LIFTING DEVICES: Provide the Main Contractor with two sets of
lifting devices suitable for each of the floor finishes installed. One set
to be for the use of subcontractors
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<PAGE> 109
requiring access to the void and the other for handing over to the CA at
Practical Completion.
430 USER INSTRUCTIONS: Provide the Main Contractor with two copies of the
floor manufacturer's maintenance and user instructions. One copy to be for
the use of subcontractors requiring access to the void and the other for
handing over to the CA at Practical Completion. The contents of the
instructions to include:
- The correct method for lifting and replacing panels and any stringers,
including limitations on the sequence and number of panels, stringers,
etc. which can be removed at one time.
- The permissible loadings that can be applied to the floor, with guidance
on the use of spreader plates, etc. during the installation of equipment
and subsequent maintenance.
- Methods for installing cabling, ducts, etc. so as to prevent damage to the
supporting structure.
- Cleaning methods for the panels and any integral finish(es).
440 SPARES: Provide the following and hand over to the Employer at Practical
Completion: 30 panels (as clause 131) with cut-outs for floor boxes.
450 POST INSTALLATION VISIT: After completion of services and other associated
work:
- Thoroughly inspect the floor installation for defects. Prepare a schedule
of outstanding defects and submit a copy to the CA.
- Thoroughly clean all accessible areas of the subfloor.
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<PAGE> 110
K41 - RAISED ACCESS FLOORS
Revision Date Description By Checked
- -- 26.2.98 Preliminary KRL
A 2.3.98 Reference to anti static laminate added DW
Clause 130.
B 13.3.98 Clause 131 corrected DW KRL
5
<PAGE> 111
PROJECT ST. PAUL'S
SUSPENDED CEILINGS
3005/K40
Rev -
[LOGO]
BENNETT INTERIOR DESIGN
TP Bennett Partnership --------------------
262 High Holborn 13 MAR 1998
London --------------------
WC1V 7DU ACTION
Tel: 0171 405 9277 --------------------
Fax: 0171 405 3568
--------------------
RAB/dr/3005/spec./k40 --------------------
--------------------
<PAGE> 112
K40 SUSPENDED CEILINGS
To be read with Preliminaries/General conditions.
TYPE(S) OF CEILING
105 SUSPENDED CEILING TYPE C-1
SUSPENDED CEILING(S) TO GENERAL OFFICE AREAS
- Drawing reference(s): N series.
- Structural soffit(s): Concrete slab, except Level 5: proprietary metal
decking pitched roof system with liner trays on steel structure.
- Ceiling type: Metal tiles on exposed powder coated aluminium grid with
integral M6 thread.
SAS system 130, SAS ceilings
- Fire spread rating for materials exposed both to the room and the void, in
accordance with Building Regulations: Class '0'.
- Airborne sound insulation of complete ceiling assembly: to BS 2750 Parts
3, 4 or 9 as relevant for control of flanking transmission over
relocatable partitions -- suspended ceiling normalised level difference,
not less that 35Dn.c.w. dB, refer to clause 162. Sound barriers as clause
420.
- Suspension system: To include all hangers, fixings, main runners, cross
members, primary channels, perimeter trims, splines, noggings, clips,
bracing, bridging etc. which are necessary to complete the installation
and achieve the performance specified. The ability of the 5th floor roof
construction, in particular the inner lining to provide a hanging soffit
for the suspended ceiling, and whether it can be breached, is to be
checked prior to suspended ceiling installation at this level. If it
cannot be used, appropriate runners, members and other necessary elements
of main suspension grid must be provided to support the suspended ceiling
from the roof structural members (rafters/purlins).
- Type: exposed powder coated aluminium grid with integral M6 thread.
Aluminium extrusion to be bird mouthed jointed.
- Hangers: Rigid adjustable.
- Top fixings: Expanding bolt anchors (concrete soffits); as appropriate for
Level 5, to CAR's approval.
- Protective finish(es) to suspension system: to suit Normal conditions.
- Finish/colour: Hot dip galvanised to all concealed components and fixings.
Polyester powder coating to RAL 9010 20% gloss for visible suspension
members.
- Perimeter trims: TCA 1109 threaded feathered metal tile to plasterboard
shadow gap trim at metal tile/plasterboard junctions.
TCA 0124 cut tile to columns, or cores and other solid walls.
- Membrane material(s): Press formed perforated electro-galvanised regular
edge mild steel tiles.
- Size(s) nominal 750 x 750mm. Perforations 1.5mm diameter to give 22% open
area in a 4mm diagonal pitch.
- Finish/colour: Electrostatically applied polyester powder coat to a smooth
20% gloss finish RAL 9010.
- Insulation materials: Acoustic pads, fully encapsulated to prevent fibre
migration, as required to achieve acoustic performance requirements. Pads
to be fixed into ceiling tiles. Specification to be 6mm Rockwool, 9.5mm
plasterboard, Rockwool black tissue faced, all sealed into tile with tear
resistant reinforced aluminium foil.
- Facing(s): Black finish to lower surface- all materials to comply with
current building regulations in respect of combustibility and surface
spread of flame.
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<PAGE> 113
- Additional loads/pressures to be sustained by the ceiling system:
Luminaries, a/c supply and extract grilles, smoke detectors, escape
signage, PA speakers, lateral loads exerted from partitions (doors,
cupboards etc).
- Services fittings: Install:- Luminaries, a/c supply and extract grilles,
smoke detectors, PA speakers.
- Note: Light fittings will be used for air return around their perimeter
into the ceiling (600mm square fittings in 750mm square ceiling tiles.
These ceiling tiles to be of appropriate cut-out size and incorporate
fixings, slots etc to co-ordinate with and accommodate the fittings
proposed and meet rigidity and all other requirements of this
specification. Numbers and extent to be to Services Engineering
specification.
- Accessories: fire Cavity Barriers as clause 410, Acoustic Cavity Barriers
as clause 420. shadow gap trims to plasterboard junctions or where cut
tiles occur.
- Other requirements: The ceiling grid will be used for the locating of
partition head tracks. The head tracks will have a compressible acoustic
seal. The ceiling tiles on partition runs should be clipped down, or have
some proprietary means of preventing lifting.
- :uninsulated, permeable, tiles may be incorporated at Services Engineering
Consultants' proposal, to act as return air "Diffusers" into the ceiling
return air plenum. Extent to be to Services Engineering Consultants
specification.
110 SUSPENDED CEILINGS: TYPE C2 PLASTERBOARD MARGINS TO PERIMETERS, CORES,
COLUMNS AND OTHER SOLID WALLS
- Drawing reference(s):
- Structural soffit(s): As clause 105.
- Ceiling system:
Type:Gyproc M/F system or equal approved.
- Suspension system: Grid and hanger fixings and spacings as recommended by
the suspended ceiling/membrane manufacturer, to include all hangers,
fixings, supports, runners and cross members, perimeter channels, clips,
bracing, bridging, etc which are necessary to complete the installation
and provide rigid installation, in particular the requirement for blind
box incorporation. Grid type and hangers to be as recommended by ceiling
system manufacturer and compatible with the metal ceiling tile system
adjacent.
- Protective finish to suspension systems: as clause 105.
- Perimeter trims: TRU-ST-150 15mm feathered shadow gap plasterboard
perimeter trim as obtainable from SAS.
- Board materials:
Type/thickness/size: Plasterboard to BS 1230 Part 1. 1 layer of 12.5mm
Type 1 wallboard, tapered edged to be taped and jointed to receive direct
decoration.
Fixings: Screw to grid members at centres and edge distances recommended
by board manufacturer using zinc or cadmium plated self drilling and
tapping countersunk screws.
Finish: Taped and jointed 2 no. coats top coat ready for painted
decorations. See section M20.
- Other requirements: Provide additional framing as necessary and continuous
batten members above ceiling on blind box centre line to allow fixing of
and support weight of blinds (by others).
- :Plasterboard perimeters may require upgrading to achieve the sound
insulation requirements outlined in clause 105.
120 SUSPENDED CEILINGS: TYPE C3
TO TOILETS TO MATCH EXISTING TOILETS.
- Structural soffit: concrete slab.
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<PAGE> 114
- Ceiling system:
Types CAPL system 120 (SAS) on concealed spring tee bar grid.
- Fire spread: as clause 105.
- Suspension system: as clause 105 generally, consisting of 25x25mm
galvanised angle hangers, 38x19mm galvanised channel support channel,
44x29mm spring tee bar tile support, 68x44mm galvanised 107 bracket
channel to support bracket.
- Top fixings: as clause 105.
- Finish/colour: Hot dip galvanised to all concealed components and fixings.
- Polyester powder coating to RAL 9010 smooth, 30% gloss.
- Tile material: 300x300mm, bevelled edges, plain
130 SUSPENDED CEILINGS: TYPE C4
PLASTERBOARD MARGINS WITHIN TOILET AREAS TO MATCH EXISTING
- Structural soffits: as clause 105.
- Ceiling systems.
- Type: British Gypsum M/F.
- Suspension system: generally as clause 110(no blind box requirement),
consisting of:
25x25mm galvanised angle hangers.
45x15mm channel MF7 support.
80x26mm top hat section MF5 plasterboard supports MF9 clip channel to
support bracket.
- Protective system to support systems: as clause 105.
- Perimeter trims: i) Junction of plasterboard and metal ceiling -- HT
Martingale, reveal trim type HTM -- ET 125.
ii) Junction of plasterboard and walls -- HT
Martingale, reveal trim type HTM-RT/150.
- Board materials: 2 no. layers, 12.5mm wallboard, lower layer taper edged.
- Finish: Taped and filled, finished with 2 no. coats top coat ready for
painted decorations.
140 SUSPENDED CEILINGS: TYPE C5
TO LIFT LOBBIES
- Structural soffits: as clause 105.
- Ceiling system to include, GRG profiled sections and plasterboard areas,
to receive skim coat for painted decorations. To incorporate services
items including recessed lighting, coffer lighting, loud speakers, smoke
detectors, air diffusers.
- Suspension system to be appropriate for ceiling material(s) and to meet
all requirements of the specification.
205 SUSPENDED CEILINGS GENERALLY: Unless specified otherwise, comply with the
relevant recommendations and performance requirements of BS 8290 for the
selection and assembly of components and materials.
210 CONTROL SAMPLE(S): Complete area(s) of the finished work in approved
location to be agreed, and obtain approval of appearance before
proceeding:
Sample to include area of ceiling types Cl, C2 (including solid
wall/column junction and be not less than 3mx4.5m).
220 ENVIRONMENTAL CONDITIONS:
- Areas for storage and installation must be clean, dry, well ventilated and
free from excessive and/or rapid variations of temperature and humidity.
- Do not install membrane material until the building is weathertight and
wet trades have finished their work. Before, during and after installing,
ensure that temperature
3
<PAGE> 115
and humidity are maintained at levels similar to those which will prevail
after building is occupied.
- Notwithstanding the above, delivery of materials and installation of the
suspended ceiling will be taken as joint acceptance by the Main Contractor
and Ceiling Contractor of the suitability of the environmental conditions.
230 CONDITIONING: Before fixing store (where recommended by supplier) on site
for at least 48 hours in conditions similar to those which will prevail
after the building is occupied. Ensure free circulation of air to all
surfaces.
240 CO-ORDINATION WITH OTHERS: The Ceiling Contractor must liaise with the
Main Contractor and other contractors to ensure:
- Related work within the void (services, partitions, fire barriers, fire
stopping, painting, etc.) is at a suitable stage of completion to enable
ceiling installation to proceed without damage or disfigurement to the
ceiling system.
- Fixtures around which the ceiling is to be installed are completed and
that services, fire barriers, etc. are in the correct position relative to
the ceiling grid.
- Hangers do not press against services, etc. and are installed vertically.
Where obstructions prevent vertical installation, brace hangers against
lateral movement or provide rigid bridging structures across obstructions.
- Services integrated within the ceiling membrane are positioned accurately,
supported adequately and aligned and levelled in relation to the membrane
and suspension system.
INSTALLATION
305 WORKMANSHIP GENERALLY:
- Handle, store and fix suspended ceiling materials and accessories in
accordance with manufacturers' recommendations, BS 8290:Part 3 and
design/performance requirements.
- Set out accurately to give level soffits free from undulations, lipping
and distortions in grid members.
- Fix securely with additional bracing and stiffening as necessary at
upstands, access hatches, partition heads, etc. to give a stable system
resistant to wind induced uplift and other specified design loads and
pressures.
- Do not use cartridge or powder activated methods for top fixings or rivets
for bottom fixings of hangers.
315 PROTECTION:
- No part of the suspension system must be subjected to loads for which it
is not designed, including lateral loads from ladders, tower scaffolds,
etc.
- Membrane materials must be handled carefully, kept clean and removed and
replaced correctly using special tools and clean gloves, etc. as
appropriate.
325 SETTING OUT: Unless shown otherwise, set out ceilings so that:
- Edges of tiles/panels are never less than half in width or length.
Position grid to suit tile/panel size(s), allowing for permitted
deviations from nominal size(s).
- All lines and joints are straight and parallel to walls unless specified
otherwise. Where surrounding walls or other building elements and features
to which the suspended ceilings relate are not square, straight or level,
obtain instructions on setting out.
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<PAGE> 116
355 FIXING BOARDS TO CONCEALED GRIDS:
- Fix and join boards using methods, materials and accessories recommended
by the board manufacturer.
- Cut boards neatly and accurately. Do not use damaged boards.
- Screw boards securely and firmly to grid members at recommended centres
and edge distances, to give a flat surface free from bowing and lipping.
Set heads of screws below surface of boards and fill flush with surface.
- Where not shown otherwise, provide movement joints as appropriate for the
area of ceiling and/or to coincide with movement joints in surrounding
structure.
- Stagger joints of boards applied in two or more layers. Ensure that edges
and ends of each board are fully supported and screwed to grid members.
360 WIRE HANGERS:
- Straighten before use and install vertically without bends or kinks. Do
not allow hangers to press against any fittings within the void.
- Tie securely at top and bottom with tight bends to loops to prevent any
vertical movement.
380 JOINTING OF PERIMETER TRIMS to be carried out neatly and accurately
without lipping or twisting using:
- Mitred joints at all external and internal corners.
- The longest lengths of trim available from manufacturer to keep
intermediate butt joints to a minimum.
390 OPENINGS IN MEMBRANE MATERIALS to be formed accurately and neatly to suit
sizes and edge details of fittings, using methods recommended by the
manufacturer and without causing damage or distortion.
395 SUPPORT OF SMALL FITTINGS VIA MEMBRANE MATERIALS:
- Fittings must be adequately supported without causing damage or distortion
to the membrane, by the use of rigid backing boards or other suitable
means.
- Surface spread of flame rating of additional supporting material must
match that of the ceiling membrane material.
400 INSULATION:
- Fit accurately and firmly with no gaps so that specified performance
levels are achieved.
- Insulation within individual tiles, trays, etc. must be fitted closely and
secured to prevent displacement when tiles are installed or subsequently
lifted. Reseal any cut dustproof sleeving.
- Lay out insulation over the membrane in the widest practical widths to
suit spacings of grid members, with closely butted joints.
- Do not cover electrical cables (unless they have been sized accordingly).
Cut insulation carefully around electrical fittings, etc.
- On sloping and vertical areas of ceiling, fastenings must be used to
prevent displacement.
5
<PAGE> 117
410 CAVITY FIRE BARRIERS:
- Fire resistance to BS 476:Part 20: Integrity/insulation (minutes): 30/15
Material: Rockwool Fire Barriers.
Fixing: In accordance with manufacturers recommendations.
- Unless shown otherwise, install barriers to subdivide the ceiling void
into areas not exceeding 20m in any direction.
- Fix securely at perimeters and joints and to ducts, pipes etc. ensuring
permanent stability and continuity with no gaps, to provide a complete
barrier to smoke and flame.
- Fixing to the ceiling must not impair free expansion of grid system or
otherwise affect fire resisting performance.
420 SOUND BARRIERS TO CELLULAR OFFICE PARTITION LINES:
- Material: Lamaphon CB10 Acoustic Ceiling Void Barriers, as manufactured by
Siderise Ltd, Kingston upon Thames, Surrey KT1 2EH.
- Align accurately with partition heads. Fit tightly and fix securely at
perimeters and joints, using methods recommended by the barrier
manufacturer, including steel support sections as appropriate. Ensure
permanent stability and continuity with no gaps.
- Seal any gaps at junctions of sound barriers with partition heads,
suspended ceiling, structural soffit, walls, ducts, pipes, etc. in
accordance with manufacturer's recommendations.
- All joints to be dressed and sealed with self adhesive aluminium foil
tape.
- All cut edges and open ends or edges to be dressed and sealed with
self-adhesive aluminium foil tape.
500 ELECTRICAL CONTINUITY AND EARTHBONDING:
- All substantial conductive parts of the suspended ceiling system including
integrated electrical equipment and fittings, are to be electrically
continuous and fully earth bonded in accordance with BS 7671 (The IEE
Wiring Regulations).
- Ensure that earth bonding is completed as soon as possible after
completion of each independent area of suspension system.
- After completion of the ceiling installation, associated services and
fittings, arrange for tests to demonstrate that the ceiling is
electrically continuous and fully earth bonded in accordance with BS
8290:Part 3.
- Notify the CA to enable the testing to be witnessed. Submit a test report
to the CA.
505 INSTRUCTIONS AND TOOLS: Provide the Main Contractor with duplicate sets of
user instructions and access tools recommended by the suspended
ceiling/access panel manufacturer. One for the use of contractors
requiring access to the void and the other for handing over to the CA at
Practical Completion.
520 USER INSTRUCTIONS: Provide the Main Contractor with two copies; one for
the use of contractors requiring access to the void and the other for
handing over to the CA at Practical Completion. The contents of the
instructions to include:
- Correct methods for lifting and replacing tiles, panels, etc.
- Cleaning methods and materials.
- Decoration of tiles and touching up where appropriate.
- Limitations placed on subsequent alterations and maintenance procedures to
fire resisting suspended ceilings to ensure that their performance is not
impaired.
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<PAGE> 118
530 SPARES: Provide the following and hand over to the Employer at Practical
Completion:
25 tiles per floor (minimum) in whole boxes.
535 REMOVAL OF CEILING TILES:
- Remove appropriate ceiling tiles to allow CA and services consultant to
inspect fire stopping and to allow for commissioning and testing and
inspection of services. Subsequently replace tiles.
540 POST INSTALLATION VISIT: After completion of services and associated work
by others:
- Thoroughly inspect the ceiling installation for defects. Prepare a
schedule of outstanding defects and submit a copy to the CA.
- Check that tiles, integrated luminaries, diffusers, etc. are correctly
fitted, aligned and clean.
540 POST INSTALLATION VISIT: After completion of services and associated work
by others:
- Thoroughly inspect the ceiling installation for defects. Prepare a
schedule of outstanding defects and submit a copy to the CA.
- Check that tiles, integrated luminaries, diffusers, etc. are correctly
fitted, aligned and clean.
7
<PAGE> 119
PETERS HILL
K40 SUSPENDED CEILINGS
<TABLE>
<CAPTION>
Revision Date Initials Details Checked/Date
<S> <C> <C> <C> <C>
- ---- 11.3.98 ---- KRL DW 13.3.98
</TABLE>
8
<PAGE> 120
PROJECT ST. PAUL'S
PLASTERBOARD FIXED PARTITIONS/INNER WALLS/LININGS
3305/K31
Rev --
[LOGO]
BENNETT INTERIOR DESIGN
TP Bennett Partnership --------------------
262 High Holborn 13 MAR 1998
London --------------------
WC1V 7DU ACTION
Tel: 0171 405 9277 --------------------
Fax: 0171 405 3568
--------------------
--------------------
--------------------
<PAGE> 121
K31 PLASTERBOARD FIXED PARTITIONS/INNER WALLS/LININGS
To be read with Preliminaries/General conditions.
TYPE(S) OF PARTITION/WALL/LINING
110 METAL STUD PARTITION FOR TOILET EXTENSIONS:
- Partition nominal thickness; as on detail drawing.
- Construction: As clause 410. Partitions to span slab to slab. (Perimeter
walls)
Dry wall types: boards and metalwork to be as manufactured by Knauf, or
equal approved. Types to be used include:
- Type 2 (painted finish): 1 layer 12.5mm wall board and 1 layer 12.5mm
moisture resistant board each side of 48mm Knauf C studs at 600mm centres.
- Type 3 (to receive tiles): as type 2 but studs at 400mm centre.
- Type 4: (thicker partitions, to incorporation in-built hand dryers, or
other areas as indicated): Twin wall construction consisting of 1 layer of
12.5mm wallboard and 1 layer 12.5mm moisture resistant board at 48mm C
studs and 400mm centres with an identical wall adjacent to it to create
overall widths as indicated on the drawings. C studs braced together at
900mm centres for rigidity.
- Type 6 (cubicles): As type 2 but acoustic rating 46 Rw dB.
- Type 7 (against risers) (as indicated on drawings, plus to receive tiles):
Knauf shaftwall system will be used comprising 2 layers 12.5mm fireline
board and 1 layer 25mm coreboard on 60mm CT studs at 600mm centres
including 25mm insulation in void between the studs.
- Finish: Walls to be finished with appropriate tape and filling material
and finished with 2 coats of topcoat on painted areas or areas for
decoration, or to receive a tiled finish.
- Other requirements: Insulation, trimming sections, seals, caulks,
deflection head details etc as indicated on the drawings.
111 METAL STUD SHAFTWALL PARTITIONS FOR DUCT RISERS AND RISER CUPBOARDS:
- Partition nominal thickness: as on detailed drawings.
Partitions to span slab to slab.
- Materials to be Lafarge, or equal approved.
- Partitions to comprise metal framework composed of perimeter track and
starter studs with vertical C.H. studs running from floor to soffit. 25mm
thick coreboard to be held in place by framing.
- Components: Include:-
J track -- JT62/B and JT92/B
E studs -- ES60/B and ES90/B
Studs -- CHS6O/B and CHS/90/B
Lafarge fire check core board 25mm.
Lafarge fire check board 12.5 and 15mm
Lafarge wallboard 12.5 and 15mm.
- Construction: Fix first a layer of boarding with long edges vertically
using 25mm drywall screws. Space screws at 200mm centres at board edges
and at 300 centres to the centre of boards. Stagger screws approximately
100mm relative to those in the adjacent board. Fix the second layer of
boarding using suitable length screws with long edges of vertical but
staggered to the first layer. Stagger screw fixings relative to the first
layer. Where partition includes for a deflection head, ensure that the
deflection requirement is left between the structural soffit and the top
of the fixed plasterboard. Stuff this deflection gap using an intumescent
caulking or Rockwool material and fix retaining angle to the soffit.
1
<PAGE> 122
- Ancillary items:
- Shadow line trims and skirting sections will be installed using the shadow
line trim reveals reference STR 12.5 and the shadow line skirting
reference SWB1O5.
- Installation of the shadow line trim will take place following the fixing
and cuffing back of the plasterboard, the trim being fixed and taped
finished to the board edge.
- With regard to the skirting section, like the shadow line trim it will be
fixed and taped to the cut edge of the plasterboard with additional self
drill self tap screws fixing to free leg of the skirting profile to the
backing framework at 600mm centres.
- Timber inserts: Where required by the detailed requirements of the
project, treated softwood timber insets and bearers will be provided and
fixed within the partitioning system. These will allow for the subsequent
fixing of items such as door linings, radiators etc.
- Finishing: All visible plasterboard surface with the exception of the duct
side or liftshaft side of shaftwall systems will be completed using the
taping and jointing system thus creating a continuous smooth finish.
Materials to be used comprise joint filler and finish, paper tapes, flexi
tapes and thin coat angle and stop beads. Application of the finish will
be as follows:
- Apply jointing compound to the joint and press appropriate length of paper
tape firmly into the compound avoiding air bubbles. Cover the paper tape
with second application of jointing compound and strike off flush with the
plasterboard face.
- Allow initial application to set fully then apply a second coat of
jointing compound over the joint feathering out of 50 -- 60mm beyond the
edge of the first coat. Allow this to set hard prior to application of a
further coat of jointing compound feathering an additional 50 -- 60mm
beyond the second coat. Allow to dry and finish joint by sanding back to a
smooth surface.
- Where taping and jointing is to be carried out using automatic taping
machines, the works should be carried out in accordance with the
manufacturers recommendations.
- Fixings: Where described fixings shall be in accordance with the detailed
drawings. Generally the works shall be completed using the following
fixings:
i) Softwood packs fixed within staircase area's to support shaft wall
and stud partitions shall be Messrs. Hilti's HRD10's or HPS --
1.8/60x 90 as indicated on the drawings.
ii) Fixing of perimeter tracks and starter channels to all systems will
be progressed using a nailable plug fixing.
iii) All other fixings within the system will be as recommended for their
locations including drywall self tapping screws for securing
plasterboard to lightweight metal components, pan head self tapping
screws for fixing light gauge metal components together and board
laminating core boards as required.
113 OFFICE PARTITIONS: GENERAL CELLULAR OFFICES / MEETING ROOMS:
- British Gypsum Gyproc Metal Stud partition or equal approved.
- Locations: As indicated on drawings.
Details: As drawing.
- Partition nominal thickness: 97 mm.
Plasterboards: 1 layer of 12.5mm wallboard with tapered edges (each side)
- Construction: As clause 412.
Framing: 70 mm wide joggled metal studs and channels.
- Finishing: Taped seamless finish as clause 470.
- Other requirements: Provide all components, fixings etc. to complete
partitions as indicated on the drawings.
- Visible head channels and other visible components to be powder coated RAL
9010 white, minimum coating 40 microns, average 60 - 80 microns. Refer
section Z31 Gloss level 20%.
- Fix skirting to both sides of partitioning. Skirting as shown on details.
- Partition to be erected from raised floor level to suspended ceiling
level.
- For acoustic barrier above ceiling refer to section K40.
2
<PAGE> 123
- Install bracing above ceilings as necessary to restrain partitions to
achieve "Medium Duty" performance as described in BS5234 Part 1.
- Glazed partitions to office fronts to be full-height, timber framed
(Maple), with 10.8mm clear laminated glass, incorporating Maple veneered
doors.
- Obtain partition components from a single source, e.g. British Gypsum or
equal approved.
114 OFFICE PARTITIONS, HIGHER ACOUSTIC SPECIFICATIONS:
- As clause 113, plus 25mm Gypglas 1200 in cavity, to achieve 42RwdB sound
insulation.
115 METAL STUD PARTITION FOR CER ROOM PERIMETER WALLS:
- Type and manufacturer as clause 113.
- Locations: as indicated on drawing 7534 G023.
- Partition nominal thickness: 122 mm.
Plasterboards: as clause 113
Plasterboards: 2 layers 12.5mm wallboard each side, outer layer taper
edged.
- Construction: As clause 410.
Framing: 70 mm wide metal studs and channels recommended for the purpose
by board manufacturer, fabricated from galvanised mild steel sheet to BS
2989, designation Z2 G275N and passivated. Sheet thickness as required by
manufacturer.
Screws: Gyproc dry wall screws, or equal approved.
Stud centres: 600 mm
- Finishing: Taped seamless finish as clause 470.
- Other requirements: as clause 113 except:
- Partition to be erected from slab-to-slab.
Plus: head defection detail required.
GENERALLY/PREPARATION
200 PROVISION OF CONDUITS: Allow for conduits to be installed within
partitions by others prior to fixing of face(s) of partitions to studs.
210 EXISTING FIXTURES, SERVICES, ETC: Ensure that surface mounted pipework,
conduit, cables, electrical outlets, fixtures, appliances, fixing
brackets, clips, skirtings, architrave's, etc., are removed from existing
backgrounds which are to be lined.
240 ADDITIONAL NOGGINGS: Ensure that noggings, bearers, etc., required to
provide fixing points for or to support fixtures, fittings and services,
are accurately positioned and securely fixed. After fixing boards mark
positions of noggings, bearers, etc. for following trades as required.
270 CONTROL SAMPLE: Complete a representative area of partitioning in an
approved location. Obtain approval of appearance before proceeding.
FIXING/FINISHING
310 WORKMANSHIP GENERALLY:
- Plasterboard: To BS 1230:Part 1 with exposed surface suitable to receive
direct decoration, or vinyl wall covering as required.
- Fixing, jointing and finishing materials and accessories, where not
specified otherwise, to be as recommended by plasterboard manufacturer.
- Operatives to be properly trained for partitioning and dry lining work.
- Prevent frost damage.
3
<PAGE> 124
- Cut boards neatly and accurately without damage to core or tearing of
paper facing. Keep cut edges to a minimum and position at internal angles
wherever possible. Mask with bound edges of adjacent boards at external
corners.
- Fix boards securely and firmly to suitably prepared and accurately
levelled backgrounds. Set heads of fastenings in a depression; do not
break paper or gypsum core. Finish neatly to give flush, smooth, flat
surfaces free from bowing and abrupt changes of level. Do not use damaged
boards.
331 ACOUSTIC INSULATION:
- 25mm glass woolmat as Gypglas 1200 or equal approved.
- Install in accordance with manufacturers recommendations and in accordance
with acoustic test method.
- Closely butt all joints leaving no gaps.
340 ACOUSTIC SEALANT:
- Manufacturer and reference: Gyproc sealant or equal approved.
- Apply as a continuous bead to clean, dry, dust-free surfaces, leaving no
gaps.
341 INTUMESCENT CAULK: As recommended by manufacturer, to maintain required
fire resistance.
350 JOINTS between tapered edges of boards to be lightly butted. Leave a 3 mm
gap where cut/unbound edges occur.
360 HORIZONTAL JOINTS will not be permitted in surfaces exposed to view.
362 HORIZONTAL JOINTS in two layer boarding, where permitted, to be offset by
at least 600 mm. Ensure that noggings are positioned to support horizontal
joints in outer layer of boarding.
400 FIXING ENDS OF PARTITIONS GENERALLY:
- Note: Fixing of partition ends will not be allowed into Atrium or external
facade mullions or other components. End studs, partition construction and
partition bracing shall be sufficient to enable vertical spanning and
maintain rigidity of partition without end fixings in these locations.
410 CONSTRUCTING METAL STUD PARTITIONS:
- Studs at wall junctions and floor/soffit channels to be fixed securely at
600 mm centres.
- Position studs at equal centres, maintaining sequence across openings.
Provide additional studs as necessary to ensure support to all vertical
edges of boards.
- Vertical joints on opposite sides of partitions to be staggered.
- When more than one layer of plasterboard is to be applied, stagger joints
between layers.
- Fix boards to each stud and along all edges with proprietary screws at not
more than 300 mm centres and not less than 10 mm from the edge of the
board. Set heads in a depression; do not break paper or gypsum core.
411 METAL STUD PARTITIONS FORMED FROM DOUBLE STUDS to be cross-braced at 600
mm centres with bracing twice screwed at each end.
412 CONSTRUCTING METAL STUD PARTITIONS FROM PROPRIETARY SYSTEM ELEMENTS:
- Install in accordance with partition system manufacturer's instructions.
4
<PAGE> 125
430 SITE DIMENSIONS: Check dimensions on site well in advance of
fabrication/installation. Report any discrepancies and problems of fit to
the CA and obtain instruction before proceeding.
431 SETTING OUT: Partitioning which does not penetrate the existing ceiling
generally to be fixed centrally to ceiling grid members.
460 CAVITY BARRIERS: Accurately cut and fit boards at perimeter and around
pipes, ducts, etc. Seal any gaps with mineral wool tightly packed to
prevent penetration of smoke and flame.
470 TAPED SEAMLESS FINISH:
- Lightly sand cut edges of boards to remove paper burrs. Apply PVAC sealer
to exposed cut edges of boards and any other plaster surfaces to which
tape is to be applied.
- Fill all joints and gaps and cover with continuous lengths of tape, fully
bedded. When set, cover with joint finish, feathered out to give a flush,
smooth, seamless surface. Apply two coats of joint finish at external
angles. Jointing materials to be to BS 6214.
- Spot nail/screw depressions with joint filler to give a flush surface.
- Fill minor indents and after joint, angle and spotting treatments have
dried, apply surface finish to give a continuous consistent texture to
surface of boards.
Surface finish: 2 coats Gyproc 'Drywall' or equivalent approved.
480 MINOR DAMAGE in existing plasterboard: Where not specified otherwise,
repair small areas of broken board by cutting away the paper, removing
loose core material and filling with joint filler. Apply PVAC sealer to
exposed plaster and cut edge of paper before filling. Finish off to give a
flush, smooth surface ready for redecoration.
490 MAJOR DAMAGE in existing plasterboard: Where not specified otherwise,
repair large damaged areas of board by cutting out and replacing with an
identical piece of board. Form a neat hole with sides vertical and
horizontal. Fix the patch using the same method as the existing dry
lining, ensuring full support of all edges of existing and new board. Fill
joints, apply tape and finish off to give a flush, smooth, seamless
surface ready for redecoration
535 REMOVAL OF CEILING TILES:
- Remove appropriate ceiling tiles to allow CA and services consultant to
inspect fire stopping and to allow for commissioning and testing and
inspection of services. Subsequently replace tiles.
540 POST INSTALLATION VISIT: After completion of services and associated work
by others:
Throughly inspect the ceiling installation for defects. Prepare a
schedule of outstanding defects and submit a copy to the CA.
Check that tiles, integrated luminaries diffusers, etc, are correctly
fitted, aligned and clean.
5
<PAGE> 126
K31 PLASTERBOARD FIXED PARTITIONS/INNER WALLS/LININGS
<TABLE>
<CAPTION>
Revision Date Initials Details Checked/Date
<S> <C> <C> <C> <C>
- ---- 12.3.98 KRL DW 13.3.98
</TABLE>
6
<PAGE> 127
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Job No. Category Date Issue No.
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[LOGO] Petershill
BENNETT INTERIOR DESIGN Project Saint Pauls
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GSI P. Cravesande 1
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CPC P. Coombs 1
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BWA I. Bishop 1
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OAP D. Satchel 1
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TSL C. Morris 1 + Disk
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L+P A. Musgrove 1
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JLW R. Norton 1
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Job No. Category Date Issue No.
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[LOGO] Petershill
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CPC P. Coombs 1
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BWA I. Bishop 1
- --------------------------------------------------------------------------------
OAP D. Satchel 1
- --------------------------------------------------------------------------------
TSL C. Morris 1 + Disk
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
L+P A. Musgrove 1
- --------------------------------------------------------------------------------
JLW R. Norton 1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TC D. Norman 1
- --------------------------------------------------------------------------------
DRAWING STATUS
- --------------------------------------------------------------------------------
PRELIMINARY
- --------------------------------------------------------------------------------
INFORMATION
- --------------------------------------------------------------------------------
APPROVAL x
- --------------------------------------------------------------------------------
COMMENT x
- --------------------------------------------------------------------------------
TENDER
- --------------------------------------------------------------------------------
CONSTRUCTION
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OTHER (Please specify)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 130
- --------------------------------------------------------------------------------
Job No. Category Date Issue No.
300S P 27.02.98 01
-----------------------------------------
[LOGO] Petershill
BENNETT INTERIOR DESIGN Project Saint Pauls
- --------------------------------------------------------------------------------
DRAWING ISSUE SHEET
- --------------------------------------------------------------------------------
Issue D 27
-------------------------------
Series P: Raised Floor Plan Date M 02
-------------------------------
Y 98
-------------------------------
Sheet no. 01 AI No. N/A
- --------------------------------------------------------------------------------
Size Title No Revisions
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
A3 BASEMENT 098
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" LOWER GROUND FLOOR 099
- --------------------------------------------------------------------------------
" GROUND FLOOR 100 B
- --------------------------------------------------------------------------------
" FIRST FLOOR 101
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" SECOND FLOOR 102
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" THIRD FLOOR 103
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" FOURTH FLOOR 104
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" FIFTH FLOOR 105 B
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- --------------------------------------------------------------------------------
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- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
No. of Copies
DISTRIBUTION (N=negative R=Reduction)
================================================================================
GSI I. King 1
- --------------------------------------------------------------------------------
GSI I. Hodgson 2
- --------------------------------------------------------------------------------
GSI P. Cravesande 1
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CPC P. Coombs 1
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BWA I. Bishop 1
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OAP D. Satchel 1
- --------------------------------------------------------------------------------
TSL C. Morris 1 + Disk
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
L+P A. Musgrove 1
- --------------------------------------------------------------------------------
JLW R. Norton 1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TC D. Norman 1
- --------------------------------------------------------------------------------
DRAWING STATUS
- --------------------------------------------------------------------------------
PRELIMINARY
- --------------------------------------------------------------------------------
INFORMATION
- --------------------------------------------------------------------------------
APPROVAL x
- --------------------------------------------------------------------------------
COMMENT x
- --------------------------------------------------------------------------------
TENDER
- --------------------------------------------------------------------------------
CONSTRUCTION
- --------------------------------------------------------------------------------
OTHER (Please specify)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 131
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[LOGO]
ROLFE JUDD
printing architecture interiors
[ADDRESS ILLEGIBLE]
-------------------------------------------
Client
MEPC
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Project
PETERSHILL, LONDON EC4
ONE CARTER LANE
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Drawing
ROOF PLAN
-------------------------------------------
Scale Date Drawer [ILLEGIBLE]
1:100(A1) 13.09.95 BOB
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Drawing No. [ILLEGIBLE]
2897/CL/07- B
--------------------------------
[ILLEGIBLE]
[ILLEGIBLE]
[ILLEGIBLE]
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[LOGO]
ROLFE JUDD
printing architecture interiors
[ADDRESS ILLEGIBLE]
-------------------------------------------
Client
MEPC
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Project
PETERSHILL, LONDON EC4
ONE CARTER LANE
-------------------------------------------
Drawing
FIFTH FLOOR
-------------------------------------------
Scale Date Drawer [ILLEGIBLE]
1:100(A1) 13.09.95 BOB
-------------------------------------------
Drawing No. [ILLEGIBLE]
2897/CL/02-3006 D
--------------------------------
Cat. No.
2897/CL/02-3006
(c) [ILLEGIBLE]
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[LOGO]
ROLFE JUDD
printing architecture interiors
[ADDRESS ILLEGIBLE]
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Client
MEPC
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Project
PETERSHILL, LONDON EC4
ONE CARTER LANE
-------------------------------------------
Drawing
TYPICAL ROOF SECTIONS
-------------------------------------------
Scale Date Drawer [ILLEGIBLE]
1:100(A1) 13.0[ILLEG]BOB
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Drawing No. [ILLEGIBLE]
2897/CL/07-3014 B
--------------------------------
Cat. No.
2897/CL/07-3014
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[LOGO]
ROLFE JUDD
printing architecture interiors
[ADDRESS ILLEGIBLE]
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Client
MEPC
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Project
PETERSHILL, LONDON EC4
ONE CARTER LANE
-------------------------------------------
Drawing
KEY SOUTH ELEVATION
-------------------------------------------
Scale Date Drawer [ILLEGIBLE]
1:100(A1) 12.09.95 BOB
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Drawing No. [ILLEGIBLE]
2897/CL/07-3008 B
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Cat. No.
2897/CL/07-3008
[ILLEGIBLE]
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[GRAPHIC OMITTED]
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[LOGO]
ROLFE JUDD
printing architecture interiors
[ADDRESS ILLEGIBLE]
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Client
MEPC
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Project
PETERSHILL, LONDON EC4
ONE CARTER LANE
-------------------------------------------
Drawing
KEY WEST ELEVATION
-------------------------------------------
Scale Date Drawer [ILLEGIBLE]
1:100(A1) 12.09.95 BOB
-------------------------------------------
Drawing No. [ILLEGIBLE]
2897/CL/07-3001 B
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Cat. No.
2897\CL\07-3001
[ILLEGIBLE]
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[GRAPHIC OMITTED]
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[LOGO]
ROLFE JUDD
printing architecture interiors
[ADDRESS ILLEGIBLE]
-------------------------------------------
Client
MEPC
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Project
PETERSHILL, LONDON EC4
ONE CARTER LANE
-------------------------------------------
Drawing
KEY EAST ELEVATION
-------------------------------------------
Scale Date Drawer [ILLEGIBLE]
1:100(A1) 12.09.95 BOB
-------------------------------------------
Drawing No. [ILLEGIBLE]
2897/CL/07-3010 B
--------------------------------
Cat. No.
2897/CL/07-3001
(c) [ILLEGIBLE]
<PAGE> 137
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<PAGE> 138
GOLDMAN SACHS PROPERTY MANAGEMENT
BRIEF SPECIFICATION OF WORKS
for the
FITTING OUT
of
1 CARTER LANE
LONDON EC4
[LOGO]
Bernard Williams Associates
26 February 1998
Revision 1
<PAGE> 139
GOLDMAN SACHS PROPERTY MANAGEMENT
FITTING OUT, 1 CARTER LANE, LONDON. EC4
Element Brief Specification
Access Floors o 150 mm high (110 mm clear) fully accessible medium
grade raised floor to general office areas. Panels
to be of corrosion resistant steel with
cementitious infill.
o 450 mm high (400 mm clear) fully accessible heavy
duty raised floor to computer rooms (CERs). Panels
to be self-finished in laminate.
o Anti-dust sealant to existing floor slab.
o Mineral fibre fire barriers below access floors as
required.
o Form cut-outs for floor boxes, grommets, etc.
o Lift/replace floor panels for access to
services.
o Steps/ramps with mild steel balustrading/
handrails at junctions of differing height floors.
Partitions and Doors o Dense concrete blockwork partitions forming
kitchen, basement plant rooms and risers.
o Fire resisting plasterboard to CERs, store rooms,
etc.
o Standard plasterboard partitions (from access
floor to suspended ceilings) to offices,
conference rooms, etc.
o Full height hardwood framed glazed screens with 10
mm thick laminated clear glass to office fronts
and conference rooms.
o Full height glazed doors and side panels to lift
lobbies.
o Full height hardwood veneered doors in hardwood
frames generally.
o Stainless steel doors in stainless steel frames
with automatic opening mechanism to kitchen.
o Laminate faced doors in hardwood frames to kitchen
changing rooms/toilets.
o Fire resisting paint finished doors and frames to
plant rooms, etc.
o Self-finished, acoustic sliding/folding partition
to conference suite.
o Additional toilet cubicles to match base building
to enlarged toilets on 1st-4th Floors.
o Stainless steel door ironmongery generally.
o Aluminium door ironmongery to ancillary areas.
o MDF board skirtings to general office areas.
o Hardwood skirtings to special areas.
- 1 -
<PAGE> 140
GOLDMAN SACHS PROPERTY MANAGEMENT
FITTING OUT, 1 CARTER LANE, LONDON. EC4
Element Brief Specification
Fixtures and Fittings o Built-in laminate faced worktops, cupboards and
shelves to the following:
o Tea Rooms
o Mail Room
o Copier Rooms/Print Room
o CERs
o First Aid
o Training Rooms
o Stores
o Built-in coat cupboards.
o Hardwood veneered equipment tops.
o Built-in fittings/screens to cafeteria and
coffee bar.
o Built-in reception desk to conference suite.
o Whiteboards/Notice boards to training rooms.
o Built-in audio visual cupboards to training rooms.
o Signs and Graphics.
o Vanitory units, etc to showers/changing rooms.
Wall Finishes o Plasterboard dry lining to gymnasium in basement.
o Full height ceramic wall tiling to kitchen,
showers, changing rooms, etc.
o Extend base building wall finishes to enlarged
toilets on 1st-4th Floors.
o Minors to aerobics area.
o Hardwood/laminate panelling to cafeteria/
coffee bar.
o Hardwood/fabric wrapped panelling to lift
lobbies.
o 'Stretchwall' acoustic panelling to video
conference rooms.
o 'Acrovyn' laminate panelling to goods lift
lobbies.
- 2 -
<PAGE> 141
GOLDMAN SACHS PROPERTY MANAGEMENT
FITTING OUT, 1 CARTER LANE, LONDON. EC4
Element Brief Specification
Painting o Fabric wall coverings to Partner offices, lift
and Decorating lobbies and special areas.
o Vinyl wall coverings generally.
o Paint finish to ancillary areas.
o Paint finish to plaster ceilings/perimeter
margin.
Suspended Ceilings o Perforated metal tile 'tartan grid' ceiling with
concealed grid to general office areas (CAPL
Ceiling System 120 or equivalent).
o Acoustic backing pad and plasterboard within
ceiling tile.
o Plasterboard perimeter margin to general office
areas.
o Plasterboard ceilings with upstands/coffers to
lift lobbies, cafeteria, coffee bar, etc.
o Non-perforated metal tile easy clean ceiling to
kitchen.
o Extend base building ceiling finishes to enlarged
toilets on 1st-4th Floors.
o Acoustic barriers above dividing walls to offices
and conference rooms.
o Mineral fibre fire barriers above ceilings as
required.
o Cut openings in ceilings for fire alarm speakers,
smoke detectors, LV lights, etc.
o Take down/replace tiles for access to services.
(NB: No Ceiling to CERs).
Carpet Flooring o Broadloom carpet on underlay to Partner offices,
lift lobbies and special areas.
o Magnetic backed 'Milliken' carpet tiles to general
areas.
Vinyl Flooring o Vinyl sheet flooring on plywood base to print room
and ancillary areas.
o Epoxy paint finish to plant rooms.
Special Flooring o Stone border to lift lobbies.
o Stone/tile/hardwood flooring to cafeteria and
coffee bar.
o Ceramic tiling to kitchen, tea rooms, changing,
showers, toilets, etc.
o Extend base building floor finishes to enlarged
toilets on 1st-4th Floors.
- 3 -
<PAGE> 142
GOLDMAN SACHS PROPERTY MANAGEMENT
FITTING OUT, 1 CARTER LANE, LONDON. EC4
Element Brief Specification
Blinds and Drapes o 'Fineblind' venetian blinds generally.
o Black-out blinds to training rooms/video
conference rooms.
Kitchen Equipment o Stainless steel equipment, worktops, shelving and
servery to kitchen/cafeteria.
o Refrigerators, microwaves, tea/coffee machines,
etc to tea rooms.
Mechanical o 2 No. 270 kW chillers located in 5th Floor plant
Installations room to support CERs/UPS room.
o 6 No. 32 kW AC units to Ground Floor CER (4 duty
/2 standby).
o 3 No. 32 kW AC units to 5th Floor CER (2 duty/1
standby).
o 2 No. 32 kW AC units to UPS room in basement (1
duty/1 standby).
o 2 No. chilled water circulating pumps with
variable speed drives.
o New chilled water riser to serve CERs/UPS room.
o 4 pipe fan coil units to perimeter zone of office
floors (4.5 m centre).
o 2 pipe fan coil units to internal zone of office
floors (4.5 m centre).
o Fresh air ductwork, chilled water and heating
pipework extended from base building risers.
o Adapt toilet extract systems to enlarged toilets
on 1st-4th Floors.
o Linear diffusers to perimeter margin.
o Swirl diffusers to tiled ceilings.
o Dedicated supply and extract systems to kitchen,
cafeteria/coffee bar, gymnasium, changing rooms,
etc.
o Transfer fans to conference rooms.
o Extend base building 'Trend' BMS system including
link to Peterborough Court.
o Leak detection systems to CERs/UPS room.
Electrical o New HV supply and transformer.
Installations o 800 kVA generator system located in 5th Floor
plant room.
o 2 No. 300 kVA UPS modules with 15 minute battery
supplies.
o New UPS riser serving CERs and 1st and 2nd Floors.
o PDU's to CERs.
o Duplex power supplies to IT cabinets, run at high
level
- 4 -
<PAGE> 143
GOLDMAN SACHS PROPERTY MANAGEMENT
FITTING OUT, 1 CARTER LANE, LONDON. EC4
Element Brief Specification
Electrical o Underfloor busbar system to general office areas.
Installations o Floor boxes/power strips fed from underfloor
(Contd.) busbar system to general areas.
o Power supplies to the following:
o Mechanical Installations
o High Fog Sprinkler Systems
o Fire Alarm/VESDA Systems
o Security Installations
o Kitchen Equipment
o World Clocks
o Photocopiers/Cleaners, etc.
o Clean, dirty and signal earthing systems.
o World Clocks.
o Cable baskets as bridges between IT/power
cabling.
o Cable baskets to new IT riser linking CERs and
basement incoming rooms.
o 'Faraday Cage' to 5th Floor CER.
o Low brightness fluorescent light fittings with Cat
2 diffusers to general office areas.
o Recessed directional compact fluorescent light
fittings to Partner offices, lift lobbies,
cafeteria/coffee bar and special areas.
o Dimming systems to training rooms and video
conference rooms.
o Battery packs to support emergency lighting.
Sprinkler o Adapt sprinklers in basement to suit new layout.
Installations o High fog sprinkler systems to CERs.
- 5 -
<PAGE> 144
GOLDMAN SACHS PROPERTY MANAGEMENT
FITTING OUT, 1 CARTER LANE, LONDON. EC4
Element Brief Specification
Plumbing Installations o Additional 2 No. WC; 2 No. urinals and 2 No. wash
hand basins to male toilets and 2 No. WC and 2No.
wash hand basins to female toilets on 1st-4th
Floors.
o Sanitary fittings to showers/changing rooms/
toilets.
o Sinks to kitchen/tea rooms.
o Extend hot, cold and waste water pipework.
o Drainage to CERs for high fog sprinkler system.
Fire Alarm o Extend base building fire alarm system and install
Installations fire alarm sounders, smoke detectors and call
points to suit layout.
o VESDA smoke alarm system to CERs.
Security Installations o Bomb blast film to all windows and glazed
partitions.
o Card readers to all entrance doors, CERs and
compliance doors.
o CCTV cameras externally and to all entrance areas.
o Intruder alarm.
Builders Work o Steelwork support to roof mounted plant.
o Adapt roof drainage system to suit new plant.
o Adapt roof and install louvres to match existing
to suit new roof mounted plant.
o Construct new riser for IT cabling, UPS busbar and
chilled water pipework.
o Adapt roof and install supports for 3 No.
satellite dishes and 3 No. aerials.
o General builders work in connection with services
installations.
Fire Safety o Fire stopping around services.
IT Cabling o 'Cat 5' structured cabling system from CERs to
offices, workstations, equipment tops, etc.
o Frames/patch panels/cabinets to CERs.
- 6 -
<PAGE> 145
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BASEMENT PLAN
GENERAL ARRANGEMENT
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3005 G 098 -------------------
[ILLEGIBLE]
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<PAGE> 146
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GENERAL ARRANGEMENT
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[ILLEGIBLE]
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A Lisa 25/2/98
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GENERAL ARRANGEMENT
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A HONG LISA 25/2/98
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<PAGE> 162
[Letterhead of CPC]
OUR REF 6/98/proj/GS/brta1702.doc/PC/gb
DATE 17th MARCH 1998
BY FACSIMILE AND POST
Brian Taylor Esq.
Arnold Project Services
18 King William Street
LONDON
EC4N 7BP
Dear Brian
ONE CARTER LANE, PETERSHILL
With reference to Package 002 secondary risers please find enclosed Ove Arup and
Partners facsimile dated 17.03.98 enclosing structural calculations.
Yours sincerely
/s/ Phil Coombs
PHIL COOMBS
PROJECT MANAGER
copy A Musgrove L&P
I King / I Hodgson GSI
K Budgen Hermes
File 445/
<PAGE> 163
ARUP Ove Arup & Partners
Consulting Engineers Facsimile
================================================================================
13 Fitzroy Street Direct Dialing
London W1P 6BQ Telephone +44 (0)171 465 2728
Telephone +44 (0)171 636 1531 Facsimile +44 (0)171 465 3620
email
[email protected]
- --------------------------------------------------------------------------------
To Phil Coombs, Capital Project Date 17 March 1998
Consultancy
cc Job number/Reference
75083-35
Fax No(s) 0171-613 3462
File reference
Prom David Satchell Total number of pages
(including this page) 9
Subject Secondary Risers - Calculations
================================================================================
If you have not received all the pages listed please phone the sender
Phil,
Please find attached our reviewed calculations for the secondary 750x300 IT
risers and the 2000x1000 kitchen extract void at Lower Ground.
Regards,
/s/ David Satchell
David Satchell
<PAGE> 164
ARUP Ove Arup & Partners Job No. Sheet No. Rev.
Calculation Sheet ----------------------------------------
75038/35
----------------------------------------
Member/Location Core A, B, C.
- --------------------------------------------------------------------------------
Job Title Project St. Pauls. Drg. Ref. Secondary Risers
- --------------------------------------------------------------------------------
Made by DS. Date 3/98. Chd.
================================================================================
[GRAPHIC OMITTED]
<PAGE> 165
CORE A
[GRAPHIC OMITTED]
<PAGE> 166
CORE B
[GRAPHIC OMITTED]
<PAGE> 167
CORE C
[GRAPHIC OMITTED]
<PAGE> 168
ARUP Ove Arup & Partners Job No. Sheet No. Rev.
Calculation Sheet ----------------------------------------
75083/35
----------------------------------------
Member/Location Kitchen Extract Void
- --------------------------------------------------------------------------------
Job Title Project St. Pauls. Drg. Ref. Lower Ground - D5
- --------------------------------------------------------------------------------
Made by DS. Date 3/98. Chd.
================================================================================
[GRAPHIC OMITTED]
<PAGE> 169
ARUP Ove Arup & Partners Job No. Sheet No. Rev.
Calculation Sheet ----------------------------------------
75083/35
----------------------------------------
Member/Location Kitchen Extract Void
- --------------------------------------------------------------------------------
Job Title Project St. Pauls. Drg. Ref. Lower Ground
- --------------------------------------------------------------------------------
Made by DS. Date 3/98. Chd.
================================================================================
[GRAPHIC OMITTED]
<PAGE> 170
ARUP Ove Arup & Partners - Job No. Sheet No. Rev.
Calculation Sheet ----------------------------------------
London 75083
Project St. Pauls ----------------------------------------
Kitchen Extract Riser
Lower Ground Drg. Ref.
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Made by DS. Date 17-Mar-98 Checked
Date ST PAUL
================================================================================
[GRAPHIC OMITTED]
<PAGE> 171
LOWER GROUND
[GRAPHIC OMITTED]
<PAGE> 172
[Letterhead of CPC]
OUR REF 11/98/adm/let/pco1103.doc/PC/gw
DATE 11 MARCH 1998
Mr Keith Budgen
Britel Fund Trustees Ltd
Standon House
21 Mansell Street
London
E1 8AA
Dear Mr Budgen
ONE CARTER LANE
I write to enclose for your approval four copies of our proposals to install a
primary services riser at 1 Carter Lane.
For ease of reference I propose to issue packages of information. Package One
enclosed includes:
1. Ove Arup and Partners facsimile dated 10/3/98 including calculations.
2. Ove Arup and Partners letter dated 9/3/98 enclosing proposals.
3. Tolent Construction method statement dated 9/3/98.
Your approval or comments by the 17/3/98 would be appreciated. Please contact
the undersigned if you have any concerns or require any further information.
Yours sincerely
/s/ [ILLEGIBLE] G. Wilson
PHIL COOMBS
PROJECT MANAGER
c.c. I King, Goldman Sachs International
I Hodgson, Goldman Sachs International
A Musgrove, Linklaters and Paines
<PAGE> 173
[Letterhead of Ove Arup & Partners]
Our ref 75083-35/DS/am/DS0348
9 March 1998
Capital Project Consultancy
6-8 Standard Place
Rivington Street
London
EC2A 3BE
For the attention of P. Coombs, Esq.
Dear Sir
PROJECT ST. PAUL'S - MAIN SERVICES RISER
We have completed our review of the proposed slab penetrations adjacent grid D5
to accommodate the new M & E and IT risers and confirm that these penetrations
arc structurally acceptable. Further, we confirm that remedial measures such as
the provision of steel trimmers are not necessary.
This assessment is based on the provision of two penetrations located adjacent
to grid 5 either side of the main spine beam located along grid D, each with the
nominal dimension 2000mm (east/west) x 1100mm (north/south) as indicated on a
typical marked up plan attached. These penetrations are to be provided through
each floor level from Lower Ground to level 5 inclusive.
We note that the northern edge of these voids are to be located a minimum of
300mm (nominal) to the south of grid 5 in order to avoid the 600 wide secondary
beam located along grid 5. Partial removal of this beam would necessitate
substantial additional works to maintain structural integrity of the floor.
Tolent Construction should provide a proposed method statement for these works,
including but not limited to the following:
o Concrete cutting technique;
o Access and control of falling concrete debris; and
o Proposal to make good the inside face of the void, including measures to
reinstate cover to all reinforcement.
<PAGE> 174
Ove Arup & Partners
75083-35/DS/am/DS Page 2
5 March 1998
Further, as discussed in the project meeting held on 2 March 1998, additional
voids will be necessary to accommodate further IT and mechanical services. As
agreed, preferred locations for these risers will be nominated by Tilney Simmons
Partners after which OAP will review their structural implications.
Yours faithfully
/s/ David Satchell
David Satchell
Enc
cc I Hodgsan - GSI (Enc)
C Morris - TSP (Enc)
D Williams - TPB (Enc)
D Norman - TC (Enc)
I Bishop - BWA (Enc)
<PAGE> 175
[GRAPHIC OMITTED]
[LOGO]
=========================================================
Drawing Status
CONSTRUCTION
=========================================================
=========================================================
Job Title
PETERSHILL, LONDON EC4
=========================================================
=========================================================
Drawing Title
ONE CARTER LANE
FIRST FLOOR
STRUCTURAL PLAN
---------------------------------------------------------
ARUP Ove Arup & Partners
13 Fitzroy Street London W1P 6BQ
Tel 171 636 1531 Fax 171 560 3824
---------------------------------------------------------
[ILLEGIBLE] 1:100
---------------------------------------------------------
[ILLEGIBLE] DS Date 27/06/96 [ILLEGIBLE] [ILLEGIBLE]
=========================================================
Job No 47346 Drawing No. CL/S/1-1 Rev H
---------------------------------------------------------
<PAGE> 176
[Letterhead of Tolent Construction LTD]
PROJECT ST PAULS
9.3.98
Method statement for the construction of new riser shafts through ground, first,
second, third and fourth floor R C concrete floor slabs. - Revision A.
1. Receive the following information from consultants
o Detailed setting out
o Exact hole opening size
o Associate tolerances
2. Following receipt of (1.) information to be set out and checked on site
any discrepancies to be confirmed back to consultants.
3. Hand rails to be set up around working area on all floors including lower
ground. Hand rails to include toe boards and warning signage.
4. Crash deck to be erected tight to underside of slab prior to cutting
works. Following the setting up of the working area in (3.) above, holes
are to be created using diamond saw cutting equipment. Water control
measures to be adopted. Water will be controlled using wet vacs as cutting
work proceeds. Personal protective equipment is to be worn as per current
health and safety legislation.
5. It is envisaged two terms will carry out operation. Team A cutting Levels
4 down to Level 2 and team B Levels 1 and ground. Team B will complete
cutting Levels 1 and ground prior to the commencement of team A cutting
Level 2.
6. Debris will be broken into managable pieces following cutting works and
removed from work zone as the operation progresses. As the holes will have
been formed using saws trimming using hand held breakers will only be
necessary at corners.
7. Each Level will be made safe using ply platforms until such time as riser
shafts are constructed and service installation commences.
8. Hand rails will remain in place until riser shafts have been constructed.
<PAGE> 177
ARUP Ove Arup & Partners Facsimile
Consulting Engineers
================================================================================
13 Fitzroy Street Direct Dialing
London W1P 6BQ Telephone +44 (0)171 465 2728
Telephone +44 (0)171 636 1531 Facsimile +44 (0)171 465 3620
email
[email protected]
- --------------------------------------------------------------------------------
To Phil Coombs, Capital Project Date 10 March 1998
Consultancy
cc Job number/Reference
75038-35
Fax No(s) 0171-613 3462
File reference
Prom David Satchell Total number of pages
(including this page) 8
Subject Riser - Slab Calculations
================================================================================
If you have not received all the pages listed please phone the sender
Phil,
Please find attached the calculations for the new slab voids adjacent grid D5 to
accommodate the main M&E and IT risers. Please note that these calculations are
yet to be reviewed internally in accordance with our Quality Assurance
procedures, but this process will be completed shortly.
Regards,
/s/ David S.
================================
PROJECT SAINT PAUL'S
--------------------------------
RECEIVED DATE: 10/3/98
FILE 445 /
================================
ISSUE INFO ACTION
--------------------------------
GSI
--------------------------------
TPB
--------------------------------
TSL
--------------------------------
OAP
--------------------------------
BWA
--------------------------------
--------------------------------
--------------------------------
================================
PROJECT MANAGER
ISSUE DATE:
================================
<PAGE> 178
ARUP Ove Arup & Partners Job No. Sheet No. Rev.
Calculation Sheet ----------------------------------------
75038-35 1.
----------------------------------------
Member/Location VOID - ADJACENT GRID D5
- --------------------------------------------------------------------------------
Job Title Project St. Pauls. Drg. Ref. (RISER M&E/IT)
- --------------------------------------------------------------------------------
Made by DS. Date 27/2/98. Chd.
================================================================================
[GRAPHIC OMITTED]
<PAGE> 179
ARUP Ove Arup & Partners Job No. Sheet No. Rev.
Calculation Sheet ----------------------------------------
75038-35 2.
----------------------------------------
Member/Location VOID - ADJACENT D5
- --------------------------------------------------------------------------------
Job Title Project St. Pauls. Drg. Ref.
- --------------------------------------------------------------------------------
Made by DS. Date 3/98. Chd.
================================================================================
[GRAPHIC OMITTED]
<PAGE> 180
ARUP Ove Arup & Partners Job No. Sheet No. Rev.
Calculation Sheet ----------------------------------------
75038-35 3.
----------------------------------------
Member/Location VOID - GRID D5.
- --------------------------------------------------------------------------------
Job Title Project St. Pauls. Drg. Ref.
- --------------------------------------------------------------------------------
Made by DS. Date 3/98. Chd.
================================================================================
[GRAPHIC OMITTED]
<PAGE> 181
ARUP Ove Arup & Partners Job No. Sheet No. Rev.
Calculation Sheet ----------------------------------------
75038-35 4
----------------------------------------
Member/Location RISER VOID - GRID D5
- --------------------------------------------------------------------------------
Job Title Project St. Pauls. Drg. Ref.
- --------------------------------------------------------------------------------
Made by DS Date 3/98. Chd.
================================================================================
[GRAPHIC OMITTED]
<PAGE> 182
ARUP Ove Arup & Partners Job No. Sheet No. Rev.
Calculation Sheet ----------------------------------------
75038-35 5
----------------------------------------
Member/Location RISER VOID - GRID D5
- --------------------------------------------------------------------------------
Job Title Project St. Pauls. Drg. Ref.
- --------------------------------------------------------------------------------
Made by DS Date 3/98 Chd.
================================================================================
[GRAPHIC OMITTED]
<PAGE> 183
ARUP Ove Arup & Partners Job No. Sheet No. Rev.
Calculation Sheet ----------------------------------------
75038-35 6.
----------------------------------------
Member/Location RISER VOID - GRID D5
- --------------------------------------------------------------------------------
Job Title Project St. Pauls. Drg. Ref.
- --------------------------------------------------------------------------------
Made by DS Date 3/98 Chd.
================================================================================
[GRAPHIC OMITTED]
<PAGE> 184
TYPICAL SLAB
REINFORCEMENT
[GRAPHIC OMITTED]
<PAGE> 185
APPENDIX E
<PAGE> 186
DATED: 1998
BRITEL FUND TRUSTEES LIMITED
-and-
GOLDMAN SACHS INTERNATIONAL
-and-
THE GOLDMAN SACHS GROUP, L.P.
UNDERLEASE
of
premises known as One Carter Lane London EC4
Linklaters & Paines
One Silk Street
London EC2Y 8HQ
Tel: 0171 456 2000
Ref: CBC/DAJR/7100675
<PAGE> 187
LEASE PARTICULARS
- --------------------------------------------------------------------------------
1. Date : 1998
- --------------------------------------------------------------------------------
2. Parties
2.1 Landlord : Britel Fund Trustees Limited (Company number
1687513) whose registered office is at
Standon House 21 Mansell Street London El 8AA
- --------------------------------------------------------------------------------
2.2 Tenant : Goldman Sachs International (Company number
226395) whose registered office is at Peterborough
Court 133 Fleet Street London
EC4A 2BB
- --------------------------------------------------------------------------------
2.3 Guarantor : The Goldman Sachs Group, L.P 85 Broad Street New
York New York 10004 and whose address for service
in the UK is c/o The Facilities Manager Goldman
Sachs International Peterborough Court 133 Fleet
Street London EC4A 2BB
- --------------------------------------------------------------------------------
3. Contractual Term : 20 years from and including 19th March 1998
- --------------------------------------------------------------------------------
4. Principal Rent : [(pound)5,184,982] POUNDS
per annum payable from and including the Rent
Commencement Date and subject to increase in
accordance with the Second Schedule
- --------------------------------------------------------------------------------
5. Rent : [ ] 1999
Commencement
Date
- --------------------------------------------------------------------------------
6. Review Dates : the 19th March in the years 2003, 2008 and 2013
- --------------------------------------------------------------------------------
7. Permitted : as high class offices within Class B1(a) of the
1987 Order and for
Use any purpose ancillary to such use as offices
<PAGE> 188
1 Definitions
In this Lease unless the context otherwise requires:
Adjoining Property means the Restaurant and all other property
adjoining or neighbouring the Premises in which the Landlord or any
Group Company has or shall have during the Term a freehold or
leasehold interest whether in possession or reversion.
An "Affiliate" of any specified person means any other person directly
or indirectly controlled or controlled by or under common control with
such specified person (for the purposes of this paragraph and the
definition of "Group Company" 'control' (including 'control by' or
under common control with') shall mean the power to direct and procure
management and policies directly or indirectly whether through the
ownership of voting securities or equity interests by contract or
otherwise) for so long as such power is exercised;)
Arbitration means arbitration in accordance with Clause 8.3
Base Rate means the base rate from time to time of Royal Bank of
Scotland PLC or (if not available) such comparable rate of interest as
the Landlord shall reasonably require
Category "A" Works mean the works as so described in the Specification
Common Parts means the paved areas shown hatched in black on plan
2897/G5119-2005 together with the planters shown thereon
Conduits means any existing or future media for the passage of
substances telecommunications or energy and any ancillary apparatus
attached to them and any enclosures for them
Contractual Term means the term specified in paragraph 4 of the
Particulars
Determination Date means 18th day of March 2013
Encumbrances means the matters contained or referred to in the
documents specified in Part III of the First Schedule
Group Company means any company within the same group of companies as
or Associated with or an Affiliate of the Tenant as set out below:
(i) Any two companies shall be taken to be members of
a group if one is the subsidiary of the other or
both are subsidiaries of a third company;
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1
<PAGE> 189
(ii) A company corporation or partnership shall be
taken to be "Associated" with another if and only
if one is a subsidiary or Affiliate of another or
both are subsidiaries or Affiliates of a third
company corporation or partnership;
(iii) In determining whether any company is a subsidiary
of another company the word subsidiary bears the
meaning assigned to it by Section 736 of the
Companies Act 1985 as originally enacted;
(iv) In determining whether any corporation (which
shall be construed in accordance with Section 740
of the Companies Act 1985 as originally enacted)
is a subsidiary of another corporation or of a
company or whether any company is a subsidiary of
a corporation the word subsidiary bears the
meaning assigned to it by Section 736 of the
Companies Act 1985 as originally enacted but
modified only so that 'company' includes
'corporation' for this purpose;
(v) A partnership (which shall be construed as
including a partnership under the laws of the
United Kingdom or elsewhere) shall be taken to be
a subsidiary of another partnership or of a
company or corporation if that other partnership
or company or corporation is entitled to either
(a) more than one half of the assets or (b) more
than one half of the income of the first mentioned
partnership and in either such case that other
partnership or company or corporation exercises
control over the first mentioned partnership.
(vi) A company or corporation shall be deemed to be a
subsidiary of a partnership if that partnership
either (a) controls the composition of the board
of directors of the company or corporation or (b)
holds more than half in nominal value of the
issued equity share capital of the company or
corporation and in either such case the
partnership exercises control over the company or
corporation;
Guarantor means the person (if any) so named in the Particulars and
such other person as may from time to time covenant pursuant to clause
4.15.2(ii)(c) and in the case of an individual includes his personal
representatives
Insured Risks means the risks from time to time required to be insured
against under the terms of the Superior Lease
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2
<PAGE> 190
Landlord means the person in whom the immediate reversion to this
Lease shall for the time being be vested being initially the person so
named in the Particulars
This Lease means this lease and any document supplemental to it or
entered into pursuant to it
Particulars means the descriptions and terms on the page headed Lease
Particulars which forms part of this Lease
Planning Acts means the Town and Country Planning Act 1990 the
Planning (Listed Buildings and Conservation Areas) Act 1990 the
Planning (Hazardous Substances) Act 1990 and the Planning
(Consequential Provisions) Act 1990
Premises means the building known as One Carter Lane London EC4 shown
edged blue on Plan 1 (including at basement level the Service Bay and
Service Ramp and other ancillary accommodation) and each and every
part thereof and all additions and alterations or reinstatements
thereof (but excluding the Restaurant including those parts of the
basement forming part of the Restaurant)
Principal Rent means the rent stated in paragraph 4 the Particulars
Quarter Days means 25 March 24 June 29 September and 25 December in
every year and Quarter Day means any of them
Restaurant means premises at ground lower ground and basement levels
and shown for identification only edged red on Plans 1, 2, 3, 4 and 5
and known as Two Old Change Court London EC4 and each and every part
thereof and all buildings from time to time thereon including the
railings shown coloured blue on Plans 6, 7 and 8
but excluding the structural elements coloured orange on Plans 2 and 3
Restaurant Spaces means the car, motor cycle and bicycle spaces
allocated to the Restaurant coloured green and blue on Plan 5 annexed
hereto
Loading Bay means the area within the Premises at basement level
available for use by the occupier of the Restaurant shown hatched
green on Plan 5
Service Area means the service area shown hatched purple on Plan 5
Service Ramp means the access way at ground level leading from the
public highway known as Distaff Lane to the basement of the Premises
and to the Adjoining Property and shown hatched blue on Plan 5
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3
<PAGE> 191
Specification means the Specification annexed hereto
Superior Lease means the Lease referred to in Part IV of the First
Schedule hereto being the Lease under which the Landlord holds inter
alia the Premises
Superior Landlord means the person or persons for the time being
entitled to the reversion mediately or immediately expectant on the
determination of the Superior Lease (or any other superior lease or
leases)
Tenant means the person so named in the Particulars and includes its
successors in title
Term means the Contractual Term together with any continuation of the
term or the tenancy (whether by statute common law holding over or
otherwise)
VAT means Value Added Tax and any similar tax substituted for it or
levied in addition to it
1987 Order means the Town and Country Planning (Use Classes) Order
1987 (as originally made)
1995 Act means the Landlord and Tenant (Covenants) Act 1995
2 Interpretation
In this Lease unless the context otherwise requires:
2.1 If the Tenant or the Guarantor for the time being is more than one
person then their covenants are joint and several
2.2 Any reference to a statute (except for the 1987 Order) includes any
modification extension or reenactment of it and any orders regulations
directions schemes and rules made under it
2.3 Any covenant by any party not to do any act or thing includes an
obligation not to permit or suffer such act or thing to be done
2.4 References to the act or default of the Tenant include acts or default
or negligence of anyone at the Premises with the Tenant's or any
undertenant's authority
2.5 The index and Clause headings in this Lease are for ease of reference
only
2.6 References to the last year of the Term shall mean the year
immediately prior to the expiration or earlier termination of the Term
- --------------------------------------------------------------------------------
4
<PAGE> 192
2.7 References to Liability include claims demands proceedings damages
losses and proper costs and expenses
2.8 References to any right of the Landlord to have access to the Premises
shall be construed as extending to the Superior Landlord and to all
persons authorised by the Landlord and the Superior Landlord
(including agents professional advisers contractors workmen and
others) but in relation to the Landlord always on the terms set out in
Clause 4.21 below
2.9 Whenever the consent or approval of the Landlord is required or
requested in relation to this Lease such provisions shall be construed
as also requiring the consent or approval of the Superior Landlord
where the same shall be required except that nothing in this Lease
shall be construed as implying that any obligation is imposed upon a
Superior Landlord not unreasonably to refuse any such consent
3 Demise and Rents
The Landlord DEMISES the Premises to the Tenant TOGETHER WITH the
rights set out in Part I of the First Schedule EXCEPT AND RESERVING as
mentioned in Part II of the First Schedule for the Contractual Term
subject to and with the benefit of the Encumbrances the Tenant paying
by way of rents without any deduction counterclaim or set off:
3.1 the Principal Rent (plus VAT) by equal quarterly payments in advance
on the Quarter Days the first payment for the period from and
including the Rent Commencement Date to (but excluding) the next
Quarter Day to be made on the Rent Commencement Date
3.2 such sums as may from time to time become payable pursuant to the
proviso to clause 4.6.4
3.3 within 14 days of demand:
3.3.1 the sums specified in Clauses 4.2 [interest] and 4.5
[utilities]
3.3.2 the sums specified in Clause 7.2 [insurance]
3.4 VAT in accordance with Clause 4.4
4 Tenant's covenants
The Tenant covenants with the Landlord throughout the Term or until
released pursuant to the 1995 Act as follows:
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5
<PAGE> 193
4.1 Rents
To pay the rents reserved by this Lease as and when required by Clause
3
4.2 Interest
If the Landlord does not receive any sum due to it on the due date to
pay on demand interest on such sum at 4 per cent above Base Rate
(compounded on the Quarter Days) from the due date until payment (both
before and after any judgment) provided this Clause shall not
prejudice any other right or remedy for the recovery of such sum
4.3 Outgoings
To pay all existing and future rates taxes charges assessments and
outgoings in respect of the Premises (whether assessed or imposed on
the owner or the occupier) except any tax arising on any actual or
deemed dealing by the Landlord with its reversion to this Lease or any
tax (other than VAT) arising as a result of the receipt by the
Landlord of the rents payable by the Tenant under Clause 3 of this
Lease
4.4 VAT
4.4.1 Obligations under this Lease to pay sums or provide
consideration to the Landlord shall be treated as exclusive
of VAT and the Tenant shall in addition pay any VAT
chargeable on the same date
4.4.2 Obligations under this Lease to reimburse or pay the
Landlord's expenditure shall extend to the VAT on that
expenditure which the Landlord is not able to recover.
4.5 Utilities
To pay the suppliers and to indemnify the Landlord against all charges
for water electricity and gas and other services used on or in
relation to the Premises and in case the water electricity gas or
other services shall be metered or charged jointly in respect of the
Premises and other premises to pay to the Landlord on demand a fair
proportion thereof.
4.6 Repair and Management
4.6.1 To keep and maintain the Premises (and all Conduits
exclusively serving the Premises) in good and substantial
repair and condition (damage by the Insured Risks excepted
save to the extent that insurance moneys are irrecoverable
as a result of the act or default of the Tenant)
- --------------------------------------------------------------------------------
6
<PAGE> 194
4.6.2 To keep all plant and machinery apparatus and equipment
comprised within the Premises properly maintained and in
good working order and to enter into maintenance agreements
with reputable contractors for the regular servicing of all
such plant and machinery apparatus and equipment and to
renew all working and other parts as and when necessary or
when recommended by such contractors and to ensure by
directions to the Tenant's staff and otherwise that such
plant and machinery apparatus and equipment are properly
operated
4.6.3 Not to do or omit to be done or suffer the same to be done
or omitted anything at or on the Premises which in any way
has or could have a material adverse affect on any
contractual rights which the Landlord has or may have (and
of which the Tenant has been notified) against any third
party in respect of the design or construction of the
Premises or in respect of the installation of any services
plant machinery apparatus and equipment within the Premises
4.6.4 Without prejudice to the generality of the other sub-clauses
in this Clause 4.6 at all times
(i) to ensure that the Premises are managed and
serviced to the standard of and appropriate for a
high class office building in the City of London
(ii) to repair maintain light clean supervise and
provide such other services for the Restaurant
Spaces the Service Bay (including the refuse
compactor in it and the disposal of refuse
including the collection and compaction thereof)
and the Service Ramp and door and the maintenance
of receptacles and plant and equipment in
connection therewith all in accordance with the
principles of good estate management and to pay
all taxes charges assessments and other outgoings
payable in respect thereof and all charges
assessments and outgoings for electricity gas oil
and other fuels payable in relation thereto or as
the Tenant shall from time to time reasonably
consider necessary or as the Landlord shall from
time to time reasonably require the Tenant to
provide
(iii) to ensure that the Common Parts are kept in a
clean and tidy condition and that the planters are
maintained and kept adequately stocked with
suitable plants and flowers
- --------------------------------------------------------------------------------
7
<PAGE> 195
(iv) to maintain inspect repair and renew the
structural elements shown coloured orange on Plans
2 and 3
Provided that in the event that and upon each such occasion
the Tenant fails to comply with any of the requirements of
this clause 4.6.4 the Landlord shall be entitled but not
obliged at the cost in all respects of the Tenant to remedy
such failure and to elect to continue to have the conduct of
such matters in which event
(A) the Tenant shall not have the conduct of such
matters unless and until the Landlord notifies the
Tenant in writing that the Landlord intends no
longer to have such conduct
(B) the Tenant shall pay to the Landlord from time to
time within 14 days after demand the costs
incurred or to be incurred by the Landlord in
effecting such matters
(C) otherwise the provisions of clause 4.21 shall
apply mutatis mutandis
4.7 Decoration
4.7.1 To clean prepare and paint or treat and generally redecorate
all parts of the Premises in every fifth year and in the
last year of the Term PROVIDED THAT in respect of those
parts of the Premises which by their nature construction or
material require no such treatment the Tenant shall do
whatever is or may in the reasonable opinion of the Landlord
be necessary for the sake of their appearance preservation
and cleanliness
4.7.2 All the work described in Clause 4.7.1 is to be carried out
(i) in a good and workmanlike manner to the Landlord's
reasonable satisfaction
(ii) in the last year of the term internally and on
every occasion externally in colours which (if
different from the existing colour) are first
approved in writing by the Landlord (approval not
to be unreasonably withheld or delayed)
4.8 Cleaning
4.8.1 To keep the Premises clean tidy and free from rubbish
4.8.2 To clean the inside of windows and any washable surfaces at
the Premises as often as reasonably necessary
- --------------------------------------------------------------------------------
8
<PAGE> 196
4.9 Overloading and Obstruction
Not to overload the Premises or the lifts therein nor any plant and
machinery or electrical installation of or serving the Premises nor to
cause any interference or obstruction to the Conduits or the Common
Parts or other parts of the Estate
4.10 Prohibited Uses
Not to use the Premises
4.10.1 for any purpose which is noisy or offensive dangerous or
illegal immoral or a nuisance or causes damage or
disturbance to the Landlord or other parts of the Estate or
which involves any substance which may be harmful polluting
or contaminating
4.10.2 for residential purposes
4.10.3 for any auction, public or political meeting, public
exhibition or show or as a betting office or for gaming or
playing amusement machines or as a sex shop (as defined in
the Local Government (Miscellaneous Provisions) Act 1982) or
for the business of an undertaker or for the business of a
staff agency employment agency (or similar agencies) or
Government Department at which the general public call
without appointment
4.11 Permitted Use
Not to use the Premises otherwise than for the Permitted Use specified
in the Particulars
4.12 Signs etc
4.12.1 Not to erect any sign notice advertisement which is visible
outside the Premises except such external signage the size
design appearance materials and manner of affixation of
which shall first have been approved in writing by the
Landlord (such approval not to be unreasonably withheld or
delayed) Provided that the Tenant shall be entitled with the
prior approval in writing of the Landlord (such approval not
to be unreasonably withheld or delayed) to name the office
building on the Premises and to erect on the exterior of the
office building a company logo or flag which complies with
the other requirements of this Lease.
4.12.2 Not to place any aerial satellite dish or other equipment on
the roof of the Premises other than in the area designated
for such purpose and then only with the prior consent of the
Landlord such consent not to be unreasonably withheld or
delayed
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4.13 Alterations
4.13.1 Not to make any alterations or additions which:
(i) affect the exterior of the Premises or
(ii) adversely affect the structure (including without
limitation alterations or additions to the
principal or loadbearing walls floors beams
columns roofs or foundations) of the Premises or
materially adversely affect the Conduits or the
central heating air conditioning sprinkler
electrical or other installations or the sanitary
or hot and cold water systems at the Premises
(iii) relate to the structural elements coloured orange
in Plans 2 and 3
4.13.2 Not without the Landlord's written consent (not to be
unreasonably withheld or delayed and which shall be
documented in substantially the form of the draft Licence to
Alter annexed hereto with such amendments and additional
provisions as the Landlord may reasonably require having
regard not only to the proposed works but also to the
requirements of institutional investors in property similar
to the Premises current for the time being in relation to
such matters) to make to the Premises any other internal
alterations or additions (whether structural or not)
PROVIDED THAT the Tenant may without obtaining the consent
of the Landlord instal alter and remove demountable
partitioning (but for the avoidance of doubt not varying the
height or position of raised floors or ceiling grids) and
carry out associated minor alterations to mechanical and
electrical services in the Premises and minor structural
alterations in the nature of boreholes conduit holes and
such like provided the same are not in breach of Clause
4.13.1 and such number (not exceeding eight) of copies as
the Landlord may require of the plans and other information
showing the layout of such partitioning and the details of
such alterations are deposited with the Landlord or its
surveyors not less than one month after commencement of the
work
4.13.3 To maintain at all times a consistent external appearance in
the treatment of all windows in the Premises
4.13.4 Without prejudice to the foregoing not save in accordance
with the terms and conditions laid down by the Institution
of Electrical Engineers current at the time to make any
alteration or addition to the electrical installations in
the Premises
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4.14 Preservation of Easements
4.14.1 Not to prejudice the acquisition of any right of light for
the benefit of the Premises by obstructing any window or
opening or giving any acknowledgement that the right is
enjoyed by consent or any other act or default of the Tenant
4.14.2 To preserve all rights of light and other easements enjoyed
by the Premises and not to permit or suffer anyone to
acquire any right of light or other easement or right over
the Premises
4.14.3 To give the Landlord immediate notice if any easement
enjoyed by the Premises is obstructed or any new easement
affecting the Premises is made or attempted
4.14.4 All costs charges and expenses incurred in securing
compliance with the provisions of this Clause 4.14 shall be
borne by the Tenant
4.15 Alienation
4.15.1 Not to:
(i) assign or charge part only of the Premises nor to
agree to do so
(ii) part with the possession of the whole or part of
the Premises or agree to do so except by an
assignment or underletting permitted by this
Clause 4.15
(iii) share the possession or occupation of the whole or
any part of the Premises except as permitted by
this Clause 4.15
(iv) assign the whole of the Premises to any Group
Company of the Tenant where in the reasonable
opinion of the Landlord the financial standing of
such Group Company is less than that of the Tenant
4.15.2 (i) Not to assign or agree to assign the whole of the
Premises unless:
(a) the circumstances and conditions set out
in sub-clause 4.15.2.(ii) shall have
been complied with or satisfied; and
(b) the Landlord has granted its consent
such consent not to be unreasonably
withheld.
(ii) The circumstances and conditions referred to in
Clause 4.15.2.(i) are:
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<PAGE> 199
(a) that the intended assignee enters into a
direct covenant with the Landlord to pay
the rents and perform and observe during
the residue of the Term or until
released pursuant to the 1995 Act all
the covenants and conditions on the
Tenant's part contained in this Lease
(b) that the Tenant who is to assign this
Lease enters into an Authorised
Guarantee Agreement with the Landlord
guaranteeing the performance of the
covenants and conditions contained in
this Lease by the intended assignee
incorporating the provisions set out in
the Third Schedule to the extent
permitted by the 1995 Act but in
addition containing a provision for the
release of the Tenant from its further
obligations under the Authorised
Guarantee Agreement (following written
request by the Tenant) upon the assignee
producing properly and externally
audited accounts for the last 3
[ILLEGIBLE] preceding accounting periods
each of not more than 12 months
[ILLEGIBLE] that the net assets of the
assignee in the UK or in any country
within European Community or in any
jurisdiction where reciprocal
enforcement [ILLEGIBLE] with England
exists as shown in the balance sheet
forming part [ILLEGIBLE] said audited
accounts for the said last three
accounting periods as at [ILLEGIBLE] of
each such period were not less than the
annual rent reserved by [ILLEGIBLE] 3.1
of this Lease at the rate (disregarding
any abatement) payable at the end of the
last such accounting period multiplied
by a factor of 5 and that the annual
profits of the assignee in the UK or in
any country within the European
Community or in any jurisdiction where
reciprocal enforcement of judgement with
England exists after tax as shown in the
said audited accounts for the said last
three accounting periods are each not
less than the said annual rent
multiplied by a factor of 5 Provided
that
(I) the Tenant shall be released
immediately from its
obligations under this Lease
and/or any such authorised
guarantee agreement if the
tests set out above are
satisfied at the date of the
proposed assignment the
Landlord will at the cost of
the Tenant within 28 days
after written request
following satisfaction of the
above requirements execute a
deed effective as from the
date upon which the
requirements were satisfied in
such form as the Tenant may
reasonably require confirming
the release of the
<PAGE> 200
liability of the Tenant under
this Lease and or the
Authorised Guarantee Agreement
as the case may be
(II) any such release shall be
deferred until any other
arrears of rents or other
monies properly due from the
Tenant have been paid to the
Landlord
(c) that such other persons as the Landlord
may reasonably require act as guarantor
for the intended assignee such guarantee
to be in the form set out in the Third
Schedule with such amendments only as
the Landlord may reasonably require; and
(d) that any intended assignee shall provide
such other security as the Landlord
reasonably requires (including without
limitation a rent deposit incorporating
a first legal charge on the deposit
monies) for the observance and
performance of the Tenant's covenants
herein contained on such terms as the
Landlord reasonably requires; and
(e) that all arrears of rent and other
monetary payments properly due under the
terms of this Lease have been paid prior
to completion of the intended
assignment;
4.15.3 Not to underlet or agree to underlet part of the Premises
other than a Permitted Part and in this Clause 4.15:-
(i) Permitted Part means
(a) a whole floor of the Premises with Security of
Tenure or
(b) (except for the basement and fifth floors) any
part of any floor of the Premises without Security
of Tenure provided that there are no more than two
occupiers on any one floor of the Premises nor
more than ten occupiers in the Premises (in each
case including the Tenant but excluding any
occupation under clause 4.15.6 of this Lease) at
any one time
(c) in the case of the basement floor the whole or
part so long as it is demised with a Permitted
Part on another floor and so that the demise of
part only of the basement floor is without
Security of Tenure and provided that there are no
more than four occupiers of the basement floor
(including the Tenant but excluding any occupation
under clause 4.15.6 of this Lease)
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<PAGE> 201
in each case (unless the underlease is without Security of Tenure)
together with an appropriate proportion of the car parking, disabled,
bicycle and motor cycle spaces
(ii) Security of Tenure means that the lessees and
occupiers of any premises with Security of Tenure
enjoy the benefit of Part II of the Landlord and
Tenant Act 1954 and without Security of Tenure
means that such lessees and occupiers have agreed
in any sub-underlease that the provisions of
Sections 24-28 of the Landlord and Tenant Act 1954
shall be excluded in relation to the tenancy
thereby created pursuant to a valid and effective
Order of the Court under the provisions of Section
38(4) of the said Act a copy of which order shall
have been produced to the Landlord before the
grant of the sub-underlease
4.15.4 Not to underlet or agree to underlet the whole of the
Premises nor a Permitted Part unless:-
(i) the rent payable under the underlease is:
(a) not less than the open market rent for
the Premises (or in the case of an
underletting of a Permitted Part the
open market rental value of the
Permitted Part) at the date of the grant
of the underlease without fine or
premium PROVIDED THAT the Tenant shall
be permitted to grant to any underlessee
a rent-free period or periods or
concessionary rent period or other
inducement in accordance with normal
market practice at the time of the grant
of the underlease
(b) payable no more than one quarter in
advance
(c) to be subject to upward only reviews at
five yearly intervals and (except only
in the case of an underlease for a term
not exceeding five years without any
option or right to renew and granted
without Security of Tenure)
contemporaneously with reviews under
this Lease
(ii) the underlease is in a form first approved by the
Landlord (whose approval shall not be unreasonably
withheld or delayed) and (so far as is consistent
with an underlease) substantially the same as this
Lease including without prejudice a covenant by
the undertenant in the same terms mutatis mutandis
as that contained in Clause 4.15.2 of this Lease
and the right for the underlessor to determine the
term thereby granted on the Determination Date
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<PAGE> 202
(iii) where an underletting of part of a floor of the
Premises the Permitted Part is of a layout and in
a location first approved by the Landlord (whose
approval shall not be unreasonably withheld or
delayed)
(iv) if the underlease is for a term not exceeding five
years it is without Security of Tenure
(v) the undertenant covenants with the Landlord and in
the underlease
(a) to observe and perform the lessee's
covenants in the underlease during the
term of the underlease or until released
pursuant to the 1995 Act
(b) not to assign or charge part only of the
underlet premises or agree to do so nor
to underlet share or part with
possession or occupation of any part of
the underlet premises provided that the
undertenant may with the consent of the
Landlord and the Tenant (which shall in
neither case be unreasonably withheld or
delayed) further underlet a Permitted
Part which is less than the whole of the
underlet premises subject to the
following conditions:-
(I) there are no more than two
occupiers (including the
undertenant but excluding any
occupation permitted under
Clause 4.15.6 of this Lease)
per floor on each floor of the
underlet premises nor more
than ten occupiers in the
Premises at any one time
(II) any sub-underlease to contain
a covenant by the
sub-undertenant not to
underlet share or part with
possession or occupation of
the whole or any part of the
sub-underlet premises in any
manner whatsoever other than
by way of an assignment of the
whole of the sub-underlet
premises with the consent of
the Tenant and the Landlord
(not to be unreasonably
withheld or delayed);
(III) any sub-underlease of (or
including) part of a floor of
the Premises to be without
Security of Tenure and a
certified copy of an order of
the court under the provisions
of Section 38(4) of the said
Act shall be produced to the
Tenant and the Landlord in
relation to the intended
sub-underlease
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<PAGE> 203
(IV) any sub-undertenant to
covenant with the Landlord and
the Tenant to observe and
perform (so long as it holds
the sub-underlease) the
tenant's covenants in the
sub-underlease
(c) not to assign or agree to assign or
underlet the whole of the underlet
premises without the Landlord's prior
written consent (which shall not be
unreasonably withheld or delayed)
4.15.5 Subject and without prejudice to Clauses 4.15.3 and 4.15.4
not to underlet the whole of the Premises nor a Permitted
Part nor vary the terms of any permitted underlease without
the prior written consent of the Landlord (which shall not
be unreasonably withheld or delayed)
4.15.6 Notwithstanding the foregoing provisions of this sub-clause
the Tenant and any permitted undertenant may without the
consent of the Landlord share occupation of the whole or any
part of the Premises with any Group Company Associated
Company or Affiliate of the Tenant or (as the case may be)
such permitted undertenant Provided that:
(i) the relationship of landlord and tenant is not
created and
(ii) the occupation by the Group Company Associated
Company or Affiliate ceases forthwith upon its
ceasing to be a Group Company Associated Company
or Affiliate of the Tenant or such permitted
undertenant for the time being and
(iii) the Landlord is informed in writing on reasonable
request of the name of each occupier and due
evidence that it is a Group Company Associated
Company or Affiliate
4.15.7 To take all necessary steps and proceedings to remedy any
breach of the covenants of the undertenant under the
underlease which affects the covenants by the Tenant
hereunder or which otherwise affects the Landlord's interest
and not to permit any reduction of the rent payable by any
undertenant
4.15.8 To keep the Landlord informed of all rent review
negotiations and not to agree any new or revised rent
without having first notified the Landlord in writing at
least 7 days earlier and within one month after agreement or
determination to notify the Landlord in writing of the rent
so agreed or determined
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<PAGE> 204
4.16 Registration
Within 21 days to give to the Landlord's solicitors (or as the
Landlord may direct) written notice of any assignment charge
underlease or other devolution of the Premises together with a
certified copy of the relevant document and a reasonable registration
fee of not less than (pound)30
4.17 Statutory Requirements
To comply promptly with all notices served by any public local or
statutory authority and with the requirements of any present or future
statute or European Union law regulation or directive (whether imposed
on the owner or occupier) which affects the Premises or their use
4.18 Planning
4.18.1 To comply with the Planning Acts
4.18.2 Not to apply for or implement any planning permission or
enter into a planning obligation under Section 106 of the
Town and Country Planning Act 1990 affecting the Premises
without first obtaining the Landlord's written consent (such
consent not to be unreasonably withheld or delayed)
4.18.3 Where development permitted by a planning permission has
begun the Tenant shall complete all the works permitted and
comply with all the conditions imposed by the permission
before the determination of the Term including the carrying
out of works stipulated to be done whether before or after
such determination
4.18.4 If the Landlord reasonably so requires to produce evidence
to the Landlord that the provisions of this Clause 4.18 have
been complied with
4.19 Notices
4.19.1 To supply the Landlord with a copy of any notice order or
certificate or proposal for any notice order or certificate
affecting or capable of affecting the Premises as soon as it
is received by or comes to the notice of the Tenant
4.19.2 At the request of the Landlord but at the joint cost of the
Landlord and the Tenant to make or join the Landlord in
making such objections or representations against or in
respect of any such notice order or certificate as the
Landlord may reasonably require
4.19.3 To give notice to the Landlord of any defect in the Premises
which might give rise to an obligation on the Landlord to do
or refrain from doing any act or thing in order to comply
with the provisions of this Lease or the duty of care
imposed on the Landlord pursuant
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<PAGE> 205
to the Defective Premises Act 1972 or otherwise and at all
times to display and maintain all necessary notices which
the Landlord may from time to time require to be displayed
at the Premises
4.20 Contaminants and Defects
4.20.1 To give the Landlord immediate written notice (upon the
Tenant becoming aware of the same) of the existence of any
contaminant pollutant or harmful substance on or any defect
in the Premises
4.20.2 If so requested by the Landlord to remove from the Premises
or remedy to the Landlord's reasonable satisfaction any such
contaminant pollutant or harmful substance other than any
such used in the proper and ordinary course of the Tenant's
business or normal occupation of the Premises for the
Permitted Use
4.21 Entry by Landlord
To permit the Landlord at all reasonable times and on reasonable
notice (except in emergency) to enter the Premises in order to
4.21.1 inspect and record the condition of the Premises
4.21.2 remedy any breach of the Tenant's obligations under this
Lease
4.21.3 instal repair maintain clean alter replace add to or connect
up to any Conduits which serve the Adjoining Property
4.21.4 repair maintain or alter the Common Parts or the Adjoining
Property
4.21.5 comply with any of its obligations under this Lease
4.21.6 comply with the obligations on its part contained in the
Superior Lease notwithstanding that the obligation to comply
with such covenants may be imposed on the Tenant by this
Lease
Provided that the Landlord shall (i) cause as little inconvenience as
reasonably practicable in the exercise of such rights and shall as
soon as reasonably practicable make good all physical damage to the
Premises (and any Tenant's chattels fixtures and fittings) caused by
such entry (ii) use all reasonable endeavours to avoid entering the
occupied office areas within the Premises during normal business hours
unless otherwise agreed by the Tenant (iii) agree in advance with the
Tenant the number of representatives of the Landlord and any others
who accompany them
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<PAGE> 206
who shall be permitted entry on any occasion (iv) allow the Tenant to
escort the Landlord's representatives at all times when they are
within the building on the Premises.
4.22 Notices to Remedy
To make good any failure to comply with Clauses 4.6 [repair] 4.7
[decoration] 4.12 [signs] 4.13 [alterations] 4.14 [preservation of
easements] 4.17 [statutory requirements] and 7.2.6 [insurers'
requirements] of which the Landlord has given written notice as soon
as reasonably practicable and in any event within 2 months after the
date of notice but without prejudice to the Landlord's other remedies
4.23 Landlord's costs
To pay to the Landlord on demand as additional rent and as a debt all
costs (which shall be properly incurred and fair and reasonable) as it
may incur:
4.23.1 from any application for consent required by this Lease
(including where consent is lawfully refused or the
application is withdrawn)
4.23.2 incidental to or in reasonable contemplation of the
preparation and service of a schedule of dilapidations
(whether before or within 6 months after expiry of the Term)
or a notice or proceedings under Section 146 or Section 147
of the Law of Property Act 1925 (even if forfeiture is
avoided other than by relief granted by the Court)
4.23.3 in connection with the enforcement or remedying of any
breach of the covenants in this Lease on the part of the
Tenant and any Guarantor
4.23.4 incidental to or in reasonable contemplation of the
preparation and service of any notices under Section 17 of
the 1995 Act
4.24 Reletting Notices
To allow a letting or sale board to be displayed on the Premises in
the last six months of the Term unless the Tenant is exercising its
rights under the Landlord and Tenant Act 1954 (but not so that it
restricts or interferes unreasonably with the light enjoyed by the
Premises) and to allow prospective tenants or purchasers to view the
Premises at reasonable times on reasonable notice
4.25 Yielding up
4.25.1 Immediately before the end of the Term:
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<PAGE> 207
(i) to give up the Premises repaired and decorated and
otherwise in accordance with the Tenant's
covenants in this Lease
(ii) If and to the extent that the Landlord so requires
to remove all alterations and additions which have
been permitted by the Landlord) and to reinstate
the Premises to the Landlord's reasonable
satisfaction to the state set out in the
Specification Provided That the Tenant shall not
be required to reinstate any approved plant or
equipment at the Premises which adds to the
letting value of the Premises and does not detract
from the value of the Landlord's reversionary
interest therein.
(iii) to remove all signs, tenant's fixtures and
fittings and other goods from the Premises and
make good any damage caused thereby to the
Landlord's reasonable satisfaction
4.25.2 If the Tenant fails to comply with Clause 4.25.1 to pay to
the Landlord on demand as a debt any costs incurred by the
Landlord in reinstating the Premises
4.26 Encumbrances
To perform and observe the Encumbrances so far as they relate to the
Premises
4.27 Superior Lease Covenants
To observe and perform the agreements covenants and stipulations on
the part of the tenant contained or referred to in the Superior Lease
so far as the same are not expressly assumed by the Landlord in this
Lease and not to do omit or suffer anything to be done whereby the
Superior Lease may be voided or forfeited and to indemnify and keep
the Landlord indemnified against all damages actions proceedings
claims and demands in any way relating thereto and not to do omit or
suffer anything to be done whereby the Superior Lease may be voided or
forfeited
4.28 New Guarantor
Within five business days of the death during the Term of any
Guarantor or of such person committing or permitting an Act of
Insolvency to give notice of this to the Landlord and if so required
by the Landlord at the expense of the Tenant within thirty business
days of such event to procure some other person reasonably acceptable
to the Landlord to execute a guarantee in respect of the Tenant's
obligations contained in this Lease in the form of the Guarantor's
covenants contained in the Third Schedule
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<PAGE> 208
4.29 CDM Regulations
Without prejudice to any requirements hereunder for the Tenant to
obtain the Landlord's consent before carrying out any work upon the
Premises the Tenant shall in respect of any such work to which the
Construction (Design and Management) Regulations 1994 (the CDM
Regulations) apply;
4.29.1 ensure that any person owing duties under the CDM
Regulations complies therewith;
4.29.2 make a declaration to the Health & Safety Executive in
accordance with Regulation 4 of the CDM regulations that it
(and not the Landlord) is the only "client" in respect of
such work;
4.29.3 upon completion of any such work by the Tenant or any other
party supply to the Landlord (without charge and subject to
an irrevocable royalty free licence in favour of the
Landlord and/or its agents and any other person interested
therein to use the same for any purpose connected with the
Premises) a copy of the health and safety file relating to
such work and any other information relevant to health and
safety; and
4.29.4 as soon as reasonably practicable after it becomes aware of
any information relevant to health and safety in relation to
the Premises provide such information to the Landlord.
5 Landlord's Covenants
The Landlord covenants with the Tenant during the period in which the
immediate reversion to this Lease is vested in it as follows:
5.1 Quiet Enjoyment
That subject to the Tenant paying the rents reserved by and complying
with the terms of this Lease the Tenant may peaceably enjoy the
Premises during the Term without any interruption by the Landlord or
any person lawfully claiming under or in trust for it
5.2 Superior Lease
5.2.1 To pay the rent reserved by the Superior Lease and to
perform (insofar as the Tenant is not liable for any such
performance under the covenants on its part herein
contained) all the tenant's covenants therein contained
5.2.2 At the reasonable request of the Tenant and at the joint
cost of the Landlord and the Tenant to use best endeavours
to procure (a) payment of the rent reserved by any lease
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<PAGE> 209
superior to this Lease (other than the Superior Lease) and
(b) the performance of all covenants contained in any such
lease or leases (in so far as the Tenant is not liable for
any such performance under the covenants on its part herein
contained).
5.2.3 Except in relation to Insurance (as to which Clause 7
applies) upon receiving written notice from and at the
expense of the Tenant to take all reasonable steps to
enforce the covenants on the part of the Superior Landlord
contained in the Superior Lease and any other Lease superior
to this Lease
5.2.4 To take all reasonable steps at the expense of the Tenant to
obtain the consent of the Superior Landlord whenever the
Tenant makes an application for any consent required
hereunder where the consent of both the Landlord and the
Superior Landlord is needed by virtue of this Lease and the
Superior Lease except where the Landlord proposes lawfully
to refuse its consent
5.3 Contribution to Costs
To pay to the Tenant within fourteen days of demand (and in default to
pay interest at 4% over Base Rate from the date of demand until the
date of payment) a fair and proper proportion reasonably and properly
allocated to the Restaurant of the reasonable costs and expenses
properly incurred by the Tenant
5.3.1 in the repair maintenance lighting cleaning and supervision
and the provision of such other services in relation thereto
as the Tenant shall from time to time reasonably consider
necessary and as shall be in accordance with the principles
of good estate management of the Restaurant Spaces the
Loading Bay the Service Area including the refuse compactor
therein and the Service Ramp and door and the costs of
disposing of refuse including the collection and compaction
thereof and the maintenance of receptacles and plant and
equipment in connection therewith
5.3.2 in the maintenance of planters in the Common Parts and the
plants and flowers therein, and
5.3.3 the maintenance inspection repair and renewal of the
structural elements shown coloured orange on Plans 2 and 3
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<PAGE> 210
plus Value Added Tax and of any existing or future taxes charges
assessments and other outgoings payable in respect thereof and of all
charges assessments and outgoings for electricity gas oil and other
fuels payable in relation thereto
5.4 To indemnify the Tenant in respect of any Liability arising from any
injury cased to the structural elements coloured orange on Plans 2 and
3 or [ILLEGIBLE] by the act or default of the tenant or occupier of
the Restaurant and those under its or their control excluding (1)
damage caused by Insured Risks and (2) any consequential loss
6 The Landlord covenants that during the term hereby granted:
6.1 It shall not allow any use of the Restaurant to commence until the
lessee or other operator or occupier from time to time has provided
the Tenant with a deed of covenant in favour of the Tenant by which
such lessee operator or occupier covenants not to place any tables or
chairs in the Common Parts (other than those parts shown coloured
yellow on Plan 9) and to use all reasonable endeavours to ensure that
patrons of the Restaurant do not consume food or drink in the Common
Parts (other than those parts shown coloured yellow on Plan No 9)
Provided that following the commencement of the use of the Restaurant
in each such case by such lessee operator or occupier the Tenant may
itself enforce the provisions of such deed and the Landlord shall have
no obligation or liability for its enforcement or if there is any
breach; and
6.2 It shall not without the consent of the Tenant (not to be unreasonably
withheld or delayed) having regard to the Landlord's obligations to
respond promptly to the Restaurant tenant) permit the use of the
Restaurant for any use other than as a high class restaurant or
winebar without any take-away facility for food or drinks.
7 Insurance
7.1 Landlord's insurance covenants
The Landlord covenants with the Tenant as follows:
7.1.1 At the joint cost of the Landlord and the Tenant to enforce
the covenants as to insurance of the Premises on the part of
the Superior Landlord contained in the Superior Lease and if
the Tenant so requires and at the joint cost (without
prejudice to the Tenant's covenants under clause 7.2) of the
Landlord and the Tenant to use its best endeavours to
procure that the Superior Landlord adds any risks specified
by the
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Tenant to the insurance policy including terrorist risk
unless insurance against terrorist risks is unavailable
7.1.2 To insure against loss of the Principal Rent and VAT payable
or reasonably estimated by the Landlord to be payable under
this Lease arising from damage to the Premises by the
Insured Risks for four years or such longer period as the
Landlord may reasonably require having regard to the likely
period for reinstating the Premises
7.1.3 At the reasonable request and cost of the Tenant to produce
evidence of the terms of the insurance under this Clause 6.1
(or an extract thereof showing that the policy is in force
and its terms)
7.1.4 If
(i) the Premises are destroyed or damaged by an
Insured Risk or
(ii) the whole or substantially the whole of the
Premises are destroyed or damaged by an act of
terrorism or other risk against which in either
case the Landlord has been unable to procure
insurance
then, subject to obtaining all necessary planning and other
consents to reinstate the same (other than tenant's and
trade fixtures and fittings) as quickly as reasonably
practicable substantially as they were before the
destruction or damage in modern form if appropriate but not
necessarily identical in layout;
7.1.5 Reinstatement following damage by an act of terrorism or
other risk against which in either case the Landlord has
been unable to procure insurance other than in the
circumstances whereby clause 7.1.4(ii) applies shall be the
responsibility of the Tenant who shall carry out the same as
quickly as reasonably practicable to the reasonable
satisfaction of the Landlord
7.2 Tenant's insurance covenants
The Tenant covenants with the Landlord throughout the Term or until
released pursuant to the 1995 Act as follows:
7.2.1 To pay to the Landlord within 14 days of demand sums equal
to:
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(i) a fair proportion (to be reasonably and properly
determined by the Landlord's Surveyors) in respect
of insurance of the Premises of the amount paid by
the Landlord to the Superior Landlord pursuant to
Clause 2(4)(a) of the Superior Lease in relation
to the Premises and the Restaurant
(ii) the cost of any professional valuation of the
Premises properly required by the Landlord (but
not more than once in any two year period)
7.2.2 To pay to the Landlord within 14 days of demand the whole of
the amount (before deduction of any commission or allowance)
which the Landlord spends on insurance pursuant to Clause
7.1.2
7.2.3 To give the Landlord immediate written notice on becoming
aware of any event or circumstances which could reasonably
be expected to affect or lead to an insurance claim
7.2.4 Not to do anything at the Premises which would or might
prejudice or invalidate the insurance of the Premises or the
Adjoining Property nor (unless the Tenant shall have
previously notified the Landlord and agreed to pay the
increased premium) cause the insurance premium to be
increased
7.2.5 To pay to the Landlord within 14 days of demand:
(i) any increased premium and any Liability incurred
by the Landlord as a result of a breach of Clause
7.2.4
(ii) any reasonable uninsured excess to which the
insurance policy may be subject and which is
normal for policies in relation to properties of
this type
(iii) the whole of any irrecoverable proportion of the
insurance moneys except only to the extent that it
is irrecoverable because of the act or omission of
the Landlord
7.2.6 To comply with the requirements and reasonable
recommendations made by the insurers
7.2.7 To notify the Landlord of the full reinstatement cost of any
fixtures and fittings installed at the Premises at the cost
of the Tenant which become Landlord's fixtures and fittings
7.2.8 To effect adequate insurance cover against damage to or
destruction of the Tenant's fixtures and fittings at the
Premises (or any part thereof)
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7.2.9 Not to effect any insurance of the Premises against an
Insured Risk other than as specified in Clause 7.2.8 but if
the Tenant effects or has the benefit of any such insurance
against the Insured Risks the Tenant shall hold such moneys
upon trust for the Landlord and pay the same to the Landlord
as soon as practicable
7.3 Suspension of Rent and Determination
7.3.1 If the Premises are unfit for occupation and use because of
damage by an Insured Risk or because of damage or
destruction of the whole or substantially the whole of the
Premises by an act of terrorism or other risk against which
in either case the Landlord has been unable to procure
insurance then (save to the extent that, where the damage is
due to an Insured Risk, payment of the loss of rent
insurance moneys is refused due to the act or default of the
Tenant or any undertenant) the Principal Rent (or a fair
proportion of it according to the nature and extent of the
damage) shall be suspended until the date on which the
Premises are again fit for occupation and use.
7.3.2 If the Premises are not again fit for occupation and use by
the date being 4 years after the date of such damage or
destruction referred to in clause 7.3.1 either the Landlord
or the Tenant may within 3 months thereafter (but not after
the Premises are again fit for occupation and use) determine
the Term by giving to the other not less than 6 nor more
than 7 months notice in writing
7.3.3 Any dispute relating to this Clause 7.3 shall be referred to
Arbitration
7.4 Termination of Superior Lease
If this Lease shall be subsisting at any time when the Superior Lease
has for any reason ceased to exist then with effect from the date of
such cesser:-
7.4.1 subject to the following provisions of this Clause, the
covenants and provisions of the Superior Lease incorporated
herein by reference shall nevertheless continue in force by
reference to the terms of the Superior Lease;
7.4.2 the Landlord shall observe and perform the covenants
relating to insurance on the part of the Superior Landlord
contained in the Superior Lease as if they were set out in
full herein (mutatis mutandis) as provisions of this Lease,
and Clauses 7.1.1 and 7.2.1 shall cease to have effect;
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7.4.3 the provisions of clause 7.2.1 shall be varied so as to
refer to costs incurred by the Landlord in effecting
insurance pursuant to clause 7.4.2 above.
7.5 Destruction by act of Terrorism or other uninsured risk
If the whole or substantially the whole of the Premises are destroyed
or damaged by an act of terrorism or other risk against which in
either case the Landlord (despite having used its best endeavours) has
been unable to procure insurance then the Landlord may by notice in
writing to that effect given to the Tenant within six months from the
date of such damage or destruction terminate this Lease within
immediate effect (without prejudice to any right of either party in
respect of any antecedent breach) Provide That if following receipt of
such notice from the Landlord the Tenant services a counter-notice
upon the Landlord requesting a new tenancy pursuant to the Landlord
and Tenant Act 1954 then the rent suspension provisions set out in
clause 7.3.1 shall cease to operate from the date of service of such
counter-notice unless and until such counter-notice and any related
applications or proceedings are withdrawn or terminated.
8 Provisos
8.1 Forfeiture
If any of the following events occurs:
8.1.1 the Tenant fails to pay any of the rents payable under this
Lease within 28 days of the due date (whether or not
formally demanded) or
8.1.2 the Tenant or Guarantor breaches any of its obligations in
this Lease or
8.1.3 execution or distress is levied on the Tenant's goods in the
Premises or
8.1.4 the Tenant or Guarantor being a company incorporated within
the United Kingdom
(i) has an Administration Order made in respect of it
or
(ii) passes a resolution or makes an Order for the
winding up of the Tenant or the Guarantor
otherwise than a member's voluntary winding up of
a solvent company for the purpose of amalgamation
or reconstruction or
(iii) a receiver or administrative receiver or receiver
and manager is appointed over the whole or any
part of its property assets or undertaking or
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(iv) is struck off the Register of Companies or is
dissolved or ceases to exist under the laws of the
country or state of its incorporation or
(v) is deemed unable to pay its debts within the
meaning of Section 123 of the Insolvency Act 1986
or
8.1.5 proceedings or events analogous to those described in Clause
8.1.4 shall be instituted or shall occur where the Tenant or
Guarantor is a company incorporated outside the United
Kingdom
8.1.6 the Tenant or Guarantor being an individual
(i) has a bankruptcy order made against him
(ii) appears to be unable to pay his debts within the
meaning of Section 268 of the Insolvency Act 1986
then the Landlord may re-enter the Premises or any part of the
Premises in the name of the whole and forfeit this Lease and the Term
created by this Lease shall immediately end but without prejudice to
the rights of any party in respect of any breach of the obligations
contained in this Lease
8.2 Notices
8.2.1 Any notice is validly given if it is in writing and either
delivered to the recipient by hand or sent by registered or
recorded delivery post addressed to the recipient at the
address given in this Lease in the case of the Tenant while
this Lease is vested in Goldman Sachs International only
addressed for the attention of The Facilities Manager or
such other address as may have been notified in writing with
reference being made in such notification to this clause of
this Lease.
8.2.2 Any notice sent by registered or recorded delivery post
shall be treated as having been served on the third working
day after the date of posting
8.3 Arbitration
8.3.1 Where this Lease provides for reference to Arbitration then
reference shall be made in accordance with the Arbitration
Act 1996 to a single arbitrator being a partner in or a
director of a leading London firm or company of Chartered
Surveyors who is experienced in the letting and/or rental
valuation of office premises in the City of
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London to be agreed between the Landlord and the Tenant or
in the absence of agreement nominated on the application of
either party by the President for the time being of the
Royal Institution of Chartered Surveyors ("the President")
8.3.2 In the absence of a determination by the arbitrator as to
his fees they shall be borne equally by the Landlord and the
Tenant
8.3.3 If the arbitrator is ready to make his award but is
unwilling to do so due to either the Landlord's or the
Tenant's failure to pay its share of the costs in connection
with the award the other party may serve on the defaulting
party a notice requiring the that party to pay such costs
within 14 days and if the defaulting party fails to comply
with such notice the other may pay to the arbitrator the
defaulting party's costs and any amount so paid shall be a
debt due forthwith from the defaulting party to the other
8.3.4 If the arbitrator fails to give notice of his determination
of if he dies is unwilling to act or becomes incapable of
acting or if for any other reason he is unable to act either
such party may request the President to discharge the
arbitrator and appoint another arbitrator in his place to
act in the same capacity which procedure may be repeated as
many times as necessary
8.4 No Implied Easements
This Lease does not include any rights over the Adjoining Property
except those mentioned in Part I of the First Schedule and Section 62
of the Law of Property Act 1925 is excluded from this Lease
8.5 No Warranty
The Landlord does not warrant that the Permitted Use complies with the
Planning Acts
8.6 Superior Lease
If there shall be any conflict between the terms of the Superior Lease
and the terms of this Lease then the terms of the Superior Lease shall
pro tanto prevail
8.7 Disclaimer
The Landlord shall not (save in the case of its negligence) be
responsible for any loss accident or damage sustained at the Premises
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8.8 Tenant's Option to Determine
If (but only if) the Tenant shall
8.8.1 give to the Landlord not less than 12 months and 3 days nor
more than 18 months prior notice in writing that the Tenant
desires to determine the Term on the Determination Date (it
being hereby agreed that any such notice shall be deemed to
be irrevocable whether or not expressed as such) and
8.8.2 have paid the rent reserved by Clause 3 up to the
Determination Date and
8.8.3 yield up the whole of the Premises in accordance with Clause
4.25 and with vacant possession on the Determination Date
(Provided that the Landlord may in its absolute discretion
waive any of the requirements in this Clause 8.8 but without
prejudice to its rights and remedies as a result of the
Tenant's failure to fulfil such requirements)
the Term shall cease and determine on the Determination Date but
without prejudice to any party's rights as a result of any antecedent
breach
8.9 Jurisdiction and Service
8.9.1 Each of the parties hereto irrevocably agrees for the
benefit of each of the other parties hereto that the place
of performance of the obligations under or pursuant to this
Lease shall be England and that the Courts of England shall
have jurisdiction to hear and determine any suit action or
proceedings and to settle any disputes which may arise out
of or in connection with this Lease and for such purposes
irrevocably submits to the jurisdiction of such Courts
8.9.2 The submission to the jurisdiction of the Courts referred to
in Clause 8.9.1 hereof shall not (and shall not be construed
so as to) limit the rights of the Landlord to take
proceedings against the Guarantor or the Surety in any other
court of competent jurisdiction nor shall the taking of
proceedings in any one or more jurisdictions preclude the
taking of proceedings in any other jurisdiction whether
concurrently or not
8.9.3 The Landlord the Tenant and the Guarantor each hereby
irrevocably agrees that
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<PAGE> 218
(i) any process issued out of the High Court may for
the purposes of the Rules of the Supreme Court of
England an any notices to be served on it under
this Lease may for the purposes of this Lease be
served on it in each such case by leaving a copy
by ordinary post addressed to it at the address
for service in England and Wales hereinbefore
specified or at such other address in England and
Wales of which the party to be served shall have
received a notice which itself complies in all
respects with Clause 8.9.3.(ii)
(ii) any notice of change of address for service to be
given by the Landlord the Tenant and the Guarantor
shall
(a) be given in writing
(b) specify the date of this Lease and the
parties hereto
(c) contain the full address of the Premises
(d) specify the last applicable address for
service hereunder either as hereinbefore
specified or (as the case may be) as
last notified pursuant to Clause
8.9.3.(i) and the date of such
notification and
(e) specify the new address in England and
Wales for such service as aforesaid and
the date (being not earlier than 14 days
after delivery of such notice) from
which the same shall apply
and any purported notice which fails in any
respect to comply with any of the provisions of
this Clause 8.9.3(ii) shall not constitute due
notice of change of address for service for the
purposes of this Clause 8.9.3(ii)
(iii) Any such service of process or notice pursuant to
Clause 8.9.3.(i) shall be deemed to have been
completed two days after posting of such process
or notice or upon personal delivery
8.9.4 The Landlord the Tenant and the Guarantor each hereby
irrevocably consents generally in respect of any legal
action or proceeding arising out of or in connection with
this Lease to the giving of any relief or the issue of any
process in connection with such action or proceeding
including (without limitation) the making enforcement or
execution
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<PAGE> 219
against any property whatsoever and wheresoever
(irrespective of its use or intended use) of any order or
judgment which may be given in such suit action or
proceeding
8.9.5 To the extent that the Landlord the Tenant or the Guarantor
may in any jurisdiction claim for itself or its assets
immunity from suit execution attachment (whether in aid of
execution before judgment or otherwise) or other legal
process and to the extent that in any such jurisdiction
there may be attributed to them or its assets such immunity
(whether or not claimed) the Landlord the Tenant and the
Guarantor each hereby irrevocably agrees not to claim and
hereby irrevocably waives such immunity to the full extent
permitted by the laws of such jurisdiction
9 Guarantee
The Guarantor covenants with the Landlord for the Term in the terms
set out in the Third Schedule
EXECUTED by the parties as a DEED the day and year first before
written.
The First Schedule
Part I
Easements and Other Rights granted
1 Subject to obtaining the consent of the Landlord (such consent not to
be unreasonably withheld or delayed) and subject to obtaining all
necessary planning and other statutory consents (and complying with
any conditions specified in such consents) the right to erect and
maintain any number of aerials or satellite dishes on the roof of the
Premises. (subject to compliance with any regulations relating thereto
laid down from time to time by the Corporation of London)
2 The right to instal plant on the roof of the Premises subject to the
same qualifications as in paragraph 1 above
3 The right to enter the Restaurant at reasonable times on reasonable
prior notice (except in the case of emergency) to enable the Tenant to
carry out its obligations under this Lease in relation to the
structural elements coloured orange on Plans 2 and 3
4 The right of protection from the Adjoining Property and the right of
support from the Adjoining Property as now enjoyed
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Part II
Exceptions and Reservations
There are excepted and reserved to the Landlord and all persons
authorised by it:
1 The right to carry out or consent to the carrying out by any person of
any erection of a new building or the rebuilding demolition or
altering of the Adjoining Property notwithstanding its effect on the
light and air enjoyed by the Premises provided that the Tenant's use
and enjoyment of the Premises is not materially prejudiced
2 Rights of entry onto the Premises as referred to in Clause 4.21
3 The right of support and protection for the Adjoining Property as now
enjoyed
4 The right of way on foot and with vehicles over and along and
otherwise to use the Service Ramp and the Service Area for vehicles
for the purposes of access to and egress from the Restaurant Spaces
and the Loading Bay and for persons for all purposes reasonably
connected with the use and occupation of the Restaurant (but not
members of the public nor patrons of the Restaurant) subject to such
reasonable regulations in relation thereto as the Tenant may from time
to time make and notify to the Landlord in relation thereto
5 The use of the Restaurant Spaces subject to such regulations as
aforesaid
6 Subject to the Tenant's reasonable security requirements being
satisfied, of way on foot and in emergencies only over and along the
access way shown coloured brown on Plan No 5 annexed
7 Of free passage and running of water soil gas and electricity and
other services through the Conduits which now or may hereafter during
the Term pass through along under or over the Premises and which serve
the Adjoining Property together with the right on giving reasonable
notice (except in emergency) to enter and remain on the Premises to
inspect maintain and repair any such Conduits making good all damage
caused by such entry
8 The right to load and unload vehicles delivering goods to and from the
Restaurant from the Loading Bay subject to such reasonable regulations
in relation thereto as the Tenant may make and notify to the Landlord
and the lessee of the Restaurant
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<PAGE> 221
9 A right from time to time to install new Conduits within the area
coloured yellow on Plan 5 subject to the person installing such new
Conduits complying with the safety, security and other reasonable
requirements of the Tenant
10 The right for the Restaurant to use the refuse compactor (if any)
within the Service Bay subject to regulations as aforesaid
11 The right to use the Common Parts subject to regulations as aforesaid
12 A right from time to time to make alterations to the structural
elements shown coloured orange on Plans 2 and 3 subject to the
Tenant's approval not to be unreasonably withheld or delayed
Part III
Encumbrances
1 Entries 2, 3, 4 8 9 and 10 on the Charges Register of Title Number NGL
604815 as shown on office copies dated 17 February 1998 Licence to
place memorial statute dated 24 September 1991 between the Mayor and
Commonalty and Citizens of the City of London (1) English Property
Corporation plc (2) and the Trustees of the Blitz Memorial Statue (3)
2 Deed of Covenant in respect of underground telegraphs dated 29 April
1969 between the Corporation of London (1) Metropolitan Provincial
Properties Limited (2) Ralli Brothers (Bankers) Limited (3) and HM
Postmaster General (4)
3 Agreement relating to City Walkway and Lift Works dated 25 September
1995 between the Mayor and Commonalty and Citizens of the City of
London (1) English Property Corporation plc (2) MEPC plc (3)
Part IV
Superior Lease
Date Parties Term Premises
[ ] The Mayor and Community 150 years from One Carter Lane and Two
and Citizens of the City of [ ] Old Change Court London
London (1) EC4 shown edged red on the
the Landlord (2) plan attached to the
Superior Lease
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<PAGE> 222
The Second Schedule
(Rent Review)
1 In this Schedule:
1.1 Review Date means each of the Rent Review Dates mentioned in the
Particulars and Relevant Review Date shall be interpreted accordingly
1.2 Rack Rental Value means the annual rent (exclusive of VAT) at which
the Premises might reasonably be expected to be let in the open market
at the Relevant Review Date
ASSUMING
1.2.1 the letting is on the same terms as those contained in this
Lease but subject to the following qualifications:
(i) the term shall be one of 10 years commencing on
the Relevant Review Date
(ii) the amount of the Principal Rent shall be
disregarded but it shall be assumed that the
principal rent is subject to review on the terms
of and at the same intervals as the Principal Rent
under this Lease
1.2.2 the Premises are available to let as a whole with vacant
possession by a willing landlord to a willing tenant without
premium
1.2.3 the Premises have been constructed at the Landlord's expense
in accordance with the Specification
1.2.4 all the covenants contained in this Lease have been fully
performed and observed
1.2.5 no work has been carried out to the Premises by the Tenant
or any undertenant which has reduced the rental value of the
Premises.
1.2.6 if the whole or any part of the Premises or any access
thereto has been destroyed or damaged it has been fully
reinstated.
BUT DISREGARDING
1.2.7 any goodwill attached to the Premises by reason of any
business carried on there
1.2.8 any effect on rent of the fact that any Tenant and any
undertenant is or has been in occupation of the Premises
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<PAGE> 223
1.2.9 any effect on rent of any improvements at the Premises made
with the Landlord's consent by the Tenant or any undertenant
except improvements carried out pursuant to an obligation to
the Landlord or at the expense of the Landlord (and the
Landlord and the Tenant hereby agree for the avoidance of
doubt that the Category "A" Works shall not be disregarded
on any review of the Principal Rent payable hereunder)
Provided that the Rack Rental Value shall be that which would be
payable after the expiry of any rent free period or concessionary rent
period for fitting out purposes and after receipt of any contribution
to fitting-out works or other inducement relative to fitting out which
might be made on a letting of the Premises so that no discount
reduction or allowance is made to reflect (or compensate the tenant
for the absence of) any such rent free or concessionary rent period or
contribution or other inducement in respect of fitting out;
2 The Principal Rent shall be reviewed on each Review Date to the higher
of:
2.1 the Principal Rent payable immediately before the Relevant Review Date
(disregarding any suspension or abatement of the Principal Rent) and
2.2 the Rack Rental Value on the Relevant Review Date agreed or determined
in accordance with this Lease
3 The Rack Rental Value at any Review Date shall be:
3.1 agreed in writing between the Landlord and the Tenant or
3.2 determined by Arbitration on the application of either Landlord or
Tenant at any time not earlier than three months before the Relevant
Review Date
4 If a Rack Rental Value is not agreed or determined by the Relevant
Review Date
4.1 the Principal Rent payable immediately before the Relevant Review Date
shall continue to be payable until the Rack Rental Value is
ascertained
4.2 when the Rack Rental Value is ascertained
4.2.1 the Tenant shall pay within 14 days of ascertainment:
(i) any difference between the Principal Rent payable
immediately before the Relevant Review Date and
the Principal Rent which would have been payable
had the Rack
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<PAGE> 224
Rental Value been ascertained on the Relevant
Review Date ("the Balancing Payment") and
(ii) interest on the Balancing Payment at Base Rate
from the date or dates when the same would have
been payable had the Rack Rental Value been
ascertained on the Relevant Review Date
4.2.2 the Landlord and Tenant shall sign and exchange a memorandum
recording the agreed amount of the Principal Rent payable on
and from the Relevant Review Date and each party shall bear
its own costs in relation to the memorandum
5 If at any Relevant Review Date the operation of the rent review
provisions in this Lease or the normal collection and retention by the
Landlord of any increase in the rent is prohibited or modified by
statute the Landlord may elect at any time that the day next following
the date on which any relaxation of such statute takes effect shall be
substituted for the Relevant Review Date
6 Time shall not be of the essence for the purposes of this Schedule
The Third Schedule
(Guarantee)
1 The Guarantor covenants with the Landlord as principal debtor that
throughout the Term or until the Tenant is released from its covenant
pursuant to the 1995 Act, the Tenant will pay the rents reserved by
and perform its obligations contained in this Lease
2 Without prejudice to paragraph 5 the liability of the Guarantor shall
be no greater than it would have been if the Guarantor had been the
Tenant (except for additional costs arising from the enforcement of
the guarantee) but shall not be affected by:
2.1 Any time given to the Tenant or any failure by the Landlord to enforce
compliance with the Tenant's covenants and obligations
2.2 The Landlord's refusal to accept rent at a time when it would or might
have been entitled to reenter the Premises
2.3 Any variation of the terms of this Lease
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<PAGE> 225
2.4 Any change in the constitution structure or powers of the Guarantor
the Tenant or the Landlord or the administration liquidation or
bankruptcy of the Tenant or Guarantor
2.5 Any act which is beyond the powers of the Tenant
2.6 The surrender of part of the Premises
2.7 The transfer of the reversion expectant on the Term
2.8 Any other act or thing (other than the default of the Landlord) by
which (but for this provision) the Guarantor would have been released
3 Where the Guarantor is more than one person the release of one or more
of them shall not release the others
4 The Guarantor shall not be entitled to participate in any rental
deposit held by the Landlord in respect of the Tenant's obligations or
stand in the Landlord's place in respect of such rental deposit
5 If this Lease is disclaimed or forfeited and if the Landlord within 6
months of receipt of the notice of disclaimer and forfeiture requires
in writing the Guarantor will (at the option of the Landlord) either
5.1 enter into a new lease of the Premises at the cost of the Guarantor on
the terms of this Lease (but as if this Lease had continued and so
that any outstanding matters relating to rent review or otherwise
shall be determined as between the Landlord and the Guarantor) for the
residue of the Term from and with effect from the date of the
disclaimer or forfeiture or
5.2 pay to the Landlord on demand an amount equal to the moneys which
would otherwise have been payable under the Lease until the earlier of
6 months after the disclaimer or forfeiture and the date on which the
Premises are fully relet
6 The Guarantor may not assign its rights or delegate its obligations
under this Guarantee in whole or in part (and any purported assignment
or delegation is void) except for an assignment of all the Guarantor's
rights and obligations hereunder in whatever form the Guarantor
determines may be appropriate to a partnership, corporation, trust or
other organisation in whatever form (the "Successor") that succeeds to
all or substantially all of the Guarantor's assets and business and
that assumes such obligations by contract, operation of law or
otherwise. Upon any such assignment and assumption of obligations the
Guarantor shall give written notice thereof to the
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<PAGE> 226
Landlord and subject to the Landlord having received in a form
reasonably satisfactory to the Landlord, a deed executed by the
Successor (accompanied by a legal opinion in a form reasonably
satisfactory to the Landlord addressed to the Landlord from a
reputable firm of lawyers in the relevant jurisdiction confirming
inter alia enforceability and due execution) whereby the Successor
assumes and covenants with the Landlord to perform all outstanding and
future obligations of the Guarantor under this Agreement, whether such
assumption is by operation of law or by virtue of such deed, the
Guarantor shall be relieved of and fully discharged from all
obligations hereunder, whether such obligations arose before or after
such delegation and assumption, but without prejudice to the
antecedent breach.
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<PAGE> 227
ON COUNTERPART
THE COMMON SEAL of BRITEL FUND }
TRUSTEES LIMITED was hereunto }
affixed in the presence of:
Authorised Signing Officer
------------------------
Authorised Signing Officer
------------------------
THE COMMON SEAL of GOLDMAN }
SACHS INTERNATIONAL }
was hereunto affixed in the presence of:
Director
------------------------
Secretary
------------------------
THE GOLDMAN SACHS GROUP
L.P. by The Goldman Sachs ------------------------
Corporation
by
Executive Vice President
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[GRAPHIC OMITTED]
[LOGO]
ROLFE JUDD
planning architecture interiors
Old Church Court [ILLEGIBLE] London [ILLEGIBLE] Telephone [ILLEGIBLE]
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Client
MEPC
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Project
PETERSHILL, LONDON EC4
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Drawing
SITE PLAN - GROUND FLOOR
CITY WALKWAY / HIGHWAY DEMISE
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MEPC
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Project
PETERSHILL, LONDON EC4
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SECTION X-X
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MEPC
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Project
PETERSHILL
LONDON EC4
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RESTAURANT
LOWER GROUND FLOOR PLAN
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MEPC
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Project
PETERSHILL
LONDON EC4
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GROUND FLOOR PLAN
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MEPC
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Project
PETERSHILL, LONDON EC4
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BASEMENT PLAN
ONE CARTER LANE
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PETERSHILL, LONDON EC4
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PETERSHILL, LONDON EC4
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PETERSHILL, LONDON EC4
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WEST ELEVATION
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MEPC
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Project
PETERSHILL, LONDON EC4
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SITE PLAN - GROUND FLOOR
CITY WALKWAY / HIGHWAY DEMISE
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Scale Date [ILLEGIBLE] [ILLEGIBLE]
1:100 04/01/97 SA
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Drawing No. [ILLEGIBLE]
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[ILLEGIBLE]
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(C) Rolfe Judd Group Practice Ltd - Copyright
PLAN No. 9
<PAGE> 237
Appendix F
<PAGE> 238
APPENDIX E
The Licence for Fit Out Works
DATED 1998
- --------------------------------------------------------------------------------
BRITEL FUND TRUSTEES LIMITED
-AND-
GOLDMAN SACHS INTERNATIONAL
-AND-
THE GOLDMAN SACHS GROUP, L.P.
- --------------------------------------------------------------------------------
Agreed Draft 19.3.98
LICENCE
FOR WORKS TO 1 CARTER LANE LONDON EC4
- --------------------------------------------------------------------------------
MAXWELL BATLEY
27 CHANCERY LANE
LONDON WC2A 1PA
REF: 77.503
<PAGE> 239
LICENCE FOR FITTING OUT WORKS
DATE 1998
The Landlord BRITEL FUND TRUSTEES LIMITED (Company Number 1687513) whose
registered office is at Standon House 21 Mansell Street
London E1 8AA
The Tenant GOLDMAN SACHS INTERNATIONAL (Company Number 226395) whose
registered office is at Peterborough Court 133 Fleet Street
London EC4A 2BB
The Guarantor GOLDMAN SACHS GROUP, L.P. whose office is at 85 Broad
Street New York New York 10004 and whose address for
service in the UK is C/o The Facilities Manager Goldman
Sachs International Peterborough Court 133 Fleet Street
London EC4A 2BB
1. DEFINITIONS
(1) In this Deed unless the context otherwise requires the following
expressions have the meanings respectively assigned to them:
"the Lease" the lease of the Premises dated [ ] and
made between the Landlord (1) the Tenant (2)
and the Guarantor (3)
"the Premises" the premises known as 1 Carter Lane London
EC4 and more particularly described in the
Lease
1
<PAGE> 240
"the Approved Plans" the plans numbered [and the specifications
dated ] annexed to this Deed as amended
from time to time in accordance with the
provisions of this Deed
"the Works" the fitting out works to the Premises all as
specified in those of the Approved Plans as
relate thereto and briefly described in the
schedule to this Deed
(2) The provisions of Clause 2 of the Lease shall apply to this Deed
mutatis mutandis
(3) Unless the context otherwise requires all other expressions in this
Deed that appear also in the Lease have the meanings given to them
by the Lease
2. PRELIMINARY
(1) This Deed is supplemental to the Lease
(2) The Tenant wishes to carry out the Works and the Landlord has agreed
to grant licence for the Works upon the terms set out below
(3) The Guarantor has agreed to enter into this Deed to confirm its
continuing liability
3. OPERATIVE PROVISIONS
(1) The Landlord at the request of the Guarantor consents to the
carrying out of the Works upon the terms of and subject to
compliance in all respects with the provisions of this Deed and of
the Lease
(2) The Tenant covenants with the Landlord as follows: -
2
<PAGE> 241
(a) Before commencing the Works and at the Tenant's own expense: -
(i) when necessary to obtain all necessary permits planning
bye-law building regulation and other permissions and
consents which are necessary for the Works to be carried
out including if appropriate building control and fire
officer consents
(ii) to produce copies of all such permits permissions and
consents obtained for the Works to the Landlord
(iii) to give such particulars of the Works to the Landlord as
the insurers of the Premises may require
(b) To pay promptly on demand any additional premiums which
properly arise as a result of the Works and which the insurers
may require to be paid from time to time
(c) In the event that the Tenant proceeds with the Works to carry
out the Works in their totality and
(i) in a sound and workmanlike manner in conformity in all
respects with the Approved Plans and with new materials
of good quality
(ii) so as to comply with all relevant planning permissions
and building regulations consents and other consents and
requirements and standards of all relevant authorities
and bodies and all statutory provisions relative to the
carrying out of the Works
(iii) without prejudice to the other requirements of this Deed
in accordance with the requirements of Clause 4.29 of
the Lease
3
<PAGE> 242
(iv) so as to cause as little disturbance and inconvenience
as possible and no avoidable nuisance or obstruction to
the owners and occupiers or users of the Restaurant
(v) to the reasonable satisfaction of the Landlord's
surveyors and other appropriate consultants
(vi) so as not at any time to damage or render unsafe the
Premises or the Restaurant or adversely affect any means
of escape
(vii) in so doing to treat and maintain materials in
accordance with manufacturer's recommendations
(viii) Without prejudice to the other requirements of this
Deed without using or specifying for use or knowingly
permitting to be used in or in relation to the Works any
materials which are generally accepted or reasonably
suspected as being deleterious at such time which
without prejudice to the generality thereof shall
include any material which:
(aa) poses a threat to the health and safety of any
person who may come into contact with the Works
(whether during their construction or after their
completion) or the Premises or
(bb) poses a threat to the physical integrity of the
Works or the Premises or any part of either of
them or
(cc) may have the effect of reducing the normal life
expectancy of the Premises or any part of them
4
<PAGE> 243
(ix) so that the Works are completed no later than 31
December 1999
(e) To obtain promptly from its contractor a certificate under the
latest edition of the I.E.E. Regulations that those parts (if
any) of the Works comprising electrical works are satisfactory
and comply with the appropriate recommended standards and to
supply a copy of such certificate to the Landlord promptly
upon its receipt
(f) Subject to the provisions of clause 4.21 of the Lease to
permit the Landlord and anyone authorised by it to inspect the
Works upon reasonable prior appointment during and for a
reasonable time following completion of the Works to examine
the carrying out of the Works and materials used or intended
to be used
(g) Fully and effectually to indemnify the Landlord from and
against all Liability by reason of or arising in any way out
of the carrying out of the Works or the alterations thereby
effected or their subsequent use or any failure by the Tenant
to observe or perform any of its obligations under this Deed
(h) To notify the Landlord in writing of the dates of commencement
and completion of the Works
(3) Notwithstanding the covenant as to insurance by the Landlord in the
Lease the Works shall be at the sole risk of the Tenant until the
Works shall have been practically completed and in the meantime the
Tenant shall: -
(a) insure or procure the insurance of the Works with insurers of
repute for their full reinstatement cost (including
professional fees) against loss and damage by fire lightning
explosion storm tempest flood bursting or overflowing of water
tanks apparatus or pipes earthquake
5
<PAGE> 244
aircraft and other aerial devices or articles dropped
therefrom riot civil and commotion
(b) promptly pay all premiums and on demand to produce to the
Landlord evidence of the policy or policies of insurance and
the receipt for the current premiums
(c) in the event of damage or destruction forthwith restore and
reinstate the Works fully in accordance with the provisions of
this Deed and apply all money received by virtue of such
insurance in so restoring and reinstating the Works and in
case the money shall be insufficient for that purpose the
Tenant will make up the deficiency out of the Tenant's own
resources
and thereafter the provisions of the Lease as to insurance shall
apply
(4) (a) The carrying out of the Works is subject to all rights of the
owners and occupiers of the Restaurant and the Adjoining
Property and where necessary the Tenant shall obtain all
necessary consents from such persons
(b) The proviso for re-entry on breach or non-observance of the
Tenant's covenants and obligations in the Lease shall be read
and construed henceforth as including a reference to the
Tenant's covenants and obligations contained in this Deed
(c) The covenants in the Lease shall henceforth take effect as if
the Works had always formed part of the Premises and had been
mentioned in the definition of the Premises demised by the
Lease but without prejudice to sub-clause (3) of this clause 3
6
<PAGE> 245
(d) The grant of this licence and any approvals or consents
pursuant to it by the Landlord or anyone on its behalf do not
imply any warranty by or on behalf of the Landlord in respect
of the Works or any part of them nor diminish in any way the
full liability of the Tenant for all its obligations in this
Deed
(5) For the avoidance of doubt the Guarantor covenants with the Landlord
that its guarantee given in the Lease extends to and includes the
obligations undertaken by the Tenant in this Deed
(6) This Deed shall not commence to have effect (save for this
sub-clause) until it is dated or if earlier when it is expressly
agreed between the parties or on their respective behalfs that it
shall have effect
THIS Deed has been duly executed on the date stated above
THE SCHEDULE
(brief description of the Works)
[
]
7
<PAGE> 246
Executed as a deed under the Common Seal )
of BRITEL FUND TRUSTEES LIMITED )
in the presence of: - )
Authorised Signing Officer
Authorised Signing Officer
8
<PAGE> 247
Executed as a deed under the Common Seal )
of GOLDMAN SACHS INTERNATIONAL )
in the presence of: - )
Director
Secretary
Executed as a deed by THE GOLDMAN )
SACHS GROUP, L.P. )
By The Goldman Sachs Corporation )
By
-----------------------------
Executive Vice President
9
<PAGE> 248
Appendix G
<PAGE> 249
[LETTERHEAD OF ROLFE JUDD]
IMcl/mct/2897/A1
11 March 1998
By Fax and Post
Mr Bob Wright
MEPC UK Ltd
12 St James's Square
London SW1Y 4LB
Dear Bob
Petershill, London EC4
In accordance with the terms and conditions of our appointment and in particular
clause 3.9, we write to confirm our position with regard to the deleterious
materials listed under the First Schedule of the document.
We can confirm that no deleterious materials or components as identified in the
First Schedule have been specified or knowingly authorised by the Architect with
the exception of thermal insulants which have been HCFC blown.
HCFC blown insulation has been knowingly accepted in the project in some
situations where a suitably durable alternative could be not be found.
Yours sincerely
/s/ Ian McIntosh
Ian McIntosh
Rolfe Judd Architecture
<PAGE> 250
Appendix H
<PAGE> 251
Review of Contractors Defects List and Comments Based Upon the Inspection of
Services at No. 1 Carter Lane, Petershill, London
The information utilised to review the situation regarding the progress of
defect rectification was produced by MACE, the Management Company, dated 20th
February 1998 and it may well be that as of the publication date of this
document, further defects have been dealt with.
According to the weekly progress report from MACE, generally attention to
defects has been noted as being progressive.
Those items outstanding at the 20th February 1998 date, relative to the aspects
of concerning this document are;
1.00 Mechanical Services
2.00 Electrical Services
3.00 Fire Detection Systems
4.00 Lifts
5.00 BMS Controls
6.00 Thermal Insulation
Non completed defects relative to the above `work packages' were noted as
follows:
Mechanical Services - Work Package 6300
Defects No. Description
3874 Clean Condenser Coils
4632 Cap Drain Cocks (also 6716, 8307, & 4811)
6712 Insulation Cover to Pipework Section
7164 Rewire Boiler Controls
7432 Install Toilet Overflow Tundish
7940 Decision required to fit Grilles to Ducts in Plenums
8287 Commission and Document 4th Floor Suite
8679 Resolve excessive sound levels from 4th Floor Fan Coil Units
Cont/d...
<PAGE> 252
2/...
BMS Controls - Work Package 6700
Defects No. Description
2008 Install Trunking Bend
2955 Install Earthing Tag to Trunking Joint
6683 Paint Touch-Up
7146 Re-Check Chiller Interface when Works complete
7152 Commission KWH Meter in LV Room
7155 Calibrate Solar Radiation Sensor at 5th Floor
7156 Commission and Demonstrate Modems
7157 Install and Commission Portable Key-Pad
7162 Boiler High Limit Stat Operation to be Resolved
Electrical Installation - Work Package 7000
Defects No. Description
4679 Cable Tray Transition not acceptable
4606 Cable Tray Bends to be replaced
7345 Conduit bend to be fitted
8303 Conduit Box Lids to be fitted
8452 Complete installation of Car Park Barrier and Commission
Fire Detection & Alarms - Work Package 7050
Defect No. Description
4986 Fix 2 No. Cables to Soffit
5431 HV Sounder 2nd Floor not level
8232 Install correctly, Detector at 5th Floor
8282 Install Break/Glass Beacon 5th Floor
8293 Fix Detector to Stair Lobby
8319 Firemans Override Switch Labels in Alarm Panel to be corrected
8323 Trunking up to Fire alarm Panel required
8345 Fix Sounders in Entrance Area
8347 Fit Smoke Detector Head Lower Ground Floor
<PAGE> 253
3/.....
Lifts - Work Package 7400
Defect No. Description
7646 Improve Lift Car Emergency Light Levels - Lift 6
8337 Repair damage to Lift Door - Lift 4
8332 Polish minor scratches to all Doors - All
8334 Polish minor scratches to all Doors - All
8335 Polish minor scratches to all Architrave's - Lift 4
8338 Polish minor scratches to all Architrave's - Lift 5
8339 Polish minor scratches to all Doors - Lift 5
8339 Polish minor scratches to all Doors - Lift 5
8339 Polish minor scratches to all Architrave's - Lift 4
8476 Polish minor scratches to all Doors - Lift 5
8477 Remove dents to doors - Lift 5
8873 Lift Inspection Report action required
The above defects should be monitored for status throughout the defects
liability period.
In addition to those items noted under the Management Companies System, the
following random instances were noted.
.01 Both Chillers appeared to be inoperative due to what was understood to be
communication problems with the system monitoring.
.02 Lack of fluid in System 1 AHU filter indicator.
.03 Open smoke vents at the rear of the Boiler Room AHU to be investigated.
.04 Water leaks detected from Primary Heating Pump No. 1.
.06 A quantity of water leakage was noted at the rear of Boiler No. 2.
.07 Redundant pipe and insulation to be removed from behind the Heating
Pressurisation Units.
.08 A water leak was detected from Heating Secondary Pump No. 3.
.09 Redundant insulation sections to be removed from behind the main plant
control panel.
<PAGE> 254
CARTER LANE, LONDON EC4
- --------------------------------------------------------------------------------
LISTS OF SNAGGING WORKS AGREED BY MEPC AND JONES LANG
WOOTTON (ON BEHALF OF GOLDMAN SACHS INTERNATIONAL)
17 March 1998
BUILDING FABRIC
In addition to the items outstanding on the main project snagging list dated
25th February 1998, the following items have been identified by Jones Lang
Wootton and the actions [ILLEGIBLE] with MEPC are noted.
Rainwater gully covers missing to all flat roof and balcony areas. Gully covers
to be installed. Pavings to be completed in these locations.
Hydrotech paint-on waterproofing to roof not completed around south west
rainwater gully in fifth floor plant area.
Metal covers to fifth floor plant mounting plinths split. Splits to be repaired.
Fifth floor plant enclosure cradle access doors. Ferrous screws to hinges to be
replaced with non-ferrous screws. Locks to be provided to restraint stays. Rolfe
Judd are to confirm that they have rechecked and are satisfied that the design
of these doors and their fixings take into account the appropriate exposure
ratings for this location.
The external glazing, spandrel panels and architectural ironmongery is dirty.
Agreed that a full cleaning down of all these surfaces will be carried out as a
matter of urgency.
Minor seepage from external planter at first floor level (southern elevation).
Mace to investigate and report on cause and proposed remedial works.
Wind noise and noise break in via lightweight covering to roof slopes on fifth
and fourth floor levels. Agreed to monitor the situation in use. In particular
to recheck to see if problem persists post completion of tenant fitting out
works in these areas.
North west staircase. Temporary nosings to the staircase treads to be removed
and any necessary making good completed.
South west staircase. Balustrade and tread repairs outstanding on the upper
levels. A number of missing internal decor panels to curtain walling. Agreed to
instruct trade contractors to complete these outstanding works.
Southern end of fourth floor elevation mid point. Minor water penetration at low
level. Agreed to investigate and implement the necessary remedial works.
Southern end of first floor elevation mid point. Minor water penetration at low
level. Agreed that this be investigated and monitored to establish necessary
[ILLEGIBLE] works.
- --------------------------------------------------------------------------------
Jones Lang Wootton 1
<PAGE> 255
[ILLEGIBLE]
- --------------------------------------------------------------------------------
2
<PAGE> 256
[LOGO] m|a|c|e
Package De-snag Weekly Progress Report
- --------------------------------------------------------------------------------
Report Date: 20.02.98
Issued by: Carlo Tugulu
Distribution: MEPC RJ OAP CFA ARP HERMES APS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
Target
Package No. & Name Company Previous Week Total Current Week Total Completion Date
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
2160 Waterproofing Coverite 46 46
- ---------------------------------------------------------------------------------------------------------------------
2350 Concrete Structure PC Harrington 10 10
- ---------------------------------------------------------------------------------------------------------------------
2800 Structural Steelwork SG Industrial 1 1
- ---------------------------------------------------------------------------------------------------------------------
2850 Restaurant Cladding EAG 24 18
- ---------------------------------------------------------------------------------------------------------------------
3211 Cladding Installation Thames Contract 218 217
- ---------------------------------------------------------------------------------------------------------------------
3220 Entrance Glazing T & WIDE 4 4
- ---------------------------------------------------------------------------------------------------------------------
3600 Roof Finishes Coverite 10 10
- ---------------------------------------------------------------------------------------------------------------------
3700 Masonry Irvine Whitlock 27 25
- ---------------------------------------------------------------------------------------------------------------------
3800 Drylining BR Hodgson 240 90
- ---------------------------------------------------------------------------------------------------------------------
4200 Toilet Fit-out HL Smith 173 173
- ---------------------------------------------------------------------------------------------------------------------
4500 Arch. Metalwork Glazzards 61 24
- ---------------------------------------------------------------------------------------------------------------------
4575 Metal Doors Hendn. Bostwick 9 9
- ---------------------------------------------------------------------------------------------------------------------
4750 Entrance Fit-out A Davies 6 6
- ---------------------------------------------------------------------------------------------------------------------
4755 Marketing Suite Fitout HL Smith 127 127
- ---------------------------------------------------------------------------------------------------------------------
5500 Facade Maintenance Facade Hoists 2 2
- ---------------------------------------------------------------------------------------------------------------------
6300 Mechanical Service And. Weatherfoil 20 12
- ---------------------------------------------------------------------------------------------------------------------
6700 BMS Controls Sync. Systems 76 9
- ---------------------------------------------------------------------------------------------------------------------
6900 Thermal Insulation Abbey Thermal 3 3
- ---------------------------------------------------------------------------------------------------------------------
7000 Electrical Services NG Bailey 28 14
- ---------------------------------------------------------------------------------------------------------------------
7050 Fire Detection Alarms Cerberus 11 9
- ---------------------------------------------------------------------------------------------------------------------
7400 Lifts Otis 16 12
- ---------------------------------------------------------------------------------------------------------------------
8100 Hard Landscaping McNicholas 46 39
- ---------------------------------------------------------------------------------------------------------------------
TOTAL 3500 1158 860
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
Mace Limited
Petershill Site Office
1, Carter Lane
Off Knightrider Court
London EC4V 5ER
Tel 0171 236 3711
[ILLEGIBLE]
<PAGE> 257
[LOGO] m|a|c|e
Packaging Snagging Status Report
- --------------------------------------------------------------------------------
Report Date: 25.02.98
Issued by: Carlo Tugulu
Distribution: MEPC
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Package No. & Name Company Current
Week Total
- --------------------------------------------------------------------------------
2160 Waterproofing Coverite 41
- --------------------------------------------------------------------------------
2350 Concrete Structure PC Harrington 10
- --------------------------------------------------------------------------------
2850 Restaurant Cladding EAG 17
- --------------------------------------------------------------------------------
3211 Cladding Installation Thames Contract 205
- --------------------------------------------------------------------------------
3220 Entrance Glazing T & WIDE 4
- --------------------------------------------------------------------------------
3600 Roof Finishes Coverite 10
- --------------------------------------------------------------------------------
3700 Masonry Irvine Whitlock 24
- --------------------------------------------------------------------------------
3800 Drylining BR Hodgson 61
- --------------------------------------------------------------------------------
4200 Toilet Fit-out HL Smith 156
- --------------------------------------------------------------------------------
4500 Arch. Metalwork Glazzards 20
- --------------------------------------------------------------------------------
4575 Metal Doors Hendn. Bostwick 9
- --------------------------------------------------------------------------------
4750 Entrance Fit-out A Davies 2
- --------------------------------------------------------------------------------
4755 Marketing Suite Fitout HL Smith 123
- --------------------------------------------------------------------------------
5500 Facade Maintenance Facade Hoists 2
- --------------------------------------------------------------------------------
6300 Mechanical Service And. Weatherfoil 12
- --------------------------------------------------------------------------------
6700 BMS Controls Sync. Systems 9
- --------------------------------------------------------------------------------
6900 Thermal Insulation Abbey Thermal 3
- --------------------------------------------------------------------------------
7000 Electrical Services NG Bailey 14
- --------------------------------------------------------------------------------
7050 Fire Detection Alarms Cerberus 9
- --------------------------------------------------------------------------------
7400 Lifts Otis 12
- --------------------------------------------------------------------------------
8100 Hard Landscaping McNicholas 25
- --------------------------------------------------------------------------------
TOTAL 768
- --------------------------------------------------------------------------------
Mace Limited
Petershill Site Office
1, Carter Lane
Off Knightrider Court
London EC4V 5ER
Tel 0171 236 3711
[ILLEGIBLE]
<PAGE> 258
SNAGGING REPORT Report limited as follows MEPC - Petershill, London EC4
Packages 2160 - 2160 One Carter Lane
Status Only uncleared snags listed
<TABLE>
<CAPTION>
Nr Zone Floor Grid ref. Type Description
- ------------------------------------------------------------------------------------------------------------------------------------
Package 2160 Waterproofing Coverite Limited
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
6648 Terraces 5th Floor General OW Complete anodised cover flashing to parapet brickwork elevations
- ------------------------------------------------------------------------------------------------------------------------------------
6649 Terraces 4th Floor General OW Complete anodised cover flashing to parapet brickwork elevations
- ------------------------------------------------------------------------------------------------------------------------------------
6836 Restaurant Ground Balcony OW Re-do paving to balcony where incorrect level
- ------------------------------------------------------------------------------------------------------------------------------------
7319 Plenums Basement B B/8-9 OW Mastic to be completed to termination of hydrotech?
- ------------------------------------------------------------------------------------------------------------------------------------
7324 Plenums Basement 9/E-D DW Mastic joint to top of hydrotech
- ------------------------------------------------------------------------------------------------------------------------------------
7327 Plenums Basement 9/E-D DW West column - termination bar has come away from column - gap
behind hydrotech?
- ------------------------------------------------------------------------------------------------------------------------------------
7334 Plenums Basement F/7-6 DW Adjacent to south door - 2 Nr. paving slabs to be replaced -
terram sheet to be checked and replaced if required
- ------------------------------------------------------------------------------------------------------------------------------------
7339 Plenums Basement F/7-6 DW Termination angle and mastic to be completed to top of hydrotech
- ------------------------------------------------------------------------------------------------------------------------------------
7348 Plenums Basement 7/B-C DW Terram sheet to be placed, paving slabs and shingle completed
- ------------------------------------------------------------------------------------------------------------------------------------
7349 Plenums Basement C/3-7 DW North door adjacent to door - termination bar missing
- ------------------------------------------------------------------------------------------------------------------------------------
7351 Plenums Basement C/3-7 DW Termination bar come away from wall adjacent to steps
- ------------------------------------------------------------------------------------------------------------------------------------
7354 Plenums Basement C/3-7 DW Paving to be completed adjacent to LEB room (inclusive of terram
and shingle)
- ------------------------------------------------------------------------------------------------------------------------------------
7355 Plenums Basement A/1-2 DW Termination bar damaged generally
- ------------------------------------------------------------------------------------------------------------------------------------
7356 Plenums Basement A/1-2 DW Termination bar missing south end of plenum
- ------------------------------------------------------------------------------------------------------------------------------------
7357 Plenums Basement A/1-2 DW Vertical mastic joint missed to centre column - full height
- ------------------------------------------------------------------------------------------------------------------------------------
7363 Plenums Basement 1/A-H DW Step adjacent to post room door - paving slab to be cut to
appropriate size - currently overhanging step
- ------------------------------------------------------------------------------------------------------------------------------------
7364 Plenums Basement 1/A-H DW Paving slab missing (plantroom 1) section (2 bays) paving slab
laid and shingle reinstated
- ------------------------------------------------------------------------------------------------------------------------------------
7365 Plenums Basement 1/A-H DW Paving slab missing to section (adjacent to lift motor room) -
paving slab laid and shingle reinstated
- ------------------------------------------------------------------------------------------------------------------------------------
7366 Terraces 5th Floor General DW Ballast to be cleared of debris
- ------------------------------------------------------------------------------------------------------------------------------------
7367 Terraces 5th Floor General DW Terram to vertical hydrotech on parapet and cladding missing
- ------------------------------------------------------------------------------------------------------------------------------------
7374 Terraces 5th Floor Elevation 1 DW Pavings rocking/not level
- ------------------------------------------------------------------------------------------------------------------------------------
7375 Terraces 5th Floor Elevation 1 OW Slotted pavings to RWP gully to lay
- ------------------------------------------------------------------------------------------------------------------------------------
7388 Terraces 5th Floor Elevation 12 DW Paving not level/lipping (exit from elevation 12)
- ------------------------------------------------------------------------------------------------------------------------------------
7389 Terraces 5th Floor Elevation 12 DW Clean pavings where stained
- ------------------------------------------------------------------------------------------------------------------------------------
7397 Terraces 5th Floor Elevation 2 OW RWP outlet to have slotted paving slab
- ------------------------------------------------------------------------------------------------------------------------------------
7407 Terraces 5th Floor Elevation 3 DW Replace damaged paving stones (3 Nr.)
- ------------------------------------------------------------------------------------------------------------------------------------
7424 Terraces 5th Floor Elevation 11 DW Paving layout not lined through
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Nr Originator Logged Action Overdue? Not by PC?
before Cleared by... Nr
- ------------------------------------------------------------------------------------------------------------------------------------
Package 2160 Waterproofing Coverite Limited
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
6648 Mace Limited - CT 24/11/97 01/12/97 o 6648
- ------------------------------------------------------------------------------------------------------------------------------------
6649 Mace Limited - CT 24/11/97 01/12/97 o 6649
- ------------------------------------------------------------------------------------------------------------------------------------
6836 Mace Limited - CT 26/11/97 03/12/97 o 6836
- ------------------------------------------------------------------------------------------------------------------------------------
7319 Mace Limited - MPH 03/12/97 10/12/97 o 7319
- ------------------------------------------------------------------------------------------------------------------------------------
7324 Mace Limited - MPH 03/12/97 10/12/97 o 7324
- ------------------------------------------------------------------------------------------------------------------------------------
7327 Mace Limited - MPH 03/12/97 10/12/97 o 7327
- ------------------------------------------------------------------------------------------------------------------------------------
7334 Mace Limited - MPH 03/12/97 10/12/97 o 7334
- ------------------------------------------------------------------------------------------------------------------------------------
7339 Mace Limited - MPH 03/12/97 10/12/97 o 7339
- ------------------------------------------------------------------------------------------------------------------------------------
7348 Mace Limited - MPH 03/12/97 10/12/97 o 7348
- ------------------------------------------------------------------------------------------------------------------------------------
7349 Mace Limited - MPH 03/12/97 10/12/97 o 7349
- ------------------------------------------------------------------------------------------------------------------------------------
7351 Mace Limited - MPH 03/12/97 10/12/97 o 7351
- ------------------------------------------------------------------------------------------------------------------------------------
7354 Mace Limited - MPH 03/12/97 10/12/97 o 7354
- ------------------------------------------------------------------------------------------------------------------------------------
7355 Mace Limited - MPH 03/12/97 10/12/97 o 7355
- ------------------------------------------------------------------------------------------------------------------------------------
7356 Mace Limited - MPH 03/12/97 10/12/97 o 7356
- ------------------------------------------------------------------------------------------------------------------------------------
7357 Mace Limited - MPH 03/12/97 10/12/97 o 7357
- ------------------------------------------------------------------------------------------------------------------------------------
7363 Mace Limited - MPH 03/12/97 10/12/97 o 7363
- ------------------------------------------------------------------------------------------------------------------------------------
7364 Mace Limited - MPH 03/12/97 10/12/97 o 7364
- ------------------------------------------------------------------------------------------------------------------------------------
7365 Mace Limited - MPH 03/12/97 10/12/97 o 7365
- ------------------------------------------------------------------------------------------------------------------------------------
7366 Rolfe Judd Architecture Ltd. - CT 03/12/97 10/12/97 o 7366
- ------------------------------------------------------------------------------------------------------------------------------------
7367 Rolfe Judd Architecture Ltd. - CT 03/12/97 10/12/97 o 7367
- ------------------------------------------------------------------------------------------------------------------------------------
7374 Rolfe Judd Architecture Ltd. - CT 03/12/97 10/12/97 o 7374
- ------------------------------------------------------------------------------------------------------------------------------------
7375 Rolfe Judd Architecture Ltd. - CT 03/12/97 10/12/97 o 7375
- ------------------------------------------------------------------------------------------------------------------------------------
7375 Rolfe Judd Architecture Ltd. - CT 03/12/97 10/12/97 o 7375
- ------------------------------------------------------------------------------------------------------------------------------------
7388 Rolfe Judd Architecture Ltd. - CT 03/12/97 10/12/97 o 7388
- ------------------------------------------------------------------------------------------------------------------------------------
7389 Rolfe Judd Architecture Ltd. - CT 03/12/97 10/12/97 o 7389
- ------------------------------------------------------------------------------------------------------------------------------------
7397 Rolfe Judd Architecture Ltd. - CT 03/12/97 10/12/97 o 7397
- ------------------------------------------------------------------------------------------------------------------------------------
7407 Rolfe Judd Architecture Ltd. - CT 03/12/97 10/12/97 o 7407
- ------------------------------------------------------------------------------------------------------------------------------------
7424 Rolfe Judd Architecture Ltd. - CT 03/12/97 10/12/97 o 7424
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
Mace Limited
25 February 1998 Page 1 m|a|c|e
<PAGE> 259
SNAGGING REPORT Report limited as follows MEPC - Petershill, London EC4
Packages 2160 - 2160 One Carter Lane
Status Only uncleared snags listed
<TABLE>
<CAPTION>
Nr Zone Floor Grid ref. Type Description
- ------------------------------------------------------------------------------------------------------------------------------------
Package 2160 Waterproofing Coverite Limited
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
7431 Terraces 4th Floor General DW paving layouts to be corrected
- ------------------------------------------------------------------------------------------------------------------------------------
7432 Terraces 4th Floor General DW Slotted paving stone required to gully points
- ------------------------------------------------------------------------------------------------------------------------------------
7433 Terraces 4th Floor General DW Clean out ballast of all debris
- ------------------------------------------------------------------------------------------------------------------------------------
7436 Terraces 4th Floor General DW Terram detail incorrect - not up vertical edges
- ------------------------------------------------------------------------------------------------------------------------------------
7440 Terraces 4th Floor General DW Lipping of paving stones
- ------------------------------------------------------------------------------------------------------------------------------------
7529 Lift (Rf A) 5th Floor DW Metal flashings over the 4No concrete plinths, under the
support brackets for Facade Hoists Ltd Lift.
Flashings cut to fit and require re-welding.
- ------------------------------------------------------------------------------------------------------------------------------------
7928 Plenums Basement 2-3/A DW No termination bar or mastic fitted to top of hydrotech.
- ------------------------------------------------------------------------------------------------------------------------------------
7939 Plenums Basement 3/E-H DW Both Gulley outlets blocked - full of pebbles etc.
- ------------------------------------------------------------------------------------------------------------------------------------
7950 Plenums Basement 2-3/H DW Mastic not completed to hydrotech termination bar
- ------------------------------------------------------------------------------------------------------------------------------------
7952 Plenums Basement 2-3/H DW Terram sheet not fitted to under of paving and shingle.
- ------------------------------------------------------------------------------------------------------------------------------------
7967 Plenums Lower Grou 1-2/H DW Mastic to termination bar to be completed
- ------------------------------------------------------------------------------------------------------------------------------------
8768 Internal 4th Floor General DW Hydrotech to be cleaned from steel columns
- ------------------------------------------------------------------------------------------------------------------------------------
8769 Internal 5th Floor General DW Hydrotech to be cleaned from steel columns
- ------------------------------------------------------------------------------------------------------------------------------------
8872 Terraces 5th Roof DW Complete flashing detail to base of all steel stanchions Roof
Plan area
====================================================================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Nr Originator Logged Action Overdue? Not by PC?
before Cleared by... Nr
- ------------------------------------------------------------------------------------------------------------------------------------
Package 2160 Waterproofing Coverite Limited
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
7431 Rolfe Judd Architecture Ltd. - CT 03/12/97 10/12/97 o 7431
- ------------------------------------------------------------------------------------------------------------------------------------
7432 Rolfe Judd Architecture Ltd. - CT 03/12/97 10/12/97 o 7432
- ------------------------------------------------------------------------------------------------------------------------------------
7433 Rolfe Judd Architecture Ltd. - CT 03/12/97 10/12/97 o 7433
- ------------------------------------------------------------------------------------------------------------------------------------
7436 Rolfe Judd Architecture Ltd. - CT 03/12/97 10/12/97 o 7436
- ------------------------------------------------------------------------------------------------------------------------------------
7440 Rolfe Judd Architecture Ltd. - CT 03/12/97 10/12/97 o 7440
- ------------------------------------------------------------------------------------------------------------------------------------
7529 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7529
- ------------------------------------------------------------------------------------------------------------------------------------
7928 Rolfe Judd Arch - KG/GF 05/12/97 11/12/97 o 7928
- ------------------------------------------------------------------------------------------------------------------------------------
7939 Rolfe Judd Arch - KG/GF 05/12/97 11/12/97 o 7939
- ------------------------------------------------------------------------------------------------------------------------------------
7950 Rolfe Judd Arch - KG/GF 05/12/97 11/12/97 o 7950
- ------------------------------------------------------------------------------------------------------------------------------------
7952 Rolfe Judd Arch - KG/GF 05/12/97 11/12/97 o 7952
- ------------------------------------------------------------------------------------------------------------------------------------
7967 Rolfe Judd Architecture Ltd. - KG/G 05/12/97 12/12/97 o 7967
- ------------------------------------------------------------------------------------------------------------------------------------
8768 Mace Limited - MPH 08/12/97 15/12/97 o 8768
- ------------------------------------------------------------------------------------------------------------------------------------
8769 Mace Limited - MPH 08/12/97 15/12/97 o 8769
- ------------------------------------------------------------------------------------------------------------------------------------
8872 Rolfe Judd Architecture Ltd. - CT 09/12/97 16/12/97 o 8872
- ------------------------------------------------------------------------------------------------------------------------------------
====================================================================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
Totals for package 2160 Waterproofing Total number of snags 41
Coverite Limited Number of snags uncleared, by Mace 41 by team 41
Number of overdue snags 41
- ------------------------------------------------------------------------------------------------------------------------------------
====================================================================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
Report totals Total number of snags 41
Number of snags uncleared, by Mace 41 by team 41
Number of overdue snags 41
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Key to work types
DQ Design Query
UW Unfinished Work
LD Latent defect
OW Outstanding works
IW Instructed works
DW Defective works
- --------------------------------------------------------------------------------
Mace Limited
25 February 1998 Page 2 m|a|c|e
<PAGE> 260
SNAGGING REPORT Report limited as follows MEPC - Petershill, London EC4
Packages 2350 - 2350 One Carter Lane
Status Only uncleared snags listed
<TABLE>
<CAPTION>
Nr Zone Floor Grid ref Type Description Originator Logged Action Overdue? Not by PC?
before Cleaned by........ Nr
- ------------------------------------------------------------------------------------------------------------------------------------
Package 2350 Concrete Structure P C Harrington Contractors
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
2081 Contractor basement 6/F DW Complete delta drain membrane and concrete topping below the
propping for the hoist. Works to be co-ordinated with Canteen
opening.
- ------------------------------------------------------------------------------------------------------------------------------------
2132 All Basement DW Apply mastic sealant to expansion joints formed in the delta
drain topping, joints formed by PCH. To be completed when advised.
- ------------------------------------------------------------------------------------------------------------------------------------
3186 Plant - 4 Basement DW Gulley cover missing to gulley adj to north wall
- ------------------------------------------------------------------------------------------------------------------------------------
6789 Loading B Basement DW Petrol intersepteor cover to be replaced
- ------------------------------------------------------------------------------------------------------------------------------------
6797 Ramp Basement DW Concrete snots to be scrabbled from top of ramp
- ------------------------------------------------------------------------------------------------------------------------------------
7315 Cleaners Basement DW Flowcrete topping to be made good - foot marks
- ------------------------------------------------------------------------------------------------------------------------------------
7317 Plenums Basement B B/8-9 DW Gulley cover to be fitted
- ------------------------------------------------------------------------------------------------------------------------------------
7325 Plenums Basement 9/E-D DW ACO raising piece to west plenum - elevation 9.
- ------------------------------------------------------------------------------------------------------------------------------------
7335 Plenums Basement F/7-6 DW ACO drain covers to south end to be re-fixed out of line not
fixed (loose)
- ------------------------------------------------------------------------------------------------------------------------------------
7362 Plenums Basement 1/A-H DW Step within plenum adjacent to post room door - Aco drain should
have a stop end fitted - currently un-acceptable.
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Nr Originator Logged Action Overdue? Not by PC?
before Cleared by... Nr
- ------------------------------------------------------------------------------------------------------------------------------------
Package 2350 Concrete Structure P C Harrington Contractors
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
2081 Mace Limited - RJ 30/07/97 06/08/97 o 2081
- ------------------------------------------------------------------------------------------------------------------------------------
2132 Mace Limited - RJ 05/08/97 12/08/97 o 2132
- ------------------------------------------------------------------------------------------------------------------------------------
3186 Mace Limited - MPH 25/09/97 02/10/97 o 3186
- ------------------------------------------------------------------------------------------------------------------------------------
6789 Mace Limited - MPH 25/11/97 02/12/97 o 6789
- ------------------------------------------------------------------------------------------------------------------------------------
6797 Mace Limited - MPH 25/11/97 02/12/97 o 6797
- ------------------------------------------------------------------------------------------------------------------------------------
7315 Mace Limited - MPH 03/12/97 10/12/97 o 7315
- ------------------------------------------------------------------------------------------------------------------------------------
7317 Mace Limited - MPH 03/12/97 10/12/97 o 7317
- ------------------------------------------------------------------------------------------------------------------------------------
7325 Mace Limited - MPH 03/12/97 10/12/97 o 7325
- ------------------------------------------------------------------------------------------------------------------------------------
7335 Mace Limited - MPH 03/12/97 10/12/97 o 7335
- ------------------------------------------------------------------------------------------------------------------------------------
7362 Mace Limited - MPH 03/12/97 10/12/97 o 7362
- ------------------------------------------------------------------------------------------------------------------------------------
====================================================================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
Totals for package 2350 Concrete Structure Total number of snags 10
P C Harrington Contractors Number of snags uncleared, by Mace 10 by team 10
Number of overdue snags 10
- ------------------------------------------------------------------------------------------------------------------------------------
====================================================================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
Report totals Total number of snags 10
Number of snags uncleared, by Mace 10 by team 10
Number of overdue snags 10
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Key to work types
DQ Design Query
UW Unfinished Work
LD Latent defect
OW Outstanding works
IN Instructed works
DW Defective works
- --------------------------------------------------------------------------------
Mace Limited
25 February 1998 Page 1 m|a|c|e
<PAGE> 261
SNAGGING REPORT Report limited as follows MEPC - Petershill, London EC4
Packages 2850 - 2850 One Carter Lane
Status Only uncleared snags listed
<TABLE>
<CAPTION>
Nr Zone Floor Grid ref Type Description
- ------------------------------------------------------------------------------------------------------------------------------------
Package 2850 Restaurant Cladding English Architectural Glazing
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
3916 Restauran Ground OW Complete mastic sealant between granite capping and rainscreen
(approx. 10% to do)
- ------------------------------------------------------------------------------------------------------------------------------------
6830 Restauran Ground Drum DW Screen print to drum glazing to be transluscent not white
- ------------------------------------------------------------------------------------------------------------------------------------
6832 Restauran Roof DW Chain links to access panel pegs rusting (throughway behind funnel)
- ------------------------------------------------------------------------------------------------------------------------------------
6834 Restauran Ground Lift Lobby DW Glatt panel damaged to top L/H of lift lobby entrance.
- ------------------------------------------------------------------------------------------------------------------------------------
6835 Restauran Ground East DW 2 No. Glatt panels/rainscreen damaged
- ------------------------------------------------------------------------------------------------------------------------------------
6838 Restauran Ground Balcony DW Rat-hole to be weather-sealed at internal splay junction drum
glazing reveal/render/granite.
- ------------------------------------------------------------------------------------------------------------------------------------
6842 Restauran Drum OW Complete threshold and ironmongery to curved drum door
- ------------------------------------------------------------------------------------------------------------------------------------
7111 Restauran Ground Lift Lobby DW Gap in soffit at ext, corner panel not sized correctly.
- ------------------------------------------------------------------------------------------------------------------------------------
7112 Restauran Ground Lift Lobby DW Flashing to ext. L/H corner of outer wall not mitred correctly.
- ------------------------------------------------------------------------------------------------------------------------------------
7113 Restauran Ground Lift Lobby DW Soffit edge trim not following line of panels
- ------------------------------------------------------------------------------------------------------------------------------------
7115 Restauran Ground Lift Lobby DW Cover trim missing rear of soffit panel
- ------------------------------------------------------------------------------------------------------------------------------------
7116 Restauran Ground Lift Lobby DW Cover trims not fixed flush at ext. corners
- ------------------------------------------------------------------------------------------------------------------------------------
7117 Restauran Ground Lift Lobby DW Folded corners to glatt panels not acceptable - damage and holes.
- ------------------------------------------------------------------------------------------------------------------------------------
7124 Restauran Ground DW Soffit panels to fit to cladding over-panels above glass units
(2 No.)
- ------------------------------------------------------------------------------------------------------------------------------------
7462 Restauran Lower Grou OW Mastic seal to complete to lower canopy joint at render.
- ------------------------------------------------------------------------------------------------------------------------------------
7466 Restauran Ground DW Clean thresholds of 2 No. sliding doors
- ------------------------------------------------------------------------------------------------------------------------------------
7468 Restauran Ground Drum DW Mastic joint to L/H internal PPC column casing unacceptable
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Nr Originator Logged Action Overdue? Not by PC?
Before Cleared by... Nr
- ------------------------------------------------------------------------------------------------------------------------------------
Package 2850 Restaurant Cladding English Architectural Glazing
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
3916 Mace Limited - CT 06/10/97 13/10/97 o 3916
- ------------------------------------------------------------------------------------------------------------------------------------
6830 Mace Limited - CT 26/11/97 03/12/97 o 6830
- ------------------------------------------------------------------------------------------------------------------------------------
6832 Mace Limited - CT 26/11/97 03/12/97 o 6832
- ------------------------------------------------------------------------------------------------------------------------------------
6834 Mace Limited - CT 26/11/97 03/12/97 o 6834
- ------------------------------------------------------------------------------------------------------------------------------------
6835 Mace Limited - CT 26/11/97 03/12/97 o 6835
- ------------------------------------------------------------------------------------------------------------------------------------
6838 Mace Limited - CT 26/11/97 03/12/97 o 6838
- ------------------------------------------------------------------------------------------------------------------------------------
6842 Mace Limited - CT 26/11/97 03/12/97 o 6842
- ------------------------------------------------------------------------------------------------------------------------------------
7111 Rolfe Judd Architecture Ltd. - CT 28/11/97 05/12/97 o 7111
- ------------------------------------------------------------------------------------------------------------------------------------
7112 Rolfe Judd Architecture Ltd. - CT 28/11/97 05/12/97 o 7112
- ------------------------------------------------------------------------------------------------------------------------------------
7113 Rolfe Judd Architecture Ltd. - CT 28/11/97 05/12/97 o 7113
- ------------------------------------------------------------------------------------------------------------------------------------
7115 Rolfe Judd Architecture Ltd. - CT 28/11/97 05/12/97 o 7115
- ------------------------------------------------------------------------------------------------------------------------------------
7116 Rolfe Judd Architecture Ltd. - CT 28/11/97 05/12/97 o 7116
- ------------------------------------------------------------------------------------------------------------------------------------
7117 Rolfe Judd Architecture Ltd. - CT 28/11/97 05/12/97 o 7117
- ------------------------------------------------------------------------------------------------------------------------------------
7124 Rolfe Judd Architecture Ltd. - CT 28/11/97 05/12/97 o 7124
- ------------------------------------------------------------------------------------------------------------------------------------
7462 Rolfe Judd Architecture Ltd - CG 03/12/97 10/12/97 o 7462
- ------------------------------------------------------------------------------------------------------------------------------------
7466 Rolfe Judd Architecture Ltd - CG 03/12/97 10/12/97 o 7466
- ------------------------------------------------------------------------------------------------------------------------------------
7468 Rolfe Judd Architecture Ltd - CG 03/12/97 10/12/97 o 7468
- ------------------------------------------------------------------------------------------------------------------------------------
====================================================================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
Totals for package 2850 Restaurant Cladding Total number of snags 17
English Architectural Glazing Number of snags uncleared, by Mace 17 by team 17
Number of overdue snags 17
</TABLE>
- --------------------------------------------------------------------------------
Mace Limited
25 February 1998 Page 1 m|a|c|e
<PAGE> 262
SNAGGING REPORT Report limited as follows MEPC - Petershill, London EC4
Packages 2850 - 2850 One Carter Lane
Status Only uncleared snags listed
<TABLE>
<CAPTION>
Nr Zone Floor Grid ref Type Description
- ------------------------------------------------------------------------------------------------------------------------------------
Package 2850 Restaurant Cladding English Architectural Glazing
- ------------------------------------------------------------------------------------------------------------------------------------
====================================================================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Report totals Total number of snags 17
Number of snags uncleared, by Mace 17 by team 17
Number of overdue snags 17
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Key to work types
DQ Design Query
UW Unfinished Work
LD Latent defect
OW Outstanding works
IN Instructed works
DW Defective works
- --------------------------------------------------------------------------------
Mace Limited
25 February 1998 Page 2 m|a|c|e
<PAGE> 263
SNAGGING REPORT Report limited as follows MEPC - Petershill, London EC4
Packages 3211 - 3211 One Carter Lane
Status Only uncleared snags listed
<TABLE>
<CAPTION>
Nr Zone Floor Grid ref Type Description
- ------------------------------------------------------------------------------------------------------------------------------------
Package 3211 Cladding Installation Thames Contracts Limited
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
2049 Elev.1 2nd Floor Bay 48 DW Scratches to R/H fin - respray not touch-up.
- ------------------------------------------------------------------------------------------------------------------------------------
2904 Elev.11 3rd Floor Bay 36 DW Review extrusion 14 at upper spandrel level bare aluminium to
be re-sprayed
- ------------------------------------------------------------------------------------------------------------------------------------
3603 Core C Basement OW External cladding to be completed internally
- ------------------------------------------------------------------------------------------------------------------------------------
5045 Internal 3rd Floor Bay 1 DW Escutcheon cover damaged. Replace - L/H WSF
- ------------------------------------------------------------------------------------------------------------------------------------
5046 Internal 3rd Floor Bay 2 DW Escutcheon cover damaged. Replace - L/H WSF
- ------------------------------------------------------------------------------------------------------------------------------------
5334 Internal 1st Floor Bay 41 DW Vertical scratch to file down and touch in to face of fixed
transom R/H WSF
- ------------------------------------------------------------------------------------------------------------------------------------
5786 Internal 3rd Floor General DW Edges of spandrells to be rounded off
- ------------------------------------------------------------------------------------------------------------------------------------
5792 Internal 3rd Floor Bay 1 DW L/H spandrell rattles - To review
- ------------------------------------------------------------------------------------------------------------------------------------
5795 Internal 3rd Floor Bay 3 DW Top L/H mitre joint to window light (L/H WSF) To be tightened
- ------------------------------------------------------------------------------------------------------------------------------------
5797 Internal 3rd Floor Bay 4 DW Top L/H corner of L/H spandrel Kicking out of frame
- ------------------------------------------------------------------------------------------------------------------------------------
5805 Internal 3rd Floor Bay 8 DW L/H spandrel kicks out at top L/H corner and rattles
- ------------------------------------------------------------------------------------------------------------------------------------
5807 Internal 3rd Floor Bay 9 DW L/H spandrel rippling at L/H edge. Trim behind panel damaged
- ------------------------------------------------------------------------------------------------------------------------------------
5861 Internal 3rd Floor Bay 11 DW L/Hbows out and
- ------------------------------------------------------------------------------------------------------------------------------------
5868 Internal 3rd Floor Bay 15 DW R/H Spandrel rattles
- ------------------------------------------------------------------------------------------------------------------------------------
5876 Internal 3rd Floor Bay 23 DW L/H spandrel panel rattles
- ------------------------------------------------------------------------------------------------------------------------------------
5877 Internal 3rd Floor Bay 23 DW Middle spandrel panel rattles
- ------------------------------------------------------------------------------------------------------------------------------------
5879 Internal 3rd Floor Bay 24 DW R/H Spandrel rattles
- ------------------------------------------------------------------------------------------------------------------------------------
5880 Internal 3rd Floor Bay 25 DW L/H spandrel bows out and rattles
- ------------------------------------------------------------------------------------------------------------------------------------
5881 Internal 3rd Floor Bay 25 DW R/H Spandrel rattles
- ------------------------------------------------------------------------------------------------------------------------------------
5884 Internal 3rd Floor Bay 29 DW L/H spandrel rattles
- ------------------------------------------------------------------------------------------------------------------------------------
5887 Internal 3rd Floor Bay 31 DW R/H Spandrel rattles
- ------------------------------------------------------------------------------------------------------------------------------------
5892 Internal 3rd Floor Bay 34 DW R/H Spandrel rattles
- ------------------------------------------------------------------------------------------------------------------------------------
5900 Internal 3rd Floor Bay 37 DW R/H spandrel bowing out
- ------------------------------------------------------------------------------------------------------------------------------------
5903 Internal 3rd Floor Bay 40 DW Trim behind spandrel badly dented/damaged L/H WSF
- ------------------------------------------------------------------------------------------------------------------------------------
5905 Internal 3rd Floor Bay 42 DW L/H spandrel rattles
- ------------------------------------------------------------------------------------------------------------------------------------
5909 Internal 3rd Floor Bay 49 DW 2 No L/H and middle right spandrels rattle
- ------------------------------------------------------------------------------------------------------------------------------------
5915 Internal 3rd Floor Bay 53 DW R/H side of trim behind top of spandrel L/H WSF bent
- ------------------------------------------------------------------------------------------------------------------------------------
5920 Internal 3rd Floor Bay 55 DW Both spandrels rattle
- ------------------------------------------------------------------------------------------------------------------------------------
5921 Internal 3rd Floor Bay 55 DW R/H trim back of spandrel to be fixed correctly
- ------------------------------------------------------------------------------------------------------------------------------------
5936 Internal 3rd Floor Bay 68 DW R/H spandrel rattles
- ------------------------------------------------------------------------------------------------------------------------------------
5939 Internal 3rd Floor Bay 70 DW Both spandrels rattle. R/H panel bowing at top L/H corner
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Nr Originator Logged Action Overdue? Not by PC?
Before Cleared by... Nr
- ------------------------------------------------------------------------------------------------------------------------------------
Package 3211 Cladding Installation Thames Contracts Limited
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
2049 Mace Limited - CT 23/07/97 30/07/97 o 2049
- ------------------------------------------------------------------------------------------------------------------------------------
2904 Mace Limited - CT 18/09/97 25/09/97 o 2904
- ------------------------------------------------------------------------------------------------------------------------------------
3603 Mace Limited - MPH 03/10/97 10/10/97 o 3603
- ------------------------------------------------------------------------------------------------------------------------------------
5045 Mace Limited - CT 30/10/97 06/11/97 o 5045
- ------------------------------------------------------------------------------------------------------------------------------------
5046 Mace Limited - CT 30/10/97 06/11/97 o 5046
- ------------------------------------------------------------------------------------------------------------------------------------
5334 Rolfe Judd Architecture Ltd. - CT 03/11/97 10/11/97 o 5334
- ------------------------------------------------------------------------------------------------------------------------------------
5786 Rolfe Judd Architecture Ltd. - CT 12/11/97 14/11/97 o 5786
- ------------------------------------------------------------------------------------------------------------------------------------
5792 Rolfe Judd Architecture Ltd. - CT 12/11/97 14/11/97 o 5792
- ------------------------------------------------------------------------------------------------------------------------------------
5795 Rolfe Judd Architecture Ltd. - CT 12/11/97 14/11/97 o 5795
- ------------------------------------------------------------------------------------------------------------------------------------
5797 Rolfe Judd Architecture Ltd. - CT 12/11/97 14/11/97 o 5797
- ------------------------------------------------------------------------------------------------------------------------------------
5805 Rolfe Judd Architecture Ltd. - CT 12/11/97 14/11/97 o 5805
- ------------------------------------------------------------------------------------------------------------------------------------
5807 Rolfe Judd Architecture Ltd. - CT 12/11/97 14/11/97 o 5807
- ------------------------------------------------------------------------------------------------------------------------------------
5861 Rolfe Judd Architecture Ltd. - CT 13/11/97 19/11/97 o 5861
- ------------------------------------------------------------------------------------------------------------------------------------
5868 Rolfe Judd Architecture Ltd. - CT 13/11/97 19/11/97 o 5868
- ------------------------------------------------------------------------------------------------------------------------------------
5876 Rolfe Judd Architecture Ltd. - CT 13/11/97 19/11/97 o 5876
- ------------------------------------------------------------------------------------------------------------------------------------
5877 Rolfe Judd Architecture Ltd. - CT 13/11/97 19/11/97 o 5877
- ------------------------------------------------------------------------------------------------------------------------------------
5879 Rolfe Judd Architecture Ltd. - CT 13/11/97 19/11/97 o 5879
- ------------------------------------------------------------------------------------------------------------------------------------
5880 Rolfe Judd Architecture Ltd. - CT 13/11/97 19/11/97 o 5880
- ------------------------------------------------------------------------------------------------------------------------------------
5881 Rolfe Judd Architecture Ltd. - CT 13/11/97 19/11/97 o 5881
- ------------------------------------------------------------------------------------------------------------------------------------
5884 Rolfe Judd Architecture Ltd. - CT 13/11/97 19/11/97 o 5884
- ------------------------------------------------------------------------------------------------------------------------------------
5887 Rolfe Judd Architecture Ltd. - CT 13/11/97 19/11/97 o 5887
- ------------------------------------------------------------------------------------------------------------------------------------
5892 Rolfe Judd Architecture Ltd. - CT 13/11/97 19/11/97 o 5892
- ------------------------------------------------------------------------------------------------------------------------------------
5900 Rolfe Judd Architecture Ltd. - CT 13/11/97 19/11/97 o 5900
- ------------------------------------------------------------------------------------------------------------------------------------
5903 Rolfe Judd Architecture Ltd. - CT 13/11/97 19/11/97 o 5903
- ------------------------------------------------------------------------------------------------------------------------------------
5905 Rolfe Judd Architecture Ltd. - CT 13/11/97 19/11/97 o 5905
- ------------------------------------------------------------------------------------------------------------------------------------
5909 Rolfe Judd Architecture Ltd. - CT 13/11/97 19/11/97 o 5909
- ------------------------------------------------------------------------------------------------------------------------------------
5915 Rolfe Judd Architecture Ltd. - CT 13/11/97 19/11/97 o 5915
- ------------------------------------------------------------------------------------------------------------------------------------
5920 Rolfe Judd Architecture Ltd. - CT 13/11/97 19/11/97 o 5920
- ------------------------------------------------------------------------------------------------------------------------------------
5921 Rolfe Judd Architecture Ltd. - CT 13/11/97 19/11/97 o 5921
- ------------------------------------------------------------------------------------------------------------------------------------
5936 Rolfe Judd Architecture Ltd. - CT 13/11/97 19/11/97 o 5936
- ------------------------------------------------------------------------------------------------------------------------------------
5939 Rolfe Judd Architecture Ltd. - CT 13/11/97 19/11/97 o 5939
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
Mace Limited
25 February 1998 Page 1 m|a|c|e
<PAGE> 264
SNAGGING REPORT Report limited as follows MEPC - Petershill, London EC4
Packages 3211 - 3211 One Carter Lane
Status Only uncleared snags listed
<TABLE>
<CAPTION>
Nr Zone Floor Grid ref Type Description
- ------------------------------------------------------------------------------------------------------------------------------------
Package 3211 Cladding Installation Thames Contracts Limited
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
5945 Internal 3rd Floor Bay 73 DW L/H spandrel bows out top R/H corner
- ------------------------------------------------------------------------------------------------------------------------------------
5946 Internal 3rd Floor Bay 74 DW L/H spandrel rattles
- ------------------------------------------------------------------------------------------------------------------------------------
5951 Internal 3rd Floor Bay 77 DW Spandrels to be reviewed - R/H bowing. Middle rattles
- ------------------------------------------------------------------------------------------------------------------------------------
6469 Internal Ground Bay 1 DW Escutcheon damaged L/H WSF
- ------------------------------------------------------------------------------------------------------------------------------------
6494 Internal Ground Bay 16 DW Grey plastic escutcheon cover ring damaged R/H WSF
- ------------------------------------------------------------------------------------------------------------------------------------
6499 Internal Ground Elevation 9 DW Spandrels bow (all bays)
- ------------------------------------------------------------------------------------------------------------------------------------
6502 Internal Ground Elevation 10 DW All spandrels bow out
- ------------------------------------------------------------------------------------------------------------------------------------
6504 Internal Ground Elevation 10 DW Touch in ppc at fixed transom where flaking off (all bays)
- ------------------------------------------------------------------------------------------------------------------------------------
6506 Internal Ground Elevation 11 DW Touch in flaked ppc/scratches to fixed transoms (all bays)
- ------------------------------------------------------------------------------------------------------------------------------------
6551 Internal Ground Bay 61 DW Large scratch/paint flaking to top edge fixed transom L/H WSF
- ------------------------------------------------------------------------------------------------------------------------------------
6662 Internal 2nd Floor Bay 1 DW Spandrel panel top trim bent
- ------------------------------------------------------------------------------------------------------------------------------------
6664 Internal 2nd Floor Bay 2 DW Spandrel panel top trim bent
- ------------------------------------------------------------------------------------------------------------------------------------
6668 Internal 2nd Floor Bay 39 DW Spandrel bowing top R/H corner
- ------------------------------------------------------------------------------------------------------------------------------------
6670 Internal 2nd Floor Bay 60 DW Spandrel rattles
- ------------------------------------------------------------------------------------------------------------------------------------
6671 Internal 2nd Floor Bay 61 DW Spandrel rattles
- ------------------------------------------------------------------------------------------------------------------------------------
6672 Internal 2nd Floor Bay 73 DW Top trim behind spandrel not fixed properly
- ------------------------------------------------------------------------------------------------------------------------------------
6803 Internal 1st Floor Bay 10 DW Spandrel panels proud of window sub frame
- ------------------------------------------------------------------------------------------------------------------------------------
6804 Internal 1st Floor Bay 56 DW Spandrel panels proud of window sub frame
- ------------------------------------------------------------------------------------------------------------------------------------
6811 Internal 1st Floor Bay 29 DW Spandrel panels bowing out
- ------------------------------------------------------------------------------------------------------------------------------------
6812 Internal 1st Floor Bay 30 DW Spandrel panels bowing out
- ------------------------------------------------------------------------------------------------------------------------------------
6996 Internal Lower Grou Bay 4 DW Grey plastic escutcheon damaged R/H WSF
- ------------------------------------------------------------------------------------------------------------------------------------
7047 Internal Lower Grou Elevation 9 DW Large spandrels bow out
- ------------------------------------------------------------------------------------------------------------------------------------
7054 Internal Lower Grou Elevation 10 DW All spandrels bow out
- ------------------------------------------------------------------------------------------------------------------------------------
7255 Internal Ground General DW Glass to be cleaned
- ------------------------------------------------------------------------------------------------------------------------------------
7256 Internal Ground General DW Spandrel panels loose/rattle in some areas, check/rectify
- ------------------------------------------------------------------------------------------------------------------------------------
7257 Internal Ground General DW Gap around windows not consistent in some areas, check/rectify
- ------------------------------------------------------------------------------------------------------------------------------------
7263 Internal Ground DW Spandrel panel trim missing B46
- ------------------------------------------------------------------------------------------------------------------------------------
7624 Core A 1st Floor Core DW Cladding closure pieces to be fitted to top of door
- ------------------------------------------------------------------------------------------------------------------------------------
7737 Core C Ground Core DW Cill detail to be completed
- ------------------------------------------------------------------------------------------------------------------------------------
7759 Core C Lower Grou Core DW SV break glass to be fitted
- ------------------------------------------------------------------------------------------------------------------------------------
7899 Internal 5th Floor General DW Spandrels rattles/blowing
- ------------------------------------------------------------------------------------------------------------------------------------
7903 Internal 5th Floor General DW Fill and spray butt joint of trim behind top of spandrel
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Nr Originator Logged Action Overdue? Not by PC?
before Cleared by... Nr
- ------------------------------------------------------------------------------------------------------------------------------------
Package 3211 Cladding Installation Thames Contracts Limited
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
5945 Rolfe Judd Architecture Ltd. - CT 13/11/97 19/11/97 o 5945
- ------------------------------------------------------------------------------------------------------------------------------------
5946 Rolfe Judd Architecture Ltd. - CT 13/11/97 19/11/97 o 5946
- ------------------------------------------------------------------------------------------------------------------------------------
5951 Rolfe Judd Architecture Ltd. - CT 13/11/97 19/11/97 o 5951
- ------------------------------------------------------------------------------------------------------------------------------------
6469 Mace Limited - CT 21/11/97 28/11/97 o 6469
- ------------------------------------------------------------------------------------------------------------------------------------
6494 Mace Limited - CT 21/11/97 28/11/97 o 6494
- ------------------------------------------------------------------------------------------------------------------------------------
6499 Mace Limited - CT 21/11/97 28/11/97 o 6499
- ------------------------------------------------------------------------------------------------------------------------------------
6502 Mace Limited - CT 21/11/97 28/11/97 o 6502
- ------------------------------------------------------------------------------------------------------------------------------------
6504 Mace Limited - CT 21/11/97 28/11/97 o 6504
- ------------------------------------------------------------------------------------------------------------------------------------
6506 Mace Limited - CT 21/11/97 28/11/97 o 6506
- ------------------------------------------------------------------------------------------------------------------------------------
6551 Mace Limited - CT 21/11/97 28/11/97 o 6551
- ------------------------------------------------------------------------------------------------------------------------------------
6662 Rolfe Judd Architecture Ltd. - GF 24/11/97 01/12/97 o 6662
- ------------------------------------------------------------------------------------------------------------------------------------
6664 Rolfe Judd Architecture Ltd. - GF 24/11/97 01/12/97 o 6664
- ------------------------------------------------------------------------------------------------------------------------------------
6668 Rolfe Judd Architecture Ltd. - GF 24/11/97 01/12/97 o 6668
- ------------------------------------------------------------------------------------------------------------------------------------
6670 Rolfe Judd Architecture Ltd. - GF 24/11/97 01/12/97 o 6670
- ------------------------------------------------------------------------------------------------------------------------------------
6671 Rolfe Judd Architecture Ltd. - GF 24/11/97 01/12/97 o 6671
- ------------------------------------------------------------------------------------------------------------------------------------
6672 Rolfe Judd Architecture Ltd. - GF 24/11/97 01/12/97 o 6672
- ------------------------------------------------------------------------------------------------------------------------------------
6803 Rolfe Judd Architecture Ltd. - GF 25/11/97 02/12/97 o 6803
- ------------------------------------------------------------------------------------------------------------------------------------
6804 Rolfe Judd Architecture Ltd. - GF 25/11/97 02/12/97 o 6804
- ------------------------------------------------------------------------------------------------------------------------------------
6811 Rolfe Judd Architecture Ltd. - GF 25/11/97 02/12/97 o 6811
- ------------------------------------------------------------------------------------------------------------------------------------
6812 Rolfe Judd Architecture Ltd. - GF 25/11/97 02/12/97 o 6812
- ------------------------------------------------------------------------------------------------------------------------------------
6996 Rolfe Judd Architecture Ltd. - GF 28/11/97 05/12/97 o 6996
- ------------------------------------------------------------------------------------------------------------------------------------
7047 Rolfe Judd Architecture Ltd. - GF 28/11/97 05/12/97 o 7047
- ------------------------------------------------------------------------------------------------------------------------------------
7054 Rolfe Judd Architecture Ltd. - GF 28/11/97 05/12/97 o 7054
- ------------------------------------------------------------------------------------------------------------------------------------
7255 Rolfe Judd Architecture Ltd. - GF 30/11/97 08/12/97 o 7255
- ------------------------------------------------------------------------------------------------------------------------------------
7256 Rolfe Judd Architecture Ltd. - GF 30/11/97 08/12/97 o 7256
- ------------------------------------------------------------------------------------------------------------------------------------
7257 Rolfe Judd Architecture Ltd. - GF 30/11/97 08/12/97 o 7257
- ------------------------------------------------------------------------------------------------------------------------------------
7263 Rolfe Judd Architecture Ltd. - GF 30/11/97 08/12/97 o 7263
- ------------------------------------------------------------------------------------------------------------------------------------
7624 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7624
- ------------------------------------------------------------------------------------------------------------------------------------
7737 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7737
- ------------------------------------------------------------------------------------------------------------------------------------
7759 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7759
- ------------------------------------------------------------------------------------------------------------------------------------
7899 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 7899
- ------------------------------------------------------------------------------------------------------------------------------------
7903 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 7903
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
Mace Limited
25 February 1998 Page 2 m|a|c|e
<PAGE> 265
SNAGGING REPORT Report limited as follows MEPC - Petershill, London EC4
Packages 3211 - 3211 One Carter Lane
Status Only uncleared snags listed
<TABLE>
<CAPTION>
Nr Zone Floor Grid ref Type Description
- ------------------------------------------------------------------------------------------------------------------------------------
Package 3211 Cladding Installation Thames Contracts Limited
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
7921 Internal 5th Floor Bay 1 DW Joint to internal trim behind spandrel not acceptable
- ------------------------------------------------------------------------------------------------------------------------------------
7927 Internal 5th Floor Bay 1 DW Make good or fill junction of beam fascia will steel column in
corner
- ------------------------------------------------------------------------------------------------------------------------------------
7929 Internal 5th Floor Bay 2 DW Bottom of spandrel not fixed behind column
- ------------------------------------------------------------------------------------------------------------------------------------
7943 Plenums Basement 3/E-H DW Mastic pointing required to window sub-frame (bay 21) within the
plenum
- ------------------------------------------------------------------------------------------------------------------------------------
7958 Internal 5th Floor Bay 8 DW Review detail as spandrel behind steel column
- ------------------------------------------------------------------------------------------------------------------------------------
7960 Internal 5th Floor Bay 9 DW Damage to R/H lower corner of window light
- ------------------------------------------------------------------------------------------------------------------------------------
7969 Internal 5th Floor Bay 10 DW Rivets to spandrel edges not acceptable
- ------------------------------------------------------------------------------------------------------------------------------------
7975 Internal 5th Floor Bay 11 DW Internal spandrel detail to complete behind steel column
- ------------------------------------------------------------------------------------------------------------------------------------
7997 Internal 5th Floor Bay 26 DW Bay 49 - damaged escutcheon cover
- ------------------------------------------------------------------------------------------------------------------------------------
8005 Internal 5th Floor Bay 33 DW Escutcheon split
- ------------------------------------------------------------------------------------------------------------------------------------
8008 Internal 5th Floor Bay 35 DW Escutcheon split
- ------------------------------------------------------------------------------------------------------------------------------------
8009 Core A Ground Core DW (GL-LGF Flight) - Fire stopping between stair slab and door to
be completed
- ------------------------------------------------------------------------------------------------------------------------------------
8046 Internal 5th Floor Bay 43 DW Spandrel panel to be fixed behind column
- ------------------------------------------------------------------------------------------------------------------------------------
8077 Internal 5th Floor Bay 48/49 DW Gap between 2 frames behind column
- ------------------------------------------------------------------------------------------------------------------------------------
8082 Internal 5th Floor Bay 49 DW Glazing unit to replace (window light to remain ?)
- ------------------------------------------------------------------------------------------------------------------------------------
8088 Internal 5th Floor Bay 52 DW Escutcheon damaged
- ------------------------------------------------------------------------------------------------------------------------------------
8103 Internal 5th Floor Bay 70 DW Escutcheon missing
- ------------------------------------------------------------------------------------------------------------------------------------
8109 Internal 5th Floor Bay 87 DW Escutcheon damaged
- ------------------------------------------------------------------------------------------------------------------------------------
8111 Internal 5th Floor Bay 88 DW Escutcheon missing
- ------------------------------------------------------------------------------------------------------------------------------------
8121 Internal 4th Floor General DW Joint to trim behind spandrels to be filled/sprayed
- ------------------------------------------------------------------------------------------------------------------------------------
8136 Internal 4th Floor Bay 71 DW Trim missing behind top of spandrel
- ------------------------------------------------------------------------------------------------------------------------------------
8151 Internal 4th Floor Bay 1 DW Visible fixings to spandrel shadow gap R/H side
- ------------------------------------------------------------------------------------------------------------------------------------
8158 Internal 4th Floor Bay 4 DW Detail behind column to be completed
- ------------------------------------------------------------------------------------------------------------------------------------
8180 Internal 4th Floor Bay 16 DW Skirting detail behind spandrel/beam
- ------------------------------------------------------------------------------------------------------------------------------------
8188 Internal 4th Floor Bay 17 DW Door - paint repairs to ppc finish to perimeter frame
- ------------------------------------------------------------------------------------------------------------------------------------
8191 Internal 4th Floor Bay 18 DW Detail to complete behind column/spandrel
- ------------------------------------------------------------------------------------------------------------------------------------
8193 Internal 4th Floor Bay 20 DW Detail behind stanchion/spandrel to complete
- ------------------------------------------------------------------------------------------------------------------------------------
8198 Internal 4th Floor Bay 27 DW Split escutcheon cover
- ------------------------------------------------------------------------------------------------------------------------------------
8205 Internal 4th Floor Bay 38 DW Details to spandrel behind stanchion to complete
- ------------------------------------------------------------------------------------------------------------------------------------
8208 Internal 4th Floor Bay 40 DW Detail between spandrel/stanchion
- ------------------------------------------------------------------------------------------------------------------------------------
8212 Internal 4th Floor Bay 42 DW Door - damage to ppc finishes to perimeter of doors
- ------------------------------------------------------------------------------------------------------------------------------------
8225 Internal 4th Floor Bay 50 DW Visible fixing on spandrel runs
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Nr Originator Logged Action Overdue? Not by PC?
before Cleared by... Nr
- ------------------------------------------------------------------------------------------------------------------------------------
Package 3211 Cladding Installation Thames Contracts Limited
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
7921 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 7921
- ------------------------------------------------------------------------------------------------------------------------------------
7927 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 7927
- ------------------------------------------------------------------------------------------------------------------------------------
7929 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 7929
- ------------------------------------------------------------------------------------------------------------------------------------
7943 Rolfe Judd Arch - KG/GF 05/12/97 11/12/97 o 7943
- ------------------------------------------------------------------------------------------------------------------------------------
7958 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 7958
- ------------------------------------------------------------------------------------------------------------------------------------
7960 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 7960
- ------------------------------------------------------------------------------------------------------------------------------------
7969 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 7969
- ------------------------------------------------------------------------------------------------------------------------------------
7975 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 7975
- ------------------------------------------------------------------------------------------------------------------------------------
7997 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 7997
- ------------------------------------------------------------------------------------------------------------------------------------
8005 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 8005
- ------------------------------------------------------------------------------------------------------------------------------------
8008 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 8008
- ------------------------------------------------------------------------------------------------------------------------------------
8009 Rolfe Judd Architecture Ltd. - KG/G 05/12/97 12/12/97 o 8009
- ------------------------------------------------------------------------------------------------------------------------------------
8046 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 8046
- ------------------------------------------------------------------------------------------------------------------------------------
8077 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 8077
- ------------------------------------------------------------------------------------------------------------------------------------
8082 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 8082
- ------------------------------------------------------------------------------------------------------------------------------------
8088 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 8088
- ------------------------------------------------------------------------------------------------------------------------------------
8103 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 8103
- ------------------------------------------------------------------------------------------------------------------------------------
8109 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 8109
- ------------------------------------------------------------------------------------------------------------------------------------
8111 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 8111
- ------------------------------------------------------------------------------------------------------------------------------------
8121 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 8121
- ------------------------------------------------------------------------------------------------------------------------------------
8136 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 8136
- ------------------------------------------------------------------------------------------------------------------------------------
8151 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 8151
- ------------------------------------------------------------------------------------------------------------------------------------
8158 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 8158
- ------------------------------------------------------------------------------------------------------------------------------------
8180 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 8180
- ------------------------------------------------------------------------------------------------------------------------------------
8188 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 8188
- ------------------------------------------------------------------------------------------------------------------------------------
8191 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 8191
- ------------------------------------------------------------------------------------------------------------------------------------
8193 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 8193
- ------------------------------------------------------------------------------------------------------------------------------------
8198 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 8198
- ------------------------------------------------------------------------------------------------------------------------------------
8205 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 8205
- ------------------------------------------------------------------------------------------------------------------------------------
8208 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 8208
- ------------------------------------------------------------------------------------------------------------------------------------
8212 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 8212
- ------------------------------------------------------------------------------------------------------------------------------------
8225 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 8225
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
Mace Limited
25 February 1998 Page 3 m|a|c|e
<PAGE> 266
SNAGGING REPORT Report limited as follows MEPC - Petershill, London EC4
Packages 3211 - 3211 One Carter Lane
Status Only uncleared snags listed
<TABLE>
<CAPTION>
Nr Zone Floor Grid ref Type Description
- ------------------------------------------------------------------------------------------------------------------------------------
Package 3211 Cladding Installation Thames Contracts Limited
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
8227 Internal 4th Floor Bay 51 DW Visible fixing on spandrel runs
- ------------------------------------------------------------------------------------------------------------------------------------
8359 Terraces 5th Floor General DW Soffits not level elevation 12 and corners. To review
- ------------------------------------------------------------------------------------------------------------------------------------
8360 Terraces 5th Floor General DW Fixings to corner soffits visible
- ------------------------------------------------------------------------------------------------------------------------------------
8364 Terraces 5th Floor General DW Detail incorrect to soffit/fascia junction
- ------------------------------------------------------------------------------------------------------------------------------------
8366 Terraces 5th Floor Bay 9 DW Damage to front edge of transom
- ------------------------------------------------------------------------------------------------------------------------------------
8369 Terraces 5th Floor Bay 12 DW Long scratch to inside face of R/H mullion. Respray
- ------------------------------------------------------------------------------------------------------------------------------------
8371 Terraces 5th Floor Bay 14 DW Touch in chips high level R/H mullion
- ------------------------------------------------------------------------------------------------------------------------------------
8372 Terraces 5th Floor Bay 14 DW Bad chip/damage to inside R/H mullion, file and respray
- ------------------------------------------------------------------------------------------------------------------------------------
8373 Terraces 5th Floor Bay 15 DW Make good and spray L/H mullion damage
- ------------------------------------------------------------------------------------------------------------------------------------
8374 Terraces 5th Floor Bay 15 DW Touch in chips to fixed transom
- ------------------------------------------------------------------------------------------------------------------------------------
8377 Terraces 5th Floor Bay 17 DW Touch in chip to transom
- ------------------------------------------------------------------------------------------------------------------------------------
8378 Terraces 5th Floor Bay 18 DW File and touch in chip to R/H mullion
- ------------------------------------------------------------------------------------------------------------------------------------
8379 Terraces 5th Floor Bay 19 DW Touch in chip to L/H mullion
- ------------------------------------------------------------------------------------------------------------------------------------
8381 Terraces 5th Floor Bay 21 DW Touch in edge of fixed transom
- ------------------------------------------------------------------------------------------------------------------------------------
8382 Terraces 5th Floor Bay 21/22 DW Seal required to gap in system behind fin?
- ------------------------------------------------------------------------------------------------------------------------------------
8383 Terraces 5th Floor Bay 23 DW Touch in chips to R/H mullion and L/H mullion
- ------------------------------------------------------------------------------------------------------------------------------------
8385 Terraces 5th Floor Bay 31 DW Chips to mullions both sides
- ------------------------------------------------------------------------------------------------------------------------------------
8386 Terraces 5th Floor Bay 32/33 DW Seal gap between panels back of fin
- ------------------------------------------------------------------------------------------------------------------------------------
8387 Terraces 5th Floor Bay 33 DW 2 large chips to make good at L/H mullion above transom
- ------------------------------------------------------------------------------------------------------------------------------------
8389 Terraces 5th Floor Bay 34 DW Touch in scratch to inside mullion and L/H side high level
- ------------------------------------------------------------------------------------------------------------------------------------
8390 Terraces 5th Floor Bay 35 DW Chip to make good R/H mullion and L/H side above transom
- ------------------------------------------------------------------------------------------------------------------------------------
8391 Terraces 5th Floor Bay 36 DW Large chip to R/H mullion above transom
- ------------------------------------------------------------------------------------------------------------------------------------
8392 Terraces 5th Floor Bay 37 DW Large chip to make good R/H mullion
- ------------------------------------------------------------------------------------------------------------------------------------
8393 Terraces 5th Floor Bay 36/37 DW Seal gap between panels back of fin
- ------------------------------------------------------------------------------------------------------------------------------------
8395 Terraces 5th Floor Bay 38 DW File and touch in chip R/H mullion above transom
- ------------------------------------------------------------------------------------------------------------------------------------
8401 Terraces 5th Floor Bay 39 DW Touch in chip to R/H mullion (head height)
- ------------------------------------------------------------------------------------------------------------------------------------
8402 Terraces 5th Floor Bay 42 DW Touch in 2 Nr. chip to top of spandrel (at fixing block)
- ------------------------------------------------------------------------------------------------------------------------------------
8407 Terraces 5th Floor Bay 49 DW Damage to L/H mullion low level
- ------------------------------------------------------------------------------------------------------------------------------------
8410 Terraces 5th Floor Bay 52 DW Make good damage to fixed transom edge
- ------------------------------------------------------------------------------------------------------------------------------------
8413 Terraces 5th Floor Bay 53 DW Chips to edge of fixed transom
- ------------------------------------------------------------------------------------------------------------------------------------
8415 Terraces 5th Floor Bay 56 DW Touch in chip to transom R/H side
- ------------------------------------------------------------------------------------------------------------------------------------
8417 Terraces 5th Floor Bay 61 DW Minor chips to transom
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Nr Originator Logged Action Overdue? Not by PC?
before Cleared by... Nr
- ------------------------------------------------------------------------------------------------------------------------------------
Package 3211 Cladding Installation Thames Contracts Limited
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
8227 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 8227
- ------------------------------------------------------------------------------------------------------------------------------------
8359 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 8359
- ------------------------------------------------------------------------------------------------------------------------------------
8360 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 8360
- ------------------------------------------------------------------------------------------------------------------------------------
8364 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 8364
- ------------------------------------------------------------------------------------------------------------------------------------
8366 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 8366
- ------------------------------------------------------------------------------------------------------------------------------------
8369 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 8369
- ------------------------------------------------------------------------------------------------------------------------------------
8371 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 8371
- ------------------------------------------------------------------------------------------------------------------------------------
8372 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 8372
- ------------------------------------------------------------------------------------------------------------------------------------
8373 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 8373
- ------------------------------------------------------------------------------------------------------------------------------------
8374 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 8374
- ------------------------------------------------------------------------------------------------------------------------------------
8377 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 8377
- ------------------------------------------------------------------------------------------------------------------------------------
8378 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 8378
- ------------------------------------------------------------------------------------------------------------------------------------
8379 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 8379
- ------------------------------------------------------------------------------------------------------------------------------------
8381 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 8381
- ------------------------------------------------------------------------------------------------------------------------------------
8382 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 8382
- ------------------------------------------------------------------------------------------------------------------------------------
8383 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 8383
- ------------------------------------------------------------------------------------------------------------------------------------
8385 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 8385
- ------------------------------------------------------------------------------------------------------------------------------------
8386 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 8386
- ------------------------------------------------------------------------------------------------------------------------------------
8387 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 8387
- ------------------------------------------------------------------------------------------------------------------------------------
8389 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 8389
- ------------------------------------------------------------------------------------------------------------------------------------
8390 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 8390
- ------------------------------------------------------------------------------------------------------------------------------------
8391 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 8391
- ------------------------------------------------------------------------------------------------------------------------------------
8392 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 8392
- ------------------------------------------------------------------------------------------------------------------------------------
8393 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 8393
- ------------------------------------------------------------------------------------------------------------------------------------
8395 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 8395
- ------------------------------------------------------------------------------------------------------------------------------------
8401 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 8401
- ------------------------------------------------------------------------------------------------------------------------------------
8402 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 8402
- ------------------------------------------------------------------------------------------------------------------------------------
8407 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 8407
- ------------------------------------------------------------------------------------------------------------------------------------
8410 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 8410
- ------------------------------------------------------------------------------------------------------------------------------------
8413 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 8413
- ------------------------------------------------------------------------------------------------------------------------------------
8415 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 8415
- ------------------------------------------------------------------------------------------------------------------------------------
8417 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 8417
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
Mace Limited
25 February 1998 Page 4 m|a|c|e
<PAGE> 267
SNAGGING REPORT Report limited as follows MEPC - Petershill, London EC4
Packages 3211 - 3211 One Carter Lane
Status Only uncleared snags listed
<TABLE>
<CAPTION>
Nr Zone Floor Grid ref Type Description
- ------------------------------------------------------------------------------------------------------------------------------------
Package 3211 Cladding Installation Thames Contracts Limited
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
8422 Terraces 5th Floor Bay 64 DW Make good and spray damage to edge of fixed transom
- ------------------------------------------------------------------------------------------------------------------------------------
8423 Terraces 5th Floor Bay 65 DW Make good chips to edge of transom
- ------------------------------------------------------------------------------------------------------------------------------------
8424 Terraces 5th Floor Bay 67 DW Make good deep scratches (2Nr.) to R/H mullion
- ------------------------------------------------------------------------------------------------------------------------------------
8425 Terraces 5th Floor Bay 68 DW Make good touch in chips to edge of transom
- ------------------------------------------------------------------------------------------------------------------------------------
8426 Terraces 5th Floor Bay 70 DW Make good damage to edge of transom
- ------------------------------------------------------------------------------------------------------------------------------------
8428 Terraces 5th Floor Bay 71 DW Make good chip to R/H mullion above transom
- ------------------------------------------------------------------------------------------------------------------------------------
8433 Terraces 5th Floor Louvre 5 DW Make good chip to R/H mullion
- ------------------------------------------------------------------------------------------------------------------------------------
8441 Terraces 5th Floor Bay 85 DW Make good chip to centre of transom
- ------------------------------------------------------------------------------------------------------------------------------------
8443 Terraces 5th Floor Bay 86 DW Make good chip to edge of transom
- ------------------------------------------------------------------------------------------------------------------------------------
8445 Terraces 5th Floor Bay 92 DW Shadow box - make good damage to R/H mullion above transom and
chip to L/H mullion
- ------------------------------------------------------------------------------------------------------------------------------------
8446 Terraces 5th Floor Bay 93 DW Make good 2 Nr. chips to L/H mullion
- ------------------------------------------------------------------------------------------------------------------------------------
8447 Terraces 5th Floor Bay 94 DW Make good chip to L/H mullion
- ------------------------------------------------------------------------------------------------------------------------------------
8448 Terraces 5th Floor Bay 95 DW Make good damage/chips to L/H mullion
- ------------------------------------------------------------------------------------------------------------------------------------
8487 Terraces 5th Floor Bay 101 DW Make good 2 Nr. chips L/H side of transom
- ------------------------------------------------------------------------------------------------------------------------------------
8488 Terraces 5th Floor Bay 101 DW Make good chip in nose of L/H fin at parapet wall
- ------------------------------------------------------------------------------------------------------------------------------------
8489 Terraces 4th Floor General DW Soffit details at corners to review (fixing of fascia)
- ------------------------------------------------------------------------------------------------------------------------------------
8490 Terraces 4th Floor General DW Joint size between soffit panels vary, to review
- ------------------------------------------------------------------------------------------------------------------------------------
8494 Terraces 4th Floor Bay 2 DW Make good chips/damage L/H mullion
- ------------------------------------------------------------------------------------------------------------------------------------
8495 Terraces 4th Floor Bay 3 DW Make good chips/damage to L/H mullion and transom
- ------------------------------------------------------------------------------------------------------------------------------------
8497 Terraces 4th Floor Bay 4 DW Make good chips/scratch to edge of transom
- ------------------------------------------------------------------------------------------------------------------------------------
8500 Terraces 4th Floor Bay 6 DW Make good numerous chips to L/H and R/H mullion
- ------------------------------------------------------------------------------------------------------------------------------------
8508 Terraces 4th Floor Bay 20 DW Make good 2 Nr. chips to transom
- ------------------------------------------------------------------------------------------------------------------------------------
8509 Terraces 4th Floor Bay 22 DW Touch in/spray exposed aluminium to face of transom
- ------------------------------------------------------------------------------------------------------------------------------------
8510 Terraces 4th Floor Bay 22 DW Make good chips/scratches to L/H mullion above transom
- ------------------------------------------------------------------------------------------------------------------------------------
8512 Terraces 4th Floor Bay 23 DW Touch in scratches to R/H mullion above transom
- ------------------------------------------------------------------------------------------------------------------------------------
8514 Terraces 4th Floor Bay 31 DW Make good chip to transom and R/H mullion
- ------------------------------------------------------------------------------------------------------------------------------------
8515 Terraces 4th Floor Bay 32 DW Make good chip to transom R/H side
- ------------------------------------------------------------------------------------------------------------------------------------
8516 Terraces 4th Floor Bay 33 DW Make good chip to mullion R/H side of spandrel
- ------------------------------------------------------------------------------------------------------------------------------------
8517 Terraces 4th Floor Bay 34 DW Make good chips to transom and remove glue/mastic
- ------------------------------------------------------------------------------------------------------------------------------------
8518 Terraces 4th Floor Bay 35 DW Make good damage to R/H mullion above transom
- ------------------------------------------------------------------------------------------------------------------------------------
8519 Terraces 4th Floor Bay 35 DW Make good chip to transom R/H side
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Nr Originator Logged Action Overdue? Not by PC?
before Cleared by... Nr
- ------------------------------------------------------------------------------------------------------------------------------------
Package 3211 Cladding Installation Thames Contracts Limited
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
8422 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 8422
- ------------------------------------------------------------------------------------------------------------------------------------
8423 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 8423
- ------------------------------------------------------------------------------------------------------------------------------------
8424 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 8424
- ------------------------------------------------------------------------------------------------------------------------------------
8425 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 8425
- ------------------------------------------------------------------------------------------------------------------------------------
8426 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 8426
- ------------------------------------------------------------------------------------------------------------------------------------
8428 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 8428
- ------------------------------------------------------------------------------------------------------------------------------------
8433 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 8433
- ------------------------------------------------------------------------------------------------------------------------------------
8441 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 8441
- ------------------------------------------------------------------------------------------------------------------------------------
8443 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 8443
- ------------------------------------------------------------------------------------------------------------------------------------
8445 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 8445
- ------------------------------------------------------------------------------------------------------------------------------------
8446 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 8446
- ------------------------------------------------------------------------------------------------------------------------------------
8447 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 8447
- ------------------------------------------------------------------------------------------------------------------------------------
8448 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 8448
- ------------------------------------------------------------------------------------------------------------------------------------
8487 Rolfe Judd Architecture Ltd. - GF 08/12/97 15/12/97 o 8487
- ------------------------------------------------------------------------------------------------------------------------------------
8488 Rolfe Judd Architecture Ltd. - GF 08/12/97 15/12/97 o 8488
- ------------------------------------------------------------------------------------------------------------------------------------
8489 Rolfe Judd Architecture Ltd. - GF 08/12/97 15/12/97 o 8489
- ------------------------------------------------------------------------------------------------------------------------------------
8490 Rolfe Judd Architecture Ltd. - GF 08/12/97 15/12/97 o 8490
- ------------------------------------------------------------------------------------------------------------------------------------
8494 Rolfe Judd Architecture Ltd. - GF 08/12/97 15/12/97 o 8494
- ------------------------------------------------------------------------------------------------------------------------------------
8495 Rolfe Judd Architecture Ltd. - GF 08/12/97 15/12/97 o 8495
- ------------------------------------------------------------------------------------------------------------------------------------
8497 Rolfe Judd Architecture Ltd. - GF 08/12/97 15/12/97 o 8497
- ------------------------------------------------------------------------------------------------------------------------------------
8500 Rolfe Judd Architecture Ltd. - GF 08/12/97 15/12/97 o 8500
- ------------------------------------------------------------------------------------------------------------------------------------
8508 Rolfe Judd Architecture Ltd. - GF 08/12/97 15/12/97 o 8508
- ------------------------------------------------------------------------------------------------------------------------------------
8509 Rolfe Judd Architecture Ltd. - GF 08/12/97 15/12/97 o 8509
- ------------------------------------------------------------------------------------------------------------------------------------
8510 Rolfe Judd Architecture Ltd. - GF 08/12/97 15/12/97 o 8510
- ------------------------------------------------------------------------------------------------------------------------------------
8512 Rolfe Judd Architecture Ltd. - GF 08/12/97 15/12/97 o 8512
- ------------------------------------------------------------------------------------------------------------------------------------
8514 Rolfe Judd Architecture Ltd. - GF 08/12/97 15/12/97 o 8514
- ------------------------------------------------------------------------------------------------------------------------------------
8515 Rolfe Judd Architecture Ltd. - GF 08/12/97 15/12/97 o 8515
- ------------------------------------------------------------------------------------------------------------------------------------
8516 Rolfe Judd Architecture Ltd. - GF 08/12/97 15/12/97 o 8516
- ------------------------------------------------------------------------------------------------------------------------------------
8517 Rolfe Judd Architecture Ltd. - GF 08/12/97 15/12/97 o 8517
- ------------------------------------------------------------------------------------------------------------------------------------
8518 Rolfe Judd Architecture Ltd. - GF 08/12/97 15/12/97 o 8518
- ------------------------------------------------------------------------------------------------------------------------------------
8519 Rolfe Judd Architecture Ltd. - GF 08/12/97 15/12/97 o 8519
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
Mace Limited
25 February 1998 Page 5 m|a|c|e
<PAGE> 268
SNAGGING REPORT Report limited as follows MEPC - Petershill, London EC4
Packages 3211 - 3211 One Carter Lane
Status Only uncleared snags listed
<TABLE>
<CAPTION>
Nr Zone Floor Grid ref Type Description
- ------------------------------------------------------------------------------------------------------------------------------------
Package 3211 Cladding Installation Thames Contacts Limited
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
8520 Terraces 4th Floor Bay 36 DW Make good chips to transom
- ------------------------------------------------------------------------------------------------------------------------------------
8522 Terraces 4th Floor Bay 38 DW Make good 2 Nr. chips to transom
- ------------------------------------------------------------------------------------------------------------------------------------
8524 Terraces 4th Floor Bay 38/39 DW Touch in scratches to nose of corner mullion
- ------------------------------------------------------------------------------------------------------------------------------------
8525 Terraces 4th Floor Bay 39 DW Make good chips to transom
- ------------------------------------------------------------------------------------------------------------------------------------
8527 Terraces 4th Floor Bay 40 DW Make good chip to bottom edge of transm at fixing block
- ------------------------------------------------------------------------------------------------------------------------------------
8528 Terraces 4th Floor Bay 40 DW Touch in scratches to L/H mullion
- ------------------------------------------------------------------------------------------------------------------------------------
8531 Terraces 4th Floor Bay 41 DW Make good chips to L/H of transom and R/H mullion
- ------------------------------------------------------------------------------------------------------------------------------------
8535 Terraces 4th Floor Bay 43 DW Shadow box elevation 8/9 - make good chips to R/H mullion
- ------------------------------------------------------------------------------------------------------------------------------------
8538 Terraces 4th Floor Bay 45 DW Re-spray face of transom and L/H mullion chips
- ------------------------------------------------------------------------------------------------------------------------------------
8539 Terraces 4th Floor Bay 46 DW File down and touch in chips to transom
- ------------------------------------------------------------------------------------------------------------------------------------
8544 Terraces 4th Floor Bay 49 DW Make good chips to L/H and R/H mullion
- ------------------------------------------------------------------------------------------------------------------------------------
8563 Elev. 1 Ground Bay 42 DW Touch in chips (2 Nr.) to R/H mullion of R/H WSF
- ------------------------------------------------------------------------------------------------------------------------------------
8571 Elev. 1 Ground Bay 43 DW Make good 2 Nr. chips L/H mullion L/H WSF
- ------------------------------------------------------------------------------------------------------------------------------------
8575 Elev. 1 Ground Bay 43 DW Chip to transom R/H WSF
- ------------------------------------------------------------------------------------------------------------------------------------
8577 Elev. 1 Ground Bay 45 DW Damage to transom
- ------------------------------------------------------------------------------------------------------------------------------------
8580 Elev. 1 Ground Bay 46 DW Chip to transom L/H WSF and dent to transom R/H WSF
- ------------------------------------------------------------------------------------------------------------------------------------
8585 Elev. 1 Ground Bay 47 DW Make good chips to both transoms
- ------------------------------------------------------------------------------------------------------------------------------------
8590 Elev. 1 Ground Bay 48 DW Chips to transom L/H WSF
- ------------------------------------------------------------------------------------------------------------------------------------
8591 Elev. 1 Ground Bay 48 DW Damage to side of L/H mullion R/H WSF (between fin)
- ------------------------------------------------------------------------------------------------------------------------------------
8593 Elev. 1 Ground Bay 48 DW Touch in scratches/damage to bottom of fin
- ------------------------------------------------------------------------------------------------------------------------------------
8598 Elev. 1 Ground Bay 50 DW Chip to bottom R/H corner of WSF mullion/transom
- ------------------------------------------------------------------------------------------------------------------------------------
8602 Elev. 1 Ground Bay 51 DW Make good transom L/H WSF
- ------------------------------------------------------------------------------------------------------------------------------------
8609 Elev. 1 Ground Bay 54 DW Chips to transom L/H WSF
- ------------------------------------------------------------------------------------------------------------------------------------
8612 Elev. 1 Ground Bay 55 DW Damage to transom L/H WSF
- ------------------------------------------------------------------------------------------------------------------------------------
8618 Elev. 1 Ground Bay 56 DW Scratches to bottom of corner mullion (between fin)
- ------------------------------------------------------------------------------------------------------------------------------------
8625 Elev. 2 Ground Bay 58 DW Paint remedials to hinges at doors and overpanels
- ------------------------------------------------------------------------------------------------------------------------------------
8628 Elev. 2 Ground Bay 58 DW Minor scratches to door frame
- ------------------------------------------------------------------------------------------------------------------------------------
8631 Elev. 2 Ground Bay 59 DW Chips to top of L/H door, door frame bent (weather seal not
working, gap visible)
- ------------------------------------------------------------------------------------------------------------------------------------
8632 Elev. 2 Ground Bay 59 DW Hinges to have paint remedials
- ------------------------------------------------------------------------------------------------------------------------------------
8635 Elev. 2 Ground Bay 60 DW L/H transom to be re-sprayed
- ------------------------------------------------------------------------------------------------------------------------------------
8650 Elev. 3 Lower Grou Bay 64 DW Touch in damage to internal transom R/H corner R/H WSF
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Nr Originator Logged Action Overdue? Not by PC?
Before Cleared by... Nr
- ------------------------------------------------------------------------------------------------------------------------------------
Package 3211 Cladding Installation Thames Contacts Limited
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
8520 Rolfe Judd Architecture Ltd - GF 08/12/97 15/12/97 o 8520
- ------------------------------------------------------------------------------------------------------------------------------------
8522 Rolfe Judd Architecture Ltd - GF 08/12/97 15/12/97 o 8522
- ------------------------------------------------------------------------------------------------------------------------------------
8524 Rolfe Judd Architecture Ltd - GF 08/12/97 15/12/97 o 8524
- ------------------------------------------------------------------------------------------------------------------------------------
8525 Rolfe Judd Architecture Ltd - GF 08/12/97 15/12/97 o 8525
- ------------------------------------------------------------------------------------------------------------------------------------
8527 Rolfe Judd Architecture Ltd - GF 08/12/97 15/12/97 o 8527
- ------------------------------------------------------------------------------------------------------------------------------------
8528 Rolfe Judd Architecture Ltd - GF 08/12/97 15/12/97 o 8528
- ------------------------------------------------------------------------------------------------------------------------------------
8531 Rolfe Judd Architecture Ltd - GF 08/12/97 15/12/97 o 8531
- ------------------------------------------------------------------------------------------------------------------------------------
8535 Rolfe Judd Architecture Ltd - GF 08/12/97 15/12/97 o 8535
- ------------------------------------------------------------------------------------------------------------------------------------
8538 Rolfe Judd Architecture Ltd - GF 08/12/97 15/12/97 o 8538
- ------------------------------------------------------------------------------------------------------------------------------------
8539 Rolfe Judd Architecture Ltd - GF 08/12/97 15/12/97 o 8539
- ------------------------------------------------------------------------------------------------------------------------------------
8544 Rolfe Judd Architecture Ltd - GF 08/12/97 15/12/97 o 8544
- ------------------------------------------------------------------------------------------------------------------------------------
8563 Rolfe Judd Architecture Ltd - GF 08/12/97 15/12/97 o 8563
- ------------------------------------------------------------------------------------------------------------------------------------
8571 Rolfe Judd Architecture Ltd - GF 08/12/97 15/12/97 o 8571
- ------------------------------------------------------------------------------------------------------------------------------------
8575 Rolfe Judd Architecture Ltd - GF 08/12/97 15/12/97 o 8575
- ------------------------------------------------------------------------------------------------------------------------------------
8577 Rolfe Judd Architecture Ltd - GF 08/12/97 15/12/97 o 8577
- ------------------------------------------------------------------------------------------------------------------------------------
8580 Rolfe Judd Architecture Ltd - GF 08/12/97 15/12/97 o 8580
- ------------------------------------------------------------------------------------------------------------------------------------
8585 Rolfe Judd Architecture Ltd - GF 08/12/97 15/12/97 o 8585
- ------------------------------------------------------------------------------------------------------------------------------------
8590 Rolfe Judd Architecture Ltd - GF 08/12/97 15/12/97 o 8590
- ------------------------------------------------------------------------------------------------------------------------------------
8591 Rolfe Judd Architecture Ltd - GF 08/12/97 15/12/97 o 8591
- ------------------------------------------------------------------------------------------------------------------------------------
8593 Rolfe Judd Architecture Ltd - GF 08/12/97 15/12/97 o 8593
- ------------------------------------------------------------------------------------------------------------------------------------
8598 Rolfe Judd Architecture Ltd - GF 08/12/97 15/12/97 o 8598
- ------------------------------------------------------------------------------------------------------------------------------------
8602 Rolfe Judd Architecture Ltd - GF 08/12/97 15/12/97 o 8602
- ------------------------------------------------------------------------------------------------------------------------------------
8609 Rolfe Judd Architecture Ltd - GF 08/12/97 15/12/97 o 8609
- ------------------------------------------------------------------------------------------------------------------------------------
8612 Rolfe Judd Architecture Ltd - GF 08/12/97 15/12/97 o 8612
- ------------------------------------------------------------------------------------------------------------------------------------
8618 Rolfe Judd Architecture Ltd - GF 08/12/97 15/12/97 o 8618
- ------------------------------------------------------------------------------------------------------------------------------------
8625 Rolfe Judd Architecture Ltd - GF 08/12/97 15/12/97 o 8625
- ------------------------------------------------------------------------------------------------------------------------------------
8628 Rolfe Judd Architecture Ltd - GF 08/12/97 15/12/97 o 8628
- ------------------------------------------------------------------------------------------------------------------------------------
8631 Rolfe Judd Architecture Ltd - GF 08/12/97 15/12/97 o 8631
- ------------------------------------------------------------------------------------------------------------------------------------
8632 Rolfe Judd Architecture Ltd - GF 08/12/97 15/12/97 o 8632
- ------------------------------------------------------------------------------------------------------------------------------------
8635 Rolfe Judd Architecture Ltd - GF 08/12/97 15/12/97 o 8635
- ------------------------------------------------------------------------------------------------------------------------------------
8650 Rolfe Judd Architecture Ltd - GF 08/12/97 15/12/97 o 8650
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
Mace Limited
25 February 1998 Page 6 m|a|c|e
<PAGE> 269
SNAGGING REPORT Report limited as follows MEPC - Petershill, London EC4
Packages 3211 - 3211 One Carter Lane
Status Only uncleared snags listed
<TABLE>
<CAPTION>
Nr Zone Floor Grid ref Type Description
- ------------------------------------------------------------------------------------------------------------------------------------
Package 3211 Cladding Installation Thames Contacts Limited
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
8670 Elev. 8 Lower Grou Bay 17 DW Door-hinges to re-paint. Smoke panel door not flush at top L/H
corner, weatherseal
- ------------------------------------------------------------------------------------------------------------------------------------
8700 Elev. 4 Lower Grou Bay 71 DW L/H transom dented, R/H transom badly scratched
- ------------------------------------------------------------------------------------------------------------------------------------
8701 Elev. 4 Lower Grou Bay 71 DW Chip to R/H mullion of L/H upper spandrel
- ------------------------------------------------------------------------------------------------------------------------------------
8705 Elev. 4 Lower Grou Bay 72 DW Chip to R/H mullion of L/H WSF
- ------------------------------------------------------------------------------------------------------------------------------------
8709 Elev. 4 Lower Grou Bay 74 DW Make good chips to staining to both WSF transoms
- ------------------------------------------------------------------------------------------------------------------------------------
8710 Elev. 4 Lower Grou Bay 75 DW Scratch to transom R/H WSF and L/H
- ------------------------------------------------------------------------------------------------------------------------------------
8720 Elev. 6 Lower Grou Bay 1 DW Gasket missing R/H WSF
- ------------------------------------------------------------------------------------------------------------------------------------
8725 Elev. 6 Lower Grou General DW Chip to transom R/H WSF
- ------------------------------------------------------------------------------------------------------------------------------------
8736 Elev. 7 Lower Grou Bay 8 DW Chip to R/H mullion R/H WSF
- ------------------------------------------------------------------------------------------------------------------------------------
8738 Elev. 7 Lower Grou Bay 9 DW Make good chip to R/H mullion R/H WSF
- ------------------------------------------------------------------------------------------------------------------------------------
8740 Elev. 7 Lower Grou Bay 11 DW Repair/respray damage to transom L/H WSF
- ------------------------------------------------------------------------------------------------------------------------------------
8742 External Colonnade Colonnade DW Cover/jambs required to brick/cladding junction
- ------------------------------------------------------------------------------------------------------------------------------------
8747 External Colonnade General DW Corner detail/plate required
- ------------------------------------------------------------------------------------------------------------------------------------
8748 External Colonnade General DW Clean down all colonnade and soffits
- ------------------------------------------------------------------------------------------------------------------------------------
8749 External Colonnade General DW Make good chips to transoms elevation 10 and mullion
- ------------------------------------------------------------------------------------------------------------------------------------
8752 External Colonnade General DW Bay 22 glass to be fitted, jambs & internal 2nd fix to complete
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Nr Originator Logged Action Overdue? Not by PC?
before Cleared by... Nr
- ------------------------------------------------------------------------------------------------------------------------------------
Package 3211 Cladding Installation Thames Contacts Limited
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
8670 Rolfe Judd Architecture Ltd - GF 08/12/97 15/12/97 o 8670
- ------------------------------------------------------------------------------------------------------------------------------------
8700 Rolfe Judd Architecture Ltd - GF 08/12/97 15/12/97 o 8700
- ------------------------------------------------------------------------------------------------------------------------------------
8701 Rolfe Judd Architecture Ltd - GF 08/12/97 15/12/97 o 8701
- ------------------------------------------------------------------------------------------------------------------------------------
8705 Rolfe Judd Architecture Ltd - GF 08/12/97 15/12/97 o 8705
- ------------------------------------------------------------------------------------------------------------------------------------
8709 Rolfe Judd Architecture Ltd - GF 08/12/97 15/12/97 o 8709
- ------------------------------------------------------------------------------------------------------------------------------------
8710 Rolfe Judd Architecture Ltd - GF 08/12/97 15/12/97 o 8710
- ------------------------------------------------------------------------------------------------------------------------------------
8720 Rolfe Judd Architecture Ltd - GF 08/12/97 15/12/97 o 8720
- ------------------------------------------------------------------------------------------------------------------------------------
8725 Rolfe Judd Architecture Ltd - GF 08/12/97 15/12/97 o 8725
- ------------------------------------------------------------------------------------------------------------------------------------
8736 Rolfe Judd Architecture Ltd - GF 08/12/97 15/12/97 o 8736
- ------------------------------------------------------------------------------------------------------------------------------------
8738 Rolfe Judd Architecture Ltd - GF 08/12/97 15/12/97 o 8738
- ------------------------------------------------------------------------------------------------------------------------------------
8740 Rolfe Judd Architecture Ltd - GF 08/12/97 15/12/97 o 8740
- ------------------------------------------------------------------------------------------------------------------------------------
8742 Rolfe Judd Architecture Ltd - GF 08/12/97 15/12/97 o 8742
- ------------------------------------------------------------------------------------------------------------------------------------
8747 Rolfe Judd Architecture Ltd - GF 08/12/97 15/12/97 o 8747
- ------------------------------------------------------------------------------------------------------------------------------------
8748 Rolfe Judd Architecture Ltd - GF 08/12/97 15/12/97 o 8748
- ------------------------------------------------------------------------------------------------------------------------------------
8749 Rolfe Judd Architecture Ltd - GF 08/12/97 15/12/97 o 8749
- ------------------------------------------------------------------------------------------------------------------------------------
8752 Rolfe Judd Architecture Ltd - GF 08/12/97 15/12/97 o 8752
- ------------------------------------------------------------------------------------------------------------------------------------
====================================================================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
Totals for package 3211 Cladding Installation Total number of snags 205
Thames Contracts Limited Number of snags uncleared, by Mace 205 by team 205
Number of overdue snags 205
</TABLE>
- --------------------------------------------------------------------------------
Mace Limited
25 February 1998 Page 7 m|a|c|e
<PAGE> 270
SNAGGING REPORT Report limited as follows MEPC - Petershill, London EC4
Packages 3211 - 3211 One Carter Lane
Status Only uncleared snags listed
<TABLE>
<CAPTION>
Nr Zone Floor Grid ref Type Description
- ------------------------------------------------------------------------------------------------------------------------------------
Package 3211 Cladding Installation Thames Contacts Limited
- ------------------------------------------------------------------------------------------------------------------------------------
====================================================================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Overdue? Not by PC?
Nr Originator Logged Action before Cleared by... Nr
- ------------------------------------------------------------------------------------------------------------------------------------
Package 3211
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Report totals Total number of snags 205
Number of snags uncleared, by Mace 205 by team 205
Number of overdue snags 205
</TABLE>
Key to work types
DQ Design Query
UW Unfinished Work
LD Latent defect
OW Outstanding works
IN Instructed works
DW Defective works
- --------------------------------------------------------------------------------
Mace Limited
25 February 1998 Page 8 m|a|c|e
<PAGE> 271
SNAGGING REPORT Report limited as follows MEPC - Petershill, London EC4
Packages 3220 - 3220 One Carter Lane
Status Only uncleared snags listed
<TABLE>
<CAPTION>
Nr Zone Floor Grid ref Type Description
- ------------------------------------------------------------------------------------------------------------------------------------
Package 3220 Entrance Glazing & Canopy T & W Ide Ltd
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
4538 Entrance Ground Canopy DW Screws to canopy aerofoil not lining through and joint not flush
(bows)
- ------------------------------------------------------------------------------------------------------------------------------------
5083 Entrance Ground Doors DW Door keep to be re-fixed to R/H door (viewed internally)
- ------------------------------------------------------------------------------------------------------------------------------------
7448 Entrance Ground Elev. 1 DW Replace scratched single glazed glass unit L/H side of doors.
- ------------------------------------------------------------------------------------------------------------------------------------
7452 Entrance Ground Elev. 1 DW Bottom lock to centre left door (viewed externally) not turning
properly.
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Nr Originator Logged Action Overdue? Not by PC?
before Cleared by... Nr
- ------------------------------------------------------------------------------------------------------------------------------------
Package 3220 Entrance Glazing & Canopy T & W Ide Ltd
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
4538 Mace Limited - MH 15/10/97 22/10/97 o 4538
- ------------------------------------------------------------------------------------------------------------------------------------
5083 Mace Limited - CT 31/10/97 07/11/97 o 5083
- ------------------------------------------------------------------------------------------------------------------------------------
7448 Rolfe Judd Architecture Ltd. - CT 03/12/97 10/12/97 o 7448
- ------------------------------------------------------------------------------------------------------------------------------------
7452 Rolfe Judd Architecture Ltd. - CG 03/12/97 10/12/97 o 7452
- ------------------------------------------------------------------------------------------------------------------------------------
====================================================================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
Totals for package 3220 Entrance Glazing & Canopy Total number of snags 4
T & W Ide Ltd Number of snags uncleared, by Mace 4 by team 4
Number of overdue snags 4
- ------------------------------------------------------------------------------------------------------------------------------------
====================================================================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
Report totals Total number of snags 4
Number of snags uncleared, by Mace 4 by team 4
Number of overdue snags 4
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Key to work types
DQ Design Query
UW Unfinished Work
LD Latent defect
OW Outstanding works
IN Instructed works
DW Defective works
- --------------------------------------------------------------------------------
Mace Limited
25 February 1998 Page 1 m|a|c|e
<PAGE> 272
SNAGGING REPORT Report limited as follows MEPC - Petershill, London EC4
Packages 3600 - 3600 One Carter Lane
Status Only uncleared snags listed
<TABLE>
<CAPTION>
Nr Zone Floor Grid ref Type Description
- ------------------------------------------------------------------------------------------------------------------------------------
Package 3600 Roof Finishes Coverite Limited
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
2514 Rf AL-L 5th Floor C8 OW Fireman's access door - grommits to be provided to screw fixing
holes
- ------------------------------------------------------------------------------------------------------------------------------------
7416 Terraces 5th Floor Elevation 10 DW RWP missing (dummy) at bay 26
- ------------------------------------------------------------------------------------------------------------------------------------
7553 Rf C Roof C/1 DW Damage to underside of the anodised fascia - (4th RWO from Bay
49.) Fascia to be MG or replaced.
- ------------------------------------------------------------------------------------------------------------------------------------
7554 Rf C Roof G-H/1 DW Scratch evident to the anodised fascia - (4th to 5th RWO from Bay
49.) Fascia to be MG or replaced.
- ------------------------------------------------------------------------------------------------------------------------------------
7556 Rf Gen Roof DW Alignment of powder coated fascia corners to be checked for line
and level. Currently not in level with adjacent straight runs of
fascia.
- ------------------------------------------------------------------------------------------------------------------------------------
7557 Rf Gen Roof DW Alignment of Kal-zip fascia flashing corners to be checked for
line and level. Currently not in level with adjacent straight runs
of fascia.
- ------------------------------------------------------------------------------------------------------------------------------------
7558 Rf Gen Roof DW Welding of Kal-zip fascia flashing corners poor, welding not
dressed properly.
- ------------------------------------------------------------------------------------------------------------------------------------
7559 Rf B Roof DW Elevation 10 - Fascia junction @ office/louvre section of cladding
- Kal-zip top fascia damaged @ underside, MG or replace.
- ------------------------------------------------------------------------------------------------------------------------------------
7560 Rf B Roof DW Kal-zip fascia junction of roof B & C - corner junction poor, also
pop rivet to be removed from front face.
- ------------------------------------------------------------------------------------------------------------------------------------
7563 Rf Gen Roof DW Kal-zip to be cleaned down and dents dressed out generally.
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Nr Originator Logged Action Overdue? Not by PC?
before Cleared by... Nr
- ------------------------------------------------------------------------------------------------------------------------------------
Package 3600 Roof Finishes Coverite Limited
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
2514 Mace Limited - MPH 01/09/97 08/09/97 o 2514
- ------------------------------------------------------------------------------------------------------------------------------------
7416 Rolfe Judd Architecture Ltd - CT 03/12/97 10/12/97 o 7416
- ------------------------------------------------------------------------------------------------------------------------------------
7553 Rolfe Judd Arch - KG/GF 04/12/97 10/12/97 o 7553
- ------------------------------------------------------------------------------------------------------------------------------------
7554 Rolfe Judd Arch - KG/GF 04/12/97 10/12/97 o 7554
- ------------------------------------------------------------------------------------------------------------------------------------
7556 Rolfe Judd Arch - KG/GF 04/12/97 10/12/97 o 7556
- ------------------------------------------------------------------------------------------------------------------------------------
7557 Rolfe Judd Arch - KG/GF 04/12/97 10/12/97 o 7557
- ------------------------------------------------------------------------------------------------------------------------------------
7558 Rolfe Judd Arch - KG/GF 04/12/97 10/12/97 o 7558
- ------------------------------------------------------------------------------------------------------------------------------------
7559 Rolfe Judd Arch - KG/GF 04/12/97 10/12/97 o 7559
- ------------------------------------------------------------------------------------------------------------------------------------
7560 Rolfe Judd Arch - KG/GF 04/12/97 10/12/97 o 7560
- ------------------------------------------------------------------------------------------------------------------------------------
7563 Rolfe Judd Arch - KG/GF 04/12/97 10/12/97 o 7563
- ------------------------------------------------------------------------------------------------------------------------------------
====================================================================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
Totals for package 3600 Roof Finishes Total number of snags 10
Coverite Limited Number of snags uncleared, by Mace 10 by team 10
Number of overdue snags 10
- ------------------------------------------------------------------------------------------------------------------------------------
====================================================================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
Report totals Total number of snags 10
Number of snags uncleared, by Mace 10 by team 10
Number of overdue snags 10
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Key to work types
DQ Design Query
UW Unfinished Work
LD Latent defect
OW Outstanding works
IN Instructed works
DW Defective works
- --------------------------------------------------------------------------------
Mace Limited
25 February 1998 Page 1 m|a|c|e
<PAGE> 273
SNAGGING REPORT Report limited as follows MEPC - Petershill, London EC4
Packages 3700 - 3700 One Carter Lane
Status Only uncleared snags listed
<TABLE>
<CAPTION>
Nr Zone Floor Grid ref Type Description
- ------------------------------------------------------------------------------------------------------------------------------------
Package 3700 Masonry Irvine Whitlock Limited
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
2249 Elev. 12 2nd Floor General DW White stains where sealer to slate on extrusion 14.
- ------------------------------------------------------------------------------------------------------------------------------------
2543 Elev. 2 2nd Floor Bay 60 DW Clean white stains to extrusion 14 L/H WSF below h/rail
- ------------------------------------------------------------------------------------------------------------------------------------
2565 Elev. 2 2nd Floor Bay 59 DW Remove white stains from extrusion 14 caused by slate sealer
- ------------------------------------------------------------------------------------------------------------------------------------
2573 Elev. 2 2nd Floor Bay 58 DW Clean white stains from extrusion 14 caused by slate sealer at low
level
- ------------------------------------------------------------------------------------------------------------------------------------
2578 Elev. 2 2nd Floor Bay 57 DW Clean white stains from extrusion 14 caused by slate sealer
- ------------------------------------------------------------------------------------------------------------------------------------
4948 Restaurant Basement OW NW corner-Block to be placed once temp electrics are removed and
mastic is made good
- ------------------------------------------------------------------------------------------------------------------------------------
5114 Elev. 7 1st Floor Bays 9-11 DW Complete pointing and m/g to copings at Balcony
- ------------------------------------------------------------------------------------------------------------------------------------
6655 Plenums Basement A/1-2 OW Complete vertical mastic blockwork to concrete HL @ Grills
- ------------------------------------------------------------------------------------------------------------------------------------
7320 Plenums Basement B B/8-9 DW Blockwork joint to be made good where security conduit box screwed
through blockwork joint
- ------------------------------------------------------------------------------------------------------------------------------------
7353 Plenums Basement C/3-7 DW Cavity not closed either side of bottom of LEB doors - cavity
closure fitted and mastic completed
- ------------------------------------------------------------------------------------------------------------------------------------
7402 Terraces 5th Floor Elevation 3 DW Stone repair unacceptable to capitals
- ------------------------------------------------------------------------------------------------------------------------------------
7404 Terraces 5th Floor Elevation 3 DW Clean stone reveals (capitals)
- ------------------------------------------------------------------------------------------------------------------------------------
7406 Terraces 5th Floor Elevation 3 DW Complete repairs to arrises of capitals
- ------------------------------------------------------------------------------------------------------------------------------------
7415 Terraces 5th Floor Elevation 4 DW Stone repairs and make good to complete
- ------------------------------------------------------------------------------------------------------------------------------------
7421 Terraces 5th Floor Elevation 10 DW Complete making good and repairs to capitals
- ------------------------------------------------------------------------------------------------------------------------------------
7428 Terraces 5th Floor Elevation 11 DW Make good stone repairs to capitals
- ------------------------------------------------------------------------------------------------------------------------------------
7439 Terraces 4th Floor General DW Make good and complete stone repairs to capitals
- ------------------------------------------------------------------------------------------------------------------------------------
7973 Plenums Lower Grou 1-2/H DW Cavity to be closed above the head of the door
- ------------------------------------------------------------------------------------------------------------------------------------
8560 Elev. 1 Ground Bay 42 DW Mastic pointing to complete R/H side granite stone
- ------------------------------------------------------------------------------------------------------------------------------------
8605 Elev. 1 Ground Bay 47 DW Vertical mastic joints to blockwork below plenum to complete
- ------------------------------------------------------------------------------------------------------------------------------------
8665 Elev. 7 Lower Grou Bay 14 DW Mastic or mortar to blockwork below L/H of plenum
- ------------------------------------------------------------------------------------------------------------------------------------
8690 Elev. 3 Lower Grou Bay 67 DW Stone mortar snots on systems to clean off
- ------------------------------------------------------------------------------------------------------------------------------------
8696 Elev. 4 Lower Grou Bay 69/68 DW Repair stone return to window frame bay 68 1st course and 4th
course
- ------------------------------------------------------------------------------------------------------------------------------------
8737 Elev. 7 Lower Grou Bay 10/9 DW Unacceptable epoxy repair to top of granite both corners
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Nr Originator Logged Action Overdue? Not by PC?
before Cleared by... Nr
- ------------------------------------------------------------------------------------------------------------------------------------
Package 3700 Masonry Irvine Whitlock Limited
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
2249 Mace Limited - CT 12/08/97 19/08/97 o 2249
- ------------------------------------------------------------------------------------------------------------------------------------
2543 Mace Limited - CT 03/09/97 10/09/97 o 2543
- ------------------------------------------------------------------------------------------------------------------------------------
2565 Mace Limited - CT 03/09/97 10/09/97 o 2565
- ------------------------------------------------------------------------------------------------------------------------------------
2573 Mace Limited - CT 03/09/97 10/09/97 o 2573
- ------------------------------------------------------------------------------------------------------------------------------------
2578 Mace Limited - CT 03/09/97 10/09/97 o 2578
- ------------------------------------------------------------------------------------------------------------------------------------
4948 Mace Limited - MPH 27/10/97 03/11/97 o 4948
- ------------------------------------------------------------------------------------------------------------------------------------
5114 Mace Limited - CT 31/10/97 07/11/97 o 5114
- ------------------------------------------------------------------------------------------------------------------------------------
6655 Mace Limited - CT 24/11/97 01/12/97 o 6655
- ------------------------------------------------------------------------------------------------------------------------------------
7320 Mace Limited - MPH 03/12/97 10/12/97 o 7320
- ------------------------------------------------------------------------------------------------------------------------------------
7353 Mace Limited - MPH 03/12/97 10/12/97 o 7353
- ------------------------------------------------------------------------------------------------------------------------------------
7402 Rolfe Judd Architecture Ltd. - CT 03/12/97 10/12/97 o 7402
- ------------------------------------------------------------------------------------------------------------------------------------
7404 Rolfe Judd Architecture Ltd. - CT 03/12/97 10/12/97 o 7404
- ------------------------------------------------------------------------------------------------------------------------------------
7406 Rolfe Judd Architecture Ltd. - CT 03/12/97 10/12/97 o 7406
- ------------------------------------------------------------------------------------------------------------------------------------
7415 Rolfe Judd Architecture Ltd. - CT 03/12/97 10/12/97 o 7415
- ------------------------------------------------------------------------------------------------------------------------------------
7421 Rolfe Judd Architecture Ltd. - CT 03/12/97 10/12/97 o 7421
- ------------------------------------------------------------------------------------------------------------------------------------
7428 Rolfe Judd Architecture Ltd. - CT 03/12/97 10/12/97 o 7428
- ------------------------------------------------------------------------------------------------------------------------------------
7439 Rolfe Judd Architecture Ltd. - CT 03/12/97 10/12/97 o 7439
- ------------------------------------------------------------------------------------------------------------------------------------
7973 Rolfe Judd Architecture Ltd. - KG/G 05/12/97 12/12/97 o 7973
- ------------------------------------------------------------------------------------------------------------------------------------
8560 Rolfe Judd Architecture Ltd. - GF 08/12/97 15/12/97 o 8560
- ------------------------------------------------------------------------------------------------------------------------------------
8605 Rolfe Judd Architecture Ltd. - GF 08/12/97 15/12/97 o 8605
- ------------------------------------------------------------------------------------------------------------------------------------
8665 Rolfe Judd Architecture Ltd. - GF 08/12/97 15/12/97 o 8665
- ------------------------------------------------------------------------------------------------------------------------------------
8690 Rolfe Judd Architecture Ltd. - GF 08/12/97 15/12/97 o 8690
- ------------------------------------------------------------------------------------------------------------------------------------
8696 Rolfe Judd Architecture Ltd. - GF 08/12/97 15/12/97 o 8696
- ------------------------------------------------------------------------------------------------------------------------------------
8737 Rolfe Judd Architecture Ltd. - GF 08/12/97 15/12/97 o 8737
- ------------------------------------------------------------------------------------------------------------------------------------
====================================================================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
Totals for package 3700 Masonry Total number of snags 24
Irvine Whitlock Limited Number of snags uncleared, by Mace 24 by team 24
Number of overdue snags 24
</TABLE>
- --------------------------------------------------------------------------------
Mace Limited
25 February 1998 Page 1 m|a|c|e
<PAGE> 274
SNAGGING REPORT Report limited as follows MEPC - Petershill, London EC4
Packages 3700 - 3700 One Carter Lane
Status Only uncleared snags listed
<TABLE>
<CAPTION>
Nr Zone Floor Grid ref Type Description etc.
- ------------------------------------------------------------------------------------------------------------------------------------
Package 3700 Masonry Irvine Whitlock Limited
- ------------------------------------------------------------------------------------------------------------------------------------
====================================================================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Report totals Total number of snags 24
Number of snags uncleared, by Mace 24 by team 24
Number of overdue snags 24
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Key to work types
DQ Design Query
UW Unfinished Work
LD Latent defect
OW Outstanding works
IN Instructed works
DW Defective works
- --------------------------------------------------------------------------------
Mace Limited
25 February 1998 Page 2 m|a|c|e
<PAGE> 275
SNAGGING REPORT Report limited as follows MEPC - Petershill, London EC4
Packages 3800 - 3800 One Carter Lane
Status Only uncleared snags listed
<TABLE>
<CAPTION>
Nr Zone Floor Grid ref Type Description
- ------------------------------------------------------------------------------------------------------------------------------------
Package 3800 Drylining B. R. Hodgson Ltd
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
5384 Core A 2nd Floor Ext DW L.L plasterboard strips below skirting trim to be completed into
Lift 5 Reveals.
- ------------------------------------------------------------------------------------------------------------------------------------
5386 Core A 2nd Floor Ext DW Mastic to be completed generally to all vertical joints in
plasterboard L.L smoke seals.
- ------------------------------------------------------------------------------------------------------------------------------------
5390 Core A 2nd Floor Lobby DW HL Trim at top of plasterboard/concrete soffit-penetrations to be
filled with mastic.
- ------------------------------------------------------------------------------------------------------------------------------------
5397 Core A 2nd Floor Ext DW South Wall - Top angle to soffit and plasterboard to be completed
to South-East corner of core @ HL.
- ------------------------------------------------------------------------------------------------------------------------------------
5398 Core A 2nd Floor Ext DW Mastic to be completed to smoke seal and cladding slab panel (Bay
60).
- ------------------------------------------------------------------------------------------------------------------------------------
5400 Core A 2nd Floor Ext DW Top coat generally - All excess top coat/jointing to be removed
and minor marks made good.
- ------------------------------------------------------------------------------------------------------------------------------------
5405 Core D 2nd Floor Ext DW Mastic to deflection head @ H.L. above Lift 1 (West door - north
bank.) to be cut back and made good.
- ------------------------------------------------------------------------------------------------------------------------------------
5419 Core B 2nd Floor Ext DW Shadow gap to RHS of double doors in electrical riser -
un-acceptable - to be improved.
- ------------------------------------------------------------------------------------------------------------------------------------
5489 Core A 3rd Floor Ext OW Smoke seal detail to be completed to the Lift 5 door reveal, once
lift ramp removed.
- ------------------------------------------------------------------------------------------------------------------------------------
5490 Core A 3rd Floor Ext DW Skirting junction to core A wall/bay 60 skirting, kicking out and
also skirting trim flexible and to be packed out.
- ------------------------------------------------------------------------------------------------------------------------------------
5491 Core A 3rd Floor Ext DW Skirting corner junction to south west core of core to be improved.
- ------------------------------------------------------------------------------------------------------------------------------------
5498 Core D 3rd Floor Ext DW Deflection head south of lifts east side - not completed @
external corner to be taken down and re-fixed flush with
plasterboard & mastic seal completed.
- ------------------------------------------------------------------------------------------------------------------------------------
5521 Core B 3rd Floor Ext DW Mastic above maple vaneer door @ HL RHS to be tidied.
- ------------------------------------------------------------------------------------------------------------------------------------
5546 Core A 1st Floor Lobby DW Dry riser wall - external corner adjacent to dry riser - running
out @ bottom
- ------------------------------------------------------------------------------------------------------------------------------------
5551 Core A 1st Floor Lobby DW Excess gap to MV architrave to be fitted (gap between MV and
p/board
- ------------------------------------------------------------------------------------------------------------------------------------
5580 Core A 1st Floor Ext DW Cladding panel bay 57 to be cleaned down also shadow gap not
consistent
- ------------------------------------------------------------------------------------------------------------------------------------
5614 Core A 1st Floor Ext DW Fire alarm glass to be fitted properly and plasterboard to be made
good
- ------------------------------------------------------------------------------------------------------------------------------------
5621 Core A 1st Floor Ext DW Smoke seal detail to be completed to lift 5 reveals once ramp
removed
- ------------------------------------------------------------------------------------------------------------------------------------
5649 Core A 1st Floor Ext DW South/East corner (adj to bay 60) - smoke seal not fixed and no
mastic - to be completed, also skirting lipping
- ------------------------------------------------------------------------------------------------------------------------------------
5658 Core C 1st Floor Ext 24 DW External corner NE of electrical riser at LL make good jointing to
skirting bead
- ------------------------------------------------------------------------------------------------------------------------------------
5659 Core D 1st Floor Ext DW Mastic/Painters mate to lift door frame and plaster board to all
four lifts
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Nr Originator Logged Action Overdue? Not by PC?
before Cleared by... Nr
- ------------------------------------------------------------------------------------------------------------------------------------
Package 3800 Drylining B. R. Hodgson Ltd
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
5384 Mace Limited - MPH 05/11/97 12/11/97 o 5384
- ------------------------------------------------------------------------------------------------------------------------------------
5386 Mace Limited - MPH 05/11/97 12/11/97 o 5386
- ------------------------------------------------------------------------------------------------------------------------------------
5390 Mace Limited - MPH 05/11/97 12/11/97 o 5390
- ------------------------------------------------------------------------------------------------------------------------------------
5397 Mace Limited - MPH 05/11/97 12/11/97 o 5397
- ------------------------------------------------------------------------------------------------------------------------------------
5398 Mace Limited - MPH 05/11/97 12/11/97 o 5398
- ------------------------------------------------------------------------------------------------------------------------------------
5400 Mace Limited - MPH 05/11/97 12/11/97 o 5400
- ------------------------------------------------------------------------------------------------------------------------------------
5405 Mace Limited - MPH 05/11/97 12/11/97 o 5405
- ------------------------------------------------------------------------------------------------------------------------------------
5419 Mace Limited - MPH 05/11/97 12/11/97 o 5419
- ------------------------------------------------------------------------------------------------------------------------------------
5489 Mace Limited - MPH 06/11/97 12/11/97 o 5489
- ------------------------------------------------------------------------------------------------------------------------------------
5490 Mace Limited - MPH 06/11/97 12/11/97 o 5490
- ------------------------------------------------------------------------------------------------------------------------------------
5491 Mace Limited - MPH 06/11/97 12/11/97 o 5491
- ------------------------------------------------------------------------------------------------------------------------------------
5498 Mace Limited - MPH 06/11/97 12/11/97 o 5498
- ------------------------------------------------------------------------------------------------------------------------------------
5521 Mace Limited - MPH 06/11/97 12/11/97 o 5521
- ------------------------------------------------------------------------------------------------------------------------------------
5546 Mace Limited - MPH 07/11/97 14/11/97 o 5546
- ------------------------------------------------------------------------------------------------------------------------------------
5551 Mace Limited - MPH 07/11/97 14/11/97 o 5551
- ------------------------------------------------------------------------------------------------------------------------------------
5580 Mace Limited - MPH 07/11/97 14/11/97 o 5580
- ------------------------------------------------------------------------------------------------------------------------------------
5614 Mace Limited - MPH 07/11/97 14/11/97 o 5614
- ------------------------------------------------------------------------------------------------------------------------------------
5621 Mace Limited - MPH 07/11/97 14/11/97 o 5621
- ------------------------------------------------------------------------------------------------------------------------------------
5649 Mace Limited - MPH 07/11/97 14/11/97 o 5649
- ------------------------------------------------------------------------------------------------------------------------------------
5658 Mace Limited - MPH 07/11/97 14/11/97 o 5658
- ------------------------------------------------------------------------------------------------------------------------------------
5659 Mace Limited - MPH 07/11/97 14/11/97 o 5659
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
Mace Limited
25 February 1998 Page 1 m|a|c|e
<PAGE> 276
SNAGGING REPORT Report limited as follows MEPC - Petershill, London EC4
Packages 3800 - 3800 One Carter Lane
Status Only uncleared snags listed
<TABLE>
<CAPTION>
Nr Zone Floor Grid ref Type Description
- ------------------------------------------------------------------------------------------------------------------------------------
Package 3800 Drylining B. R. Hodgson Ltd
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
5673 Core D 1st Floor Ext DW Mastic joint to vertical strips of plasterboard under skirting
trim
- ------------------------------------------------------------------------------------------------------------------------------------
5674 Core D 1st Floor Ext DW Internal corner to north wall/entrance hall wall to be improved
- ------------------------------------------------------------------------------------------------------------------------------------
5687 Core D 1st Floor Ext DW External corner to lift/toilet core west side - further rubbing
down required
- ------------------------------------------------------------------------------------------------------------------------------------
5701 Core B 1st Floor Ext DW Double door electrical riser - external corner and shadow gap @
LL-RHS - jointing to be improved also skirting detail and smoke
seal detail under door to be improved - mastic, glue etc. to
skirting trim
- ------------------------------------------------------------------------------------------------------------------------------------
6395 Core A All General OW Lobby - Deflection head detail to north wall where soffit sets
back from p/board leaving a void to be completed (i.e., void filled
and deflection angle fitted)
- ------------------------------------------------------------------------------------------------------------------------------------
6396 Core C All General OW Lobby - Deflection head detail to north wall where soffit sets
back from p/board leaving a void to be completed (i.e., void filled
and deflection angle fitted)
- ------------------------------------------------------------------------------------------------------------------------------------
6407 Core A 2nd Floor DW Lobby - Quality of sealant around pipe penetrations adj to
deflection head, not acceptable
- ------------------------------------------------------------------------------------------------------------------------------------
6411 Core C 1st Floor DW External - Make good required to plasterboard to pyro fire alarm
cables
- ------------------------------------------------------------------------------------------------------------------------------------
6417 Core B Lower Grou DW External - sealing to pipe penetrations - generally
- ------------------------------------------------------------------------------------------------------------------------------------
6420 Core C Lower Grou OW Lobby - general completion of all penetrations through wall and
deflection head and core sealing to be completed
- ------------------------------------------------------------------------------------------------------------------------------------
7483 Core A 5th Floor Core DW Remove radiator and complete plasterboard behind radiator
- ------------------------------------------------------------------------------------------------------------------------------------
7494 Core A 5th Floor Core DW Hole in plasterboard at junction of 5th floor landing slab and
shaftwall to be made good
- ------------------------------------------------------------------------------------------------------------------------------------
7507 Core A 4th Floor Lobby DW Back to back box to be completed
- ------------------------------------------------------------------------------------------------------------------------------------
7521 Core A 4th Floor Core DW Make good cladding wall plasterboard between wall and stringer of
stairs
- ------------------------------------------------------------------------------------------------------------------------------------
7541 Core A 3rd Floor Lobby DW Deflection head junction completed to south wall
- ------------------------------------------------------------------------------------------------------------------------------------
7601 Core A 1st Floor Lobby DW Deflection head detail to be completed to north wall
- ------------------------------------------------------------------------------------------------------------------------------------
7633 Core A Ground Lobby DW Fire rated mastic to junction box in SW of lobby unacceptable
- ------------------------------------------------------------------------------------------------------------------------------------
7637 Core A Ground Lobby DW North Wall - deflection headwork to be completed
- ------------------------------------------------------------------------------------------------------------------------------------
7675 Core C All General DW 1/2 Landing - North wall - strip running straight down to 3rd floor
level, junction at landing level to be rubbed down and made good
- ------------------------------------------------------------------------------------------------------------------------------------
7781 Core B 5th Floor Lobby DW Lobby adjacent to ceiling - gap evident to plasterboard wall and
ceiling. Shadow trim
- ------------------------------------------------------------------------------------------------------------------------------------
7787 Core B 5th Floor Lobby DW Ceiling trim adjacent to MV door (opposite male toilet) wall bowed
to be dubbed out gap between trim and board
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Nr Originator Logged Action Overdue? Not by PC?
before Cleared by... Nr
- ------------------------------------------------------------------------------------------------------------------------------------
Package 3800 Drylining B. R. Hodgson Ltd
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
5673 Mace Limited - MPH 07/11/97 14/11/97 o 5673
- ------------------------------------------------------------------------------------------------------------------------------------
5674 Mace Limited - MPH 07/11/97 14/11/97 o 5674
- ------------------------------------------------------------------------------------------------------------------------------------
5687 Mace Limited - MPH 07/11/97 14/11/97 o 5687
- ------------------------------------------------------------------------------------------------------------------------------------
5701 Mace Limited - MPH 07/11/97 14/11/97 o 5701
- ------------------------------------------------------------------------------------------------------------------------------------
6395 Corporation of London - RJ 19/11/97 25/11/97 o 6395
- ------------------------------------------------------------------------------------------------------------------------------------
6396 Corporation of London - RJ 19/11/97 25/11/97 o 6396
- ------------------------------------------------------------------------------------------------------------------------------------
6407 Corporation of London - RJ 19/11/97 25/11/97 o 6407
- ------------------------------------------------------------------------------------------------------------------------------------
6411 Corporation of London - RJ 19/11/97 25/11/97 o 6411
- ------------------------------------------------------------------------------------------------------------------------------------
6417 Corporation of London - RJ 19/11/97 25/11/97 o 6417
- ------------------------------------------------------------------------------------------------------------------------------------
6420 Corporation of London - RJ 19/11/97 25/11/97 o 6420
- ------------------------------------------------------------------------------------------------------------------------------------
7483 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7483
- ------------------------------------------------------------------------------------------------------------------------------------
7494 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7494
- ------------------------------------------------------------------------------------------------------------------------------------
7507 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7507
- ------------------------------------------------------------------------------------------------------------------------------------
7521 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7521
- ------------------------------------------------------------------------------------------------------------------------------------
7541 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7541
- ------------------------------------------------------------------------------------------------------------------------------------
7601 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7601
- ------------------------------------------------------------------------------------------------------------------------------------
7633 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7633
- ------------------------------------------------------------------------------------------------------------------------------------
7637 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7637
- ------------------------------------------------------------------------------------------------------------------------------------
7675 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7675
- ------------------------------------------------------------------------------------------------------------------------------------
7781 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7781
- ------------------------------------------------------------------------------------------------------------------------------------
7787 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7787
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
Mace Limited
25 February 1998 Page 2 m|a|c|e
<PAGE> 277
SNAGGING REPORT Report limited as follows MEPC - Petershill, London EC4
Packages 3800 - 3800 One Carter Lane
Status Only uncleared snags listed
<TABLE>
<CAPTION>
Nr Zone Floor Grid ref Type Description
- ------------------------------------------------------------------------------------------------------------------------------------
Package 3800 Drylining B. R. Hodgson Ltd
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
7794 Core B 5th Floor Lobby DW Ceiling trim - gap between plasterboard and trim - generally to be
made good/completed. Also mitres poor to be improved
- ------------------------------------------------------------------------------------------------------------------------------------
8016 Core A Ground Core DW (GF-LGF Flight) - South dry-lining to be continued from HL between
cladding/stair up to 1st floor level.
- ------------------------------------------------------------------------------------------------------------------------------------
8017 Core A Ground Core DW (GF-LGF Flight) - Aris to trim onto door to be improved (both
sides of the door.)
- ------------------------------------------------------------------------------------------------------------------------------------
8019 Core A Ground Core DW (GF-LGF Flight) - RHS of door - plasterboard return to underside
of the door to be improved - currently not flush and jointing very
un-tidy. Flush edges to be formed.
- ------------------------------------------------------------------------------------------------------------------------------------
8026 Core A Ground Core DW (GF-LGF Flight) - SE internal corner poor to be made good.
- ------------------------------------------------------------------------------------------------------------------------------------
8030 Core A Ground Core DW (GF-LGF Flight) - SW arris to centre well wall to be improved.
- ------------------------------------------------------------------------------------------------------------------------------------
8034 Core A Lower Grou Core DW Aris to external corner - LHS of lobby door to be improved.
- ------------------------------------------------------------------------------------------------------------------------------------
8038 Core A Lower Grou Core DW HL bulkhead ceiling built in-correctly - should cover the fire
alarm cable and also the MG around the dry riser pipe
- ------------------------------------------------------------------------------------------------------------------------------------
8054 Core A Lower Grou Lobby DW Plasterboard to be continued above smoke vent door.
- ------------------------------------------------------------------------------------------------------------------------------------
8065 Core A Lower Grou Core DW Internal corner to 1/2 landing (SE & SW) to be improved -
especially @ handrail level
- ------------------------------------------------------------------------------------------------------------------------------------
8068 Internal 5th Floor Core A DW Firestopping to complete 2 nr. ducts above handrail
- ------------------------------------------------------------------------------------------------------------------------------------
8070 Internal 5th Floor Core A DW Review firestop mastic to top of walls/beams (quality)
- ------------------------------------------------------------------------------------------------------------------------------------
8253 Core C 4th Floor Lobby DW South wall steelwork fire proofing to be completed up to south
lobby wall
- ------------------------------------------------------------------------------------------------------------------------------------
8254 Core C 4th Floor Lobby DW Existing steelwork fire proofing to be T&J (as office area)
- ------------------------------------------------------------------------------------------------------------------------------------
8257 Core C 4th Floor Lobby DW Arris to shadow gap onto cladding (both sides) to be MG/improved.
LH detail currently un-acceptable
- ------------------------------------------------------------------------------------------------------------------------------------
8260 Core C 4th Floor Lobby DW Plasterboard junction and mastic junction onto firemans hatch to
be improved.
- ------------------------------------------------------------------------------------------------------------------------------------
8268 Core C All General DW Lobbys - Fire rating to concrete slab/screed and plasterboard to
be improved - excessive gaps evident.
- ------------------------------------------------------------------------------------------------------------------------------------
8329 Lifts Gene All DW Tidy junction of architrave and plasterboard reveal.
- ------------------------------------------------------------------------------------------------------------------------------------
8796 Core A All Lift 5 DW Complete plasterboard cants to internal Lift shaft & sealant works
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Nr Originator Logged Action Overdue? Not by PC?
Before Cleared by... Nr
- ------------------------------------------------------------------------------------------------------------------------------------
Package 3800 Drylining B. R. Hodgson Ltd
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
7794 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7794
- ------------------------------------------------------------------------------------------------------------------------------------
8016 Rolfe Judd Architecture Ltd. - KG/G 05/12/97 12/12/97 o 8016
- ------------------------------------------------------------------------------------------------------------------------------------
8017 Rolfe Judd Architecture Ltd. - KG/G 05/12/97 12/12/97 o 8017
- ------------------------------------------------------------------------------------------------------------------------------------
8019 Rolfe Judd Architecture Ltd. - KG/G 05/12/97 12/12/97 o 8019
- ------------------------------------------------------------------------------------------------------------------------------------
8026 Rolfe Judd Architecture Ltd. - KG/G 05/12/97 12/12/97 o 8026
- ------------------------------------------------------------------------------------------------------------------------------------
8030 Rolfe Judd Architecture Ltd. - KG/G 05/12/97 12/12/97 o 8030
- ------------------------------------------------------------------------------------------------------------------------------------
8034 Rolfe Judd Architecture Ltd. - KG/G 05/12/97 12/12/97 o 8034
- ------------------------------------------------------------------------------------------------------------------------------------
8038 Rolfe Judd Architecture Ltd. - KG/G 05/12/97 12/12/97 o 8038
- ------------------------------------------------------------------------------------------------------------------------------------
8054 Rolfe Judd Architecture Ltd. - KG/G 05/12/97 12/12/97 o 8054
- ------------------------------------------------------------------------------------------------------------------------------------
8065 Rolfe Judd Architecture Ltd. - KG/G 05/12/97 12/12/97 o 8065
- ------------------------------------------------------------------------------------------------------------------------------------
8068 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 8068
- ------------------------------------------------------------------------------------------------------------------------------------
8070 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 8070
- ------------------------------------------------------------------------------------------------------------------------------------
8253 Rolfe Judd Ltd - KG 05/12/97 12/12/97 o 8253
- ------------------------------------------------------------------------------------------------------------------------------------
8254 Rolfe Judd Ltd - KG 05/12/97 12/12/97 o 8254
- ------------------------------------------------------------------------------------------------------------------------------------
8257 Rolfe Judd Ltd - KG 05/12/97 12/12/97 o 8257
- ------------------------------------------------------------------------------------------------------------------------------------
8260 Rolfe Judd Ltd - KG 05/12/97 12/12/97 o 8260
- ------------------------------------------------------------------------------------------------------------------------------------
8268 Rolfe Judd Ltd - KG 05/12/97 12/12/97 o 8268
- ------------------------------------------------------------------------------------------------------------------------------------
8329 Rolfe Judd Ltd - AP 05/12/97 12/12/97 o 8329
- ------------------------------------------------------------------------------------------------------------------------------------
8796 Mace Limited - MPH 08/12/97 15/12/97 o 8796
- ------------------------------------------------------------------------------------------------------------------------------------
====================================================================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
Totals for package 3800 Drylining Total number of snags 61
B. R. Hodgson Ltd Number of snags uncleared, by Mace 61 by team 61
Number of overdue snags 61
</TABLE>
- --------------------------------------------------------------------------------
Mace Limited
25 February 1998 Page 3 m|a|c|e
<PAGE> 278
SNAGGING REPORT Report limited as follows MEPC - Petershill, London EC4
Packages 3800 - 3800 One Carter Lane
Status Only uncleared snags listed
<TABLE>
<CAPTION>
Nr Zone Floor Grid ref Type Description Originator Logged Action Overdue? Not by PC?
before Cleared by... Nr
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Package 3800 Drylining B. R. Hodgson Ltd
- ------------------------------------------------------------------------------------------------------------------------------------
====================================================================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Report totals Total number of snags 61
Number of snags uncleared, by Mace 61 by team 61
Number of overdue snags 61
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Key to work types
DQ Design Query
UW Unfinished Work
LD Latent defect
OW Outstanding works
IN Instructed works
DW Defective works
- --------------------------------------------------------------------------------
Mace Limited
25 February 1998 Page 4 m|a|c|e
<PAGE> 279
SNAGGING REPORT Report limited as follows MEPC - Petershill, London EC4
Packages 4200 - 4200 One Carter Lane
Status Only uncleared snags listed
<TABLE>
<CAPTION>
Nr Zone Floor Grid ref Type Description
- ------------------------------------------------------------------------------------------------------------------------------------
Package 4200 Toilet Fit-out H L Smith Construction Limited
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
3363 South Corr Basement Door B53 OW Gap above Door B53 (leading into steps up to ramp) to be
fitted/fire stopped
- ------------------------------------------------------------------------------------------------------------------------------------
4505 North Corr Basement OW Doors dirty and damage occurring, paint quality to be improved.
- ------------------------------------------------------------------------------------------------------------------------------------
4700 Boiler Rm Basement OW Access Panel adj to west door to be fitted
- ------------------------------------------------------------------------------------------------------------------------------------
4771 North Corr Basement Door B16 OW North Corridor (painted area) - Packers for the architrave to be
removed and painters mate to be applied to the architrave (gap
between blockwork and architrave very evident.)
- ------------------------------------------------------------------------------------------------------------------------------------
5199 Toilet(S) Basement DW External lock to be replaced - damaged.
- ------------------------------------------------------------------------------------------------------------------------------------
5413 Core B 2nd Floor Ext DW Single door to electrical riser - door warped and does not sit
flush within the frame.
- ------------------------------------------------------------------------------------------------------------------------------------
5415 Core B 2nd Floor Ext DW Double doors to electrical riser warped and does not sit flush
within the frame.
- ------------------------------------------------------------------------------------------------------------------------------------
5422 Core C 2nd Floor Ext DW Double doors to electrical riser - do not sit flush when closed
and locked.
- ------------------------------------------------------------------------------------------------------------------------------------
5508 Core D 3rd Floor Ext DW Male toilet wall @ HL mastic joint to perimeter of infill board,
also excess mastic tidied generally.
- ------------------------------------------------------------------------------------------------------------------------------------
5689 Core D 1st Floor Ext DW South-east external corner to be made good
- ------------------------------------------------------------------------------------------------------------------------------------
5713 Core C 2nd Floor External DW Elec riser - LH leaf not sitting flush @ central hinges
- ------------------------------------------------------------------------------------------------------------------------------------
5714 Core C 2nd Floor External DW Elec riser - Frame cracked @ joint-bottom LHS
- ------------------------------------------------------------------------------------------------------------------------------------
5819 Disabled Lower Grou DW Difusser (above toilet) - both ends of difusser not square with
central section.
- ------------------------------------------------------------------------------------------------------------------------------------
5832 Disabled Lower Grou DW External architrave - french polishing to be improved to pin holes
& chips to architrave reveals onto frame.
- ------------------------------------------------------------------------------------------------------------------------------------
5849 Disabled Ground DW Access panel (above toilet) - Top and top RHS is proud of adj
tiling and dificult to open - improve.
- ------------------------------------------------------------------------------------------------------------------------------------
5956 Core A 3rd Floor Lobby DW 1/4 Core Door: Damage to door - attempt @ making good adj to top
lock - made good to an acceptable standard or replaced
- ------------------------------------------------------------------------------------------------------------------------------------
5964 Core A 3rd Floor Lobby DW MV Door: Damage to architrave reveal approx 1m from slab
- ------------------------------------------------------------------------------------------------------------------------------------
5979 Core B 3rd Floor Lobby DW Core Door (Both 1/4 and main): door to be rubbed down and
repainted - excessive damage/marks
- ------------------------------------------------------------------------------------------------------------------------------------
5982 Core B 3rd Floor Lobby DW MV Door: Final polishing required - especially to mitre joints in
architrave
- ------------------------------------------------------------------------------------------------------------------------------------
5986 Core B 3rd Floor Lobby DW Double door (electrical): Top lock very stiff to close (LH door)
- ------------------------------------------------------------------------------------------------------------------------------------
5999 Core C 3rd Floor Lobby DW Core Door (painted): door to be cleaned down inside core and MG
and repainted
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Nr Originator Logged Action Overdue? Not by PC?
before Cleared by... Nr
- ------------------------------------------------------------------------------------------------------------------------------------
Package 4200 Toilet Fit-out H L Smith Construction Limited
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
3363 Mace Limited - MPH 29/09/97 06/10/97 o 3363
- ------------------------------------------------------------------------------------------------------------------------------------
4505 Rolfe Judd Architecture Ltd. - GF 13/10/97 20/10/97 o 4505
- ------------------------------------------------------------------------------------------------------------------------------------
4700 Mace Limited - MPH 16/10/97 23/10/97 o 4700
- ------------------------------------------------------------------------------------------------------------------------------------
4771 Mace Limited - MPH 17/10/97 23/10/97 o 4771
- ------------------------------------------------------------------------------------------------------------------------------------
5199 Mace Limited - MPH 02/11/97 07/11/97 o 5199
- ------------------------------------------------------------------------------------------------------------------------------------
5413 Mace Limited - MPH 05/11/97 12/11/97 o 5413
- ------------------------------------------------------------------------------------------------------------------------------------
5415 Mace Limited - MPH 05/11/97 12/11/97 o 5415
- ------------------------------------------------------------------------------------------------------------------------------------
5422 Mace Limited - MPH 05/11/97 12/11/97 o 5422
- ------------------------------------------------------------------------------------------------------------------------------------
5508 Mace Limited - MPH 06/11/97 12/11/97 o 5508
- ------------------------------------------------------------------------------------------------------------------------------------
5689 Mace Limited - MPH 07/11/97 14/11/97 o 5689
- ------------------------------------------------------------------------------------------------------------------------------------
5713 Mace Limited - MPH 07/11/97 14/11/97 o 5713
- ------------------------------------------------------------------------------------------------------------------------------------
5714 Mace Limited - MPH 07/11/97 14/11/97 o 5714
- ------------------------------------------------------------------------------------------------------------------------------------
5819 Mace Limited - MPH 12/11/97 19/11/97 o 5819
- ------------------------------------------------------------------------------------------------------------------------------------
5832 Mace Limited - MPH 12/11/97 19/11/97 o 5832
- ------------------------------------------------------------------------------------------------------------------------------------
5849 Mace Limited - MPH 13/11/97 19/11/97 o 5849
- ------------------------------------------------------------------------------------------------------------------------------------
5956 Mace Limited - MPH 13/11/97 20/11/97 o 5956
- ------------------------------------------------------------------------------------------------------------------------------------
5964 Mace Limited - MPH 13/11/97 20/11/97 o 5964
- ------------------------------------------------------------------------------------------------------------------------------------
5979 Mace Limited - MPH 13/11/97 20/11/97 o 5979
- ------------------------------------------------------------------------------------------------------------------------------------
5982 Mace Limited - MPH 13/11/97 20/11/97 o 5982
- ------------------------------------------------------------------------------------------------------------------------------------
5986 Mace Limited - MPH 13/11/97 20/11/97 o 5986
- ------------------------------------------------------------------------------------------------------------------------------------
5999 Mace Limited - MPH 13/11/97 20/11/97 o 5999
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
Mace Limited
25 February 1998 Page 1 m|a|c|e
<PAGE> 280
SNAGGING REPORT Report limited as follows MEPC - Petershill, London EC4
Packages 4200 - 4200 One Carter Lane
Status Only uncleared snags listed
<TABLE>
<CAPTION>
Nr Zone Floor Grid ref Type Description
- ------------------------------------------------------------------------------------------------------------------------------------
Package 4200 Toilet Fit-out H L Smith Construction Limited
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
6005 Core C 3rd Floor Lobby DW Core Door (painted): Push plate - dirty and scratched - excessive
give evident - MG or replace
- ------------------------------------------------------------------------------------------------------------------------------------
6010 Core C 3rd Floor Lobby DW MV door: Push plate to be cleaned down
- ------------------------------------------------------------------------------------------------------------------------------------
6021 Core C 3rd Floor Lobby DW Double Doors: Chip to bottom LH door
- ------------------------------------------------------------------------------------------------------------------------------------
6023 Core C 1st Floor DW Core Door (painted): Core side - RHS @ HL - architrave damaged to
be made good
- ------------------------------------------------------------------------------------------------------------------------------------
6028 Core C 1st Floor DW Core Door (painted): All scratches and marks to be made good and
painted
- ------------------------------------------------------------------------------------------------------------------------------------
6029 Core C 1st Floor DW Core Door (painted): Damage to top of door - side above top hinge
(lobby side)
- ------------------------------------------------------------------------------------------------------------------------------------
6037 Core C 1st Floor DW Mech Door: LHS frame not flush with drylining
- ------------------------------------------------------------------------------------------------------------------------------------
6040 Core C 1st Floor DW Mech Door: Internal mastic seal to drylining and door frame -
mastic to be made good - packers cut back and mastic made good
- ------------------------------------------------------------------------------------------------------------------------------------
6045 Core C 1st Floor DW Electrical Double Doors: Door not flush within the frame - centre
hinge pertruding
- ------------------------------------------------------------------------------------------------------------------------------------
6053 Core B 1st Floor DW Core Door (Painted): Chips to be made good, adj to lock side of
door
- ------------------------------------------------------------------------------------------------------------------------------------
6055 Core B 1st Floor DW Core Door (Painted): Bottom RHS of door - chipped by frame
packer-packer cut back and door MG
- ------------------------------------------------------------------------------------------------------------------------------------
6089 Core B 1st Floor DW Single Electrical Door: Door warped @ HL (LHS above lock)
- ------------------------------------------------------------------------------------------------------------------------------------
6174 Core A Ground DW MV Door: Marks and indents to be made good to MV over panel and
head of MV door
- ------------------------------------------------------------------------------------------------------------------------------------
6177 Core A Ground DW MV Door: Filling and polishing of mitre architrave to be improved
- ------------------------------------------------------------------------------------------------------------------------------------
6185 Core A Ground DW Mechanical Riser: Lock very stiff to door - Ease
- ------------------------------------------------------------------------------------------------------------------------------------
6196 Core B Ground DW MV Door: Scratch to architrave - LHS @ LL
- ------------------------------------------------------------------------------------------------------------------------------------
6198 Core B Ground DW MV Door: Chips to head of door
- ------------------------------------------------------------------------------------------------------------------------------------
6200 Core B Ground DW MV Door: french polishing to nail holes to be improved generally
- ------------------------------------------------------------------------------------------------------------------------------------
6205 Core B Ground DW Electrical Riser (Single Door): Door is warped - virtually
impossible to lock - Door is not acceptable
- ------------------------------------------------------------------------------------------------------------------------------------
6229 Core B Ground DW Mechanical Riser (inside riser): Packers cut away and mastic made
good
- ------------------------------------------------------------------------------------------------------------------------------------
6235 Core C Ground DW Core Door: 1/4 door top lock keep to be made good and paint removed
- ------------------------------------------------------------------------------------------------------------------------------------
6242 Core C Ground DW MV Door: Marks to door ajdacent to 'D' handle
- ------------------------------------------------------------------------------------------------------------------------------------
6246 Core C Ground DW MV Door: Marks to bottom RHS of door (office side)
- ------------------------------------------------------------------------------------------------------------------------------------
6248 Core C Ground DW MV Door: Chips to architrave reveals to be made good
- ------------------------------------------------------------------------------------------------------------------------------------
6254 Core C Ground DW Mechanical Riser: Packers to be cut back and mastic made good
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Nr Originator Logged Action Overdue? Not by PC?
before Cleared by... Nr
- ------------------------------------------------------------------------------------------------------------------------------------
Package 4200 Toilet Fit-out H L Smith Construction Limited
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
6005 Mace Limited - MPH 13/11/97 20/11/97 o 6005
- ------------------------------------------------------------------------------------------------------------------------------------
6010 Mace Limited - MPH 13/11/97 20/11/97 o 6010
- ------------------------------------------------------------------------------------------------------------------------------------
6021 Mace Limited - MPH 13/11/97 20/11/97 o 6021
- ------------------------------------------------------------------------------------------------------------------------------------
6023 Mace Limited - MPH 13/11/97 20/11/97 o 6023
- ------------------------------------------------------------------------------------------------------------------------------------
6028 Mace Limited - MPH 13/11/97 20/11/97 o 6028
- ------------------------------------------------------------------------------------------------------------------------------------
6029 Mace Limited - MPH 13/11/97 20/11/97 o 6029
- ------------------------------------------------------------------------------------------------------------------------------------
6037 Mace Limited - MPH 13/11/97 20/11/97 o 6037
- ------------------------------------------------------------------------------------------------------------------------------------
6040 Mace Limited - MPH 13/11/97 20/11/97 o 6040
- ------------------------------------------------------------------------------------------------------------------------------------
6045 Mace Limited - MPH 14/11/97 20/11/97 o 6045
- ------------------------------------------------------------------------------------------------------------------------------------
6053 Mace Limited - MPH 14/11/97 20/11/97 o 6053
- ------------------------------------------------------------------------------------------------------------------------------------
6055 Mace Limited - MPH 14/11/97 20/11/97 o 6055
- ------------------------------------------------------------------------------------------------------------------------------------
6089 Mace Limited - MPH 14/11/97 20/11/97 o 6089
- ------------------------------------------------------------------------------------------------------------------------------------
6174 Mace Limited - MPH 17/11/97 24/11/97 o 6174
- ------------------------------------------------------------------------------------------------------------------------------------
6177 Mace Limited - MPH 17/11/97 24/11/97 o 6177
- ------------------------------------------------------------------------------------------------------------------------------------
6185 Mace Limited - MPH 17/11/97 24/11/97 o 6185
- ------------------------------------------------------------------------------------------------------------------------------------
6196 Mace Limited - MPH 17/11/97 24/11/97 o 6196
- ------------------------------------------------------------------------------------------------------------------------------------
6198 Mace Limited - MPH 17/11/97 24/11/97 o 6198
- ------------------------------------------------------------------------------------------------------------------------------------
6200 Mace Limited - MPH 17/11/97 24/11/97 o 6200
- ------------------------------------------------------------------------------------------------------------------------------------
6205 Mace Limited - MPH 17/11/97 24/11/97 o 6205
- ------------------------------------------------------------------------------------------------------------------------------------
6229 Mace Limited - MPH 17/11/97 24/11/97 o 6229
- ------------------------------------------------------------------------------------------------------------------------------------
6235 Mace Limited - MPH 17/11/97 24/11/97 o 6235
- ------------------------------------------------------------------------------------------------------------------------------------
6242 Mace Limited - MPH 17/11/97 24/11/97 o 6242
- ------------------------------------------------------------------------------------------------------------------------------------
6246 Mace Limited - MPH 17/11/97 24/11/97 o 6246
- ------------------------------------------------------------------------------------------------------------------------------------
6248 Mace Limited - MPH 17/11/97 24/11/97 o 6248
- ------------------------------------------------------------------------------------------------------------------------------------
6254 Mace Limited - MPH 17/11/97 24/11/97 o 6254
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
Mace Limited
25 February 1998 Page 2 m|a|c|e
<PAGE> 281
SNAGGING REPORT Report limited as follows MEPC - Petershill, London EC4
Packages 4200 - 4200 One Carter Lane
Status Only uncleared snags listed
<TABLE>
<CAPTION>
Nr Zone Floor Grid ref Type Description
- ------------------------------------------------------------------------------------------------------------------------------------
Package 4200 Toilet Fit-out H L Smith Construction Limited
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
6257 Core C Ground OW Electrical Riser Concertina Doors: Locks to be fitted both set of
doors
- ------------------------------------------------------------------------------------------------------------------------------------
6579 General All DW Floor sealant un-acceptable to all toilets - sealant 'pooling' and
patchy to be improved.
- ------------------------------------------------------------------------------------------------------------------------------------
6589 Core A Lower Grou MV Door DW Nail holes to be made good and polished both inside core and
office area
- ------------------------------------------------------------------------------------------------------------------------------------
6595 Core A Lower Grou Mech. Door DW Frame to be cleaned down - make good to all chips/indents and
painted
- ------------------------------------------------------------------------------------------------------------------------------------
6596 Core A Lower Grou Mech. Door DW Cill to be made good and painted
- ------------------------------------------------------------------------------------------------------------------------------------
6603 Core B Lower Grou MV Door DW Final polish to be completed
- ------------------------------------------------------------------------------------------------------------------------------------
6611 Core B Lower Grou Double Elec DW Packers to be cut back to frame
- ------------------------------------------------------------------------------------------------------------------------------------
6617 Core B Lower Grou Mech. Door DW Metal air seal and cill level - damage to be replaced
- ------------------------------------------------------------------------------------------------------------------------------------
6623 Core B Lower Grou Mech. Door DW Packers to be cut away and mastic made good
- ------------------------------------------------------------------------------------------------------------------------------------
6636 Core C Lower Grou Mech. Door DW Shadow gap trim/door frame - paint cracked on R/H side to be made
good
- ------------------------------------------------------------------------------------------------------------------------------------
6759 Boiler Rm Basement Door B5 DW Door threshold to door onto plenum damaged - to be made good
- ------------------------------------------------------------------------------------------------------------------------------------
6826 Internal 1st Floor Core A DW Dirty marks/stains to lobby door
- ------------------------------------------------------------------------------------------------------------------------------------
6845 Tennants Basement Door B1 DW Door made good and painted
- ------------------------------------------------------------------------------------------------------------------------------------
6853 EL9 Plenu Basement Door B72 DW Cill to be cleaned made good and painted
- ------------------------------------------------------------------------------------------------------------------------------------
6854 EL9 Plenu Basement Door B72 DW Head of frame inside plenum to have a fire stop seal
- ------------------------------------------------------------------------------------------------------------------------------------
6856 EL9 Plenu Basement Door B72 DW Door cleaned made good and painted
- ------------------------------------------------------------------------------------------------------------------------------------
6857 L.V. Room Basement Door B70 DW Both doors to be cleaned down, made good, and paint touched up
- ------------------------------------------------------------------------------------------------------------------------------------
6864 L.V. Room Basement Door B69 DW Chips, indents to door and frame to be made good and repainted
- ------------------------------------------------------------------------------------------------------------------------------------
6874 Plant - 4 Basement Door B67 DW Cill - plant on cill damaged, to be made good or replaced
- ------------------------------------------------------------------------------------------------------------------------------------
6875 Plant - 4 Basement Door B67 DW Door to be cleaned down, made good, and painted where required
- ------------------------------------------------------------------------------------------------------------------------------------
6879 Plant - 4 Basement Door B62 DW Frame and door to be cleaned down, made good, and painted
- ------------------------------------------------------------------------------------------------------------------------------------
6883 Plant - 4 Basement Door B63 DW Plenum side - fire stopping between head and door, and smoke vent
- ------------------------------------------------------------------------------------------------------------------------------------
6884 Plant - 4 Basement Door B63 DW Cill - damage to cill plant - to be made good or replaced
- ------------------------------------------------------------------------------------------------------------------------------------
6885 Plant - 4 Basement Door B63 DW Door cleaned down - made good and re-painted (if required)
- ------------------------------------------------------------------------------------------------------------------------------------
6900 South Corr Basement Door B54 DW Door stops to be fitted
- ------------------------------------------------------------------------------------------------------------------------------------
6908 South Corr Basement Door B51 DW Chips/indents made good and re-painted
- ------------------------------------------------------------------------------------------------------------------------------------
6909 South Corr Basement Door B51 DW MG to be improved
- ------------------------------------------------------------------------------------------------------------------------------------
6914 Restaurant Basement Door B49 DW Signage not fitted
- ------------------------------------------------------------------------------------------------------------------------------------
6915 Restaurant Basement Door B49 DW Chips/indents/screw holes to be made good and paint touched up
- ------------------------------------------------------------------------------------------------------------------------------------
6918 Restaurant Basement Door B49 DW Chips to head of frame to be made good and painted
- ------------------------------------------------------------------------------------------------------------------------------------
6926 Loading B Basement Door B50 DW General make good and touch up of paintwork
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
<CAPTION>
Nr Originator Logged Action Overdue? Not by PC?
before Cleared by... Nr
- ------------------------------------------------------------------------------------------------------------------------------------
Package 4200 Toilet Fit-out H L Smith Construction Limited
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
6257 Mace Limited - MPH 17/11/97 24/11/97 o 6257
- ------------------------------------------------------------------------------------------------------------------------------------
6579 Rolfe Judd Architecture Ltd. - GF 21/11/97 28/11/97 o 6579
- ------------------------------------------------------------------------------------------------------------------------------------
6589 Mace Limited - MPH 23/11/97 01/12/97 o 6589
- ------------------------------------------------------------------------------------------------------------------------------------
6595 Mace Limited - MPH 23/11/97 01/12/97 o 6595
- ------------------------------------------------------------------------------------------------------------------------------------
6596 Mace Limited - MPH 23/11/97 01/12/97 o 6596
- ------------------------------------------------------------------------------------------------------------------------------------
6603 Mace Limited - MPH 23/11/97 01/12/97 o 6603
- ------------------------------------------------------------------------------------------------------------------------------------
6611 Mace Limited - MPH 23/11/97 01/12/97 o 6611
- ------------------------------------------------------------------------------------------------------------------------------------
6617 Mace Limited - MPH 23/11/97 01/12/97 o 6617
- ------------------------------------------------------------------------------------------------------------------------------------
6623 Mace Limited - MPH 23/11/97 01/12/97 o 6623
- ------------------------------------------------------------------------------------------------------------------------------------
6636 Mace Limited - MPH 23/11/97 01/12/97 o 6636
- ------------------------------------------------------------------------------------------------------------------------------------
6759 Mace Limited - MPH 25/11/97 02/12/97 o 6759
- ------------------------------------------------------------------------------------------------------------------------------------
6826 Rolfe Judd Architecture Ltd. - GF 25/11/97 02/12/97 o 6826
- ------------------------------------------------------------------------------------------------------------------------------------
6845 Mace Limited - MPH 27/11/97 04/12/97 o 6845
- ------------------------------------------------------------------------------------------------------------------------------------
6853 Mace Limited - MPH 27/11/97 04/12/97 o 6853
- ------------------------------------------------------------------------------------------------------------------------------------
6854 Mace Limited - MPH 27/11/97 04/12/97 o 6854
- ------------------------------------------------------------------------------------------------------------------------------------
6856 Mace Limited - MPH 27/11/97 04/12/97 o 6856
- ------------------------------------------------------------------------------------------------------------------------------------
6857 Mace Limited - MPH 27/11/97 04/12/97 o 6857
- ------------------------------------------------------------------------------------------------------------------------------------
6864 Mace Limited - MPH 27/11/97 04/12/97 o 6864
- ------------------------------------------------------------------------------------------------------------------------------------
6874 Mace Limited - MPH 27/11/97 04/12/97 o 6874
- ------------------------------------------------------------------------------------------------------------------------------------
6875 Mace Limited - MPH 27/11/97 04/12/97 o 6875
- ------------------------------------------------------------------------------------------------------------------------------------
6879 Mace Limited - MPH 27/11/97 04/12/97 o 6879
- ------------------------------------------------------------------------------------------------------------------------------------
6883 Mace Limited - MPH 27/11/97 04/12/97 o 6883
- ------------------------------------------------------------------------------------------------------------------------------------
6884 Mace Limited - MPH 27/11/97 04/12/97 o 6884
- ------------------------------------------------------------------------------------------------------------------------------------
6885 Mace Limited - MPH 27/11/97 04/12/97 o 6885
- ------------------------------------------------------------------------------------------------------------------------------------
6900 Mace Limited - MPH 27/11/97 04/12/97 o 6900
- ------------------------------------------------------------------------------------------------------------------------------------
6908 Mace Limited - MPH 27/11/97 04/12/97 o 6908
- ------------------------------------------------------------------------------------------------------------------------------------
6909 Mace Limited - MPH 27/11/97 04/12/97 o 6909
- ------------------------------------------------------------------------------------------------------------------------------------
6914 Mace Limited - MPH 27/11/97 04/12/97 o 6914
- ------------------------------------------------------------------------------------------------------------------------------------
6915 Mace Limited - MPH 27/11/97 04/12/97 o 6915
- ------------------------------------------------------------------------------------------------------------------------------------
6918 Mace Limited - MPH 27/11/97 04/12/97 o 6918
- ------------------------------------------------------------------------------------------------------------------------------------
6926 Mace Limited - MPH 27/11/97 04/12/97 o 6926
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
Mace Limited
25 February 1998 Page 3 m|a|c|e
<PAGE> 282
SNAGGING REPORT Report limited as follows MEPC - Petershill, London EC4
Packages 4200 - 4200 One Carter Lane
Status Only uncleared snags listed
<TABLE>
<CAPTION>
Nr Zone Floor Grid ref Type Description
- ------------------------------------------------------------------------------------------------------------------------------------
Package 4200 Toilet Fit-out H L Smith Construction Limited
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
6931 Core A Basement Door B40 DW Core side-to LH mitre to be improved
- ------------------------------------------------------------------------------------------------------------------------------------
6932 Core A Basement Door B40 DW Chips/indents to be made good and painted
- ------------------------------------------------------------------------------------------------------------------------------------
6934 Core A Basement Door B41 DW Paintwork quality to head of door - un-acceptable
- ------------------------------------------------------------------------------------------------------------------------------------
6935 Core A Basement Door B41 DW End of door - (adj to push plate) to be made good and painted
- ------------------------------------------------------------------------------------------------------------------------------------
6936 Core A Basement Door B41 DW Chips and indents generally
- ------------------------------------------------------------------------------------------------------------------------------------
6940 Plant - 1 Basement Door B28 DW Signage to be completed
- ------------------------------------------------------------------------------------------------------------------------------------
6942 Plant - 1 Basement Door B28 DW General chips, indents - MG and painted
- ------------------------------------------------------------------------------------------------------------------------------------
6945 Plant - 1 Basement Door B30 DW Fire seal strips damaged
- ------------------------------------------------------------------------------------------------------------------------------------
6949 Plant - 1 Basement Door B30 DW Mitre to top RHS (corridor side) to be improved
- ------------------------------------------------------------------------------------------------------------------------------------
6952 Cleaners Basement Door B18 DW Damage to door RHS of 'D' handle
- ------------------------------------------------------------------------------------------------------------------------------------
6953 Cleaners Basement Door B18 DW End of door - paint quality poor, also lump in door adj to top of
push plate
- ------------------------------------------------------------------------------------------------------------------------------------
6958 LMR - B Basement Door B19 DW (Inside LMR) top LH architrave - cut in-accurately - to be made
good
- ------------------------------------------------------------------------------------------------------------------------------------
6969 EL 12 Plen Basement Door B3 DW Screw holes make good to be improved
- ------------------------------------------------------------------------------------------------------------------------------------
6970 EL 12 Plen Basement Door B3 DW Final clean, make good and paintwork touch up
- ------------------------------------------------------------------------------------------------------------------------------------
7033 Internal Lower Grou Bay 16/17 DW Outer core - gap between architrave and board
- ------------------------------------------------------------------------------------------------------------------------------------
7035 Internal Lower Grou Bay 16/17 OW Core door - draft exluder missing from overpanel?
- ------------------------------------------------------------------------------------------------------------------------------------
7037 Internal Lower Grou Bay 16/17 DW Core door - damage/dents to door of architraves, nail fillings
visible
- ------------------------------------------------------------------------------------------------------------------------------------
7127 All Basement General DW Doors damaged - marked and dirty
- ------------------------------------------------------------------------------------------------------------------------------------
7129 All Basement General DW Holes in architrave to be filled
- ------------------------------------------------------------------------------------------------------------------------------------
7130 All Basement General DW Screw heads showing through
- ------------------------------------------------------------------------------------------------------------------------------------
7131 All Basement General DW Gap between blockwork and frame to be completed
- ------------------------------------------------------------------------------------------------------------------------------------
7174 Restauran Basement Door B50 DW Door to be cleaned down yellow packer and bottom of frame (LGS) to
be cut back, also made good and painted where required
- ------------------------------------------------------------------------------------------------------------------------------------
7175 Restauran Basement Door B50 DW Screw made good to be improved
- ------------------------------------------------------------------------------------------------------------------------------------
7176 North Corr Basement Door B11 DW Door to be cleaned, especially push plates, made good and painted
- ------------------------------------------------------------------------------------------------------------------------------------
7191 LMR A Basement Door B8 DW Door to be cleaned, made good and painted, especially mitres
- ------------------------------------------------------------------------------------------------------------------------------------
7202 Plant - 3 Basement Door B79 DW Making good required to end of door above lock
- ------------------------------------------------------------------------------------------------------------------------------------
7203 Plant - 3 Basement Door B79 DW Plenum side - RHS at LL - packer to be cut back and mastic made
good
- ------------------------------------------------------------------------------------------------------------------------------------
7205 Plant - 3 Basement Door B79 DW Cill to be cleaned down and made good and painted if required
- ------------------------------------------------------------------------------------------------------------------------------------
7206 Plant - 3 Basement Door B79 DW Mastic to be completed to cill on plantroom side
- ------------------------------------------------------------------------------------------------------------------------------------
7207 Plant - 3 Basement Door B79 DW To be fitted
- ------------------------------------------------------------------------------------------------------------------------------------
7220 Plant - 2 Basement Door 33 DW Painters mate required to blockwork/frame junction
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Nr Originator Logged Action Overdue? Not by PC?
before Cleared by... Nr
- ------------------------------------------------------------------------------------------------------------------------------------
Package 4200 Toilet Fit-out H L Smith Construction Limited
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
6931 Mace Limited - MPH 27/11/97 04/12/97 o 6931
- ------------------------------------------------------------------------------------------------------------------------------------
6932 Mace Limited - MPH 27/11/97 04/12/97 o 6932
- ------------------------------------------------------------------------------------------------------------------------------------
6934 Mace Limited - MPH 27/11/97 04/12/97 o 6934
- ------------------------------------------------------------------------------------------------------------------------------------
6935 Mace Limited - MPH 27/11/97 04/12/97 o 6935
- ------------------------------------------------------------------------------------------------------------------------------------
6936 Mace Limited - MPH 27/11/97 04/12/97 o 6936
- ------------------------------------------------------------------------------------------------------------------------------------
6940 Mace Limited - MPH 27/11/97 04/12/97 o 6940
- ------------------------------------------------------------------------------------------------------------------------------------
6942 Mace Limited - MPH 27/11/97 04/12/97 o 6942
- ------------------------------------------------------------------------------------------------------------------------------------
6945 Mace Limited - MPH 27/11/97 04/12/97 o 6945
- ------------------------------------------------------------------------------------------------------------------------------------
6949 Mace Limited - MPH 27/11/97 04/12/97 o 6949
- ------------------------------------------------------------------------------------------------------------------------------------
6952 Mace Limited - MPH 27/11/97 04/12/97 o 6952
- ------------------------------------------------------------------------------------------------------------------------------------
6953 Mace Limited - MPH 27/11/97 04/12/97 o 6953
- ------------------------------------------------------------------------------------------------------------------------------------
6958 Mace Limited - MPH 27/11/97 04/12/97 o 6958
- ------------------------------------------------------------------------------------------------------------------------------------
6969 Mace Limited - MPH 27/11/97 04/12/97 o 6969
- ------------------------------------------------------------------------------------------------------------------------------------
6970 Mace Limited - MPH 27/11/97 04/12/97 o 6970
- ------------------------------------------------------------------------------------------------------------------------------------
7033 Rolfe Judd Architecture Ltd - CT 28/11/97 05/12/97 o 7033
- ------------------------------------------------------------------------------------------------------------------------------------
7035 Rolfe Judd Architecture Ltd - CRT 28/11/97 05/12/97 o 7035
- ------------------------------------------------------------------------------------------------------------------------------------
7037 Rolfe Judd Architecture Ltd - CT 28/11/97 05/12/97 o 7037
- ------------------------------------------------------------------------------------------------------------------------------------
7127 Rolfe Judd Architecture Ltd - GF 30/11/97 08/12/97 o 7127
- ------------------------------------------------------------------------------------------------------------------------------------
7129 Rolfe Judd Architecture Ltd - GF 30/11/97 08/12/97 o 7129
- ------------------------------------------------------------------------------------------------------------------------------------
7130 Rolfe Judd Architecture Ltd - GF 30/11/97 08/12/97 o 7130
- ------------------------------------------------------------------------------------------------------------------------------------
7131 Rolfe Judd Architecture Ltd - GF 30/11/97 08/12/97 o 7131
- ------------------------------------------------------------------------------------------------------------------------------------
7174 Mace Limited - MPH 30/11/97 08/12/97 o 7174
- ------------------------------------------------------------------------------------------------------------------------------------
7175 Mace Limited - MPH 30/11/97 08/12/97 o 7175
- ------------------------------------------------------------------------------------------------------------------------------------
7176 Mace Limited - MPH 30/11/97 08/12/97 o 7176
- ------------------------------------------------------------------------------------------------------------------------------------
7191 Mace Limited - MPH 30/11/97 08/12/97 o 7191
- ------------------------------------------------------------------------------------------------------------------------------------
7202 Mace Limited - MPH 30/11/97 08/12/97 o 7202
- ------------------------------------------------------------------------------------------------------------------------------------
7203 Mace Limited - MPH 30/11/97 08/12/97 o 7203
- ------------------------------------------------------------------------------------------------------------------------------------
7205 Mace Limited - MPH 30/11/97 08/12/97 o 7205
- ------------------------------------------------------------------------------------------------------------------------------------
7206 Mace Limited - MPH 30/11/97 08/12/97 o 7206
- ------------------------------------------------------------------------------------------------------------------------------------
7207 Mace Limited - MPH 30/11/97 08/12/97 o 7207
- ------------------------------------------------------------------------------------------------------------------------------------
7220 Mace Limited - MPH 30/11/97 08/12/97 o 7220
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
Mace Limited
25 February 1998 Page 4 m|a|c|e
<PAGE> 283
SNAGGING REPORT Report limited as follows MEPC - Petershill, London EC4
Packages 4200 - 4200 One Carter Lane
Status Only uncleared snags listed
<TABLE>
<CAPTION>
Nr Zone Floor Grid ref Type Description
- ------------------------------------------------------------------------------------------------------------------------------------
Package 4200 Toilet Fit-out H L Smith Construction Limited
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
7221 Plant -2 Basement Access pan DW Rubs on frame - difficult to open, requires plaining
- ------------------------------------------------------------------------------------------------------------------------------------
7224 Plant -2 Basement Access Pan DW Paint quality improved to frame (adjacent hinges)
- ------------------------------------------------------------------------------------------------------------------------------------
7225 LMR C Basement Door 34 DW General clean down, made good and painted
- ------------------------------------------------------------------------------------------------------------------------------------
7226 LMR C Basement Door 34 DW Making good to frame to be improved to architrave (inside LMR)
adjacent to light switch
- ------------------------------------------------------------------------------------------------------------------------------------
7231 LMR C Basement Door 34 DW Door handle and lock scratched, make good
- ------------------------------------------------------------------------------------------------------------------------------------
7233 Post Rm Basement Door B36 DW Cill to be cleaned down, made good and painted if required
- ------------------------------------------------------------------------------------------------------------------------------------
7267 Internal Ground DW New filling to maple doors not acceptable
- ------------------------------------------------------------------------------------------------------------------------------------
7281 Toilet (S) Basement DW 2 Nr. holes behind radiator to be made good
- ------------------------------------------------------------------------------------------------------------------------------------
7310 Post Roo Basement DW Paint adjacent to cistern to be made good
- ------------------------------------------------------------------------------------------------------------------------------------
7358 Plenums Basement 1/A-H DW Door stop required to top of door from boiler room
- ------------------------------------------------------------------------------------------------------------------------------------
7473 Core A 5th Floor Lobby DW Lobby door architrave mitres to be improved both sides
- ------------------------------------------------------------------------------------------------------------------------------------
7474 Core A 5th Floor Lobby DW MV door - french polishing to be completed
- ------------------------------------------------------------------------------------------------------------------------------------
7480 Core A 5th Floor Core DW Lobby door (core side) make good around sign
- ------------------------------------------------------------------------------------------------------------------------------------
7509 Core A 4th Floor Lobby DW MV door - mitres to be filled, nail holes fitted and door and
french polishing generally
- ------------------------------------------------------------------------------------------------------------------------------------
7515 Core A 4th Floor Lobby DW Lobby door - make good around top lock in 1/4 door
- ------------------------------------------------------------------------------------------------------------------------------------
7531 Core A 3rd Floor Core DW Arris to door damaged - make good and paint
- ------------------------------------------------------------------------------------------------------------------------------------
7583 Core A 2nd Floor Lobby DW MV Door - French polishing to be completed
- ------------------------------------------------------------------------------------------------------------------------------------
7596 Core A 1st Floor Core DW Lobby door - 'D' handle and ironmongery to be cleaned down
- ------------------------------------------------------------------------------------------------------------------------------------
7603 Core A 1st Floor Lobby DW MV Door - french polishing to be completed
- ------------------------------------------------------------------------------------------------------------------------------------
7604 Core A 1st Floor Lobby DW MV Door - paint to be cleaned from door
- ------------------------------------------------------------------------------------------------------------------------------------
7607 Core A 1st Floor Lobby DW MV Door - LH architrave to be made good
- ------------------------------------------------------------------------------------------------------------------------------------
7608 Core A 1st Floor Lobby DW MV Door - gap between architrave and drylining unacceptable
- ------------------------------------------------------------------------------------------------------------------------------------
7630 Core A Ground Core DW Lobby Door - damage to architrave to be made good
- ------------------------------------------------------------------------------------------------------------------------------------
7634 Core A Ground Lobby DW MV door - door is damaged in corners/arrises made good and french
polish whole door
- ------------------------------------------------------------------------------------------------------------------------------------
7635 Core A Ground Lobby DW MV Door - overpanel damaged in the corner (bottom left hand side)
- ------------------------------------------------------------------------------------------------------------------------------------
7661 Core C 4th Floor Core DW Sign to lobby door damaged and screws to be replaced, countersunk
aluminium screws
- ------------------------------------------------------------------------------------------------------------------------------------
7662 Core C 4th Floor Core DW Architrave damaged at high level - to be made good and painted
- ------------------------------------------------------------------------------------------------------------------------------------
7744 Core C Ground Core DW Door does not self close
- ------------------------------------------------------------------------------------------------------------------------------------
7771 Core C Lower Grou Core DW Well Door - Chip to be made good at Low level
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Nr Originator Logged Action Overdue? Not by PC?
before Cleared by... Nr
- ------------------------------------------------------------------------------------------------------------------------------------
Package 4200 Toilet Fit-out H L Smith Construction Limited
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
7221 Mace Limited - MPH 30/11/97 08/12/97 o 7221
- ------------------------------------------------------------------------------------------------------------------------------------
7224 Mace Limited - MPH 30/11/97 08/12/97 o 7224
- ------------------------------------------------------------------------------------------------------------------------------------
7225 Mace Limited - MPH 30/11/97 08/12/97 o 7225
- ------------------------------------------------------------------------------------------------------------------------------------
7226 Mace Limited - MPH 30/11/97 08/12/97 o 7226
- ------------------------------------------------------------------------------------------------------------------------------------
7231 Mace Limited - MPH 30/11/97 08/12/97 o 7231
- ------------------------------------------------------------------------------------------------------------------------------------
7233 Mace Limited - MPH 30/11/97 08/12/97 o 7233
- ------------------------------------------------------------------------------------------------------------------------------------
7267 Rolfe Judd Architecture Ltd. - GF 30/11/97 08/12/97 o 7267
- ------------------------------------------------------------------------------------------------------------------------------------
7281 Mace Limited - MPH 03/12/97 10/12/97 o 7281
- ------------------------------------------------------------------------------------------------------------------------------------
7310 Mace Limited - MPH 03/12/97 10/12/97 o 7310
- ------------------------------------------------------------------------------------------------------------------------------------
7358 Mace Limited - MPH 03/12/97 10/12/97 o 7358
- ------------------------------------------------------------------------------------------------------------------------------------
7473 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7473
- ------------------------------------------------------------------------------------------------------------------------------------
7474 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7474
- ------------------------------------------------------------------------------------------------------------------------------------
7480 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7480
- ------------------------------------------------------------------------------------------------------------------------------------
7509 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7509
- ------------------------------------------------------------------------------------------------------------------------------------
7515 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7515
- ------------------------------------------------------------------------------------------------------------------------------------
7531 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7531
- ------------------------------------------------------------------------------------------------------------------------------------
7583 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7583
- ------------------------------------------------------------------------------------------------------------------------------------
7596 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7596
- ------------------------------------------------------------------------------------------------------------------------------------
7603 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7603
- ------------------------------------------------------------------------------------------------------------------------------------
7604 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7604
- ------------------------------------------------------------------------------------------------------------------------------------
7607 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7607
- ------------------------------------------------------------------------------------------------------------------------------------
7608 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7608
- ------------------------------------------------------------------------------------------------------------------------------------
7630 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7630
- ------------------------------------------------------------------------------------------------------------------------------------
7634 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7634
- ------------------------------------------------------------------------------------------------------------------------------------
7635 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7635
- ------------------------------------------------------------------------------------------------------------------------------------
7661 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7661
- ------------------------------------------------------------------------------------------------------------------------------------
7662 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7662
- ------------------------------------------------------------------------------------------------------------------------------------
7744 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7744
- ------------------------------------------------------------------------------------------------------------------------------------
7771 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7771
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
Mace Limited
25 February 1998 Page 5 m|a|c|e
<PAGE> 284
SNAGGING REPORT Report limited as follows MEPC - Petershill, London EC4
Packages 4200 - 4200 One Carter Lane
Status Only uncleared snags listed
<TABLE>
<CAPTION>
Nr Zone Floor Grid ref Type Description
- ------------------------------------------------------------------------------------------------------------------------------------
Package 4200 Toilet Fit-out H L Smith Construction Limited
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
7778 Core B 5th Floor Lobby DW South Wall - toilet wall at junction with curtain wall door LL,
recess trim to be continued to underside of raised floor
- ------------------------------------------------------------------------------------------------------------------------------------
7779 Core B 5th Floor Lobby DW South Wall - toilet wall at junction with cladding - cracked at
junction with door frame - mastic
- ------------------------------------------------------------------------------------------------------------------------------------
7785 Core B 5th Floor Lobby DW MV door opposite to male toilet - clean down, french polished and
made good
- ------------------------------------------------------------------------------------------------------------------------------------
7786 Core B 5th Floor Lobby DW MV Door - architrave at office side rough, requires filling and
polishing
- ------------------------------------------------------------------------------------------------------------------------------------
7789 Core B 5th Floor Lobby DW External corner to RHS of female toilet door to be improved
- ------------------------------------------------------------------------------------------------------------------------------------
7790 Core B 5th Floor Lobby DW Complete taping and jointing above male female toilet door
- ------------------------------------------------------------------------------------------------------------------------------------
7797 Core B 5th Floor Lobby DW MV Door - Filling of mitres to be improved
- ------------------------------------------------------------------------------------------------------------------------------------
7844 Core B 2nd Floor Lobby DW Lobby Door - make good generally all damage and paint/touch up
- ------------------------------------------------------------------------------------------------------------------------------------
7845 Core B All General DW MV Door - Architrave to be cut to level of fit out raised floor
(all doors)
- ------------------------------------------------------------------------------------------------------------------------------------
7853 Core B 1st Floor Lobby DW MV Door - Remove paint from architrave at HL RHS
- ------------------------------------------------------------------------------------------------------------------------------------
7881 Core B Lower Grou Lobby DW Lobby Corridor (outer lobby) - MV door to be french polished.
- ------------------------------------------------------------------------------------------------------------------------------------
7982 Plenums Lower Grou 1-2/H DW Detail of the door to be resolved - currently un-acceptable
- ------------------------------------------------------------------------------------------------------------------------------------
7984 Plenums Lower Grou 1-2/H DW Skirting detail to be completed - below access hatch.
- ------------------------------------------------------------------------------------------------------------------------------------
8063 Internal 5th Floor Core A DW Make good gap between P/B and door architrave
- ------------------------------------------------------------------------------------------------------------------------------------
8269 Core C All General DW Lobbys - MV Doors to be cleaned, chips made good and french
polished.
- ------------------------------------------------------------------------------------------------------------------------------------
8774 Core C Basement A/7-E DW Budget locks to be provided to Core C outer lobby
- ------------------------------------------------------------------------------------------------------------------------------------
8775 Core A Basement - DW Budget locks to be provided to core A lobby smoke vent door
- ------------------------------------------------------------------------------------------------------------------------------------
8810 Lift 6 Lower Grou Door LG38 DW Ironmongery to be fitted, top coat of paint to be completed.
- ------------------------------------------------------------------------------------------------------------------------------------
8811 Entrance Ground DW Push plate to be fitted to main entrance side door onto office
area.
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Nr Originator Logged Action Overdue? Not by PC?
before Cleared by... Nr
- ------------------------------------------------------------------------------------------------------------------------------------
Package 4200 Toilet Fit-out H L Smith Construction Limited
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
7778 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7778
- ------------------------------------------------------------------------------------------------------------------------------------
7779 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7779
- ------------------------------------------------------------------------------------------------------------------------------------
7785 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7785
- ------------------------------------------------------------------------------------------------------------------------------------
7786 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7786
- ------------------------------------------------------------------------------------------------------------------------------------
7789 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7789
- ------------------------------------------------------------------------------------------------------------------------------------
7790 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7790
- ------------------------------------------------------------------------------------------------------------------------------------
7797 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7797
- ------------------------------------------------------------------------------------------------------------------------------------
7844 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7844
- ------------------------------------------------------------------------------------------------------------------------------------
7845 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7845
- ------------------------------------------------------------------------------------------------------------------------------------
7853 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7853
- ------------------------------------------------------------------------------------------------------------------------------------
7881 Rolfe Judd Arch - KG/GF 05/12/97 11/12/97 o 7881
- ------------------------------------------------------------------------------------------------------------------------------------
7982 Rolfe Judd Architecture Ltd. - KG/G 05/12/97 12/12/97 o 7982
- ------------------------------------------------------------------------------------------------------------------------------------
7984 Rolfe Judd Architecture Ltd. - KG/G 05/12/97 12/12/97 o 7984
- ------------------------------------------------------------------------------------------------------------------------------------
8063 Rolfe Judd Architecture Ltd. - GF 05/12/97 12/12/97 o 8063
- ------------------------------------------------------------------------------------------------------------------------------------
8269 Rolfe Judd Ltd - KG 05/12/97 12/12/97 o 8269
- ------------------------------------------------------------------------------------------------------------------------------------
8774 Mace Limited - MPH 08/12/97 15/12/97 o 8774
- ------------------------------------------------------------------------------------------------------------------------------------
8775 Mace Limited - MPH 08/12/97 15/12/97 o 8775
- ------------------------------------------------------------------------------------------------------------------------------------
8810 Mace Limited - MPH 08/12/97 15/12/97 o 8810
- ------------------------------------------------------------------------------------------------------------------------------------
8811 Mace Limited - MPH 08/12/97 15/12/97 o 8811
- ------------------------------------------------------------------------------------------------------------------------------------
====================================================================================================================================
Totals for package 4200 Toilet Fit-Out Total number of snags 156
H L Smith Construction Limited Number of snags uncleared, by Mace 156 by team 156
Number of overdue snags 156
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
Mace Limited
25 February 1998 Page 6 m|a|c|e
<PAGE> 285
SNAGGING REPORT Report limited as follows MEPC - Petershill, London EC4
Packages 4200 - 4200 One Carter Lane
Status Only uncleared snags listed
<TABLE>
<CAPTION>
Overdue? Not by PC?
Action
NR Zone Floor Grid Ref. Type Description Originator Logged Before Cleared by Nr
- ------------------------------------------------------------------------------------------------------------------------------------
Package 4200 Toilet Fit-out H L Smith Construction Limited
- ------------------------------------------------------------------------------------------------------------------------------------
====================================================================================================================================
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Report totals Total number of snags 156
Number of snags uncleared, by Mace 156 by team 156
Number of overdue snags 156
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Key to work types
DQ Design Query
UW Unfinished Work
LD Latent defect
OW Outstanding works
IN Instructed works
DW Defective works
- --------------------------------------------------------------------------------
Mace Limited
25 February 1998 Page 7 m|a|c|e
<PAGE> 286
SNAGGING REPORT Report limited as follows MEPC - Petershill, London EC4
Packages 4500 - 4500 One Carter Lane
Status Only uncleared snags listed
<TABLE>
<CAPTION>
Nr Zone Floor Grid ref Type Description
- ------------------------------------------------------------------------------------------------------------------------------------
Package 4500 Architectural Metalwork R Glazzard (Dudley) Limited
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
3927 Restaurant Ground OW Complete S/S handrail to west balcony
- ------------------------------------------------------------------------------------------------------------------------------------
6329 Core A Basement DW Basement 1/2 landing-bottom screw to perimeter handrail bracket
currently spans movement joint
- ------------------------------------------------------------------------------------------------------------------------------------
7307 Basement Basement General DW All smoke vents to be cleaned, writing removed, dents dressed out
- ------------------------------------------------------------------------------------------------------------------------------------
7371 Terraces 5th Floor Elevation 2 DW Packers unacceptable under corner posts, mastic?
- ------------------------------------------------------------------------------------------------------------------------------------
7379 Terraces 5th Floor Elevation 1 DW Corner post/stool to ext. bay 49 not fixed correctly
- ------------------------------------------------------------------------------------------------------------------------------------
7398 Terraces 5th Floor Elevation 2 DW Paint stains to top rail
- ------------------------------------------------------------------------------------------------------------------------------------
7399 Terraces 5th Floor Elevation 3 DW Corner balcony guard bay 61 - joints on top rail incorrect
- ------------------------------------------------------------------------------------------------------------------------------------
7430 Terraces 5th Floor Elevation 11 DW Small return top rail wrong length - not mitreing correctly
- ------------------------------------------------------------------------------------------------------------------------------------
7617 Core C All Core DW Handrail brackets on stringer - all bolts to be checked that they
are fixed level and washers are provided.
- ------------------------------------------------------------------------------------------------------------------------------------
7669 Core C 4th Floor All DW 1/2 Landing - All handrail fixings to be flush with wall
- ------------------------------------------------------------------------------------------------------------------------------------
7677 Core C All General DW 3rd - 3rd Floor 1/2 landing - Support brackets missing, just below
landing level
- ------------------------------------------------------------------------------------------------------------------------------------
7805 Core B All General DW Handrail brackets fixing to stringer and wall to be filled so no
gap evident
- ------------------------------------------------------------------------------------------------------------------------------------
7814 Core B 5th Floor Core DW 1/2 Landing - Timber handrail marked at corner
- ------------------------------------------------------------------------------------------------------------------------------------
7836 Core B 3rd Floor Core DW 1/2 Landing - Joint to west handrail unacceptable (gap evident)
- ------------------------------------------------------------------------------------------------------------------------------------
7841 Core B 2nd Floor Core DW Handrail brackets loose - 1st and 2nd bracket up from 2nd fire
landing
- ------------------------------------------------------------------------------------------------------------------------------------
7935 Plenums Basement 2-3/A DW Support grille for plenum grille (adjacent to granite) to be fixed
in the centre.
- ------------------------------------------------------------------------------------------------------------------------------------
8080 Core A Basement Core DW Fixed blade louvre - screw fixings poor & paint quality to be
improved.
- ------------------------------------------------------------------------------------------------------------------------------------
8556 External Ground General DW Line level grilles and level with paving
- ------------------------------------------------------------------------------------------------------------------------------------
8751 External Colonnade General DW Clean grilles, line level, brackets to follow
- ------------------------------------------------------------------------------------------------------------------------------------
8761 Core B All DW Complete fixings to brackets underside timber handrail (both well
& perimeter rails)
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Nr Originator Logged Action Overdue? Not by PC?
before Cleared by... Nr
- ------------------------------------------------------------------------------------------------------------------------------------
Package 4500 Architectural Metalwork R Glazzard (Dudley) Limited
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
3927 Mace Limited - CT 06/10/97 13/10/97 o 3927
- ------------------------------------------------------------------------------------------------------------------------------------
6329 Mace Limited - MPH 18/11/97 25/11/97 o 6329
- ------------------------------------------------------------------------------------------------------------------------------------
7307 Rolfe Judd Architecture Ltd. - MPH 03/12/97 10/12/97 o 7307
- ------------------------------------------------------------------------------------------------------------------------------------
7371 Rolfe Judd Architecture Ltd. - CT 03/12/97 10/12/97 o 7371
- ------------------------------------------------------------------------------------------------------------------------------------
7379 Rolfe Judd Architecture Ltd. - CT 03/12/97 10/12/97 o 7379
- ------------------------------------------------------------------------------------------------------------------------------------
7398 Rolfe Judd Architecture Ltd. - CT 03/12/97 10/12/97 o 7398
- ------------------------------------------------------------------------------------------------------------------------------------
7399 Rolfe Judd Architecture Ltd. - CT 03/12/97 10/12/97 o 7399
- ------------------------------------------------------------------------------------------------------------------------------------
7430 Rolfe Judd Architecture Ltd. - CT 03/12/97 10/12/97 o 7430
- ------------------------------------------------------------------------------------------------------------------------------------
7617 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7617
- ------------------------------------------------------------------------------------------------------------------------------------
7669 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7669
- ------------------------------------------------------------------------------------------------------------------------------------
7677 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7677
- ------------------------------------------------------------------------------------------------------------------------------------
7805 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7805
- ------------------------------------------------------------------------------------------------------------------------------------
7814 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7814
- ------------------------------------------------------------------------------------------------------------------------------------
7836 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7836
- ------------------------------------------------------------------------------------------------------------------------------------
7841 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7841
- ------------------------------------------------------------------------------------------------------------------------------------
7935 Rolfe Judd Arch - KG/GF 05/12/97 11/12/97 o 7935
- ------------------------------------------------------------------------------------------------------------------------------------
8080 Rolfe Judd Architecture Ltd. - KG/G 05/12/97 12/12/97 o 8080
- ------------------------------------------------------------------------------------------------------------------------------------
8556 Rolfe Judd Architecture Ltd. - GF 08/12/97 15/12/97 o 8556
- ------------------------------------------------------------------------------------------------------------------------------------
8751 Rolfe Judd Architecture Ltd. - GF 08/12/97 15/12/97 o 8751
- ------------------------------------------------------------------------------------------------------------------------------------
8761 Mace Limited - MMPH 08/12/97 15/12/97 o 8761
- ------------------------------------------------------------------------------------------------------------------------------------
====================================================================================================================================
Totals for package 4500 Architectural Metalwork Total number of snags 20
R Glazzard (Dudley) Limited Number of snags uncleared, by Mace 20 by team 20
Number of overdue snags 20
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
Mace Limited
25 February 1998 Page 1 m|a|c|e
<PAGE> 287
SNAGGING REPORT Report limited as follows MEPC - Petershill, London EC4
Packages 4500 - 4500 One Carter Lane
Status Only uncleared snags listed
<TABLE>
<CAPTION>
Overdue? Not by PC?
Action
NR Zone Floor Grid Ref. Type Description Originator Logged Before Cleared by Nr
- ------------------------------------------------------------------------------------------------------------------------------------
Package 4500 Architectural Metalwork R Glazzard (Dudley) Limited
- ------------------------------------------------------------------------------------------------------------------------------------
====================================================================================================================================
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Report totals Total number of snags 20
Number of snags uncleared, by Mace 20 by team 20
Number of overdue snags 20
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Key to work types
DQ Design Query
UW Unfinished Work
LD Latent defect
OW Outstanding works
IN Instructed works
DW Defective works
- --------------------------------------------------------------------------------
Mace Limited
25 February 1998 Page 2 m|a|c|e
<PAGE> 288
Snagging report Report limited as follows MEPC - Petershill, London EC4
Packages 4575 - 4575 One Carter Lane
Status Only uncleared snags listed
<TABLE>
<CAPTION>
Nr Zone Floor Grid ref. Type Description
- ------------------------------------------------------------------------------------------------------------------------------------
Package 4575 Metal Doors Henderson Bostwick Industrial Doors Limited
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
3554 North Corr Basement OW RS4, 5 & 6 - Inspection to the fireproofing to the back of the
Rolfer shutter once Fire-proofing completed to behind the shutter
boxes, (blockwork not formed due to close proximity of services.)
- ------------------------------------------------------------------------------------------------------------------------------------
3557 General Basement OW All Rolfer shutters (No.s Rs1, 2, 3, 4, 5, 6, 7, 8, 12)
commissioned and test certificate forwarded to Mace.
- ------------------------------------------------------------------------------------------------------------------------------------
3562 General Lower Grou OW Final clean and offer for inspection of all Metal Doors Ref No.s
B26M, LG36, LG29.)
- ------------------------------------------------------------------------------------------------------------------------------------
6371 General Basement OW Detailed Specification to be issued (as according to the Trade
Contract.)
- ------------------------------------------------------------------------------------------------------------------------------------
6375 Sprinkler Lower Grou DW 'D' handle to door reference LG39m to be changed for a 'D' handle
which is RAL 7021 (similar to the door.)
- ------------------------------------------------------------------------------------------------------------------------------------
6376 Ramp Basement DW External push button to RS8 - conduit running down external face
of the galvanised steel channel to be removed - conduit to exit
push button box from the back, so as not visible.
- ------------------------------------------------------------------------------------------------------------------------------------
7299 General Basement DW All Rolfer shutters and metal doors to be cleaned down generally
- ------------------------------------------------------------------------------------------------------------------------------------
7303 Restaurant Ground DW RS7 - Marks to be cleaned down on HL box
- ------------------------------------------------------------------------------------------------------------------------------------
7305 Sprinkler Lower Grou DW Metal door to be adjusted, does not close fully on closure
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Nr Originator Logged Action Overdue? Not by PC?
Before Cleared by... Nr
- ------------------------------------------------------------------------------------------------------------------------------------
Package 4575 Metal Doors Henderson Bostwick Industrial Doors Limited
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
3554 Mace Limited - MPH 02/10/97 09/10/97 o 3554
- ------------------------------------------------------------------------------------------------------------------------------------
3557 Mace Limited - MPH 02/10/97 09/10/97 o 3557
- ------------------------------------------------------------------------------------------------------------------------------------
3562 Mace Limited - MPH 02/10/97 09/10/97 o 3562
- ------------------------------------------------------------------------------------------------------------------------------------
6371 Mace Limited - MPH 18/11/97 25/11/97 o 6371
- ------------------------------------------------------------------------------------------------------------------------------------
6375 Mace Limited - MPH 18/11/97 25/11/97 o 6375
- ------------------------------------------------------------------------------------------------------------------------------------
6376 Mace Limited - MPH 18/11/97 25/11/97 o 6376
- ------------------------------------------------------------------------------------------------------------------------------------
7299 Mace Limited - MPH 13/12/97 10/12/97 o 7299
- ------------------------------------------------------------------------------------------------------------------------------------
7303 Mace Limited - MPH 13/12/97 10/12/97 o 7303
- ------------------------------------------------------------------------------------------------------------------------------------
7305 Mace Limited - MPH 13/12/97 10/12/97 o 7305
- ------------------------------------------------------------------------------------------------------------------------------------
====================================================================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
Totals for package 4575 Metal Doors Total number of snags 9
Henderson Bostwick Industrial Doors Number of snags uncleared, by Mace 9 by team 9
Limited Number of overdue snags 9
- ------------------------------------------------------------------------------------------------------------------------------------
====================================================================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
Report totals Total number of snags 9
Number of snags uncleared, by Mace 9 by team 9
Number of overdue snags 9
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Key to work types
DQ Design Query
UW Unfinished Work
LD Latent Defect
OW Outstanding works
IN Instructed works
DW Defective works
- --------------------------------------------------------------------------------
Mace Limited
25 February 1998 Page 1 m|a|c|e
<PAGE> 289
Snagging report Report limited as follows MEPC - Petershill, London EC4
Packages 4750 - 4750 One Carter Lane
Status Only uncleared snags listed
<TABLE>
<CAPTION>
Nr Zone Floor Grid ref. Type Description
- ------------------------------------------------------------------------------------------------------------------------------------
Package 4750 Entrance Hall Fit-out A Davies & Co. (Shopfitters) Limited
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
7457 Entrance Ground Elev. 1 DW Damaged linear grille at high level ceiling to entrance at junction
with fin
- ------------------------------------------------------------------------------------------------------------------------------------
7460 Entrance Ground Elev. 1 DW Limestone wall chipped - 3rd course from ceiling (L/H wall viewed
internally)
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Nr Originator Logged Action Overdue? Not by PC?
Before Cleared by... Nr
- ------------------------------------------------------------------------------------------------------------------------------------
Package 4750 Entrance Hall Fit-out A Davies & Co. (Shopfitters) Limited
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
====================================================================================================================================
7457 Rolfe Judd Architecture Ltd. - CG 03/12/97 10/12/97 o 7457
- ------------------------------------------------------------------------------------------------------------------------------------
7460 Rolfe Judd Architecture Ltd. - CG 03/12/97 10/12/97 o 7460
- ------------------------------------------------------------------------------------------------------------------------------------
Totals for package 4570 Entrance Hall Fit-out Total number of snags 2
A Davies & Co. (Shopfitters) Limited Number of snags uncleared, by Mace 2 by team 2
Number of overdue snags 2
- ------------------------------------------------------------------------------------------------------------------------------------
====================================================================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
Report totals Total number of snags 2
Number of snags uncleared, by Mace 2 by team 2
Number of overdue snags 2
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Key to work types
DQ Design Query
UW Unfinished Work
LD Latent Defect
OW Outstanding works
IN Instructed works
DW Defective works
- --------------------------------------------------------------------------------
Mace Limited
25 February 1998 Page 1 m|a|c|e
<PAGE> 290
Snagging report Report limited as follows MEPC - Petershill, London EC4
Packages 4755 - 4755 One Carter Lane
Status Only uncleared snags listed
<TABLE>
<CAPTION>
Nr Zone Floor Grid ref. Type Description
- ------------------------------------------------------------------------------------------------------------------------------------
Package 4755 Marketing suite fit out H L Smith Construction Limited
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
5680 Core C 2nd Floor Lobby DW Core door above bottom hinge, chip evident to door to be made good
- ------------------------------------------------------------------------------------------------------------------------------------
5716 Core B 2nd Floor Lobby DW Lobby door - generally to be made good and paint quality improved
(all chips and indents removed
- ------------------------------------------------------------------------------------------------------------------------------------
5729 Core A 2nd Floor Lobby DW Lobby door - all marks and indents to be made good and paint
quality to be improved
- ------------------------------------------------------------------------------------------------------------------------------------
5955 Core A 3rd Floor Lobby DW Core door: Chips and indents to the side of door and also 1/4
door of side - to be made good and decorated
- ------------------------------------------------------------------------------------------------------------------------------------
5958 Core A 3rd Floor Lobby DW Core Door: Paint peeling - adj to top hinge
- ------------------------------------------------------------------------------------------------------------------------------------
5974 Core B 3rd Floor Lobby DW Core Door: paint on hinges-door to be cleaned down and made good
where required
- ------------------------------------------------------------------------------------------------------------------------------------
5976 Core B 3rd Floor Lobby DW Core Door (1/2 Door): Chips to be made good to side (adj seal
brushes)
- ------------------------------------------------------------------------------------------------------------------------------------
6168 Core A Ground DW Core Door (Painted): MG required to 1/4 door lock keep-on
architrave
- ------------------------------------------------------------------------------------------------------------------------------------
6187 Core B Ground DW Core Door (Painted): Door to be cleaned down and MG and paint all
chips/indents etc.
- ------------------------------------------------------------------------------------------------------------------------------------
6192 Core B Ground DW Core Door (Painted): Paint quality not sharp either side of black
seal strip
- ------------------------------------------------------------------------------------------------------------------------------------
6238 Core C Ground DW Core Door: Architrave mitres-Excess filler to be rubbed down and
repainted
- ------------------------------------------------------------------------------------------------------------------------------------
6607 Core B Lower Grou Single Elect DW Making good required to frame R/H side (rubbed down and paint
touched up)
- ------------------------------------------------------------------------------------------------------------------------------------
6621 Core B Lower Grou Mech. Door DW Door to have final clean down, made good if required
- ------------------------------------------------------------------------------------------------------------------------------------
6634 Core C Lower Grou Mech. Door DW Head of frame adjacent to metal seal to be made good and painted
- ------------------------------------------------------------------------------------------------------------------------------------
6768 Toller Corr Basement DW Painters mate to all gaps between architrave and blockwork
- ------------------------------------------------------------------------------------------------------------------------------------
7274 North Corr Basement DW North Corridor (unpainted) - SV sign missing from HL smoke vent
(at junction of north/west corridor)
- ------------------------------------------------------------------------------------------------------------------------------------
7481 Core A 5th Floor Core DW Make good damage
- ------------------------------------------------------------------------------------------------------------------------------------
7489 Core A 5th Floor Core DW Make good dry riser box at low level (especially external corners)
- ------------------------------------------------------------------------------------------------------------------------------------
7501 Core A 4th Floor Core DW Make good paintwork to lobby door, also 'D' handle loose
- ------------------------------------------------------------------------------------------------------------------------------------
7503 Core A 4th Floor Lobby DW Lobby door - clean, fill and re-paint (especially at high level)
- ------------------------------------------------------------------------------------------------------------------------------------
7518 Core A All Lobby DW Make good paintwork below power socket
- ------------------------------------------------------------------------------------------------------------------------------------
7522 Core A 4th Floor Core DW Make good cladding wall plasterboard between wall and stringer of
stairs
- ------------------------------------------------------------------------------------------------------------------------------------
7525 Core A 4th Floor Core DW Soffit to 4th (1/2 landing) to 3rd floor - pin holes not filled,
make good
- ------------------------------------------------------------------------------------------------------------------------------------
7530 Core A 3rd Floor Core DW 'Fire door keep shut' signed to be replaced
- ------------------------------------------------------------------------------------------------------------------------------------
7562 Core A 3rd Floor Core DW Concrete stringer for 4th floor (1/2 landing) to be made good and
re-painted
- ------------------------------------------------------------------------------------------------------------------------------------
7567 Core A 3rd Floor Core DW 1/2 landing - shaft wall at landing - splatter marks on wall
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Nr Originator Logged Action Overdue? Not by PC?
Before Cleared by... Nr
- ------------------------------------------------------------------------------------------------------------------------------------
Package 4755 Marketing suite fit out H L Smith Construction Limited
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
5680 Mace Limited - MPH 07/11/97 14/11/97 o 5680
- ------------------------------------------------------------------------------------------------------------------------------------
5716 Mace Limited - MPH 07/11/97 14/11/97 o 5716
- ------------------------------------------------------------------------------------------------------------------------------------
5729 Mace Limited - MPH 07/11/97 14/11/97 o 5729
- ------------------------------------------------------------------------------------------------------------------------------------
5955 Mace Limited - MPH 13/11/97 20/11/97 o 5955
- ------------------------------------------------------------------------------------------------------------------------------------
5958 Mace Limited - MPH 13/11/97 20/11/97 o 5958
- ------------------------------------------------------------------------------------------------------------------------------------
5974 Mace Limited - MPH 13/11/97 20/11/97 o 5974
- ------------------------------------------------------------------------------------------------------------------------------------
5976 Mace Limited - MPH 13/11/97 20/11/97 o 5976
- ------------------------------------------------------------------------------------------------------------------------------------
6168 Mace Limited - MPH 17/11/97 24/11/97 o 6168
- ------------------------------------------------------------------------------------------------------------------------------------
6187 Mace Limited - MPH 17/11/97 24/11/97 o 6187
- ------------------------------------------------------------------------------------------------------------------------------------
6192 Mace Limited - MPH 17/11/97 24/11/97 o 6192
- ------------------------------------------------------------------------------------------------------------------------------------
6238 Mace Limited - MPH 17/11/97 24/11/97 o 6238
- ------------------------------------------------------------------------------------------------------------------------------------
6607 Mace Limited - MPH 23/11/97 01/12/97 o 6607
- ------------------------------------------------------------------------------------------------------------------------------------
6621 Mace Limited - MPH 23/11/97 01/12/97 o 6621
- ------------------------------------------------------------------------------------------------------------------------------------
6634 Mace Limited - MPH 23/11/97 01/12/97 o 6634
- ------------------------------------------------------------------------------------------------------------------------------------
6768 Mace Limited - MPH 25/11/97 02/12/97 o 6768
- ------------------------------------------------------------------------------------------------------------------------------------
7274 Mace Limited - MPH 03/12/97 10/12/97 o 7274
- ------------------------------------------------------------------------------------------------------------------------------------
7481 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7481
- ------------------------------------------------------------------------------------------------------------------------------------
7489 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7489
- ------------------------------------------------------------------------------------------------------------------------------------
7501 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7501
- ------------------------------------------------------------------------------------------------------------------------------------
7503 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7503
- ------------------------------------------------------------------------------------------------------------------------------------
7518 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7518
- ------------------------------------------------------------------------------------------------------------------------------------
7522 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7522
- ------------------------------------------------------------------------------------------------------------------------------------
7525 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7525
- ------------------------------------------------------------------------------------------------------------------------------------
7530 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7530
- ------------------------------------------------------------------------------------------------------------------------------------
7562 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7562
- ------------------------------------------------------------------------------------------------------------------------------------
7567 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7567
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
Mace Limited
25 February 1998 Page 1 m|a|c|e
<PAGE> 291
Snagging report Report limited as follows MEPC - Petershill, London EC4
Packages 4755 - 4755 One Carter Lane
Status Only uncleared snags listed
<TABLE>
<CAPTION>
Nr Zone Floor Grid ref. Type Description
- ------------------------------------------------------------------------------------------------------------------------------------
Package 4755 Marketing suite fit out H L Smith Construction Limited
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
7570 Core A 2nd Floor Core DW Lobby door - damage to architrave - fill and re-paint
- ------------------------------------------------------------------------------------------------------------------------------------
7575 Core A 2nd Floor Lobby DW Lobby door - make good all damage and repaint
- ------------------------------------------------------------------------------------------------------------------------------------
7576 Core A 2nd Floor Lobby DW Lobby door - mitres unacceptable
- ------------------------------------------------------------------------------------------------------------------------------------
7577 Core A 2nd Floor Lobby DW Paint cutting in around dry riser box to be improved
- ------------------------------------------------------------------------------------------------------------------------------------
7584 Core C All Core DW Clean glue over-spill on stringer & nosings - general comment to
all floors.
- ------------------------------------------------------------------------------------------------------------------------------------
7586 Core C All Core DW Vinyl in certain locations coming away - not stuck down
sufficiently - all levels to be checked and re-stuck where
required.
- ------------------------------------------------------------------------------------------------------------------------------------
7587 Core C All Core DW Threshold detail to be completed to all lobby door threshold.
- ------------------------------------------------------------------------------------------------------------------------------------
7595 Core A 1st Floor Core DW Lobby door - paint quality to be improved
- ------------------------------------------------------------------------------------------------------------------------------------
7598 Core C All Core DW Mastic to vinyl joints to be completed generally.
- ------------------------------------------------------------------------------------------------------------------------------------
7599 Core C All Core DW Skirting mitres to be improved generally.
- ------------------------------------------------------------------------------------------------------------------------------------
7602 Core C All Core DW Stringer trim to be higher than tread vinyl - (example being 2nd
tread down from 1st floor.)
- ------------------------------------------------------------------------------------------------------------------------------------
7605 Core C All Core DW 1/2 Landing - junction of landing and three step landing leading
up, grey nosing strip to run over tread skirting detail - not to
be cut in.
- ------------------------------------------------------------------------------------------------------------------------------------
7613 Core C All Core DW Vinyl to have all paint cleaned down from vinyl - cleaning quality
generally un-acceptable.
- ------------------------------------------------------------------------------------------------------------------------------------
7614 Core C All Core DW Vinyl tile pattern to line through with adjacent vinyl tiles -
currently un-acceptable in certain locations.
- ------------------------------------------------------------------------------------------------------------------------------------
7615 Core C All Core DW 1/2 landing - Vinyl to continue around the stringer as the
pre-agreed detail - strip missing.
- ------------------------------------------------------------------------------------------------------------------------------------
7616 Core C All Core DW Nosing generally not stuck down sufficiently - certain situations
vinyl nosings coming away.
- ------------------------------------------------------------------------------------------------------------------------------------
7618 Core C All Core DW West face of concrete stringer (adjacent to cladding) to be
painted.
- ------------------------------------------------------------------------------------------------------------------------------------
7663 Core C 4th Floor Core DW 3rd tread from top - vinyl not stuck down LH corner
- ------------------------------------------------------------------------------------------------------------------------------------
7664 Core C 4th Floor Core DW Vinyl backing to riser - not level
- ------------------------------------------------------------------------------------------------------------------------------------
7666 Core C All General DW Vinyl detail - junction to three step landing detail not as
agreed. Requires finishing off
- ------------------------------------------------------------------------------------------------------------------------------------
7673 Core C 4th Floor Core DW 1/2 Landing - Grey strip to run through into riser black strip
- ------------------------------------------------------------------------------------------------------------------------------------
7676 Core C All General DW 3rd Floor Landing Flight - 4th/1st tread from 3rd floor - LH vinyl
end strip to be continuous (example)
- ------------------------------------------------------------------------------------------------------------------------------------
7679 Core C All General DW Stringer - adjacent to cladding (going up) not painted
- ------------------------------------------------------------------------------------------------------------------------------------
7683 Core C 3rd Floor Core DW Timber fillet missing at high level above core door should run
through and stop at dry riser wall
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Nr Originator Logged Action Overdue? Not by PC?
Before Cleared by... Nr
- ------------------------------------------------------------------------------------------------------------------------------------
Package 4755 Marketing suite fit out H L Smith Construction Limited
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
7570 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7570
- ------------------------------------------------------------------------------------------------------------------------------------
7575 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7575
- ------------------------------------------------------------------------------------------------------------------------------------
7576 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7576
- ------------------------------------------------------------------------------------------------------------------------------------
7577 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7577
- ------------------------------------------------------------------------------------------------------------------------------------
7584 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7584
- ------------------------------------------------------------------------------------------------------------------------------------
7586 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7586
- ------------------------------------------------------------------------------------------------------------------------------------
7587 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7587
- ------------------------------------------------------------------------------------------------------------------------------------
7595 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7595
- ------------------------------------------------------------------------------------------------------------------------------------
7598 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7598
- ------------------------------------------------------------------------------------------------------------------------------------
7599 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7599
- ------------------------------------------------------------------------------------------------------------------------------------
7602 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7602
- ------------------------------------------------------------------------------------------------------------------------------------
7605 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7605
- ------------------------------------------------------------------------------------------------------------------------------------
7613 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7613
- ------------------------------------------------------------------------------------------------------------------------------------
7614 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7614
- ------------------------------------------------------------------------------------------------------------------------------------
7615 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7615
- ------------------------------------------------------------------------------------------------------------------------------------
7616 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7616
- ------------------------------------------------------------------------------------------------------------------------------------
7618 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7618
- ------------------------------------------------------------------------------------------------------------------------------------
7663 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7663
- ------------------------------------------------------------------------------------------------------------------------------------
7664 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7664
- ------------------------------------------------------------------------------------------------------------------------------------
7666 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7666
- ------------------------------------------------------------------------------------------------------------------------------------
7673 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7673
- ------------------------------------------------------------------------------------------------------------------------------------
7676 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7676
- ------------------------------------------------------------------------------------------------------------------------------------
7679 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7679
- ------------------------------------------------------------------------------------------------------------------------------------
7683 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7683
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
Mace Limited
25 February 1998 Page 2 m|a|c|e
<PAGE> 292
Snagging report Report limited as follows MEPC - Petershill, London EC4
Packages 4755 - 4755 One Carter Lane
Status Only uncleared snags listed
<TABLE>
<CAPTION>
Nr Zone Floor Grid ref. Type Description
- ------------------------------------------------------------------------------------------------------------------------------------
Package 4755 Marketing suite fit out H L Smith Construction Limited
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
7691 Core C 3rd Floor Core DW 1/2 Landing - Vinyl perimweter skirting detail to be improved at
junction with movement joint
- ------------------------------------------------------------------------------------------------------------------------------------
7698 Core C 3rd Floor Core DW 1/2 Landing - Standing at lower landing looking directly up -
taping and jointing to be made good and paint quality to be
improved
- ------------------------------------------------------------------------------------------------------------------------------------
7702 Core C 2nd Floor Core DW Single window - taping and jointing to be improved to RHS of
window jamb at HL and painted
- ------------------------------------------------------------------------------------------------------------------------------------
7707 Core C 2nd Floor Core DW Dry riser - external corner - metal bead showing, paint touch up
required
- ------------------------------------------------------------------------------------------------------------------------------------
7710 Core C 2nd Floor Core DW 1/2 landing - hole to be made good and painted above light fitting
(north wall)
- ------------------------------------------------------------------------------------------------------------------------------------
7716 Core C 1st Floor Core DW Paint quality to be improved around high level light to west wall
- ------------------------------------------------------------------------------------------------------------------------------------
7723 Core C 1st Floor Core DW Lobby door - to be made good, quality unacceptable
- ------------------------------------------------------------------------------------------------------------------------------------
7726 Core C 1st Floor Core DW SE internal corner at LL - adjacent to lobby door hinges, taping
and jointing to be improved and re-painted
- ------------------------------------------------------------------------------------------------------------------------------------
7743 Core C Ground Core DW Dry riser walls - north wall bowed also taping and jointing and
painting quality to be improved at low level (around light
socket etc)
- ------------------------------------------------------------------------------------------------------------------------------------
7751 Core C Ground Core DW 1/2 landing - Timber soffit - mitre joints poor, to be improved
- ------------------------------------------------------------------------------------------------------------------------------------
7756 Core C Lower Grou Core DW Timber capping skirting - to underside of junction
- ------------------------------------------------------------------------------------------------------------------------------------
7764 Core C Lower Grou Core DW Vinyl skirting detail to be completed to central well
- ------------------------------------------------------------------------------------------------------------------------------------
7768 Core C Lower Grou Core DW Paint quality to be improved around (and behind) radiator
- ------------------------------------------------------------------------------------------------------------------------------------
7776 Core C Lower Grou Core DW 1/2 Landing - Cladding wall - paint to be finished to above light
fitting
- ------------------------------------------------------------------------------------------------------------------------------------
7807 Core B 5th Floor Core DW Concrete soffit supporting north shaftwall, filling and painting to
be improved at LHS
- ------------------------------------------------------------------------------------------------------------------------------------
7810 Core B 5th Floor Core DW 1/2 landing - Chips to 5th floor soffit to be made good
- ------------------------------------------------------------------------------------------------------------------------------------
7812 Core B 5th Floor Core DW 1/2 Landing - paint quality to be improved under light fitting
- ------------------------------------------------------------------------------------------------------------------------------------
7816 Core B 4th Floor Core DW Lobby door to be cleaned down touched up and made good
- ------------------------------------------------------------------------------------------------------------------------------------
7826 Core B 3rd Floor Core DW Make good mitre joint to timber soffit between soffit for landing
and soffit for above flight of stairs
- ------------------------------------------------------------------------------------------------------------------------------------
7827 Core B 3rd Floor Core DW Lobby Door - Make good chips to architrave at HL
- ------------------------------------------------------------------------------------------------------------------------------------
7828 Core B 3rd Floor Core DW Lobby Door - make good around 1/4 door keep
- ------------------------------------------------------------------------------------------------------------------------------------
7829 Core B 3rd Floor Core DW Lobby Door - Generally making good marks and dents/chips to door
- ------------------------------------------------------------------------------------------------------------------------------------
7832 Core B 3rd Floor Lobby DW Touch up paint work and make good
- ------------------------------------------------------------------------------------------------------------------------------------
7839 Core B 2nd Floor Core DW Make good and paint east wall below light fitting
- ------------------------------------------------------------------------------------------------------------------------------------
7843 Core B 2nd Floor Lobby DW Lobby Door - Make good around lock and paint
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Nr Originator Logged Action Overdue? Not by PC?
Before Cleared by... Nr
- ------------------------------------------------------------------------------------------------------------------------------------
Package 4755 Marketing suite fit out H L Smith Construction Limited
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
7691 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7691
- ------------------------------------------------------------------------------------------------------------------------------------
7698 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7698
- ------------------------------------------------------------------------------------------------------------------------------------
7702 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7702
- ------------------------------------------------------------------------------------------------------------------------------------
7707 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7707
- ------------------------------------------------------------------------------------------------------------------------------------
7710 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7710
- ------------------------------------------------------------------------------------------------------------------------------------
7716 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7716
- ------------------------------------------------------------------------------------------------------------------------------------
7723 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7723
- ------------------------------------------------------------------------------------------------------------------------------------
7726 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7726
- ------------------------------------------------------------------------------------------------------------------------------------
7743 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7743
- ------------------------------------------------------------------------------------------------------------------------------------
7751 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7751
- ------------------------------------------------------------------------------------------------------------------------------------
7756 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7756
- ------------------------------------------------------------------------------------------------------------------------------------
7764 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7764
- ------------------------------------------------------------------------------------------------------------------------------------
7768 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7768
- ------------------------------------------------------------------------------------------------------------------------------------
7776 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7776
- ------------------------------------------------------------------------------------------------------------------------------------
7807 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7807
- ------------------------------------------------------------------------------------------------------------------------------------
7810 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7810
- ------------------------------------------------------------------------------------------------------------------------------------
7812 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7812
- ------------------------------------------------------------------------------------------------------------------------------------
7816 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7816
- ------------------------------------------------------------------------------------------------------------------------------------
7826 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7826
- ------------------------------------------------------------------------------------------------------------------------------------
7827 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7827
- ------------------------------------------------------------------------------------------------------------------------------------
7828 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7828
- ------------------------------------------------------------------------------------------------------------------------------------
7829 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7829
- ------------------------------------------------------------------------------------------------------------------------------------
7832 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7832
- ------------------------------------------------------------------------------------------------------------------------------------
7839 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7839
- ------------------------------------------------------------------------------------------------------------------------------------
7843 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7843
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
Mace Limited
25 February 1998 Page 3 m|a|c|e
<PAGE> 293
Snagging report Report limited as follows MEPC - Petershill, London EC4
Packages 4755 - 4755 One Carter Lane
Status Only uncleared snags listed
<TABLE>
<CAPTION>
Nr Zone Floor Grid ref. Type Description
- ------------------------------------------------------------------------------------------------------------------------------------
Package 4755 Marketing suite fit out H L Smith Construction Limited
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
7847 Core B 2nd Floor Core DW NE internal corner - paint cracking around, and inside the
movement joint to be made good
- ------------------------------------------------------------------------------------------------------------------------------------
7854 Core B 1st Floor Core DW Lobby Door - Make good all chips/indents especially to
architrave and re-paint where required
- ------------------------------------------------------------------------------------------------------------------------------------
7860 Core B Ground Core DW East Wall - improve paint quality to movement joint
(adjacent 1st floor soffit)
- ------------------------------------------------------------------------------------------------------------------------------------
7861 Core B Ground Core DW Paint touch up generally
- ------------------------------------------------------------------------------------------------------------------------------------
7862 Core B Ground Core DW Make good smoothing compound around staircase corner
- ------------------------------------------------------------------------------------------------------------------------------------
7863 Core B Ground Lobby DW MG marks to paintwork - generally
- ------------------------------------------------------------------------------------------------------------------------------------
7865 Core B Ground Lobby DW Dents, chips and marks to be MG to architrave and door
- re-painted if required.
- ------------------------------------------------------------------------------------------------------------------------------------
7867 Core B Ground Lobby DW Lobby door - chip to be MG adj to push plate.
- ------------------------------------------------------------------------------------------------------------------------------------
7869 Core B Ground Core DW West wall - Paint quality poor - directly behind handrail
- ------------------------------------------------------------------------------------------------------------------------------------
7870 Core B Ground Core DW 1/2 landing - NW internal corner - movement joint quality to
be improved.
- ------------------------------------------------------------------------------------------------------------------------------------
7871 Core B Lower Grou Lobby DW Lobby door - architrave/door to be MG and paint
touched up
- ------------------------------------------------------------------------------------------------------------------------------------
7886 Core B Lower Grou Core DW 1/2 landing - T&J/paint quality to be improved above
light to east wall
- ------------------------------------------------------------------------------------------------------------------------------------
7890 Core B Basement Core DW Arris of external corner LHS of lobby door to be
improved.
- ------------------------------------------------------------------------------------------------------------------------------------
7892 Core B Basement Core DW Painters mate detail to around door frame head & RH of
door frame to be improved.
- ------------------------------------------------------------------------------------------------------------------------------------
7895 Core B Basement Core DW Paint cutting in around sounder to be improved.
- ------------------------------------------------------------------------------------------------------------------------------------
7901 Core B Basement Core DW SW internal corner - paint quality to be improved.
- ------------------------------------------------------------------------------------------------------------------------------------
7912 Core B Basement Lobby DW Ceiling tiles - 3rd from south-west corner damage - replace.
- ------------------------------------------------------------------------------------------------------------------------------------
7915 Core B Basement Lobby DW Ceiling tiles - NW tile and margin does not sit properly together.
- ------------------------------------------------------------------------------------------------------------------------------------
7991 Plenums Lower Grou 1-2/H DW Smoke Vent sign to be fitted onto plenum door -
rather than blockwork
- ------------------------------------------------------------------------------------------------------------------------------------
8013 Core A Ground Core DW (GF-LGF Flight) - Nosing to be completed to vinyl to
top two steps.
- ------------------------------------------------------------------------------------------------------------------------------------
8028 Core A Ground Core DW (GF-LGF Flight) - North Wall - wall to be MG and
painted adj to around and below light & sounder.
- ------------------------------------------------------------------------------------------------------------------------------------
8031 Core A Lower Grou Core DW Walls to be MG generally of all damage and re-painted.
- ------------------------------------------------------------------------------------------------------------------------------------
8035 Core A Lower Grou Core DW Filling and paint quality poor around door frame.
- ------------------------------------------------------------------------------------------------------------------------------------
8057 Core A Lower Grou Lobby DW Plasterboard to be continued above smoke vent door & painted.
- ------------------------------------------------------------------------------------------------------------------------------------
8064 Core A Lower Grou Lobby DW Back to back remedial to be improved around the light
switches - further rubbing down and painting.
- ------------------------------------------------------------------------------------------------------------------------------------
8138 Core C All General DW Vinyl generally un-acceptable - gaps evident to tiles
and trims and also between tiles
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Nr Originator Logged Action Overdue? Not by PC?
Before Cleared by... Nr
- ------------------------------------------------------------------------------------------------------------------------------------
Package 4755 Marketing suite fit out H L Smith Construction Limited
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
7847 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7847
- ------------------------------------------------------------------------------------------------------------------------------------
7854 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7854
- ------------------------------------------------------------------------------------------------------------------------------------
7860 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7860
- ------------------------------------------------------------------------------------------------------------------------------------
7861 Rolfe Judd Arch - KG/GF 05/12/97 11/12/97 o 7861
- ------------------------------------------------------------------------------------------------------------------------------------
7862 Rolfe Judd Arch - KG/GF 05/12/97 11/12/97 o 7862
- ------------------------------------------------------------------------------------------------------------------------------------
7863 Rolfe Judd Arch - KG/GF 05/12/97 11/12/97 o 7863
- ------------------------------------------------------------------------------------------------------------------------------------
7865 Rolfe Judd Arch - KG/GF 05/12/97 11/12/97 o 7865
- ------------------------------------------------------------------------------------------------------------------------------------
7867 Rolfe Judd Arch - KG/GF 05/12/97 11/12/97 o 7867
- ------------------------------------------------------------------------------------------------------------------------------------
7869 Rolfe Judd Arch - KG/GF 05/12/97 11/12/97 o 7869
- ------------------------------------------------------------------------------------------------------------------------------------
7870 Rolfe Judd Arch - KG/GF 05/12/97 11/12/97 o 7870
- ------------------------------------------------------------------------------------------------------------------------------------
7871 Rolfe Judd Arch - KG/GF 05/12/97 11/12/97 o 7871
- ------------------------------------------------------------------------------------------------------------------------------------
7886 Rolfe Judd Arch - KG/GF 05/12/97 11/12/97 o 7886
- ------------------------------------------------------------------------------------------------------------------------------------
7890 Rolfe Judd Arch - KG/GF 05/12/97 11/12/97 o 7890
- ------------------------------------------------------------------------------------------------------------------------------------
7892 Rolfe Judd Arch - KG/GF 05/12/97 11/12/97 o 7892
- ------------------------------------------------------------------------------------------------------------------------------------
7895 Rolfe Judd Arch - KG/GF 05/12/97 11/12/97 o 7895
- ------------------------------------------------------------------------------------------------------------------------------------
7901 Rolfe Judd Arch - KG/GF 05/12/97 11/12/97 o 7901
- ------------------------------------------------------------------------------------------------------------------------------------
7912 Rolfe Judd Arch - KG/GF 05/12/97 11/12/97 o 7912
- ------------------------------------------------------------------------------------------------------------------------------------
7915 Rolfe Judd Arch - KG/GF 05/12/97 11/12/97 o 7915
- ------------------------------------------------------------------------------------------------------------------------------------
7991 Rolfe Judd Architecture Ltd. - KG/G 05/12/97 12/12/97 o 7991
- ------------------------------------------------------------------------------------------------------------------------------------
8013 Rolfe Judd Architecture Ltd. - KG/G 05/12/97 12/12/97 o 8013
- ------------------------------------------------------------------------------------------------------------------------------------
8028 Rolfe Judd Architecture Ltd. - KG/G 05/12/97 12/12/97 o 8028
- ------------------------------------------------------------------------------------------------------------------------------------
8031 Rolfe Judd Architecture Ltd. - KG/G 05/12/97 12/12/97 o 8031
- ------------------------------------------------------------------------------------------------------------------------------------
8035 Rolfe Judd Architecture Ltd. - KG/G 05/12/97 12/12/97 o 8035
- ------------------------------------------------------------------------------------------------------------------------------------
8057 Rolfe Judd Architecture Ltd. - KG/G 05/12/97 12/12/97 o 8057
- ------------------------------------------------------------------------------------------------------------------------------------
8064 Rolfe Judd Architecture Ltd. - KG/G 05/12/97 12/12/97 o 8064
- ------------------------------------------------------------------------------------------------------------------------------------
8064 Rolfe Judd Architecture Ltd. - KG/G 05/12/97 12/12/97 o 8064
- ------------------------------------------------------------------------------------------------------------------------------------
8138 Rolfe Judd Architecture Ltd. - KG/G 05/12/97 12/12/97 o 8138
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
Mace Limited
25 February 1998 Page 4 m|a|c|e
<PAGE> 294
Snagging report Report limited as follows MEPC - Petershill, London EC4
Packages 4755 - 4755 One Carter Lane
Status Only uncleared snags listed
<TABLE>
<CAPTION>
Nr Zone Floor Grid ref. Type Description
- ------------------------------------------------------------------------------------------------------------------------------------
Package 4755 Marketing suite fit out H L Smith Construction Limited
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
8146 Core C All General DW Vinyl edge trim badly cut - leaving rough cut evident,
to be MG or replaced.
- ------------------------------------------------------------------------------------------------------------------------------------
8147 Core C All General DW Vinyl edge details to be improved when vinyl trims
return around corners on landings - example LFG well wall -
trim around upper landing and last three treads.
- ------------------------------------------------------------------------------------------------------------------------------------
8238 Core A All General DW Vinyl in certain locations coming away - not stuck
down sufficiently - all levels to be checked and re-stuck
where required.
- ------------------------------------------------------------------------------------------------------------------------------------
8240 Core A All General DW Mastic to vinyl joints to be completed generally.
- ------------------------------------------------------------------------------------------------------------------------------------
8241 Core A All General DW Skirting mitres to be improved generally.
- ------------------------------------------------------------------------------------------------------------------------------------
8242 Core A All General DW Stringer trim to be higher than tread vinyl.
- ------------------------------------------------------------------------------------------------------------------------------------
8244 Core A All General DW Vinyl tile pattern to run through with adjacent tiles,
currently un-acceptable in certain locations.
- ------------------------------------------------------------------------------------------------------------------------------------
8245 Core A All General DW 1/2 landing vinyl to continue around the stringer as
the pre-agreed detail - strip missing.
- ------------------------------------------------------------------------------------------------------------------------------------
8246 Core A All General DW Vinyl nosings to be stuck down - certain locations
nosing coming away from the tread.
- ------------------------------------------------------------------------------------------------------------------------------------
8247 Core A All General DW Gaps evident between vinyl tiles and trims.
- ------------------------------------------------------------------------------------------------------------------------------------
8248 Core A All General DW Edge vinyl trim badly cut leaving rough edges - to be
made good.
- ------------------------------------------------------------------------------------------------------------------------------------
8249 Core A All General DW Vinyl to be generally snagged by HLS prior to area
specific snag.
- ------------------------------------------------------------------------------------------------------------------------------------
8250 Core C All General DW Vinyl to be generally snagged by HLS prior to area
specific snag.
- ------------------------------------------------------------------------------------------------------------------------------------
8255 Core C 4th Floor Lobby DW Lobby door - MG chips and indents and paint touch up
required.
- ------------------------------------------------------------------------------------------------------------------------------------
8259 Core C 4th Floor Lobby DW MG paintwork marks, chips, indents generally.
- ------------------------------------------------------------------------------------------------------------------------------------
8264 Core C All General DW Making good around the Dry riser boxes to be improved.
- ------------------------------------------------------------------------------------------------------------------------------------
8265 Core A All General DW Making good around the Dry riser boxes to be improved.
- ------------------------------------------------------------------------------------------------------------------------------------
8267 Core C All General DW Lobbys - Damage to plasterboard/paint MG & re-painted.
- ------------------------------------------------------------------------------------------------------------------------------------
8766 Core B All Core DW Damage to paintwork to walls and core door(s) to be
made good and paint touched up.
- ------------------------------------------------------------------------------------------------------------------------------------
8787 Core C Lower Grou Core DW (LGF - 1/2 landing) - Paint required to concrete slab
level at 1/2 landing leading down to Basement Level. Please
note there is no skirting detail (concrete just sealed).
- ------------------------------------------------------------------------------------------------------------------------------------
8812 All Basement General DW Signage currently screwed into high level cable trays/cable
tray supports, to be replaced with signage hung properly from
high level services/concrete soffit (where possible.) Also all
high level signage to achieve 2.1m minimum clearance from
concrete slab.
- ------------------------------------------------------------------------------------------------------------------------------------
8815 Core C All General DW Fire exit directional signs to be fitted within core
(FE80 as Core B & A).
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Nr Originator Logged Action Overdue? Not by PC?
Before Cleared by... Nr
- ------------------------------------------------------------------------------------------------------------------------------------
Package 4755 Marketing suite fit out H L Smith Construction Limited
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
8146 Rolfe Judd Architecture Ltd. - KG/G 05/12/97 12/12/97 o 8146
- ------------------------------------------------------------------------------------------------------------------------------------
8147 Rolfe Judd Architecture Ltd. - KG/G 05/12/97 12/12/97 o 8147
- ------------------------------------------------------------------------------------------------------------------------------------
8238 Rolfe Judd Ltd - KG 05/12/97 12/12/97 o 8238
- ------------------------------------------------------------------------------------------------------------------------------------
8240 Rolfe Judd Ltd - KG 05/12/97 12/12/97 o 8240
- ------------------------------------------------------------------------------------------------------------------------------------
8241 Rolfe Judd Ltd - KG 05/12/97 12/12/97 o 8241
- ------------------------------------------------------------------------------------------------------------------------------------
8242 Rolfe Judd Ltd - KG 05/12/97 12/12/97 o 8242
- ------------------------------------------------------------------------------------------------------------------------------------
8244 Rolfe Judd Ltd - KG 05/12/97 12/12/97 o 8244
- ------------------------------------------------------------------------------------------------------------------------------------
8245 Rolfe Judd Ltd - KG 05/12/97 12/12/97 o 8245
- ------------------------------------------------------------------------------------------------------------------------------------
8246 Rolfe Judd Ltd - KG 05/12/97 12/12/97 o 8246
- ------------------------------------------------------------------------------------------------------------------------------------
8247 Rolfe Judd Ltd - KG 05/12/97 12/12/97 o 8247
- ------------------------------------------------------------------------------------------------------------------------------------
8248 Rolfe Judd Ltd - KG 05/12/97 12/12/97 o 8248
- ------------------------------------------------------------------------------------------------------------------------------------
8249 Rolfe Judd Ltd - KG 05/12/97 12/12/97 o 8249
- ------------------------------------------------------------------------------------------------------------------------------------
8250 Rolfe Judd Ltd - KG 05/12/97 12/12/97 o 8250
- ------------------------------------------------------------------------------------------------------------------------------------
8255 Rolfe Judd Ltd - KG 05/12/97 12/12/97 o 8255
- ------------------------------------------------------------------------------------------------------------------------------------
8259 Rolfe Judd Ltd - KG 05/12/97 12/12/97 o 8259
- ------------------------------------------------------------------------------------------------------------------------------------
8264 Rolfe Judd Ltd - KG 05/12/97 12/12/97 o 8264
- ------------------------------------------------------------------------------------------------------------------------------------
8265 Rolfe Judd Ltd - KG 05/12/97 12/12/97 o 8265
- ------------------------------------------------------------------------------------------------------------------------------------
8267 Rolfe Judd Ltd - KG 05/12/97 12/12/97 o 8267
- ------------------------------------------------------------------------------------------------------------------------------------
8766 Mace Limited - MPH 08/12/97 15/12/97 o 8766
- ------------------------------------------------------------------------------------------------------------------------------------
8787 Rolfe Judd Architecture Ltd. - GF 08/12/97 15/12/97 o 8787
- ------------------------------------------------------------------------------------------------------------------------------------
8812 Mace Limited - MPH 08/12/97 15/12/97 o 8812
- ------------------------------------------------------------------------------------------------------------------------------------
8815 Mace Limited - MPH 08/12/97 15/12/97 o 8815
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
Mace Limited
25 February 1998 Page 5 m|a|c|e
<PAGE> 295
Snagging report Report limited as follows MEPC - Petershill, London EC4
Packages 4755 - 4755 One Carter Lane
Status Only uncleared snags listed
<TABLE>
<CAPTION>
Overdue? Not by PC?
Action
NR Zone Floor Grid Ref Type Description Originator Logged Before Cleared by Nr
- -----------------------------------------------------------------------------------------------------------------------------------
Package 4755 Marketing suite fit out H L Smith Construction Limited
- -----------------------------------------------------------------------------------------------------------------------------------
===================================================================================================================================
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Totals for package 4755 Marketing suite fit out Total number of snags 123
H L Smith Construction Number of snags uncleared, by Mace 123 by team 123
Number of overdue snags 123
- ----------------------------------------------------------------------------------------------------------------------------
===========================================================================================================================
- ----------------------------------------------------------------------------------------------------------------------------
Report totals Total number of snags 123
Number of snags uncleared, by Mace 123 by team 123
Number of overdue snags 123
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
Key to work types
DQ Design Query
UW Unfinished Work
LD Latent defect
OW Outstanding works
IN Instructed works
DW Defective works
- --------------------------------------------------------------------------------
Mace Limited
25 February 1998 Page 6 m|a|c|e
<PAGE> 296
Snagging report Report limited as follows MEPC - Petershill, London EC4
Packages 5500 - 5500 One Carter Lane
Status Only uncleared snags listed
<TABLE>
<CAPTION>
Nr Zone Floor Grid ref. Type Description
- ------------------------------------------------------------------------------------------------------------------------------------
Package 5500 Facade Maintenance Equipment Facade Hoists Limited
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
4409 Rf C Track Roof DW Elevation 1,2,3,4,10,11,12 - All plate washer to be inspected and
replaced where required with bigger galvanised plate washer -
current plate washer too small and pulling the bolts from vertical.
- ------------------------------------------------------------------------------------------------------------------------------------
4424 Track Gen Roof OW Safety signage to be provided to Cradle, Trolley and double doors.
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Nr Originator Logged Action Overdue? Not by PC?
Before Cleared by... Nr
- ------------------------------------------------------------------------------------------------------------------------------------
Package 5500 Facade Maintenance Equipment Facade Hoists Limited
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
4409 Mace Limited - MPH 06/10/97 13/10/97 o 4409
- ------------------------------------------------------------------------------------------------------------------------------------
4424 Mace Limited - MPH 06/10/97 13/10/97 o 4424
- ------------------------------------------------------------------------------------------------------------------------------------
====================================================================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
Totals for package 5500 Facade Maintenance Equipment Total number of snags 2
Facade Hoists Limited Number of snags uncleared, by Mace 2 by team 2
Number of overdue snags 2
- ------------------------------------------------------------------------------------------------------------------------------------
====================================================================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
Report totals Total number of snags 2
Number of snags uncleared, by Mace 2 by team 2
Number of overdue snags 2
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Key to work types
DQ Design Query
UW Unfinished Work
LD Latent defect
OW Outstanding works
IN Instructed works
DW Defective works
- --------------------------------------------------------------------------------
Mace Limited
25 February 1998 Page 1 m|a|c|e
<PAGE> 297
Snagging report Report limited as follows MEPC - Petershill, London EC4
Packages 6300 - 6300 One Carter Lane
Status Only uncleared snags listed
<TABLE>
<CAPTION>
Nr Zone Floor Grid ref. Type Description
- ------------------------------------------------------------------------------------------------------------------------------------
Package 6300 Mechanical Services Andrews Weatherfoil Limited
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
3874 External Roof IW Clean condensor coils.
- ------------------------------------------------------------------------------------------------------------------------------------
4532 General Basement OW Cap all drain valves at conns to AHU coils.
- ------------------------------------------------------------------------------------------------------------------------------------
6712 Plant - 3 Basement IW Hammerclad section of pipework above fresh air
ductwork to A/S 15.
- ------------------------------------------------------------------------------------------------------------------------------------
6716 General All IW Caps required on all drain cocks.
- ------------------------------------------------------------------------------------------------------------------------------------
7164 Boiler Rm Basement DW Boiler height limit stat operation in conjunction with
system high limit stat to be resolved by wiring in series.
- ------------------------------------------------------------------------------------------------------------------------------------
7423 Terraces 5th Floor Elevation 11 IW Overflow hopper required from toilets.
- ------------------------------------------------------------------------------------------------------------------------------------
7484 Core A 5th Floor Core IW Remove radiator and complete plasterboard behind
radiator (Pk 3800)
- ------------------------------------------------------------------------------------------------------------------------------------
7940 Plenums Basement 3/E-H DW Grille to be provided to air intake and extract ducts
within the plenum?
- ------------------------------------------------------------------------------------------------------------------------------------
8287 Marketing 4th Floor OW Environmental checks
- ------------------------------------------------------------------------------------------------------------------------------------
8307 Core B 2nd Floor DW Hose union cap required
- ------------------------------------------------------------------------------------------------------------------------------------
8311 Core C 1st Floor DW Hose union and cap missing from CHWF
- ------------------------------------------------------------------------------------------------------------------------------------
8679 Marketing 4th Floor DW Resolve noise problem to all FCU
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Nr Originator Logged Action Overdue? Not by PC?
Before Cleared by... Nr
- ------------------------------------------------------------------------------------------------------------------------------------
Package 6300 Mechanical Services Andrews Weatherfoil Limited
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
3874 Mace Limited - AP 05/10/97 13/10/97 o 3874
- ------------------------------------------------------------------------------------------------------------------------------------
4532 Ernest Griffiths and Sons - NG 14/10/97 21/10/97 o 4532
- ------------------------------------------------------------------------------------------------------------------------------------
6712 Mace Limited - AP 24/11/97 01/12/97 o 6712
- ------------------------------------------------------------------------------------------------------------------------------------
6716 Mace Limited - AP 24/11/97 01/12/97 o 6716
- ------------------------------------------------------------------------------------------------------------------------------------
7164 Mace Limited - TP 30/11/97 08/12/97 o 7164
- ------------------------------------------------------------------------------------------------------------------------------------
7423 Rolfe Judd Architecture Ltd - CT 03/12/97 10/12/97 o 7423
- ------------------------------------------------------------------------------------------------------------------------------------
7484 Rolfe Judd Arch - KG/GF 04/12/97 11/12/97 o 7484
- ------------------------------------------------------------------------------------------------------------------------------------
7940 Rolfe Judd Arch - KG/GF 05/12/97 11/12/97 o 7940
- ------------------------------------------------------------------------------------------------------------------------------------
8287 Rolfe Judd Ltd - AP 05/12/97 12/12/97 o 8287
- ------------------------------------------------------------------------------------------------------------------------------------
8307 Rolfe Judd Ltd - AP 05/12/97 12/12/97 o 8307
- ------------------------------------------------------------------------------------------------------------------------------------
8311 Rolfe Judd Ltd - AP 05/12/97 12/12/97 o 8311
- ------------------------------------------------------------------------------------------------------------------------------------
8679 Mace Limited - AP 08/12/97 15/12/97 o 8679
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
====================================================================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
Totals for package 6300 Mechanical Services Total number of snags 12
Andrews Weatherfoil Limited Number of snags uncleared, by Mace 12 by team 12
Number of overdue snags 12
- ------------------------------------------------------------------------------------------------------------------------------------
====================================================================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
Report totals Total number of snags 12
Number of snags uncleared, by Mace 12 by team 12
Number of overdue snags 12
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Key to work types
DQ Design Query
UW Unfinished Work
LD Latent defect
OW Outstanding works
IN Instructed works
DW Defective works
- --------------------------------------------------------------------------------
Mace Limited
25 February 1998 Page 1 m|a|c|e
<PAGE> 298
Snagging report Report limited as follows MEPC - Petershill, London EC4
Packages 6700 - 6700 One Carter Lane
Status Only uncleared snags listed
<TABLE>
<CAPTION>
Nr Zone Floor Grid ref. Type Description
- ------------------------------------------------------------------------------------------------------------------------------------
Package 6700 BMS / Controls Synchronised Systems
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
2008 Plant - 1 Basement DW Install factory made 90 deg bend on trunking above sump pump
panels.
- ------------------------------------------------------------------------------------------------------------------------------------
2955 Core A 3rd Floor Riser DW Install earth tag across trunking joint.
- ------------------------------------------------------------------------------------------------------------------------------------
6683 Plant - 3 Basement IW Touch up paint to center section of MCC 3.
- ------------------------------------------------------------------------------------------------------------------------------------
7146 External 5th Floor OW Re-check C 1R/chiller interface when chiller works complete.
- ------------------------------------------------------------------------------------------------------------------------------------
7152 LV Room Basement OW Commission KWH meter once NGB rectify pulse
- ------------------------------------------------------------------------------------------------------------------------------------
7155 External 5th Floor OW Calibrate and demonstrate solar radiation sensor
- ------------------------------------------------------------------------------------------------------------------------------------
7156 Plant - 4 Basement OW Commissioni and demonstrate modem
- ------------------------------------------------------------------------------------------------------------------------------------
7157 Plant - 1 Basement OW Install and commissioni portable keypad
- ------------------------------------------------------------------------------------------------------------------------------------
7162 Boiler Rm Basement DW Boiler height limit stat operation in conjunction with
system high limit stat to be resolved
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Nr Originator Logged Action Overdue? Not by PC?
Before Cleared by... Nr
- ------------------------------------------------------------------------------------------------------------------------------------
Package 6700 BMS / Controls Synchronised Systems plc
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
2008 Mace Limited - AP 21/07/97 28/07/97 o 2008
- ------------------------------------------------------------------------------------------------------------------------------------
2955 Mace Limited - AP 22/09/97 29/09/97 o 2955
- ------------------------------------------------------------------------------------------------------------------------------------
6683 Ove Arup & Partners - GP 24/11/97 01/12/97 o 6683
- ------------------------------------------------------------------------------------------------------------------------------------
7146 Mace Limited - TP 30/11/97 08/12/97 o 7146
- ------------------------------------------------------------------------------------------------------------------------------------
7152 Mace Limited - TP 30/11/97 08/12/97 o 7152
- ------------------------------------------------------------------------------------------------------------------------------------
7155 Mace Limited - TP 30/11/97 08/12/97 o 7155
- ------------------------------------------------------------------------------------------------------------------------------------
7156 Mace Limited - TP 30/11/97 08/12/97 o 7156
- ------------------------------------------------------------------------------------------------------------------------------------
7157 Mace Limited - TP 30/11/97 08/12/97 o 7157
- ------------------------------------------------------------------------------------------------------------------------------------
7162 Mace Limited - TP 30/11/97 08/12/97 o 7162
- ------------------------------------------------------------------------------------------------------------------------------------
====================================================================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
Totals for package 6700 BMS / Controls Total number of snags 9
Synchronised Systems plc Number of snags uncleared, by Mace 9 by team 9
Number of overdue snags 9
- ------------------------------------------------------------------------------------------------------------------------------------
====================================================================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
Report totals Total number of snags 9
Number of snags uncleared, by Mace 9 by team 9
Number of overdue snags 9
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Key to work types
DQ Design Query
UW Unfinished Work
LD Latent defect
OW Outstanding works
IN Instructed works
DW Defective works
- --------------------------------------------------------------------------------
Mace Limited
25 February 1998 Page 1 m|a|c|e
<PAGE> 299
Snagging report Report limited as follows MEPC - Petershill, London EC4
Packages 6900 - 6900 One Carter Lane
Status Only uncleared snags listed
<TABLE>
<CAPTION>
Nr Zone Floor Grid ref. Type Description
- ------------------------------------------------------------------------------------------------------------------------------------
Package 6900 Building Fabric Insulation & Firestopping Abbey Thermal Insulation Limited
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
7326 Plenums Basement General DW HL thermal insulation to have thermal protection to butt joints
and angle fitted
- ------------------------------------------------------------------------------------------------------------------------------------
7938 Plenums Basement 3/E-H DW Thermal insulation not completed to east concrete beam.
- ------------------------------------------------------------------------------------------------------------------------------------
7959 Plenums Basement 2-3/H DW Thermal insulation not completed to within the plenum?
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Nr Originator Logged Action Overdue? Not by PC?
Before Cleared by... Nr
- ------------------------------------------------------------------------------------------------------------------------------------
Package 6900 Building Fabric Insulation & Firestopping Abbey Thermal Insulation Limited
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
7326 Mace Limited - MPH 03/12/97 10/12/97 o 7326
- ------------------------------------------------------------------------------------------------------------------------------------
7938 Rolfe Judd Arch - KG/GF 05/12/97 11/12/97 o 7938
- ------------------------------------------------------------------------------------------------------------------------------------
7959 Rolfe Judd Arch - KG/GF 05/12/97 11/12/97 o 7959
- ------------------------------------------------------------------------------------------------------------------------------------
====================================================================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
Totals for package 6900 Building Fabric Insulation &
Firestopping Total number of snags 3
Abbey Thermal Insulation Limited Number of snags uncleared, by Mace 3 by team 3
Number of overdue snags 3
- ------------------------------------------------------------------------------------------------------------------------------------
====================================================================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
Report totals Total number of snags 3
Number of snags uncleared, by Mace 3 by team 3
Number of overdue snags 3
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Key to work types
DQ Design Query
UW Unfinished Work
LD Latent Defect
OW Outstanding works
IN Instructed works
DW Defective works
- --------------------------------------------------------------------------------
Mace Limited
25 February 1998 Page 1 m|a|c|e
<PAGE> 300
Snagging report Report limited as follows MEPC - Petershill, London EC4
Packages 7000 - 7000 One Carter Lane
Status Only uncleared snags listed
<TABLE>
<CAPTION>
Nr Zone Floor Grid ref. Type Description
- ------------------------------------------------------------------------------------------------------------------------------------
Package 7000 Electrical Installation N. G. Bailey & Co. Ltd
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
4679 North Corr Basement DW Transition from 100 to 600 tray not acceptable. Add 100 bend
and transition to level of 600 tray with mechanica fixing.
(corner of PR2 and lift 5)
- ------------------------------------------------------------------------------------------------------------------------------------
4686 North Corr Basement DW Replace bends with factory manufactured components.
- ------------------------------------------------------------------------------------------------------------------------------------
4992 West Corri Basement 7-8 DW Transition of all tray from core C to Corridor to be resolved.
- ------------------------------------------------------------------------------------------------------------------------------------
4993 West Corri Basement 6-7 DW Replace tray horizontal off set with factory components
- Adjacent LV Room
- ------------------------------------------------------------------------------------------------------------------------------------
4995 West Corri Basement 3-6 DW Replace tray off sets with factory made components adjacent to
plantroom 3
- ------------------------------------------------------------------------------------------------------------------------------------
4999 South Corr Basement F DW Replace trunking offset with factory manufactured units
- ------------------------------------------------------------------------------------------------------------------------------------
5002 South Corr Basement D DW Replace off set with factory made unit on trunking
- ------------------------------------------------------------------------------------------------------------------------------------
5004 South Corr Basement B DW Replace off set with factory made unit on trunking
- ------------------------------------------------------------------------------------------------------------------------------------
5005 South Corr Basement B DW Replace tray off set with factory made unit
- ------------------------------------------------------------------------------------------------------------------------------------
5006 West Corri Basement 8 DW Transition from 100 to 600 tray to have physical connection where
entering the L.V room
- ------------------------------------------------------------------------------------------------------------------------------------
5008 West Corri Basement 7-8 DW Tray from core C to 600 to L.V room requires bend, off set and
physical connection. Damaged end to replace
- ------------------------------------------------------------------------------------------------------------------------------------
7345 Plenums Basement 7/B-C DW Conduit above second SV from west to have proper bend fitted within
conduit - cable currently exposed
- ------------------------------------------------------------------------------------------------------------------------------------
8303 Internal All - DW Fit besa box lids to future conduits
- ------------------------------------------------------------------------------------------------------------------------------------
8452 Ramp Lower Grou OW Complete installation of car park barrier and commissioning.
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Nr Originator Logged Action Overdue? Not by PC?
Before Cleared by... Nr
- ------------------------------------------------------------------------------------------------------------------------------------
Package 7000 Electrical Installation N. G. Bailey & Co. Ltd
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
4679 Mace Limited - AP 16/10/97 23/10/97 o 4679
- ------------------------------------------------------------------------------------------------------------------------------------
4686 Mace Limited - AP 16/10/97 23/10/97 o 4686
- ------------------------------------------------------------------------------------------------------------------------------------
4992 Mace Limited - TP 28/10/97 04/11/97 o 4992
- ------------------------------------------------------------------------------------------------------------------------------------
4993 Mace Limited - TP 28/10/97 04/11/97 o 4993
- ------------------------------------------------------------------------------------------------------------------------------------
4995 Mace Limited - TP 28/10/97 04/11/97 o 4995
- ------------------------------------------------------------------------------------------------------------------------------------
4999 Mace Limited - TP 28/10/97 04/11/97 o 4999
- ------------------------------------------------------------------------------------------------------------------------------------
5002 Mace Limited - TP 29/10/97 04/11/97 o 5002
- ------------------------------------------------------------------------------------------------------------------------------------
5004 Mace Limited - TP 29/10/97 04/11/97 o 5004
- ------------------------------------------------------------------------------------------------------------------------------------
5005 Mace Limited - TP 29/10/97 04/11/97 o 5005
- ------------------------------------------------------------------------------------------------------------------------------------
5006 Mace Limited - TP 29/10/97 04/11/97 o 5006
- ------------------------------------------------------------------------------------------------------------------------------------
5008 Mace Limited - TP 29/10/97 04/11/97 o 5008
- ------------------------------------------------------------------------------------------------------------------------------------
7345 Mace Limited - MPH 03/12/97 10/12/97 o 7345
- ------------------------------------------------------------------------------------------------------------------------------------
8303 Rolfe Judd Ltd - AP 05/12/97 12/12/97 o 8303
- ------------------------------------------------------------------------------------------------------------------------------------
8452 Mace Limited - AP 08/12/97 15/12/97 o 8452
- ------------------------------------------------------------------------------------------------------------------------------------
====================================================================================================================================
Totals for package 7000 Electrical Installation Total number of snags 14
N. G. Bailey & Co. Ltd Number of snags uncleared, by Mace 14 by team 14
Number of overdue snags 14
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
Mace Limited
25 February 1998 Page 1 m|a|c|e
<PAGE> 301
Snagging report Report limited as follows MEPC - Petershill, London EC4
Packages 7000 - 7000 One Carter Lane
Status Only uncleared snags listed
<TABLE>
<CAPTION>
Overdue? Not by PC?
Action
NR Zone Floor Grid Ref. Type Description Originator Logged Before Cleared by Nr
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Package 7000 Electrical Installation N. G. Bailey & Co. Ltd
- ------------------------------------------------------------------------------------------------------------------------------------
====================================================================================================================================
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Report totals Total number of snags 14
Number of snags uncleared, by Mace 14 by team 14
Number of overdue snags 14
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Key to work types
DQ Design Query
UW Unfinished Work
LD Latent Defect
OW Outstanding works
IN Instructed works
DW Defective works
- --------------------------------------------------------------------------------
Mace Limited
25 February 1998 Page 2 m|a|c|e
<PAGE> 302
Snagging report Report limited as follows MEPC - Petershill, London EC4
Packages 7050 - 7050 One Carter Lane
Status Only uncleared snags listed
<TABLE>
<CAPTION>
Nr Zone Floor Grid ref. Type Description
- ------------------------------------------------------------------------------------------------------------------------------------
Package 7050 Fire Detection & Alarms Cerberus Limited
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
4986 BMS Roo Basement DW 2No cables (NE corner) from plant room 4, to be fixed back to
the soffit
- ------------------------------------------------------------------------------------------------------------------------------------
5431 Core C 2nd Floor Ext DW HL sounder (adj to Lobby door) not level.
- ------------------------------------------------------------------------------------------------------------------------------------
8232 Core B 5th Floor - DW Install smoke detector in ceiling correctly
- ------------------------------------------------------------------------------------------------------------------------------------
8282 External 5th Floor - OW Install in final location break glass/beacon
- ------------------------------------------------------------------------------------------------------------------------------------
8293 Core A 4th Floor - DW Fit detector to slab soffit stair lobby
- ------------------------------------------------------------------------------------------------------------------------------------
8319 General Ground - OW Firemans override switch labels on fore alarm panel to be corrected
- ------------------------------------------------------------------------------------------------------------------------------------
8323 General Ground - OW Trunking up required for fire alarm panel
- ------------------------------------------------------------------------------------------------------------------------------------
8345 Core A Ground - DW Fix sounder properly in entrance area
- ------------------------------------------------------------------------------------------------------------------------------------
8347 Core B Lower Grou - DW Fit smoke detector head
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Nr Originator Logged Action Overdue? Not by PC?
Before Cleared by... Nr
- ------------------------------------------------------------------------------------------------------------------------------------
Package 7050 Fire Detection & Alarms Cerberus Limited
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
4986 Mace Limited - MPH 27/10/97 03/11/97 o 4986
- ------------------------------------------------------------------------------------------------------------------------------------
5431 Mace Limited - MPH 05/11/97 12/11/97 o 5431
- ------------------------------------------------------------------------------------------------------------------------------------
8232 Mace Limited - AP 05/12/97 12/12/97 o 8232
- ------------------------------------------------------------------------------------------------------------------------------------
8282 Rolfe Judd Ltd - AP 05/12/97 12/12/97 o 8282
- ------------------------------------------------------------------------------------------------------------------------------------
8293 Rolfe Judd Ltd - AP 05/12/97 12/12/97 o 8293
- ------------------------------------------------------------------------------------------------------------------------------------
8319 Andrew Reid & Partners - SF 05/12/97 12/12/97 o 8319
- ------------------------------------------------------------------------------------------------------------------------------------
8323 Andrew Reid & Partners - SF 05/12/97 12/12/97 o 8323
- ------------------------------------------------------------------------------------------------------------------------------------
8345 Mace Limited - AP 05/12/97 12/12/97 o 8345
- ------------------------------------------------------------------------------------------------------------------------------------
8347 Mace Limited - AP 05/12/97 12/12/97 o 8347
- ------------------------------------------------------------------------------------------------------------------------------------
====================================================================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
Totals for package 7050 Fire Detection & Alarms Total number of snags 9
Cerberus Limited Number of snags uncleared, by Mace 9 by team 9
Number of overdue snags 9
- ------------------------------------------------------------------------------------------------------------------------------------
====================================================================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
Report totals Total number of snags 9
Number of snags uncleared, by Mace 9 by team 9
Number of overdue snags 9
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Key to work types
DQ Design Query
UW Unfinished Work
LD Latent Defect
OW Outstanding works
IN Instructed works
DW Defective works
- --------------------------------------------------------------------------------
Mace Limited
25 February 1998 Page 1 m|a|c|e
<PAGE> 303
Snagging report Report limited as follows MEPC - Petershill, London EC4
Packages 7400 - 7400 One Carter Lane
Status Only uncleared snags listed
<TABLE>
<CAPTION>
Nr Zone Floor Grid ref. Type Description
- ------------------------------------------------------------------------------------------------------------------------------------
Package 7400 Lifts Otis plc
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
7646 Lift 6 All Lifts DW Improve lux of lift car emergency lights
- ------------------------------------------------------------------------------------------------------------------------------------
8331 Lift 4 5th Floor DW Repair damage to LHS door
- ------------------------------------------------------------------------------------------------------------------------------------
8332 Lift Gener All DW Polish minor scratches to all doors.
- ------------------------------------------------------------------------------------------------------------------------------------
8334 Lift 5 2nd Floor DW Polish scratches to RH door
- ------------------------------------------------------------------------------------------------------------------------------------
8335 Lift 4 1st Floor DW Polish scratches upper architrave.
- ------------------------------------------------------------------------------------------------------------------------------------
8338 Lift 5 1st Floor DW Polish scratches RH corner architrave.
- ------------------------------------------------------------------------------------------------------------------------------------
8339 Lift 5 Lower Grou DW Polish scratches RH & LH door panels
- ------------------------------------------------------------------------------------------------------------------------------------
8340 Lift 5 Lower Grou DW Polish scratches RH & LH door panels
- ------------------------------------------------------------------------------------------------------------------------------------
8474 Lift 4 Basement - OW Polish scratches on RH architrave.
- ------------------------------------------------------------------------------------------------------------------------------------
8476 Lift 5 Basement - OW Polish scratches on RH door panels.
- ------------------------------------------------------------------------------------------------------------------------------------
8477 Lift 5 Basement - OW Remove dents to LH & RH door panels.
- ------------------------------------------------------------------------------------------------------------------------------------
8873 Lift 6 Lower Grou OW Corporation of London inspection of lift 6 - carry out works
resulting from the Inspection (see separate list)
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Nr Originator Logged Action Overdue? Not by PC?
Before Cleared by... Nr
- ------------------------------------------------------------------------------------------------------------------------------------
Package 7400 Lifts Otis plc
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
7646 Andrew Reid & Partners - SF 04/12/97 11/12/97 o 7646
- ------------------------------------------------------------------------------------------------------------------------------------
8331 Rolfe Judd Ltd - AP 05/12/97 12/12/97 o 8331
- ------------------------------------------------------------------------------------------------------------------------------------
8332 Rolfe Judd Ltd - AP 05/12/97 12/12/97 o 8332
- ------------------------------------------------------------------------------------------------------------------------------------
8334 Rolfe Judd Ltd - AP 05/12/97 12/12/97 o 8334
- ------------------------------------------------------------------------------------------------------------------------------------
8335 Rolfe Judd Ltd - AP 05/12/97 12/12/97 o 8335
- ------------------------------------------------------------------------------------------------------------------------------------
8338 Rolfe Judd Ltd - AP 05/12/97 12/12/97 o 8338
- ------------------------------------------------------------------------------------------------------------------------------------
8339 Rolfe Judd Ltd - AP 05/12/97 12/12/97 o 8339
- ------------------------------------------------------------------------------------------------------------------------------------
8340 Rolfe Judd Ltd - AP 05/12/97 12/12/97 o 8340
- ------------------------------------------------------------------------------------------------------------------------------------
8474 Mace Limited - AP 08/12/97 12/12/97 o 8474
- ------------------------------------------------------------------------------------------------------------------------------------
8476 Mace Limited - AP 08/12/97 12/12/97 o 8476
- ------------------------------------------------------------------------------------------------------------------------------------
8477 Mace Limited - AP 08/12/97 12/12/97 o 8477
- ------------------------------------------------------------------------------------------------------------------------------------
8873 Mace Limited - AP 10/12/97 17/12/97 o 8873
- ------------------------------------------------------------------------------------------------------------------------------------
====================================================================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
Totals for package 7400 Lifts Total number of snags 12
Otis plc Number of snags uncleared, by Mace 12 by team 12
Number of overdue snags 12
- ------------------------------------------------------------------------------------------------------------------------------------
====================================================================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
Report totals Total number of snags 12
Number of snags uncleared, by Mace 12 by team 12
Number of overdue snags 12
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Key to work types
DQ Design Query
UW Unfinished Work
LD Latent Defect
OW Outstanding works
IN Instructed works
DW Defective works
- --------------------------------------------------------------------------------
Mace Limited
25 February 1998 Page 1 m|a|c|e
<PAGE> 304
Snagging report Report limited as follows MEPC - Petershill, London EC4
Packages 8100 - 8100 One Carter Lane
Status Only uncleared snags listed
<TABLE>
<CAPTION>
Nr Zone Floor Grid ref. Type Description
- ------------------------------------------------------------------------------------------------------------------------------------
Package 8100 Hard Landscaping McNicholas plc
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
6069 External Ground General OW Plastic demarcation studs (Corporation highway) to be fixed
- ------------------------------------------------------------------------------------------------------------------------------------
6084 GF5 Ground General Lipping between y/s
- ------------------------------------------------------------------------------------------------------------------------------------
6086 GF5 Ground General Brass signage plates to knock-out panels
- ------------------------------------------------------------------------------------------------------------------------------------
6094 GF5 - General Lipping to y/s at lamp column
- ------------------------------------------------------------------------------------------------------------------------------------
6095 GF5 - General Cut y/s to edge of planter not securely bedded
- ------------------------------------------------------------------------------------------------------------------------------------
6098 GF5 - - Replace y/s with granite to match CFA detail
- ------------------------------------------------------------------------------------------------------------------------------------
6102 LG11 - - Lipping between top granite step and y/s
- ------------------------------------------------------------------------------------------------------------------------------------
6106 LG11A - - Lipping between y/s and top granite step
- ------------------------------------------------------------------------------------------------------------------------------------
6107 LG11A - - Cracked joints to be repointed
- ------------------------------------------------------------------------------------------------------------------------------------
6108 LG5 - - Brass sign plate to be fitted to smoke vents
- ------------------------------------------------------------------------------------------------------------------------------------
6123 LG5 - - Fit brass sign to smoke vent
- ------------------------------------------------------------------------------------------------------------------------------------
6277 LG11 All General DW Y/stone lipping to this area and ramps
- ------------------------------------------------------------------------------------------------------------------------------------
7465 Restauran EXTERNAL General DW Review performance of render at low level where rising damp
visible.
- ------------------------------------------------------------------------------------------------------------------------------------
8823 LG6 Lower Grou Elev. 11 DW Fix 2 No. handrails to steps and plenum grille/planter end
Elevation 11
- ------------------------------------------------------------------------------------------------------------------------------------
8832 LG10 Lower Grou DW General pointing remedials and lipping between slabs as marked in
yellow crayon
- ------------------------------------------------------------------------------------------------------------------------------------
8833 LG10A Lower Grou DW General pointing remedials and lipping between slabs as marked in
yellow crayon
- ------------------------------------------------------------------------------------------------------------------------------------
8834 GF6 Ground DW 1 no. handrail support spigot bent/damaged at Drum planter.
Rail out of line/level
- ------------------------------------------------------------------------------------------------------------------------------------
8836 LG10A Lower Grou DW Complete mastic pointing to paving/metal threshold of curved
glass door of Restaurant
- ------------------------------------------------------------------------------------------------------------------------------------
8839 External All DW Remove staining to render finishes on Drum, Restaurant and planters
- ------------------------------------------------------------------------------------------------------------------------------------
8842 External All DW Pointing remedials and lipping to paving slabs/junctions to be
rectified as marked by yellow crayon. To be complete 19.12.97
latest
- ------------------------------------------------------------------------------------------------------------------------------------
8870 External General DW Monitor render finish to Drum planter, Restaurant planter and
balcony where drip detail in question and rectify if proved
inadequate.
- ------------------------------------------------------------------------------------------------------------------------------------
8883 GF7/8 Ground DW Render to be improved to external lights set within drum planter
and Restaurant wall
- ------------------------------------------------------------------------------------------------------------------------------------
8884 GF6 Ground DW Render to be improved/corrected at R/H edge of drum planter
junction with Building facade (elev. 2). Curve not true.
- ------------------------------------------------------------------------------------------------------------------------------------
8885 GF6 Ground DW Scan. House Plinth - 2 No. granite plinth stones broken.
Unacceptable repairs. REPLACE.
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Nr Originator Logged Action Overdue? Not by PC?
Before Cleared by... Nr
- ------------------------------------------------------------------------------------------------------------------------------------
Package 8100 Hard Landscaping McNicholas plc
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
6069 Charles Funke Associates - CT 14/11/97 21/11/97 o 6069
- ------------------------------------------------------------------------------------------------------------------------------------
6084 Charles Funke Associates - CT 14/11/97 21/11/97 o 6084
- ------------------------------------------------------------------------------------------------------------------------------------
6086 Charles Funke Associates - CT 14/11/97 21/11/97 o 6086
- ------------------------------------------------------------------------------------------------------------------------------------
6094 Charles Funke Associates - CT 14/11/97 21/11/97 o 6094
- ------------------------------------------------------------------------------------------------------------------------------------
6095 Charles Funke Associates - CT 14/11/97 21/11/97 o 6095
- ------------------------------------------------------------------------------------------------------------------------------------
6098 Charles Funke Associates - CT 14/11/97 21/11/97 o 6098
- ------------------------------------------------------------------------------------------------------------------------------------
6102 Charles Funke Associates - CT 14/11/97 21/11/97 o 6102
- ------------------------------------------------------------------------------------------------------------------------------------
6106 Charles Funke Associates - CT 14/11/97 21/11/97 o 6106
- ------------------------------------------------------------------------------------------------------------------------------------
6107 Charles Funke Associates - CT 14/11/97 21/11/97 o 6107
- ------------------------------------------------------------------------------------------------------------------------------------
6108 Charles Funke Associates - CT 14/11/97 21/11/97 o 6108
- ------------------------------------------------------------------------------------------------------------------------------------
6123 Charles Funke Associates - CT 14/11/97 21/11/97 o 6123
- ------------------------------------------------------------------------------------------------------------------------------------
6277 Corporation of London - CT 17/11/98 24/11/97 o 6277
- ------------------------------------------------------------------------------------------------------------------------------------
7465 Rolfe Judd Architecture Ltd. - CG 03/12/97 10/12/97 o 7465
- ------------------------------------------------------------------------------------------------------------------------------------
8823 Mace Limited - 09/12/97 16/12/97 o 8823
- ------------------------------------------------------------------------------------------------------------------------------------
8832 Corporation of London - 09/12/97 16/12/97 o 8832
- ------------------------------------------------------------------------------------------------------------------------------------
8833 Corporation of London - 09/12/97 16/12/97 o 8833
- ------------------------------------------------------------------------------------------------------------------------------------
8834 Mace Limited - 09/12/97 16/12/97 o 8834
- ------------------------------------------------------------------------------------------------------------------------------------
8836 Mace Limited - 09/12/97 16/12/97 o 8836
- ------------------------------------------------------------------------------------------------------------------------------------
8839 Mace Limited - 09/12/97 16/12/97 o 8839
- ------------------------------------------------------------------------------------------------------------------------------------
8842 Corporation of London - 09/12/97 16/12/97 o 8842
- ------------------------------------------------------------------------------------------------------------------------------------
8870 Rolfe Judd Architecture Ltd. - CT 09/12/97 16/12/97 o 8870
- ------------------------------------------------------------------------------------------------------------------------------------
8883 Rolfe Judd Architecture Ltd. - CT 10/12/97 17/12/97 o 8883
- ------------------------------------------------------------------------------------------------------------------------------------
8884 Rolfe Judd Architecture Ltd. - CT 10/12/97 17/12/97 o 8884
- ------------------------------------------------------------------------------------------------------------------------------------
8885 Rolfe Judd Architecture Ltd. - CT 10/12/97 17/12/97 o 8885
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
Mace Limited
25 February 1998 Page 1 m|a|c|e
<PAGE> 305
Snagging report Report limited as follows MEPC - Petershill, London EC4
Packages 8100 - 8100 One Carter Lane
Status Only uncleared snags listed
<TABLE>
<CAPTION>
Nr Zone Floor Grid ref. Type Description
- ------------------------------------------------------------------------------------------------------------------------------------
Package 8100 Hard Landscaping McNicholas plc
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
8891 GF5 Lower Grou DW Complete paving between Blitz memorial and tree pit.
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Nr Originator Logged Action Overdue? Not by PC?
Before Cleared by... Nr
- ------------------------------------------------------------------------------------------------------------------------------------
Package 8100 Hard Landscaping McNicholas plc
- ------------------------------------------------------------------------------------------------------------------------------------
8891 Rolfe Judd Architecture Ltd. - CT 10/12/97 17/12/97 o 8891
- ------------------------------------------------------------------------------------------------------------------------------------
====================================================================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
Totals for package 8100 Hard Landscaping Total number of snags 25
McNicholas plc Number of snags uncleared, by Mace 25 by team 25
Number of overdue snags 25
- ------------------------------------------------------------------------------------------------------------------------------------
====================================================================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
Report totals Total number of snags 25
Number of snags uncleared, by Mace 25 by team 25
Number of overdue snags 25
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Key to work types
DQ Design Query
UW Unfinished Work
LD Latent Defect
OW Outstanding works
IN Instructed works
DW Defective works
- --------------------------------------------------------------------------------
Mace Limited
25 February 1998 Page 2 m|a|c|e
<PAGE> 306
APPENDIX I
<PAGE> 307
ONE CARTER LANE
at Petershill, London EC4
SPECIFICATION
BASE BUILDING SPECIFICATION
<PAGE> 308
ONE CARTER LANE
at Petershill, London EC4
BASE BUILDING SPECIFICATION
INDEX
SECTION 1 - GENERAL
1.1 Introduction
1.2 Design Standards
1.3 Fire Strategy
SECTION 2 - STRUCTURE
2.1 General
2.2 Design Standards
2.3 Imposed Conditions
2.4 Performance Requirements
2.5 Stability and Movement Joints
2.6 Substructure
2.7 Superstructure
SECTION 3 - EXTERNAL ENVELOPE
3.1 Elevations
3.2 Roof
3.3 Cleaning and Maintenance
SECTION 4 - INTERNAL FINISHES
4.1 Entrance Hall
4.2 Reception Area
4.3 Show Suite
4.4 Shell Office Areas
4.5 Lift Lobbies
4.6 Toilets
4.7 Staircases
SECTION 5 - MECHANICAL SERVICES
5.1 Design Standards
5.2 Incoming Service
5.3 Offices Air Conditioning
<PAGE> 309
5.4 Offices Fresh Air
5.5 Toilet Ventilation
5.6 Ventilation Plant
5.7 Ancillary Spaces
5.8 Central Plant
5.9 Domestic Water
5.10 Foul Drainage
5.11 Surface Water Drainage
5.12 Dry Risers
5.13 First Aid Fire fighting
5.14 Sprinklers
5.15 BMS and Controls
5.16 Commissioning
SECTION 6 - ELECTRICAL SERVICES
6.1 Incoming Mains
6.2 Standby Generation
6.3 Distribution Systems
6.4 Lighting
6.5 Fire Alarms
6.6 Security
6.7 Lightning Protection
6.8 Earthing and Bonding
6.9 Communications
SECTION 7 - LIFT INSTALLATION
SECTION 8 - EXTERNAL
8.1 Hard Landscape
8.2 Soft Landscape
8.3 City Walkway Lift
8.4 External Lighting
SECTION 9 - ANCILLARY AREAS
9.1 Service Bay and Ramp
9.2 Car Parking
9.3 Basement "Multi-use" Areas
9.4 Basement Areas
SECTION 10 - FLOOR AREAS
SECTION 11 - PROFESSIONAL TEAM
<PAGE> 310
SECTION 1 - GENERAL
1.1 Introduction
Petershill is located immediately to the south of St Paul's Cathedral
within the heart of the City of London.
MEPC have obtained planning permission for two new office buildings
totalling 14,300m/2/ and a restaurant unit.
MEPC will construct One Carter Lane, which will provide 10,500m/2/ of
office accommodation on 7 floors. The entrance is in the centre of the
facade which fronts St Paul's Cathedral. Goods servicing and 16 basement
car spaces will be accessed from Distaff Lane.
The site of One Old Change Court has been sold to Nissho Iwai Europe plc
who will construct a 4800m/2/ office building as their new London
headquarters.
Areas of civic space will be created: Peters Hill Steps will be remodelled
to create an enhanced vista of St Paul's Cathedral from the Thames and a
new square will be formed at the centre of the scheme. This new public
square will be enhanced by locating a restaurant as the focal point of the
scheme.
1.2 Design Standards
The design parameters for One Carter Lane are as follows:-
o Environmental design based on 1 person per 10 square metres.
o Means of escape calculations based on 1 person per 7.5 square
metres.
o Toilet provision based on 1 person per 14 square metres with 60/60
male/female split except the fifth floor which is based on 50/50.
o Restrictions are imposed on the height of the building by St. Paul's
heights. The roof cladding and cleaning rails are designed to lie
below these critical sight lines.
o The depth of the foundations are restricted by the requirements of
the St. Paul's Act - known as St. Paul's depths.
o Structural design to office areas is 4kN/m/2/ imposed load with
1kN/m/2/ for partitions. Plantroom loads are 7.5kN/m/2/.
<PAGE> 311
The plan of the offices is based on a central core containing lifts,
stair, toilets and principle risers. Two secondary stairs are provided at
opposite ends of the building for fire fighting and as means of escape in
case of fire.
All external and internal setting out is based on an internal 1.5 metre
space planning grid.
The acoustic requirement for the office space is NR35.
Where appropriate the design is executed to comply with all relevant
British Standards and Codes of Practice as administered by the District
Surveyor of the Corporation of London. Refer to section 1.3 of this report
with regard to the agreements reached with the District Surveyor relating
to the Fire Strategy for the project.
1.3 Fire Strategy
A complete Fire Strategy document prepared by Warrington Fire Research
Consultancy is available on request. The main items are highlighted as
follows:
1.3.1 Statutory Considerations
The project is subject to the requirements of the Building Regulations
1991. It is necessary to comply with Schedule 1 of the Regulations
relating to:
o B1 (means of escape)
o B2 (internal fire spread (linings)
o B3 (internal fire spread/structure)
o B4 (external fire spread) and
o B5 (access and facilities for the fire service)
One Carter Lane has a footprint greater than 930m/2/ in area and has a
storey part of which is more than 25 metres above the level of the footway
in Distaff Lane at the rear of the building. The building is therefore
subject to control under Section 20 of the London Building Acts
(Amendment) Act 1939 which provides that The Corporation of London may,
after consulting the fire authority, impose conditions for the provision
and maintenance of fire fighting and prevention devices.
Compliance with these requirements is normally achieved by meeting the
standards contained in the Home Office Guide.
<PAGE> 312
1.3.2 Principles of Fire Strategy
Means of Escape arrangements are based on 7.5 m/2/per person to office
areas, 30m/2/per person for storage and 1m/2//per person for possible
conference/restaurant use in the basement.
Office floors will be capable of occupation as a single tenancy or split
into two. The tenancy subdivisions will be located to allow access for
each occupier to two stairs.
Means of escape is based on single stage evacuation.
Stairs are approached by 30 minute lobbies.
All stairs calculated to be 1100 mm width.
All wall and ceiling linings achieve Class "0" in circulation spaces and
Class "1" elsewhere.
All elements of structure are designed to 90 minute standard of fire
resistance. Apart from the basement car park which is to 2 hours.
Calculations have been prepared to define areas of unprotected facade.
The strategy for meeting the requirements of Section 20 is based upon the
provision of the fire safety measures which can reasonably be required in
the case of this building and reflects agreements reached with the
Corporation of London. These agreements dictate that there is no
requirement for dedicated fire fighting lifts and that sprinklers are
omitted from all areas with the exception of the basement storey.
The basement storey is provided with a sprinkler system designed to BS
5306 Part 2.
The lower ground, ground and upper storeys are provided with openable
windows equal in area to 2.5% of the floor area at each level arranged on
opposing faces of the building to facilitate smoke venting.
Access to the interior of the office buildings is via fire fighting shafts
designed in accordance with the recommendations of BS 5588 Part 5.
The basement storey is provided with means of venting smoke in the form of
natural vents equal in area to 2.5% of the floor area. Apart from the
substation and oil storage area for which ventilation is 5%.
The car park in One Carter Lane will be smoke vented using natural
ventilation via breakout panels. A mechanical system will be used for
vehicle and petroleum exhaust.
<PAGE> 313
The fire alarm system and control panels are described in Section 6.
Fire brigade tender access is available along the Carter Lane frontage and
from Distaff Lane. The section of Petershill steps adjacent to the south
west corner of the building is capable of supporting the weight of a fire
tender as is an area of the City Walkway between One Carter Lane and
Scandinavia House.
<PAGE> 314
SECTION 2 - STRUCTURE
2.1 General
The site is within the vicinity of St Paul's and therefore basement and
foundation depth is controlled by the St Paul's Act of 1935 and in terms
of roof height by the St Paul's sightlines.
The site slopes approximately three metres between the north and south
boundaries. At its lowest level it is still several metres above the
ground water table.
The building is a reinforced concrete beam and slab structure with columns
generally on a 9m x 9m or 9m x 6m grid. The building is founded on pad and
strip foundations in gravel underlain by London Clay.
2.2 Design Standards
The building is designed in accordance with the Building Regulations 1991
as administered by the District Surveyor of the Corporation of London and
the following statutory regulations and bye-laws:
2.2.1 Codes of Practice and Standards
BS 8004 : Foundations
BS 6399: Part 1: 1984 : Design Loading for Buildings -
Dead and Imposed Loads
BS 6399: Part 3: 1988 : Design Loading for Buildings -
Imposed Roof Loads
CP3: Chapter V: Part 2 : Wind Loading
BS 5950 : Structural Use of Steelwork
BS 8110 : Structural Use of Concrete
2.2.2 Technical References
Commentary on BS 5959: Part 3: Section 3.1 Steel Construction Institute
1990 (SCI Publication 078).
<PAGE> 315
2.3 Imposed Conditions
2.3.1 Loadings
The office areas are designed to 4kN/m/2/ live load and 1kN/m/2/ for
demountable partitions. Plant areas are designed to 7.5kN/m/2/. Live load
reduction factors have been used in the column load take downs.
2.3.2 Wind/Minimum Stability
Wind loadings have been assessed in accordance with CP3. Ch V: Part 2.
2.3.3 Imposed Movements
Settlement
Relative column rotations are less than 1/1000
Deflection Limits
The structure is designed to comply with the recommendations in current
codes of practice for both vertical and horizontal deflections. Under
characteristic wind loads the relative lateral deflection in any storey
will not exceed H/500
2.4 Performance Requirements
2.4.1 Fire Resistance Periods
The building is designed to allow 90 minutes fire resistance, although
some basement areas are 2 hour fire resistant, and the slab between
basement and offices above is four hours fire resistant.
2.4.2 Protection Against Ground Water
The basement structure is designed to BS 8110, with a drained cavity
around the perimeter walls and over parts of the basement floor level.
2.4.3 Retaining Wall
The perimeter boundary retaining walls, constructed as part of the 1960's
development are retained for this building. The general principle adopted
is that no additional horizontal or vertical loads have been imposed on
these walls. The first structural bay of the basement slab has been
replaced at the same level to maintain its propping effect at the toe of
the existing walls. Backing structure to the walls has been provided as
required where the original
<PAGE> 316
lateral support system has been changed. A new retaining wall has been
provided along the south side of the site.
2.4.4 Progressive Collapse
The buildings will be designed to comply with the relevant code
requirements for peripheral and internal ties.
2.4.5 Durability
In general the structural elements are not exposed and concrete elements
are classed as mild exposure conditions. Roof steelwork within the warm
and dry envelope will not require any corrosion protection.
The following exceptions apply:
o Concrete in contact with the group is classed as moderate exposure
in accordance with the site investigation results.
o Concrete surfaces trafficked by vehicles (i.e., the loading areas
and the car parks) are likely to be directly or indirectly exposed
to de- icing salts and will be classed as very severe exposure
conditions.
o Exposed steelwork or steelwork likely to subject to regular
condensation or steelwork within the building envelope will have an
appropriate corrosion protection system.
2.5 Stability and Movement Joints
2.5.1 Stability
Lateral stability to the building is provided by reinforced concrete lift
shaft walls and the moment frame action of the southern spine beams and
columns. The steel roof is stabilised by a combination of bracing down to
the supporting concrete slab and cantilever action of to columns.
2.5.2 Movement Joints
The building is not of sufficient size nor has a core arrangement such
that movement joints are required within its floor plate. Refer to CIRIA
Technical Note 107.
A dedicated movement joint is located in the E-W direction along the
demise line between One Carter Lane and the site of One Old Change Court.
<PAGE> 317
2.6 Substructure
2.6.1 Retaining Walls and Foundations
The original retaining wall remains around the perimeter of the site. The
first internal bay of the existing basement slab has been retained or
replaced at the same level to prop the wall at its toe. The superstructure
above is supported independently on columns cast adjacent to the inside
face of the wall.
The foundations of the buildings are shallow pad and strip footings. Their
depth is limited by compliance with St Paul's Depths.
The core walls and concrete shear walls at the east and west sides of the
building below ground resist horizontal earth pressure imbalance.
2.6.2 Basement Slab
The basement slab is 200mm thick on 50mm blinding cast monolithically
with the foundations. Watertightness to all "multi-use" areas and
electrical plantrooms in the basement is provided by a 100mm delta drain
cavity system installed on the slab surface with associated underground
drainage. Other plantroom areas are not so provided, in accordance with
the CIRIA guidance.
2.6.3 Public Open Space Slab
The slab is a beam and slab arrangement with 250mm or 275mm slab
supported typically on 600mm x 600mm deep or 600mm x 500mm deep beams.
Localised framing occurs around the tree planter areas and smoke vents.
2.7 Superstructure
2.7.1 The floors are in-situ reinforced concrete ribbed slabs. The 125mm
concrete deck spans onto continuous ribs 600mm wide and 425mm deep at 3m
centres. These in turn span 9m and are supported by a central 2m by 425mm
deep spine beam and the perimeter columns. The spine beam spans up to 9m.
The constant 425 mm depth allows maximum flexibility for the services
arrangement in the void below while the 3m centre to centre spacing of the
ribs provides additional space for the crossover of ducts.
Future occupiers will have the ability to create holes through the slab
areas between the beams.
The steel roof is supported off the 4th and 5th floor slabs and consists
of decking supported off Z-purlins which span between and in the same
plane as the roof beams.
<PAGE> 318
The plant itself is supported on plinths mounted onto the roof slab.
The steel frame is connected to the concrete frame such that the voltage
from a lightning strike can be transmitted via the reinforcement down to
dedicated earthing rods in the ground.
<PAGE> 319
SECTION 3 - EXTERNAL ENVELOPE
3.1 Elevations
The elevations consist of brick piers, granite plinths, slate bands and
aluminium windows and cladding. The elevations are designed to minimise
the use of vertical movement joints. The composite construction of the
external walls provides a "U" value of 0.35 watts per square metre
overall.
Various decorative elements of metalwork are attached to the brickwork and
cladding.
3.1.1 Brickwork and Stonework
The brickwork to One Carter Lane building is a grey/brown facing brick
laid in a modified Flemish bond.
The pointing consists of a reddish coloured sand cement mortar with an 8mm
recessed/raked joint to perpends and bed joints.
The brickwork is supported at most floor levels on stainless steel support
angles with pistol bricks and mastic soft joints below.
The brickwork loads are spread horizontally by proprietary serviced slip
trip 2 slip membranes to obviate requirements for vertical movement
joints. The slip membranes are fronted by mastic in the brickwork.
The structure is designed to carry the loads imposed by the facade. These
have been estimated at 2.5kn/m/2/ for the masonry and 1.0kn/m/2/ for the
glazed curtain wall elements. (This will be confirmed during
trade-contractor design of the windows and cladding).
Rustications are contained in the lower parts of the brickwork. Glass
blocks are used for feature relief at parapet level.
Steelwork decorative handrail features finished with galvanising and
polyester powder coating are fixed to the brickwork.
Decorative stainless steel rails are fixed as part of the cladding system.
The granite columns at base level are non-loadbearing and restrained back
to the structure.
The cappings and columns are built into the brickwork as are the band
courses.
<PAGE> 320
SECTION 3 - EXTERNAL ENVELOPE
3.1 Elevations
The elevations consist of brick piers, granite plinths, slate bends and
aluminium windows and cladding. The elevations are designed to minimise
the use of vertical movement joints. The composite construction of the
external walls provides a "U" value of 0.35 watts per square metre
overall.
Various decorative elements of metalwork are attached to the brickwork and
cladding.
3.1.1 Brickwork and Stonework
The brickwork to One Carter Lane building is a grey/brown facing brick
laid in a modified Flemish bond.
The pointing consists of a reddish coloured sand cement mortar with an 8mm
recessed/raked joint to perpends and bed joints.
The brickwork is supported at most floor levels on stainless steel support
angles with pistol bricks and mastic soft joints below.
The brickwork loads are spread horizontally by proprietary serviced slip
trip 2 slip membranes to obviate requirements for vertical movement
joints. The slip membranes are fronted by mastic in the brickwork.
The structure is designed to carry the loads imposed by the facade. These
have been estimated at 2.5kn/m/2/ for the masonry and 1.0kn/m/2/ for the
glazed curtain wall elements. (This will be confirmed during
trade-contractor design of the windows and cladding).
Rustications are contained in the lower parts of the brickwork. Glass
blocks are used for feature relief at parapet level.
Steelwork decorative handrail features finished with galvanising and
polyester powder coating are fixed to the brickwork.
Decorative stainless steel rails are fixed as part of the cladding system.
The granite columns at base level are non-loadbearing and restrained back
to the structure.
The cappings and columns are built into the brickwork as are the band
courses.
<PAGE> 321
3.1.2 Windows and Cladding
The window frames and cladding elements are fabricated in aluminium and
finished in dark blue grey anodising. The windows have thermally broken
frames. A proportion of them are bottom hung opening lights for purposes
of smoke clearance and possible natural or emergency ventilation. The
glazing units are double glazed comprising:
o 10mm Luxguard low E/solar coated clear glass outer
o 12mm cavity
o 6.8mm laminated glass inner
The acoustic performance of the window/cladding element is designed to
achieve NR35 to the office areas. The inner laminated glazing provides a
measure of protection in the event of failure.
3.2 Roof
The main roof is as standing seam aluminium pitched roofing system
supported on a steel frame and purlins. The "U" value achieved by the
composite construction is 0.45 watts per square metre.
Areas of flat roof are constructed with a Hydrotech monolithic roof
membrane with insulation above; predominantly in plant areas and on
balconies. Such areas are finished with concrete paving slabs surrounded
by gravel.
3.2.1 Pitched Roof Area
The Kal-zip standing seam notify system is manufactured by Hoogovens. The
build-up at the roof system is liner tray, vapour barrier, insulation and
standing seam roof; all in accordance with the manufacturers
recommendations. Services penetrations and caves use standard components
and detailing. Ridges and hips are welded to achieve a finer junction.
3.2.2 Flat Roof Areas
The Hydrotech water proofing system is a flexible, self-healing,
reinforced monolithic membrane formulated of modified bitumens, synthetic
rubbered and antioxidants. The build up in membrane, insulation, filter
sheet and slab gravel as appropriate.
3.3 Cleaning and Maintenance
The major parts of the facades are cleaned from mechanised cleaning
cradles supported by rails at roof level.
<PAGE> 322
Some elements of glass and cladding at roof terrace and ground levels are
cleaned from the surrounding level. Drawings are available to detail such
areas.
3.3.1 Access Equipment
A single unit comprising of cradle and mobile jib, operates from a pair
of roof mounted tracks.
To maintain a complete circuit of the building using one unit, the tracks
on fifth and sixth roof levels are linked at an enclosed docking area by
means of a lift and traversing turntable.
All elements are powered and controlled from a remote handset.
3.3.2 Access from Ground
Access for cleaning and maintenance within the "colonnade" area can be
provided by a proprietary piece of equipment which can be manhandled to
the required location but stored within the service yard. Access is
provided to both the wall surfaces and soffit. Details are incorporated in
the Technical Guide.
Other areas where access is gained from the ground are accessible using
ladders or other equipment customarily used, and supplied, by cleaning and
maintenance contractors.
<PAGE> 323
SECTION 4 - INTERNAL FINISHES
4.1 Entrance Hall
The Entrance Hall is entered through two pairs of plate glass doors fitted
with stainless steel ironmongery and fittings set within the fully glazed
entrance screen. Signage for the building name or occupier can be provided
on the glazed screen; above the entrance doors but below the level of the
canopy. The entrance has a canopy constructed from glass and steel. Parts
of the steel structure are encased in anodised aluminium shaped casings.
All of the steel work is finished in polyester powder coating. There is a
concealed gutter which discharges into the rainwater system within the
building.
The pavement immediately outside the Entrance Hall is of York stone
paving. The same brickwork with rustications, as used generally, returns
towards the fully glazed screen.
There are two pairs of entrance doors. The entrance screen is as fully
glazed as practicable. There is no over door heater as the Entrance Hall
is regarded as a transition zone between outside and the Reception Area.
There are "heating only" fancoil units within the Entrance Hall. Three
discharge over the entrance screen and three over the opening between
Entrance hall and Reception Area.
A matwell extends for a distance of two metres inside the line of the
entrance doors. The mat incorporates natural coir set within aluminium
strips and is removable for cleaning. The entire floor width ramps
slightly to deal with the difference in levels between pavement and
Reception Area. This way there are no steps or ramp edges nor requirements
for handrails or balustrades. The York stone, bedded on a screed extends
to the top of the ramp and into the Reception Area beyond. The area is
heated by under floor hot water trench heating, with grilles to each side
of the Entrance Hall running the entire length of the side wall, in
combination with the high level fancoil units.
The walls are clad full height in sealed limestone. The side walls
incorporate horizontal rustications which follow Moleanos through on the
lines of the external rustications. The wall through to the Reception Area
incorporates similarly sized rustications both horizontally and
vertically.
The ceiling is of demountable plaster tiles on an exposed grid and
lighting is provided by a grid pattern of Concorde metal halide
downlighters. The spacing of the grid matches that of the rustications in
the walls.
Switches and sockets will be brushed stainless steel.
There is a stainless steel fire alarm repeater panel immediately outside
the entrance screen set into the brickwork return.
<PAGE> 324
4.2 Reception Area
The York stone floor continues into the Reception Area as a perimeter
margin which returns into the lift lobby. The inner floor area is of
limestone. The walls are clad Ball height with sealed Moleanos limestone.
The horizontal joint in the Moleanos limestone follow through from the
Entrance Hall but without the expressed rustications. The walls and soffit
of the opening from the Entrance Hall to the Reception Area are clad in
Moleanos limestone.
There is a feature wall behind the reception desk. This wall is finished
with square maple veneered panels trimmed with stainless steel. It has the
potential to incorporate the name of the occupier and is illuminated by
low voltage downlighters.
The Reception Area is discreetly air conditioned using fancoil units
concealed behind the feature wall. Air is taken in at the sides and
discharged at high level across the ceiling. Access to the fancoil units
is incorporated in the feature wall behind the reception desk. There is a
doorway from the Reception Area through to the ground floor offices. The
door and frame are of maple with stainless steel ironmongery as used
elsewhere. The lift architraves, doors and full height over panels are of
brushed stainless steel. There is a cupboard at the rear of the wall
between entrance hall and Reception Area. The door and frame are of maple.
This cupboard contains the main fire alarm panel and light switches
although there is a small repeater panel incorporated into the reception
desk.
Glass signboards are available which can be supported on stainless steel
fittings, mounted on each of the walls leading towards the lift lobby.
This signage is flexible to incorporate any or a combination of building
name, occupier, sub-tenants, departments, etc. The signboards are
illuminated by the low voltage downlighters in the ceiling above.
The ceiling is a plain plasterboard ceiling painted white and without
access panels. Lighting is by low voltage downlighters on a variety of
circuits whereby fittings illuminate the space generally but also
highlight the reception desk, feature wall, signboards and lift entrances.
The transformers for the downlighters are accessed through the apertures
in the ceiling into which the fittings are fixed.
The reception desk is a combination of maple, glass, pre-patinated copper
and natural anodised aluminium and incorporates the fire alarm repeater
panel and facilities for the occupiers security system.
The passenger lift cars incorporate metal surfaces of brushed stainless
steel. The floors are of York and Molcanos stone. The walls are clad with
a series of Moleanos limestone panels bonded to the stainless steel walls.
The ceilings are of plasterboard painted white and incorporating low
voltage downlighters.
<PAGE> 325
4.3 Show Suite
The Show Suite, in the front part of the fourth floor, is partially fitted
out in accordance with the specification for the Category A allowances.
There is a fully accessible medium grade raised floor system with a
nominal depth of 150mm (inclusive of panel) and incorporating 600mm x
600mm panels. The raised floor panels are of corrosion resistant steel
with cementitious infill supported on adjustable pedestals. The void is
complete with all required barriers or fire breaks.
The exposed inner surfaces of the cladding system are finished with off
white polyester powder coating. This includes the panels underneath the
glazing.
The windows are openable for smoke venting or natural ventilation and
bottom hung inward opening. Each window is fitted with a polyester powder
coated narrow venetian blind.
The masonry piers, core walls and columns are drylined with plasterboard
and painted white. Skirtings are of polyester powder coated aluminium to
match the cladding.
The ceiling is a combination of perimeter margin and gridwork for a
suspended ceiling system. The perimeter margin is of plasterboard painted
white and incorporates blind boxes to each window and continuous slot
diffusers.
The suspended ceiling gridwork is to suit a 500mm x 500mm perforated metal
tile system with concealed grid; CAPL Ceiling System 120 or equivalent.
The ceiling tiles installed for use as a marketing suite are to be removed
and a contribution made to the Tenant for the replacement with new tiles.
The ceiling is at 2.65m clear height from the floor tile surface.
The LG3 Category 2 luminaires installed for use as a marketing suite are
to be removed and a contribution has been given to the Tenant to replace
with new luminaires. The lighting installation is wired via connection
boxes which provide a potential interface with a lighting control system
by the occupier. There are a series of separately dimmable circuits to
adjust the lighting level. At the perimeter, air is supplied by a
continuous 3-slot diffusers. In the inner zone air is supplied via 500mm x
500mm 4-way grilles which are co-ordinated with the ceiling grid.
All doors and frames facing the office space are of maple hardwood with
stainless steel ironmongery. Door frames are full height and each door has
an over panel. The duct access doors are painted softwood with flashgap
details to minimise visual impact.
<PAGE> 326
4.4 Shell Office Areas
The floor is the exposed top surface of the concrete slab ready to receive
raised floor. The 'ceiling' is the exposed concrete soffit ready to
receive services and suspended ceiling.
The internal face of the cladding system is self finished as before.
The masonry piers and core walls are drylined with plasterboard finished
ready to receive decoration but without skirtings.
Columns are left exposed with rainwater pipes to be boxed in by tenants.
This provides flexibility for condensate drains, light switches and
controls by the occupier, to be provided to suit his requirements.
Office doors and duct access doors as described above.
4.5 Lift Lobbies
Except for the ground floor and fourth floor show suite, all lift lobbies
are treated as an extension of the shell office areas.
At all levels the lifts incorporate brushed stainless steel architraves
and doors.
4.6 Toilets
There are male and female toilets to each floor. There is a single
disabled toilet on each floor adjoining the rear of the lift shaft. The
male and female toilets are "back to back" sharing a common services duct.
The design is such that they are "extendable". By removing the end wall
and extending the common duct further cubicles can be incorporated to suit
a higher occupancy on a particular floor. The floor and wall materials
have been selected to be subject to continued availability.
The floors are finished slate slabs bedded onto a screed.
The majority of the walls, including those which form the cubicles are
clad in 300mm x 300mm ceramic tiles which have a limestone colouring and
texture but with the durability of ceramic tiles. The wall which runs the
full length of the toilets is drylined with plasterboard and painted with
a "strong" colour. This wall is picked out by a row of compact fluorescent
downlighters in the ceiling above. There is a full height mirror in the
ladies toilet.
The doors and flames flown office to lobby and lobby to toilets are maple
hardwood with brushed stainless steel ironmongery. The cubicle doors are
frameless, finished in maple hardwood, and hung on pivot hinges. The back
and access panels to the am of the cubicles are similarly finished. A
typical
<PAGE> 327
cubicle door incorporates a push plate on the outside, a door lock/engaged
sign and handle on the inside and a coat hook. Each cubicle incorporates a
door stop, toilet roll holder and tundish. All are in brushed stainless
steel
The ceiling is a combination of white painted plasterboard margins around
a suspended ceiling of 300mm x 300mm plain metal pan ceiling tiles. Air
supply and extract is by way of linear diffusers set at the junction
between margin end suspended ceiling. Lighting is by compact fluorescent
downlighters generally set into the margin but on occasion in the tiles.
The sanitary ware is all white ceramic.
The toilets are complete with six litre concealed cistern and white seat
and cover.
The vanity tops are of slate complete with under counter top basins and
chrome taps offset to one side. There is a stainless steel strip between
each vanity top which incorporates a pressed stainless steel soap dish.
Above each vanity top there is an individual polished plate straight edged
mirror fixed 20mm from the wall surface on stainless steel fixings.
Each male and female toilet incorporates a satin stainless steel electric
hand-drier.
All switches, band-drier points and shaving sockets are of brushed
stainless steel.
The disabled toilets are generally as above but with a wheelchair
accessible toilet complete with all associated grab rails. The door
lock/engaged sign is the disabled model for easier opening. There is a
stainless steel towel rail.
4.7 Staircases
4.7.1 Stairs to Core A and C
The stairs to core A and C are both designed for fire fighting access and
means of escape. Each core is provided with a hosereel and a dry riser.
Ventilation is provided by opening windows to provide the statutory
ventilation to both lobby and stair at each level.
The core walls are constructed in dry lining to achieve the 120 minute
fire rating, with some blockwork at lower levels. All walls are painted
white.
Doors and frames which face into the stairs are painted softwood in
softwood frames.
<PAGE> 328
Stair flights and landings are concrete.
Balustrades are hand painted mild steel.
Four compact fluorescent wall lights are provided at each level to achieve
minimum 100 lux lighting level.
Staircases are heated by hot water served Hudevad panel radiators at each
floor level.
All switches and sockets are brushed stainless steel.
Fascias and soffits are white painted concrete.
Goings, riser, and landings are to be finished with studded rubber class
"O" floorings; this material will also form nosings and coved skirtings at
landings.
4.7.2 Stairs in Core "B"
The stair to core B is designed for means of escape only.
No ventilation is required to this stair.
The core walls are constructed in dry lining to achieve the 90 minute fire
rating, with some blockwork at lower levels. All walls are painted white.
Doors and frames which face into this stair are painted softwood in
softwood frames.
Stair flights and landings are in concrete.
Balustrades are hand painted mild steel with maple wreathed hardwood
handrails.
Four compact fluorescent wall lights are provided at each floor level to
achieve minimum 100 lux lighting levels at each level.
As the staircase is internal there is one Hudevad radiator at basement
level only.
All switches and sockets are brushed stainless steel.
Fascias and soffits are white painted concrete.
Goings, risers and landings are to be left unfinished. An allowance will
be passed to the Tenant as a contribution to cover the cost of surface
preparation, trims and installation. The carpet and nosings will be
supplied.
<PAGE> 329
SECTION 5 - MECHANICAL SERVICES
5.1 Design Standards
The building services are designed in accordance with Building regulations
and Codes of Practice, including CIBSE Guidance and the IEE 16th Edition
Regulations.
Design conditions are tabulated below:
=========================================================================
Outside Design Condition
Summer 28 C DB/21 C WB
Winter -5.5 C DB/-5.5 C WB
=========================================================================
Office Design Condition
Summer 22 C +/- 2 C
Winter 20 C +/- 2 C
=========================================================================
IT Cooling Load 23 + 10 w/m/2/
=========================================================================
Fresh Air to Office Areas 1/s/m/2/ 1.3
=========================================================================
Air Change Rate for Car Parks 6 ac/hr
=========================================================================
Air Change Rate for Toilets 6 ac/hr
=========================================================================
Number of Boilers 2 @ 66% load
=========================================================================
Approximate Total Boiler Capacity KW 2190
=========================================================================
Number of Chillers 2
=========================================================================
Approximate Total Chiller Capacity
KW 1500
=========================================================================
Number of Office Supply Air
Handling Units 2
=========================================================================
Number of Office Extract Air Handling 2
Units
=========================================================================
5.2 Incoming Services
A gas main, a water main and duplicate fire mains enter the building from
Carter lane.
Drainage connections are made by gravity to sewers in Carter Lane and
Distaff lane.
<PAGE> 330
5.3 Offices Air Conditioning
The offices are generally fitted out to shell and core. This description
refers to the show suite and forms the basis of the Category A
Specification.
The offices are air conditioned by a fan coil unit system.
At the perimeters a 4 pipe system provides both heating and cooling. In
central areas the system provides cooling only.
The fan coil units are connected in a reverse return arrangement to ensure
that they are self balancing.
Fan coil units are of the air side control type for reduced maintenance.
Air flow across the heating and cooling coils is controlled by face and
bypass dampers to cater for load variations.
Air handling plants in the basements provide fresh air to the office fan
coil units. Constant volume dampers are incorporated on all branches from
the main supply air risers. This will ensure that each floor operates
independently of the others and that a constant volume of air passes into
the occupied spaces. This will avoid the necessity to re-balance all
floors when floors are being fitted out.
Return air is through the luminaires into the ceiling void and to
builderswork shafts to the basement air handling plants.
5.4 Offices Fresh Air
Air handling plants supplying fresh air are designed to provide air to the
offices at a rate of 1.3 litres per square metre.
The cooling coil is designed to offset heat gains from the luminaires and
provide the necessary dehumidification to offset the latent heat gains
from the office occupants.
Variable volume fans are used in the central supply and extract air
handling plants to allow the total amount of air to be varied. This allows
flexibility in controlling floors on an individual or half floor basis
floor.
The air conditioning system incorporates two separate systems to suit a
possible occupational split.
5.5 Toilet Ventilation
Toilets will be ventilated at a rate of 6 air changes per hour the toilet
supply unit is fitted with a cooling coil. The toilets will be supplied at
a constant air temperature of 20 C.
<PAGE> 331
5.6 Ventilation Plant
The car park, loading bay and basement plantroom spaces are mechanically
ventilated with local units.
Space provision has been allowed for future plant to serve the basement
"multi-use" space. Connections are provided to the landlords heating water
circuit.
5.7 Ancillary Space
The entrance hall is heated.
The reception area is air conditioned.
The staircases are heated with a radiator system.
The basement corridors are heated with a radiator system.
5.8 Central Plant
Air cooled chillers using R134a refrigerant are positioned at roof level
below an open screen. The associated pump sets are located at basement
level.
Gas fired boilers are positioned at basement level.
5.9 Domestic Water
A metered incoming mains water supply is provided. The main will supply
storage tank located in the basement sized to provide water for one
working day in the event of supply mains failure.
From the tank water is boosted throughout the building to serve toilets
and tenant vending/tea rooms for which capped branches are incorporated in
Cores A and C. Connections are also made to mechanical plant, washdown
taps and window cleaning equipment.
Within each toilet area an unvented local electric water heater is
provided to serve wash hand basin. Hot water to vending/drinks rooms will
installed by the occupier.
5.10 Foul Drainage
Soil stacks serving toilet cores drop to basement level and discharge by
gravity to the street sewers via intercepting traps. Anti-syphon pipes are
provided adjacent to each stack with cross connections to maintain water
traps. Stacks are vented above roof level. Soil stacks and anti-siphon
pipes with capped off branches are provided in Cores A and C to serve
vending/tea rooms.
<PAGE> 332
All basement mechanical plantrooms are provided with floor gullies
draining to pump sumps. These lift water into the high level gravity foul
drainage system. Foul drainage is provided to the basement toilet area and
capped off drainage points for tenant use are left in the "multi-use" area
in the basement.
Drainage from car park and unloading bay areas is collected in a series of
channels and gullies and passes through a petrol interceptor to pump sumps
before discharging to the gravity sewers.
5.11 Surface Water Drainage
Rainwater is collected at roof level by a series of gutters and outlets.
Down pipes drop to basement level and discharge by gravity to the street
sewers via intercepting traps. Connections are made into this system from
outlets located within the basement air intake/exhaust plenums.
5.12 Dry Risers
A dry riser is provided for LFCDA use within Cores A and C. An inlet is
provided in the external facade at ground level and outlet valves provided
at all floor levels including basement but excluding ground floor.
5.13 First Aid Firefighting
A water storage tank and booster pump set are provided in the basement.
The boosted water main serves hosereels at each floor at Cores A, B and C
and throughout the basement.
Hosereels are provided at each stair core.
Extinguishers are to be provided by the occupier.
5.14 Sprinklers
The office floors do not require sprinklers but to meet the District
Surveyor's requirements a sprinkler system is provided to cover all
basement areas except for the London Electricity Plc substation, LV room,
battery room and communications room as these contain sensitive essential
equipment.
The Thames Water mains flow and pressure is sufficient to serve the
installation directly without the need for tanks and pumps. The system
comprises of incoming fire mains serving two installation control valves
located within a valve chamber at lower ground floor level. One
installation is a wet system serving all internal basement areas. The
second installation is an alternate wet and dry system serving the car
park and loading bay areas.
<PAGE> 333
This later system allows for winter draining of water and replacing with
compressed air to prevent freezing.
5.15 BMS and Controls
The control and monitoring of mechanical services plant is provided by a
Trend Building Management System incorporating intelligent outstations and
a central operator's station.
The control system provides the following features for central plant:
o Optimised start/stop of plant
o Night set back protection (frost)
o Direct digital control
o Boiler sequencing
o Sequential plant start
o Floor isolation
The fan coil units in the Show Suite are fitted with intelligent unitary
controllers which provide temperature control and enable local
temperatures to be monitored centrally. Remote units are provided for set
point adjustment and for setting extended occupancy of groups of fan coil
units.
In addition to the usual automatic control features the building is fitted
with kWh metres which are monitored by the BMS for future billing
purposes.
The system is designed to allow an easy upgrade and for connection of
additional fan coil units during floor fit out.
5.16 Commissioning
The works will include as follows:
o Pre-commissioning
o Commissioning
o Performance Testing
They will be carried out in accordance with:
o CIBSE Commissioning Codes
o BSRIA Application Guides
Pre-commissioning comprises the activities to advance the works from
static completion to commissioning.
Commissioning will be the advancement from static completion to full
working order in accordance with the CIBSE Commissioning Codes and BSRIA
Application Guides.
<PAGE> 334
Performance testing will be the evaluation of the commissioned system to
prove its operation within the stipulated tolerances. Performance testing
will be carried out on the Show Suite for a fourteen day period to record:
o Dry bulb temperature
o West bulb temperature or relative humidity
o Radiant temperature
o Air velocity
o Supply air temperature
o Chilled water flow and return temperature
o Supply temperatures in air ducts
MEPC has appointed Andrew Reid & Partners as Commissioning Consultants to
mange the above processes.
<PAGE> 335
SECTION 6 - ELECTRICAL SERVICES
6.1 Incoming Mains Supply and Metering
6.1.1 General
The substation will be leased to London Electricity Plc.
The estimated maximum demand is 1200 kVA derived from four low voltage
supplies from London Electricity Plc.
The build up to the estimated maximum demand is as follows:
<TABLE>
<CAPTION>
================================================================================
Load Load
Area m/2/ w/s mm Diversity kVA
================================================================================
<S> <C> <C> <C> <C>
Office 11605 50 90 550
- --------------------------------------------------------------------------------
Car Park 1145 10 100 12
- --------------------------------------------------------------------------------
Plant Space 3850 10 75 30
- --------------------------------------------------------------------------------
Storage 1365 15 100 22
- --------------------------------------------------------------------------------
Conference 0 70 50 0
- --------------------------------------------------------------------------------
Vertical Transport 5 Lifts 88kW 20 20
- --------------------------------------------------------------------------------
Mechanical 1180kW 40 546
- --------------------------------------------------------------------------------
Public Health 76kW 25 20
================================================================================
Estimated Maximum Demand 1200 kVA
================================================================================
</TABLE>
The low voltage supplies from the substation will terminate on a main low
voltage switchboard in the basement serving various items of plant and
tenancies via low smoke and fume cables and a system of rising busbars.
The Substation is located in the basement. Twenty four hour access is
provided from the colonnade area. One of the air grilles is lockable and
hinged. When lifted it provides access down a steel staircase. A further
door provides access to the substation. This staircase/lobby area is
separated from the building in general and is additionally used to
ventilate the substation. One of the distribution boards to the City
Walkway lighting is in this area. The other is within a weatherproof
cupboard at the head of the ramp. Keys to the openable grille are held by
the occupier, London Electricity plc and Corporation of London. London
Electricity plc are the sole key holders to the door to the substation.
There will be a pair of doors, for plant access, from the substation to
the corridor. London Electricity plc are the sole key holders. There is a
planked opening between the hard landscape of Petershill Steps and the
corridor leading to the substation.
<PAGE> 336
6.1.2 Metering
A central landlords meter will be provided on the incoming supplies to the
buildings. Each potential tenancy will have to apply for a supply from his
selected Regional Electricity Company (REC) appointing a meter operator
who will provide a metered supply.
6.2 Standby Generation
6.2.1 Landlords Generation
The car park and unloading bay air handling units require a secondary
power supply from a landlords generator rated at 50kVA. The exhaust
discharges into the loading bay area.
6.2.2 Occupiers Generators
Provision has been made in terms of space allowance and in the design of
the electrical distribution to provide for the possible installation by
the occupiers of standby generators at basement level. Space is allowed
for generator flues to be routed to roof level. Space is allowed for
radiators at roof level. There is also space at roof level for smaller
sized packaged generators.
6.3 Distribution Systems
Distribution of general power and information technology to workstations
from riser positions will be via the raised floor. The underfloor services
will be provided by the occupier to suit his requirements.
6.4 Lighting
Lighting to office areas is designed generally to the requirements of the
CIBSE Lighting Code of Practice. General office lighting consists of
recessed modular fluorescent luminaires with low brightness LG3 category 2
louvres. General office lighting levels are designed for an average of 500
lux in cellular offices at a working plane 800mm above floor level.
Once luminaires are wired from a modular wiring system and "lighting
connection boxes" and switched in banks from switchplates throughout the
office area. Dimming has been provided from each of the switchplates and a
central location to set the levels via a lighting control system by
Simmtronic.
Lighting to stair core areas is provided by compact fluorescent luminaires
locally switched.
<PAGE> 337
The lighting in plantrooms uses fluorescent luminaires with a trough type
reflector. The basement car park is illuminated using fluorescent
luminaires in corrosion resistant scaled bodies.
Other areas with a higher headroom (eg Service Bay, Vehicle Ramp) are to
be illuminated with low bay industrial type luminaires using high
intensity discharge lamps with fully sealed diffusers.
Emergency lighting is designed to comply with the requirements of BS5266,
Part I, 1988 and ICEL Guidance and incorporating all known requirements of
future European Codes.
The emergency lighting will be based on 3 hour battery packs.
Emergency exit signage luminaires will be provided to satisfy the
requirements of the Building Control Officer.
6.5 Fire Alarms
An addressable analogue automatic fire detection system is provided. The
system will be designed to a standard which incorporates protection of
life and property and in accordance with the requirements of BS5839. A
fire alarm control panel is located within the ground floor entrance hall
services cupboard with repeater panels outside the entrance screen and on
the reception desk.
The system will be designed for single stage evacuation by means of
sounders. The system will have the provision for future extension and
connection of equipment to be provided by the occupier. The occupier will
have to provide detection points (break glass manual call points and
smoke/heat detector units) and sounders to suit the office partitioning
layout.
The fire alarm installation will be zoned on a floor by floor basis. The
fire alarm system will interface with the BMS, the lifts for lift homing
and the basement sprinkler installation.
6.6 Security
The security provisions will includes conduit work systems to enable the
occupier to install, if he so chooses:
o Alarm system to all office doors and windows adjacent to ground
level areas or the shared areas as above.
6.7 Lightning Protection
A lightning protection system is installed in accordance with BS6651
<PAGE> 338
The steel roof and structural elements are used with bonds provided to the
window cleaning equipment, services on the roof and parapet handrails.
The structural steel and reinforcement will serve as down conductors with
bonds to the cladding and using the lower structural elements as an earth.
6.8 Earthing and Bonding
Earthing and Bonding will be carried out in accordance with the IEE 16th
Edition Regulations.
6.9 Communications
The primary incoming route for communication is from the "walk-in" duct
which runs the length of Petershill Stops alongside the basement. Sleeved
ducts provide entry from the duct into the adjoining "multi-use" basement
area which can be fitted with combined or separate communications rooms as
preferred. A second incoming route, to provide diversity of routing, is
provided by a set of sleeved ducts which enter the basement corridor in
the S.E. corner adjacent to Distaff Lane. Ducts link across the roadway to
the new "walk-in" cut which in turn links with that within Queen Victoria
Street. Thus second supplies can be brought in from Queen Victoria Street.
There is a major distribution route of cable tray along the basement
corridors. There are two rising communications ducts; one in Core A and
the second in Core C. If a typical floor were to be divided a
communications duct would serve each part. The communications ducts link
into the raised floor void. The communications duct in Core C continues to
roof level where it links with a flat occupiers plant area which can be
used to locate satellite communications dishes; amongst a variety of other
occupiers plant usages.
No incoming communications links have been installed but they have been
checked to be available within the timetable of an occupiers fit-out.
<PAGE> 339
SECTION 7 - LIFT INSTALLATION
The recommendations of CIBSE Guide D have been used as a basis for the
design of the lift service. The handling capacity of the lifts is based on
17% of the building population arriving with a five minute period.
Due to the restrictions of the St Paul's Heights all the lifts will be
underslung electric traction with basement machine rooms.
Four 16 persons 1250kg 1.6m/s lifts, giving an average waiting interval of
25 seconds will be provided.
The passenger lift finishes consist of a stone floor limestone walls in a
square grid with brushed stainless steel trim and a painted MDF ceiling
with low voltage lighting including emergency. The control panel will be
brushed stainless steel on one side of the car, a mirror will be on the
other side. Doors will be brushed stainless steel.
Provision for drapes will be provided in one passenger lift.
A 1600kg goods lift with internal dimensions of 2500mm x 1350mm, which can
accommodate a 2650mm full eight partition diagonally will be provided.
The goods lift will be brushed stainless steel walls/ceiling and studded
rubber flooring to match that used on stairs A and C.
<PAGE> 340
SECTION 8 - EXTERNAL
8.1 Hard Landscape
8.1.1 Design Criteria
The Hard Landscape provides accessibility throughout the linked network of
usable public open spaces, using robust detailing and quality natural
materials. The works to all external areas will be taken over by the City
Corporation as City Walkway.
The landscape design has been carried out to meet the requirements of the
following Corporation of London documents:
o City Walkway Outline Specification
o General Specification for Street Improvement Works in the City of
London
o Designing an accessible City for people with disabilities.
o Draft Guidance note on improving the City's Street Furniture and
Paving.
8.1.2 Construction
Construction above slab to include waterproofing, insulation, concrete
upstand walls and step formations, bulk fill with high density expanded
polystyrene (to make up large differences of levels between slab and
finish levels between slab and finish where required) and D.O.T. Type I or
concrete as appropriate to pedestrian/vehicular use.
City Walkway designed to resist a live load of 5.0 KN/m(2)
Surface falls generally 1:40 - 1:60.
Access Ramps generally 1:20 to avoid requirement for handrails and where
necessary 1:15 or 1:12 with handrails generally 1.8 m width (minimum 1.2).
Steps generally 400mm treads and risers 130 - 150mm dependent on location.
Nosings are demarked in association with handrails to assist partially
sighted.
Handrails are provided 900mm above nosings/ramps and project 300mm beyond
top and bottom of level changes.
All vertical elements meet the City Walkways requirement for 0.74/KN/m
loading and minimum height for any parapet/balustrade is 1.070m.
<PAGE> 341
Drainage is through slotted channels and slabs of matching appearance to
surrounding paving and leads into subsurface gullies and piping.
Boundary demarcations, smoke vent knock out panels and paved over access
hatches (LEB and generator room) will be denoted with brass studs and
strips within paving surface.
Manhole and access covers will all be recessed flush with the finished
hard landscape surfaces.
8.1.3 Materials
Predominant paving material to be new diamond cut Yorkstone, 75mm thick in
vehicular trafficked areas and 50mm thick where only pedestrian, laid
stretcher bond in 600mm widths, random lengths (although majority 1200mm)
with 6mm pointed joints on 25mm 1:3 lime/sharp sand mortar bed.
Feature paving grid in new sawn bottom flame textured granite sett units
giving acceptable finish for pushchair/wheelchair access.
Steps in sold piece flame textured mid grey granite with rounded nosings.
Upstand walls, seats and planters are all stone clad concrete, in either
granite or limestone dependent on location, to match stone of adjacent
building when in direct proximity.
Handrails to be tubular stainless steel supported on painted, galvanised
mild steel posts or wall supports.
Railings to be black painted galvanised mild steel panels fixed into walls
and columns with bolted plates.
8.2 Soft Landscape
8.2.1 Design Criteria
The landscape is predominantly hard urban townscape but the focus and
definition to the spaces will be provided by planting; in particular by
the use of framework and feature semi-mature tree planting.
The maintenance of the scheme is to be undertaken by MEPC for one year
following practical completion (to include defects liability) when it will
be handed over to the City Corporation Parks Department.
8.2.2 Planters
Planters have been designed as an integral part of the scheme, either into
the ground or coupled with seating.
<PAGE> 342
All planters are designed with drainage, underground guying systems.
watering and inspection points and are to receive manual rather than
automatic irrigation to ensure closer attention to maintenance.
8.2.3 Materials
Quercus palustris (Pin Oak) will be the tree forming the single line along
Sermon Lane and Distaff Lane as well as providing the largest specimen
tree on site at the upper level adjacent to the restaurant.
Platanus acerifolia (London Plane) will form the free grove at the heart
of the scheme, Old Change Court, emanating horn raised seating planters.
Robinia pseudoacacia (False Acacia) will provide the light, architectural
canopies for the seating area off Petershill Steps within the western
recess of One Old Change Court
Underplanting in the raised planters beneath trees will allow for an
element of seasonal bedding by the City Corporation (preferably a mass of
single species and white) within a framework of Buxux sempevirens (Box)
edging.
Framework shrub planting at building plinths and adjacent to courtyard
seating will comprise of formally clipped evergreen "tables" using Taxus
baccata (Yew).
Larger shrub planting (including climbers/trailers) will take place in 3
areas of the overall scheme, one of these being the "drum" planter
adjacent to the elliptical steps in order to soften the edges and
replicate the planting in the nearby Scandinavia House beds.
8.3 City Walkway Lift
A City Walkway lift will be provided in accordance with the requirements
of the Highways Agreement. It is located adjacent to the restaurant
building. It is self contained and its sole use is to link upper and lower
levels of the City Walkway, primarily for use by the disabled. The
Corporation of London would like this lift to be monitored by the tenant
of the office building. If the tenant will not agree to this the
Corporation of London will monitor the lift via a modem link in which case
the tenant will be required to allow the Corporation of London to install
necessary wiring.
It is an 8 person 630kg hydraulic lift. The lift car finishes are in
accordance with the requirements of the Highways Agreement and include
hardwearing and vandal resistant finishes. In due course this lift will be
taken over and maintained by Corporation of London as part of the City
Walkway.
<PAGE> 343
8.4 External Lighting
Almost all external areas are City Walkway and are to be illuminated in
accordance with the requirements of the Highways Agreement. The external
lighting scheme includes as follows:
o Fittings mounted on some of the masonry piers of the building.
o Fully recessed uplighters set within the tree planters.
o Low level brick lights to illuminate steps and ramps.
o Fully recessed uplighters set within the paving to illuminate the
face of the restaurant; fed from the restaurant electrical supply.
Subject to the approval of Corporation of London.
The electrical supplies for lighting to the City Walkway are taken direct
from London Electricity street lighting circuits. They will be switched in
conjunction with surrounding street lighting. The distribution boards will
be in locations agreed with Corporation of London; one in the colonnade
area and the other at the top of the ramp. In both cases they are directly
accessible from outside. Once the external lighting has been taken over in
accordance with the provisions of the Highways Agreements it will be
maintained by Corporation of London.
The colonnade does not form part of the City Walkway and the lighting to
the soffit is connected to supplies within the building and controlled by
the occupier.
<PAGE> 344
SECTION 9 - ANCILLARY AREAS
9.1 Service Bay and Ramp
One Carter lane is serviced from a below ground service yard approached
from a two way ramp (car or service vehicle) off Distaff Lane. The service
yard also provides servicing for the restaurant, Two Old Change court.
Both have designated service bays separated by a combined turning circle.
The facilities are as follows:
o One Carter Lane: Two 8m vehicular service bays.
One refuse compactor bay.
One recycled refuse zone.
o Restaurant: One 8m vehicular service bay (capable of
servicing dray vehicles.
The finishes to this area are exposed blockwork walls concrete soffit and
concrete ground slab laid to falls.
The One Carter Lane goods lift is located within the office core but
adjacent to the service yard.
9.2 Car Parking
Consists of 15 car spaces supplemented by 15 motorcycle bays and 15
bicycle locations. 1 maintenance bay is supplied in addition to the above.
This is the maximum provision under present planning guidelines.
A corridor link provides access from the car park to the passenger lifts.
The finishes to this area are exposed blockwork and concrete.
9.3 Basement "Multi-Use" Areas
The basement contains "multi-use" spaces fitted to shell only. These
spaces can be fitted out as the following:
o Internal restaurant/canteen, with full kitchen facilities.
o Conference facilities
o Storage
o Communications rooms
Adequate escape facilities have been provided.
<PAGE> 345
The space is accessed directly from the lobby to the passenger lifts. This
lobby is fitted with a 300mm by 300mm suspended ceiling with same sized
recessed fluorescent light fittings.
Drainage facilities have been installed to provide flexibility for toilet
and kitchen requirements for the above.
Shell finishes are as follows:
o Delta drain screed floor
o Fairfaced blockwork walls
o Concrete soffit
9.4 Basement Areas
9.4.1 Lobbies and Corridors
Fairfaced blockwork walls, concrete soffit, Delta Drain or concrete floor.
Lobbies to cores A, B and C are finished with drylined walls and Delta
Drain composite floor system.
Doors throughout the basement are softwood painted fire rated as
necessary.
9.4.2 Cleaners Cupboards
4 units each with a Belfast cleaners storage facilities located adjacent
to the "multi-use" area
Finished in fairfaced blockwork.
A further 4 units can be constructed alongside.
9.4.3 Toilet Facilities
2 unisex shower and toilet facilities arc sited to the west of the main
lift lobby. They are for the use of those arriving by bicycle, carrying
out sports or maintenance staff
Each facility contains a toilet, wash hand basin and shower unit
The floors and walls are ceramic tiled. The ceiling is demountable.
One further toilet unit with wash hand basin is located adjacent to the
service yard, generally as above. This is for the use of staff controlling
the service bay and, at the occupiers discretion, messengers and delivery
drivers.
<PAGE> 346
9.4.4 Service Bay Control/Post Room
o A control room and post receiving facility is located adjacent to
the service bay.
o Walls are fairfaced blockwork. The floor is Delta Drain composite
floor system. The ceiling is the exposed concrete soffit.
<PAGE> 347
SECTION 10 - FLOOR AREAS
10.1 AREA SCHEDULE
<TABLE>
<CAPTION>
FLOOR AREAS (Net)
m/2/ sq ft
<S> <C> <C>
Fifth 752 8,095
Fourth 1,586 17,072
Third 1,709 18,396
Second 1,705 18,353
First 1,641 17,664
Ground 1,528 16,448
Lower Ground 1,584 17,050
Basement 1,100 11,840
- ---------------------------------------------
Total 11,605 124,918
</TABLE>
Areas have been taken from current drawings and may be subject to
variation.
<PAGE> 348
SECTION 11 - PROFESSIONAL TEAM
Architects Rolfe Judd Architecture Limited
Quantity Surveyors Cyril Sweett & Partners Limited
Structural Engineers Ove Arup & Partners
Services Engineers Ove Arup & Partners
Landscape Consultants Charles Funke Associates
Commissioning Consultants Andrew Reid & Partners
Development Consultants Jones Lang Wootton
Space Planners Gensler & Associates
Letting Agents Jones Lang Wooton
DTZ Debenham Thorpe
<PAGE> 349
Petershill London EC4
One Carter Lane
Indices from [Illegible] Manuals
together with
Lists of 'as built' drawings
as compiled by
Bob Wight MEPC
Mike Tiplady JLW
17/3/98
<PAGE> 350
Health and Safety File One Carter Lane, London EC4
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<TABLE>
<CAPTION>
Health and Safety File Structure
<S> <C> <C>
Volume 1 Principal Reference Document
Volume 2 Pre-construction Data Architectural
Structural
Public Health
Landscape Architect
Volume 3 Waterproofing and roofing Coverite Limited
Volume 4 Concrete Structure & P C Harrington Contractors Limited
Underground Drainage
Volume 5 Structural Steelwork Swift Structures Limited
Volume 6 Cladding C.I.R. Cooperative Industriale
Romagnola S.C.A.R.L.
Volume 7 Entrance Glazing & Canopy T W Ide Limited
Volume 8 Masonry Irvine Whitlock Limited
Volume 9 Drylining B.R. Hodgson Limited
Volume 10 Toilet Fit Out H L Smith Construction Limited
Volume 11 Metalwork R Glazzard (Dudley) Limited
Volume 12 Metal Doors Roller Shutters Henderson Bostwick Limited
Volume 13 Entrance Hall Fit Out A Davies Limited
Volume 14 Marketing Suite Fit Out H.L. Smith Construction Limited
Volume 15 Facade Maint. Equipment Facade Hoists Limited
Volume 16 Mechanical Services Andrews Weatherfoil plc
Volume 17 Controls / BMS Synchronised Systems Limited
Volume 18 Thermal Insulation & Abbey Thermal Insulation Limited
Fire Stopping
Volume 19 Electrical Services N G Bailey Limited
Volume 20 Fire Detection & Alarms Cerberus Limited
Volume 21 Lightning Protection R C Cutting Limited
Volume 22 Lifts Otis plc
Volume 23 Hard Landscaping McNicholas plc
Volume 24 Soft Landscaping Hasmead Limited
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7.2 Structural Engineer Ove Arup & Partners General Arrangement Drawings
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CL/S/0-0C General Notes
CL/S/0-1M Ground Floor Structural Plan
CL/S/1-1H 1st Floor Structural Plan
CL/S/1-2F Restaurant Roof Steelwork
CL/S/2-1F 2nd Floor Structural Plan
CL/S/3-1G 3rd Floor Structural Plan
CL/S/4-1H 4th Floor Structural Plan
CL/S/5-1M 5th Floor Structural Plan
CL/S/6-1C 6th Floor Structural Plan
CL/S/B1-1U Lower Grd Floor Structural Plan
CL/S/B2-1N Basement Structural Plan
CL/S/B2-2 Screen to Delta Drain
CL/S/B3-1N One Carter Lane Foundation Plan
CL/S/S-20F Foundation/Basement Sect-Sht 1
CL/S/S-21E Foundation/Basement Sect-Sht 2
CL/S/S-22L Lower Grd Floor Sections-Sht 1
CL/S/S-23E Foundation/Basement Sect-Sht 3
CL/S/S-24F Foundation/Basement Sect-Sht 4
CL/S/S-25C Foundation/Basement Sect-Sht 5
CL/S/S-26E Foundation/Basement Sect-Sht 6
CL/S/S-27L Foundation/Basement Sect-Sht 7
CL/S/S-28C Foundation/Basement Sect-Sht 8
CL/S/S-29E Foundation/Basement Sect-Sht 9
CL/S/S-30L Lower Ground Floor Sect-Sht 2
CL/S/S-31F Lower Ground Floor Sect-Sht 3
CL/S/S-32D Lower Ground Floor Sect-Sht 4
CL/S/S-33C Lower Ground Floor Sect-Sht 5
CL/S/S-34F Lower Ground Floor Sect-Sht 6
CL/S/S-35E Ground Floor Sections-Sht 1
CL/S/S-36C Ground Floor Sections-Sht 2
CL/S/S-37D Lower Ground Floor Sect-Sht 7
CL/S/S-38B One Carter Lane Floor Sect-Sht 1
CL/S/S-40E One Carter Lane Floor Sect-Sht 2
CL/S/S-41E One Carter Lane Floor Sect-Sht 3
CL/S/S-42D One Carter Lane Floor Sect-Sht 4
CL/S/S-43F One Carter Lane Floor Sect-Sht 5
CL/S/S-44E One Carter Lane Floor Sect-Sht 6
CL/S/S-45G One Carter Lane Floor Sect & Typical Stair Details-Sht 7
CL/S/S-46H One Carter Lane Floor Sect-Sht 8
CL/S/S-47B One Carter Lane Floor Sect-Sht 9
CL/S/S-48B Stair Core A Insitu Concrete Stair
CL/S/S-50B Stair Core B Precast Stair Detail
CL/S/S-51B Stair Core C Insitu Stairs
CL/S/S-52B One Carter Ln Stair Core C-Sht 1
CL/S/S-54C One Carter Ln Stair Core C-Sht 2
CL/S/S-55C One Carter Lane Core B General Arrangement - Sheet 1
CL/S/S-56D One Carter Lane Core B General Arrangement - Sheet 2
CL/S/S-57D One Carter Lane Core B Precast Stair Details
CL/S/S-58D Roof Steelwork Sect-Sheet 1 of 2
CL/S/S-60D Roof Steelwork Sect-Sheet 2 of 2
CL/S/S-618 Roof Steelwork Details -Sheet 1
CL/S/S-62E One Carter Lane Ramp
CL/S/S 100A Corporation Duct Wall Elevation
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SP/0-1A Structural Penetrations Through Ground Floor Plan
SP/1-1A Structural Penetrations Through First Floor Plan
SP/2-1A Structural Penetrations Through Second Floor Plan
SP/3-1A Structural Penetrations Through Third Floor Plan
SP/4-1A Structural Penetrations Through Fourth Floor Man
SP/5-1A Structural Penetrations Through Fifth Floor Plan
SP/B1-1A Structural Penetrations Through Lower Ground Floor Plan
SP/S-50A Structural Penetrations Through Core A Sheet 1 of 3
SP/S-51A Structural Penetrations Through Core A Sheet 2 of 3
SP/S-54A Structural Penetrations Through Core C Sheet 1
SP/S-56A Structural Penetrations Through Core B Sheet 1 of 2
SP/S-57A Structural Penetrations Through Core B Sheet 2 of 2
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</TABLE>
7.2 Structural Engineer Ove Arup & Partners Reinforcement Drawings
<TABLE>
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R001 Foundation Details - Sheet 1
R002A Foundation Details - Sheet 2
R003 Foundation Details - Sheet 3
R004 Foundation Details - Sheet 4
R005 Foundation Details - Sheet 5
R006 Foundation Details - Sheet 6
R007A Foundation Details - Sheet 7
R008A Foundation Details - Sheet 8
R009B Foundation Details - Sheet 9
R010 Foundation Details - Sheet 10
R011A Foundation Details - Sheet 11
R012 Foundation Details - Sheet 12
R013A Foundation Details - Sheet 13
R014 Foundation Details - Sheet 14
R015B Foundation Details - Sheet 15
R016A Foundation Details - Sheet 16
R017 Details of Waling Beam Between Basement & Lower Ground Floor
R018A Foundation Details - Sheet 18
R019A Retaining walls
R020A Basement Slab-Sheet 1
R021A Basement Slab-Sheet 2
R022 Basement Slab-Sheet 3
R023A Basement Slab-Sheet 4
R024B Basement Slab-Sheet 5
R025 Manhole Details
R026 Petrol Interceptor
R027E Column Starters
R028B Key Plan to Columns
R029C Col. Foundation Level to Lwr Grd Flr
R030D Col. Foundation to Lwr Grd-Sht 2
R031 Core C Stair Case Basement to Lower Ground Floor
R032A Foundation Details - Sheet 17
R033A Core D Wall Details - Base to Grd Shear Wall at Grid A-Base to LGF
R034A Shear Wall on Grid H -Foundation to LGF
R035 Core A Stair
R036 Core A Stair
R037B Col-Sht 3 Foundatn Level to LGF
R038 Wall Adjacent to Ramp
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<TABLE>
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R039 Detail of Walls Basement to LGF
R040 250mm Thick RC Wall Sth of & Parallel to GL9
R041 Foundation to Corp. Duct - Sht 1
R042 Foundation to Corp. Duct - Sht 2
R043 Col Details Basement- Grd Flr
R044 Detail of Wall to Corp. Duct
R045 Staircase Details Base to LGF
R046 Core B S/case Base to 5 Flr - Sht1
R047 Core B S/case Base to 5 Flr - Sht2
R100A Lower Ground Floor Slab Detail
R10lA Lower Ground Floor Beam Detail
R102A Lower Ground Floor Beams
R103 Detail of Lower Ground Flr Beam
R104 Transfer Beams, Lower Grd Flr
R105A Lower Ground Floor Beam Detail
R106A Lower Ground Floor Slab & Beam
R107 Lower Ground Floor Beam Detail
R108 Lower Ground Floor Beam Detail
R109 Detail of Lower Ground Flr Beam
R110A Lower Ground Flr Details of Slab
R111A Lower Ground Flr Details of Slab
R112 Beam Details LGF Zones 3&4
R113 Beam Details LGF Zones 3&4
R114 Lower Ground Flr-Detail of Beam
R115A Shear-Walls at Grid Lines A & H Lower Ground to Ground Floor
R116A One Carter Lane RC Details of Lower Ground Floor Beams
R117 One Carter Lane RC Details of Lower Ground Floor Beams
R118 Col. LGF to Ground Floor
R119 Core CS/case LGF to 4th Flr Plan
R120 Core CS/case LGF to 4th Flr Sect
R121 Details of LGF Slab
R122 Col. Zone 3&4 - LGF to Grd Flr
R123 Col. Zone 3&4 - LGF to Grd Flr
R124 Walls & Slab to Drum Plaza East
R125A LGF Plaza East Beams - Sheet 1
R126 LGF Beams Plaza East
R127 LGF Beams Plaza East
R128 LGF Plaza East Beams - Sheet 2
R129 LGF Slab Plaza East
R130A LGF Slab Plaza East
R13lA LGF Slab Plaza East
R132A LGF Stab Plaza East
R133 LGF Slab Plaza West
R134 LGF Slab Plaza West
R135 LGF Slab Plaza West
R136 LGF Slab Plaza West
R137 LGF Slab Plaza West
R138A LGF Beams Plaza West
R139 LGF Beams Plaza West
R140 LGF Beams Plaza West
R141 LGF Beams Plaza West
R142 LGF Plaza West Beams
R143 LGF Beams Plaza West
R144 LGF Slab Plaza East
R145 Detail of Walls LGF to Grd Flr
R200A Waling Beam Detail - GF - Sht 1
R201 Waling Beam Detail - GF - Sht 2
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<TABLE>
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R202A Ground Floor Slab Details
R203A Ground Floor Slab Details
R204A Ground Floor Slab Details
R205A Ground Floor Slab Details
R206B Ground Floor Slab & Beams
R207 Ground Floor Beam Details
R208 Col. Ground Floor to First Floor
R209 Core A Stairs
R210 Core A Stairs
R211A Ground Floor Detail of Slab
R212 Ground Floor Beam Details
R213 Beam Detail Grd Flr Zones 3&4
R214 RC Details of Ground Floor Beam
R215 RC Details of Ground Floor Beam
R216 RC Details of Ground Floor Beam
R217 RC Details of Ground Floor Beam
R218 Ground Floor Plaza East Slab
R219 Ground Floor Plaza East Beams
R220 Ground Floor Beams Plaza East
R221 Ground Floor Beams Plaza East
R222 Ground Floor Plaza East Beams
R223 Col. Zones 3&4 Grd to 1st Floor
R224 Ground Floor Slab Plaza East
R225 Ground Floor Slab Plaza East
R226 Core D Wall Details Grd to 6th Flr
R227 Grd Floor Beams Plaza East
R300 1st Floor Slab Details - Sheet 1
R301 1st Floor Slab Details - Sheet 2
R302 1st Floor Beams
R303 1st Floor Beams
R304 1st Floor Beams
R305A 1st Floor Slab & Beams
R306 1st Floor Beam Details
R307 Col. Zones 1 - 1st to 2nd Floor
R308A 1st Floor Slab Details
R309A 1st Floor Slab Details - Sht 2
R310A 1st Floor Slab Details - Sht 3
R311 RC Details of 1st Floor Beams
R312 RC Details of 1st Floor Beams
R313A 1st Floor Beam Details - Sht 3
R314A 1st Floor Beam Details - Sht 4
R315 1st Floor Beam Details - Sht 5
R316A 1st Floor Beam Details - Sht 6
R317 Col. Zones 2 - 1st to 2nd Floor
R318 Col. Zones 3 & 4 - 1st to 3rd Floor
R319 Core C Beams
R400 2nd Floor Slab Details - Sheet 1
R401 2nd Floor Slab Details - Sheet 2
R402 2nd Floor Beam Details - Sheet 1
R403 2nd Floor Beam Details - Sheet 2
R404 2nd Floor Beam Details - Sheet 3
R405 2nd Floor Slab & Details
R406A 2nd Floor Slab Details
R407 2nd Floor Slab Details
R408 2nd Floor Slab Details
R409 2nd Floor Beam Details
R410 2nd Floor Beam Details
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<TABLE>
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R411A 2nd Floor Beam Details
R412 2nd Floor Beam Details
R413 2nd Floor Beam Details
R414A 2nd Floor Beam Details
R415 Col. Zone 1 - 2nd to 3rd Floor
R500 3rd Floor Slab Details
R501 3rd Floor Slab Details - Sheet 2
R502 3rd Floor Beam Details
R503 3rd Floor Beam Details
R504 3rd Floor Beam Details
R505 3rd Floor Slab & Beam Details
R506A 3rd Floor Slab Details
R507 3rd Floor Slab Details
R508 3rd Floor Slab Details
R509 3rd Floor Beam Details
R510 3rd Floor Beam Details
R511A 3rd Floor Beam Details
R512 3rd Floor Beam Details
R513 3rd Floor Beam Details
R514A 3rd Floor Beam Details
R515 Col. Details Zone 1&23rd - 5th Flr
R516 Col. Details Zone 1&23rd - 5th Flr
R517A Col. Details Zone 3&43rd - 5th Flr
R600 4th Floor Slab - Sheet 1
R601 4th Floor Slab - Sheet 2
R602 4th Floor Beam Details
R603 4th Floor Beam Details
R604 4th Floor Beam Details
R605 4th Floor Slab & Beam Details
R606 4th Floor Slab Details
R607 4th Floor Slab Details
R608 4th Floor Slab Details
R609 4th Floor Beam Details
R610 4th Floor Beam Details
R611 4th Floor Beam Details
R612 4th Floor Beam Details
R613 4th Floor Beam Details
R614 4th Floor Beam Details
R700A 5th Flr Slab/Beam Details - Zone 1
R701A 5th Floor Beam Details - Zone 1
R702B 5th Flr Slab/Beam Details - Zone 2
R703 5th Floor Slab Details - Sheet 1
R704 5th Floor Slab Details - Sheet 2
R705 5th Floor Beams - Zone 3&4
R706 5th Floor Beams - Zone 3&4
R707 5th Floor Beans - Zone 3&4
R708A 5th Floor Beams - Zone 3&4
R709 5th Floor Beans - Zone 3&4
R710 5th Floor Beams - Zone 3&4
R711 5th Floor Beams - Zone 3&4
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7.3 Public Health -Ove Arup & Partners Services Drawings
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CL/P1-0-1 Gr'nd fl'r. Public Health services
CL/P1-20-1 Manholes, sumps, interceptors
CL/P1-20-2 Manholes, sumps, interceptors
CL/P1-20-3 Manhole schedule
CL/P1-3-1 1st. - 3rd Public Health services
CL/P1-30-1 Water & Fire Hose Reel Schem.
CL/P1-30-2 Sprinkler & dry riser schematic
CL/P1-30-3 Services detail sheet
CL/P1-30-4 Foul water drainage schematic
CL/P1-4-1 4th floor Public Health services
CL/P1-5-1 5th floor Public Health services
CL/P1-B1-1 LGF Public Health services
CL/P1-B2-1 Basement PH services-Water
CL/P2-B2-1 Automatic sprinkler installation
CL/P3-B2-1 Substructure drainage and incoming services ducts
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7.4 Mechanical & Electrical Engineer Ove Arup & Partners Drawings
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All information on Mechanical & Electrical Building
Services is contained in Trade Contractor records
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Volume I - Principal Reference Document
7.5 Landscape Architect Charles Funke Associates Contract Drawings
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PL 05 E Overall Landscape Plan
PL 06 M Landscape detail Plan
PL 09 A Planting plan
PL 11 F Construction detail - ramp steps
PL 12 E Construction detail - granite surface
PL 13 F Construction detail - yorkstone
PL 14 E Construction detail - seat planter
PL 15 D Construction detail - seat planter
PL 16 E Construction detail - tree pits
PL 19 D Construction detail - bollard/handrail
PL 20 Construction detail - wall/railing
PL 21 D Construction detail - wall/railing
PL 23 D Construction detail - ramp steps
PL 25 F Construction detail - restaurant sections
PL 26 C Planting details
PL 29 C Construction detail - parapet
PL 30 E Landscaping setting out plan
PL 32 B Drainage setting out
PL 36 B Light setting out
PL 37 A Stud setting out
PL 39 Restaurant wall lights
PL 40 Drum planter wall lights
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Section 7 page 8 of 9 mace
<PAGE> 358
OPERATING AND MAINTENANCE MANUAL
COVERITE LIMITED
PETERSHILL DEVELOPMENT
1 CARTER LANE, LONDON
ELEMENT 2160 - WATERPROOFING
Signed on behalf of the Trade Contractor /s/ [Illegible]
--------------------
Coverite Limited
--------------------
Palace Gates
--------------------
Bridge Road
--------------------
Wood Green
--------------------
London N22 4SP
--------------------
Date 14th January 1997
--------------------
contracts
<PAGE> 359
- --------------------------------------------------------------------------------
OPERATING AND MAINTENANCE MANUAL
- --------------------------------------------------------------------------------
EFFECTIVE DATE
PETERSHILL DEVELOPMENT, LONDON 14.10.97
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CONTENTS
--------
SECTION No. SECTION TITLE PAGE No.
----------- ------------- --------
<S> <C> <C>
1 General Particulars 1-2
2 Repairs 3
3 Replacements 4-5
4 Operations 6
5 Maintenance 7
6 As Built Drawings 8
- --------------------------------------------------------------------------------
</TABLE>
<PAGE> 360
Package 2160 Coverite Ltd Waterproofing
<TABLE>
<S> <C>
2160/LSP/ 1001 rev C
2 rev B
3 --
2001
1039 rev A
1040 rev A
1041 rev B
1042 rev C
1043 rev A
1044 rev A
1045 rev A
1046 rev B
1047 rev B
1048 rev B
1049 rev A
1050 rev A
1051 rev B
1052 rev B
1053 rev A
1054 rev B
1055 rev B
1056 rev A
1057 rev B
1059 rev B
1061 rev A
1062 rev A
1063 rev B
1064 rev B
1065 rev A
2010 rev C
2011 rev B
SK/2160/1001 rev A
1002 rev A
1011 rev D
1012 rev E
1013 rev D
1014 rev D
1015 rev A
1016 rev A
1017 rev B
1018 rev C
1019 rev D
1020 rev A
1021 rev A
1022 rev A
1023 rev B
1024 rev B
1025 rev A
1026 rev D
1027 rev B
1028 rev B
1029 rev D
</TABLE>
<PAGE> 361
Coverite (contd)
<TABLE>
<S> <C>
2160/LSP/1030 rev A
1031 rev D
1032 rev D
1033 rev A
1034 rev A
1035 rev A
1036 rev A
1037 rev A
1038 rev B
</TABLE>
<PAGE> 362
[LOGO] P.C. HARRINGTON CONTRACTORS LIMITED
PETERSHILL, LONDON E.C.4
ref:oom1
Package 2350
- --------------------------------------------------------------------------------
OPERATION AND MAINTENANCE
INSTRUCTIONS
for the
SUBSTRUCTURE, SUPERSTRUCTURE
&
SUBSTRUCTURE DRAINAGE
11/06/97
1
Draft 3
Distribution: Mace
file
<PAGE> 363
[LOGO] P.C. HARRINGTON CONTRACTORS LIMITED
PETERSHILL, LONDON E.C.4
ref:oom1
- --------------------------------------------------------------------------------
INDEX
<TABLE>
<S> <C>
SECTION 1 GENERAL
SECTION 2 THE INSTALLATION
SECTION 3 SCHEDULES
SECTION 4 OPERATION OF THE INSTALLATION
SECTION 5 MAINTENANCE OF THE INSTALLATION
SECTION 6 SYSTEM RECORDS
SECTION 7 AS BUILT RECORD DRAWINGS
SECTION 8 MANUFACTURERS LITERATURE
SECTION 9 STATIC TEST CERTIFICATES
SECTION 10 COMMISSIONING RESULTS
APPENDIX 1
APPENDIX 2
</TABLE>
11/06/97
3
Draft 3
Distribution: Mace
file
<PAGE> 364
[LOGO] P.C. HARRINGTON CONTRACTORS LIMITED
PETERSHILL, LONDON E.C.4
ref:oom1
- --------------------------------------------------------------------------------
7 RECORD DRAWINGS
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
AS BUILT DRAWING NUMBER TITLE
- --------------------------------------------------------------------------------
<S> <C>
PCH/CL/S/B2-1/SL/A Basement slab levels
PCH/CL/S/B2-1/CP/A Basement column positions
PCH/CL/S/B2-1/SFL/A Basement Soffit levels
PCH/CL/S/B1-1-1/SL/A Lower ground floor slab levels
PCH/CL/S/B1-1/CP/A Lower ground floor column and slab edge
positions
PCH/CL/S/B1-1/SFL/A Lower ground floor Soffit levels
PCH/CL/S/0-1/SL/A Ground floor slab levels
PCH/CL/S/0-1/CP/A Ground floor column and slab edge positions
PCH/CL/S/0-1/SFL/A Ground floor Soffit levels
PCH/CL/S/1-1/SL/A First floor slab levels
PCH/CL/S/1-1/CP/A First floor column and slab edge positions
PCH/CL/S/1-1/SFL/A First floor Soffit levels
PCH/CL/S/2-1/SL/A Second floor slab levels
PCH/CL/S/2-1/CP/A Second floor column and slab edge positions
PCH/CL/S/2-1/SFL/A Second floor Soffit levels
PCH/CL/S/3-1/SL/A Third floor slab levels
PCH/CL/S/3-1/CP/A Third floor column and slab edge positions
PCH/CL/S/3-1/SFL/A Third floor Soffit levels
PCH/CL/S/4-1/SL/A Fourth floor slab levels
PCH/CL/S/4-1/CP/A Fourth floor column and slab edge positions
PCH/CL/S/4-1/SFL/A Fourth floor Soffit levels
PCH/CL/S/5-1/SL/A Fifth floor slab levels
PCH/CL/S/5-1/CP/A Fifth floor column and slab edge positions
PCH/CL/S/5-1/SFL/A Fifth floor Soffit levels
PCH/CL/S/B1-1-2/AB/A Drainage
- --------------------------------------------------------------------------------
</TABLE>
11/06/97
12
Draft 3
Distribution: Mace
file
<PAGE> 365
[GRAPHIC OMITTED]
Package 2800
Structural Steelwork
Swift Structures Ltd
Trading as
S. G. INDUSTRIAL
Operations/Maintenance
Manual
<TABLE>
<S> <C>
Project Title: Petershill -- Structural Steelwork
Package 2800
Project Address: Petershill
1 Carter Lane
London
Project Managers: M.A.C.E. Ltd
Consulting Engineers: Ove Arup & Partners
Architect: Rolfe Judd
Concrete Package
Contractor: P.C.Harrington (Reference only)
</TABLE>
<PAGE> 366
[GRAPHIC OMITTED]
INDEX
<TABLE>
<S> <C>
1. Fabrication/Erection Contractor/Welder Certification
2. Design Engineers/Calculations
3. Erection Method Statement
4. Steel Section Suppliers
5. Paint Suppliers/Specification/Paint Applicators
6. Component/Fixings Suppliers
7. Consulting Engineers Drawing Packages
8. S.G.I. Drawing and Mark No Package
9. Materials Specification Packages
</TABLE>
<PAGE> 367
[GRAPHIC OMITTED]
S.G.I. DRAWINGS
<TABLE>
<S> <C>
8.1 Drawing No D744 -- 100 Rev A
Steelwork 5th Floor
Hold Down Bolt Assembly
8.2 Drawing No D744 -- 100 Rev B
Steelwork 5th Floor
Column Marking Plan
8.3 Drawing No D744 -- 102 Rev D
Steelwork 5th Floor Marking Plan
8.4 Drawing No D744 -- 103 Rev A
Purlin Marking Plan -- Roof B & C
8.5 Drawing No D744 -- 300 Rev A
Steelwork Holding Down Bolt Assembly &
Column Marking Plan -- 4th Floor
8.6 Drawing No D744 -- 301 Rev F
Steelwork 5th Floor Marking Plan
8.7 Drawing No D744 -- 600 Rev D
Steelwork Restaurant Holding Down Bolt &
Column Marking Plans
8.8 Drawing No D744 -- 658 Rev
Restaurant Roof Marking Plan
</TABLE>
<PAGE> 368
Cir (Imola) Limited
Via Bicocca n. 14/c
Imola
Italy
Telephone: 0039 542 62 15 11
Fax: 0039 542 64 03 90
Petershill, 1 Carter Lane
Off Knightrider Court
London EC4V 5ER
Package 3210 - Cladding Supply
Technical Specification and Operation and
Maintenance Manual
Section 1
November 30, 1997
Construction Manager
Mace Limited
7 Plough Yard
London EC2A 3LP
[GRAPHIC OMITTED]
Client
MEPC Limited
12 St James Square
London SW1Y 4LB
<PAGE> 369
Technical Specifications
- --------------------------------------------------------------------------------
Contents - Section 1 - Technical Specification
<TABLE>
<S> <C>
1. General Description ..................................... 1
2. Materials ............................................... 3
3. Workmanship ............................................. 6
4. Standards and Codes ..................................... 8
5. Movement ................................................ 9
6. Fixing Devices .......................................... 10
7. D/S Approvals ........................................... 11
8. Drawings ................................................ 12
9. Material Suppliers and Finishers ........................ 13
10. Samples ................................................. 14
11. Spares .................................................. 15
12. Calculations ............................................ 16
</TABLE>
<PAGE> 370
Sheet 1 of 1
================================================================================
DRAWING REGISTER P-01
- -----------------------------------------------
CIR Alluminio
- --------------------------------------------------------------------------------
Project: PETERSHILL, 1 CARTER LANE, LONDON, EC4 PACKAGE Nr. 3210 JOB Nr. 3610
- --------------------------------------------------------------------------------
Client: MEPC Drawings Type: GENERAL ELEVATION DATE:
2-12-97
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
FOR CONSTRUCTION AS BUILT
SAMPLE ------------------------------------------------------------
W/T / DWG. DESCRIPTION sub Issue return sub Issue return
& HSE No. No. date rev date stat No. date rev date stat
- ------------------------------------------------------------------------------------------------------------------
Drawing Nr. Drawing Title
==================================================================================================================
<C> <S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
E-01-V North Elevation General layout drwg. /
- ------------------------------------------------------------------------------------------------------------------
E-02-V South elevation General layout drwg. /
- ------------------------------------------------------------------------------------------------------------------
E-03-V East elevation General layout drwg. /
- ------------------------------------------------------------------------------------------------------------------
E-04-V West elevation General layout drwg. /
- ------------------------------------------------------------------------------------------------------------------
E-05-V Section A General layout drwg. /
- ------------------------------------------------------------------------------------------------------------------
E-06-V Section B General layout drwg. /
- ------------------------------------------------------------------------------------------------------------------
E-07 South block south elevation & plan
'ta' D E
- ------------------------------------------------------------------------------------------------------------------
E-08 South block south/east elevation &
plan 'tb' D E
- ------------------------------------------------------------------------------------------------------------------
E-09 South block south/west elevation &
plan 'tc' D E
- ------------------------------------------------------------------------------------------------------------------
E-10 Middle block east elevation & plan
'td' D E
- ------------------------------------------------------------------------------------------------------------------
E-11 Middle block west elevation & plan
'te' D E
- ------------------------------------------------------------------------------------------------------------------
E-12 North block north-east & north-east
return elevations & plan 'tc' D E
- ------------------------------------------------------------------------------------------------------------------
E-13 North block north-west & north-west
return elevations & plan 'tg' D E
- ------------------------------------------------------------------------------------------------------------------
E-14 North block north elevations & plan
'th' D E
</TABLE>
<PAGE> 371
Sheet 1 of 2
================================================================================
DRAWING REGISTER P-01
- -----------------------------------------------
CIR Alluminio
- --------------------------------------------------------------------------------
Project: PETERSHILL, 1 CARTER LANE, LONDON, EC4 PACKAGE Nr. 3210 JOB Nr. 3610
- --------------------------------------------------------------------------------
Client: MEPC Drawings Type: BAY ELEVATIONS DATE:
2-12-97
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
FOR CONSTRUCTION AS BUILT
SAMPLE ------------------------------------------------------------
W/T / DWG. DESCRIPTION sub Issue return sub Issue return
& HSE No. No. date rev date stat No. date rev date stat
- ------------------------------------------------------------------------------------------------------------------
Drawing Nr. Drawing Title
==================================================================================================================
<C> <S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
B-01 Elevation typical Bay C C
- ------------------------------------------------------------------------------------------------------------------
B-02 South/east Elevation Bay 2 A A
- ------------------------------------------------------------------------------------------------------------------
B-03 South Block elevation Bay 3 & 19 A A
- ------------------------------------------------------------------------------------------------------------------
B-05 Corner south/east elevation bay 5 B B
- ------------------------------------------------------------------------------------------------------------------
B-09 South elevation bay 9 D E
- ------------------------------------------------------------------------------------------------------------------
B-10 South elevation bay l0 F G
- ------------------------------------------------------------------------------------------------------------------
B-11 South elevation bay 11 D E
- ------------------------------------------------------------------------------------------------------------------
B-15 Corner south/west elevation bay-15 B B
- ------------------------------------------------------------------------------------------------------------------
B-16 South/east elevation bay 16 A A
- ------------------------------------------------------------------------------------------------------------------
B-18 Core C-stair elevation bay 17 and
bay 18 H I
- ------------------------------------------------------------------------------------------------------------------
B-20 South block-Elev. 9 - Colonnade South
/ west Elev. Return bay E F
- ------------------------------------------------------------------------------------------------------------------
B-21 Colonnade south/west elev. return bay
Colonnade north/west elev. return bay B B
- ------------------------------------------------------------------------------------------------------------------
B-23 Corner return to south block east side
elevation bay-23 B C
- ------------------------------------------------------------------------------------------------------------------
B-24 Elevation Bay-24 hoist area C D
- ------------------------------------------------------------------------------------------------------------------
B-25 Elevation Bay-25 C D
- ------------------------------------------------------------------------------------------------------------------
B-26 Elevation Bay-26 D E
- ------------------------------------------------------------------------------------------------------------------
B-27 Elevation Bay-27-28-29-30-31-32-36 C D
- ------------------------------------------------------------------------------------------------------------------
B-33 Elevation Bay-33 west colonnade D E
- ------------------------------------------------------------------------------------------------------------------
B-34 Elevation Bay-34 west colonnade D E
- ------------------------------------------------------------------------------------------------------------------
B-35 Elevation Bay-35 hoist area B C
- ------------------------------------------------------------------------------------------------------------------
B-37 Corner return to north block west
side elevation bay-37 B C
- ------------------------------------------------------------------------------------------------------------------
B-39 North/west elevation bay 39-40 B B
- ------------------------------------------------------------------------------------------------------------------
B-42 Corner north/west elevation Bay-42 D D
- ------------------------------------------------------------------------------------------------------------------
B-49 Main entrance elevation typical Bay 49 B C
- ------------------------------------------------------------------------------------------------------------------
B-56 Corner north/east elevation bay-56 C C
- ------------------------------------------------------------------------------------------------------------------
B-57 North/east elevation bay 57-60 B B
- ------------------------------------------------------------------------------------------------------------------
B-59 Core A - Stair - Elevation Bay 58
and Bay 59 D E
- ------------------------------------------------------------------------------------------------------------------
B-61 Corner east courtyard elevation
Bay-61 B C
- ------------------------------------------------------------------------------------------------------------------
B-62 Elevation Bay 62 east courtyard D E
- ------------------------------------------------------------------------------------------------------------------
B-63 Elevation typical Bay 63-64-65-66
east courtyard B C
- ------------------------------------------------------------------------------------------------------------------
B-67 Elevation bay-67 east courtyard C D
- ------------------------------------------------------------------------------------------------------------------
B-68 Elevation bay-68 east courtyard C D
- ------------------------------------------------------------------------------------------------------------------
B-69 Elevation typical bay-69-70-71-72
east courtyard B C
- ------------------------------------------------------------------------------------------------------------------
B-73 Elevation Bay-73-74 east courtyard hoist area A B
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 372
Sheet 1 of 1
================================================================================
DRAWING REGISTER
- -----------------------------------------------
CIR Alluminio
- --------------------------------------------------------------------------------
Project: PETERSHILL, 1 CARTER LANE, LONDON, EC4 PACKAGE Nr. 3210 JOB Nr. 3610
- --------------------------------------------------------------------------------
Client: MEPC Drawings Type: GENERAL ARRANGEMENTS DRAWINGS PLANS DATE:
2-12-97
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
FOR CONSTRUCTION AS BUILT
SAMPLE ------------------------------------------------------------
W/T / DWG. DESCRIPTION sub Issue return sub Issue return
& HSE No. No. date rev date stat No. date rev date stat
- ------------------------------------------------------------------------------------------------------------------
Drawing
Nr. Drawing Title
==================================================================================================================
<C> <S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
GA-01 South block 4th floor slab panel and
bracket layout plan / A
- ------------------------------------------------------------------------------------------------------------------
GA-02 North block 5th floor slab panel and
brackets west layout plan / A
- ------------------------------------------------------------------------------------------------------------------
GA-03 North block 5th floor slab panel and
brackets east layout plan / A
- ------------------------------------------------------------------------------------------------------------------
GA-06 South block 4th floor plan terrace
cladding / A
- ------------------------------------------------------------------------------------------------------------------
GA-07 North block 5th floor plan terrace
cladding / A
- ------------------------------------------------------------------------------------------------------------------
GA-08 Core A 5th floor plan layout details A B
- ------------------------------------------------------------------------------------------------------------------
GA-O8-1 Core C 4th floor plan layout details A B
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 373
Sheet 2 of 2
================================================================================
DRAWING REGISTER P-01
- -----------------------------------------------
CIR Alluminio
- --------------------------------------------------------------------------------
Project: PETERSHILL, 1 CARTER LANE, LONDON, EC4 PACKAGE Nr. 3210 JOB Nr. 3610
- --------------------------------------------------------------------------------
Client: MEPC Drawings Type: BAY ELEVATIONS DATE:
2-12-97
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
FOR CONSTRUCTION AS BUILT
SAMPLE ------------------------------------------------------------
W/T / DWG. DESCRIPTION sub Issue return sub Issue return
& HSE No. No. date rev date stat No. date rev date stat
- ------------------------------------------------------------------------------------------------------------------
Drawing
Nr. Drawing Title
==================================================================================================================
<C> <S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
B-75 Elevation bay-75 east courtyard B D
- ------------------------------------------------------------------------------------------------------------------
B-76 Elevation typical bay-76 C D
- ------------------------------------------------------------------------------------------------------------------
B-77 Corner return to east courtyard
elevation bay-77 C D
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 374
Sheet 1 of 1
================================================================================
DRAWING REGISTER
- -----------------------------------------------
CIR Alluminio
- --------------------------------------------------------------------------------
Project: PETERSHILL, 1 CARTER LANE, LONDON, EC4 PACKAGE Nr. 3210 JOB Nr. 3610
- --------------------------------------------------------------------------------
Client: MEPC Drawings Type: COPING PLANS DATE:
2-12-97
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
FOR CONSTRUCTION AS BUILT
SAMPLE ------------------------------------------------------------
W/T / DWG. DESCRIPTION sub Issue return sub Issue return
& HSE No. No. date rev date stat No. date rev date stat
- ------------------------------------------------------------------------------------------------------------------
Drawing
Nr. Drawing Title
==================================================================================================================
<C> <S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CP-09 Coping Plan of bay 9-10-11 A C
- ------------------------------------------------------------------------------------------------------------------
CP-23 Coping Plan: Bay 23 B C
- ------------------------------------------------------------------------------------------------------------------
CP-24 Coping Plan: Bay 24 A C
- ------------------------------------------------------------------------------------------------------------------
CP-25 Coping Plan: Bay 25 B C
- ------------------------------------------------------------------------------------------------------------------
CP-37 Coping Plan: Bay 37 A C
- ------------------------------------------------------------------------------------------------------------------
CP-49 Coping Plan: Bay 49 A B
- ------------------------------------------------------------------------------------------------------------------
CP-61 Coping Plan: Bay 61 A C
- ------------------------------------------------------------------------------------------------------------------
CP-62 Coping Plan: Bay 62 B C
- ------------------------------------------------------------------------------------------------------------------
CP-67 Coping Plan: Bay 67-68-33-34 B C
- ------------------------------------------------------------------------------------------------------------------
CP-76 Coping Plan: Bay 76 A C
- ------------------------------------------------------------------------------------------------------------------
CP-77 Coping Plan: Bay 77 B C
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 375
Sheet 1 of 4
================================================================================
DRAWING REGISTER P-01
- -----------------------------------------------
CIR Alluminio
- --------------------------------------------------------------------------------
Project: PETERSHILL, 1 CARTER LANE, LONDON, EC4 PACKAGE Nr. 3210 JOB Nr. 3610
- --------------------------------------------------------------------------------
Client: MEPC Drawings Type: HORIZONTAL SECTIONS DATE:
2-12-97
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
FOR CONSTRUCTION AS BUILT
SAMPLE ------------------------------------------------------------
W/T / DWG. DESCRIPTION sub Issue return sub Issue return
& HSE No. No. date rev date stat No. date rev date stat
- ------------------------------------------------------------------------------------------------------------------
Drawing
Nr. Drawing Title
==================================================================================================================
<C> <S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
H-101 Horizontal section central
mullion-glass E F
- ------------------------------------------------------------------------------------------------------------------
H-102 Horizontal section central mullion-panel E F
- ------------------------------------------------------------------------------------------------------------------
H-102/1 General details referred to hor.
section mullion panel h-102
- ------------------------------------------------------------------------------------------------------------------
H-103 Horizontal section: window jamb to column:
south block lev. 3/north lock lev. 4 E F
- ------------------------------------------------------------------------------------------------------------------
H-104 Horizontal section: spandrel jamb to
600x300 column south level 3/north
lev. 4 E F
- ------------------------------------------------------------------------------------------------------------------
H-105 Hor. sec: side jamb panel lev. 1
north-gf south E F
- ------------------------------------------------------------------------------------------------------------------
H-106 Horiz. sec. on external corner-
glass level D E
- ------------------------------------------------------------------------------------------------------------------
H-107 Hor. sec: on ext. cor.-double channel
level D E
- ------------------------------------------------------------------------------------------------------------------
H-108 Hor. sec: slab panel with fix.
bracket detail: south block level 3.
north block level 4 D E
- ------------------------------------------------------------------------------------------------------------------
H-109 Hor. sec: slab panel with fix.
bracket detail to back of concrete
column D E
- ------------------------------------------------------------------------------------------------------------------
H-110 Hor. sec. side jamb. glass level 3
south/ 4 north
- ------------------------------------------------------------------------------------------------------------------
H-111 Hor. sect. side jamb-glass lev. 3
south/ 4 north C D
- ------------------------------------------------------------------------------------------------------------------
H-111/1 Hor. sec. side jamb glass level 1st
floor hoist area A B
- ------------------------------------------------------------------------------------------------------------------
H-113 Hor. sec. side jamb panel lev. 3
south 7/ 4 north B C
- ------------------------------------------------------------------------------------------------------------------
H-114 Hor. sec. on slab panel to front of
concr. column. with fixing brkt.
detail B C
- ------------------------------------------------------------------------------------------------------------------
H-115 Hor. sec: low lev. gran:jamb areas B
- ------------------------------------------------------------------------------------------------------------------
H-116 Hor. sec: low lev. gran:centr.
mullion
- ------------------------------------------------------------------------------------------------------------------
H-117 Hor. sec. on slab pan. to front of
concrete column. with fixing brkt.
detail B
- ------------------------------------------------------------------------------------------------------------------
H-118 Hor. sec. on slab pan. to front of
concrete column. with fixing brkt.
detail B
- ------------------------------------------------------------------------------------------------------------------
H-119 Hor. sec. side jamb-panel to cor. bays D E
- ------------------------------------------------------------------------------------------------------------------
H-120 Hor. sec. on ext. cor.-double chan.
lev. A
- ------------------------------------------------------------------------------------------------------------------
H-121 Hor. sec. side jamb-panel lwr. gr.
floor south block A B
- ------------------------------------------------------------------------------------------------------------------
H-122 Hor. sec: spandrel jamb to 600x300
column: south lev. 3/north lev. 4 A
- ------------------------------------------------------------------------------------------------------------------
H-123 Hor. sec. side jamb-glass north block D E
- ------------------------------------------------------------------------------------------------------------------
H-124 Hor. sec: wind. jamb to col: south
block lev. grd. A
- ------------------------------------------------------------------------------------------------------------------
H-125 Colonnade-lower gr. fl. hor. sec.
mull. glass A
- ------------------------------------------------------------------------------------------------------------------
H-126 Hor. sec: front slab pan. joint: west
colonnade bay-21 B C
- ------------------------------------------------------------------------------------------------------------------
H-127 Hor. sec: at feature channel & box
pan. joints: west colonnade (bay 21) B C
- ------------------------------------------------------------------------------------------------------------------
H-128 Hor. sec: int. corner where bay 21
converges with bay 22 & 20 C D
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 376
Sheet 2 of 4
================================================================================
DRAWING REGISTER
- -----------------------------------------------
CIR Alluminio
- --------------------------------------------------------------------------------
Project: PETERSHILL, 1 CARTER LANE, LONDON, EC4 PACKAGE Nr. 3210 JOB Nr. 3610
- --------------------------------------------------------------------------------
Client: MEPC Drawings Type: HORIZONTAL SECTIONS DATE:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
FOR CONSTRUCTION AS BUILT
SAMPLE ------------------------------------------------------------
W/T / DWG. DESCRIPTION sub Issue return sub Issue return
& HSE No. No. date rev date stat No. date rev date stat
- ------------------------------------------------------------------------------------------------------------------
Drawing
Nr. Drawing Title
==================================================================================================================
<C> <S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
H-129 Hor. sec. on external corner-glass
level B C
- ------------------------------------------------------------------------------------------------------------------
H-130 Horizontal section side jamb-panel
lwr. gr. floor east courtyard
- ------------------------------------------------------------------------------------------------------------------
H-131 Horizontal section on external corner
bay 5 with granite A
- ------------------------------------------------------------------------------------------------------------------
H-132 Horizontal section: slab panel with fixing
bracket detail: to back of concrete
column gr. floor east courtyard C
- ------------------------------------------------------------------------------------------------------------------
H-133 Horizontal section side jamb-panel to
corner bays A
- ------------------------------------------------------------------------------------------------------------------
H-134 Horizontal section side jamb-panel to
corner bays 67-68-75-76 A
- ------------------------------------------------------------------------------------------------------------------
H-135 Horizontal section on external corner
bay 42 - with granite A
- ------------------------------------------------------------------------------------------------------------------
H-136 Horizontal section: slab panel with
fixing bracket detail: to back of
concrete column gr. floor east
courtyard bays 67-68-75-76 A
- ------------------------------------------------------------------------------------------------------------------
H-137 Horizontal section on external corner
bay 77 glass level B
- ------------------------------------------------------------------------------------------------------------------
H-138 West colonnade horizontal section on
first floor C
- ------------------------------------------------------------------------------------------------------------------
H-139 Horizontal section: internal corner
at sub-structure-sill level: where
bay 21 converges with bays 22 & 20 A
- ------------------------------------------------------------------------------------------------------------------
H-140 Horizontal section: slab panel
internal corner B C
- ------------------------------------------------------------------------------------------------------------------
H-141 Horizontal section on external corner
bay 61 glass level A
- ------------------------------------------------------------------------------------------------------------------
H-142 Horizontal section: slab panel with
fixing bracket detail: south block
level 3. A
- ------------------------------------------------------------------------------------------------------------------
H-143 Horizontal section: slab panel with
fixing bracket detail: to back of
concrete column A
- ------------------------------------------------------------------------------------------------------------------
H-144 Horizontal section: window jamb to
column B
- ------------------------------------------------------------------------------------------------------------------
H-144/1 Horizont. sec: window jamb to column
at hoist positions A
- ------------------------------------------------------------------------------------------------------------------
H-145 Horizontal section side jamb-panel to
corner bays A
- ------------------------------------------------------------------------------------------------------------------
H-146 Horizontal section side jamb-panel
lwr. floor east courtyard corner A
- ------------------------------------------------------------------------------------------------------------------
H-147 Horizontal section on external corner
bay 77 - with granite A
- ------------------------------------------------------------------------------------------------------------------
H-148 Horizontal section on slab panel to
front of concrete column with fixing
brkt. detail B
- ------------------------------------------------------------------------------------------------------------------
H-149 Horizontal section on external
corner-double channel level A
- ------------------------------------------------------------------------------------------------------------------
H-150 Horizontal section side jamb-panel to
corner bays B
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 377
Sheet 3 of 4
================================================================================
DRAWING REGISTER
- -----------------------------------------------
CIR Alluminio
- --------------------------------------------------------------------------------
Project: PETERSHILL, 1 CARTER LANE, LONDON, EC4 PACKAGE Nr. 3210 JOB Nr. 3610
- --------------------------------------------------------------------------------
Client: MEPC Drawings Type: HORIZONTAL SECTIONS DATE:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
FOR CONSTRUCTION AS BUILT
SAMPLE ------------------------------------------------------------
W/T / DWG. DESCRIPTION sub Issue return sub Issue return
& HSE No. No. date rev date stat No. date rev date stat
- ------------------------------------------------------------------------------------------------------------------
Drawing Nr. Drawing Title
==================================================================================================================
<C> <S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
H-151 Horizontal section on external corner
bay 77 glass level B
- ------------------------------------------------------------------------------------------------------------------
H-152 Horizontal section on external
corner-double channel level B
- ------------------------------------------------------------------------------------------------------------------
H-153 Horizontal section: window jamb to
column B
- ------------------------------------------------------------------------------------------------------------------
H-154 Horizontal section on external
corner-double channel level B
- ------------------------------------------------------------------------------------------------------------------
H-155 Horizontal section on slab panel to
front of concrete column with fixing
brkt. detail A
- ------------------------------------------------------------------------------------------------------------------
H-156 Horizontal section: slab panel with
fixing bracket detail: to back of
concrete column east courtyard B
- ------------------------------------------------------------------------------------------------------------------
H-157 Horizontal section on slab panel to
front of concrete column with fixing
brkt. detail C
- ------------------------------------------------------------------------------------------------------------------
H-158 West colonnade horizontal section
side jamb 1st level B
- ------------------------------------------------------------------------------------------------------------------
H-158/1 West colonnade horizontal section
side jamb 1st level hoist area
- ------------------------------------------------------------------------------------------------------------------
H-159 Horizontal section on external
corner-double channel level A
- ------------------------------------------------------------------------------------------------------------------
H-159/1 Horiz. section on external
corner-double channel level B
- ------------------------------------------------------------------------------------------------------------------
H-160 Horiz. section on external corner
bay 77-25 at 1st level A
- ------------------------------------------------------------------------------------------------------------------
H-161 Horizontal section side jamb A
- ------------------------------------------------------------------------------------------------------------------
H-162 Horiz. section on internal corner-
glass level A
- ------------------------------------------------------------------------------------------------------------------
H-163 Horiz. section: slab panel with
fixing bracket detail: south block
level 3 A
- ------------------------------------------------------------------------------------------------------------------
H-164 Horiz. section: slab panel with
fixing bracket detail: south block
level 3 A
- ------------------------------------------------------------------------------------------------------------------
H-165 Horiz. section level lwr-grd/east
courtyard
- ------------------------------------------------------------------------------------------------------------------
H-166 Horizontal section on internal
corner glass level A
- ------------------------------------------------------------------------------------------------------------------
H-167 Horiz. corner section on slab panel
to front of concrete column. with
fixing brkt. detail B
- ------------------------------------------------------------------------------------------------------------------
H-168 Horiz. jamb section lgf level - west
colonnade A
- ------------------------------------------------------------------------------------------------------------------
H-169 Horiz. jamb section grd level-west
colonnade A
- ------------------------------------------------------------------------------------------------------------------
H-170 Horizontal sect. through lateral
fixing-west colonnade A
- ------------------------------------------------------------------------------------------------------------------
H-171 Colonnade-lower gr. fl. horiz.
section mullion - glass A
- ------------------------------------------------------------------------------------------------------------------
H-172 Main entrance horiz. sect. side
jamb-panel A
- ------------------------------------------------------------------------------------------------------------------
H-173 Main entrance horiz. sect. side
jamb-panel A
- ------------------------------------------------------------------------------------------------------------------
H-174 Main entrance horiz. sect. central
mullion - glass
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 378
Sheet 4 of 4
================================================================================
DRAWING REGISTER
- -----------------------------------------------
CIR Alluminio
- --------------------------------------------------------------------------------
Project: PETERSHILL, 1 CARTER LANE, LONDON, EC4 PACKAGE Nr. 3210 JOB Nr. 3610
- --------------------------------------------------------------------------------
Client: MEPC Drawings Type: HORIZONTAL SECTIONS DATE:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
FOR CONSTRUCTION AS BUILT
SAMPLE ------------------------------------------------------------
W/T / DWG. DESCRIPTION sub Issue return sub Issue return
& HSE No. No. date rev date stat No. date rev date stat
- ------------------------------------------------------------------------------------------------------------------
Drawing Nr. Drawing Title
==================================================================================================================
<C> <S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
H-175 Main entrance horizontal section side
jamb-panel B
- ------------------------------------------------------------------------------------------------------------------
H-176 Main entrance general horiz. section
central mullion-panel
- ------------------------------------------------------------------------------------------------------------------
H-177 Colonnade-lower gr. fl. horiz.
section fire - resisting lights B C
- ------------------------------------------------------------------------------------------------------------------
H-178 Main entrance section door position
central mullion-glass
- ------------------------------------------------------------------------------------------------------------------
H-179 Main entrance horizontal section side
jamb-panel
- ------------------------------------------------------------------------------------------------------------------
H-180 Horiz. jamb sect. LGF level-
fireresisting lights B C
- ------------------------------------------------------------------------------------------------------------------
H-181 Colonnade - lower gr. fl. horiz.
section bay 20
- ------------------------------------------------------------------------------------------------------------------
H-182 Colonnade-lower gr. fl. horiz.
section bay 20
- ------------------------------------------------------------------------------------------------------------------
H-183 Horizon. jamb sect.: west colonnade
door - lwr grd level B C
- ------------------------------------------------------------------------------------------------------------------
H-184 Horizon. jamb section: west colonnade
door - lwr grd level B C
- ------------------------------------------------------------------------------------------------------------------
H-185 Horizont. jamb sect.: west colonnade
bay 22 - lwr grd level A B
- ------------------------------------------------------------------------------------------------------------------
H-186 Horizont. sect.: slab panel with
fixing bracket detail: 4th floor
- ------------------------------------------------------------------------------------------------------------------
H-187 Horiz. sect.: slab panel with fixing
bracket detail: 5th floor
- ------------------------------------------------------------------------------------------------------------------
H-188 Horiz. sect.: slab panel with fixing
bracket detail: 4th floor
- ------------------------------------------------------------------------------------------------------------------
H-189 Horiz. sect: window jamb to column
- ------------------------------------------------------------------------------------------------------------------
H-190 Horiz. sect: slab panel with fixing
bracket detail: 5th floor
- ------------------------------------------------------------------------------------------------------------------
H-191 Horiz. sect on external corner -
double channel level A
- ------------------------------------------------------------------------------------------------------------------
H-192 Horiz. sect.: spandrel panel
corner detail 4th level B
- ------------------------------------------------------------------------------------------------------------------
H-193 Horiz. sect.: on external corner -
glass level
- ------------------------------------------------------------------------------------------------------------------
H-194 Horiz. sect.: on external
corner-double channel level
- ------------------------------------------------------------------------------------------------------------------
H-195 Horiz. sect.: slab panel with fixing
bracket detail: 4th floor
- ------------------------------------------------------------------------------------------------------------------
H-196 Horiz. sect. on external corner -
double channel level A
- ------------------------------------------------------------------------------------------------------------------
H-197 Horiz. sect. side jamb - glass
- ------------------------------------------------------------------------------------------------------------------
H-198 Horiz. sect. on external corner -
glass level
- ------------------------------------------------------------------------------------------------------------------
H-199 Horiz. sect. on external corner -
double channel level
- ------------------------------------------------------------------------------------------------------------------
H-200 Horiz. sect. on external corner bay
37 glass level
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 379
Sheet 1 of 2
================================================================================
DRAWING REGISTER P-01
- -----------------------------------------------
CIR Alluminio
- --------------------------------------------------------------------------------
Project: PETERSHILL, 1 CARTER LANE, LONDON, EC4 PACKAGE Nr. 3210 JOB Nr. 3610
- --------------------------------------------------------------------------------
Client: MEPC Drawings Type: HORIZONTAL SECTIONS TO CORES DATE:
2-12-97
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
FOR CONSTRUCTION AS BUILT
SAMPLE ------------------------------------------------------------
W/T / DWG. DESCRIPTION sub Issue return sub Issue return
& HSE No. No. date rev date stat No. date rev date stat
- ------------------------------------------------------------------------------------------------------------------
Drawing Nr. Drawing Title
==================================================================================================================
<C> <S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
H-201 Horizontal section core A/C - lobby
central mullion - sidehung opening
sm. vent C D
- ------------------------------------------------------------------------------------------------------------------
H-202 Horizontal section cen. mullion-
panel B C
- ------------------------------------------------------------------------------------------------------------------
H-203 Horiz. section lobbyside jamb-side hung
opening C C
- ------------------------------------------------------------------------------------------------------------------
H-205 Horizontal section core C bay 17 core
A bay 58 D E
- ------------------------------------------------------------------------------------------------------------------
H-205/1 Hor. section to 1st Fl. core A - Bay 58
- ------------------------------------------------------------------------------------------------------------------
H-206 Core C - Hor. section side jamb -
panel 1st / end floor B C
- ------------------------------------------------------------------------------------------------------------------
H-207 Horizontal section to lobby front
panel with bracket fixing detail to
low level B C
- ------------------------------------------------------------------------------------------------------------------
H-207/1 Hor. section to lobby core A front
panel with bracket fixing detail to
low level (column 144)
- ------------------------------------------------------------------------------------------------------------------
H-208 Horizontal section-lobby front panel
with bracket fixing left side and
central details to low level B C
- ------------------------------------------------------------------------------------------------------------------
H-209 Horizontal section-lobby B C
- ------------------------------------------------------------------------------------------------------------------
H-210 Horizontal section core C Bays 17-18 / A
- ------------------------------------------------------------------------------------------------------------------
H-211 Horizontal section core C bays 17-18 A B
- ------------------------------------------------------------------------------------------------------------------
H-212 Horizontal section core C bays 17-18
1st/2nd floor A B
- ------------------------------------------------------------------------------------------------------------------
H-213 Horizontal section core C bays 17-18 A B
- ------------------------------------------------------------------------------------------------------------------
H-214 Horizontal section core C bays 17-18 A B
- ------------------------------------------------------------------------------------------------------------------
H-215 Horizontal section core C - bays 17-18 A B
- ------------------------------------------------------------------------------------------------------------------
H-216 Horizontal section core C bays 17-18
1st/2nd floor A B
- ------------------------------------------------------------------------------------------------------------------
H-217 Horizontal section core C bays 17-18
gr/1st/2nd floor A B
- ------------------------------------------------------------------------------------------------------------------
H-218 Horizontal section core C bays 17-18 B
- ------------------------------------------------------------------------------------------------------------------
H-219 Horizontal section core C bays 17-18 B
- ------------------------------------------------------------------------------------------------------------------
H-220 Horizontal section core C bays 17-18 A B
- ------------------------------------------------------------------------------------------------------------------
H-221 Hor. section to low. gr. floor side
jamb - Core C - bay 18 A
- ------------------------------------------------------------------------------------------------------------------
H-222 Hor. section core C bays 17-18 low.
ground floor B C
- ------------------------------------------------------------------------------------------------------------------
H-223 Horizontal section: spandrel jamb to
600x300 column: core C bays 17-18
- ------------------------------------------------------------------------------------------------------------------
H-224 Horizontal section side jamb core C
bays 17-18 A B
- ------------------------------------------------------------------------------------------------------------------
H-225 Core C - bay 18 hor. section - 3rd
floor
- ------------------------------------------------------------------------------------------------------------------
H-226 Horizontal section core C bay 17-18 A
- ------------------------------------------------------------------------------------------------------------------
H-227 Horizontal section core A bays 58-59
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 380
Sheet 2 of 2
================================================================================
DRAWING REGISTER P-01
- -----------------------------------------------
CIR Alluminio
- --------------------------------------------------------------------------------
Project: PETERSHILL, 1 CARTER LANE, LONDON, EC4 PACKAGE Nr. 3210 JOB Nr. 3610
- --------------------------------------------------------------------------------
Client: MEPC Drawings Type: HORIZONTAL SECTIONS TO CORES DATE:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
FOR CONSTRUCTION AS BUILT
SAMPLE ------------------------------------------------------------
W/T / DWG. DESCRIPTION sub Issue return sub Issue return
& HSE No. No. date rev date stat No. date rev date stat
- ------------------------------------------------------------------------------------------------------------------
Drawing Nr. Drawing Title
==================================================================================================================
<C> <S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
H-228 Core C bays 17-18 dry riser side jamb
Hor. section
- ------------------------------------------------------------------------------------------------------------------
H-229 Horizontal section core C bays 17-18 A
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 381
Sheet 1 of 1
================================================================================
DRAWING REGISTER P-01
- -----------------------------------------------
CIR Alluminio
- --------------------------------------------------------------------------------
Project: PETERSHILL, 1 CARTER LANE, LONDON, EC4 PACKAGE Nr. 3210 JOB Nr. 3610
- --------------------------------------------------------------------------------
Client: MEPC Drawings Type: HORIZONTAL SECTIONS TO CORES DATE:
2-12-97
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
FOR CONSTRUCTION AS BUILT
SAMPLE ------------------------------------------------------------
W/T / DWG. DESCRIPTION sub Issue return sub Issue return
& HSE No. No. date rev date stat No. date rev date stat
- ------------------------------------------------------------------------------------------------------------------
Drawing Nr. Drawing Title
==================================================================================================================
<C> <S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
H-251 Horizontal section on external
corner - double channel level
- ------------------------------------------------------------------------------------------------------------------
H-252 Horizontal section on external
corner - double channel level bay 61
1st Floor /
- ------------------------------------------------------------------------------------------------------------------
H-253 Horizontal section on slab panel to
front of concrete column with fixing
brkt. detail /
- ------------------------------------------------------------------------------------------------------------------
H-254 Horizontal section on slab panel to
front of concrete column. with fixing
brkt. detail /
- ------------------------------------------------------------------------------------------------------------------
H-255 East courtyard horizontal section
side jamb 1st level /
- ------------------------------------------------------------------------------------------------------------------
H-256 East courtyard horizontal section
side jamb 1st level /
- ------------------------------------------------------------------------------------------------------------------
H-257 Ground floor horizontal section on
external corner bay 77
- ------------------------------------------------------------------------------------------------------------------
H-258 Horizontal section on external
corner - double channel level /
- ------------------------------------------------------------------------------------------------------------------
H-259 Bay 26 - Hor. sect.: slab panel
corner detail 4th level A
- ------------------------------------------------------------------------------------------------------------------
H-260 Horizontal section on external
corner - double channel level /
- ------------------------------------------------------------------------------------------------------------------
H-261 Horizontal section on external
corner - at 1st level /
- ------------------------------------------------------------------------------------------------------------------
H-262 ...............
- ------------------------------------------------------------------------------------------------------------------
H-263 Hor. sect.: slab panel corner detail
4th level A
- ------------------------------------------------------------------------------------------------------------------
H-264 Horizontal section: slab panel corner
detail 4th level A
- ------------------------------------------------------------------------------------------------------------------
H-265 Horizontal section: window jamb to
column A
- ------------------------------------------------------------------------------------------------------------------
H-266 1/2 Hour fire rated panel horizontal
section bay 62 B C
- ------------------------------------------------------------------------------------------------------------------
H-267 1/2 Hour fire rated panel horizontal
section bay 62 A B
- ------------------------------------------------------------------------------------------------------------------
H-268 1/2 Hour fire rated panel horizontal
section bay 62 side jamb-glass A B
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 382
Sheet 1 of 1
================================================================================
DRAWING REGISTER P-01
- -----------------------------------------------
CIR Alluminio
- --------------------------------------------------------------------------------
Project: PETERSHILL, 1 CARTER LANE, LONDON, EC4 PACKAGE Nr. 3210 JOB Nr. 3610
- --------------------------------------------------------------------------------
Client: MEPC Drawings Type: HORIZONTAL SECTIONS TO CORES DATE:
2-12-97
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
FOR CONSTRUCTION AS BUILT
SAMPLE ------------------------------------------------------------
W/T / DWG. DESCRIPTION sub Issue return sub Issue return
& HSE No. No. date rev date stat No. date rev date stat
- ------------------------------------------------------------------------------------------------------------------
Drawing
Nr. Drawing Title
==================================================================================================================
<C> <S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
H-301-1 Horizontal section central mullion -
bracket detail A B
- ------------------------------------------------------------------------------------------------------------------
H-302-1 Horizontal section central mullion -
bracket detail A B
- ------------------------------------------------------------------------------------------------------------------
H-305-1 Horizontal section at slab panel
level - shadow box / A
- ------------------------------------------------------------------------------------------------------------------
H-309-1 Horizontal section at core A bracket
detail A B
- ------------------------------------------------------------------------------------------------------------------
H-310-1 Terrace horizontal corner section / A
- ------------------------------------------------------------------------------------------------------------------
H-311-1 Terrace horizontal corner section at
shadow box A B
- ------------------------------------------------------------------------------------------------------------------
H-312-1 Terrace horizontal corner section A B
- ------------------------------------------------------------------------------------------------------------------
H-313-1 Terrace horizontal corner section at
shadow box A B
- ------------------------------------------------------------------------------------------------------------------
H-317-1 Terrace horizontal corner section A B
- ------------------------------------------------------------------------------------------------------------------
H-318-1 Horizontal section at slab panel
corner / A
- ------------------------------------------------------------------------------------------------------------------
H-319-1 Terrace horizontal corner section / A
- ------------------------------------------------------------------------------------------------------------------
H-320-1 Terrace horizontal corner section
bracket detail / A
- ------------------------------------------------------------------------------------------------------------------
H-322-1 Horizontal section at core C bracket
detail A
- ------------------------------------------------------------------------------------------------------------------
H-323-1 Terrace horizontal corner section A B
- ------------------------------------------------------------------------------------------------------------------
H-324-1 Terrace horizontal section shadow
box A B
- ------------------------------------------------------------------------------------------------------------------
H-326-1 Horizontal section at core A and core / A
C bracket detail
- ------------------------------------------------------------------------------------------------------------------
H-327-1 Horizontal section at core A and core
C bracket detail / A
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 383
Sheet 1 of 1
================================================================================
DRAWING REGISTER
- -----------------------------------------------
CIR Alluminio (*) Ancora da modificare a "CAD"
- --------------------------------------------------------------------------------
Project: PETERSHILL, 1 CARTER LANE, LONDON, EC4 PACKAGE Nr. 3210 JOB Nr. 3610
- --------------------------------------------------------------------------------
Client: MEPC Drawings Type: HORIZONTAL SECTIONS TO CORES DATE:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
FOR CONSTRUCTION AS BUILT
SAMPLE ------------------------------------------------------------
W/T / DWG. DESCRIPTION sub Issue return sub Issue return
& HSE Nr. No. date rev date stat No. date rev date stat
- ------------------------------------------------------------------------------------------------------------------
Drawing
Nr. Drawing Title
==================================================================================================================
<C> <S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
H-301 Terrace cladding - horizontal section
mullion-glass at standard junction B C
- ------------------------------------------------------------------------------------------------------------------
H-302 Terrace cladding - horizontal section
mullion-glass at rhs 120x80 position B C
- ------------------------------------------------------------------------------------------------------------------
H-303 Horizontal section on external
corner-glass level B C
- ------------------------------------------------------------------------------------------------------------------
H-304 Horizontal section on external
corner-glass level A B
- ------------------------------------------------------------------------------------------------------------------
H-305 Horizontal section central
mullion-shadow box A
- ------------------------------------------------------------------------------------------------------------------
H-306 Central mullion-glass on main entrance / A
- ------------------------------------------------------------------------------------------------------------------
H-307 Horizontal section on external
corner-glass level / A
- ------------------------------------------------------------------------------------------------------------------
H-308 Terrace doors horizontal section to
side mullion A
- ------------------------------------------------------------------------------------------------------------------
H-309 Horizontal section - lobby central
mullion / A
- ------------------------------------------------------------------------------------------------------------------
H-310 Horizontal section on external corner
- panel level A B
- ------------------------------------------------------------------------------------------------------------------
H-311 Horizontal section on internal corner
- box panel level A B
- ------------------------------------------------------------------------------------------------------------------
H-312 Horizontal section on external corner
- panel level B C
- ------------------------------------------------------------------------------------------------------------------
H-313 Horizontal section on external corner
box panel level A B
- ------------------------------------------------------------------------------------------------------------------
H-314 Horizontal section central mullion
- panel A B
- ------------------------------------------------------------------------------------------------------------------
H-315 Horizontal section central mullion
- panel / A
- ------------------------------------------------------------------------------------------------------------------
H-316 Horizontal section - lobby central
mullion A B
- ------------------------------------------------------------------------------------------------------------------
H-317 Horizontal section on external corner
to core A/C - 2hr. fr. panel A
- ------------------------------------------------------------------------------------------------------------------
H-318 Horizontal section on internal corner
- door section A B
- ------------------------------------------------------------------------------------------------------------------
H-319 Horizontal section on external corner
- glass level /
- ------------------------------------------------------------------------------------------------------------------
H-320 Horizontal section on external corner
- glass level / A
- ------------------------------------------------------------------------------------------------------------------
H-321 Horizontal section - lobby central
mullion A
- ------------------------------------------------------------------------------------------------------------------
H-323 Horizontal section on external corner
- glass level - shadow box / A
- ------------------------------------------------------------------------------------------------------------------
H-324 Horizontal section central mullion -
shadow box / A
- ------------------------------------------------------------------------------------------------------------------
H-325 Horizontal section 5th floor/core A
junction with 2hr. fr. wall /
- ------------------------------------------------------------------------------------------------------------------
H-328 Vertical section 5th fl. window top
flashings detail at shs column/"I"
beam junction / A
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 384
Sheet 1 of 4
================================================================================
DRAWING REGISTER P-01
- -----------------------------------------------
CIR Alluminio
- --------------------------------------------------------------------------------
Project: PETERSHILL, 1 CARTER LANE, LONDON, EC4 PACKAGE Nr. 3210 JOB Nr. 3610
- --------------------------------------------------------------------------------
Client: MEPC Drawings Type: VERTICAL SECTIONS DATE:
2-12-97
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
FOR CONSTRUCTION AS BUILT
SAMPLE ------------------------------------------------------------
W/T / DWG. DESCRIPTION sub Issue return sub Issue return
& HSE Nr. No. date rev date stat No. date rev date stat
- ------------------------------------------------------------------------------------------------------------------
Drawing
Nr. Drawing Title
==================================================================================================================
<C> <S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
V-101 Vertical sec. parapet & top transome G H
- ------------------------------------------------------------------------------------------------------------------
V-102 Vert. sec. double channel without
offset E F
- ------------------------------------------------------------------------------------------------------------------
V-103 Low lev. vert. sec. double channel
with offset F G
- ------------------------------------------------------------------------------------------------------------------
V-104 Vertical section cill with projected
brickwork B C
- ------------------------------------------------------------------------------------------------------------------
V-105 Vertical section cill with projected
brickwork and soffit D E
- ------------------------------------------------------------------------------------------------------------------
V-105/1 Details referred to vertical sections
V-105, V-140, V-141 A
- ------------------------------------------------------------------------------------------------------------------
V-106 Top level single channel G H
- ------------------------------------------------------------------------------------------------------------------
V-107 Vertical section: coping level of
bays 10 D F
- ------------------------------------------------------------------------------------------------------------------
V-110 Vertical section: coping level on
corner bays 5-15-42-56 C
- ------------------------------------------------------------------------------------------------------------------
V-110/1 Vertical section: coping level on
corner bays 5-15-42-56 B
- ------------------------------------------------------------------------------------------------------------------
V-111 Vertical section double channel
without offset A
- ------------------------------------------------------------------------------------------------------------------
V-112 1st floor vertical section double
channel with offset A
- ------------------------------------------------------------------------------------------------------------------
V-113 Vertical section: coping level of
bays 9-11 B
- ------------------------------------------------------------------------------------------------------------------
V-114 Vertical section: coping level C
- ------------------------------------------------------------------------------------------------------------------
V-115 Vert. sect.-exter. corner double
channel without offset E
- ------------------------------------------------------------------------------------------------------------------
V-115/1 Vertical section-external corner
double channel without offset E
- ------------------------------------------------------------------------------------------------------------------
V-116 Vertical section ext. corn. double
chan. with offset D E
- ------------------------------------------------------------------------------------------------------------------
V-116/1 Vertical section-external corner
double channel with offset D
- ------------------------------------------------------------------------------------------------------------------
V-117 Vertical section double channel
without offset C
- ------------------------------------------------------------------------------------------------------------------
V-117/1 Vertical section double channel
without offset B
- ------------------------------------------------------------------------------------------------------------------
V-118 Vertical section: coping level C
- ------------------------------------------------------------------------------------------------------------------
V-119 Vertical section single channel
coping level C D
- ------------------------------------------------------------------------------------------------------------------
V-120 Vertical section: coping level D
- ------------------------------------------------------------------------------------------------------------------
V-121 Vert. sec. double channel with offset D
- ------------------------------------------------------------------------------------------------------------------
V-122 Vertical section single channel C
- ------------------------------------------------------------------------------------------------------------------
V-122/1 South elevation-lev. 18.490 single
channel to bays 9-10-11
- ------------------------------------------------------------------------------------------------------------------
V-122/2 Elevation varies single channel
detail
- ------------------------------------------------------------------------------------------------------------------
V-123 Vertical section: low level granite
top transom E F
- ------------------------------------------------------------------------------------------------------------------
V-124 South/east elev. low lev. with granite C
- ------------------------------------------------------------------------------------------------------------------
V-125 Vert. sect: low lev. north west A/1-3 B
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 385
Sheet 2 of 4
================================================================================
DRAWING REGISTER
- -----------------------------------------------
CIR Alluminio (*) Ancora da modificare a "CAD"
- --------------------------------------------------------------------------------
Project: PETERSHILL, 1 CARTER LANE, LONDON, EC4 PACKAGE Nr. 3210 JOB Nr. 3610
- --------------------------------------------------------------------------------
Client: MEPC Drawings Type: VERTICAL SECTIONS DATE:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
FOR CONSTRUCTION AS BUILT
SAMPLE ------------------------------------------------------------
W/T / DWG. DESCRIPTION sub Issue return sub Issue return
& HSE No. No. date rev date stat No. date rev date stat
- ------------------------------------------------------------------------------------------------------------------
Drawing
Nr. Drawing Title
==================================================================================================================
<C> <S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
V-126 Low level with granite south
elevation-bays 12-13-14 B
- ------------------------------------------------------------------------------------------------------------------
V-127 Vertical section low level with
granite south west corner bay 15 B
- ------------------------------------------------------------------------------------------------------------------
V-128 Vertical section low level with
granite corner bay 56 H-1 B
- ------------------------------------------------------------------------------------------------------------------
V-129 Low level with granite east courtyard B
- ------------------------------------------------------------------------------------------------------------------
V-130 Vertical section: low lev. west
colonnade & north/south returns C D
- ------------------------------------------------------------------------------------------------------------------
V-131 Vert. sec: low lev. with granite:
core 'C' left side B
- ------------------------------------------------------------------------------------------------------------------
V-132 Low lev. vert. sec. double channel
with offset B
- ------------------------------------------------------------------------------------------------------------------
V-135 Top level single channel C
- ------------------------------------------------------------------------------------------------------------------
V-136 Low lev. vert. sect. double chan.
with offset C D
- ------------------------------------------------------------------------------------------------------------------
V-137 Vertical section: coping level on
corner bay 37 C
- ------------------------------------------------------------------------------------------------------------------
V-138 Vert. sec: ground floor: west
colonnade (bay 21) & north/south
returns (bays 20 & 22) C D
- ------------------------------------------------------------------------------------------------------------------
V-139 Main entrance vertical section cill
with projected brickwork A
- ------------------------------------------------------------------------------------------------------------------
V-140 Vertical section to 1st/2nd fl.
south block - 2nd/3rd fl. north block
cill with projected brick work and
soffit B
- ------------------------------------------------------------------------------------------------------------------
V-141 Vertical section to 1st/2nd fl. south
block - 2nd/3rd fl. north block cill
with projected brick work and soffit B
- ------------------------------------------------------------------------------------------------------------------
V-142 Vertical section: low level bay 61 -
east courtyard A
- ------------------------------------------------------------------------------------------------------------------
V-143 Vertical section - grd floor
level bay 61 - north block A
- ------------------------------------------------------------------------------------------------------------------
V-144 Vertical section: coping level on
corner bay 61 /
- ------------------------------------------------------------------------------------------------------------------
V-145 Vertical section cill with projected
brickwork A
- ------------------------------------------------------------------------------------------------------------------
V-146 Vertical section cill with projected
brickwork at corner bay 61 A
- ------------------------------------------------------------------------------------------------------------------
V-147 Vertical section cill with projected
brickwork A
- ------------------------------------------------------------------------------------------------------------------
V-148 1/2 Hour fire rated panel vert.
section to double channel without
offset-bay 62 A B
- ------------------------------------------------------------------------------------------------------------------
V-149 1/2 Hour fire rated panel vert. sect.
at low level bay 62 granite top
transom A B
- ------------------------------------------------------------------------------------------------------------------
V-150 Vertical section low level with
granite corner bay nr. 5 (F-9) A
- ------------------------------------------------------------------------------------------------------------------
V-151 North elevation-grd line 1 low level
with granite (from D to B) A
- ------------------------------------------------------------------------------------------------------------------
V-152 North elevation-grd line 1 low level
with granite (from H to E) B C
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 386
Sheet 3 of 4
================================================================================
DRAWING REGISTER
- -----------------------------------------------
CIR Alluminio (*) Ancora da modificare a "CAD"
- --------------------------------------------------------------------------------
Project: PETERSHILL, 1 CARTER LANE, LONDON, EC4 PACKAGE Nr. 3210 JOB Nr. 3610
- --------------------------------------------------------------------------------
Client: MEPC Drawings Type: VERTICAL SECTIONS DATE:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
FOR CONSTRUCTION AS BUILT
SAMPLE ------------------------------------------------------------
W/T / DWG. DESCRIPTION sub Issue return sub Issue return
& HSE No. No. date rev date stat No. date rev date stat
- ------------------------------------------------------------------------------------------------------------------
Drawing
Nr. Drawing Title
==================================================================================================================
<C> <S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
V-153 Low level with granite south
block-south elevation A
- ------------------------------------------------------------------------------------------------------------------
V-154 North block-low level with granite
east courtyard-bays from 63 to 66 A
- ------------------------------------------------------------------------------------------------------------------
V-155 Vertical section: low level with
granite corners A1 A
- ------------------------------------------------------------------------------------------------------------------
V-156 South block-west elevation low level
with granite: bay n(degrees) 16 A
- ------------------------------------------------------------------------------------------------------------------
V-157 South elevation-vertical section low
level with granite at bays 9-10-11 B C
- ------------------------------------------------------------------------------------------------------------------
V-158 North/east elevation low level with
granite to bays 57-60 A
- ------------------------------------------------------------------------------------------------------------------
V-159 Vertical section cill with projected
brickwork D
- ------------------------------------------------------------------------------------------------------------------
V-160 Low level vertical section double
channel with offset B C
- ------------------------------------------------------------------------------------------------------------------
V-160/1 1st level: details referred to
vertical section V-160 / A
- ------------------------------------------------------------------------------------------------------------------
V-160/2 1st level details referred to
vertical section V-160 / A
- ------------------------------------------------------------------------------------------------------------------
V-161 Low level vertical section double
channel with offset D
- ------------------------------------------------------------------------------------------------------------------
V-162 Vertical section double channel with
offset C
- ------------------------------------------------------------------------------------------------------------------
V-163 Vertical section: coping level D
- ------------------------------------------------------------------------------------------------------------------
V-164 Vertical section double channel with
offset C
- ------------------------------------------------------------------------------------------------------------------
V-164/1 Vertical section double channel with
offset C
- ------------------------------------------------------------------------------------------------------------------
V-165 Low level vertical section double
channel with offset A
- ------------------------------------------------------------------------------------------------------------------
V-166 Vertical section single channel
coping level E
- ------------------------------------------------------------------------------------------------------------------
V-167 Low level vertical section double
channel with offset B
- ------------------------------------------------------------------------------------------------------------------
V-168 Vertical section - external corner
double channel with offset C
- ------------------------------------------------------------------------------------------------------------------
V-168/1 Vertical section-external corner
double channel with offset B
- ------------------------------------------------------------------------------------------------------------------
V-169 1st level vertical section double
channel with offset bay 77 G.L.F. A
- ------------------------------------------------------------------------------------------------------------------
V-169/1 1st level details referred to
vertical section V-169 /
- ------------------------------------------------------------------------------------------------------------------
V-170 Vertical section: low level south
return colonnade - bay 20 C D
- ------------------------------------------------------------------------------------------------------------------
V-171 Vertical section: threshold detail
west colonnade door-lwr grd level B
- ------------------------------------------------------------------------------------------------------------------
V-172 Vertical section parapet and top
transome
- ------------------------------------------------------------------------------------------------------------------
V-173 Main entrance vertical section double
channel A
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 387
Sheet 4 of 4
================================================================================
DRAWING REGISTER
- -----------------------------------------------
CIR Alluminio (*) Ancora da modificare a "CAD"
- --------------------------------------------------------------------------------
Project: PETERSHILL, 1 CARTER LANE, LONDON, EC4 PACKAGE Nr. 3210 JOB Nr. 3610
- --------------------------------------------------------------------------------
Client: MEPC Drawings Type: VERTICAL SECTIONS DATE:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
FOR CONSTRUCTION AS BUILT
SAMPLE ------------------------------------------------------------
W/T / DWG. DESCRIPTION sub Issue return sub Issue return
& HSE No. No. date rev date stat No. date rev date stat
- ------------------------------------------------------------------------------------------------------------------
Drawing
Nr. Drawing Title
==================================================================================================================
<C> <S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
V-174 Main entrance vertical section double
channel C
- ------------------------------------------------------------------------------------------------------------------
V-174/1 Main entrance vertical section double
channel details of V-174 A
- ------------------------------------------------------------------------------------------------------------------
V-175 Main entrance vertical section double
channel B
- ------------------------------------------------------------------------------------------------------------------
V-176 Main entrance vertical section parapet
and top transome A
- ------------------------------------------------------------------------------------------------------------------
V-177 Colonnade-lower gr. fl. vert. section
fireresisting lights C D
- ------------------------------------------------------------------------------------------------------------------
V-178 Colonnade-lower gr. fl. vert. section
fireresisting lights B C
- ------------------------------------------------------------------------------------------------------------------
V-179 Vertical section: ground floor
colonnade-fire resisting lights B C
- ------------------------------------------------------------------------------------------------------------------
V-180 Vertical section-external corner
double channel with offset A
- ------------------------------------------------------------------------------------------------------------------
V-181 Vertical section-external corner
double channel with offset
- ------------------------------------------------------------------------------------------------------------------
V-182 Vertical section: ground floor: west
colonnade (bay 21) and north/south
returns (bays 20 & 22)
- ------------------------------------------------------------------------------------------------------------------
V-183 Vertical section-external corner
double channel without offset A
- ------------------------------------------------------------------------------------------------------------------
V-184 Vertical section: top transome west
colonnade door-lwr grd level A B
- ------------------------------------------------------------------------------------------------------------------
V-185 Vertical section: coping level of bay
10/bay 11
- ------------------------------------------------------------------------------------------------------------------
V-186 1st level vertical section double
channel with offset north block /
- ------------------------------------------------------------------------------------------------------------------
V-186/1 1st level: details referred to
vertical section V-186 /
- ------------------------------------------------------------------------------------------------------------------
V-187 Low level vertical section double
channel with offset /
- ------------------------------------------------------------------------------------------------------------------
V-188 Vertical section cill with projected
brickwork /
- ------------------------------------------------------------------------------------------------------------------
V-189 Vertical section cill with projected
brickwork A
- ------------------------------------------------------------------------------------------------------------------
V-190 1st level vertical section double
channel /
- ------------------------------------------------------------------------------------------------------------------
V-191 Vertical section 4th floor cill with
projected brickwork A
- ------------------------------------------------------------------------------------------------------------------
V-192 Vertical section 4th floor cill with
projected brickwork /
- ------------------------------------------------------------------------------------------------------------------
V-193 Vertical section: coping level A
- ------------------------------------------------------------------------------------------------------------------
V-194 Fire rated panels - low level with
granite north block - east courtyard
- bay 62 A
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 388
Sheet 1 of 1
================================================================================
DRAWING REGISTER
- -----------------------------------------------
CIR Alluminio (*) Ancora da modificare a "CAD"
- --------------------------------------------------------------------------------
Project: PETERSHILL, 1 CARTER LANE, LONDON, EC4 PACKAGE Nr. 3210 JOB Nr. 3610
- --------------------------------------------------------------------------------
Client: MEPC Drawings Type: VERTICAL SECTIONS TO CORES DATE:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
FOR CONSTRUCTION AS BUILT
SAMPLE ------------------------------------------------------------
W/T / DWG. DESCRIPTION sub Issue return sub Issue return
& HSE No. No. date rev date stat No. date rev date stat
- ------------------------------------------------------------------------------------------------------------------
Drawing Nr. Drawing Title
==================================================================================================================
<C> <S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
V-201 Vertical section core A/C bays
17-18-58-59 D E
- ------------------------------------------------------------------------------------------------------------------
V-202 Vertical section core C bays 17-18 D
- ------------------------------------------------------------------------------------------------------------------
V-203 Vertical section core C bays 17-18 C
- ------------------------------------------------------------------------------------------------------------------
V-204 Vertical section core C bays 17-18 D
- ------------------------------------------------------------------------------------------------------------------
V-205 Vertical section core C bays 17-18 C D
- ------------------------------------------------------------------------------------------------------------------
V-206 Vertical section core A/C bays
17-18-58-59 B
- ------------------------------------------------------------------------------------------------------------------
V-207 Vertical section core C bays 18 B
- ------------------------------------------------------------------------------------------------------------------
V-208 Vertical section cill with projected
brickwork C
- ------------------------------------------------------------------------------------------------------------------
V-209 Core C - vertical section bay 17 -
star C D
- ------------------------------------------------------------------------------------------------------------------
V-210 Core A - Staircase fixed panel on door
bay 59 - vertical section / A
- ------------------------------------------------------------------------------------------------------------------
V-211 Core C - vert. section door threshold
bays 17 A B
- ------------------------------------------------------------------------------------------------------------------
V-212 Vertical section core C bays 17-18 D
- ------------------------------------------------------------------------------------------------------------------
V-213 Vertical section core C - stair bay
18 C
- ------------------------------------------------------------------------------------------------------------------
V-214 Vertical section core C bays 18
- ------------------------------------------------------------------------------------------------------------------
V-215 Vertical section core C bays 17-18 A
- ------------------------------------------------------------------------------------------------------------------
V-216 Core C - vertical section bays 17-18 B
- ------------------------------------------------------------------------------------------------------------------
V-217 Core C - dry riser low section at
threshold bays 17 / A
- ------------------------------------------------------------------------------------------------------------------
V-220 Core A - dry riser low section at
threshold bay 58 / A
- ------------------------------------------------------------------------------------------------------------------
V-221 Core A - doors low section at
threshold bay 58-59 / A
- ------------------------------------------------------------------------------------------------------------------
V-222 Core A - doors low section at
threshold bay 59 / A
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 389
Sheet 1 of 2
================================================================================
DRAWING REGISTER
- -----------------------------------------------
CIR Alluminio
- --------------------------------------------------------------------------------
Project: PETERSHILL, 1 CARTER LANE, LONDON, EC4 PACKAGE Nr. 3210 JOB Nr. 3610
- --------------------------------------------------------------------------------
Client: MEPC Drawings Type: VERTICAL SECTIONS TO TERRACE CLADD. DATE:
2-12-97
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
FOR CONSTRUCTION AS BUILT
SAMPLE ------------------------------------------------------------
W/T / DWG. DESCRIPTION sub Issue return sub Issue return
& HSE No. No. date rev date stat No. date rev date stat
- ------------------------------------------------------------------------------------------------------------------
Drawing Nr. Drawing Title
==================================================================================================================
<C> <S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
V-301 Terrace Vertical section at
intermediate transome A B
- ------------------------------------------------------------------------------------------------------------------
V-302 Terrace vertical section A B
- ------------------------------------------------------------------------------------------------------------------
V-303 Vertical section 5th floor window top
fixing detail at rhs column
position/soffit junction A B
- ------------------------------------------------------------------------------------------------------------------
V-305 Terrace vertical section / A
- ------------------------------------------------------------------------------------------------------------------
V-306 4th/5th fl. g.l. A/F office -
Vertical Section to bottom hung
opening parapet transome & gutter
junction B C
- ------------------------------------------------------------------------------------------------------------------
V-307 Core A/C 4th/5th fl. - Vertical
Section to smoke vent - lobby parapet
transome & gutter junction B C
- ------------------------------------------------------------------------------------------------------------------
V-308 Vertical section - Main entrance
parapet and top transome / A
- ------------------------------------------------------------------------------------------------------------------
V-309 Terrace vertical section at shadow
box A B
- ------------------------------------------------------------------------------------------------------------------
V-310 Vertical section 4th floor window top
detail and soffit junction (south
block) A B
- ------------------------------------------------------------------------------------------------------------------
V-312 Vertical section 5th fl. window top
fixing detail at RHS column/"I" beam
junction / A
- ------------------------------------------------------------------------------------------------------------------
V-313 Terrace vertical section at shadow
box B C
- ------------------------------------------------------------------------------------------------------------------
V-314 Vertical section 5th floor shadow box
panel detail and soffit junction
(north block) B C
- ------------------------------------------------------------------------------------------------------------------
V-315 Terrace cladding vertical section 5th
fl. door top fixing detail / A
- ------------------------------------------------------------------------------------------------------------------
V-316 Vertical section fixed light to panel
transom detail /
- ------------------------------------------------------------------------------------------------------------------
V-318 Core A/C 4th/5th fl. vertical section
to stair smoke vent parapet transome
& gutter junction A B
- ------------------------------------------------------------------------------------------------------------------
V-320 Vertical section 5th fl. window top
fixing detail at SHS column/"I" beam
junction / A
- ------------------------------------------------------------------------------------------------------------------
V-323 Vertical section 4th/5th floor window
top detail & gutter junction
(south/north blocks) B C
- ------------------------------------------------------------------------------------------------------------------
V-324 Vertical section 4th fl. window top
fixing detail at RHS column/"I" beam
junction / A
- ------------------------------------------------------------------------------------------------------------------
V-325 Terrace cladding vertical section 4th
fl. door top fixing detail A B
- ------------------------------------------------------------------------------------------------------------------
V-327 4th/5th fl. smoke vent top detail &
gutter junction (south/north block) B C
- ------------------------------------------------------------------------------------------------------------------
V-328 Terrace cladding vertical section at
door threshold / A B
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 390
Sheet 2 of 2
================================================================================
DRAWING REGISTER
- -----------------------------------------------
CIR Alluminio
- --------------------------------------------------------------------------------
Project: PETERSHILL, 1 CARTER LANE, LONDON, EC4 PACKAGE Nr. 3210 JOB Nr. 3610
- --------------------------------------------------------------------------------
Client: MEPC Drawings Type: VERTICAL SECTIONS TO TERRACE CLADD. DATE:
2-12-97
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
FOR CONSTRUCTION AS BUILT
SAMPLE ------------------------------------------------------------
W/T / DWG. DESCRIPTION sub Issue return sub Issue return
& HSE Nr. No. date rev date stat No. date rev date stat
- ------------------------------------------------------------------------------------------------------------------
Drawing
Nr. Drawing Title
==================================================================================================================
<C> <S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
V-329 Vertical section 4th fl. window top
fixing detail at SHS column/"I" beam
junction / A
- ------------------------------------------------------------------------------------------------------------------
V-330 Terrance vertical section / A
- ------------------------------------------------------------------------------------------------------------------
V-331 Terrance cladding corner to cores
upper external view / A
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 391
Operation and Maintenance Manual
- --------------------------------------------------------------------------------
Cir (Imola) Limited
Via Bicocca n.14/c
Imola
Italy
Telephone: 0039 542 62 15 11
Fax: 0039 542 64 03 90
Petershill, 1 Carter Lane
Off Knightrider Court
London EC4V 5ER
Package 3210 - Cladding Supply
Technical Specification and Operation and
Maintenance Manual
Section 2
November 30, 1997
Construction Manager
Mace Limited
7 Plough Yard
London EC2A 3LP
[GRAPHIC OMITTED]
Client
MEPC Limited
12 St James Square
London SW1Y 4LB
<PAGE> 392
Technical Specifcation
- --------------------------------------------------------------------------------
Contents - Section 2 - Operation & Maintenance Manual
<TABLE>
<S> <C>
1. Aluminium Sections ....................................................19
2. Glass and Glazing .....................................................20
3. Gaskets ...............................................................22
4. Ironmongery and Fittings for Windows ..................................23
5. Louvres ...............................................................25
6. Shadow Boxes ..........................................................26
7. Smoke Vent Controls Cores A and C .....................................27
8. Stair Core Doors A and C ..............................................28
9. Fire Rated Screens ....................................................29
10. Method Statement Re-Glazing ...........................................30
11. Cleaning/Maintenance ..................................................31
12. Electrical Bonding ....................................................32
13. Drawing Register/As-Built Information .................................33
14. Electrical Security Contacts ..........................................34
15. Remedial Works ........................................................35
</TABLE>
<PAGE> 393
================================================================================
Package 3220 Entrance Glazing
T & W IDE LIMITED
GLASSHOUSE FIELDS
LONDON E1 9JA
TEL: 0171 790 2333
FAX: 0171 790 0201
OPERATING AND MAINTENANCE MANUAL
ENTRANCE GLAZING AND CANOPY
1A CARTER LANE
LONDON EC4V 5ER
Contact:-
Mr D Hall
================================================================================
<PAGE> 394
INDEX
-----
Page 1. Risks to Health & Safety
2. Access
3. Cleaning
4. Maintenance
<PAGE> 395
[LETTERHEAD OF T & W IDE LIMITED]
PACKAGE 3220
ENTRANCE HALL GLAZING & CANOPY
INFORMATION SUBMITTAL
INDEX.
<TABLE>
<S> <C> <C>
Section 1. General Specification
" 2. Statutory Authority Approval
" 3. Torque Settings Used
" 4. Sealant Compatibility
" 5. Arbofoam Gap Filling
" 6. Thermal Stress Analysis
</TABLE>
<PAGE> 396
[COVERITE LOGO] COVERITE LTD Package 3600 Roofing
PETERSHILL
DETAILED SPECIFICATION FOR KALZIP ROOFING - PETERSHILL
WORK PACKAGE: 3600
ROOF BUILD UP
Non acoustic areas shown not hatched on roof plan 2.699/3600/01 Rev F
0.7 thick aluminium stucco embossed Kal-bau TR3O-150 liner panel fixed to Purlin
with a stainless steel self tapping screw c/w 16mm 0 washer SFS Stadler
reference TDC-S-S16-6 3x25 fixed at 305mm centres to every Purlin. Liner panel
side laps sealed with sellotape IDL311 19x2 strip mastic sealant laps stitched
with 400mm centres with an AD68 stainless steel rivet. All purlins faces and any
other steel/aluminium interface is isolated with PVC barrier tape.
Once liner panel is installed top hat frame is fixed to form fixing platform for
kalzip fixing clips. Top hat brackets which are 160mm long are fixed at 915mm
centres brackets are 2mm gal and fixed to purlin using 4No. stainless steel self
drilling screws SFS Stadler code SX6 / 6.55x 25 (2 finishing each side of
tophat) bottom of top hat bracket isolated with PVC barrier tape. Top hat is
fixed to top hat bracket with 4No. (Z each side) carbon steel self drilling
screws SFS Stadler code SD5-5-5x25.
30mm thick Rockwool RWS semi rigid insulation slab is laid between top hats
(section also cut in under top hat) Monarflex reflex 275 vapour barrier is laid
ridge to eave over top hats and insulation all laps sealed with Monoband cross
linked Butyl rubber sealant tape vapour barrier is laid foil face down. Vapour
barrier is sealed around all penetrations and dressed up and sealed on all
upstands. Seal around penetrations can be no more than 60mm from base of trough
in decking to avoid cold bridge from maintenance track.
Vapour barrier is trapped with Kalzip fixing clip which is fixed through barrier
into tophat using 2No. (one each side of clip) stainless steel self drilling
screws c/w 16mm 0 washer SFS code SX2/15-A16-6.3x3.
Once vapour barrier is installed 2mm thick Kal-flex Tecsound membrane is laid on
top of barrier. Once Tecsound membrane is installed 100mm thick rockwool roll
batt insulation is installed over clips on top of sound bloc membrane this
insulation is compressed to 80mm thick when Kalzip sheets are fixed.
Kalzip 300 profile 0.9mm thick aluminium with stucco embossed finish is then
laid onto clips and snapped into position. Kalzip zipping machine then clips
and snapped into position. Kalzip zipping machine then clips onto lap and runs
up sheet zipping them together.
<PAGE> 397
[COVERITE LOGO]
Acoustic Build up
The difference on the acoustic areas are as follows: 30mm semi rigid slab is
replaced with 28mm thick pyroc board supplied by capre boards. There is no
tecsound membrane. Aluminium soakers 1.2mm thick stucco embossed with a minimum
150 upstand are site welded into pan of Kalzip sheet around all penetrations
80mm hardrock is used under all welded areas.
Both the Non Acoustic and Acoustic Roofs confirm to Clause 2.22 Acoustic
Performance.
Gutter Construction
Gutter support steel is fabricated out of 8mm thick hot rolled steel and bolted
with M12x5Onuts bolts and washers to the rafters. Gutter brackets are fixed
between main steel supports at 750mm centres. These are fabricated out of 6mm
mild steel and galvanised after manufacture. Gutter is then laid onto gutter
supports and joints site welded together T Pren expanding joint materials is
welded into gutter at 12m centres as approved Hoogovens detail. T pren is
manufactured from UV resistant synthetic rubber bonded to approx. 1mm thick one
quarter hard aluminium strips both sides. A stucco embossed retaining flashing
and eaves closure are riveted to close eve and ratin gutter AD6855 rivets are
used. An Ayreshire eaves beam is fixed to brackets at end of hot rolled gutter
support steel which provides a fixing point for the 1.4 thick stucco embossed
capping flashing this is fixed to 1.5mm mill finish retaining angle. All confirm
to Clauses 3.16 a-e.
Platform & Access Hatch
Flooring is constructed from 3mm galvanised steel with 35mm x 35mm punched
holes. Floor is welded to 8mm thick welded plates which form the support
structure for the platform. Platform is then bolted using Ml6x5Omm long nuts
bolts and washers to hot rolled stubs which are bolted to RSC by others beneath
roof structure. Handrail is bolted to platform, it is of a double tube
construction. Access hatch is supplied by Bilco. Access ladder with retractable
grabrail is bolted to floor using Hilti resin anchors. Ladder is built from 48mm
o/s diameter aluminium tube, with cast aluminium safe tread rungs at 250mm
centres.
Louvred Screen
3mm thick galvanised brackets are bolted to hot rolled steel frame with 6mm
stainless steel nuts bolts and washers. Pre drilled 3mm thick will finish top
hat sections are then bolted to cleats isolating tape is placed between cleat
and top hat tophats are fixed at 600 mm centres.
Plantroom Cladding
Talfab profiled sheet (C38) 0.9mm thick aluminium coloured to outside granite
00A05 PVF2 coated. Sheets are fixed to cladding rails in eavery trough (152.4mm
centres) with
<PAGE> 398
[COVERITE LOGO]
stainless steel self drilling self tapping screws c/w 16mm washer and colour
coded cap to match sheet supplied by SFS Stadler code Sx3/l0/516 - 5.5 x 28).
Flashings
All flashings to eaves are constructed from 3mm thick aluminium.
Side laps of sheets are stitched together at 400mm centres with stainless steel
stitching screws c/w 16mm 0 washers and colour coded caps to match sheets
supplied by SFS Stadler code SL2-S-S14-4.8x20.
Durability
The above system, and component materials, are detailed to perform for a period
of at least 25 years.
Fabrication
All confirms to Clauses 5.00 - 5.01 to 5.03.
Workmanship
All conforms to Clause 6.00 - A-M.
Specification
With reference to Clause 9.02 A
1. N/A
2. N/A
3. N/A
4. Refer to Q.A Manual sent separately
5. See above
6. See Separate information.
7. See above.
8. See above
9. Sent previously
<PAGE> 399
Coverite Package 3600 Roofing
[ILLEGIBLE] built drawings
2.699 / 3600 / 26 rev E
27 rev C
SE 1 rev B
SE 2 rev B
<PAGE> 400
[IRVINE WHITLOCK LOGO]
MATERIAL SPECIFICATION
FOR
PETERSHILL, LONDON EC4
PACKAGE 3700 - MASONRY
IRVINE WHITLOCK LTD
<PAGE> 401
[IRVINE WHITLOCK LOGO]
1.0 INTRODUCTION
This specification has been produced for Material Specification, Operating and
Maintenance Manual and Material Safety.
The specification is broken down into four main categories, those being:
(i) Original Tender Specification produced by Rolfe Judd.
(ii) Irvine Whitlock Specification including relevant calculations,
and where used in the works.
(iii) Manufacturers literature.
(iv) Safety data, COSHH and associated Risk Assessments.
This specification, being produced during the construction of the contract is
designed as 'a live file', which will be updated as necessary during the
construction of the works.
At the foot of each page is a unique document reference number and revision to
allow for each page to be traceable as it is revised.
<PAGE> 402
[IRVINE WHITLOCK LOGO]
<TABLE>
<S> <C>
1. Blocks To Basement
2. Mortar
3. Insulation
4. Facing Bricks
5. Engineering Bricks To LE Substation
6. Damp Proof Course
7. Weepholes
8. Granite
9. Limestone
1O. Slate
11. Concrete Lintels
12. Head Restraints & Ties To Internal Walls
13. Head Restraints & Ties To External
Walls
14. Fixings And Fastenings
15. Sealant
16. Support Metalwork For Granite,
Limestone & Brickwork
17. Slip Joint
18. Miscellaneous And Sundry Items
19. Method Statements
20. Calculations
</TABLE>
<PAGE> 403
Smart Crosby International
Drawing Issue Sheet
- --------------------------------------------------------------------------------
Project: PETERSHILL, 1 CARTER LANE, LONDON, EC4 Job No: IWL/001A/96
- --------------------------------------------------------------------------------
Client: IRVINE WHITLOCK LIMITED Date: MAY 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Sheet 3 of
Date 19/08/96 20/08/96 21/08/96 21/08/96 28/08/96 22/10/96 23/10/96
- ------------------------------------------------------------------------------------------------------------------------------------
Drawing Title Drawing Number Revision
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Cladding Details South Ele Grids B-C IWL/01/96/101
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details South Ele Grids C-D IWL/01/96/102
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details South Ele Grids D-E IWL/01/96/103
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details South Ele Grid E-F IWL/01/96/104
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details East Ele Grid 8-9 IWL/01/96/105
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details Ele Grid 7-8 IWL/01/96/106 E
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details Grid 7 E-F IWL/01/96/107 G G
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details West Ele Grid 8-9 IWL/01/96/108
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details West Ele Grid 7-8 IWL/01/96/109 D
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details Grid 7 C-B IWL/01/96/110 D D
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details East Ele Grid 6-7 IWL/01/96/111
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details East Ele Grid 5-6 IWL/01/96/112
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details East Ele Grid 3&4 IWL/01/96/113
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details West Ele Grid 6-7 IWL/01/96/114
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details West Ele Grid 5-6 IWL/01/96/115
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details West Ele Grid 3&4 IWL/01/96/116
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details Grid 3 B-C IWL/01/96/118
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details Grid 3 H-G IWL/01/96/119 D
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details Grid 3 F&G IWL/01/96/120
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details Grid 3 E-F IWL/01/96/121
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details West Ele Grid 2-3 IWL/01/96/122 C
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details West Ele Grid 1-2 IWL/01/96/123
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details North Elev Grid H-G IWL/01/96/124 C
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details North Elev Grid G-F IWL/01/96/125 C
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details North Elev Grid E IWL/01/96/126 D E E
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details North Elev Grid D IWL/01/96/127 D E E
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details North Elev Grid C-D IWL/01/96/128 D
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details North Elev Grid A-C IWL/01/96/129 D
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details South Ele Grid B-C IWL/01/96/130 C
- ------------------------------------------------------------------------------------------------------------------------------------
Distribution - Paper Copies Copies
- ------------------------------------------------------------------------------------------------------------------------------------
IRVINE WHITLOCK LIMITED 5 5 5 5 5
- ------------------------------------------------------------------------------------------------------------------------------------
ROLFE JUDD 1 1 1 1 1
- ------------------------------------------------------------------------------------------------------------------------------------
ANCON CLARK 1 1 1 1 1
- ------------------------------------------------------------------------------------------------------------------------------------
ALBION STONE QUARRIES 1 1
- ------------------------------------------------------------------------------------------------------------------------------------
MARATHON DESIGN
- ------------------------------------------------------------------------------------------------------------------------------------
A DAVIES LIMITED 1
- ------------------------------------------------------------------------------------------------------------------------------------
CIR, ITALY
- ------------------------------------------------------------------------------------------------------------------------------------
Purpose STATUS B STATUS B STATUS B STATUS B STATUS B STATUS B STATUS B
- ------------------------------------------------------------------------------------------------------------------------------------
Smart Crosby International, 3 Grosvenor House, Melton Road, Oakham, Leics, LE15 6AX
Telephone: 01572 756961 Fax: 01572 756962
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Sheet 3 of
Date 07/11/96 26/11/96 26/11/96 12/12/96 12/12/96 16/01/97 18/11/97
- ------------------------------------------------------------------------------------------------------------------------------------
Drawing Title Drawing Number Revision
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Cladding Details South Ele Grids B-C IWL/01/96/101 E
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details South Ele Grids C-D IWL/01/96/102 E
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details South Ele Grids D-E IWL/01/96/103 E
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details South Ele Grid E-F IWL/01/96/104 F
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details East Ele Grid 8-9 IWL/01/96/105 E
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details Ele Grid 7-8 IWL/01/96/106 E
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details Grid 7 E-F IWL/01/96/107 G
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details West Ele Grid 8-9 IWL/01/96/108 C
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details West Ele Grid 7-8 IWL/01/96/109 D
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details Grid 7 C-B IWL/01/96/110 D
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details East Ele Grid 6-7 IWL/01/96/111 D
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details East Ele Grid 5-6 IWL/01/96/112 C
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details East Ele Grid 3&4 IWL/01/96/113 C
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details West Ele Grid 6-7 IWL/01/96/114 C C C
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details West Ele Grid 5-6 IWL/01/96/115 B
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details West Ele Grid 3&4 IWL/01/96/116 B
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details Grid 3 B-C IWL/01/96/118 A
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details Grid 3 H-G IWL/01/96/119 E E
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details Grid 3 F&G IWL/01/96/120 E E E
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details Grid 3 E-F IWL/01/96/121 D
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details West Ele Grid 2-3 IWL/01/96/122 C
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details West Ele Grid 1-2 IWL/01/96/123 A
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details North Elev Grid H-G IWL/01/96/124 C
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details North Elev Grid G-F IWL/01/96/125 C
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details North Elev Grid E IWL/01/96/126 F C
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details North Elev Grid D IWL/01/96/127 F G
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details North Elev Grid C-D IWL/01/96/128 D
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details North Elev Grid A-C IWL/01/96/129 D
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details South Ele Grid B-C IWL/01/96/130 C
- ------------------------------------------------------------------------------------------------------------------------------------
Distribution - Paper Copies Copies
- ------------------------------------------------------------------------------------------------------------------------------------
IRVINE WHITLOCK LIMITED 5 5 5 5 1
- ------------------------------------------------------------------------------------------------------------------------------------
ROLFE JUDD 1 1 1 1
- ------------------------------------------------------------------------------------------------------------------------------------
ANCON CLARK 1 1 1 1
- ------------------------------------------------------------------------------------------------------------------------------------
ALBION STONE QUARRIES 1 1 1
- ------------------------------------------------------------------------------------------------------------------------------------
MARATHON DESIGN
- ------------------------------------------------------------------------------------------------------------------------------------
A DAVIES LIMITED
- ------------------------------------------------------------------------------------------------------------------------------------
CIR, ITALY 1
- ------------------------------------------------------------------------------------------------------------------------------------
Purpose STATUS B STATUS A STATUS B STATUS B STATUS A STATUS B AS BUILT
DRAWINGS
- ------------------------------------------------------------------------------------------------------------------------------------
Smart Crosby International, 3 Grosvenor House, Melton Road, Oakham, Leics, LE15 6AX
Telephone: 01572 756961 Fax: 01572 756962
</TABLE>
<PAGE> 404
Smart Crosby International
Drawing Issue Sheet
- --------------------------------------------------------------------------------
Project: PETERSHILL, 1 CARTER LANE, LONDON, EC4 Job No: IWL/001/96
- --------------------------------------------------------------------------------
Client: IRVINE WHITLOCK LIMITED Date: APRIL 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Sheet 3 of
Date 29/11/96 17/11/97
- ------------------------------------------------------------------------------------------------------------------------------------
Drawing Title Drawing Number Revision
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Cladding Details South Elev Grids C-D IWL/01/96/131 E
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details South Elev Grids D-E IWL/01/96/132 E
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details South Elev Grids E-F IWL/01/96/133 B
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details East Elev Grid 8-9 IWL/01/96/134 B
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details East Elev Grid 7-8 IWL/01/96/135 B
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details Grid 7 E-F IWL/01/96/136 F
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details East Elev Grid 6-7 IWL/01/96/137 G
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details East Elev Grid 5-6 IWL/01/96/138 F
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details East Elev Grid 3&4 IWL/01/96/139 F
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details Grid 3 E-F IWL/01/96/140 E
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details Grid 3 G IWL/01/96/141 E
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details Grid 3 H IWL/01/96/142 E
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details East Elev Grid 2-3 IWL/01/96/143 C C
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details East Elev Grid 1-2 IWL/01/96/144 C
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details North Elev Grids H-G IWL/01/96/145 A
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details North Elev Grids G-F IWL/01/96/146 B
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details North Elev Grid F-E IWL/01/96/147 C
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details North Elev Grid D IWL/01/96/148 C
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details North Elev Grid C-D IWL/01/96/149 B
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details North Elev Grids A-C IWL/01/96/150 B
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details West Elev Grid 1-2 IWL/01/96/151 B
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details West Elev Grid 2-3 IWL/01/96/152 A
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details Grid 3 B-C IWL/01/96/154 E
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details West Elev Grid 3-4 IWL/01/96/155 F
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details West Elev Grid 5-6 IWL/01/96/156 E
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details West Elev Grid 6-7 IWL/01/96/157 F
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details Grid B/7 IWL/01/96/158 G
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details West Elev Grid 7-8 IWL/01/96/159 B
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details West Elev Grids 8-9 IWL/01/96/160 C
- ------------------------------------------------------------------------------------------------------------------------------------
Distribution - Paper Copies Copies
- ------------------------------------------------------------------------------------------------------------------------------------
IRVINE WHITLOCK LIMITED 5 1
- ------------------------------------------------------------------------------------------------------------------------------------
ROLFE JUDD 1
- ------------------------------------------------------------------------------------------------------------------------------------
ANCON CLARK 1
- ------------------------------------------------------------------------------------------------------------------------------------
ALBION STONE QUARRIES
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Purpose STATUS B AS BUILT
DRAWING
- ------------------------------------------------------------------------------------------------------------------------------------
Smart Crosby International, 3 Grosvenor House, Melton Road, Oakham, Leics, LE15 6AX
Telephone: 01572 756961 Fax: 01572 756962
</TABLE>
<PAGE> 405
Smart Crosby International
Drawing Issue Sheet
- --------------------------------------------------------------------------------
Project: PETERSHILL, 1 CARTER LANE, LONDON, EC4 Job No: IWL/001A/96
- --------------------------------------------------------------------------------
Client: IRVINE WHITLOCK LIMITED Date: JUNE 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Sheet 1 of
Date 28/06/96 02/07/96 10/07/96 12/07/96 16/07/96 22/07/96 28/08/96
- ------------------------------------------------------------------------------------------------------------------------------------
Drawing Title Drawing Number Revision
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
2nd to 4th Floor South Elev Grid B-C IWL/01/96/161 0 A
- ------------------------------------------------------------------------------------------------------------------------------------
2nd to 4th Floor South Elev Grid C-D IWL/01/96/162 0 A
- ------------------------------------------------------------------------------------------------------------------------------------
2nd to 4th Floor South Elev Grid D-E IWL/01/96/163 0 A
- ------------------------------------------------------------------------------------------------------------------------------------
2nd to 4th Floor South Elev Grid E&F IWL/01/96/164 0 A
- ------------------------------------------------------------------------------------------------------------------------------------
2nd to 4th Floor East Elev Grid 9-8 IWL/01/96/165 0 A
- ------------------------------------------------------------------------------------------------------------------------------------
2nd to 4th Floor East Elev Grid 8-7 IWL/01/96/166 0 A
- ------------------------------------------------------------------------------------------------------------------------------------
2nd to 4th Floor Grid 7/E-F IWL/01/96/167 0 A B
- ------------------------------------------------------------------------------------------------------------------------------------
2nd to 4th Floor East Elev Grid 6-7 IWL/01/96/168 0 A
- ------------------------------------------------------------------------------------------------------------------------------------
2nd to 4th Floor East Elev Grid 5-6 IWL/01/96/169 0
- ------------------------------------------------------------------------------------------------------------------------------------
2nd to 4th Floor East Elev Grid 3-4 IWL/01/96/170 0 A
- ------------------------------------------------------------------------------------------------------------------------------------
2nd to 4th Floor Grid 3/F IWL/01/96/171 0 A
- ------------------------------------------------------------------------------------------------------------------------------------
2nd to 4th Floor Grid 3/G IWL/01/96/172 0 A
- ------------------------------------------------------------------------------------------------------------------------------------
2nd to 4th Floor Grid 3/H IWL/01/96/173 0 A
- ------------------------------------------------------------------------------------------------------------------------------------
3rd to 5th Floor East Elev Grid 2-3 IWL/01/96/174 0 A B
- ------------------------------------------------------------------------------------------------------------------------------------
3rd to 5th Floor East Elev Grid 1-2 IWL/01/96/175 0 A
- ------------------------------------------------------------------------------------------------------------------------------------
3rd to 5th Floor North Elev Grid H-G IWL/01/96/176 0
- ------------------------------------------------------------------------------------------------------------------------------------
3rd to 5th Floor North Elev Grid G-F IWL/01/96/177 0
- ------------------------------------------------------------------------------------------------------------------------------------
3rd to 5th Floor North Elev Grid E IWL/01/96/178 0
- ------------------------------------------------------------------------------------------------------------------------------------
3rd to 5th Floor North Elev Grid D IWL/01/96/179 0
- ------------------------------------------------------------------------------------------------------------------------------------
3rd to 5th Floor North Elev Grid C IWL/01/96/180 0
- ------------------------------------------------------------------------------------------------------------------------------------
3rd to 5th Floor North Elev Grid A-C IWL/01/96/181 0
- ------------------------------------------------------------------------------------------------------------------------------------
3rd to 5th Floor West Elev Grid 1-2 IWL/01/96/182 0
- ------------------------------------------------------------------------------------------------------------------------------------
3rd to 5th Floor East Elev Grid 2-3 IWL/01/96/183 0
- ------------------------------------------------------------------------------------------------------------------------------------
2nd to 4th Floor Grid 3 B-C IWL/01/96/184 0 A
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
2nd to 4th Floor West Elev Grid 3-4 IWL/01/96/186 0 A
- ------------------------------------------------------------------------------------------------------------------------------------
2nd to 4th Floor West Elev Grid 5-6 IWL/01/96/187 0 A
- ------------------------------------------------------------------------------------------------------------------------------------
2nd to 4th Floor West Elev Grid 6-7 IWL/01/96/188 0 A
- ------------------------------------------------------------------------------------------------------------------------------------
2nd to 4th Floor Grid 7 B-C IWL/01/96/189 0 A
- ------------------------------------------------------------------------------------------------------------------------------------
2nd to 4th Floor West Elev Grid 7-8 IWL/01/96/190 0
- ------------------------------------------------------------------------------------------------------------------------------------
Distribution - Paper Copies Copies
- ------------------------------------------------------------------------------------------------------------------------------------
ANCON CLARK 1 1 1 1 1 1 1
- ------------------------------------------------------------------------------------------------------------------------------------
IRVINE WHITLOCK LTD 5 5 5 5 5 5 5
- ------------------------------------------------------------------------------------------------------------------------------------
ROLFE JUDD 1 1 1 1 1 1 1
- ------------------------------------------------------------------------------------------------------------------------------------
ALBION STONE
- ------------------------------------------------------------------------------------------------------------------------------------
CIR, ITALY
- ------------------------------------------------------------------------------------------------------------------------------------
Purpose APPROVAL APPROVAL APPROVAL APPROVAL APPROVAL APPROVAL APPROVAL
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Sheet 1 of
Date 28/08/96 01/10/96 01/10/96 02/10/96 07/10/96 07/11/96 26/11/96
- ------------------------------------------------------------------------------------------------------------------------------------
Drawing Title Drawing Number Revision
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
2nd to 4th Floor South Elev Grid B-C IWL/01/96/161 C
- ------------------------------------------------------------------------------------------------------------------------------------
2nd to 4th Floor South Elev Grid C-D IWL/01/96/162 B C
- ------------------------------------------------------------------------------------------------------------------------------------
2nd to 4th Floor South Elev Grid D-E IWL/01/96/163 B
- ------------------------------------------------------------------------------------------------------------------------------------
2nd to 4th Floor South Elev Grid E&F IWL/01/96/164 B
- ------------------------------------------------------------------------------------------------------------------------------------
2nd to 4th Floor East Elev Grid 9-8 IWL/01/96/165 B
- ------------------------------------------------------------------------------------------------------------------------------------
2nd to 4th Floor East Elev Grid 8-7 IWL/01/96/166 B C
- ------------------------------------------------------------------------------------------------------------------------------------
2nd to 4th Floor Grid 7/E-F IWL/01/96/167 C C
- ------------------------------------------------------------------------------------------------------------------------------------
2nd to 4th Floor East Elev Grid 6-7 IWL/01/96/168
- ------------------------------------------------------------------------------------------------------------------------------------
2nd to 4th Floor East Elev Grid 5-6 IWL/01/96/169 A
- ------------------------------------------------------------------------------------------------------------------------------------
2nd to 4th Floor East Elev Grid 3-4 IWL/01/96/170
- ------------------------------------------------------------------------------------------------------------------------------------
2nd to 4th Floor Grid 3/F IWL/01/96/171
- ------------------------------------------------------------------------------------------------------------------------------------
2nd to 4th Floor Grid 3/G IWL/01/96/172
- ------------------------------------------------------------------------------------------------------------------------------------
2nd to 4th Floor Grid 3/H IWL/01/96/173
- ------------------------------------------------------------------------------------------------------------------------------------
3rd to 5th Floor East Elev Grid 2-3 IWL/01/96/174 C D
- ------------------------------------------------------------------------------------------------------------------------------------
3rd to 5th Floor East Elev Grid 1-2 IWL/01/96/175 B C
- ------------------------------------------------------------------------------------------------------------------------------------
3rd to 5th Floor North Elev Grid H-G IWL/01/96/176 A
- ------------------------------------------------------------------------------------------------------------------------------------
3rd to 5th Floor North Elev Grid G-F IWL/01/96/177 A
- ------------------------------------------------------------------------------------------------------------------------------------
3rd to 5th Floor North Elev Grid E IWL/01/96/178 A B
- ------------------------------------------------------------------------------------------------------------------------------------
3rd to 5th Floor North Elev Grid D IWL/01/96/179 A B
- ------------------------------------------------------------------------------------------------------------------------------------
3rd to 5th Floor North Elev Grid C IWL/01/96/180 A B
- ------------------------------------------------------------------------------------------------------------------------------------
3rd to 5th Floor North Elev Grid A-C IWL/01/96/181 A B
- ------------------------------------------------------------------------------------------------------------------------------------
3rd to 5th Floor West Elev Grid 1-2 IWL/01/96/182 A B
- ------------------------------------------------------------------------------------------------------------------------------------
3rd to 5th Floor East Elev Grid 2-3 IWL/01/96/183 A B
- ------------------------------------------------------------------------------------------------------------------------------------
2nd to 4th Floor Grid 3 B-C IWL/01/96/184
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
2nd to 4th Floor West Elev Grid 3-4 IWL/01/96/186
- ------------------------------------------------------------------------------------------------------------------------------------
2nd to 4th Floor West Elev Grid 5-6 IWL/01/96/187
- ------------------------------------------------------------------------------------------------------------------------------------
2nd to 4th Floor West Elev Grid 6-7 IWL/01/96/188
- ------------------------------------------------------------------------------------------------------------------------------------
2nd to 4th Floor Grid 7 B-C IWL/01/96/189 B
- ------------------------------------------------------------------------------------------------------------------------------------
2nd to 4th Floor West Elev Grid 7-8 IWL/01/96/190 A B
- ------------------------------------------------------------------------------------------------------------------------------------
Distribution - Paper Copies Copies
- ------------------------------------------------------------------------------------------------------------------------------------
ANCON CLARK 1 1 1 1 1 1 1
- ------------------------------------------------------------------------------------------------------------------------------------
IRVINE WHITLOCK LTD 5 5 5 5 5 5 5
- ------------------------------------------------------------------------------------------------------------------------------------
ROLFE JUDD 1 1 1 1 1 1 1
- ------------------------------------------------------------------------------------------------------------------------------------
ALBION STONE 1
- ------------------------------------------------------------------------------------------------------------------------------------
CIR, ITALY
- ------------------------------------------------------------------------------------------------------------------------------------
Purpose STATUS B STATUS B STATUS B STATUS B STATUS B STATUS B STATUS B
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
Sheet 1 of
Date 29/11/96 12/12/96 16/04/97 25/04/97 17/11/97
- ------------------------------------------------------------------------------------------------------------
Drawing Title Drawing Number Revision
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
2nd to 4th Floor South Elev Grid B-C IWL/01/96/161 D
- ------------------------------------------------------------------------------------------------------------
2nd to 4th Floor South Elev Grid C-D IWL/01/96/162 D E
- ------------------------------------------------------------------------------------------------------------
2nd to 4th Floor South Elev Grid D-E IWL/01/96/163 D E
- ------------------------------------------------------------------------------------------------------------
2nd to 4th Floor South Elev Grid E&F IWL/01/96/164 C
- ------------------------------------------------------------------------------------------------------------
2nd to 4th Floor East Elev Grid 9-8 IWL/01/96/165 C
- ------------------------------------------------------------------------------------------------------------
2nd to 4th Floor East Elev Grid 8-7 IWL/01/96/166 D
- ------------------------------------------------------------------------------------------------------------
2nd to 4th Floor Grid 7/E-F IWL/01/96/167 D E F
- ------------------------------------------------------------------------------------------------------------
2nd to 4th Floor East Elev Grid 6-7 IWL/01/96/168 A
- ------------------------------------------------------------------------------------------------------------
2nd to 4th Floor East Elev Grid 5-6 IWL/01/96/169 A
- ------------------------------------------------------------------------------------------------------------
2nd to 4th Floor East Elev Grid 3-4 IWL/01/96/170 A
- ------------------------------------------------------------------------------------------------------------
2nd to 4th Floor Grid 3/F IWL/01/96/171 A
- ------------------------------------------------------------------------------------------------------------
2nd to 4th Floor Grid 3/G IWL/01/96/172 A
- ------------------------------------------------------------------------------------------------------------
2nd to 4th Floor Grid 3/H IWL/01/96/173 A
- ------------------------------------------------------------------------------------------------------------
3rd to 5th Floor East Elev Grid 2-3 IWL/01/96/174 E
- ------------------------------------------------------------------------------------------------------------
3rd to 5th Floor East Elev Grid 1-2 IWL/01/96/175 D
- ------------------------------------------------------------------------------------------------------------
3rd to 5th Floor North Elev Grid H-G IWL/01/96/176 B
- ------------------------------------------------------------------------------------------------------------
3rd to 5th Floor North Elev Grid G-F IWL/01/96/177 B
- ------------------------------------------------------------------------------------------------------------
3rd to 5th Floor North Elev Grid E IWL/01/96/178 C
- ------------------------------------------------------------------------------------------------------------
3rd to 5th Floor North Elev Grid D IWL/01/96/179 C
- ------------------------------------------------------------------------------------------------------------
3rd to 5th Floor North Elev Grid C IWL/01/96/180 C
- ------------------------------------------------------------------------------------------------------------
3rd to 5th Floor North Elev Grid A-C IWL/01/96/181 C
- ------------------------------------------------------------------------------------------------------------
3rd to 5th Floor West Elev Grid 1-2 IWL/01/96/182 C
- ------------------------------------------------------------------------------------------------------------
3rd to 5th Floor East Elev Grid 2-3 IWL/01/96/183 C
- ------------------------------------------------------------------------------------------------------------
2nd to 4th Floor Grid 3 B-C IWL/01/96/184 A
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
2nd to 4th Floor West Elev Grid 3-4 IWL/01/96/186 A
- ------------------------------------------------------------------------------------------------------------
2nd to 4th Floor West Elev Grid 5-6 IWL/01/96/187 A
- ------------------------------------------------------------------------------------------------------------
2nd to 4th Floor West Elev Grid 6-7 IWL/01/96/188 A
- ------------------------------------------------------------------------------------------------------------
2nd to 4th Floor Grid 7 B-C IWL/01/96/189 C D E
- ------------------------------------------------------------------------------------------------------------
2nd to 4th Floor West Elev Grid 7-8 IWL/01/96/190 C
- ------------------------------------------------------------------------------------------------------------
Distribution - Paper Copies Copies
- ------------------------------------------------------------------------------------------------------------
ANCON CLARK 1 1 1 1
- ------------------------------------------------------------------------------------------------------------
IRVINE WHITLOCK LTD 5 5 5 5 1
- ------------------------------------------------------------------------------------------------------------
ROLFE JUDD 1 1 1 1
- ------------------------------------------------------------------------------------------------------------
ALBION STONE 1 1
- ------------------------------------------------------------------------------------------------------------
CIR, ITALY 1 1
- ------------------------------------------------------------------------------------------------------------
Purpose STATUS B STATUS B STATUS B STATUS B AS BUILT
DRAWINGS
- ------------------------------------------------------------------------------------------------------------
Smart Crosby International, 3 Grosvenor House, Melton Road, Oakham, Leics, LE15 6AX
Telephone: 01572 756961 Fax: 01572 756962
</TABLE>
<PAGE> 406
Smart Crosby International
Drawing Issue Sheet
- --------------------------------------------------------------------------------
Project: PETERSHILL, 1 CARTER LANE, LONDON, EC4 Job No: IWL/001A/96
- --------------------------------------------------------------------------------
Client: IRVINE WHITLOCK LIMITED Date: JUNE 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Sheet 1 of
Date 12/07/96 18/07/96 22/07/96 23/07/96 24/07/96 24/09/96 30/09/96
- ------------------------------------------------------------------------------------------------------------------------------------
Drawing Title Drawing Number
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
2nd to 4th Floor West Ele Grid 8-9 IWL/01/96/191 0
- ------------------------------------------------------------------------------------------------------------------------------------
4th to 5th Floor East Ele Grid 6-7 IWL/01/96/192 0 A B
- ------------------------------------------------------------------------------------------------------------------------------------
4th to 5th Floor East Ele Grid 5-6 IWL/01/96/193 0 A B C
- ------------------------------------------------------------------------------------------------------------------------------------
4th to 5th Floor East Ele Grid 3-5 IWL/01/96/194 0 A
- ------------------------------------------------------------------------------------------------------------------------------------
4th to 5th Floor Grid 3/F IWL/01/96/195 0 A
- ------------------------------------------------------------------------------------------------------------------------------------
4th to 5th Floor Grid 3/G IWL/01/96/196 0 A
- ------------------------------------------------------------------------------------------------------------------------------------
4th to 5th Floor Grid 3/H IWL/01/96/197 0 A
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
4th to 5th Floor Grid 3/B-C IWL/01/96/199 0 A
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Distribution - Paper Copies Copies
- ------------------------------------------------------------------------------------------------------------------------------------
ANCON CLARK 1 1 1 1 1 1
- ------------------------------------------------------------------------------------------------------------------------------------
IRVINE WHITLOCK LTD 5 5 5 5 5 5
- ------------------------------------------------------------------------------------------------------------------------------------
ROLFE JUDD 1 1 1 1 1 1
- ------------------------------------------------------------------------------------------------------------------------------------
CIR, ITALY 1
- ------------------------------------------------------------------------------------------------------------------------------------
ALBION STONE 1 1
- ------------------------------------------------------------------------------------------------------------------------------------
Purpose APPROVAL PRE- APPROVAL APPROVAL APPROVAL B STATUS B STATUS
LIMINARY
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Sheet 1 of
Date 07/10/96 26/11/96 10/12/96 12/12/96 15/04/97 18/04/97 23/04/97
- ------------------------------------------------------------------------------------------------------------------------------------
Drawing Title Drawing Number
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
2nd to 4th Floor West Ele Grid 8-9 IWL/01/96/191 A B
- ------------------------------------------------------------------------------------------------------------------------------------
4th to 5th Floor East Ele Grid 6-7 IWL/01/96/192 C C D
- ------------------------------------------------------------------------------------------------------------------------------------
4th to 5th Floor East Ele Grid 5-6 IWL/01/96/193 C D
- ------------------------------------------------------------------------------------------------------------------------------------
4th to 5th Floor East Ele Grid 3-5 IWL/01/96/194 A B
- ------------------------------------------------------------------------------------------------------------------------------------
4th to 5th Floor Grid 3/F IWL/01/96/195 B B C
- ------------------------------------------------------------------------------------------------------------------------------------
4th to 5th Floor Grid 3/G IWL/01/96/196 A B
- ------------------------------------------------------------------------------------------------------------------------------------
4th to 5th Floor Grid 3/H IWL/01/96/197 A B
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
4th to 5th Floor Grid 3/B-C IWL/01/96/199 B B C
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Distribution - Paper Copies Copies
- ------------------------------------------------------------------------------------------------------------------------------------
ANCON CLARK 1 1 1 1 1
- ------------------------------------------------------------------------------------------------------------------------------------
IRVINE WHITLOCK LTD 5 5 5 5 5
- ------------------------------------------------------------------------------------------------------------------------------------
ROLFE JUDD 1 1 1 1 1 1
- ------------------------------------------------------------------------------------------------------------------------------------
CIR, ITALY 1 1
- ------------------------------------------------------------------------------------------------------------------------------------
ALBION STONE 1 1 1
- ------------------------------------------------------------------------------------------------------------------------------------
Purpose B STATUS B STATUS B STATUS B STATUS B STATUS PRE- B STATUS
LIMINARY
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Sheet 1 of
Date 28/04/97 23/06/97 17/11/97
- ------------------------------------------------------------------------------------------------------------------------------------
Drawing Title Drawing Number
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
2nd to 4th Floor West Ele Grid 8-9 IWL/01/96/191 C
- ------------------------------------------------------------------------------------------------------------------------------------
4th to 5th Floor East Ele Grid 6-7 IWL/01/96/192 D E E
- ------------------------------------------------------------------------------------------------------------------------------------
4th to 5th Floor East Ele Grid 5-6 IWL/01/96/193 D
- ------------------------------------------------------------------------------------------------------------------------------------
4th to 5th Floor East Ele Grid 3-5 IWL/01/96/194 B
- ------------------------------------------------------------------------------------------------------------------------------------
4th to 5th Floor Grid 3/F IWL/01/96/195 C
- ------------------------------------------------------------------------------------------------------------------------------------
4th to 5th Floor Grid 3/G IWL/01/96/196 B
- ------------------------------------------------------------------------------------------------------------------------------------
4th to 5th Floor Grid 3/H IWL/01/96/197 C C
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
4th to 5th Floor Grid 3/B-C IWL/01/96/199 D D
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Distribution - Paper Copies Copies
- ------------------------------------------------------------------------------------------------------------------------------------
ANCON CLARK 1 1
- ------------------------------------------------------------------------------------------------------------------------------------
IRVINE WHITLOCK LTD 5 5 1
- ------------------------------------------------------------------------------------------------------------------------------------
ROLFE JUDD 1 1
- ------------------------------------------------------------------------------------------------------------------------------------
CIR, ITALY 1
- ------------------------------------------------------------------------------------------------------------------------------------
ALBION STONE 1 1
- ------------------------------------------------------------------------------------------------------------------------------------
Purpose B STATUS B STATUS AS BUILT
DRAWINGS
- ------------------------------------------------------------------------------------------------------------------------------------
Smart Crosby International, 3 Grosvenor House, Melton Road, Oakham, Leics, LE15 6AX
Telephone: 01572 756961 Fax: 01572 756962
</TABLE>
<PAGE> 407
Smart Crosby International
Drawing Issue Sheet
- --------------------------------------------------------------------------------
Project: PETERSHILL, 1 CARTER LANE, LONDON, EC4 Job No: IWL/001A/96
- --------------------------------------------------------------------------------
Client: IRVINE WHITLOCK LIMITED Date: JUNE 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Sheet 1 of
Date 15/04/97 18/04/97 23/04/97 28/04/97 23/06/97 17/11/97
- ------------------------------------------------------------------------------------------------------------------------------------
Drawing Title Drawing Number
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
4th to 5th Floor West Ele Grid 3-5 IWL/01/96/200 C C
- ------------------------------------------------------------------------------------------------------------------------------------
4th to 5th Floor West Ele Grid 5-6 IWL/01/96/201 B B
- ------------------------------------------------------------------------------------------------------------------------------------
4th to 5th Floor West Ele Grid 6-7 IWL/01/96/202 C C D D
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details East Elev Grid 2-3 IWL/01/96/203 B
- ------------------------------------------------------------------------------------------------------------------------------------
Cladding Details East Elev Grid 1-2 IWL/01/96/204 C
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Roof Coping, 4th & 5th & Balcony IWL/01/96/210 D
to 1st
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Distribution - Paper Copies Copies
- ------------------------------------------------------------------------------------------------------------------------------------
ANCON CLARK 1 1 1 1
- ------------------------------------------------------------------------------------------------------------------------------------
IRVINE WHITLOCK LTD 5 5 5 5 1
- ------------------------------------------------------------------------------------------------------------------------------------
ROLFE JUDD 1 1 1 1 1
- ------------------------------------------------------------------------------------------------------------------------------------
MARATHON DESIGN
- ------------------------------------------------------------------------------------------------------------------------------------
ALBION STONE 1 1 1 1
- ------------------------------------------------------------------------------------------------------------------------------------
IBSTOCK BUILDING PRODUCTS
- ------------------------------------------------------------------------------------------------------------------------------------
CIR, ITALY 1 1 1
- ------------------------------------------------------------------------------------------------------------------------------------
Purpose B STATUS PRE- B STATUS B STATUS B STATUS AS BUILT
LIMINARY DRAWINGS
- ------------------------------------------------------------------------------------------------------------------------------------
Smart Crosby International, 3 Grosvenor House, Melton Road, Oakham, Leics, LE15 6AX
Telephone: 01572 756961 Fax: 01572 756962
</TABLE>
<PAGE> 408
Smart Crosby International
Drawing Issue Sheet
- --------------------------------------------------------------------------------
Project: PETERSHILL, 1 CARTER LANE, LONDON, EC4 Job No: IWL/001/96
- --------------------------------------------------------------------------------
Client: IRVINE WHITLOCK LIMITED Date: MARCH 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Sheet 2 of
Date 14/11/96 29/11/96 29/11/96 17/12/96 19/12/96 24/02/97 25/02/97
- ------------------------------------------------------------------------------------------------------------------------------------
Drawing Title Drawing Number Revision
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Granite Plinth Fixing Details Sheet 1 IWL/01/96/301 D
- ------------------------------------------------------------------------------------------------------------------------------------
Granite Plinth Fixing Details Sheet 2 IWL/01/96/302 D
- ------------------------------------------------------------------------------------------------------------------------------------
Granite Plinth Fixing Det to Glazing St 1 IWL/01/96/303
- ------------------------------------------------------------------------------------------------------------------------------------
Granite Plinth Fixing Det to Glazing St 2 IWL/01/96/304
- ------------------------------------------------------------------------------------------------------------------------------------
Granite Plinth Fixing Det to Glazing St 3 IWL/01/96/305
- ------------------------------------------------------------------------------------------------------------------------------------
Granite Plinth Corner Details IWL/01/96/306
- ------------------------------------------------------------------------------------------------------------------------------------
Limestone Plinth Fixing IWL/01/96/307
- ------------------------------------------------------------------------------------------------------------------------------------
Limestone Plinth Courtyard East Elev IWL/01/96/308
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Typ Vert Section Through Masonry IWL/01/96/310 B C
- ------------------------------------------------------------------------------------------------------------------------------------
Typ Vert Sec Thro Granite Finish & Fxgs IWL/01/96/311 A
- ------------------------------------------------------------------------------------------------------------------------------------
Granite Plinth Fixing West Ele H/3-2 IWL/01/96/312 C
- ------------------------------------------------------------------------------------------------------------------------------------
Grte Pth Fixg Det to Glazg H/3 & 3/H-G IWL/01/96/313
- ------------------------------------------------------------------------------------------------------------------------------------
Granite Plinth Fixing Line 3 G/H IWL/01/96/314
- ------------------------------------------------------------------------------------------------------------------------------------
Grte Pth Fixg Det to Glazg H/3 & 3H-G IWL/01/96/315
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Typ Vert Sec Thro Parapet & Coping IWL/01/96/317 B C
- ------------------------------------------------------------------------------------------------------------------------------------
Typ Vert Sec Thro Parapet Corner IWL/01/96/318 A B
- ------------------------------------------------------------------------------------------------------------------------------------
Typ R/H Limestone Fascia & Soffit IWL/01/96/319
- ------------------------------------------------------------------------------------------------------------------------------------
Typ Det of Bricwk returns 1st H-3/F-7 IWL/01/96/320 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
Typ Det of Bricwk returns 1st A-3 IWL/01/96/321 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
Typ Det of Bricwk returns 1st B-7 IWL/01/96/322 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
Typ Det of Std RH Fascia & Soffit IWL/01/96/323
- ------------------------------------------------------------------------------------------------------------------------------------
Typ Flashing Detail to Glazing IWL/01/96/324 0
- ------------------------------------------------------------------------------------------------------------------------------------
Typ Vert Sec Thro South Elev Grid 9 IWL/01/96/325
- ------------------------------------------------------------------------------------------------------------------------------------
Typ Vert Sec Thro South Elev Lwr Balc IWL/01/96/326
- ------------------------------------------------------------------------------------------------------------------------------------
Details of Capitals to 5th Floor IWL/01/96/327
- ------------------------------------------------------------------------------------------------------------------------------------
Details of Capitals to 5th Floor IWL/01/96/328
- ------------------------------------------------------------------------------------------------------------------------------------
Details of Capitals to 4th Floor IWL/01/96/329
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Distribution - Paper Copies Copies
- ------------------------------------------------------------------------------------------------------------------------------------
IRVINE WHITLOCK LTD 5 5 5 5 1 5
- ------------------------------------------------------------------------------------------------------------------------------------
CIR LONDON LIMITED
- ------------------------------------------------------------------------------------------------------------------------------------
ROLFE JUDD 1 1 1 1 1 1
- ------------------------------------------------------------------------------------------------------------------------------------
ANCON CLARK 1 1 1 1 1 1
- ------------------------------------------------------------------------------------------------------------------------------------
CIR, ITALY
- ------------------------------------------------------------------------------------------------------------------------------------
ALBION STONE
- ------------------------------------------------------------------------------------------------------------------------------------
MARATHON DESIGN
- ------------------------------------------------------------------------------------------------------------------------------------
OVE ARUP
- ------------------------------------------------------------------------------------------------------------------------------------
Purpose FOR STATUS B APPROVAL STATUS B APPROVAL FOR STATUS B
INFOR- INFOR-
MATION MATION
ONLY ONLY
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Sheet 2 of
Date 07/03/97 21/03/97 02/04/97 03/04/97 15/04/97 30/04/97 30/04/97
- ------------------------------------------------------------------------------------------------------------------------------------
Drawing Title Drawing Number Revision
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Granite Plinth Fixing Details Sheet 1 IWL/01/96/301
- ------------------------------------------------------------------------------------------------------------------------------------
Granite Plinth Fixing Details Sheet 2 IWL/01/96/302
- ------------------------------------------------------------------------------------------------------------------------------------
Granite Plinth Fixing Det to Glazing St 1 IWL/01/96/303
- ------------------------------------------------------------------------------------------------------------------------------------
Granite Plinth Fixing Det to Glazing St 2 IWL/01/96/304
- ------------------------------------------------------------------------------------------------------------------------------------
Granite Plinth Fixing Det to Glazing St 3 IWL/01/96/305
- ------------------------------------------------------------------------------------------------------------------------------------
Granite Plinth Corner Details IWL/01/96/306
- ------------------------------------------------------------------------------------------------------------------------------------
Limestone Plinth Fixing IWL/01/96/307
- ------------------------------------------------------------------------------------------------------------------------------------
Limestone Plinth Courtyard East Elev IWL/01/96/308
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Typ Vert Section Through Masonry IWL/01/96/310
- ------------------------------------------------------------------------------------------------------------------------------------
Tryp Vert Sec Thro Granite Finish & Fxgs IWL/01/96/311
- ------------------------------------------------------------------------------------------------------------------------------------
Granite Plinth Fixing West Ele H/3-2 IWL/01/96/312
- ------------------------------------------------------------------------------------------------------------------------------------
Grte Pth Fixg Det to Glazg H/3 & 3/H-G IWL/01/96/313
- ------------------------------------------------------------------------------------------------------------------------------------
Granite Plinth Fixing Line 3 G/H IWL/01/96/314
- ------------------------------------------------------------------------------------------------------------------------------------
Pth Fixg Det to Glazg H/3 & 3H-G IWL/01/96/315
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Typ Vert Sec Thro Parapet & Coping IWL/01/96/317 D
- ------------------------------------------------------------------------------------------------------------------------------------
Typ Vert Sec Thro Parapet Corner IWL/01/96/318
- ------------------------------------------------------------------------------------------------------------------------------------
Typ R/H Limestone Fascia & Soffit IWL/01/96/319
- ------------------------------------------------------------------------------------------------------------------------------------
Typ Det of Bricwk returns 1st H-3/F-7 IWL/01/96/320
- ------------------------------------------------------------------------------------------------------------------------------------
Typ Det of Bricwk returns 1st A-3 IWL/01/96/321
- ------------------------------------------------------------------------------------------------------------------------------------
Typ Det of Bricwk returns 1st B-7 IWL/01/96/322
- ------------------------------------------------------------------------------------------------------------------------------------
Typ Det of Std RH Fascia & Soffit IWL/01/96/323 0
- ------------------------------------------------------------------------------------------------------------------------------------
Typ Flashing Detail to Glazing IWL/01/96/324
- ------------------------------------------------------------------------------------------------------------------------------------
Typ Vert Sec Thro South Elev Grid 9 IWL/01/96/325
- ------------------------------------------------------------------------------------------------------------------------------------
Typ Vert Sec Thro South Elev Lwr Balc IWL/01/96/326 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
Details of Capitals to 5th Floor IWL/01/96/327 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
Details of Capitals to 5th Floor IWL/01/96/328 0
- ------------------------------------------------------------------------------------------------------------------------------------
Details of Capitals to 4th Floor IWL/01/96/329 0
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Distribution - Paper Copies Copies
- ------------------------------------------------------------------------------------------------------------------------------------
IRVINE WHITLOCK LTD 1 1 1 1 5 5 5
- ------------------------------------------------------------------------------------------------------------------------------------
CIR LONDON LIMITED
- ------------------------------------------------------------------------------------------------------------------------------------
ROLFE JUDD 1 1 1 1
- ------------------------------------------------------------------------------------------------------------------------------------
ANCON CLARK 1 1 1 1 1 1
- ------------------------------------------------------------------------------------------------------------------------------------
CIR, ITALY 1
- ------------------------------------------------------------------------------------------------------------------------------------
ALBION STONE 1
- ------------------------------------------------------------------------------------------------------------------------------------
MARATHON DESIGN
- ------------------------------------------------------------------------------------------------------------------------------------
OVE ARUP 1
- ------------------------------------------------------------------------------------------------------------------------------------
Purpose FOR FOR FOR FOR APPROVAL STATUS B STATUS B
INFOR- INFOR- INFOR- INFOR-
MATION MATION MATION MATION
ONLY ONLY ONLY ONLY
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Sheet 2 of
Date 29/05/97 29/05/97 17/11/97
- ------------------------------------------------------------------------------------------------------------------------------------
Drawing Title Drawing Number Revision
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Granite Plinth Fixing Details Sheet 1 IWL/01/96/301 D
- ------------------------------------------------------------------------------------------------------------------------------------
Granite Plinth Fixing Details Sheet 2 IWL/01/96/302 D
- ------------------------------------------------------------------------------------------------------------------------------------
Granite Plinth Fixing Det to Glazing St 1 IWL/01/96/303 B
- ------------------------------------------------------------------------------------------------------------------------------------
Granite Plinth Fixing Det to Glazing St 2 IWL/01/96/304 B
- ------------------------------------------------------------------------------------------------------------------------------------
Granite Plinth Fixing Det to Glazing St 3 IWL/01/96/305 A
- ------------------------------------------------------------------------------------------------------------------------------------
Granite Plinth Corner Details IWL/01/96/306
- ------------------------------------------------------------------------------------------------------------------------------------
Limestone Plinth Fixing IWL/01/96/307 B
- ------------------------------------------------------------------------------------------------------------------------------------
Limestone Plinth Courtyard East Elev IWL/01/96/308 0
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Typ Vert Section Through Masonry IWL/01/96/310 C
- ------------------------------------------------------------------------------------------------------------------------------------
Tryp Vert Sec Thro Granite Finish & Fxgs IWL/01/96/311 A
- ------------------------------------------------------------------------------------------------------------------------------------
Granite Plinth Fixing West Ele H/3-2 IWL/01/96/312 C
- ------------------------------------------------------------------------------------------------------------------------------------
Grte Fin Pth Det to Glazg H/3 & 3/H-G IWL/01/96/313 0
- ------------------------------------------------------------------------------------------------------------------------------------
Granite Plinth Fixing Line 3 G/H IWL/01/96/314 0
- ------------------------------------------------------------------------------------------------------------------------------------
Grte Fin Pth Det to Glazg H/3 & 3H-G IWL/01/96/315 0
- ------------------------------------------------------------------------------------------------------------------------------------
0
- ------------------------------------------------------------------------------------------------------------------------------------
Typ Vert Sec Thro Parapet & Coping IWL/01/96/317 D
- ------------------------------------------------------------------------------------------------------------------------------------
Typ Vert Sec Thro Parapet Corner IWL/01/96/318 C C
- ------------------------------------------------------------------------------------------------------------------------------------
Typ R/H Limestone Fascia & Soffit IWL/01/96/319
- ------------------------------------------------------------------------------------------------------------------------------------
Typ Det of Bricwk returns 1st H-3/F-7 IWL/01/96/320 0
- ------------------------------------------------------------------------------------------------------------------------------------
Typ Det of Bricwk returns 1st A-3 IWL/01/96/321 0
- ------------------------------------------------------------------------------------------------------------------------------------
Typ Det of Bricwk returns 1st B-7 IWL/01/96/322 0
- ------------------------------------------------------------------------------------------------------------------------------------
Typ Det of Std RH Fascia & Soffit IWL/01/96/323
- ------------------------------------------------------------------------------------------------------------------------------------
Typ Flashing Detail to Glazing IWL/01/96/324 0
- ------------------------------------------------------------------------------------------------------------------------------------
Typ Vert Sec Thro South Elev Grid 9 IWL/01/96/325 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
Typ Vert Sec Thro South Elev Lwr Balc IWL/01/96/326 0
- ------------------------------------------------------------------------------------------------------------------------------------
Details of Capitals to 5th Floor IWL/01/96/327 0
- ------------------------------------------------------------------------------------------------------------------------------------
Details of Capitals to 5th Floor IWL/01/96/328 0
- ------------------------------------------------------------------------------------------------------------------------------------
Details of Capitals to 4th Floor IWL/01/96/329 0
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Distribution - Paper Copies Copies
- ------------------------------------------------------------------------------------------------------------------------------------
IRVINE WHITLOCK LTD 5 5 1
- ------------------------------------------------------------------------------------------------------------------------------------
CIR LONDON LIMITED
- ------------------------------------------------------------------------------------------------------------------------------------
ROLFE JUDD 1 1
- ------------------------------------------------------------------------------------------------------------------------------------
ANCON CLARK 1 1
- ------------------------------------------------------------------------------------------------------------------------------------
CIR, ITALY 1 1
- ------------------------------------------------------------------------------------------------------------------------------------
ALBION STONE
- ------------------------------------------------------------------------------------------------------------------------------------
MARATHON DESIGN
- ------------------------------------------------------------------------------------------------------------------------------------
OVE ARUP
- ------------------------------------------------------------------------------------------------------------------------------------
Purpose STATUS B APPROVAL AS BUILT
DRAWING
- ------------------------------------------------------------------------------------------------------------------------------------
Smart Crosby International, 3 Grosvenor House, Melton Road, Oakham, Leics, LE15 6AX
Telephone: 01572 756961 Fax: 01572 756962
</TABLE>
<PAGE> 409
Smart Crosby International
Drawing Issue Sheet
- --------------------------------------------------------------------------------
Project: PETERSHILL, 1 CARTER LANE, LONDON, EC4 Job No: IWL/001/96
- --------------------------------------------------------------------------------
Client: IRVINE WHITLOCK LIMITED Date: MARCH 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Sheet 1 of
Date 03/04/97 15/04/97 16/04/97 29/05/97 30/04/97 02/06/97 17/11/97
- ------------------------------------------------------------------------------------------------------------------------------------
Drawing Title Drawing Number Revision
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Details of Capitals to 4th Floor South IWL/01/96/331 0 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
Details of Capitals to 4th Floor IWL/01/96/332 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
Details of Capital Fxgs to 5th Floor IWL/01/96/333 0
- ------------------------------------------------------------------------------------------------------------------------------------
Typ Vert Sec Thro Grid 35th Floor IWL/01/96/334 0 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
Typ Vert Sec Thro Grid 15th Floor IWL/01/96/335 0 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
Typ Vert Sec Thro Parapet Ret Grid 7 IWL/01/96/336 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
Typ Vert Sec Thro Parapet Ret Grid 3 IWL/01/96/337 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Distribution - Paper Copies Copies
- ------------------------------------------------------------------------------------------------------------------------------------
IRVINE WHITLOCK LIMITED 1 5 5 5 1 5 1
- ------------------------------------------------------------------------------------------------------------------------------------
CIR LONDON LIMITED
- ------------------------------------------------------------------------------------------------------------------------------------
ROLFE JUDD 1 1 1 1
- ------------------------------------------------------------------------------------------------------------------------------------
ANCON CLARK 1 1 1 1 1 1
- ------------------------------------------------------------------------------------------------------------------------------------
CIR, ITALY 1 1 1 1
- ------------------------------------------------------------------------------------------------------------------------------------
ALBION STONE 1 1
- ------------------------------------------------------------------------------------------------------------------------------------
MARATHON DESIGN
- ------------------------------------------------------------------------------------------------------------------------------------
OVE ARUP
- ------------------------------------------------------------------------------------------------------------------------------------
Purpose FOR APPROVAL APPROVAL APPROVAL FOR APPROVAL AS BUILT
INFOR- INFOR- DRAWING
MATION MATION
ONLY ONLY
- ------------------------------------------------------------------------------------------------------------------------------------
Smart Crosby International, 3 Grosvenor House, Melton Road, Oakham, Leics, LE15 6AX
Telephone: 01572 756961 Fax: 01572 756962
</TABLE>
<PAGE> 410
Smart Crosby International
Drawing Issue Sheet
- --------------------------------------------------------------------------------
Project: PETERSHILL, 1 CARTER LANE, LONDON, EC4 Job No: IWL/001/96
- --------------------------------------------------------------------------------
Client: IRVINE WHITLOCK LIMITED Date: APRIL 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Sheet 1 of
Date 16/04/96 17/04/96 24/04/96 03/05/96 06/06/96 06/06/96 10/06/96
- ------------------------------------------------------------------------------------------------------------------------------------
Drawing Title Drawing Number Revision
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Typical Plan Sections A-A to L-L IWL/01/96/401 0 0 A B
- ------------------------------------------------------------------------------------------------------------------------------------
Typical Plan Sections V-V to K1-K1 IWL/01/96/402 0 A
- ------------------------------------------------------------------------------------------------------------------------------------
Typical Plan Sections L2-Z2 IWL/01/96/403 0 A
- ------------------------------------------------------------------------------------------------------------------------------------
Typical Plan Sections L1-L1 to T1-T1 IWL/01/96/404 0 A
- ------------------------------------------------------------------------------------------------------------------------------------
Typical Plan Sections IWL/01/96/405
- ------------------------------------------------------------------------------------------------------------------------------------
Typical Plan Sections F4-F4 to M4-M4 IWL/01/96/406
- ------------------------------------------------------------------------------------------------------------------------------------
Site Fxgs to Limestone LG to Ground IWL/01/96/407
- ------------------------------------------------------------------------------------------------------------------------------------
Distribution - Paper Copies Copies
- ------------------------------------------------------------------------------------------------------------------------------------
ANCON CLARK 1 1 1 1 1 1
- ------------------------------------------------------------------------------------------------------------------------------------
IRVINE WHITLOCK LTD 5 5 5 5 5 5
- ------------------------------------------------------------------------------------------------------------------------------------
ROLFE JUDD 1 1 1 1 1 1
- ------------------------------------------------------------------------------------------------------------------------------------
CIR, ITALY
- ------------------------------------------------------------------------------------------------------------------------------------
Purpose PRE- APPROVAL APPROVAL APPROVAL B STATUS APPROVAL APPROVAL
LIMINARY
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Sheet 1 of
Date 20/06/96 25/06/96 16/07/96 16/07/96 07/08/96 29/11/96 29/11/96
- ------------------------------------------------------------------------------------------------------------------------------------
Drawing Title Drawing Number Revision
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Typical Plan Sections A-A to L-L IWL/01/96/401 C D E
- ------------------------------------------------------------------------------------------------------------------------------------
Typical Plan Sections V-V to K1-K1 IWL/01/96/402 C D E
- ------------------------------------------------------------------------------------------------------------------------------------
Typical Plan Sections L2-Z2 IWL/01/96/403 B C D
- ------------------------------------------------------------------------------------------------------------------------------------
Typical Plan Sections L1-L1 to T1-T1 IWL/01/96/404 B C D E
- ------------------------------------------------------------------------------------------------------------------------------------
Typical Plan Sections IWL/01/96/405 0 A
- ------------------------------------------------------------------------------------------------------------------------------------
Typical Plan Sections F4-F4 to M4-M4 IWL/01/96/406 0 A
- ------------------------------------------------------------------------------------------------------------------------------------
Site Fxgs to Limestone LG to Ground IWL/01/96/407 A
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Distribution - Paper Copies Copies
- ------------------------------------------------------------------------------------------------------------------------------------
ANCON CLARK 1 1 1 1 1 1 1
- ------------------------------------------------------------------------------------------------------------------------------------
IRVINE WHITLOCK LTD 5 5 5 5 5 5 5
- ------------------------------------------------------------------------------------------------------------------------------------
ROLFE JUDD 1 1 1 1 1 1 1
- ------------------------------------------------------------------------------------------------------------------------------------
CIR, ITALY
- ------------------------------------------------------------------------------------------------------------------------------------
Purpose B STATUS B STATUS B STATUS APPROVAL B STATUS B STATUS APPROVAL
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Sheet 1 of
Date 16/01/97 17/11/97
- ------------------------------------------------------------------------------------------------------------------------------------
Drawing Title Drawing Number Revision
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Typical Plan Sections A-A to L-L IWL/01/96/401 E
- ------------------------------------------------------------------------------------------------------------------------------------
Typical Plan Sections V-V to K1-K1 IWL/01/96/402 F F
- ------------------------------------------------------------------------------------------------------------------------------------
Typical Plan Sections L2-Z2 IWL/01/96/403 D
- ------------------------------------------------------------------------------------------------------------------------------------
Typical Plan Sections L1-L1 to T1-T1 IWL/01/96/404 E
- ------------------------------------------------------------------------------------------------------------------------------------
Typical Plan Sections IWL/01/96/405 A
- ------------------------------------------------------------------------------------------------------------------------------------
Typical Plan Sections F4-F4 to M4-M4 IWL/01/96/406 A
- ------------------------------------------------------------------------------------------------------------------------------------
Site Fxgs to Limestone LG to Ground IWL/01/96/407 A
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Distribution - Paper Copies Copies
- ------------------------------------------------------------------------------------------------------------------------------------
ANCON CLARK 1
- ------------------------------------------------------------------------------------------------------------------------------------
IRVINE WHITLOCK LTD 5 1
- ------------------------------------------------------------------------------------------------------------------------------------
ROLFE JUDD 1
- ------------------------------------------------------------------------------------------------------------------------------------
CIR, ITALY 1
- ------------------------------------------------------------------------------------------------------------------------------------
Purpose B STATUS AS BUILT
DRAWING
- ------------------------------------------------------------------------------------------------------------------------------------
Smart Crosby International, 3 Grosvenor House, Melton Road, Oakham, Leics, LE15 6AX
Telephone: 01572 756961 Fax: 01572 756962
</TABLE>
<PAGE> 411
Smart Crosby International
Drawing Issue Sheet
- --------------------------------------------------------------------------------
Project: PETERSHILL, 1 CARTER LANE, LONDON, EC4 Job No: IWL/001/96
- --------------------------------------------------------------------------------
Client: IRVINE WHITLOCK LIMITED Date: APRIL 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Sheet 1 of
Date 17/04/96 01/08/96 08/08/96 03/09/96 03/10/96 17/10/97 17/11/97
- ------------------------------------------------------------------------------------------------------------------------------------
Drawing Title Drawing Number Revision
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Blockwork Details to Basement Floor IWL/01/96/501 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
Layout Blockwork Walls GF Sheet 1/2 IWL/01/96/502 0 0 A A A
- ------------------------------------------------------------------------------------------------------------------------------------
Layout Blockwork Walls GF Sheet 2/2 IWL/01/96/503 0 0 A A A
- ------------------------------------------------------------------------------------------------------------------------------------
Blockwork Head Restraint Detail (A4) IWL/01/96/504 0
- ------------------------------------------------------------------------------------------------------------------------------------
Layout of Blockwork Walls to LGF IWL/01/96/505 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Distribution - Paper Copies Copies
- ------------------------------------------------------------------------------------------------------------------------------------
IRVINE WHITLOCK LTD 5 1 4 2 5 5 1
- ------------------------------------------------------------------------------------------------------------------------------------
ROLFE JUDD 1 1 1
- ------------------------------------------------------------------------------------------------------------------------------------
ANCON CLARK 1
- ------------------------------------------------------------------------------------------------------------------------------------
Purpose APPROVAL INFOR- REQUESTED INFOR- APPROVAL FOR CON- AS BUILT
MATION BY JW MATION STRUCTION DRAWING
- ------------------------------------------------------------------------------------------------------------------------------------
Smart Crosby International, 3 Grosvenor House, Melton Road, Oakham, Leics, LE15 6AX
Telephone: 01572 756961 Fax: 01572 756962
</TABLE>
<PAGE> 412
Smart Crosby International
Drawing Issue Sheet
- --------------------------------------------------------------------------------
Project: PETERSHILL, 1 CARTER LANE, LONDON, EC4 Job No: IWL/001A/96
- --------------------------------------------------------------------------------
Client: IRVINE WHITLOCK LIMITED Date: MAY 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Sheet 1 of
Date 20/05/96 26/07/96 30/07/96 08/10/96 17/11/97
- ------------------------------------------------------------------------------------------------------------------------------------
Drawing Title Drawing Number Revision
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Masonry Details Test Sample Elevation IWL/01/96/601 0
- ------------------------------------------------------------------------------------------------------------------------------------
Granite Plinth Details for Impact Test IWL/01/96/602 0 A A
- ------------------------------------------------------------------------------------------------------------------------------------
Limestone Plinth Details for Impact Test IWL/01/96/603 0 A A
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Distribution - Paper Copies Copies
- ------------------------------------------------------------------------------------------------------------------------------------
IRVINE WHITLOCK LTD 1 1 1 2 1
- ------------------------------------------------------------------------------------------------------------------------------------
ROLFE JUDD 1 1 1 2
- ------------------------------------------------------------------------------------------------------------------------------------
TAYWOOD ENGINEERING 1 1 1
- ------------------------------------------------------------------------------------------------------------------------------------
CIR LONDON LTD 1
- ------------------------------------------------------------------------------------------------------------------------------------
MACE 1 1 1
- ------------------------------------------------------------------------------------------------------------------------------------
OVE ARUP & PARTNERS 1 1 1
- ------------------------------------------------------------------------------------------------------------------------------------
ANCON CLARK 1 1 1
- ------------------------------------------------------------------------------------------------------------------------------------
Purpose INFOR- INFOR- INFOR- INFOR- AS BUILT
MATION MATION MATION MATION DRAWING
ONLY ONLY
- ------------------------------------------------------------------------------------------------------------------------------------
Smart Crosby International, 3 Grosvenor House, Melton Road, Oakham, Leics, LE15 6AX
Telephone: 01572 756961 Fax: 01572 756962
</TABLE>
<PAGE> 413
Smart Crosby International
Drawing Issue Sheet
- --------------------------------------------------------------------------------
Project: PETERSHILL, 1 CARTER LANE, LONDON, EC4 Job No: IWL/001A/96
- --------------------------------------------------------------------------------
Client: IRVINE WHITLOCK LIMITED Date: JUNE 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Sheet 2 of
Date 21/05/97 23/06/97 23/06/97 17/11/97
- ------------------------------------------------------------------------------------------------------------------------------------
Drawing Title Drawing Number
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Clad'g Det South Ele Stone Capital Det IWL/01/96/701 D D
- ------------------------------------------------------------------------------------------------------------------------------------
Courtyard & Colonnade Stone Cap. Det IWL/01/96/702 D D
- ------------------------------------------------------------------------------------------------------------------------------------
Courtyard & Colonnade Stone Cap. Det IWL/01/96/703 E E
- ------------------------------------------------------------------------------------------------------------------------------------
South Elevation Stone Capital Details IWL/01/96/704 B B
- ------------------------------------------------------------------------------------------------------------------------------------
Grids 3-C-QR-E Stone Capital Details IWL/01/96/705 B B
- ------------------------------------------------------------------------------------------------------------------------------------
Grids 7/B-C & 7/E-F Stone Cap. Det. IWL/01/96/706 B B
- ------------------------------------------------------------------------------------------------------------------------------------
Courtyd & Colonnade Lwr Cap Details IWL/01/96/707 B B
- ------------------------------------------------------------------------------------------------------------------------------------
Courtyd & Colonnade Stone Cap Details IWL/01/96/708 A B B
- ------------------------------------------------------------------------------------------------------------------------------------
Courtyd & Colonnade Stone Cap Details IWL/01/96/709 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Granite Plinth Section Details IWL/01/96/801 A
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Elevation Key Sheet 1 IWL/01/96/901 0
- ------------------------------------------------------------------------------------------------------------------------------------
Elevation Key Sheet 2 IWL/01/96/902 0
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Distribution - Paper Copies Copies
- ------------------------------------------------------------------------------------------------------------------------------------
ANCON CLARK 1 1 1
- ------------------------------------------------------------------------------------------------------------------------------------
IRVINE WHITLOCK LTD 3 5 5 1
- ------------------------------------------------------------------------------------------------------------------------------------
ROLFE JUDD 1 1
- ------------------------------------------------------------------------------------------------------------------------------------
ALBION STONE 1 1 1
- ------------------------------------------------------------------------------------------------------------------------------------
MACE
- ------------------------------------------------------------------------------------------------------------------------------------
CIR, ITALY
- ------------------------------------------------------------------------------------------------------------------------------------
Purpose STATUS B STATUS B APPROVAL AS BUILT
DRAWING
- ------------------------------------------------------------------------------------------------------------------------------------
Smart Crosby International, 3 Grosvenor House, Melton Road, Oakham, Leics, LE15 6AX
Telephone: 01572 756961 Fax: 01572 756962
</TABLE>
<PAGE> 414
3800 [LOGO]
Drylining B R Hodgson
LIMITED
INDEX
<TABLE>
<S> <C>
1.0 WALL TYPES AND SPECIFICATION AS SCHEDULE.
2.0 PARTITION DETAILS
3.0 PARTITION LAYOUTS
4.0 PARTITION STRENGTH TESTS
5.0 FIXING DETAILS
6.0 DETAILED SPECIFICATION
7.0 MAINTENANCE OPERATION MANUAL
</TABLE>
<PAGE> 415
<TABLE>
<CAPTION>
BR Hodgson Package 3800 Drylining
<S> <C> <C> <C>
01/B 60 B 91/B 37
02/B 61/B 92/B 38
03/C 62/B 93/B 39
04/B 63/B 94/B 40
05/B 64/B 95/B 41
06/B 65 96/B 42/B
07/B 66 97/B 44
12/B 67/B 98/B
13/B 68 B 99
15/B 69/B 100
15 A 70 102
71/B 103
72/B 20
73/B 21
74 B 22
75 B 23
76 B 24
77 B 25
80/B 26
81/B 27
82/B 28
83/B 29 a
84/B 30 a
85/B 31 a
86/B 32 a
87/B 33 a
88/B 34 a
89/B 35 A
</TABLE>
<PAGE> 416
Package 4200
Toilet Fit Out
HL Smith
OPERATING AND MAINTENANCE
MANUAL
AND
HEALTH AND SAFETY FILE
FOR
PETERSHILL
LOCATED AT
ONE CARTER LANE
LONDON
EC4
Prepared in accordance with Regulation 14(d-f)
of the
Construction (Design and Management) Regulations 1994
H L Smith Construction Ltd
Station Court
Station Road
Bourne End
Bucks
SL8 5YP
Compiled on 9 October 1997
Revision A
<PAGE> 417
HL Smith Construction Ltd
- --------------------------------------------------------------------------------
Petershill, One Carter Lane, London, EC4.
Operating and Maintenance Manual and Health and Safety File.
- --------------------------------------------------------------------------------
The following drawings have been submitted for As Built drawings:
<TABLE>
<CAPTION>
Drawing No. Rev. Description
<S> <C> <C>
1302/471/01 D Basement layout
1302/471/02 E Lower Ground layout
1302/471/03 E Ground to Fourth layout
1302/471/04 F Fifth layout
1302/471/05 C Typical cubicle details
1302/471/06 B Mirror and signage details
1302/471/07 C Hand basin details
1302/471/08 B Basement sections
1302/471/09 B Lower Ground to Fourth male sections
1302/471/10 C Lower Ground to Fourth female sections
1302/471/11 B Lower Ground to Fourth female sections
1302/471/12 C Fifth male sections
1302/471/13 D Fifth female sections
1302/471/14 B Basement ceiling plan
1302/471/15 B Lower Ground ceiling plan
1302/471/16 B Ground to Fourth ceiling plan
1302/471/17 C Fifth ceiling plan
1302/471/18 B Basement floor layout
1302/471/19 A Lower Ground floor layout
1302/471/20 A Ground to Fourth floor layout
1302/471/21 A Fifth floor layout
1302/471/22 D Typical door elevations
1302/471/23 C Door details sheet 1
1302/471/24 C Door details sheet 2
1302/471/25 D Door schedule sheet 1
1302/471/26 B Partition types
1302/471/27 B Partition details
1302/471/28 B Lower Ground to Fourth disabled sections
1302/471/29 C Suspended ceiling details
1302/471/30 D Typical door elevations
1302/471/31 E Basement door details
1302/471/32 D Door details type T and V
1302/471/33 C Lift and staircores door elevations
1302/471/34 B Ground floor reception door details
1302/471/35 E Door schedule sheet 2
</TABLE>
<PAGE> 418
HL Smith Construction Ltd
- --------------------------------------------------------------------------------
Petershill, One Carter Lane, London, EC4.
Operating and Maintenance Manual and Health and Safety File.
- --------------------------------------------------------------------------------
CONTENTS
<TABLE>
<S> <C>
Section 1. Drywall works
Section 2. Suspended ceilings
Section 3. Slate floors, skirtings and vanity units
Section 4. Tiled floors and walls
Section 5. Joinery
Section 6. Ironmongery
Section 7. Decorations
Section 8. Mirrors
Section 9. Stainless steel shelves and aprons
Section 10. Silicone sealant
Section 11. Plumbing services
Section 12. As built drawings
Section 13. Client spares
</TABLE>
<PAGE> 419
<PAGE> 420
DETAILED SPECIFICATION
FOR
MEPC
AT
PETERSHILL, ONE CARTER LANE
OFF KNIGHTRIDER COURT
LONDON
EC4V 5ER
TOILET FITOUT PACKAGE 4200
H L Smith Construction May 1997
Station Court
Station Road
Bourne End
Buckinghamshire
SL8 5YP
Tel: 01628 529 691
Fax: 01628 810030
<PAGE> 421
INDEX Glazzards
Package 4500
DESCRIPTION Architectural Metalwork
REFERENCE / SECTION
NUMBER
1. The supply and installation of balustrade and wall handrails to Staircases
A & C rising from Basement to Roof.
2. The supply and installation at balustrade and wall handrails to Staircase
B rising from Basement to Roof.
3. The supply and installation of Balcony Structure and Balustrade to the
Second Floor North Elevation.
4. The supply and installation of Window Guards to Floors 1 and 4 on
Elevations 3, 4, 5, 9, 10 and 11.
5. The supply and installation of Window Guards/Parapet Rails to
4th & 5th Floors on Elevations 3, 4, 5, 9, 10 and 11.
6. The supply and installation of Parapet Rail to 4th & 5th Floors on all
Elevations.
7. The supply and installation of various items of staircases, balustrades
and handrails to the Basement Plantrooms all as our individual working
drawings.
8. The supply and installation of 'Open' Type Floor Grilles and Support
Steels at Lower Ground Level and Ground Floor Level.
9. The supply and installation of balustrade to the Restaurant External
Balcony.
10. The supply and installation of Wall Handrails to Stairs F & G in the
Restaurant.
11. The supply and installation of Louvre Grilles to the Basement Plant Rooms.
12. General Specification Requirements
Types of Steel - Alloys.
Colour matching.
Galvanising zinc Thickness.
Letter of Certification
Appendix 'A'
<PAGE> 422
AS BUILT DRAWINGS
-----------------
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
DRG / SHEET / REVISION DESCRIPTION
NUMBER
- --------------------------------------------------------------------------------
<S> <C> <C>
3651/1/F STAIR 2 G.A
- --------------------------------------------------------------------------------
3654/1/C LE SUB STATION STAIRS G.A
- --------------------------------------------------------------------------------
3655/1/B STAIR 7 G.A
- --------------------------------------------------------------------------------
3656/1/B STAIR 8 G.A
- --------------------------------------------------------------------------------
3657/1/C STAIR 9 GAS CHAMBER IN BASEMENT
- --------------------------------------------------------------------------------
3658/l/D STAIR 10 BALUSTRADE G.A
- --------------------------------------------------------------------------------
3659/1/C STAIR 11 BALUSTRADE G.A
- --------------------------------------------------------------------------------
3660/1/A RAMP 12 BALUSTRADE GA & DETAILS
- --------------------------------------------------------------------------------
3661/1/C STAIRS 13 & 14 G.A
- --------------------------------------------------------------------------------
3662/1/B STAIRS 15 G.A
- --------------------------------------------------------------------------------
3663/1/A STAIR 16 G.A
- --------------------------------------------------------------------------------
3664/1/B STAIR 17 G.A
- --------------------------------------------------------------------------------
3665/1/B BALUSTRADE & WALL RAIL RAMP No 18
- --------------------------------------------------------------------------------
3666/1/B RAMP No 19 BASEMENT GA & DETAILS
- --------------------------------------------------------------------------------
3667/1/B BALL STANDARD BALUSTRADE TO
RAMP No 20 G.A & DETAILS
- --------------------------------------------------------------------------------
3668/69/l/D WALL RAILS TO STAIRS - GAS METER
ROOM / BOILER ROOM
- --------------------------------------------------------------------------------
3670/1/C WALL RAILS TO RAMPS LIFT LOBBY A
- --------------------------------------------------------------------------------
3671/1/B WALL RAILS TO RAMPS NORTH CORRID
- --------------------------------------------------------------------------------
3671/2/A WALL RAILS
- --------------------------------------------------------------------------------
3672/1/B WALL RAILS TO RAMP SOUTH CORRID
- --------------------------------------------------------------------------------
RV1035/8/C & RV1035/9/B VENTILATOR LOUVRE GRILLES
- --------------------------------------------------------------------------------
3674/1/C VEHICLE BUFFERS
- --------------------------------------------------------------------------------
3675/1/C COLUMN GUARDS
- --------------------------------------------------------------------------------
3676/1/B GATE TO LE-SUB
- --------------------------------------------------------------------------------
3677/1/A DUCT GUARD
- --------------------------------------------------------------------------------
3678/1/B HANDRAIL TO STAIR E
- --------------------------------------------------------------------------------
3680/1/D CORE STAIR A - FLIGHTS 22 TO 20 WELL
BALUSTRADE G.A
- --------------------------------------------------------------------------------
3680/2/D CORE STAIR A - FLIGHTS 19 TO 15 WELL
BALUSTRADE G.A
- --------------------------------------------------------------------------------
3680/3/E CORE STAIR A - FLIGHTS 14 TO 9 WELL
BALUSTRADE G.A
- --------------------------------------------------------------------------------
</TABLE>
15
<PAGE> 423
<TABLE>
<S> <C>
- --------------------------------------------------------------------------------
3680/4/D CORE STAIR A - FLIGHTS 8 TO 1 WELL
BALUSTRADE G.A
- --------------------------------------------------------------------------------
3680/6/D CORE A BALUSTRADE
- --------------------------------------------------------------------------------
3681/1/C CORE A FLIGHTS 22 To 20 WALL RAIL
G.A
- --------------------------------------------------------------------------------
3681/2/C CORE A FLIGHTS 19 TO 15 WALL RAIL
G.A
- --------------------------------------------------------------------------------
3681/3/C CORE A FLIGHTS 14 TO 9 WALL RAIL GA
- --------------------------------------------------------------------------------
3681/4/D CORE A FLIGHTS 8 TO 3 WALL RAIL GA
- --------------------------------------------------------------------------------
3681/5/C CORE A FLIGHTS 2 TO 1 WALL RAIL GA
- --------------------------------------------------------------------------------
3681/6/D CORE A BALUSTRADE & WALL PALM
DETAILS
- --------------------------------------------------------------------------------
3681/7/B CORE A WALL RAIL PLAN
- --------------------------------------------------------------------------------
3682/1/C CORE B WELL BALUSTRADE GA
- --------------------------------------------------------------------------------
3682/2/D CORE B WELL BALUSTRADE GA
- --------------------------------------------------------------------------------
3682/3/D CORE B BALUSTRADE DETAILS
- --------------------------------------------------------------------------------
3683/1/A CORE B WALL RAIL G.A
- --------------------------------------------------------------------------------
3683/2/B CORE B WALL RAIL G.A
- --------------------------------------------------------------------------------
3684/1/C CORE C WELL BALUSTRADE GA
- --------------------------------------------------------------------------------
3684/2/C CORE C WELL BALUSTRADE GA
- --------------------------------------------------------------------------------
3684/3/B CORE STAIR C BALUSTRADE DETAILS
- --------------------------------------------------------------------------------
3684/4/A CORE C BALUSTRADE DETAILS TO
FLIGHT 1
- --------------------------------------------------------------------------------
3685/1/B CORE C WALL RAIL (FLTS 18-7) & BAL
GA
- --------------------------------------------------------------------------------
3685/2/B CORE C WALL RAIL (FLTS 6-1) & BAL GA
- --------------------------------------------------------------------------------
3685/3/B CORE C OUTER BALUSTRADE
- --------------------------------------------------------------------------------
3685/4/A CORE C WALL RAIL
- --------------------------------------------------------------------------------
3687/1/B WALL CORE TO STAIR G
- --------------------------------------------------------------------------------
3688-SK3/A CUVRED RESTAURANT B'STRADE
- --------------------------------------------------------------------------------
3690/1/F FLR GRILLES LOWER GND FLOOR G.A
- --------------------------------------------------------------------------------
3690/2/E GRILLS TO COLONNADE DETAILS
- --------------------------------------------------------------------------------
3690/3/F COLONNADE GRILLS, HINGED PANEL
DETS
- --------------------------------------------------------------------------------
3690/4/D COLONNADE GRILLES (AIRPLENUMS
- --------------------------------------------------------------------------------
3690/5/E COLONNADE GRILLES STAIR & BAL
- --------------------------------------------------------------------------------
3691/1/B AIR GRILLES LOWER GRD FLOOR
LOCATION
- --------------------------------------------------------------------------------
3691/10/A PLENUM GRILLS, GL NORTH EW GRILLE
- --------------------------------------------------------------------------------
</TABLE>
17
<PAGE> 424
<TABLE>
<S> <C>
- --------------------------------------------------------------------------------
3691/12/E L.G FLR GRILLS PANEL G1-G5
- --------------------------------------------------------------------------------
3691/15/D LOWER GRD FLR GRILLES HINGED
PANEL
- --------------------------------------------------------------------------------
3691/2/B PLENUM GRILL LOWER GRD FL.R GRID
F+9
- --------------------------------------------------------------------------------
3691/4/C PLENUM GRILL LOWER G.GRILLE GRID
LINE 3
- --------------------------------------------------------------------------------
3691/5/B PLENUM GRILLS GRND FLOOR NW
CARTER LANE
- --------------------------------------------------------------------------------
3691/6/B PLENUM GRILLS GRD FLR NE CARTER
LANE
- --------------------------------------------------------------------------------
3691/7/C PLENUM GRILLS GRD FLR NORTH ELE
- --------------------------------------------------------------------------------
3691/9/B PLENUM GRILLS FLR NORTH ELV TYP
DETS
- --------------------------------------------------------------------------------
3692/1/I NORTH ELV-2ND FLOOR BALCONY
- --------------------------------------------------------------------------------
3692/2/G 2ND FLOOR BALCONY STRUCTURE
- --------------------------------------------------------------------------------
3692/3/C NORTH ELV 2ND FLOOR BALCONY RWP
- --------------------------------------------------------------------------------
3694/1/A lst FLR BALCONY BALUSTRADE SOUTH
ELV G.A
- --------------------------------------------------------------------------------
3695/1/A 4TH FLOOR BALCONY BALUSTRADE
- --------------------------------------------------------------------------------
3696/1/D PARAPET RAILS LEVEL 4 G.A
- --------------------------------------------------------------------------------
3697/1/C PARAPET RAILS LEVEL 5 G.A
- --------------------------------------------------------------------------------
3698/4/F WINDOW GUARD UNITS / PARAPET RAIL
LEVEL 4 G.A
- --------------------------------------------------------------------------------
3698/8/A WINDOW GUARD UNITS TO LEVEL 1 G.A
- --------------------------------------------------------------------------------
3934/1/B STEEL STAIR & HANDRAIL TO CORE B
- --------------------------------------------------------------------------------
3935/1/B PIPE BRIDGE
- --------------------------------------------------------------------------------
3911/1/B HANDRAIL TO SOUTH SIDE
- --------------------------------------------------------------------------------
3911/2/C HANDRAIL TO SOUTH SIDE
- --------------------------------------------------------------------------------
3916/1/A STEEL STAIR & BALUSTRADE TO
SPINKLER CHAMBER
- --------------------------------------------------------------------------------
3920/1/A STAIR TO LIFT MOTOR
- --------------------------------------------------------------------------------
</TABLE>
18
<PAGE> 425
HENDERSON-BOSTWICK Package 4575
SOUTHERN REGION Metal Doors
Crow House, Crow Arch Lane Ind Est, RINGWOOD, Hants BH24 1PD
Tel: (01425) 462020 Fax: (01425) 462035
MACE Limited Our Ref: GB/PJ901670/jeb
Petershill Site Office
1, Carter Lane
Off Knightrider Court
London
EC4V 5ER
19 November 1997
For the attention of Mike Handley
Dear Sirs,
RE: Petershill, London EC4
In accordance with your letter we have pleasure in enclosing herewith as
requested 3 no. copies of an Operating and Maintenance Manual applicable to the
above contract.
Each folder contains:-
Standard 'Operating, Safety, Maintenance and Repair Instruction' leaflet.
Specific Servicing and Maintenance instructions relevant to Defendors,
Slideovers and Firetex doors.
Defendor, Slideover and Firetex Sales and Technical literature.
Contract drawing(s) 901670 -01B, -02B, -03A, -04B, -05A, -06B, -09B, -10C, -11D,
- -12B -13B, -14, -15C, -16, -21, -22.
We trust that the above provides you with the information required.
Assuring you of our best attention at all times.
Yours faithfully,
for HENDERSON-BOSTWICK INDUSTRIAL DOORS LTD
/S/ Gary Bristow
- --------------------------
GARY BRISTOW
Contracts Administrator
<TABLE>
<CAPTION>
- -------------------------------------
PETERSHILL LONDON, EC4
RECEIVED
20 NOV 1997
- -------------------------------------
<S> <C> <C>
ACTION INFO
- -------------------------------------
MH
- -------------------------------------
RB
- -------------------------------------
AP
- -------------------------------------
MK
- -------------------------------------
[ILLEGIBLE]
- -------------------------------------
[ILLEGIBLE]
- -------------------------------------
[ILLEGIBLE]
- -------------------------------------
[ILLEGIBLE]
- -------------------------------------
[ILLEGIBLE]
- -------------------------------------
[ILLEGIBLE]
- -------------------------------------
[ILLEGIBLE]
- -------------------------------------
[ILLEGIBLE]
- -------------------------------------
[ILLEGIBLE]
- -------------------------------------
JD
- -------------------------------------
BGo.
- -------------------------------------
[ILLEGIBLE]
- -------------------------------------
FILE 4575
- -------------------------------------
mace limited m|a|c|e
- -------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
[LPCB LOGO] Henderson-Bostwick Industrial Doors Ltd [DSMA LOGO]
Registered in England No. 1129675
Registered Office: Grange Close, Clover Nook Industrial Park, Somercotes,
Derbyshire DE55 4QT.
The name Henderson is used by Henderson-Bostwick Industrial Doors Limited under
license.
<PAGE> 426
A DAVIES SHOPFITTERS
CLIENT MANUAL
OPERATION AND MAINTENANCE
(Incorporating CDM)
for
MEPC
PACKAGE NO. 4750:
ENTRANCE HALL/RECEPTION
at
PETERSHILL, LONDON EC4
created by
A DAVIES & CO (SHOPFITTERS) LTD
18 HORN LANE
LONDON
W3 6QU
TEL: 0181 992 3444
FAX: 0181 992 0726
Project Co-Ordinator Date: 31st October 1997 Ref: 3952
<PAGE> 427
DAVIES
CONTENTS
<TABLE>
<S> <C>
1. Operation & Maintenance Manual
2. Setting Out Drawings:
A) 3952/2 Ground Floor North Entrance Scale Plan
B) 3952/3 Stone ElevatIon @ A-A, B-B & Full Size Scale Plan Details
C) 3952/4 Elevation @ E-E
D) 3952/5 Elevations C-C & D-D Lift Lobby & Reception Area
E) 3952/6 Heights throu' Walls Stonework Fixing Details & Floor Details
F) 3952/7 Reflective Ceiling Plan
G) 3952/8 Screen Wall to Fancoil Unit Elevations
H) 3952/9 Screen Wall to Fancoil Unit Support Framing
I) 3952/10 Screen Wall to Fancoil Unit Height Sections
J) 3952/11 Screen Wall to Fancoil Unit Plan Details
K) 3952/12 Plan of Blockwork Face of Stonework
L) 3952/13 Sections throu' Ceiling and Full Size Details
M) 3952/14 Metal Floor @ Reception Desk and Fancoil Unit
N) 3952/15 Height and Plan @ Office & Cupboard Doors
0) 3952/16 Nameboards 'On Hold'
P) 3952/17 Entrance Mat
Q) 3952/18 Fancoil Housing Veneer Detail
R) 3952/19 Metal Fixing Details @ Stone Soffit
</TABLE>
<PAGE> 428
Package 5500 Facade Hoists Ltd
Facade Maintenance Equipment
PETERSHILL
SPECIFICATION
AND
OPERATING/MAINTENANCE
INSTRUCTIONS
<PAGE> 429
------------
PETERSHILL
------------
--------------------
PACKAGE 5500
FACADE MAINTENANCE
--------------------
---------------------------
S P E C I F I C A T I O N
---------------------------
<PAGE> 430
SECTION 6
DRAWINGS
<PAGE> 431
Package 5500 Facade Hoists Ltd. Facade Maintenance
Equipment
FH 984 B
1798-8
1798-6 A
1798-5 D
1798-4 A
FH 101 A
1798-2 D
FH 100 1 rev D
1798-3 A
FH 752-3M rev B
1798-L-1
304-14
ACE 9004
900-15-3
900-15-2
300-15-TLS
1798-L-15
<PAGE> 432
Package 6300 Andrew Weatherfoil Ltd Mechanical Services
MASTER INDEX
INTRODUCTION: General information on contents of manual including services
covered by manual. Design and performance data. List of
abbreviations. Schedule of recoed drawings. Director of
manufacturers.
SECTION 1: DESCRIPTION OF SERVICES
General description of the services embraced by this manual,
their major components and functions.
SECTION 2: OPERATING PROCEDURE
Details of operation of the main plant items. Preliminary
checks, start up, running checks, shutdown and emergency
shutdown.
SECTION 3: EQUIPMENT SCHEDULES
Technical details of all Plant and Equipment, manufacturers,
types, duties, serial numbers etc.
SECTION 4: MAINTENANCE PROCEDURES
Outline of various procedures for maintaining the services and
equipment detailed.
SECTION 5: FAULT TRACING
General notes on safety procedures and details of fault
tracing.
SECTION 6: RECOMMENDED SPARES
Recommendation of minimum requirement of spares to be held in
stock.
SECTION 7: COMMISSIONING DATA
Complete set of commissioning test results for all systems
detailed within this manual.
SECTION 8: MANUFACTURERS LITERATURE
Individual manufacturers technical literature.
SECTION 9: OPERATING AND MAINTENANCE MANUAL FOR THE SPRINKLER, DRY RISER
AND FIRST AID HOSEREEL SYSTEMS
<PAGE> 433
MECHANICAL - SERVICES
PETERSHILL
NM6267 / S / RD-1000
================================================================================
<TABLE>
<CAPTION>
DRAWING
NUMBER DESCRIPTION
================================================================================
<S> <C>
RD-1001 BASEMENT MECHANICAL CO-ORD SERVICES LAYOUT
RD-1002 BASEMENT MECHANICAL CO-ORD SERVICES SECTION
RD-1003 BASEMENT MECHANICAL CO-ORD SERVICES SECTION
RD-1004 BASEMENT MECHANICAL CO-ORD SERVICES SECTION
RD-1005 BASEMENT MECHANICAL CO-ORD SERVICES SECTION
RD-1006 BASEMENT MECHANICAL CO-ORD SERVICES PLANTROOM No1 PLAN
RD-1007 BASEMENT MECHANICAL CO-ORD SERVICES PLANTROOM No1 SECTIONS
RD-1008 BASEMENT MECHANICAL CO-ORD SERVICES PLANTROOM No1 SECTIONS
RD-1009 BASEMENT MECHANICAL CO-ORD SERVICES PLANTROOM No2 PLAN
RD-1010 BASEMENT MECHANICAL CO-ORD SERVICES PLANTROOM No2 SECTIONS
RD-1011 BASEMENT MECHANICAL CO-ORD SERVICES PLANTROOM No2 SECTIONS
RD-1012 BASEMENT MECHANICAL CO-ORD SERVICES PLANTROOM No3 PLAN
RD-1013 BASEMENT MECHANICAL CO-ORD SERVICES PLANTROOM No3 SECTIONS
RD-1014 BASEMENT MECHANICAL CO-ORD SERVICES PLANTROOM No3 SECTIONS
RD-1015 BASEMENT MECHANICAL CO-ORD SERVICES PLANTROOM No4 PLAN
RD-1016 BASEMENT MECHANICAL CO-ORD SERVICES PLANTROOM No4 SECTIONS
RD-1017 BASEMENT MECHANICAL CO-ORD SERVICES PLANTROOM No4 SECTIONS
RD-1018 BASEMENT BOILER ROOM MECHANICAL CO-ORD SERVICES LAYOUT
RD-1019 BASEMENT BOILER ROOM MECHANICAL CO-ORD SERVICES SECTIONS
RD-1020 BASEMENT BOILER ROOM MECHANICAL CO-ORD SERVICES SECTIONS
RD-1021 LOWER GROUND FLOOR MECHANICAL CO-ORD SERVICES LAYOUT
RD-1022 GROUND FLOOR MECHANICAL CO-ORD SERVICES LAYOUT
RD-1023 1st TO 3rd FLOOR MECHANICAL CO-ORD SERVICES LAYOUT (TYP)
RD-1024 4TH FLOOR MECHANICAL CO-ORD SERVICES LAYOUT (MANAGEMENT SUITE)
RD-1025 4TH FLOOR MECHANICAL CO-ORD SERVICES LAYOUT SECTIONS (MANAGEMENT SUITE)
RD-1026 5TH FLOOR/ROOF MECHANICAL CO-ORD SERVICES LAYOUT
RD-1027 CORE A MECHANICAL CO-ORD SERVICES LAYOUT PLAN
RD-1028 CORE A MECHANICAL CO-ORD SERVICES LAYOUT PLAN & SECTIONS
RD-1029 4TH FLOOR DIFFUSER LAYOUT
RD-1030 CORE B MECHANICAL CO-ORD SERVICES LAYOUT PLAN
RD-1031 CORE B MECHANICAL CO-ORD SERVICES LAYOUT PLAN & SECTIONS
RD-1032 CORE B MECHANICAL CO-ORD SERVICES LAYOUT SECTIONS
RD-1033 CORE C MECHANICAL CO-ORD SERVICES LAYOUT PLAN
RD-1034 CORE C MECHANICAL CO-ORD SERVICES LAYOUT PLAN & SECTIONS
RD-1035 CORE C MECHANICAL CO-ORD SERVICES LAYOUT SECTIONS (4TH FLOOR)
RD-1036 CORE D MECHANICAL CO-ORD SERVICES LAYOUT LOWER GROUND FLR TOILETS
RD-1037 CORE D MECHANICAL CO-ORD SERVICES LAYOUT PLAN & SECT (TYP FLOOR TOILETS)
RD-1038 CORE D MECHANICAL CO-ORD SERVICES LAYOUT-SECTIONS 4TH FLOOR TOILETS
RD-1039 OFFICE AIR CONDITIONING SCHEMATIC (CORES A-D INCL)
RD-1040 CHILLED WATER SCHEMATIC
RD-1041 HEATING SCHEMATIC
RD-1042 ANCILLARY AREAS VENTILATION SCHEMATIC
RD-1043 CORE D MECHANICAL CO-ORD SERVICES LAYOUT 5TH FLOOR TOILETS
RD-1044 5TH FLOOR CHILLER ENCLOSURE & DETAILS
RD-1045 5TH FLOOR MECHANICAL SERVICES LAYOUT FIFTH FLOOR SECTIONS
RD-1046 BASEMENT MECHANICAL CO-ORD SERVICES LAYOUT CORE C
RD-1047 BASEMENT MECHANICAL CO-ORD SERVICES LAYOUT CORE C SECTIONS
RD-1048 LOADING BAY SMOKE DUCT PLAN & SECTIONS (BASEMENT)
RD-1049 CORE C HTG. & CH.W BRANCHES TO FLOORS LG-3RD TYPICAL
RD-1050 DETAILS OF RECEPTION AREA FCU. GROUND FLOOR ENTRANCE
RD-1051 BASEMENT BOILER ROOM HTG SCHEMATIC & VALVE SCHEDULE
RD-1052 BASEMENT PLANTROOM 4 CHW SCHEMATIC & VALVE SCHEDULE
RD-1053 BASEMENT PLANTROOM 3 HTG SCHEMATIC, CHW SCHEMATIC & VALVE SCHEDULES
RD-1054 BASEMENT PLANTROOM 1 HTG SCHEMATIC, CHW SCHEMATIC & VALVE SCHEDULES
RD-1055 BASEMENT PLANTROOM 2 HTG SCHEMATIC & VALVE SCHEDULES
RD-1056 BASEMENT HTG & CHW SPRINKLER SCHEMATIC & VALVE SCHEDULES
RD-1057 CORE A RISER HTG & DOMESTIC WATER SCHEMATIC
RD-1058 CORE B/D RISER HTG & COLD WATER SCHEMATIC & VALVE SCHEDULES
RD-1059 CORE B RISER CHW SCHEMATIC & VALVE SCHEDULES
RD-1060 BASEMENT CORE C RISER SCHEMATIC & VALVE SCHEDULES
</TABLE>
01/02/1998 SHEET 1 OF 4
================================================================================
<PAGE> 434
MECHANICAL - SERVICES
PETERSHILL
NM6267 / S / RD-1000
================================================================================
<TABLE>
<CAPTION>
DRAWING
NUMBER DESCRIPTION
================================================================================
<S> <C>
RD-1061 BASEMENT MECHANICAL BOILER ROOM SUPPLY SCHEMATIC
RD-1062 PART OFFICE AIR-COND CORES 'A' & 'B' PLANTROOM EXTRACT SCHEMATIC PLANTROOM 1
RD-1063 TRUCK DOCK EXTRACT, CARPARK SUPPLY PLANTROOM SUPPLY SCHEMATIC PLANTROOM 2
RD-1064 PART OFFICE AIR-COND CORES 'B' 'C' 'D' CAR PARK EXTRACT SCHEMATIC PLANTROOM 3
RD-1065 PART OFFICE AIR-COND. CORE 'C' PLANTROOM EXTRACT SCHEMATIC PLANTROOM 4
</TABLE>
01/02/1998 SHEET 2 OF 4
================================================================================
<PAGE> 435
SPRINKLER - SERVICES
PETERSHILL
NM6267 / S / RD-3000
================================================================================
<TABLE>
<CAPTION>
DRAWING
NUMBER DESCRIPTION
================================================================================
<S> <C>
RD-3001 BASEMENT SPRINKLER LAYOUT
RD-3002 BASEMENT BOILER ROOM SPRINKLER PIPEWORK LAYOUT
RD-3003 PLANTROOM No1 SPRINKLER LAYOUT
RD-3004 PLANTROOM No2 SPRINKLER LAYOUT
RD-3005 PLANTROOM No3 SPRINKLER LAYOUT
RD-3006 PLANTROOM No4 SPRINKLER LAYOUT
RD-3007 CORE 'A' RISER DRAWING
RD-3008 CORE 'C' RISER DRAWING
RD-3009 BASEMENT BOILER ROOM SPRINKLER PIPEWORK SECTIONS
RD-3010 BASEMENT PLANTROOM No1 SPRINKLER PIPEWORK SECTIONS
RD-3011 BASEMENT PLANTROOM No1 SPRINKLER PIPEWORK SECTIONS
RD-3012 BASEMENT PLANTROOM No2 SECTIONS
RD-3013 LOWER GROUND FLOOR VALVE CHAMBER
RD-3014 SCHEMATIC & SPRINKLER VALVE SETS
</TABLE>
01/02/1998 SHEET 3 OF 4
================================================================================
<PAGE> 436
PUBLIC HEALTH
PETERSHILL
NM6267 / S / RD-2000
================================================================================
<TABLE>
<CAPTION>
DRAWING
NUMBER DESCRIPTION
================================================================================
<S> <C>
RD-2001 BASEMENT PUBLIC HEALTH SERVICES
RD-2002 LOWER GROUND FLOOR PUBLIC HEALTH SERVICES
RD-2003 GROUND FLOOR PUBLIC HEALTH SERVICES
RD-2004 TYPICAL 1ST TO 3RD FLOOR PUBLIC HEALTH SERVICES
RD-2005 4TH FLOOR PUBLIC HEALTH SERVICES
RD-2006 5TH FLOOR PUBLIC HEALTH SERVICES
RD-2007 DOMESTIC WATER SERVICES SCHEMATIC
RD-2008 FOUL WATER DRAINAGE SCHEMATIC
RD-2009 TWO OLD CHANGE COURT LOWER GROUND FLOOR PUBLIC HEALTH SERVICES
RD-2010 SETTING OUT OF TYPICAL TOILET AREA CORE 'D' PUBLIC HEALTH SERVICES
RD-2011 CORE 'A' BASEMENT FLOOR PLAN-SANITATION RAINWATER & WATER SERVICES
RD-2012 CORE 'D' PUBLIC HEALTH CO-ORDINATED SERVICES LAYOUT PLAN VIEW
RD-2013 TWO OLD CHANGE COURT LOWER GROUND & GROUND FLOOR PUBLIC HEALTH SERVICES
</TABLE>
01/02/1998 SHEET 4 OF 4
================================================================================
<PAGE> 437
Package 6700
BMS & Controls
- --------------------------------------------------------------------------------
SECTION 1 DRAWING SCHEDULE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECTION 2 DESCRIPTION OF OPERATION
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECTION 3 SOFTWARE FLOW DIAGRAMS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECTION 4 MANUFACTURERS LITERATURE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECTION 5 SCHEDULE OF SPARES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECTION 6 PREVENTATIVE MAINTENANCE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECTION 7 TEST CERTIFICATES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECTION 8 RECORD DRAWINGS AND SCHEDULES
- --------------------------------------------------------------------------------
SYNCHRONISED SYSTEMS LTD
HORTON ROAD
COLNBROOK
SLOUGH
BERKSHIRE SL3 0AT
TEL: 01753 788000
FAX: 01753 771001
<PAGE> 438
Building Energy Management System Operating and Maintenance Manual
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
================================================================================
Drawing Number Description
================================================================================
<S> <C>
S96064-01 Schematic Diagram for L.A.N. 011 & Inter-Network
S96064-02 Spare
S96064-03 Reserved for future LG Floor Network
S96064-04 Reserved for future Gnd. Floor Network
S96064-05 Reserved for future 1st. Floor Network
S96064-06 Reserved for future 2nd. Floor Network
S96064-07 Reserved for future 3rd. Floor Network
S96064-08 Schematic Diagram for 4th Floor L.A.N. 017
S96064-09 Spare
S96064-10 4th Floor Fan Coil Units - B.M.S. Controller Reference Schedule
S96064-11 4th Floor Fan Coil Units - Typical 'master' controller (Zones 1, 2 & 4)
S96064-12 4th Floor Fan Coil Units - Typical 'slave' controller (Zones 1, 2 & 4)
S96064-12/1 4th Floor Fan Coil Units - FCU 11 Schematic Wiring / General Arrangement
S96064-13 4th Floor Fan Coil Units - FCU 30 Schematic Wiring / General Arrangement
S96064-14 4th Floor Fan Coil Units - FCU 8 Schematic Wiring / General Arrangement
S96064-15 4th Floor Fan Coil Units - FCU 9 Schematic Wiring / General Arrangement
S96064-16 Spare
S96064-17 Spare
S96064-18 Spare
S96064-19 Spare
S96064-20 MCC1 - Equipment Schedule & Notes
S96064-21 MCC1 - Schematic Wiring Diagram (Sheet 1 of 9)
S96064-22 MCC1 - Schematic Wiring Diagram (Sheet 2 of 9)
S96064-23 MCC1 - Schematic Wiring Diagram (Sheet 3 of 9)
S96064-24 MCC1 - Schematic Wiring Diagram (Sheet 4 of 9)
S96064-25 MCC1 - Schematic Wiring Diagram (Sheet 5 of 9)
S96064-26 MCC1 - Schematic Wiring Diagram (Sheet 6 of 9)
S96064-27 MCC1 - Schematic Wiring Diagram (Sheet 7 of 9)
S96064-28 MCC1 - Schematic Wiring Diagram (Sheet 8 of 9)
S96064-29 MCC1 - Schematic Wiring Diagram (Sheet 9 of 9)
S96064-30 Spare
S96064-31 MCC1 - General Arrangement Diagram
S96064-32 MCC1 - Internal Layout Diagram
S96064-33 MCC1 - Label Details
S96064-34 Spare
S96064-35 MCC2 - Equipment Schedule & Notes
S96064-36 MCC2 - Schematic Wiring Diagram (Sheet 1 of 13)
S96064-37 MCC2 - Schematic Wiring Diagram (Sheet 2 of 13)
S96064-38 MCC2 - Schematic Wiring Diagram (Sheet 3 of 13)
S96064-39 MCC2 - Schematic Wiring Diagram (Sheet 4 of 13)
S96064-40 MCC2 - Schematic Wiring Diagram (Sheet 5 of 13)
S96064-41 MCC2 - Schematic Wiring Diagram (Sheet 6 of 13)
S96064-42 MCC2 - Schematic Wiring Diagram (Sheet 7 of 13)
S96064-43 MCC2 - Schematic Wiring Diagram (Sheet 8 of 13)
S96064-44 MCC2 - Schematic Wiring Diagram (Sheet 9 of 13)
S96064-45 MCC2 - Schematic Wiring Diagram (Sheet 10 of 13)
S96064-46 MCC2 - Schematic Wiring Diagram (Sheet 11 of 13)
S96064-47 MCC2 - Schematic Wiring Diagram (Sheet 12 of 13)
S96064-48 MCC2 - Schematic Wiring Diagram (Sheet 13 of 13)
S96064-49 Spare
S96064-50 MCC2 - General Arrangement Diagram
S96064-51 MCC2 - Internal Layout Diagram
S96064-52 MCC2 - Label Details
================================================================================
</TABLE>
continued...
- --------------------------------------------------------------------------------
Petershill, EC4 Page 3
<PAGE> 439
Building Energy Management System Operating and Maintenance Manual
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
================================================================================
Drawing Number Description
================================================================================
<S> <C>
S96064-52 Spare
S96064-53 Spare
S96064-54 Spare
S96064-55 MCC3 - Equipment Schedule & Notes
S96064-56 MCC3 - Schematic Wiring Diagram (Sheet 1 of 8)
S96064-57 MCC3 - Schematic Wiring Diagram (Sheet 2 of 8)
S96064-58 MCC3 - Schematic Wiring Diagram (Sheet 3 of 8)
S96064-59 MCC3 - Schematic Wiring Diagram (Sheet 4 of 8)
S96064-60 MCC3 - Schematic Wiring Diagram (Sheet 5 of 8)
S96064-61 MCC3 - Schematic Wiring Diagram (Sheet 6 of 8)
S96064-62 MCC3 - Schematic Wiring Diagram (Sheet 7 of 8)
S96064-63 MCC3 - Schematic Wiring Diagram (Sheet 8 of 8)
S96064-64 Spare
S96064-65 MCC3 - General Arrangement Diagram
S96064-66 MCC3 - Internal Layout Diagram
S96064-67 MCC3 - Label Details
S96064-68 Spare
S96064-69 MCC4 - Equipment Schedule & Notes
S96064-70 MCC4 - Schematic Wiring Diagram (Sheet 1 of 9)
S96064-71 MCC4 - Schematic Wiring Diagram (Sheet 2 of 9)
S96064-72 MCC4 - Schematic Wiring Diagram (Sheet 3 of 9)
S96064-73 MCC4 - Schematic Wiring Diagram (Sheet 4 of 9)
S96064-74 MCC4 - Schematic Wiring Diagram (Sheet 5 of 9)
S96064-75 MCC4 - Schematic Wiring Diagram (Sheet 6 of 9)
S96064-76 MCC4 - Schematic Wiring Diagram (Sheet 7 of 9)
S96064-77 MCC4 - Schematic Wiring Diagram (Sheet 8 of 9)
S96064-78 MCC4 - Schematic Wiring Diagram (Sheet 9 of 9)
S96064-79 Spare
S96064-80 MCC4 - General Arrangement Diagram
S96064-81 MCC4 - Internal Layout Diagram
S96064-82 MCC4 - Label Details
S96064-83 Roof Outstation C1R - Equipment Schedule & Notes
S96064-84 Roof Outstation C1R - Schematic Wiring Diagram (Sheet 1 of 2)
S96064-85 Roof Outstation C1R - Schematic Wiring Diagram (Sheet 2 of 2)
S96064-86 Roof Outstation C1R - General Arrangement Diagram / Label Details
S96064-87 Spare
S96064-86 Spare
S96064-88 Spare
S96064-89 C.A.V. Controllers CLGA, CGA, C1A, C2A, C3A & C5A - Sch.
Wiring Diagram
S96064-90 Constant Volume (C.A.V.) Controller C4A - Schematic Wiring Diagram
S96064-91 C.A.V. Controllers CLGB, C1B, C2B & C3B - Schematic Wiring Diagram
S96064-92 Constant Volume (C.A.V.) Controller CGB - Schematic Wiring Diagram
S96064-93 Constant Volume (C.A.V.) Controllers C4B - Schematic Wiring Diagram
S96064-94 Constant Volume (C.A.V.) Controllers C5B - Schematic Wiring Diagram
S96064-95 C.A.V. Controllers CLGC, CGC, C1C & C2C - Schematic Wiring Diagram
S96064-96 Constant Volume (C.A.V.) Controllers C3C - Schematic Wiring Diagram
S96064-97 Constant Volume (C.A.V.) Controller C4C - Schematic Wiring Diagram
S96064-98 Constant Volume Controller - Typical Enclosure Gen. Arrangement / Labels
S96064-99 MCC & B.M.S. / Fire System - Cause & Effect Table
S96064-100 Spare
S96064-101 Spare
S96064-102 Spare
S96064-103 Spare
================================================================================
</TABLE>
continued...
- --------------------------------------------------------------------------------
Petershill, EC4 Page 4
<PAGE> 440
ABBEY THERMAL INSULATION LIMITED
10 Riverside House
Lower Southend Road, Wickford, Essex, SS11 8BB
Telephone: 01268 572116 o Facsimile: 01268 572117
OPERATING & MAINTENANCE MANUAL
THERMAL INSULATION & FIRE PROTECTION
PETERSHILL PACKAGE 6900
Registered Office: No. 1 Skylines, Limeharbour, Isle of Dogs, London E14 9TS
Registered Number: 2814170
<PAGE> 441
- --------------------------------------------------------------------------------
OPERATING & MAINTENANCE MANUAL PETERSHILL
- --------------------------------------------------------------------------------
CONTENTS
GENERAL PARTICULARS 2
OPERATION 3
MAINTENANCE 4
REPLACEMENTS 5
REPAIRS & SPECIFICATIONS 6 - 10
MANUAL DRAWINGS 11
INSPECTION 12
- --------------------------------------------------------------------------------
OMM 1
<PAGE> 442
Package 7000
MEPC (UK) Ltd
Petershill
London EC4
ELECTRICAL SERVICES
Operation & Maintenance Manual
N.G. Bailey
<PAGE> 443
MEPC (UK) Ltd
Petershill
ELECTRICAL SERVICES
Operation & Maintenance Manual
Contents
Foreword
Amendment Record Sheet
Health and Safety
SECTION 1 ELECTRICAL SERVICES INSTALLATION
SECTION 2 LV SUPPLIES AND DISTRIBUTION
SECTION 3 SMALL POWER
SECTION 4 LIGHTING SYSTEM
SECTION 5 MANUFACTURERS AND SUPPLIERS
SECTION 6 RECORD DOCUMENTATION
SECTION 7 RECORD DRAWINGS
<PAGE> 444
[LOGO]
Bailey
N G BAILEY & CO LTD
MEPC PETERSHILL RECORD DRAWINGS
CONTENTS
Drawing No. Description
E1 Main LV Schematic
E2 Not Issued (covered by Cerberus Fire Alarms)
E3 Electrical Services Detail Sheet
E4 Schedule of Luminaires and Electrical Symbols
E5 Basement Power Distribution
E6/1 Basement Co-ordination Services Sections AA-EE
E6/2 Basement Co-ordination Services Section D-D
E6/3 Basement Co-ordination Services Section F-F
E6/4 Basement Co-ordination Services Sections GG, HH + JJ
E7 Basement Lighting
E8 Modular Wiring 4th Floor Marketing Suite
E9/1 LV Switchroom Co-ordinated Services Plan Layout
E9/2 LV Switchroom Co-ordinated Services Sections
E10/1 Core B Riser Layout
E10/2 Core C Riser Layout
E11 Electrical Services Lower Ground Floor
E12 Electrical Services Ground Floor
E13 Main Entrance Electrical Services Lighting Layout
E14 Main Entrance Electrical Services Power Layout
E15 1st to 3rd Floors Electrical Services
E16 4th Floor Electrical Power and Ancillary Services
E17 4th Floor Lighting Layout
E18 5th Floor Electrical Services
E19 5th Floor Electrical Services
E20 External Lighting Layout
E21 Colonnade External Lighting
E22 Main Earthing and Details
E23 Ground to 4th Floor High Level Toilet Core
E24 Ground to 4th Floor Low Level Toilet Core
E25 5th Floor High Level Toilet Core
E26 5th Floor Low Level Toilet Core
<PAGE> 445
T & R GENERATORS LTD
KEENS LANE, GUILDFORD, SURREY, GU3 3JS, U.K.
TEL: 01483 235666. FAX: 01483 236610
- --------------------------------------------------------------------------------
TECHNICAL, OPERATION AND
MAINTENANCE MANUAL
- --------------------------------------------------------------------------------
SET SERIAL NO. GA7167/1
CUSTOMER: N.G. BAILEY & CO. LTD.
SITE: PETERSHILL, LONDON EC4.
- --------------------------------------------------------------------------------
ENGINE: PERKINS 3152.4
ALTERNATOR: MECC ALTE ECN 31LA
CONTROL SYSTEM: AUTOMATIC MAINS FAILURE
INSTALATION: FUEL TANK MOUNTED, SOUND ATTENUATED ENCLOSURE
- --------------------------------------------------------------------------------
CONTENTS
1. TECHNICAL, OPERATION AND MAINTENANCE MANUAL
2. ENGINE MANUAL
3. ALTERNATOR MANUAL
4. DATA SHEETS
5. BATTERY CHARGING
6. WIRING DIAGRAMS
- --------------------------------------------------------------------------------
<PAGE> 446
[LOGO]
Package 7050
Fire Detection and Alarm System
Operation and Maintenance Manual
No. 5376/FO1483.001
Petershill - London
April 1997
Cerberus Limited
Trinity Court, Wokingham
BERKSHIRE, RG41 3AE
Telephone: Reading (0118) 989 9234
Fax: Reading (0118) 989 9235
<PAGE> 447
[LOGO] CERBERUS
CERBERUS FIRE AND SECURITY SYSTEMS
SAFEGUARD LIFE AND PROPERTY
FIRE DETECTION AND ALARM SYSTEM
OPERATION AND MAINTENANCE MANUAL
PETERSHILL - LONDON
NO. 5376/FO1483.001
CONTENTS
1. INTRODUCTION
1.1 SYSTEM OVERVIEW
1.2 FIRE ALARM STRATEGY
2. FIRE ALARM SYSTEM
2.1 MAINTENANCE MANUAL/HARDWARE DESCRIPTION
2.2 EQUIPMENT DATA SHEETS
2.3 EQUIPMENT TECHNICAL / OPERATING DESCRIPTIONS
2.4 DRAWINGS
3. MAINTENANCE
3.1 CERBERUS CUSTOMER SERVICE POLICY STATEMENT
3.2 ANNUAL PREVENTATIVE MAINTENANCE OVERVIEW
3.3 USER RESPONSIBILITY
3.4 SYSTEM LOGBOOK / SERVICE DIRECTORY
3.5 COMMISSIONING CERTIFICATE
3.6 CERBERUS HEALTH AND SAFETY POLICY STATEMENT
<PAGE> 448
Document Transmittal Note/Print Request
[GRAPHIC OMITTED]
<PAGE> 449
[LOGO]
CUTTING
&
company
OPERATION AND
MAINTENANCE MANUAL
FOR THE
LIGHTNING PROTECTION SYSTEM
AT
PETERSHILL, LONDON, E.C.4.
TRADE CONTRACTOR R.C. CUTTING & CO. LTD.
TRADE DESCRIPTION LIGHTING PROTECTION
WORKS PACKAGE CODE 7300
R.C. CUTTING & COMPANY LIMITED LIGHTNING PROTECTION ENGINEERS
WEMBURY ROAD HIGHGATE LONDON N6 5PX TELEPHONE [LOGO]
0181 348 0052 FAX 0181 348 3273
--------
REGISTERED OFFICE AS ABOVE REGISTERED NUMBER 326209 ENGLAND
MEMBER OF THE NATIONAL FEDERATION OF MASTER STEEPLEJACKS &
LIGHTNING CONDUCTOR ENGINEERS
Membership No. 4603
<PAGE> 450
Project PETERSHILL, LONDON, E.C.4.
Works LIGHTNING PROTECTION SYSTEM
Subject OPERATION & MAINTENANCE MANUAL
CONTENTS
Page Description
1 SCOPE OF THE SYSTEM
2 OPERATION AND MAINTENANCE REQUIREMENTS
3 PARTS / SPARES LIST
4 TEST CERTIFICATE
5 AS INSTALLED LAYOUT DRAWING
<PAGE> 451
[GRAPHIC OMITTED]
SITE ADDRESS
PETERSHILL
LONDON EC4
LIGHTNING PROTECTION
DRAWING NUMBER
296
<PAGE> 452
OWNERS INFORMATION MANUAL
NEW LIFT INSTALLATION
AT
PETERSHILL
No. 1 CARTER LANE
LONDON
EC4
1 X 2,000 KG. GOODS LIFT
78NW2444
<PAGE> 453
CONTENTS
General Information
Safety 3
Safe Lift Operation 7
Design Intent 9
Responsibility and Warranty 11
Statutory Requirements 13
Operation 15
Full Collective Control 17
Technical Description
Specification Summary 1
18 ATF Machine 2
MCS 321 Microprocessor Control System 3
Governor 9669A 4
Buffers 5
VF Motion Control 6
Top of Car Inspection 7
Wiring 8
Vandal Resistant Fixtures 9
Guide Shoes 10
DO 2000 Door Operator 11
Lambda Door Detector 12
Car and Landing Doors 13
Safety Type 9672D 14
Ancilliary Equipment 15
Preventative Maintenance
Programmed and Planned Maintenance 1
Parts List - Machine 2
Parts List - Door Detector 3
Drawings
As Built Drawings 1
Certificates
Test Certificates 1
Testing Method Statement 2
Maintenance Documentation
F54 Certificates 1
<PAGE> 454
Otis Pk
Goods Lift
Drawing no 78NW2444 sheet 1 rev C
2 rev C
3 rev C
4 rev C
5 rev B
Passenger Lift
78NW2440 sheet 1 rev C
2 rev C
3 rev C
4 rev C
5 rev B
6 rev B
7 rev B
Olympic Finisher Ltd T/3603/ 01 rev D
02 rev C
03 rev B
04 rev A
05 rev B
06 rev B
07 rev B
08 rev A
10 rev B
11 rev B
<PAGE> 455
Otis continued)
12 rev A
14 rev A
15 rev B
16 rev B
17 rev A
18 rev B
19 rev A
<PAGE> 456
McNICHOLAS PLC [LOGO]
================================================================================
OPERATION & MAINTENANCE MANUAL
MEPC - PETERSHILL
ONE CARTER LANE
LONDON EC4
PACKAGE 8100 - HARD LANDSCAPING
McNICHOLAS PLC
McNICHOLAS HOUSE
KINGSBURY ROAD
LONDON
NW9 8XE
Tel: 0181 200 0303
Fax: 0181 205 6767
Signed: ___________________
On behalf of McNicholas PLC
Date: _____________________
================================================================================
================================================================================
27th November 1997
MEPC - PETERSHILL Operation & Maintenance Manual
<PAGE> 457
McNICHOLAS PLC [LOGO]
================================================================================
60 AS BUILT DRAWINGS (continued)
================================================================================
6.2 W & D Cole
CCE 2025/02 Rev D Details - Posts and Brackets
CCE 2025/03 Rev B Layout - Stainless Steel Handrail
CCE 2025/04 Rev - Layout - Circular Planter
CCE 2025/05 Rev - Specification - Circular Planter
CCE 2025/07 Rev - Layout at Gridlines J/H 5
CCE 2025/08 Rev A Layout - Various Double Handrail
CCE 2025/09 Rev - Stone Plinth to Scan House
CCE 2025/10 Rev A Layout to Fire Ramp
CCE 2025/11 Rev C Layout - Ramp West of Restaurant
CCE 2025/12 Rev A Specification/Layout - Restaurant Balcony
CCE 2025/14 Rev C Details - Restaurant Entrance
================================================================================
27th November 1997 Page 15
MEPC - PETERSHILL Operation & Maintenance Manual
<PAGE> 458
PACKAGE 7400 LIFTS
OWNERS INFORMATION MANUAL
NEW LIFT INSTALLATION
AT
PETERSHILL
No. 1 CARTER LANE
LONDON
EC4
4 X TRACTION PASSENGER LIFTS
78NW2440 - 78NW2443
<PAGE> 459
CONTENTS
General Information
Safety 3
Safe Lift Operation 7
Design Intent 9
Responsibility and Warranty 11
Statutory Requirements 13
Operation 15
Full Collective Control 17
Technical Description
Specification Summary 1
18 ATF Machine 2
MCS 321 Microprocessor Control System 3
Governor 9669A 4
Buffers 5
VF Motion Control 6
Top of Car Inspection 7
Wiring 8
Car Operating Panel 9
Guide Shoes 10
DO 2000 Door Operator 11
Lambda Door Detector 12
Car and Landing Doors 13
Hall Lantern 14
Landing Controls 15
Ancilliary Equipment 16
Preventative Maintenance
Programmed and Planned Maintenance 1
Parts List - Machine 2
Parts List - Door Detector 3
Drawings
As Built Drawings 1
Certificates
Test Certificates 1
Testing Method Statement 2
Maintenance Documentation
F54 Certificates 1
<PAGE> 1
EXHIBIT 10.9
DATED 25 MARCH 1998
BRITEL FUND TRUSTEES LIMITED
AND
GOLDMAN SACHS INTERNATIONAL
AND
GOLDMAN SACHS PROPERTY MANAGEMENT
AND
THE GOLDMAN SACHS GROUP, L.P.
AND
ENGLISH PROPERTY CORPORATION plc
and
MEPC plc
FIT OUT WORKS AGREEMENT
relating to
One Carter Lane
London EC4
<PAGE> 2
THIS AGREEMENT made the Twenty Fifth day of March 1998
BETWEEN:
(1) BRITEL FUND TRUSTEES LIMITED (Company number 1687513) whose registered
office is at Standon House 21 Mansell Street London E1 8AA (the "LANDLORD");
(2) ENGLISH PROPERTY CORPORATION plc (Company number 640408) whose registered
office is at 12 St James's Square London SW1Y 4LB (the "DEVELOPER");
(3) GOLDMAN SACHS INTERNATIONAL (Company number 226395) whose registered office
is at Peterborough Court 133 Fleet Street London EC4A 2BB (the "TENANT");
(4) GOLDMAN SACHS PROPERTY MANAGEMENT (Company number 2432555) whose registered
office is at Peterborough Court 133 Fleet Street London EC4A 2BB ("GSPM")
(5) THE GOLDMAN SACHS GROUP, L.P. whose office is at 85 Broad Street New York
New York 10004 (the "GUARANTOR"); and
(6) MEPC plc whose registered office is at 12 St James's Square London SW1Y 4LB
(the "DEVELOPER'S GUARANTOR").
WHEREAS:
(A) The Developer is to carry out the Developer's Fit Out Works at its own cost
and in accordance with the provisions of the Agreement for Lease and this
Agreement.
(B) The Tenant is to carry out the Tenant's Fit Out Works at its own cost and in
accordance with the provisions of the Agreement for Lease and this
Agreement.
(C) The Developer has agreed to employ GSPM as its contractor to carry out the
Developer's Fit Out Works.
WITNESSES as follows:
1 DEFINITIONS
In this Agreement unless the context otherwise requires expressions defined
in the Agreement for Lease (as defined below) shall have the same meanings
herein and additionally the following words shall have the following
meanings:
AGREEMENT FOR LEASE means the agreement for lease of the Premises of even
date herewith made between the Landlord (1) the Developer (2) the Tenant (3)
the Guarantor (4) and the Developer's Guarantor (5);
CATEGORY A WORKS means the works to be carried out in accordance with the
Category A Specification set out at Appendix A;
CONSENTS means all licences, consents, permissions and approvals necessary
for the Landlord lawfully to carry out the Works;
DEVELOPER'S FIT OUT WORKS means items comprised in the Fit Out Works which
are acquired by the Developer in accordance with the provisions of this
Agreement.
MAXIMUM SUM means the sum of [pound sterling] 3,413,752 plus value added
tax;
PREMISES means One Carter Land London EC4 more particularly described in the
draft lease annexed to the Agreement for Lease as the Premises;
TENANT'S FIT OUT WORKS means the Fit Out Works which are not Developer's Fit
Out Works
1
<PAGE> 3
VAT means Value Added Tax and any similar tax substituted for it or levied
in addition to it.
2 FIT OUT WORKS
2.1 The Developer shall acquire and complete the installation of the items
comprised in the Developer's Fit Out Works as follows:
- The Category A Fit Out Works up to pound 3,036,755
- Carpets up to pound 231,969
- Floor boxes up to pound 78,288
- Fourth floor works: pound 66,740
but in no circumstances shall its aggregate expenditure exceed the Maximum
Sum;
2.2 In order to enable the Developer's obligations to the Tenant to be
satisfied the Developer hereby employs GSPM to design and carry out the
Developer's Fit Out Works;
2.3 GSPM HEREBY COVENANTS with the Landlord to permit the Landlord (or its
surveyors) at all reasonable times to inspect the progress of the
Developer's Fit Out Works and the quality of the materials and workmanship
used therein.
3 PAYMENTS BY DEVELOPER
The Developer hereby appoints GSPM, and GSPM hereby agrees, to carry out
the Developer's Fit Out Works for the Developer. GSPM shall invoice the
Developer on 1 April 1998, 1 July 1998 and 1 October 1998 in respect of the
Developer's Fit Out Works, each such invoice to be a proper VAT invoice
addressed to the Developer for the sum of pound 1,137,917 on each occasion,
and the Developer shall pay the invoiced amount to GSPM within 1 week of
receipt of the relevant invoice.
4 APPLICATION OF PAYMENTS
4.1 GSPM shall not later than six months after the practical completion of the
Developer's Fit Out Works produce to the Developer a reasonably detailed
statement showing the actual expenditure incurred by the Developer and the
items on which it was incurred;
4.2 GSPM shall thereafter from time to time provide amended statements
reflecting any changes in the amount of such actual expenditure;
4.3 Nothing herein shall constitute a statement, warranty or representation
that the Developer or the Tenant shall be or become entitled to any capital
allowances in respect of any expenditure or contribution to expenditure
incurred or made under this Agreement.
5 OWNERSHIP OF FIT OUT
5.1 It is agreed that the Tenant has no ownership interest in the Fit Out Works
paid for by the Developer.
5.2 The parties hereby acknowledge that the Goldman Sachs group shall have no
liability to, and shall not, pay for any Developer's Fit Out Works and that
the Developer shall have no liability to, and shall not pay for any
Tenant's Fit Out Works.
2
<PAGE> 4
6 NOTICES INCLUDING REQUESTS FOR PAYMENT
Notices and requests for payment shall be sent to the registered office of
the Developer (the address of which shall be notified to the Tenant from
time to time) marked for the attention of Julian Barwick or such other
person as the Developer may from time to time nominate.
7 SUB-CONTRACTOR'S CERTIFICATE
GSPM confirms that it has applied for a certificate under section 561 of
the Income and Corporation Taxes Act 1988 and acknowledges that all
payments to be made under this agreement shall be made under deduction of
tax in accordance with the provisions of Chapter IV of the Income and
Corporation Taxes Act 1988 unless at the time of such payment it has
demonstrated to the Developer's reasonable satisfaction that it is the
valid holder of a current certificate.
8 PROPER LAW AND JURISDICTION
This Agreement shall be governed by and construed in accordance in all
respects with English law and the parties hereto hereby submit to the
non-exclusive jurisdiction of the High Court of Justice of England in
relation to any claim, dispute or difference which may arise hereunder and
in relation to the enforcement of any judgment rendered pursuant to any
such claim dispute or difference and, for the purpose of Order 10 Rule 3 of
the Rules of the Supreme Court of England (or any modification or
re-enactment thereof), the parties hereby irrevocable agrees that any
process may be served on them by leaving a copy thereof at their respective
addresses (as referred to above).
9 DEVELOPER'S GUARANTOR
9.1 The Developer's Guarantor covenants with the Tenant as principal debtor
that the Developer will pay the sums due from it under and perform its
obligations contained in this Agreement.
9.2 The liability of the Developer's Guarantor shall not be affected by:
9.2.1 any time given to the Tenant or any failure by the Tenant to enforce
compliance with the Developer's covenants and obligations;
9.2.2 any variation of the terms of this Agreement;
9.2.3 any change in the constitution structure or powers of the
Developer's Guarantor or the Developer or the administration
liquidation or bankruptcy of the Developer or the Developer's
Guarantor;
9.2.4 any act which is beyond the powers of the Developer;
9.2.5 the transfer of the reversion expectant on the term to be granted by
the Lease;
9.2.6 any other act or thing by which (but for this provision) the
Developer's Guarantor would have been released.
10 THE GUARANTOR
10.1 The Guarantor covenants with the Landlord as principal debtor that the
Tenant will pay the sums due from it under and perform its obligations
contained in this Agreement.
10.2 The liability of the Guarantor shall be no greater than it would have been
if the Guarantor had been the Tenant (except for additional costs arising
from the enforcement of the guarantee) but shall not be affected by:
3
<PAGE> 5
10.2.1 any time given to the Tenant or any failure by the Landlord to
enforce compliance with the Tenant's covenants and obligations;
10.2.2 any variation of the terms of this Agreement;
10.2.3 any change in the constitution structure or powers of the
Guarantor the Tenant or the Landlord or the administration
liquidation or bankruptcy of the Tenant or Guarantor;
10.2.4 any act which is beyond the powers of the Tenant;
10.2.5 the transfer of the reversion expectant on the term to be granted
by the Lease;
10.2.6 any other act or thing (other than the default of the Landlord)
by which (but for this provision) the Guarantor would have been
released.
10.3 The Guarantor may not assign its rights or delegate its obligations under
this Guarantee in whole or in part (and any purported assignment or
delegation is void) except for an assignment of all the Guarantor's rights
and obligations hereunder in whatever form the Guarantor determines may be
appropriate to a partnership, corporation, trust or other organisation in
whatever form (the "SUCCESSOR") that succeeds to all or substantially all
of the Guarantor's assets and business and that assumes such obligations by
contract, operation of law or otherwise. Upon any such assignment and
assumption of obligations the Guarantor shall give written notice thereof
to the Landlord and subject to the Landlord having received in a form
reasonably satisfactory to the Landlord, a deed executed by the Successor
(accompanied by a legal opinion in a form reasonably satisfactory to the
Landlord addressed to the Landlord from a reputable firm of lawyers in the
relevant jurisdiction confirming inter alia validity and due execution)
whereby the Successor assumes and covenants with the Landlord to perform
all outstanding and future obligations of the Guarantor under this
Agreement, whether such assumption is by operation of law or by virtue of
such deed, the Guarantor shall be relieved of and fully discharged from all
obligations hereunder, whether such obligations arose before or after such
delegation and assumption, but without prejudice to any antecedent breach.
11 INTEREST ON OVERDUE SUMS
If the person entitled so to do does not receive any sum due to it by the
due date the person liable to pay it shall pay on demand interest on such
sum at 4 per cent above the current base rate of Barclays Bank Plc from the
due date until payment (both before and after any judgment).
12 NOTICES
Section 196 of the Law of Property Act 1925 shall apply to any notice which
may be served under this Agreement as if the final words of Section 196(4)
"and that service.....be delivered" were deleted and replaced by "and that
service shall be deemed to be made on the third Working Day after posting".
13 AGREEMENT FOR LEASE AND LICENCE TO ALTER
This Agreement is without prejudice to the Tenant's obligations under the
Agreement for Lease and Licence to Alter.
4
<PAGE> 6
SIGNED by the parties or their duly authorised representatives the day and
year first before written
SIGNED by on ) /s/ [signature]
behalf of the Landlord ) Authorised Signing Officer
)
SIGNED by [name] on ) /s/ [signature]
behalf of the Developer )
)
SIGNED by [name] on )
behalf of the Tenant )
)
SIGNED by on )
behalf of GSPM )
)
5
<PAGE> 7
SIGNED by on )
behalf of The Guarantor )
)
SIGNED by [name] on ) /s/ [signature]
behalf of The Developer's Guarantor )
)
6
<PAGE> 1
EXHIBIT 10.10
DATED: 9th September 1998
BRITEL FUND TRUSTEES LIMITED
- and -
GOLDMAN SACHS INTERNATIONAL
- and -
THE GOLDMAN SACHS GROUP, L.P.
UNDERLEASE
of
premises known as One Carter Lane London EC4
Linklaters & Paines
One Silk Street
London EC2Y 8HQ
Tel: 0171 456 2000
Ref: CBC/DAJR/7100675
<PAGE> 2
- ----------------
[ILLEGIBLE]
- ----------------
LEASE PARTICULARS
- --------------------------------------------------------------------------------
1. Date : (Pound)121,848 L GS 8/10 1998
- --------------------------------------------------------------------------------
2. Parties
2.1 Landlord : Britel Fund Trustees Limited (Company number 1687513)
whose registered office is at Standon House 21 Mansell
Street London E1 8AA
- --------------------------------------------------------------------------------
[SEAL]
2.2 Tenant : Goldman Sachs International (Company number 226395)
whose registered office is at Peterborough Court 133
Fleet Street London EC4A 2BB
- --------------------------------------------------------------------------------
2.3 Guarantor : The Goldman Sachs Group, LP 85 Broad Street New York New
York 10004 and whose address for service in the UK is
c/o the Facilities Manager Goldman Sachs
International Peterborough Court 133 Fleet Street London
EC4A 2BB
[SEAL]
- --------------------------------------------------------------------------------
3. Contractual Term : 20 years from and including 19th March 1998
- --------------------------------------------------------------------------------
4. Principal Rent : (pounds)5,184,982 POUNDS
per annum payable from and including the Rent
Commencement Date and subject to increase in accordance
with the Second Schedule
[SEAL]
- --------------------------------------------------------------------------------
5. Rent : 19 June 1999
Commencement
Date
[SEAL]
- --------------------------------------------------------------------------------
6. Review Dates : the 19th March in the years 2003, 2008 and 2013
- --------------------------------------------------------------------------------
7. Permitted : as high class offices within Class B1(a) of the 1987
Use Order and for any purpose ancillary to such use as
offices
[SEAL]
- --------------------------------------------------------------------------------
[SEAL] [SEAL] [SEAL] [SEAL] [SEAL]
<PAGE> 3
1 Definitions
In this Lease unless the context otherwise requires:
Adjoining Property means the Restaurant and all other property adjoining
or neighbouring the Premises in which the Landlord or any Group Company
has or shall have during the Term a freehold or leasehold interest whether
in possession or reversion.
An "Affiliate" of any specified person means any other person directly or
indirectly controlling or controlled by or under common control with such
specified person (for the purposes of this paragraph and the definition of
"Group Company" 'control' (including 'control by' or under 'common control
with') shall mean the power to direct and procure management and policies
directly or indirectly (whether through the ownership of voting securities
or equity interests by contract or otherwise) for so long as such power is
exercised);
Arbitration means arbitration in accordance with Clause 8.3
Base Rate means the base rate from time to time of Royal Bank of Scotland
PLC or (if not available) such comparable rate of interest as the Landlord
shall reasonably require
Category "A" Works mean the works as so described in the Specification
Common Parts means the paved areas shown hatched in black on Plan 1
together with the planters shown thereon
Conduits means any existing or future media for the passage of substances
telecommunications or energy and any ancillary apparatus attached to them
and any enclosures for them
Contractual Term means the term specified in paragraph 3 of the
Particulars
Determination Date means 18th March 2013
Encumbrances means the matters contained or referred to in the documents
specified in Part III of the First Schedule
Group Company means any company within the same group of companies as or
Associated with or an Affiliate of the Tenant as set out below:
(i) Any two companies shall be taken to be members of a group if
one is the subsidiary of the other or both are subsidiaries of
a third company;
- --------------------------------------------------------------------------------
1
<PAGE> 4
(ii) A company corporation or partnership shall be taken to be
"Associated" with another if and only if one is a subsidiary
or Affiliate of another or both are subsidiaries or Affiliates
of a third company corporation or partnership;
(iii) In determining whether any company is a subsidiary of another
company the word subsidiary bears the meaning assigned to it
by Section 736 of the Companies Act 1985 as originally
enacted;
(iv) In determining whether any corporation (which shall be
construed in accordance with Section 740 of the Companies Act
1985 as originally enacted) is a subsidiary of another
corporation or of a company or whether any company is a
subsidiary of a corporation the word subsidiary bears the
meaning assigned to it by Section 736 of the Companies Act
1985 as originally enacted but modified only so that `company'
includes `corporation' for this purpose;
(v) A partnership (which shall be construed as including a
partnership under the laws of the United Kingdom or elsewhere)
shall be taken to be a subsidiary of another partnership or of
a company or corporation if that other partnership or company
or corporation is entitled to either (a) more than one half of
the assets or (b) more than one half of the income of the
first mentioned partnership and in either such case that other
partnership or company or corporation exercises control over
the first mentioned Partnership.
(vi) A company or corporation shall be deemed to be a subsidiary of
a partnership if that partnership either (a) controls the
composition of the board of directors of the company or
corporation or (b) holds more than half in nominal value of
the issued equity share capital of the company or corporation
and in either such case the partnership exercises control over
the company or corporation;
Guarantor means the person (if any) so named in the Particulars and such
other person as may from time to time covenant pursuant to clause
4.l5.2(ii)(c) and in the case of an individual includes his personal
representatives
Insured Risks means the risks from time to time required to be insured
against under the terms of the Superior Lease
- --------------------------------------------------------------------------------
2
<PAGE> 5
Landlord means the person in whom the immediate reversion to this Lease
shall for the time being be vested being initially the person so named in
the Particulars
This Lease means this lease and any document supplemental to it or entered
into pursuant to it
Particulars means the descriptions and terms on the page headed Lease
Particulars which forms part of this Lease
Planning Acts means the Town and Country Planning Act 1990 the Planning
(Listed Buildings and Conservation Areas) Act 1990 the Planning (Hazardous
Substances) Act 1990 and the Planning (Consequential Provisions) Act 1990
Premises means the building known as One Carter Lane London EC4 shown
edged blue on Plan 1 (including at basement level the Service Bay and
Service Ramp and other ancillary accommodation) and each and every part
thereof and all additions and alterations or reinstatements thereof but
excluding the Restaurant (including those parts of the basement forming
part of the Restaurant)
Principal Rent means the rent stated in paragraph 4 of the Particulars
Quarter Days means 25 March 24 June 29 September and 25 December in every
year and Quarter Day means any of them
Restaurant means premises at ground lower ground and basement levels and
shown for identification only edged red on Plans 1, 2, 3, 4 and 5 and
known as Two Old Change Court London EC4 and each and every part thereof
and all buildings from time to time thereon including the railings shown
coloured blue on Plans 6, 7 and 8 but excluding the structural elements
coloured orange on Plans 2 and 3
Restaurant Spaces means the car, motor cycle and bicycle spaces allocated
to the Restaurant coloured green and blue on Plan 5
Loading Bay means the area within the Premises at basement level available
for use by the occupier of the Restaurant shown hatched green on Plan 5
Service Area means the service area shown hatched purple on Plan 5
Service Ramp means the access way at ground level leading from the public
highway known as Distaff Lane to the basement of the Premises and to the
Adjoining Property and shown hatched blue on Plan 5
- --------------------------------------------------------------------------------
3
<PAGE> 6
Specification means the Specification annexed hereto
Superior Lease means the Lease referred to in Part IV of the First
Schedule hereto being the Lease under which the Landlord holds inter alia
the Premises
Superior Landlord means the person or persons for the time being entitled
to the reversion mediately or immediately expectant on the determination
of the Superior Lease (or any other superior lease or leases)
Tenant means the person so named in the Particulars and includes its
successors in title
Term means the Contractual Term together with any continuation of the term
or the tenancy (whether by statute common law holding over or otherwise)
VAT means Value Added Tax and any similar tax substituted for it or levied
in addition to it
1987 Order means the Town and Country Planning (Use Classes) Order 1987
(as originally made)
1995 Act means the Landlord and Tenant (Covenants) Act 1995
2 Interpretation
In this Lease unless the context otherwise requires:
2.1 If the Tenant or the Guarantor for the time being is more than one person
then their covenants are joint and several
2.2 Any reference to a statute (except for the 1987 Order) includes any
modification extension or reenactment of it and any orders regulations
directions schemes and rules made under it
2.3 Any covenant by any party not to do any act or thing includes an
obligation not to permit or suffer such act or thing to be done
2.4 References to the act or default of the Tenant include acts or default or
negligence of anyone at the Premises with the Tenant's or any
undertenant's authority
2.5 The index and Clause headings in this Lease are for ease of reference only
2.6 References to the last year of the Term shall mean the year immediately
prior to the expiration or earlier termination of the Term
- --------------------------------------------------------------------------------
4
<PAGE> 7
2.7 References to Liability include claims demands proceedings damages losses
and proper costs and expenses
2.8 References to any right of the Landlord to have access to the Premises
shall be construed as extending to the Superior Landlord and to all
persons authorised by the Landlord and the Superior Landlord (including
agents professional advisers contractors workmen and others) but in
relation to the Landlord always on the terms set out in Clause 4.21 below
2.9 Whenever the consent or approval of the Landlord is required or requested
in relation to this Lease such provisions shall be construed as also
requiring the consent or approval of the Superior Landlord where the same
shall be required except that nothing in this Lease shall be construed as
implying that any obligation is imposed upon a Superior Landlord not
unreasonably to refuse any such consent
3 Demise and Rents
The Landlord DEMISES the Premises to the Tenant TOGETHER WITH the rights
set out in Part I of the First Schedule EXCEPT AND RESERVING as mentioned
in Part II of the First Schedule for the Contractual Term subject to and
with the benefit of the Encumbrances the Tenant paying by way of rents
without any deduction counterclaim or set off:
3.1 the Principal Rent (plus VAT) by equal quarterly payments in advance on
the Quarter Days the first payment for the period from and including the
Rent Commencement Date to (but excluding) the next Quarter Day to be made
on the Rent Commencement Date
3.2 such sums as may from time to time become payable pursuant to the proviso
to clause 4.6.4
3.3 within 14 days of demand:
3.3.1 the sums specified in Clauses 4.2 [interest] and 4.5
[utilities]
3.3.2 the sums specified in Clause 7.2 [insurance]
3.4 VAT in accordance with Clause 4.4
4 Tenant's covenants
The Tenant covenants with the Landlord throughout the Term or until
released pursuant to the 1995 Act as follows:
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4.1 Rents
To pay the rents reserved by this Lease as and when required by Clause 3
4.2 Interest
If the Landlord does not receive any sum due to it on the due date to pay
on demand interest on such sum at 4 per cent above Base Rate (compounded
on the Quarter Days) from the due date until payment (both before and
after any judgment) provided this Clause shall not prejudice any other
right or remedy for the recovery of such sum
4.3 Outgoings
To pay all existing and future rates taxes charges assessments and
outgoings in respect of the Premises (whether assessed or imposed on the
owner or the occupier) except any tax arising on any actual or deemed
dealing by the Landlord with its reversion to this Lease or any tax (other
than VAT) arising as a result of the receipt by the Landlord of the rents
payable by the Tenant under Clause 3 of this Lease
4.4 VAT
4.4.1 Obligations under this Lease to pay sums or provide
consideration to the Landlord shall be treated as exclusive of
VAT and the Tenant shall in addition pay any VAT chargeable on
the same date
4.4.2 Obligations under this Lease to reimburse or pay the
Landlord's expenditure shall extend to the VAT on that
expenditure which the Landlord is not able to recover.
4.5 Utilities
To pay the suppliers and to indemnify the Landlord against all charges for
water electricity and gas and other services used on or in relation to the
Premises and in case the water electricity gas or other services shall be
metered or charged jointly in respect of the Premises and other premises
to pay to the Landlord on demand a fair proportion thereof.
4.6 Repair and Management
4.6.1 To keep and maintain the Premises (and all Conduits
exclusively serving the Premises) in good and substantial
repair and condition (damage by the Insured Risks excepted
save to the extent that insurance moneys are irrecoverable as
a result of the act or default of the Tenant)
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4.6.2 To keep all plant and machinery apparatus and equipment
comprised within the Premises properly maintained and in good
working order and to enter into maintenance agreements with
reputable contractors for the regular servicing of all such
plant and machinery apparatus and equipment and to renew all
working and other parts as and when necessary or when
recommended by such contractors and to ensure by directions to
the Tenant's staff and otherwise that such plant and machinery
apparatus and equipment are properly operated
4.6.3 Not to do or omit to be done or suffer the same to be done or
omitted anything at or on the Premises which in any way has or
could have a material adverse affect on any contractual rights
which the Landlord has or may have (and of which the Tenant
has been notified) against any third party in respect of the
design or construction of the Premises or in respect of the
installation of any services plant machinery apparatus and
equipment within the Premises
4.6.4 Without prejudice to the generality of the other sub-clauses
in this Clause 4.6 at all times
(i) to ensure that the Premises are managed and serviced to
the standard of and appropriate for a high class office
building in the City of London
(ii) to repair maintain light clean supervise and provide
such other services for the Restaurant Spaces the
Loading Service Bay the Service Area (including the
refuse compactor in it and the disposal of refuse
including the collection and compaction thereof) and the
Service Ramp and door and the maintenance of receptacles
and plant and equipment in connection therewith as the
Tenant shall from time to time reasonably consider
necessary or as the Landlord shall from time to time
reasonably require the Tenant to provide all in
accordance with the principles of good estate management
and to pay all taxes charges assessments and other
outgoings payable in respect thereof and all charges
assessments and outgoings for electricity gas oil and
other fuels payable in relation thereto or as the Tenant
shall from time to time reasonably consider necessary or
as the Landlord shall from time to time reasonably
require the Tenant to provide
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(iii) to ensure that the Common Parts are kept in a clean and
tidy condition and that the planters are maintained and
kept adequately stocked with suitable plants and flowers
(iv) to maintain inspect repair and renew the structural
elements shown coloured orange on Plans 2 and 3
Provided that in the event that and upon each such occasion
the Tenant fails to comply with any of the requirements of
this clause 4.6.4 the Landlord shall be entitled but not
obliged at the cost in all respects of the Tenant to remedy
such failure and to elect to continue to have the conduct of
such matters in which event
(A) the Tenant shall not have the conduct of such matters
unless and until the Landlord notifies the Tenant in
writing that the Landlord intends no longer to have such
conduct
(B) the Tenant shall pay to the Landlord from time to time
within 14 days after demand the costs incurred or to be
incurred by the Landlord in effecting such matters
(C) otherwise the provisions of clause 4.21 shall apply
mutatis mutandis
4.7 Decoration
4.7.1 To clean prepare and paint or treat and generally redecorate
all parts of the Premises in every fifth year and in the last
year of the Term PROVIDED THAT in respect of those parts of
the Premises which by their nature construction or material
require no such treatment the Tenant shall do whatever is or
may in the reasonable opinion of the Landlord be necessary for
the sake of their appearance preservation and cleanliness
4.7.2 All the work described in Clause 4.7.1 is to be carried out
(i) in a good and workmanlike manner to the Landlord's
reasonable satisfaction
(ii) in the last year of the term internally and on every
occasion externally in colours which (if different from
the existing colour) are first approved in writing by
the Landlord (approval not to be unreasonably withheld
or delayed)
4.8 Cleaning
4.8.1 To keep the Premises clean tidy and free from rubbish
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4.8.2 To clean the inside of windows and any washable surfaces at
the Premises as often as reasonably necessary
4.9 Overloading and Obstruction
Not to overload the Premises or the lifts therein nor any plant and
machinery or electrical installation of or serving the Premises nor to
cause any interference or obstruction to the Conduits or the Common Parts
4.10 Prohibited Uses
Not to use the Premises
4.10.1 for any purpose which is noisy or offensive dangerous or
illegal immoral or a nuisance or causes damage or disturbance
to the Landlord the Adjoining Property or the Common Parts or
which involves any substance which may be harmful polluting or
contaminating
4.10.2 for residential purpose
4.10.3 for any auction, public or political meeting, public
exhibition or show or as a betting office or for gaming or
playing amusement machines or as a sex shop (as defined in the
Local Government (Miscellaneous Provisions) Act 1982) or for
the business of an undertaker or for the business of a staff
agency employment agency (or similar agencies) or Government
Department at which the general public call without
appointment
4.11 Permitted Use
Not to use the Premises otherwise than for the Permitted Use specified in
the Particulars
4.12 Signs etc
4.12.1 Not to erect any sign notice advertisement which is visible
outside the Premises except such external signage the size
design appearance materials and manner of affixation of which
shall first have been approved in writing by the Landlord
(such approval not to be unreasonably withheld or delayed)
Provided that the Tenant shall be entitled with the prior
approval in writing of the Landlord (such approval not to be
unreasonably withheld or delayed) to name the office building
on the Premises and to erect on the exterior of the office
building a company logo or flag which complies with the other
requirements of this Lease.
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4.12.2 Not to place any aerial satellite dish or other equipment on
the roof of the Premises other than in the area designated for
such purpose and then only with the prior consent of the
Landlord such consent not to be unreasonably withheld or
delayed
4.13 Alterations
4.13.1 Not to make any alterations or additions which:
(i) affect the exterior of the Premises or
(ii) adversely affect the structure (including without
limitation alterations or additions to the principal or
loadbearing walls floors beams columns roofs or
foundations) of the Premises or materially adversely
affect the Conduits or the central heating air
conditioning sprinkler electrical or other installations
or the sanitary or hot and cold water systems at the
Premises
(iii) relate to the structural elements coloured orange on
Plans 2 and 3
4.13.2 Not without the Landlord's written consent (not to be
unreasonably withheld or delayed and which shall be documented
in substantially the form of the draft Licence to Alter
annexed hereto with such amendments and additional provisions
as the Landlord may reasonably require having regard not only
to the proposed works but also to the requirements of
institutional investors in property similar to the Premises
current for the time being in relation to such matters) to
make to the Premises any other internal alterations or
additions (whether structural or not) PROVIDED THAT the Tenant
may without obtaining the consent of the Landlord instal alter
and remove demountable partitioning (but for the avoidance of
doubt not varying the height or position of raised floors or
ceiling grids) and carry out associated minor alterations to
mechanical and electrical services in the Premises and minor
structural alterations in the nature of boreholes conduit
holes and such like provided the same are not in breach of
Clause 4.13.1 and such number (not exceeding eight) of copies
as the Landlord may require of the plans and other information
showing the layout of such partitioning and the details of
such alterations are deposited with the Landlord or its
surveyors not less than one month after commencement of the
work
4.13.3 To maintain at all times a consistent external appearance in
the treatment of all windows in the Premises
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4.13.4 Without prejudice to the foregoing not save in accordance with
the terms and conditions laid down by the Institution of
Electrical Engineers current at the time to make any
alteration or addition to the electrical installations in the
Premises
4.14 Preservation of Easements
4.14.1 Not to prejudice the acquisition of any right of light for the
benefit of the Premises by obstructing any window or opening
or giving any acknowledgement that the right is enjoyed by
consent or any other act or default of the Tenant
4.14.2 To preserve all rights of light and other easements enjoyed by
the Premises and not to permit or suffer anyone to acquire any
right of light or other easement or right over the Premises
4.14.3 To give the Landlord immediate notice if any easement enjoyed
by the Premises is obstructed or any new easement affecting
the Premises is made or attempted
4.14.4 All costs charges and expenses incurred in securing compliance
with the provisions of this Clause 4.14 shall be borne by the
Tenant
4.15 Alienation
4.15.1 Not to:
(i) assign or charge part only of the Premises nor to agree
to do so
(ii) part with the possession of the whole or part of the
Premises or agree to do so except by an assignment or
underletting permitted by this Clause 4.15
(iii) share the possession or occupation of the whole or any
part of the Premises except as permitted by this Clause
4.15
(iv) assign the whole of the Premises to any Group Company of
the Tenant where in the reasonable opinion of the
Landlord the financial standing of such Group Company is
less than that of the Tenant
4.15.2 (i) Not to assign or agree to assign the whole of the
Premises unless:
(a) the circumstances and conditions set out in
sub-clause 4.15.2.(ii) shall have been complied
with or satisfied; and
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(b) the Landlord has granted its consent such consent
not to be unreasonably withheld.
(ii) The circumstances and conditions referred to in Clause
4.15.2.(i) are:
(a) that the intended assignee enters into a direct
covenant with the Landlord to pay the rents and
perform and observe during the residue of the Term
or until released pursuant to the 1995 Act all the
covenants and conditions on the Tenant's part
contained in this Lease; and
(b) that the Tenant who is to assign this Lease enters
into an Authorised Guarantee Agreement with the
Landlord guaranteeing the performance of the
covenants and conditions contained in this Lease
by the intended assignee incorporating the
provisions set out in the Third Schedule to the
extent permitted by the 1995 Act but in addition
containing a provision for the release of the
Tenant from its further obligations under the
Authorised Guarantee Agreement (following written
request by the Tenant) upon the assignee producing
properly and externally audited accounts for the
last 3 immediately preceding accounting periods
each of not more than 12 months showing that the
net assets of the assignee in the UK or in any
country within the European Community or in any
jurisdiction where reciprocal enforcement of
judgement with England exists as shown in the
balance sheet forming part of the said audited
accounts for the said last three accounting
periods as at the end of each such period were not
less than the annual rent reserved by Clause 3.1
of this Lease at the rate (disregarding any
abatement) payable at the later of the Rent
Commencement Date or the end of the last such
accounting period multiplied by a factor of 5 and
that the annual profits of the assignee in the UK
or in any country within the European Community or
in any jurisdiction where reciprocal enforcement
of judgement with England exists after tax as
shown in the said audited accounts for the said
last three accounting periods are each not less
than the said annual rent multiplied by a factor
of 5 Provided that
(I) the Tenant shall be released immediately
from its obligations under this Lease and/or
any such Authorised Guarantee Agreement if
the tests set out above are satisfied at the
date of the proposed assignment in which
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event the Landlord will at the cost of the
Tenant within 28 days after written request
following satisfaction of the above
requirements execute a deed effective as
from the date upon which the requirements
were satisfied in such form as the Tenant
may reasonably require confirming the
release of the liability of the Tenant under
this Lease and or the Authorised Guarantee
Agreement as the case may be
(II) any such release shall be deferred until any
other arrears of rents or other monies
properly due from the Tenant have been paid
to the Landlord; and
(c) that such other persons as the Landlord may
reasonably require act as guarantor for the
intended assignee such guarantee to be in the form
set out in the Third Schedule with such amendments
only as the Landlord may reasonably require; and
(d) that any intended assignee shall provide such
other security as the Landlord reasonably requires
(including without limitation a rent deposit
incorporating a first legal charge on the deposit
monies) for the observance and performance of the
Tenant's covenants herein contained on such terms
as the Landlord reasonably requires; and
(e) that all arrears of rent and other monetary
payments properly due under the terms of this
Lease have been paid prior to completion of the
intended assignment;
4.15.3 Not to underlet or agree to underlet part of the Premises
other than a Permitted Part and in this Clause 4.15:-
(i) Permitted Part means
(a) a whole floor of the Premises with Security of Tenure or
(b) (except for the basement and fifth floors) any part of
any floor of the Premises without Security of Tenure
provided that there are no more than two occupiers on
any one floor of the Premises nor more than ten
occupiers in the Premises (in each case including the
Tenant but excluding any occupation under clause 4.15.6
of this Lease) at any one time
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(c) in the case of the basement floor the whole or part so
long as it is demised with a Permitted Part on another
floor and so that the demise of part only of the
basement floor is without Security of Tenure and
provided that there are no more than four occupiers of
the basement floor (including the Tenant but excluding
any occupation under clause 4.15.6 of this Lease)
in each case (unless the underlease is without Security of Tenure)
together with an appropriate proportion of the car parking, disabled,
bicycle and motor cycle spaces
(ii) Security of Tenure means that the lessees and occupiers
of any premises with Security of Tenure enjoy the
benefit of Part II of the Landlord and Tenant Act 1954
and without Security of Tenure means that such lessees
and occupiers have agreed in any sub-underlease that the
provisions of Sections 24-28 of the Landlord and Tenant
Act 1954 shall be excluded in relation to the tenancy
thereby created pursuant to a valid and effective Order
of the Court under the provisions of Section 38(4) of
the said Act a copy of which order shall have been
produced to the Landlord before the grant of the
sub-underlease
4.15.4 Not to underlet or agree to underlet the whole of the Premises
nor a Permitted Part unless:-
(i) the rent payable under the underlease is:
(a) not less than the open market rent for the
Premises (or in the case of an underletting of a
Permitted Part the open market rental value of the
Permitted Part) at the date of the grant of the
underlease without fine or premium PROVIDED THAT
the Tenant shall be permitted to grant to any
underlessee a rent-free period or periods or
concessionary rent period or other inducement in
accordance with normal market practice at the time
of the grant of the underlease
(b) payable no more than one quarter in advance
(c) to be subject to upward only reviews at five
yearly intervals and (except only in the case of
an underline for a term not exceeding five years
without any option or right to renew and granted
without Security of Tenure) contemporaneously with
reviews under this Lease
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(ii) the underlease is in a form first approved by the
Landlord (whose approval shall not be unreasonably
withheld or delayed) and (so far as is consistent with
an underlease) substantially the same as this Lease
including a covenant by the undertenant in the same
terms mutatis mutandis as that contained in Clause
4.15.2 of this Lease and the right for the underlessor
to determine the term thereby granted on the
Determination Date
(iii) where an underletting of part of a floor of the Premises
the Permitted Part is of a layout and in a location
first approved by the Landlord (whose approval shall not
be unreasonably withheld or delayed)
(iv) if the underlease is for a term not exceeding five years
it is without Security of Tenure
(v) the undertenant covenants with the Landlord and in the
underlease
(a) to observe and perform the lessee's covenants in
the underlease during the term of the underlease
or until released pursuant to the 1995 Act
(b) not to assign or charge part only of the underlet
premises or agree to do so nor to underlet share
or part with possession or occupation of any part
of the underlet premises provided that the
undertenant may with the consent of the Landlord
and the Tenant (which shall in neither case be
unreasonably withheld or delayed) further underlet
a Permitted Part which is less than the whole of
the underlet premises subject to the following
conditions:-
(I) there are no more than two occupiers
(including the undertenant but excluding any
occupation permitted under Clause 4.15.6 of
this Lease) per floor on each floor of the
underlet premises nor more than ten
occupiers in the Premises at any one time
(II) any sub-underlease to contain a covenant by
the sub-undertenant not to underlet share or
part with possession or occupation of the
whole or any part of the sub-underlet
premises in any manner whatsoever other than
by way of an assignment of the whole of the
sub-underlet premises with the consent of
the Tenant and the Landlord (not to be
unreasonably withheld or delayed);
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(III) any sub-underlease of (or including) part of
a floor of the Premises to be without
Security of Tenure and a certified copy of
an order of the court under the provisions
of Section 38(4) of the said Act shall be
produced to the Tenant and the Landlord in
relation to the intended sub-underlease
(IV) any sub-undertenant to covenant with the
Landlord and the Tenant to observe and
perform (so long as it holds the
sub-underlease) the tenant's covenants in
the sub-underlease
(c) not to assign or agree to assign or underlet the
whole of the underlet premises without the
Landlord's prior written consent (which shall not
be unreasonably withheld or delayed)
4.15.5 Subject and without prejudice to Clauses 4.15.3 and 4.15.4
not to underlet the whole of the Premises nor a Permitted Part
nor vary the terms of any permitted underlease without the
prior written consent of the Landlord (which shall not be
unreasonably withheld or delayed)
4.15.6 Notwithstanding the foregoing provisions of this sub-clause
the Tenant and any permitted undertenant may without the
consent of the Landlord share occupation of the whole or any
part of the Premises with any Group Company Associated Company
or Affiliate of the Tenant or (as the case may be) such
permitted undertenant Provided that:
(i) the relationship of landlord and tenant is not created
and
(ii) the occupation by the Group Company Associated Company
or Affiliate ceases forthwith upon its ceasing to be a
Group Company Associated Company or Affiliate of the
Tenant or such permitted undertenant for the time being
and
(iii) the Landlord is informed in writing on reasonable
request of the name of each occupier and due evidence
that it is a Group Company Associated Company or
Affiliate
4.15.7 To take all necessary steps and proceedings to remedy any
breach of the covenants of the undertenant under the
underlease which affects the covenants by the Tenant hereunder
or which otherwise affects the Landlord's interest and not to
permit any reduction of the rent payable by any undertenant
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4.15.8 To keep the Landlord informed of all rent review negotiations
and not to agree any new or revised rent without having first
notified the Landlord in writing at least 7 days earlier and
within one month after agreement or determination to notify
the Landlord in writing of the rent so agreed or determined
4.16 Registration
Within 21 days to give to the Landlord's solicitors (or as the Landlord
may direct) written notice of any assignment charge underlease or other
devolution of the Premises together with a certified copy of the relevant
document and a reasonable registration fee of not less than (pounds)30
4.17 Statutory Requirements
To comply promptly with all notices served by any public local or
statutory authority and with the requirements of any present or future
statute or European Union law regulation or directive (whether imposed on
the owner or occupier) which affects the Premises or their use
4.18 Planning
4.18.1 To comply with the Planning Acts
4.18.2 Not to apply for or implement any planning permission or enter
into a planning obligation under Section 106 of the Town and
Country Planning Act 1990 affecting the Premises without first
obtaining the Landlord's written consent (such consent not to
be unreasonably withheld or delayed)
4.18.3 Where development permitted by a planning permission has begun
the Tenant shall complete all the works permitted and comply
with all the conditions imposed by the permission before the
determination of the Term including the carrying out of works
stipulated to be done whether before or after such
determination
4.18.4 If the Landlord reasonably so requires to produce evidence to
the Landlord that the provisions of this Clause 4.18 have been
complied with
4.19 Notices
4.19.1 To supply the Landlord with a copy of any notice order or
certificate or proposal for any notice order or certificate
affecting or capable of affecting the Premises as soon as it
is received by or comes to the notice of the Tenant
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4.19.2 At the request of the Landlord but at the joint cost of the
Landlord and the Tenant to make or join the Landlord in making
such objections or representations against or in respect of
any such notice order or certificate as the Landlord may
reasonably require
4.19.3 To give notice to the Landlord of any defect in the Premises
which might give rise to an obligation on the Landlord to do
or refrain from doing any act or thing in order to comply with
the provisions of this Lease or the duty of care imposed on
the Landlord pursuant to the Defective Premises Act 1972 or
otherwise and at all times to display and maintain all
necessary notices which the Landlord may from time to time
require to be displayed at the Premises
4.20 Contaminants and Defects
4.20.1 To give the Landlord immediate written notice (upon the Tenant
becoming aware of the same) of the existence of any
contaminant pollutant or harmful substance on or any defect in
the Premises
4.20.2 If so requested by the Landlord to remove from the Premises or
remedy to the Landlord's reasonable satisfaction any such
contaminant pollutant or harmful substance other than any such
used in the proper and ordinary course of the Tenant's
business or normal occupation of the Premises for the
Permitted Use
4.21 Entry by Landlord
To permit the Landlord at all reasonable times and on reasonable notice
(except in emergency) to enter the Premises in order to
4.21.1 inspect and record the condition of the Premises
4.21.2 remedy any breach of the Tenants obligations under this Lease
4.21.3 instal repair maintain clean alter replace add to or connect
up to any Conduits which serve the Adjoining Property
4.21.4 repair maintain or alter the Common Parts or the Adjoining
Property
4.21.5 comply with any of its obligations under this Lease
4.21.6 comply with the obligations on its part contained in the
Superior Lease notwithstanding that the obligation to comply
with such covenants may be imposed on the Tenant by this Lease
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Provided that the Landlord shall (i) cause as little inconvenience as
reasonably practicable in the exercise of such rights and shall as soon as
reasonably practicable make good all physical damage to the Premises (and
any Tenant's chattels fixtures and fittings) caused by such entry (ii) use
all reasonable endeavours to avoid entering the occupied office areas
within the Premises during normal business hours unless otherwise agreed
by the Tenant (iii) agree in advance with the Tenant the number of
representatives of the Landlord and any others who accompany them who
shall be permitted entry on any occasion (iv) allow the Tenant to escort
the Landlord's representatives at all times when they are within the
building on the Premises.
4.22 Notices to Remedy
To make good any failure to comply with Clauses 4.6 [repair] 4.7
[decoration] 4.12 [signs] 4.13 [alterations] 4.14 [preservation of
easements] 4.17 [statutory requirements] and 7.2.6 [insurers'
requirements] of which the Landlord has given written notice as soon as
reasonably practicable and in any event within 2 months after the date of
notice but without prejudice to the Landlord's other remedies
4.23 Landlord's costs
To pay to the Landlord on demand as additional rent and as a debt all
costs (which shall be properly incurred and fair and reasonable) as it may
incur:
4.23.1 from any application for consent required by this Lease
(including where consent is lawfully refused or the
application is withdrawn)
4.23.2 incidental to or in reasonable contemplation of the
preparation and service of a schedule of dilapidations
(whether before or within 6 months after expiry of the Term)
or a notice or proceedings under Section 146 or Section 147 of
the Law of Property Act 1925 (even if forfeiture is avoided
other than by relief granted by the Court)
4.23.3 in connection with the enforcement or remedying of any breach
of the covenants in this Lease on the part of the Tenant and
any Guarantor
4.23.4 incidental to or in reasonable contemplation of the
preparation and service of any notices under Section 17 of the
1995 Act
4.24 Reletting Notices
To allow a letting or sale board to be displayed on the Premises in the
last six months of the Term unless the Tenant is exercising its rights
under the Landlord and Tenant Act 1954 (but not so that
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<PAGE> 22
it restricts or interferes unreasonably with the right enjoyed by the
Premises) and to allow prospective tenants or purchasers to view the
Premises at reasonable times on reasonable notice
4.25 Yielding up
4.25.1 Immediately before the end of the Term:
(i) to give up the Premises repaired and decorated and
otherwise in accordance with the Tenant's covenants in
this Lease
(ii) if and to the extent that the Landlord so requires to
remove all alterations and additions which have been
permitted by the Landlord and to reinstate the Premises
to the Landlord's reasonable satisfaction to the state
set out in the Specification Provided That the Tenant
shall not be required to reinstate any approved plant or
equipment at the Premises which adds to the letting
value of the Premises and does not detract from the
value of the Landlord's reversionary interest therein.
(iii) to remove all signs, tenant's fixtures and fittings and
other goods from the Premises and make good any damage
caused thereby to the Landlord's reasonable satisfaction
4.25.2 If the Tenant fails to comply with Clause 4.25.1 to pay to the
Landlord on demand as a debt any costs incurred by the
Landlord in reinstating the Premises
4.25 Encumbrances
To perform and observe the Encumbrances so far as they relate to the
Premises
4.27 Superior Lease Covenants
To observe and perform the agreements covenants and stipulations on the
part of the tenant contained or referred to in the Superior Lease so far
as the same are not expressly assumed by the Landlord in this Lease and
not to do omit or suffer anything to be done whereby the Superior Lease
may be voided or forfeited and to indemnify and keep the Landlord
indemnified against all damages actions proceedings claims and demands in
any way relating thereto and not to do omit or suffer anything to be done
whereby the Superior Lease may be voided or forfeited
4.28 New Guarantor
Within five business days of the death during the Term of any Guarantor or
of such person committing or permitting an Act of Insolvency to give
notice of this to the Landlord and if so required by the Landlord at the
expense of the Tenant within thirty business days of such event to
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<PAGE> 23
procure some other person reasonably acceptable to the Landlord to execute
a guarantee in respect of the Tenant's obligations contained in this Lease
in the form of the Guarantor's covenants contained in the Third Schedule
4.29 CDM Regulations
Without prejudice to any requirements hereunder for the Tenant to obtain
the Landlord's consent before carrying out any work upon the Premises the
Tenant shall in respect of any such work to which the Construction (Design
and Management) Regulations 1994 (the CDM Regulations) apply:
4.29.1 ensure that any person owing duties under the CDM Regulations
complies therewith;
4.29.2 make a declaration to the Health & Safety Executive in
accordance with Regulation 4 of the CDM Regulations that it
(and not the Landlord) is the only "client" in respect of such
work;
4.29.3 upon completion of any such work by the Tenant or any other
party supply to the Landlord (without charge and subject to an
irrevocable royalty free licence in favour of the Landlord
and/or its agents and any other person interested therein to
use the same for any purpose connected with the Premises) a
copy of the health and safety file relating to such work and
any other information relevant to health and safety; and
4.29.4 as soon as reasonably practicable after it becomes aware of
any information relevant to health and safety in relation to
the Premises provide such information to the Landlord.
5 Landlord's Covenants
The Landlord covenants with the Tenant during the period in which the
immediate reversion to this Lease is vested in it as follows:
5.1 Quiet Enjoyment
That subject to the Tenant paying the rents reserved by and complying with
the terms of this Lease the Tenant may peaceably enjoy the Premises during
the Term without any interruption by the Landlord or any person lawfully
claiming under or in trust for it
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<PAGE> 24
5.2 Superior Lease
5.2.1 To pay the rent reserved by the Superior Lease and to perform
(insofar as the Tenant is not liable for any such performance
under the covenants on its part herein contained) all the
tenant's covenants therein contained
5.2.2 At the reasonable request of the Tenant and at the joint cost
of the Landlord and the Tenant to use best endeavours to
procure (a) payment of the rent reserved by any lease superior
to this Lease (other than the Superior Lease) and (b) the
performance of all covenants contained in any such lease or
leases (in so far as the Tenant is not liable for any such
performance under the covenants on its part herein contained).
5.2.3 Except in relation to insurance (as to which Clause 7 applies)
upon receiving written notice from and at the expense of the
Tenant to take all reasonable steps to enforce the covenants
on the part of the Superior Landlord contained in the Superior
Lease and any other Lease superior to this Lease
5.2.4 To take all reasonable steps at the expense of the Tenant to
obtain the consent of the Superior Landlord whenever the
Tenant makes an application for any consent required hereunder
where the consent of both the Landlord and the Superior
Landlord is needed by virtue of this Lease and the Superior
Lease except where the Landlord proposes lawfully to refuse
its consent
5.3 Contribution to Costs
To pay to the Tenant within fourteen days of demand (and in default to pay
interest at 4% over Base Rate from the date of demand until the date of
payment) a fair and proper proportion reasonably and properly allocated to
the Restaurant according to user of the reasonable costs and expenses
properly incurred by the Tenant
5.3.1 In the repair maintenance lighting cleaning and supervision
and the provision of such other services in relation thereto
as the Tenant shall from time to time reasonably consider
necessary and as shall be in accordance with the principles of
good estate management of the Restaurant Spaces the Loading
Bay the Service Area including the refuse compactor therein
and the Service Ramp and door and the costs of disposing of
refuse including the collection and compaction thereof and the
maintenance of receptacles and plant and equipment in
connection therewith
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<PAGE> 25
5.3.2 in the maintenance of planters in the Common Parts and the
plants and flowers therein and in ensuring that the Common
Parts are kept in a clean and tidy condition, and
5.3.3 the maintenance inspection repair and renewal of the
structural elements shown coloured orange on Plans 2 and 3
plus Value Added Tax and of any existing or future taxes charges
assessments and other outgoings payable in respect thereof and of all
charges assessments and outgoings for electricity gas oil and other fuels
payable in relation thereto PROVIDED THAT the Tenant shall make an
appropriate allowance in respect of any insurance proceeds received by the
Tenant in respect of any such expenditure referred to in clauses 5.3.1 and
5.3.3
5.4 The Landlord or the tenant of the Restaurant shall be entitled by
appointment to inspect invoices vouchers and receipts relating to
expenditure referred to in clause 5.3
5.5 To indemnify the Tenant in respect of any Liability arising from any
injury caused to the structural elements coloured orange on Plans 2 and 3
or those structural elements within adjacent to above or below the
Restaurant by the act or default of the tenant or occupier of the
Restaurant and those under its or their control excluding (1) damage
caused by insured Risks and (2) any consequential loss
6 The Landlord covenants that during the term hereby granted:
6.1 It shall not allow any use of the Restaurant to commence until the lessee
or other operator or occupier from time to time has provided the Tenant
with a deed of covenant in favour of the Tenant by which such lessee
operator or occupier covenants not to place any tables or chairs in the
Common Parts (other than those parts shown coloured yellow on Plan 9) and
to use all reasonable endeavours to ensure that patrons of the Restaurant
do not consume food or drink in the Common Parts (other than those parts
shown coloured yellow on Plan No 9) Provided that following the
commencement of the use of the Restaurant in each such case by such lessee
operator or occupier the Tenant may itself enforce the provisions of such
deed and the Landlord shall have no obligation or liability for its
enforcement or if there is any breach; and
6.2 It shall not without the consent of the Tenant (not to be unreasonably
withheld or delayed) having regard to the Landlord's obligations to
respond promptly to the Restaurant tenant) permit the use of the
Restaurant for any use other than as a high class restaurant or winebar
without any take-away facility for food or drinks.
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<PAGE> 26
7 Insurance
7.1 Landlord's insurance covenants
The Landlord covenants with the Tenant as follows:
7.1.1 At the joint cost of the Landlord and the Tenant to enforce
the covenants as to insurance of the Premises on the part of
the Superior Landlord contained in the Superior Lease and if
the Tenant so requires and at the joint cost (without
prejudice to the Tenant's covenants under clause 7.2) of the
Landlord and the Tenant to use its best endeavours to procure
that the Superior Landlord adds any risks specified by the
Tenant to the insurance policy including terrorist risk unless
insurance against terrorist risks is unavailable
7.1.2 To insure against loss of the Principal Rent and VAT payable
or reasonably estimated by the Landlord to be payable under
this Lease arising from damage to the Premises by the Insured
Risks for four years or such longer period as the Landlord may
reasonably require having regard to the likely period for
reinstating the Premises
7.1.3 At the reasonable request and cost of the Tenant to produce
evidence of the terms of the insurance under this Clause 7.1
(or an extract thereof showing that the policy is in force and
its terms)
7.1.4 If
(i) the Premises are destroyed or damaged by an Insured Risk
or
(ii) the whole or substantially the whole of the Premises are
destroyed or damaged by an act of terrorism or other
risk against which in either case the Landlord has been
unable to procure insurance
then, subject to obtaining all necessary planning and other
consents to reinstate the same (other than tenant's and trade
fixtures and fittings) as quickly as reasonably practicable
substantially as they were before the destruction or damage in
modern form if appropriate but not necessarily identical in
layout;
7.1.5 Reinstatement following damage by an act of terrorism or other
risk against which in either case the Landlord has been unable
to procure insurance other than in the circumstances whereby
clause 7.1.4(ii) applies shall be the responsibility of the
Tenant
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<PAGE> 27
who shall carry out the same as quickly as reasonably
practicable to the reasonable satisfaction of the Landlord
7.2 Tenant's insurance covenants
The Tenant covenants with the Landlord throughout the Term or until
released pursuant to the 1995 Act as follows:
7.2.1 To pay to the Landlord within 14 days of demand sums equal to:
(i) a fair proportion (to be reasonably and properly
determined by the Landlord's Surveyors) in respect of
insurance of the Premises of the amount paid by the
Landlord to the Superior Landlord pursuant to Clause
2(4)(a) of the Superior Lease in relation to the
Premises and the Restaurant
(ii) the cost of any professional valuation of the Premises
properly required by the Landlord (but not more than
once in any two year period)
7.2.2 To pay to the Landlord within 14 days of demand the whole of
the amount (before deduction of any commission or allowance)
which the Landlord spends on insurance pursuant to Clause
7.1.2
7.2.3 To give the Landlord immediate written notice on becoming
aware of any event or circumstances which could reasonably be
expected to affect or lead to an insurance claim
7.2.4 Not to do anything at the Premises which would or might
prejudice or invalidate the insurance of the Premises or the
Adjoining Property nor (unless the Tenant shall have
previously notified the Landlord and agreed to pay the
increased premium) cause the insurance premium to be increased
7.2.5 To pay to the Landlord within 14 days of demand:
(i) any increased premium and any Liability incurred by the
Landlord as a result of a breach of Clause 7.2.4
(ii) any reasonable uninsured excess to which the insurance
policy may be subject and which is normal for policies
in relation to properties of this type
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<PAGE> 28
(iii) the whole of any irrecoverable proportion of the
insurance moneys except only to the extent that it is
irrecoverable because of the act or omission of the
Landlord or the tenant of the Restaurant
7.2.6 To comply with the requirements and reasonable recommendations
made by the insurers
7.2.7 To notify the Landlord of the full reinstatement cost of any
fixtures and fittings installed at the Premises at the cost of
the Tenant which become Landlord's fixtures and fittings
7.2.8 To effect adequate insurance cover against damage to or
destruction of the Tenant's fixtures and fittings at the
Premises (or any part thereof)
7.2.9 Not to effect any insurance of the Premises against an Insured
Risk other than as specified in Clause 7.2.8 but if the Tenant
effects or has the benefit of any such insurance against the
Insured Risks the Tenant shall hold such moneys upon trust for
the Landlord and pay the same to the Landlord as soon as
practicable
7.3 Suspension of Rent and Determination
7.3.1 If the Premises are unfit for occupation and use because of
damage by an Insured Risk or because of damage or destruction
of the whole or substantially the whole of the Premises by an
act of terrorism or other risk against which in either case
the Landlord has been unable to procure insurance then (save
to the extent that, where the damage is due to an Insured
Risk, payment of the loss of rent insurance moneys is refused
due to the act or default of the Tenant or any undertenant)
the Principal Rent (or a fair proportion of it according to
the nature and extent of the damage) shall be suspended until
the date on which the Premises are again fit for occupation
and use.
7.3.2 If the Premises are not again fit for occupation and use by
the date being 4 years after the date of such damage or
destruction referred to in clause 7.3.1 either the Landlord or
the Tenant may within 3 months thereafter (but not after the
Premises are again fit for occupation and use) determine the
Term by giving to the other not less than 6 nor more than 7
months notice in writing
7.3.3 Any dispute relating to this Clause 7.3 shall be referred to
Arbitration
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<PAGE> 29
7.4 Termination of Superior Lease
If this Lease shall be subsisting at any time when the Superior Lease has
for any reason ceased to exist then with effect from the date of such
cesser:-
7.4.1 subject to the following provisions of this Clause, the
covenants and provisions of the Superior Lease incorporated
herein by reference shall nevertheless continue in force by
reference to the terms of the Superior Lease;
7.4.2 the Landlord shall observe and perform the covenants relating
to insurance on the part of the Superior Landlord contained in
the Superior Lease as if they were set out in full herein
(mutatis mutandis) as provisions of this Lease, and Clauses
7.1.1 and 7.2.1 shall cease to have effect;
7.4.3 the provisions of clause 7.2.1 shall be varied so as to refer
to costs incurred by the Landlord in effecting insurance
pursuant to clause 7.4.2 above.
7.5 Destruction by act of Terrorism or other uninsured risk
If the whole or substantially the whole of the Premises are destroyed or
damaged by an act of terrorism or other risk against which in either case
the Landlord (despite having used its best endeavours) has been unable to
procure insurance then the Landlord may by notice in writing to that
effect given to the Tenant within six months from the date of such damage
or destruction terminate this Lease with immediate effect (without
prejudice to any right of either party in respect of any antecedent
breach) Provided That if following receipt of such notice from the
Landlord the Tenant services a counter-notice upon the Landlord requesting
a new tenancy pursuant to the Landlord and Tenant Act 1954 then the rent
suspension provisions set out in clause 7.3.1 shall cease to operate from
the date of service of such counter-notice unless and until such counter-
notice and any related applications or proceedings are withdrawn or
terminated.
8 Provisos
8.1 Forfeiture
If any of the following events occurs:
8.1.1 the Tenant fails to pay any of the rents payable under this
Lease within 28 days of the due date (whether or not formally
demanded) or
8.1.2 the Tenant or Guarantor breaches any of its obligations in
this Lease or
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<PAGE> 30
8.1.3 execution or distress is levied on the Tenant's goods in the
Premises or
8.1.4 the Tenant or Guarantor being a company incorporated within
the United Kingdom
(i) has an Administration Order made in respect of it or
(ii) passes a resolution or makes an Order for the winding up
of the Tenant or the Guarantor otherwise than a member's
voluntary winding up of a solvent company for the
purpose of amalgamation or reconstruction or
(iii) a receiver or administrative receiver or receiver and
manager is appointed over the whole or any part of its
property assets or undertaking or
(iv) is struck off the Register of Companies or is dissolved
or ceases to exist under the laws of the country or
state of its incorporation or
(v) is deemed unable to pay its debts within the meaning of
Section 123 of the Insolvency Act 1986 or
8.1.5 proceedings or events analogous to those described in Clause
8.1.4 shall be instituted or shall occur where the Tenant or
Guarantor is a company incorporated outside the United Kingdom
or
8.1.6 the Tenant or Guarantor being an individual
(i) has a bankruptcy order made against him or
(ii) appears to be unable to pay his debts within the meaning
of Section 268 of the Insolvency Act 1986
then the Landlord may re-enter the Premises or any part of the Premises in
the name of the whole and forfeit this Lease and the Term created by this
Lease shall Immediately end but without prejudice to the rights of any
party in respect of any breach of the obligations contained in this Lease
8.2 Notices
8.2.1 Any notice is validly given if it is in writing and either
delivered to the recipient by hand or sent by registered or
recorded delivery post addressed to the recipient at the
address given in this Lease in the case of the Tenant while
this Lease is vested in Goldman Sachs International only
addressed for the attention of The Facilities Manager
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<PAGE> 31
or such other address as may have been notified in writing
with reference being made in such notification to this clause
of this Lease.
8.2.2 Any notice sent by registered or recorded delivery post shall
be treated as having been served on the third working day
after the date of posting
8.3 Arbitration
8.3.1 Where this Lease provides for reference to Arbitration then
reference shall be made in accordance with the Arbitration Act
1996 to a single arbitrator being a partner in or a director
of a leading London firm or company of Chartered Surveyors who
is experienced in the letting and/or rental valuation of
office premises in the City of London to be agreed between the
Landlord and the Tenant or in the absence of agreement
nominated on the application of either party by the President
for the time being of the Royal Institution of Chartered
Surveyors ("the President")
8.32 In the absence of a determination by the arbitrator as to his
fees they shall be borne equally by the Landlord and the
Tenant
8.3.3 If the arbitrator is ready to make his award but is unwilling
to do so due to either the Landlord's or the Tenant's failure
to pay its share of the costs in connection with the award the
other party may serve on the defaulting party a notice
requiring the that party to pay such costs within 14 days and
if the defaulting party fails to comply with such notice the
other may pay to the arbitrator the defaulting party's costs
and any amount so paid shall be a debt due forthwith from the
defaulting party to the other
8.3.4 If the arbitrator fails to give notice of his determination or
if he dies is unwilling to act or becomes incapable of acting
or if for any other reason he is unable to act either such
party may request the President to discharge the arbitrator
and appoint another arbitrator in his place to act in the same
capacity which procedure may be repeated as many times as
necessary
8.4 No Implied Easements
This Lease does not include any rights over the Adjoining Property except
those mentioned in Part I of the First Schedule and Section 62 of the Law
of Property Act 1925 is excluded from this Lease
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<PAGE> 32
8.5 No Warranty
The Landlord does not warrant that the Permitted Use complies with the
Planning Acts
8.6 Superior Lease
If there shall be any conflict between the terms of the Superior Lease and
the terms of this Lease then the terms of the Superior Lease shall pro
tanto prevail
8.7 Disclaimer
The Landlord shall not (save in the case of its negligence) be responsible
for any loss accident or damage sustained at the Premises.
8.8 Tenant's Option to Determine
If (but only if) the Tenant shall
8.8.1 give to the Landlord not less than 12 months and 3 days nor
more than 18 months prior notice in writing that the Tenant
desires to determine the Term on the Determination Date (it
being hereby agreed that any such notice shall be deemed to be
irrevocable whether or not expressed as such) and
8.8.2 have paid the rent reserved by Clause 3 up to the
Determination Date and
8.8.3 yield up the whole of the Premises in accordance with Clause
4.25 and with vacant possession on the Determination Date
(Provided that the Landlord may in its absolute discretion
waive any of the requirements in this Clause 8.8 but without
prejudice to its rights and remedies as a result of the
Tenant's failure to fulfil such requirements)
the Term shall cease and determine on the Determination Date but without
prejudice to any party's rights as a result of any antecedent breach
8.9 Jurisdiction and Service
8.9.1 Each of the parties hereto irrevocably agrees for the benefit
of each of the other parties hereto that the place of
performance of the obligations under or pursuant to this Lease
shall be England and that the Courts of England shall have
jurisdiction to hear and determine any suit action or
proceedings and to settle any disputes which may arise out of
or in connection with this Lease and for such purposes
irrevocably submits to the jurisdiction of such Courts
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<PAGE> 33
8.9.2 The submission to the jurisdiction of the Courts referred to
in Clause 8.9.1 hereof shall not (and shall not be construed
so as to) limit the rights of the Landlord to take proceedings
against the Tenant or the Guarantor in any other court of
competent jurisdiction nor shall the taking of proceedings in
any one or more jurisdictions preclude the taking of
proceedings in any other jurisdiction whether concurrently or
not
8.9.3 The Landlord the Tenant and the Guarantor each hereby
irrevocably agrees that
(i) any process issued out of the High Court may for the
purposes of the Rules of the Supreme Court of England
and any notices to be served on it under this Lease may
for the purposes of this Lease be served on it in each
such case by leaving a copy by ordinary post addressed
to it at the address for service in England and Wales
hereinbefore specified or at such other address in
England and Wales of which the party to be served shall
have received a notice which itself complies in all
respects with Clause 8.9.3(ii)
(ii) any notice of change of address for service to be given
by the Landlord the Tenant and the Guarantor shall
(a) be given in writing
(b) specify the date of this Lease and the parties
hereto
(c) contain the full address of the Premises
(d) specify the last applicable address for service
hereunder either as hereinbefore specified or (as
the case may be) as last notified pursuant to
Clause 8.9.3(ii) and the date of such notification
and
(e) specify the new address in England and Wales for
such service as aforesaid and the date (being not
earlier than 14 days after delivery of such
notice) from which the same shall apply
and any purported notice which fails in any respect to
comply with any of the provisions of this Clause
8.9.3(ii) shall not constitute due notice of change of
address for service for the purposes of this Clause
8.9.3(ii)
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<PAGE> 34
(iii) Any such service of process or notice pursuant to Clause
8.9.3(i) shall be deemed to have been completed two days
after posting of such process or notice or upon personal
delivery
8.9.4 The Landlord the Tenant and the Guarantor each hereby
irrevocably consents generally in respect of any legal action
or proceeding arising out of or in connection with this Lease
to the giving of any relief or the issue of any process in
connection with such action or proceeding including (without
limitation) the making enforcement or execution against any
property whatsoever and wheresoever (irrespective of its use
or intended use) of any order or judgment which may be given
in such suit action or proceeding
8.9.5 To the extent that the Landlord the Tenant or the Guarantor
may in any jurisdiction claim for itself or its assets
immunity from suit execution attachment (whether in aid of
execution before judgment or otherwise) or other legal process
and to the extent that in any such jurisdiction there may be
attributed to them or its assets such immunity (whether or not
claimed) the Landlord the Tenant and the Guarantor each hereby
irrevocably agrees not to claim and hereby irrevocably waives
such immunity to the full extent permitted by the laws of such
jurisdiction
9 Guarantee
The Guarantor covenants with the Landlord for the Term in the terms set
out in the Third Schedule
EXECUTED by the parties as a DEED the day and year first before written.
The First Schedule
Part I
Easements and Other Rights granted
1 Subject to obtaining the consent of the Landlord (such consent not to be
unreasonably withheld or delayed) and subject to obtaining all necessary
planning and other statutory consents (and complying with any conditions
specified in such consents) the right to erect and maintain any number of
aerials or satellite dishes on the roof of the Premises (subject to
compliance with any regulations relating thereto laid down from time to
time by the Corporation of London)
2 The right to instal plant on the roof of the Premises subject to the same
qualifications as in paragraph 1 above
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<PAGE> 35
[GRAPHIC OMITTED]
-------------
[LOGO]
Rolfe Judd
-------------
[ILLEGIBLE]
Plan No. 1
<PAGE> 36
3 The right to enter the Restaurant at reasonable times on reasonable prior
notice (except in the case of emergency) to enable the Tenant to carry out
its obligations under this Lease in relation to the structural elements
coloured orange on Plans 2 and 3
4 The right of protection from the Adjoining Property and the right of
support from the Adjoining Property as now enjoyed
PART II
EXCEPTIONS AND RESERVATIONS
There are excepted and reserved to the Landlord and all persons authorised
by it:
1 The right to carry out or consent to the carrying out by any person of any
erection of a new building or the rebuilding demolition or altering of the
Adjoining Property notwithstanding its effect on the light and air enjoyed
by the Premises provided that the Tenant's use and enjoyment of the
Premises is not materially prejudiced
2 Rights of entry onto the Premises as referred to in Clause 4.21
3 The right of support and protection for the Adjoining Property as now
enjoyed
4 The right of way on foot and with vehicles over and along and otherwise to
use the Service Ramp and the Service Area for vehicles for the purposes of
access to and egress from the Restaurant Spaces and the Loading Bay and for
persons for all purposes reasonably connected with the use and occupation
of the Restaurant (but not (except in case of emergency) members of the
public nor patrons of the Restaurant) subject to such reasonable
regulations in relation thereto as the Tenant may from time to time make
and notify to the Landlord in relation thereto
5 The use of the Restaurant Spaces subject to such regulations as aforesaid
6 Subject to the Tenant's reasonable security requirements being satisfied,
the right of way on foot and in emergencies only (a) over and along the
access way and stairway shown coloured brown on Plans 3 and 5 annexed and
then over and along the Service Ramp to gain access to Distaff Lane and (b)
from the exit at basement level shown marked X on Plan 5 over and along the
Service Area the Loading Bay and the Service Ramp to gain access to Distaff
Lane
7 The right of free passage and running of water soil gas and electricity and
other services through the Conduits which now or may hereafter during the
Term pass through along under or over the
33
<PAGE> 37
Premises and which serve the Adjoining Property together with the right on
giving reasonable notice (except in emergency) to enter and remain on the
Premises to inspect maintain and repair any such Conduits making good all
damage caused by such entry
8 The right to load and unload vehicles delivering goods to and from the
Restaurant from the Loading Bay subject to such reasonable regulations in
relation thereto as the Tenant may make and notify to the Landlord and the
tenant of the Restaurant
9 The right from time to time to install new Conduits within the area coloured
yellow on Plan 5 subject to the person installing such new Conduits
complying with the safety, security and other reasonable requirements of the
Tenant
10 The right for the Restaurant to use the refuse compactor (if any) within the
Service Bay subject to regulations as aforesaid
11 The right to use the Common Parts subject to regulations as aforesaid
12 The right from time to time to make alterations to the structural elements
shown coloured orange on Plans 2 and 3 subject to the Tenant's approval not
to be unreasonably withheld or delayed
PART III
ENCUMBRANCES
1 Entries 2, 3, 4 8 9 and 10 on the Charges Register of Title Number NGL
604815 as shown on office copies dated 17 February 1998
2 License to place memorial statue dated 24 September 1991 between the Mayor
and Commonalty and Citizens of the City of London (1) English Property
Corporation plc (2) and the Trustees of the Blitz Memorial Statue (3)
3 Deed of Covenant in respect of underground telegraphs dated 29 April 1969
between the Corporation of London (1) Metropolitan Provincial Properties
Limited (2) Ralli Brothers (Bankers) Limited (3) and HM Postmaster
General (4)
4 Agreement relating to City Walkway and Lift Works dated 25 September 1995
between the Mayor and Commonalty and Citizens of the City of London (1)
English Property Corporation plc (2) MEPC plc (3)
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<PAGE> 38
PART IV
SUPERIOR LEASE
<TABLE>
<CAPTION>
DATE PARTIES TERM PREMISES
<S> <C> <C> <C>
18 August The Mayor and Commonalty 150 years One Carter Lane and Two
1998 and Citizens of the City of from and Old Change Court London
London(1) including 23 EC4 shown edged red on the
the Landlord(2) December plan attached to the
1997 Superior Lease
</TABLE>
THE SECOND SCHEDULE
(RENT REVIEW)
1 In this Schedule:
1.1 REVIEW DATE means each of the Rent Review Dates mentioned in the
Particulars and RELEVANT REVIEW DATE shall be interpreted accordingly
1.2 RACK RENTAL VALUE means the annual rent (exclusive of VAT) at which the
Premises might reasonably be expected to be let in the open market at
the Relevant Review Date
ASSUMING
1.2.1 the letting is on the same terms as those contained in this
Lease but subject to the following qualifications:
(i) the term shall be one of 10 years commencing on the
Relevant Review Date
(ii) The amount of the Principal Rent shall be disregarded
but it shall be assumed that the Principal Rent is
subject to review on the terms of and at the same
intervals as the Principal Rent under this Lease
1.2.2 the Premises are available to let as a whole with vacant
possession by a willing landlord to a willing tenant without
premium
1.2.3 the Premises have been constructed at the Landlord's expense
in accordance with the Specification
1.2.4 all the covenants contained in this Lease have been fully
performed and observed
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<PAGE> 39
1.2.5 no work has been carried out to the Premises by the Tenant or any
undertenant which has reduced the rental value of the Premises.
1.2.6 if the whole or any part of the Premises or any access thereto has been
destroyed or damaged it has been fully reinstated.
BUT DISREGARDING
1.2.7 any goodwill attached to the Premises by reason of any business carried
on there
1.2.8 any effect on rent of the fact that any Tenant and any undertenant is or
has been in occupation of the Premises
1.2.9 any effect on rent of any improvements at the Premises made with the
Landlord's consent by the Tenant or any undertenant except improvements
carried out pursuant to an obligation to the Landlord or at the expense of
the Landlord (and the Landlord and the Tenant hereby agree for the
avoidance of doubt that the Category "A" Works shall not be disregarded on
any review of the Principal Rent payable hereunder)
Provided that the Rack Rental Value shall be that which would be payable
after the expiry of any rent free period or concessionary rent period for
fitting out purposes and after receipt of any contribution to fitting-out
works or other inducement relative to fitting out which might be made on a
letting of the Premises so that no discount reduction or allowance is made to
reflect (or compensate the tenant for the absence of) any such rent free or
concessionary rent period or contribution or other inducement in respect of
fitting out;
2 The Principal Rent shall be reviewed on each Review Date to the higher of:
2.1 the Principal Rent payable immediately before the Relevant Review Date
(disregarding any suspension or abatement of the Principal Rent) and
2.2 the Rack Rental Value on the Relevant Review Date agreed or determined in
accordance with this Lease
3 The Rack Rental Value at any Review Date shall be:
3.1 agreed in writing between the Landlord and the Tenant or
3.2 determined by Arbitration on the application of either Landlord or Tenant
at any time not earlier than three months before the Relevant Review Date
36
<PAGE> 40
4 If the Rack Rental Value is not agreed or determined by the Relevant Review
Date
4.1 the Principal Rent payable immediately before the Relevant Review Date
shall continue to be payable until the Rack Rental Value is ascertained
4.2 when the Rack Rental Value is ascertained
4.2.1 the Tenant shall pay within 14 days of ascertainment:
(i) any difference between the Principal Rent payable immediately
before the Relevant Review Date and the Principal Rent which would
have been payable had the Rack Rental Value been ascertained on
the Relevant Review Date ("the Balancing Payment") and
(ii) interest on the Balancing Payment at Base Rate from the date or
dates when the same would have been payable had the Rack Rental
Value been ascertained on the Relevant Review Date
4.2.2 the Landlord and Tenant shall sign and exchange a memorandum
recording the agreed amount of the Principal Rent payable on and from
the Relevant Review Date and each party shall bear its own costs in
relation to the memorandum
5 If at any Relevant Review Date the operation of the rent review provisions
in this Lease or the normal collection and retention by the Landlord of any
increase in the rent is prohibited or modified by statute the Landlord may
elect at any time that the day next following the date on which any
relaxation of such statute takes effect shall be substituted for the
Relevant Review Date
6 Time shall not be of the essence for the purposes of this Schedule
THE THIRD SCHEDULE
(GUARANTEE)
1 The Guarantor convenants with the Landlord as principal debtor that
throughout the Term or until the Tenant is released from its covenant
pursuant to the 1995 Act the Tenant will pay the rents reserved by and
perform its obligations contained in this Lease
37
<PAGE> 41
2 Without prejudice to paragraph 5 the liability of the Guarantor shall be no
greater than it would have been if the Guarantor had been the Tenant
(except for additional costs arising from the enforcement of the guarantee)
but shall not be affected by:
2.1 Any time given to the Tenant or any failure by the Landlord to enforce
compliance with the Tenant's covenants and obligations
2.2 The Landlord's refusal to accept rent at a time when it would or might
have been entitled to re-enter the Premises
2.3 Any variation of the terms of this Lease
2.4 Any change in the constitution structure or powers of the Guarantor the
Tenant or the Landlord or the administration liquidation or bankruptcy of
the Tenant or Guarantor
2.5 Any act which is beyond the powers of the Tenant
2.6 The surrender of part of the Premises
2.7 The transfer of the reversion expectant on the Term
2.8 Any other act or thing (other than the default of the Landlord) by which
(but for this provision) the Guarantor would have been released
3 Where the Guarantor is more than one person the release of one or more of
them shall not release the others
4 The Guarantor shall not be entitled to participate in any rental deposit
held by the Landlord in respect of the Tenant's obligations or stand in the
Landlord's place in respect of such rental deposit
5 If this Lease is disclaimed or forfeited and if the Landlord within 6
months of receipt of the notice of disclaimer and forfeiture requires in
writing the Guarantor will (at the option of the Landlord) either
5.1 enter into a new lease of the Premises at the cost of the Guarantor on the
terms of this Lease (but as if this Lease had continued and so that any
outstanding matters relating to rent review or otherwise shall be
determined as between the Landlord and the Guarantor) for the residue of
the Term from and with effect from the date of the disclaimer or forfeiture
or
38
<PAGE> 42
5.2 pay to the Landlord on demand an amount equal to the moneys which would
otherwise have been payable under the Lease until the earlier of 6 months
after the disclaimer or forfeiture and the date on which the Premises are
fully relet
6 The Guarantor may not assign its rights or delegate its obligations under
this Guarantee in whole or in part (and any purported assignment or
delegation is void) except for an assignment of all the Guarantor's rights
and obligations hereunder in whatever form the Guarantor determines may be
appropriate to a partnership, corporation, trust or other organisation in
whatever form (the "SUCCESSOR") that succeeds to all or substantially all
of the Guarantor's assets and business and that assumes such obligations by
contract, operation of law or otherwise. Upon any such assignment and
assumption of obligations the Guarantor shall give written notice thereof
to the Landlord and subject to the Landlord having received in a form
reasonably satisfactory to the Landlord, a deed executed by the Successor
(accompanied by a legal opinion in a form reasonably satisfactory to the
Landlord addressed to the Landlord from a reputable firm of lawyers in the
relevant jurisdiction confirming inter alia enforceability and due
execution) whereby the Successor assumes and covenants with the Landlord to
perform all outstanding and future obligations of the Guarantor under this
Agreement, whether such assumption is by operation of law or by virtue of
such deed, the Guarantor shall be relieved of and fully discharged from all
obligations hereunder, whether such obligations arose before or after such
delegation and assumption, but without prejudice to any antecedent breach.
THE COMMON SEAL OF BRITEL FUND
TRUSTEES LIMITED was hereunto
affixed in the presence of:
Authorised Signing Officer [Illegible]
-------------------------
Authorised Signing Officer [Illegible]
-------------------------
39
<PAGE> 1
EXHIBIT 10.11
DATED 5th March 1994
SHINE HILL DEVELOPMENT LIMITED
(Landlord)
and
SHINE BELT LIMITED
FAIR PAGE LIMITED
PANHY LIMITED
MAPLE COURT LIMITED
(Confirmors)
and
GOLDMAN SACHS (ASIA) FINANCE
(Tenant)
- --------------------------------------------------------------------------------
LEASE
of
The whole of 37th Floor
of Asia Pacific Finance Tower
3 Garden Road, Hong Kong
Inland Lot No. 8888
- --------------------------------------------------------------------------------
Registered in the Land Registry by
Memorial No.
on
p. Land Registrar
Bateson Starr
in association with
Mallesons Stephen Jaques
Suite 801, Asia Pacific Finance Tower
Citibank Plaza
3 Garden Road
Central, Hong Kong
Ref: SHIN2040-134 (HK1747)
<PAGE> 2
THIS LEASE is made this 5th day of March One Thousand Nine Hundred and
Ninety-Four
BETWEEN
(1) The party named and described as the Landlord in Part 1 of the First
Schedule hereto (hereinafter called the "Landlord" which expression shall
where the context admits include its successors and assigns);
(2) the party named and described as the "Confirmors" in Part 2 of the First
Schedule hereto (hereinafter called the "Confirmors"); and
(3) the party named and described as the "Tenant" in Part 3 of the First
Schedule hereto (hereinafter called "the Tenant").
WHEREBY IT IS AGREED as follows:-
1. DEFINITIONS
1.1 In this Lease, unless the context otherwise requires, the following
expressions shall have the following meanings ascribed to them.
"Buildings" the buildings erected on the Lot and more
particularly described in Part 1 of the Second
Schedule hereto.
"Deed of Mutual the Deed of Mutual Grant and Mutual Covenant
Covenant" and Management Agreement for the Lot and
the Buildings.
"Government" the Government of Hong Kong.
"House Rules" the rules governing or regulating the use,
operation and maintenance of the Buildings and the
services, facilities and amenities thereof and the
conduct of persons occupying, using or visiting the
same as may be prescribed by the Manager from time
to time in accordance with the Deed of Mutual
Covenant.
"Lot" All that piece or parcel of land registered in the
Land Registry as Inland Lot No.8888.
"Manager" the service company or agent for the time being
appointed as the Manager of the Lot and the
Buildings under the Deed of Mutual Covenant or the
Building Management Ordinance.
"Premises" All those premises more particularly described
[STAMP]
- -----------------------------
DUPLICATE or COUNTERPART
Original Stamped with
[name]
- -----------------------------
[STAMP] [STAMP]
<PAGE> 3
in Part 2 of the Second Schedule hereto.
"Rent" the rent more particularly described in Part 1 of
the Fourth Schedule hereto.
"Term" the term more particularly described in the Third
Schedule hereto.
1.2 References to Clauses and Schedules are references to clauses of or
schedules to this Lease.
1.3 The Index and the headings are for ease of reference only and do not form
part of this Lease or affect the construction thereof.
1.4 References to any Ordinance, regulation or other statutory provision include
references to such Ordinance, regulation or provision as modified, codified or
re-enacted from time to time.
1.5 In this Lease, if the context so permits or requires, words importing the
singular number only shall include the plural number and vice versa; words
importing the masculine gender only shall include the feminine gender and the
neuter gender and vice versa and words importing persons shall include
corporations.
2. PREMISES
2.1 The Landlord shall let and the Tenant shall take the Premises (the external
surfaces of the walls glass curtain walls windows frames and glass being
excluded) TOGETHER with the use in common with the Landlord and all others
having the like right of the entrances staircases landings passageways,
lavatories, lifts, escalators and central air-conditioning services serving the
Premises (whenever the same shall be operating) in the Buildings insofar as the
same are necessary for the proper use and enjoyment of the Premises and except
insofar as the Landlord or the Manager may from time to time restrict such use
for the purpose of replacing, renewing, repairing, decorating or maintaining the
same EXCEPT AND RESERVED unto the Landlord and all persons authorised by the
Landlord or otherwise entitled thereto:-
(a) the right of free and uninterrupted passage and running of water,
soil, gas, drainage, electricity and all other services or
supplies through such sewers, watercourses, conduits, pipes,
wires, cables and ducts as are now or may hereafter be in, on or
under the Premises or the raised flooring therein and serving or
capable of serving the Buildings or any adjoining or neighbouring
property together with the right to enter upon the Premises at all
times to inspect repair or maintain any such sewers, watercourses,
conduits, pipes, wires, cables and ducts;
(b) the exclusive right to install in or affix to any part of the
Buildings (other than the Premises) such flues, pipes,
- 2 -
<PAGE> 4
conduits, chimneys, aerials, plant, machinery and other apparatus,
signs, placards, posters and other advertising structures
whatsoever (whether illuminated or not) as the Landlord shall
think fit together with the right to repair maintain service
remove or replace the same;
(c) the right and liberty to enter upon the Premises in the
circumstances permitted hereunder;
(d) the right to subjacent and lateral support from the Premises for
the remainder of the Buildings;
(e) right of access to all common areas
for the Term yielding and paying therefor throughout the Term the Rent and the
management charges set out in Part 2 of the Fourth Schedule hereto which sums
shall be payable exclusive of rates and other outgoings and in advance clear of
all deductions, counterclaim or set-off whatsoever on the first day of each
calendar month; the first and the last of such payments to be apportioned
according to the number of days in the relevant month included in the Term.
3. RENT
3.1 The Tenant hereby agrees with the Landlord that the Tenant will throughout
the Term pay the Rent to the Landlord on the days and in the manner herein
provided in Hong Kong currency in the amount more particularly described in Part
1 of the Fourth Schedule hereto.
4. MANAGEMENT CHARGES & OTHERS
4.1 The Tenant hereby agrees with the Landlord that the Tenant will pay to the
Landlord in Hong Kong currency on the days and in the manner herein provided.
(a) MANAGEMENT CHARGES
(i) the monthly management charges (which include normal
air-conditioning charges) as set out in Part 2 of the
Fourth Schedule hereto subject to increase in accordance
with Clause 4.2 hereof; and
(ii) additional management charges (if any) payable by the
Tenant pursuant to the Deed of Mutual Covenant for the use
by the Tenant of those Common Facilities (as defined in the
Deed of Mutual Covenant) of the Buildings which are not
covered by the monthly management charges aforesaid and
additional air-conditioning charges (if any) payable by the
Tenant pursuant to the Deed of Mutual Covenant; and
- 3 -
<PAGE> 5
(b) INTEREST - by way of interest without any deduction counterclaim
or set-off whatsoever and on demand interest calculated on a daily
basis at a monthly rate equivalent to one and one-half percent (1
l/2%) on:-
(i) the Rent or any sum of money payable by the Tenant
hereunder and not received by the Landlord within fourteen
(14) days from the due date for payment (whether demanded
or not) from the due date aforesaid until the whole of such
sum is received by the Landlord;
(ii) any sum paid by the Landlord in the event of default by the
Tenant of its obligation to pay for the same under this
Lease from the date of payment by the Landlord until the
same is repaid to the Landlord; and
(iii) any sum which shall be properly declined by the Landlord so
as not to waive a breach of covenant from the due date
until acceptance following the remedying of the breach by
the Tenant.
4.2 INCREASE OF CHARGES
The monthly management charges referred to in Clause 4.1(a)(i) shall be
subject to increase at any time during the continuance of this Lease as
determined by the Manager in accordance with the Deed of Mutual Covenant and
upon the Landlord giving to the Tenant notice in writing of such increase.
4.3 RATES
(a) The Tenant further agrees with the Landlord that the Tenant will
pay and discharge all rates, taxes, water rates, assessments,
duties, impositions, charges and outgoings whatsoever (including
all charges and outgoings of a recurrent nature (if any) imposed
by the Deed of Mutual Covenant and/or the regulations prescribed
pursuant thereto to which the Premises are subject) now or
hereafter to be assessed, imposed, raised, charged or levied on
the Premises or any part thereof or upon the owner or occupier
thereof by Government, the Manager and/or other lawful authority
(Crown Rent, Property Tax and charges of a capital and
non-recurrent nature alone excepted) and pay or (if the same has
already been paid by the Landlord) refund to the Landlord on
demand in case any of the same are payable, assessed, imposed,
raised, charged or levied in respect of the Buildings as a whole
or any part thereof (which includes the Premises) a proper
proportion thereof to be reasonably determined by the Manager
and/or the Landlord as the amount attributable to the Premises.
- 4 -
<PAGE> 6
(b) In the event that an assessment to rates in respect of the
Premises shall be raised upon the Landlord direct, the Landlord
shall during the month immediately preceding any quarter in
respect of which such rates may fall due be at liberty to debit
the Tenant with the amount thereof and the same shall forthwith be
paid by the Tenant to the Landlord whereupon the Landlord shall
account for the same to the Government.
(c) In the event that no valuation of the Premises shall have been
made in accordance with the Rating Ordinance (Cap. 116) or any
statutory amendment or modification thereof for the time being in
force, the Landlord shall be at liberty to make an interim
valuation thereof and the Tenant shall, until such time as the
Premises are assessed to rates, pay to the Landlord quarterly and
in advance a sum equal to the rates which would be charged by the
Hong Kong Government for each quarter on the basis of such interim
valuation on account of the Tenant's liability under this Clause
4.3. Any over-payment or under-payment by the Tenant shall be
adjusted when a valuation under the Rating Ordinance shall have
been made known.
4.4 UTILITY CHARGES
The Tenant shall apply to the Hong Kong Electric Company Limited for the
provision of a separate electricity meter for the Premises and to apply to other
utility supply companies for similar provisions and pay and discharge all
deposits, installation charges and charges in respect of water gas electricity
telex and telephone as may be shown by or operated from the Tenant's own metered
supply or by accounts rendered to the Tenant in respect of all such utilities
consumed on or in the Premises PROVIDED that if the Landlord has already paid
the deposit and/or the installation charges in respect of the supply of water
gas electricity or telephone to the Premises, the Tenant shall reimburse the
Landlord on demand for such deposit and (as the case may be) pay to the Landlord
such amount as the Landlord may determine in respect of the installation charges
and the deposit, if any, shall be returned to the Tenant at the expiration of
the Term after deducting all outstanding liability for water gas electricity and
telephone charges (if any).
4.5 OTHER FACILITIES
(a) The Tenant hereby acknowledges that the Landlord has paid for the
installation of certain number of lines for "High Speed Data Link"
and that the Tenant may subscribe for the use of such lines
subject to availability thereof as determined by the Landlord in
its sole and absolute discretion. In the event that the Tenant
subscribes for the use of such lines, the Tenant shall pay to the
Landlord such amount as the Landlord may reasonably determine in
respect of the installation charges for such number of lines as
may be required by the Tenant.
- 5 -
<PAGE> 7
(b) The Tenant further acknowledges that facilities for the following
have been installed within the Buildings:-
(i) transmission and broadcasting of financial news and data;
(ii) video link; and
(iii) inter-floor communication.
The said facilities can, subject to availability thereof as
determined by the Landlord in its sole and absolute discretion, be
used by the Tenant upon payment by the Tenant of such reasonable
charges and upon such other terms and conditions as may from time
to time be determined or prescribed by the Landlord or other
person or persons entitled thereto Provided that the Tenant shall
be responsible for making all necessary arrangement with the
relevant service companies for the provision of the necessary
services.
5. TENANT'S POSITIVE COVENANTS
The Tenant hereby agrees with the Landlord as follows:-
5.1 COMPLIANCE WITH ORDINANCES, ETC
The Tenant hereby agrees with the Landlord that the Tenant shall obey and
comply with and shall indemnify the Landlord fully against any breach by the
Tenant of any ordinances, regulations, by-laws, rules, licences and requirements
of any Government or other competent authority insofar as they relate to or
affect the Premises or any works, additions or improvements therein or thereto
made by the Tenant or the use or occupation thereof or the conduct or carrying
on of the Tenant's business or the employment therein or any other act, deed,
matter or thing done, permitted suffered or omitted therein or thereon by the
Tenant or any servant, agent, employee, contractor or licensee (which term shall
include any person present in using or visiting the Premises with the Tenant's
consent, express or implied) of the Tenant and shall notify the Landlord
forthwith in writing of any notice received from any statutory or public
authority concerning or affecting the Premises or any services supplied thereto.
5.2 COMPLIANCE WITH CONDITIONS & DEED OF MUTUAL COVENANT
The Tenant shall observe, perform and comply with all the covenants,
terms and provisions of the Conditions of Sale or the Crown Lease under which
the Landlord holds the Premises and the Deed of Mutual Covenant and the House
Rules insofar as they relate to the Premises and indemnify the Landlord against
any breach or non-observance or non-compliance thereof by the Tenant.
- 6 -
<PAGE> 8
5.3 FITTING OUT
The Tenant shall fit out the interior of the Premises in accordance with
such plans and specifications as shall have been first submitted by the Tenant
to and approved in writing by the Landlord under Clause 5.3(b) hereof in a good
proper and workmanlike fashion using good quality materials and in all respects
in a style appropriate to a first class commercial office and shall maintain the
Premises including the furnishings, fixtures and fittings therein or thereto (if
any) in good and substantial repair and condition to the reasonable satisfaction
of the Landlord throughout the Term Provided That nothing herein shall make the
Landlord responsible for any damages or claims arising from any defects in the
design or quality of the fitting out carried out by the Tenant. The Tenant shall
not cause or permit to be made any variation to the approved fitting-out plans
and specifications or to the interior design or layout of the Premises without
the prior written approval of the Landlord, such approval not to be unreasonably
withheld.
For the purpose of fitting-out or redecorating or renovating the
Premises, the Tenant shall observe and comply with the following provisions:-
(a) APPROVAL OF PLANS - The Tenant shall at its own cost prepare and
submit to the Landlord for approval three (3) sets of suitable
drawings and specifications of the works proposed to be carried
out by the Tenant (hereinafter called the "TENANT'S WORKS") and
the schematic drawings illustrating the design and layout proposal
of the Tenant's Works (hereinafter collectively called the
"TENANT'S PLANS"). The Tenant shall include in the Tenant's Plans
the following:-
(i) detailed drawings, plans and specifications of or of any
changes in the electrical wiring and installations,
air-conditioning piping, ducting or vents or fire services
installation and/or other services;
(ii) details of the electricity consumption capacity, electrical
wiring and installation, telephone wiring, piping, ducting,
computer cabling, wiring and other arrangements (whether
underneath the raised flooring, above the false ceilings or
otherwise);
(iii) details of all lighting features;
(iv) details of partitioning, internal decoration, furnishings
and equipment;
(v) the position and details of any heavy equipment; and
(vi) such other relevant information as the Landlord may
- 7 -
<PAGE> 9
consider necessary.
(b) ACCEPTANCE OF PLANS - The Landlord will consider the Tenant's
Plans and may accept or reject the Tenant's Plans or require
modifications thereof or any part of them as it thinks fit in its
reasonable discretion and within reasonable time from the
submission of the Tenant's plans to the Landlord.
(c) FEES FOR APPROVAL & INSPECTION - The Tenant shall reimburse the
Landlord on demand the fees of all architectural, mechanical,
electrical and structural engineering consultants and other
professional's fees incurred according to fee notes or bills
rendered by any such consultants or professionals in connection
with the consideration and approval or rejection of the Tenant's
Plans and the supervision and inspection of the Tenant's Works.
The Tenant shall also pay to the Landlord on demand such amount as
the Landlord may in its absolute discretion prescribe as the
approval or vetting fees for the approval of the Tenant's Plans.
(d) COMPLIANCE WITH ORDINANCES - The Tenant shall comply with all
applicable statutes, codes, ordinances, licences and other
regulations for and shall be solely responsible for obtaining all
necessary approval from all relevant Government departments and
utility companies required for all work, performed by or on behalf
of the Tenant on the Premises. The approval by the Landlord's
agents or consultants of the Tenant's Works or the Tenant's Plans
or the inspection of the Tenant's Works shall not constitute or be
deemed to constitute any representation or certification by the
Landlord that the Tenant's Works are in compliance with the said
statutes, codes, ordinances, licences and other regulations. When
several sets of requirements must be met, the standard set by the
Landlord's consultants shall apply.
(e) PERMISSION FOR COMMENCEMENT - The Tenant will not commence the
Tenant's Works until the same shall have been approved in writing
by the Landlord and a notice shall have been given by the Landlord
that the Tenant's Works can be commenced and as soon as possible
after such approval and notice shall have been given, the Tenant
shall commence the Tenant's Works and complete them expeditiously.
(f) DESIGNATED CONTRACTORS - The following types of the Tenant's Works
shall not be carried out by any contractor other than contractors
designated by the Landlord:-
(i) the following types of the Tenant's Works relating to the
raised flooring:-
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<PAGE> 10
(aa) the alignment, re-alignment or removal of the
raised flooring installation;
(bb) the creation of openings on the raised flooring
panels;
(cc) the change of the headroom or height of the raised
flooring;
(dd) the cutting or subdivision of the raised flooring
panels; and
(ee) the laying of marbles or other finishes (other than
carpet) on top of the raised flooring;
(ii) works touching or affecting the heating, ventilation and
air-conditioning system for the Buildings (including that
part of the said system installed within the Premises);
(iii) electrical works to be undertaken by the Tenant in the
common areas of the Buildings in connection with the use
and enjoyment of the Premises by the Tenant;
(iv) works touching or affecting the fire services installations
of the Building (including those within the Premises);
(v) plumbing and drainage works;
(vi) works touching or affecting the building management system
for the Buildings;
(vii) works touching or affecting the communication networks
which forms part of the Common Facilities (as defined in
the Deed of Mutual Covenant) of the Buildings; and
(viii) works touching or affecting the suspended ceiling of the
Buildings (including that within the Premises).
The contract for the above types of the Tenant's Works to be
carried out at the Premises shall be made between the Tenant and
the designated contractor. All other types of the Tenant's Works
shall be carried by contractors as approved in writing by the
Landlord, such approval not to be unreasonably withheld Provided
always that the Landlord shall not in any way be responsible or
liable for the works carried out by or the performance of such
designated or approved contractors.
(g) INFORMATION ON CONTRACTORS - The Tenant shall submit to the
Landlord by hand or via registered post at least three
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<PAGE> 11
(3) days prior to the commencement of the Tenant's Works the
following information:-
(i) the name(s) and address(es) of the general contractor(s)
and other contractors designated or approved by the
Landlord whom the Tenant intends to engage for the Tenant's
Works;
(ii) the proposed commencement date of and the estimated date of
completion of the Tenant's Works; and
(iii) certificates of insurance for public liability and
workmen's compensation.
(h) COMPLIANCE WITH LANDLORD'S INSTRUCTIONS - In carrying out any
approved work under this Clause or other provisions of this Lease,
the Tenant shall cause its servants, agents, employees,
contractors, licensees and workmen to cooperate with the Landlord
and/or the Manager and all servants, agents and workmen of the
Landlord and/or the Manager and with other tenants or contractors
carrying out any work in the Buildings. The Tenant shall comply
with and cause its servants, agents, employees, contractors,
licensees and workmen to obey and comply with all reasonable
fitting out rules which may be prescribed by the Landlord or the
Manager and all reasonable instructions and directions which may
from time to time be given in connection with the carrying out of
such work by the Landlord, the Manager and all servants or agents
of the Landlord or the Manager.
(i) COMPLETION - As soon as practicable after completion of the
Tenant's Works, the Tenant shall provide the Landlord with a copy
of the "as-built" plans for the Tenant's Works.
(j) VARIATIONS - The Tenant shall not cause or permit to be made any
variation to the approved Tenant's Plans or the Tenant's Works
after the completion thereof except with the approval of the
Landlord, such approval not to be unreasonably withheld. The
Landlord may enter upon the Premises for the purpose of inspecting
the construction of the Tenant's Works. The Tenant shall forthwith
on demand by the Landlord and at its own cost and expense demolish
and remove any alteration or addition subsequently made to the
Tenant's Works in breach of the provisions of this Lease and
reinstate the Premises to the satisfaction of the Landlord.
(k) ELECTRICITY CHARGES FOR FITTING OUT - The Tenant shall be solely
responsible for all electricity and other utility charges incurred
in connection with or arising out of fitting out the Premises and
shall pay to the Landlord a service charge of such amount as the
Landlord may determine for the temporary supply of electricity and
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<PAGE> 12
water and other attendance rendered during the fitting out period.
(1) REMOVAL OF GARBAGE - The Tenant shall remove from the Premises all
garbage, refuse and construction and decoration waste to such
location as may from time to time be designated by the Manager and
if the Tenant shall fail to do so, the Landlord may cause such
removal to be made at the cost and expense of the Tenant.
(m) DEPOSIT - As security for the due observance by the Tenant of the
terms and conditions of Clause 5.3, the Tenant shall pay to the
Landlord such an amount as may be required by the Landlord as a
fitting-out deposit which shall be refunded to the Tenant without
interest within thirty (30) days after the completion of the
Tenant's Works if there shall be no breach of any of the terms or
conditions contained in Clause 5.3.
5.4 TELEPHONE INSTALLATIONS
The Tenant shall make arrangement with the Hong Kong Telephone Company
Limited with respect to the installation of telephones in the Premises Provided
that subject to availability of telephone lines already installed by the
Landlord within the Buildings, such arrangement shall be made by the tenant
jointly with the Landlord and such installations shall be in accordance with the
requirements of the Hong Kong Telephone Company Limited and shall not unduly
interfere with the use and enjoyment of the Buildings (other than the Premises)
by the owners and/or tenants thereof.
5.5 GOOD REPAIR OF INTERIOR
With the exception of maintenance required as a result of inherent
defects of a structural nature, the Tenant shall keep all the interior of the
Premises including the raised flooring and cables and wirings installed
thereunder, interior plaster or other finishing material or rendering to walls,
floors and ceilings of the Premises and the Landlord's fixtures and fittings
therein and all additions thereto including all doors, windows, window frames,
electrical installations and wiring, light fittings, fire alarm and
fire-fighting installations and all cables, conduits, sanitary and water
apparatus comprised in and used solely for the benefit of the Premises
(hereinafter collectively called the Landlord's Fixtures and Installations) and
all other fixtures fittings and additions in or at the Premises in good, clean,
substantial and proper repair and condition and properly preserved and painted
as may be appropriate and when from time to time required by the Landlord or any
relevant Government authority and so maintain the same at the expense of the
Tenant and deliver up the same to the Landlord at the expiration or sooner
determination of the Term in like condition, fair wear and tear excepted.
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5.6 REPAIR OF GLASS CURTAIN WALL
The Tenant shall pay to or reimburse the Landlord such reasonable amount
as may be payable to the Manager or other owners of the Buildings (other than
the Premises) under the Deed of Mutual Covenant in respect of all broken or
damaged part or parts of the glass curtain wall corresponding to the Premises or
other part or parts of the Buildings (if any) whether used exclusively by the
Tenant or not if the damage is caused by the act, default, neglect or omission
of the Tenant or any of its servants, agents, employees, contractors or
licensees.
5.7 ELECTRICAL INSTALLATIONS
The Tenant shall repair and replace any electrical wiring, installation
or piping within the Premises or used exclusively by the Tenant if the same
becomes dangerous or unsafe unless the damages are caused by inherent defects in
the wiring, installation or piping made by the Landlord or if so required by the
Landlord or the relevant utility company and in so doing or in carrying out any
other works thereto at the Tenant's own instigation the Tenant shall use only
the contractor previously nominated or approved by the Landlord in writing for
the purpose. The Tenant shall permit the Landlord or its agents or servants to
test the Tenant's wiring and/or piping in the Premises at any time. The Tenant
shall indemnify the Landlord and hold it harmless against any cost damage claim
demand action or proceeding resulting from or attributable to any mal-function
or disrepair of the electrical installation, wiring or piping in the Premises.
The Tenant shall not, without the prior written consent of the Landlord (such
consent not to be unreasonably withheld), install or alter or permit or suffer
to be made any alterations in or additions to the electrical wiring,
installation or piping.
5.8 GOOD REPAIR OF TOILETS & WATER APPARATUS
The Tenant shall maintain all toilets sanitary and water apparatus as are
located within the Premises (or elsewhere in the Buildings if used exclusively
by the Tenant) in good, clean, substantial and proper repair and condition at
all times during the Term and in accordance with the Regulations of the Public
Health Department or other relevant Government authority, fair wear and tear
excepted.
5.9 CLEANING CONTRACTORS
The Tenant shall keep the Premises and every part thereof at all times in
a clean and sanitary state and condition and dispose of all refuse and rubbish
in accordance with the House Rules and shall not bring or keep or suffer to be
brought or kept in or on the Premises anything which in the opinion of the
Landlord is or may become unclean unsightly or detrimental to the Premises. The
Tenant shall, at its own expense, employ cleaning contractors nominated or
approved by the Manager pursuant to the Deed of Mutual Covenant for the cleaning
of the Premises. The Tenant shall enter into a separate agreement with such
cleaning contractors and make all payments direct to such cleaning contractors.
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The Landlord shall not assume any responsibility for the acts, omissions or
neglect of such cleaning contractors and the Tenant shall fully indemnify the
Landlord against all claims costs and damage rising out of the acts, omissions
or neglect of such cleaning contractors.
5.10 CLEANING OF DRAINS
The Tenant shall pay to or reimburse the Landlord forthwith on demand the
reasonable cost incurred by the Landlord in cleaning, clearing, repairing or
replacing any of the drains pipes or sanitary or plumbing apparatus choked,
blocked or stopped up owing to the improper or careless use or neglect thereof
by the Tenant or its servants, agents, employees, contractors or licensees and
keep the Landlord fully indemnified against any cost claim or damage caused
thereby or arising therefrom.
5.11 MAKING GOOD DEFECTS
The Tenant shall notify the Landlord of and make good at the expense of
the Tenant all defects or damage caused by the act, default, neglect or omission
of the Tenant or any of its servants, agents, employees, contractors or
licensees in and to the Premises and other parts of the Buildings.
5.12 NOTICE OF ENTRY FOR REPAIR OF ADJOINING PREMISES
The Tenant shall permit the Landlord, the Manager and their duly
authorized surveyor(s) or agent(s) and all other persons duly authorized by the
Landlord and/or the Manager with or without workmen or others and with or
without appliances at all reasonable times and upon written notice (except in
case of emergency) to enter upon the Premises for the purpose of executing
repairs and/or alterations on any adjoining premises.
5.13 TO PERMIT LANDLORD TO ENTER & VIEW
The Tenant shall permit the Landlord, the Manager and their respective
agents and all other persons duly authorized by the Landlord and/or the Manager
with or without workmen or others and with or without appliances at all
reasonable times and upon written notice (except in case of emergency) to enter
upon the Premises to view the condition or user thereof or to inspect any works
in progress and to take inventories of the fixtures and fittings therein. The
Landlord may serve a notice on the Tenant requiring the Tenant to execute such
repair for which the Tenant is liable hereunder and/or remedy breach of such
covenant herein contained on the part of the Tenant to be observed within
fourteen (14) of the date of the notice (or sooner if required) and the Tenant
shall pay to the Landlord forthwith on demand all the expenses (including
solicitors' costs and surveyor's fees) incurred by the Landlord in connection
with the preparation and service of such notice Provided that in the event of an
emergency the Landlord and/or the Manager or their respective servants or agents
may enter the Premises without notice, forcibly if necessary. For the better
observance of this provision, if the Tenant is requested by the Manager under
the Deed of Mutual Covenant
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to furnish to the Manager duplicate of the keys to the entrance doors of the
Premises and the Tenant is prepared to accept such request, the Tenant shall
furnish to the Manager duplicate of the keys to the entrance doors of the
Premises. The Tenant shall further inform the Landlord as to the presence and
nature of any security system installed by the Tenant in the Premises.
5.14 TO EXECUTE REPAIRS ON RECEIPTS OF NOTICE
The Tenant shall, on receipt of any notice issued by the Landlord
pursuant to Clause 5.13 specifying any works or repairs which are required to be
done and for which the Tenant is liable hereunder, forthwith comply with the
notice, put in hand and execute the same with all possible despatch. If the
Tenant shall not within fourteen (14) days of the date of the notice (or sooner
if required) proceed diligently with the execution of such works or repairs, the
Tenant shall permit the Landlord or its authorized representatives with all
necessary workmen, tools, materials, equipment and appliances to enter upon the
Premises and execute such works or repairs and the costs thereof shall be a debt
due from the Tenant to the Landlord, be repayable by the Tenant forthwith on
demand by the Landlord and be forthwith recoverable from the Tenant by action.
5.15 PROSPECTIVE TENANTS
During the last six (5) months of the Term, the Tenant shall allow the
Landlord to show the Premises to prospective tenants or purchasers and allow the
Landlord to exhibit without interference upon such part of the Premises as the
Landlord shall think fit a notice indicating that the Premises are to become
vacant and containing such other information in connection therewith as the
Landlord shall require and the Tenant shall not conceal such notice.
5.16 PROTECTION FROM TYPHOON
The Tenant shall take all reasonable precautions to protect the interior
of the Premises against damage by storm, typhoon, heavy rainfall or the like and
in particular to ensure that all exterior doors (if any) and windows are
securely fastened upon the threat of such adverse weather conditions.
5.17 SERVICE ENTRANCES
The Tenant shall load and unload goods, equipment, furniture or large or
heavy objects only at such times and through such goods lifts, entrances and
staircases as may from time to time be designated by the Landlord or the Manager
for such purposes Provided always that under no circumstances shall passenger
lifts be used at any time for delivery purpose.
5.18 COMMON AREAS
The Tenant shall indemnify the Landlord against the cost of any
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damage caused to any part of the common areas of the Buildings occasioned by
act, default, neglect or omission of the Tenant or any of its servants, agents,
employees, contractors or licensees.
5.19 TENANT'S SERVANTS AGENTS ETC
The Tenant shall be liable for the acts, defaults, neglects and omissions
of the Tenant's servants, agents, employees, contractors or licensees (including
any person present in, using or visiting the Premises with the consent of the
Tenant, express or implied) as if they were the acts, defaults, neglects and
omissions of the Tenant and indemnify fully the Landlord against all costs,
claims, demands, expenses or liability to any third party or loss in connection
therewith.
5.20 DIRECTORY BOARDS
The Tenant shall pay to the Landlord forthwith upon demand the cost of
affixing, repairing, altering or replacing as necessary the Tenant's name on the
directory boards provided by the Landlord or the Manager.
5.21 SECURITY
The Tenant shall ensure that the Tenant's own security system (if any)
within and at the entrance of the Premises is at all times compatible with and
if so required by the Landlord linked up to the security system (if any) for the
Buildings provided and operated by the Landlord and/or the Manager.
5.22 CHANGE OF NAME
Without prejudice to Clause 6.16, the Tenant shall, in the event of the
Tenant changing its name, notify the Landlord at least seven (7) days prior to
such change of name.
5.23 YIELD UP PREMISES & HANDOVER
The Tenant shall quietly yield up the Premises and hand over the same
together with the Landlord's Fixtures and Installations and other fixtures
fittings and additions (if any) therein and thereto at the expiration or sooner
determination of the Term in good, clean and substantial repair and condition
substantially the same as at the commencement of this Lease (fair wear and tear
excepted) notwithstanding any rule of law or equity to the contrary Provided
that where any alterations or installations of any fixtures or additions to the
Premises have been made during the Term with or without the Landlord's written
consent, the Landlord may at its absolute discretion require the Tenant at its
own expense to reinstate, remove or do away with such alterations fixtures or
additions or such part or portion thereof as the Landlord may require and make
good and repair in a proper and workmanlike manner any damage to the Premises
and/or the Landlord's Fixtures and Installations as a result thereof before
delivering up the Premises to the Landlord. The Landlord may at its absolute
discretion further require the Tenant at
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its own expense to remove its own trade fixtures and trade equipment and make
good all damages to the Premises to the reasonable satisfaction of the Landlord
including damage to the fixtures fittings and decoration within the Premises and
the Buildings caused by such removal.
5.24 INFORM LANDLORD OF DAMAGE
The Tenant shall give notice in writing to the Landlord and the Manager
or their respective agents immediately of any damage that may be caused to the
Premises or suffered by any person therein or thereon and of any accident to or
defects in the electrical installation, wiring or piping, fittings, fixtures or
other facilities provided by the Landlord.
5.25 INDEMNIFICATION OF LANDLORD
Except in the case of damage or injury caused by inherent defects of a
structural nature, the Tenant shall be wholly responsible for any damage or
injury caused to any person whomsoever or any property whatsoever whether
directly or indirectly through the defective or damaged condition of any part of
the interior of the Premises or any fixtures, fittings, installations and
additions therein including the Landlord's Fixtures and Installations for the
repair of which the Tenant is responsible hereunder or through or in any way
owing to the spread of fire or smoke or the leakage or overflow of water from
the Premises or any part thereof or through the act, neglect, default or
omission of the Tenant or any of its servants, agents, employees, contractors or
licensees and shall make good the same by payment or otherwise and indemnify the
Landlord against all costs, claims, demands, actions and legal proceedings
whatsoever made upon the Landlord by any person in respect of any such loss
damage or injury and all costs and expenses incidental thereto. For the better
observance of this Clause, the Landlord may, but shall not be obliged to, effect
at the Tenant's expense insurance cover in respect of such risks in accordance
with the provisions of this Clause 5.25 with a reputable insurance company
acceptable to the Landlord.
5.26 TENANT'S INSURANCE
The Tenant shall effect and maintain during the Term insurance cover in
respect of the following:-
(a) Third party liability
In respect of liability for loss injury or damage to any person or
property whatsoever caused through or by any act, neglect, default
or omission of the Tenant which might give rise to a claim for
indemnity pursuant to Clause 5.25 hereof.
(b) Glass
All glass, if any, now or hereafter on or in the Premises
excluding the glass curtain wall for its full replacement
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value.
(c) Water Damage
Against damage to the Landlord's Fixtures and Installations to the
full insurable value occurring in respect of the use or misuse of
the fire-fighting installation installed within the Premises or
the incursion of water therein.
(d) Tenants Fittings
The Tenant's fittings, goods, personal effects, stock and
equipment within the Premises against fire and extraneous perils
for their full replacement value.
The policy of insurance shall be effected with an insurance company approved by
the Landlord, such approval not to be unreasonably withheld and shall be
endorsed to show the Landlord as registered owner of the Premises and shall be
in an amount of not less than that set out in the Fifth Schedule hereto payable
on each claim and shall contain a clause to the effect that the insurance cover
thereby effected and the terms and conditions thereof shall not be cancelled,
modified or restricted without the prior written consent of the Landlord. The
Tenant hereby further undertakes to produce to the Landlord as and when required
by the Landlord such policy of insurance together with a receipt for the last
payment of premium and a certificate from the insurance company that the policy
is fully paid up and in all respects valid and subsisting.
6. TENANT'S NEGATIVE COVENANTS
6.1 INJURY TO WALLS
The Tenant shall not, without the prior written consent of the Landlord
(which may, in the absolute discretion of the Landlord, be withheld or granted
upon such terms and conditions as the Landlord may impose), cut, maim, injure,
drill into, mark or deface or permit or suffer to be cut, maimed, injured,
drilled into, marked or defaced any doors (other than those installed by the
Tenant), windows, window-frames, partition or structural walls (other than those
internal partition walls erected by the Tenant), glass curtain walls, ceilings,
raised floor, beams, structural members or other part of the fabric of the
Premises or any of the plumbing or sanitary or air-conditioning apparatus or
installations included therein or lay or use any floor covering or do anything
which may damage or penetrate the existing raised flooring or slab.
6.2 ALTERATION TO EXTERIOR
The Tenant shall not, without the prior written consent of the Landlord
(which may, in the absolute discretion of the Landlord, be withheld or granted
upon such terms and conditions as the Landlord may
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impose), affix or attach anything or paint or make any alteration whatsoever to
the exterior of the Premises or the common areas or allow anything to be
affixed, attached, painted, suspended or hung outside the Premises or drop
anything from the Premises.
6.3 INSIDE FACES OF WINDOWS
The Tenant shall not paint, spray, put on or adhere any thing or
substance on the inside or outside faces of the windows or the window frames or
the glass curtain walls of the Premises.
6.4 NUISANCE
The Tenant shall not cause or produce or suffer or permit to be produced
on or in the Premises any sound or noise or vibration (including sound produced
by broadcasting from television, radio or any apparatus or instrument capable of
producing or reproducing music or sound or vibration) or other acts or things in
or on the Premises which is or are or may be or become a nuisance or annoyance
to the tenants or occupiers of adjacent or neighbouring premises or to users or
customers of the same or to the Landlord or which in the opinion of the Landlord
may prejudicially affect or depreciate the Premises or the Buildings or any
adjacent or neighbouring premises. It is hereby agreed that a persistent breach
by the Tenant of this Clause shall amount a breach of this Lease which will
entitle the Landlord to exercise its right of re-entry hereunder.
6.5 AUCTIONS & SALES
The Tenant shall not conduct or permit any sale to the public by auction,
bankruptcy, close-out or other sale of things or properties of a similar nature
to take place on the Premises.
6.6 USER
(a) The Tenant shall not use the Premises or any part thereof for any
purpose other than as office Provided that no warranty is given or
deemed to be given by the Landlord as to the fitness of the
Premises for such use. In particular, the Tenant shall not alter
the lavatory comprised in the Premises for any other use.
(b) The Tenant shall not use or cause or permit or suffer to be used
any part of the Premises for gambling or for any illegal, immoral
or improper purpose or in any way so as to cause a nuisance,
annoyance, inconvenience, damage or danger to the Landlord or the
tenants or occupiers of adjacent or neighbouring premises.
(c) The Tenant shall not tout or cause or permit or suffer any touting
or soliciting for business or the distribution of any pamphlet,
notice or advertising matter outside the Premises or anywhere
within the Buildings (except inside
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the Premises) by any of the Tenant's servants, agents, employees,
contractors or licensees.
(d) The Tenant shall not use the Premises or any part thereof as
sleeping quarters or as domestic premises within the meaning of
the Landlord and Tenant (Consolidation) Ordinance or similar
legislation for the time being in force and the Tenant shall not
allow any person to remain on the Premises overnight other than
for working purposes and with prior notice to the Landlord or the
Manager Provided that the Tenant may post watchmen to look after
the contents of the Premises and the names of the watchmen shall
be registered with the Landlord.
(e) Except for the reheating of pre-prepared food for consumption by
the Tenant's employees by an approved microwave oven, the Tenant
shall not cook, prepare, deliver or permit or suffer to be cooked
or prepared or delivered any food in the Premises save with the
prior written consent of the Landlord or permit any offensive or
unusual odours (as determined by the Landlord absolutely) to be
produced upon or emanate from the Premises.
(f) The Tenant shall not keep or permit or suffer to be kept any
animals or pets inside the Premises and shall take all such steps
and precautions to the satisfaction of the Landlord to prevent the
Premises or any part thereof from becoming infested by termites,
rats, mice, cockroaches or any other pests or vermin and for the
better observance of this provision, the Landlord may require the
Tenant to effect pest control for the Premises at the Tenant's
cost and expense at such intervals as the Landlord or any relevant
Government authority may direct by employing such pest
extermination contractors as the Landlord may approve, such
approval not to be unreasonably withheld.
6.7 HEAVY MACHINERY
The Tenant shall not, without the prior written consent of the Landlord
(such consent not to be unreasonably withheld but may be granted subject to such
reasonable conditions as the Landlord may impose), install or cause or permit or
suffer to be installed any equipment apparatus or machinery or any part thereof
which imposes a weight on any part of the flooring in excess of five (5) KPa or
which requires any additional electrical wiring or piping or which consumes
electricity or gas not metered through the Tenant's separate meter. The Landlord
shall be entitled to prescribe the maximum weight and permitted location of
safes and other heavy equipment and to require that the same stand on supports
of such dimensions and material to distribute the weight thereof as the Landlord
may deem necessary and the Tenant shall reimburse the Landlord all costs,
charges and expenses incurred by the Landlord in making such prescription.
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6.8 MANUFACTURE & STORAGE OF MERCHANDISE
The Tenant shall not use the Premises for the manufacture of goods or
merchandise or for the storage of goods or merchandise other than as samples or
exhibits reasonably required in connection with the Tenant's business carried on
therein or keep or store or cause or permit or suffer to be kept or stored any
extra-hazardous, inflammable or dangerous goods within the meaning of the
Dangerous Goods Ordinance and the regulations thereunder.
6.9 OBSTRUCTION IN PASSAGES
The Tenant shall not place or leave or suffer or to permit to be placed
or left by any of its servants, agents, employees, contractors or licensees any
boxes, furniture, articles or rubbish in the entrance or any of the staircases,
passages or landings or other parts of the Buildings used in common with other
tenants or the Landlord or otherwise encumber the same. The Tenant hereby agrees
to keep the Landlord indemnified against all losses, claims, damages or expenses
suffered or incurred by the Landlord as a result of a breach of this Clause.
Without prejudice to any other remedy it may have under this Lease, the Landlord
or any of its servants or agents may without any prior notice to the Tenant
remove any such obstruction and dispose of the same as it may in absolute
discretion think fit without incurring any liability therefor to the Tenant or
any other person whomsoever and the Tenant shall pay to the Landlord forthwith
on demand all costs and expenses incurred in connection with such removal.
6.10 GOODS & MERCHANDISE OUTSIDE THE PREMISES
The Tenant shall not place expose or leave or permit or suffer to be
placed exposed or left for display sale or otherwise any goods or merchandise or
thing whatsoever upon or over the ground or passages outside the Premises.
6.11 AIR-CONDITIONING
(a) The Tenant shall not install air-conditioning plant, machinery or
equipment in addition to or in place of those provided by the
Landlord.
(b) Where any air-conditioning plant, machinery or equipment for
cooling or recirculating air is installed in or about the Premises
(whether by the Landlord or the Tenant with the Landlord's
approval), the Tenant shall to the extent of the Tenant's control
over the same at all times use and regulate the same to ensure
that the air-conditioning plant, machinery or equipment is
employed to the best advantage in the conditions from time to time
prevailing.
(c) Where air-conditioning service is required by the Tenant outside
the normal business hours (i.e. from 8:00 a.m. to 6:30 p.m. every
day (Sundays and public holidays excluded)
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for Mondays to Fridays and from 8:00 a.m. to 2:00 p.m. on
Saturdays which are not public holidays) and is provided by the
Manager on the Tenant giving the Manager reasonable advance notice
of the Tenant's requirements, the Tenant shall pay to the Landlord
and/or the Manager forthwith on demand or reimburse the Landlord
such amount as the Manager may, in accordance with the Deed of
Mutual Covenant, charge for such additional air-conditioning
service Provided that nothing herein shall oblige the Landlord to
arrange for such additional air-conditioning service the provision
whereof is governed by the Deed of Mutual Covenant.
6.12 SIGNS
The Tenant shall not exhibit or display on or affix to the interior or
exterior of the Premises so as to be visible from outside the Buildings any
writing, sign, signboard or other device whether illuminated or not or affix any
writing, sign, signboard or other device in, at or above any common area, lobby,
landing, passage or corridor of the Buildings Provided always that the Tenant
shall be entitled to have its name and business displayed in lettering and/or
characters to a design and standard of workmanship approved by the Landlord on a
signboard or name-plate at the entrance of the Premises. The Landlord and/or the
Manager or their respective authorized agents shall have the right to remove at
the expense of the Tenant any signboard, sign, name-plate and decorative device
associated therewith affixed or put up or displayed without the prior written
consent of the Landlord.
6.13 AERIALS
The Tenant shall not erect any aerial on the roof or walls of the
Buildings or on the ceiling or walls of the Premises or interfere with, remove,
dismantle or alter the common aerials (if any) provided by the Landlord.
6.14 PARKING
The Tenant shall not park in, obstruct or otherwise use or permit any of
its servants, agents, employees, contractors or licensees to park in, obstruct
or otherwise use those areas of the Buildings allocated to the parking or
movement of or access for vehicles or designated as loading/unloading areas
otherwise than in accordance with the permissions and directions of the Landlord
and/or the Manager or as permitted under the House Rules.
6.15 BREACH OF INSURANCE POLICY
The Tenant shall not do or cause or permit or suffer to be done any act
or thing whereby the policy or policies of insurance on the Premises and/or the
Buildings against loss or damage by fire and/or other insurable risks and/or
claims by third parties for the time being subsisting may become void or
voidable or whereby the rate of premium or
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premia thereon may be increased and the Tenant shall pay to the Landlord
forthwith on demand all sums paid by the Landlord by way of increased premium or
premia thereon and all expenses incurred by the Landlord in and about any
renewal of such policy or policies arising from or rendered necessary by a
breach by the Tenant of this Clause.
6.16 NO SUBLETTING
The Tenant shall not assign, underlet, part with the possession of or
transfer the Premises or any part thereof or any interest therein or permit or
suffer any arrangement or transaction whereby any person who is not a party to
this Lease obtains the use, possession, occupation or enjoyment of the Premises
or any part thereof irrespective of whether any rental or other consideration is
given therefor. The lease created hereby shall be personal to the Tenant named
in this Lease. Without limiting the generality of the foregoing, the following
acts and events shall, unless approved in writing by the Landlord, be deemed to
be breaches of this Clause:-
(a) In the case of the Tenant being a partnership, the taking in of
one or more new partner whether on the death or retirement of an
existing partner or otherwise.
(b) In the case of the Tenant being an individual (including a sole
surviving partner of a partnership tenant), the death, insanity or
other disability of that individual to the intent that no right to
use, possess, occupy or enjoy the Premises or any part thereof
shall vest in the executors, administrators, personal
representatives, next of kind, trustee or committee of such an
individual.
(c) In the case of the Tenant being a corporation, the take-over,
reconstruction, amalgamation, merger, voluntary liquidation or
change in the person or persons in whom the majority of its voting
shares are vested or who otherwise has/have effective control
thereof.
(d) The giving by the Tenant of a power of attorney or similar
authority whereby the donee of the power obtains the right to use,
possess, occupy and enjoy the Premises or any part thereof or does
in fact use, possess, occupy or enjoy the same.
(e) The change of the business name of the Tenant.
6.17 COMMON FACILITIES, ETC.
The Tenant shall not make any alteration to or interfere or tamper or
permit its servants, agents, employees, contractors or licensees to make any
alteration to or interfere or tamper with any of the following other than in the
manner expressly permitted hereunder:-
(a) the raised flooring within the Premises;
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(b) the heating, ventilation and air-conditioning system for the
Buildings (including that part of system installed within the
Premises);
(c) the electrical installations for the Buildings;
(d) the fire services installations of the Buildings (including those
within the Premises);
(e) the installations for plumbing and drainage for the Buildings
(including those within the Premises);
(f) the building management system of the Buildings;
(g) the communication network which forms part of the Common
Facilities (as defined in the Deed of Mutual Covenant) of the
Buildings;
(h) the suspended ceiling of the Buildings (including that within the
Premises); and
(i) the conduits, pipes, wires, cables and ducts in, on or under the
Premises or the raised flooring therein serving or intended to
serve the Buildings or any adjoining or neighbouring property.
7. LANDLORD'S OBLIGATIONS
The Landlord hereby agrees with the Tenant as follows:-
7.1 QUIET ENJOYMENT
Subject to the Tenant duly paying the Rent and the other charges
hereinbefore mentioned on the days and in manner herein provided for and
observing and performing the agreements, stipulations, terms, conditions and
obligations herein contained, the Tenant shall have quiet possession and
enjoyment of the Premises during the Term without any interruption by the
Landlord or any person lawfully claiming under or through or in trust for the
Landlord.
7.2 CROWN RENT
The Landlord shall pay the Crown Rent, Property Tax and all other
expenses of a capital and non-recurrent nature attributable to or payable in
respect of the Premises.
7.3 MAIN STRUCTURE
The Landlord shall use best endeavours to procure that the Manager shall
keep the roof of the Buildings and the main structure and walls (including the
glass curtain walls) thereof and the mains, drains, pipes and cables therein in
a proper state of repair and condition
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Provided that the Landlord shall not be liable for breach of this Clause unless
and until prior written notice of any defect or want of repair shall have been
given by the Tenant to the Landlord and the Landlord shall have failed to notify
the Manager to carry out any such necessary repair after the lapse of a
reasonable time from the service of such notice.
7.4 AIR-CONDITIONING
The Landlord shall use its best endeavours to procure that subject to the
right of the Manager under the Deed of Mutual Covenant to change the hours for
air-conditioning services, the Manager shall provide air-conditioning services
to the Premises daily from 8:00 a.m. until 6:30 p.m. everyday (Sundays and
public holidays excluded) for Mondays to Fridays and from 8:00 a.m. to 2:00 p.m.
on Saturdays (which are not public holidays). If the Tenant shall require
additional air-conditioning services outside the times specified by the
Landlord, the Landlord shall use its best endeavours to procure that the Manager
shall provide the same to the Tenant on receiving reasonable notice of the
Tenants requirements. The charges for air-conditioning outside the times
specified by the Landlord shall be determined by the Landlord and/or the Manager
and notified to the Tenant from time to time.
7.5 FACILITIES
The Landlord shall use best endeavours to procure that the Manager shall
maintain the lifts, escalators, travelators, fire and security services
equipment, central air-conditioning system and other common facilities of the
Buildings in proper working order and keep the same in good repair.
7.6 COMPLIANCE WITH CONDITIONS
The Landlord shall comply with the provisions of the Conditions of Sale
or the Crown Lease under which the Landlord holds the Premises and shall not do
or permit any act or thing to be done (or omitted to be done) which results in
the whole or any part of the Premises being or becoming subject to re-entry
under the Conditions of Sale or the Crown Lease.
7.7 LANDLORD'S REPAIRS
The Landlord shall, upon receipt of the Tenants request therefor and
within a reasonable period, effect such repairs to the interior of the Premises
as shall be necessitated by damage caused by any defects or want of repair in
the structure of the Buildings or any part thereof or any other services or
facilities if the Landlord is liable for such repairs hereunder.
8. EXCLUSIONS
8.1 It is hereby expressly agreed and declared that the Landlord
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shall not in any circumstances be liable to the Tenant or any other person
whomsoever:-
(a) Lifts, Air-Conditioning & Other Common Facilities - in respect of
any injury, loss, damage or loss of business whatsoever which may
be suffered or sustained by the Tenant or any other person or to
any property whatsoever caused by or through or in any way owing
to any malfunction, defect in or breakdown of the lifts,
escalators, travelators, fire and security services, central
air-conditioning system, satellite and the ancillary distribution
system, backbone distribution system, the "High Speed Data Link"
system or any other services or facilities provided in the
Building or any failure, malfunction, explosion, variation,
interruption or suspension of electricity or water supply or any
other services or services provided in the Building; or
(b) Fire & Overflow Water - in respect of any injury, loss, damage or
loss of business whatsoever which may be suffered or sustained by
the Tenant or any other person or to any property whatsoever
caused by or through or in any way owing to typhoon, landslide,
subsidence of the ground, the escape of fumes, smoke, fire or any
other substance or thing or the overflow of water or vibrations
from anywhere within the Buildings or in the neighborhood or the
influx of rain water or sea water into the Buildings or the
Premises or the activity of rats or other vermin in the Buildings
or the act, neglect, default or omission of the tenants and
occupiers of the other parts of the Buildings or the defective or
damaged condition of the Premises or the Landlord's Fixtures and
Installations or any part thereof or dropping or falling of any
article whatsoever from the Buildings; or
(c) Security - for the security or safekeeping of the Premises or any
contents therein and in particular but without prejudice to the
generality of the foregoing, the provision by the Landlord and/or
the Manager of watchmen and caretakers or any mechanical or
electrical alarm systems (if any) of whatever nature shall not
create any obligation on the part of the Landlord as to the
security of the Premises or any contents therein and the
responsibility for the safety of the Premises and the contents
thereof shall at all times rest with the Tenants; or
(d) Vehicles - for the supervision of or for any damage or loss to
vehicles or accessories or injury to persons or any other damage
resulting therefrom,
and the Tenant shall indemnify and keep the Landlord fully indemnified against
all claims and demands whatsoever made upon the Landlord by any
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of the servants, agents, employees, contractors or licensees of the Tenant or
any other person claiming through or under the Tenant as a result of any such
loss or damage or injury aforesaid nor shall the Rent and other charges
hereinbefore mentioned or any part thereof abate or cease to be payable on
account of the happening of any of the foregoing.
9. SUSPENSION OF RENT IN CASE OF FIRE ETC.
If:-
(a) the Premises or the Buildings or any part thereof shall at any
time during the Term be destroyed or damaged or become
inaccessible or uninhabitable owing to fire, water, storm,
typhoon, defective construction, white ants, earthquake,
subsidence of the ground or any calamity beyond the control of the
Landlord and not attributable to the act, default, neglect or
omission of the Tenant or any of its servants, agents, employees,
contractors or licensees so as to render the Premises unfit for
commercial use in accordance with Clause 2.1; or
(b) at any time during the Term the Premises or the Buildings shall be
condemned as a dangerous structure or a demolition order or
closing order shall become operative in respect of the Premises or
the Buildings so as to prevent the occupation of the Premises the
happening of which is not attributable to the act, default,
neglect or omission of the Tenant or any of its servants, agents,
employees, contractors or licensees,
then the Rent hereby reserved or a fair proportion thereof according to the
nature and extent of the damage sustained or the order made shall after the
expiration of the then current calendar month be suspended until the Premises
shall be reinstated or fit for the use as aforesaid or the said order lifted, as
the case may be, Provided that:-
(i) the Landlord shall not be obliged to reinstate the Premises or the
Buildings or carry out any repairs thereto if, by reason of the
condition of the Premises or any local regulations or other
circumstances beyond the control of the Landlord, it is not
practicable or reasonable so to do; and
(ii) should the Premises or the Buildings not have been reinstated in
the meantime, either the Landlord or the Tenant may at any time
after four (4) months from the date of occurrence of such damage
or the said order give to the other of them a notice in writing to
determine this Lease and thereupon the same and everything herein
contained shall cease and be of no effect as from the date of such
notice but without prejudice to the rights and remedies of either
party against the other in respect of any
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<PAGE> 28
antecedent claim or breach of the agreements, stipulations, terms
and conditions herein contained or of the Landlord in respect of
the Rent payable hereunder prior to the date off such notice.
In the event of any disagreement between the parties hereto on the application
of this Section, the matter shall be referred to a single Chartered Surveyor
appointed by mutual agreement or failing agreement to a single Chartered
Surveyor nominated by the Chairman for the time being of the Royal Institution
of Chartered Surveyors (Hong Kong and China branch) and the decision of the
Chartered Surveyor who shall be acting as an arbitrator shall be final and
binding. The costs of such appointment of the Chartered Surveyors shall be borne
by the Landlord and the Tenant in equal shares.
10. DEFAULT
It is hereby expressly agreed and declared as follows:-
10.1 If:-
(a) the Rent and/or any of the other charges payable hereunder or any
part thereof shall be in arrear for fourteen (14) days after the
same shall have become payable (whether formally demanded or not);
or
(b) the Tenant shall suspend business without the Landlord's prior
written consent; or
(c) there shall be any other breach or non-performance of any of the
stipulations, conditions or agreements herein contained and on the
part of the Tenant to be observed or performed; or
(d) the Tenant shall become bankrupt or enter into composition with
his creditors generally or being a corporation go into liquidation
whether compulsory or voluntary (save for the purposes of
amalgamation or reconstruction approved by the Landlord) or shall
suffer a receiver to be appointed; or
(e) the Tenant shall suffer execution to be levied upon the Premises
or otherwise on the Tenant's goods in Hong Kong,
then and in any such case it shall be lawful for the Landlord at any time
thereafter to re-enter on and upon the Premises or any part thereof in the name
of the whole and thereupon this Lease shall absolutely determine but without
prejudice to any right of action by the Landlord in respect of any outstanding
breach or non-observance or non-performance by the Tenant of any of the terms of
this Lease. A written notice served by the Landlord on the Tenant to the effect
that the Landlord thereby exercises the power of re-entry herein contained shall
be a full and sufficient
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<PAGE> 29
exercise of such power without physical entry on the part of the Landlord
notwithstanding any rule of law or equity to the contrary.
10.2 Notwithstanding anything herein contained if the Rent, management,
air-conditioning or other charges or moneys herein reserved or any part or parts
thereof shall be in arrears (hereinafter referred to as "the Arrears") and if
the Tenant persists in its failure to pay the same after three (3) days' notice
in writing is given by the Landlord, the Landlord shall be entitled to:-
(a) recover from the Tenant as a debt the expenses incurred by the
Landlord in the course of recovering the Arrears including without
limitation:-
(i) such sum as the Landlord shall reasonably determine being
collection charges for the additional work incurred by the
Landlord's staff and/or the Manager (as the case may be) in
collecting the Arrears;
(ii) all legal charges and expenses on an indemnity basis
incurred by the Landlord for the purpose of recovering the
Arrears;
(iii) all other fees paid to debt-collectors appointed by the
Landlord for the purpose of collecting the Arrears; and
(b) disconnect or discontinue the supply of services to the Premises
and/or to the Tenant such as air-conditioning services, water,
gas, electric power, management and other services forthwith
without incurring any liability to the Tenant for any loss or
damage suffered by the Tenant as a result thereof;
Provided Always that the rights and remedies given to the Landlord by this
Clause shall be deemed cumulative remedies and shall not prejudice any right of
action or any remedy of the Landlord for the recovery of any Rent or money due
to the Landlord from the Tenant.
10.3 Any demand for or acceptance of any Rent by the Landlord or its agents
hereunder shall not be deemed to operate as a waiver by the Landlord of any
right to proceed against the Tenant in respect of any breach, non-observance or
non-performance by the Tenant of any of the agreements, stipulations, terms and
conditions herein contained and on the part of the Tenant to be observed and
performed and any such breach, non-observance or non-performance shall be deemed
to be a continuing breach of covenant and the Tenant shall not be entitled to
set up any such demand for or acceptance of rent as a defence in any action for
forfeiture or otherwise.
10.4 For the purpose of this Lease, any act, default, neglect or omission of any
servant agent employee contractor or licensee (which term shall include any
person present in using or visiting the Premises with
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<PAGE> 30
the consent of the Tenant express or implied) of the Tenant shall be deemed to
be the act, default, neglect or omission of the Tenant and any act, default,
neglect or omission of any servant agent employee contractor or licensee of the
Landlord shall be deemed to be the act, default, neglect or omission of the
Landlord.
10.5 For the purposes of Part III of the Landlord and Tenant (Consolidation)
Ordinance or any statutory modification or re-enactment thereof for the time
being in force and of this Lease, the Rent and the management charges payable in
respect of the Premises shall be and be deemed to be in arrear if not paid in
advance at the times and in the manner hereinbefore provided for payment
thereof.
11. DEPOSIT
11.1 To secure the due payment of the Rent and the due performance and
observance of the terms and conditions herein contained and on the part of the
Tenant to be performed and observed, the Tenant shall on the signing hereof and
throughout the Term maintain a deposit ("the Deposit") in such sum as shall from
time to time be equivalent to the aggregate of:-
(a) two (2) months' Rent payable hereunder;
(b) three (3) months' management fees payable hereunder from time to
time (initially of the amount set out in Part 2 of the Fourth
Schedule hereto); and
(c) one (1) quarter's rates payable in respect of the Premises by
reference to rateable value of the Premises and pending valuation
of the Premises in accordance with the Rating Ordinance (Cap.
116), by reference to the interim valuation made by the Landlord
pursuant to Clause 4.3(c).
The Deposit shall remain deposited with the Landlord and shall not be withdrawn
throughout the Term and shall only be released as hereinafter provided. The
Landlord shall be entitled to deduct from the Deposit the amount of all losses
and damages sustained or incurred by the Landlord as a result of any breach,
non-observance or non-performance by the Tenant of any of the covenants, terms
or conditions herein contained. The Tenant shall forthwith on demand deposit
with the Landlord the amount so deducted or (as the case may be) an additional
amount to the intent that the Tenant shall at all times during the Term maintain
with the Landlord as Deposit a sum as shall be equivalent to the aggregate of:-
(i) two (2) months' Rent payable hereunder;
(ii) three (3) months' management fees payable hereunder from time to
time.
(iii) one (1) quarter's rates payable in respect of the Premises by
reference to rateable value of the Premises and pending valuation
of the Premises in accordance with the Rating
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<PAGE> 31
Ordinance (Cap. 116), by reference to the interim valuation made
by the Landlord pursuant to Clause 4.3(c).
11.2 The Deposit shall be retained by the Landlord until the expiration of the
Term and after all the Tenant's covenants terms and conditions shall have been
duly performed and observed, it shall be repaid to the Tenant without interest
or compensation within thirty (30) days from the date of the Tenant delivering
up vacant possession of the Premises together with all fixtures and fittings
therein and thereto to the Landlord or within thirty (30) days from the date of
the full and final settlement by the Tenant of all claims made by the Landlord
in respect of the Tenant's obligations hereunder whichever shall be the later
Provided that the Landlord may prior to refund of the Deposit require the Tenant
to produce receipts for rates and other utilities covering the Term or other
evidence showing that payment thereof has been made by the Tenant during the
Term.
12. BUILDING MANAGEMENT & REGULATIONS
12.1 CHANGE OF COMMON AREAS, ETC
The Landlord or the Landlord's agent shall have the right from time to
time and at any time without the same constituting an actual or constructive
eviction of the Tenant and without incurring any liability to the Tenant in
respect thereof but causing as little inconvenience as possible to the Tenant to
erect install, restrict and/or alter the arrangement and/or the location and/or
alter the arrangement and/or the accessibility of entrances, staircases,
landings, passages, doors, doorways, corridors, lobbies, lifts, escalators,
travelators, lavatories, counters, showcases or other common areas of the
Buildings or any services or apparatus or installations serving the Buildings.
12.2 CONFLICT WITH HOUSE RULES
The House Rules shall be supplementary to the terms and conditions
contained in this Lease and shall not in any way derogate from such terms and
conditions. In the event of conflict between such House Rules and the terms and
conditions of this Lease the terms and conditions of this Lease shall prevail.
12.3 NON-ENFORCEMENT
The Landlord or the Landlord's agent shall not be liable for any loss or
damage howsoever caused arising from any non-enforcement of the Deed of Mutual
Covenant or the House Rules or non-observance thereof by any person.
12.4 DESIGNATION OF COMMON AREAS
The Landlord and/or the Manager shall be entitled to restrict, designate,
cordon off and/or partition any part or parts of the common areas and/or the
common facilities for the sole use of any tenant and/or
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<PAGE> 32
the Manager and the Tenant shall not raise any objection thereto and shall not
have any recourse against the Landlord and/or the Manager in any manner
whatsoever.
12.5 ALTERATION AND DISPLAYS
The Landlord reserves the right from time to time to improve extend add
to or reduce the Buildings or any part thereof or in any manner whatsoever alter
or deal with the Buildings or any part thereof (other than the Premises)
Provided always that in exercising such right the Landlord will endeavour to
cause as little inconvenience to the Tenant as is practicable under the
circumstances.
12.6 NAME OF THE BUILDINGS
Subject to the terms of the Deed of Mutual Covenant, the Landlord hereby
reserves the right from time to time by giving not less than three (3) months'
notice to the Tenant to change the names of the two (2) blocks of office
premises and the podium comprised in the Buildings or any one or more of them
without thereby becoming liable to the Tenant, its servants, agents or licensees
for any damages, claims, costs or expenses suffered or incurred as a result of
or in connection with any such change.
12.7 PUBLIC ADDRESS SYSTEM
Notwithstanding anything herein contained or implied to the contrary, the
Landlord may provide and install a public address system throughout the common
areas and may play, relay or broadcast or permit any other person to play, relay
or broadcast recorded music or public announcement therein.
13. INTERPRETATION AND MISCELLANEOUS
13.1 CONDONATION NOT A WAIVER
No condoning, excusing or overlooking by the Landlord of any default,
breach, non-observance or non-performance by the Tenant at any time or times of
any of the agreements, stipulations, terms and conditions herein contained shall
operate as a waiver of the Landlord's rights hereunder in respect of any
continuing or subsequent default, breach, non-observance or non-performance or
so as to defeat or affect in any way the rights and remedies of the Landlord
hereunder in respect of any such continuing or subsequent default or breach and
no waiver by the Landlord shall be inferred from or implied by anything done or
omitted by the Landlord unless expressed in writing and signed by the Landlord.
Any consent given by the Landlord shall operate as a consent only for the
particular matter to which it relates and shall in no way be considered as a
waiver or release of any of the provisions hereof nor shall it be construed as
dispensing with the necessity of obtaining the specific written consent of the
Landlord in the future in respect of similar or other matters unless expressly
so provided.
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<PAGE> 33
13.2 SERVICE OF NOTICES
Any notice required to be served on the Tenant shall be sufficiently
served if delivered to or despatched by pre-paid post to or left at the Premises
or at the last known address of the Tenant. Any notice to be served on the
Landlord shall be sufficiently served if delivered to or despatched by pre-paid
post to the registered office of the Landlord. A notice sent by hand shall be
deemed to be given upon delivery to the addressee and a notice sent by pre-paid
post shall be deemed to be given two (2) days after the date of the notice.
13.3 LANDLORD AND TENANT LEGISLATION
To the extent that the Tenant may lawfully so do the Tenant hereby
expressly agrees to deprive himself of all rights (if any) to protection against
eviction or ejectment provided by any existing legislation or by any future
enactment in substitution or amendment thereof or addition thereto to the intent
that the Tenant shall deliver up vacant possession of the Premises to the
Landlord at the expiration or sooner determination of the Term hereby created
notwithstanding any rule of law or equity to the contrary.
13.4 GENDER, ETC.
In this Lease, if the context permits or requires, words importing the
singular number shall include the plural number and vice versa and words
importing the masculine feminine or neuter gender shall include the other of
them and references to any Ordinance, regulation or other statutory provision
include references to such Ordinance, regulation or provision as from time to
time modified, codified or re-enacted.
13.5 MARGINAL NOTES
The marginal notes, headings and index are intended for guidance only and
do not form a part of this lease nor shall any of the provisions of this Lease
be construed or interpreted by reference thereto or in any way affected or
limited thereby.
13.6 STAMP DUTY
The stamp duty and Land Registry registration fees payable on this Lease
and its counterpart shall be borne by the Landlord and the Tenant hereto in
equal shares. Each of the Landlord and the Tenant shall pay its own legal costs
of and incidental to the Lease and its counterpart.
13.7 EXCLUSION OF WARRANTIES
(a) This Lease and a Side Letter of even date herewith sets out the
full agreement reached between the parties hereto and no other
representations have been made or warranties given relating to the
Landlord, the Tenant, the Buildings or the Premises and if any
such representations have been
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<PAGE> 34
made or warranties given the same are hereby waived.
(b) Nothing herein contained shall confer on the Tenant any right,
interest, privilege, easement or appurtenance whatsoever mentioned
or referred to in Section 16(1) of the Conveyancing and Property
Ordinance (Chapter 219 of the Laws of Hong Kong) save those
expressly set out herein.
13.8 NO FINE OR PREMIUM PAID
The Tenant acknowledges that no fine premium key money or other
consideration has been paid by the Tenant to the Landlord or its agents for the
grant of this Lease.
13.9 INSPECTION OF PREMISES
The Tenant hereby declares and confirms that it has duly inspected the
Premises and is satisfied with the current state and condition of the Premises
and the fixtures and finishes therein. The parties hereto agree that the
Premises will be let to the Tenant by the Landlord in the state and condition as
at the date of the signing of this Lease and no warranty or representation
whatsoever has been given or is made by the Landlord or its agents regarding the
user of the Premises and the Tenant shall satisfy itself or shall be deemed to
have satisfied itself that they are suitable for the purpose for which they are
to be used and the Tenant hereby agrees that it will at its own expense apply
for any requisite licence or licences permit or permits from all Government or
Public Authorities in respect of the carrying on of the Tenant's business
therein and shall execute and comply with all ordinances, regulation, Orders,
Notices or Rules made by all competent Government or Public Authorities in
connection with the conduct of such business by the Tenant in the Premises And
the Tenant hereby further agrees to indemnify the Landlord in respect of any
breach by the Tenant of the aforesaid And in particular but without limitation
no warranty or representation is given or made by the Landlord or its agents
regarding:-
(a) the fittings and finishes or the installations and appliances (if
any) in the Premises and/or the Buildings;
(b) the state and condition of the Premises or the Buildings and the
user thereof; or
(c) the composition of the Buildings
13.10 JOINT & SEVERAL LIABILITY
Where more than one person are named in Part 3 of the First Schedule
hereto as the Tenant, the representations, warranties, agreements, undertakings
and covenants herein contained on the part of the Tenant shall be the joint and
several representations, warranties, agreements, undertakings and covenants of
such persons.
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<PAGE> 35
13.11 CONFIRMATION
The Confirmors hereby confirm that the Landlord may enter into this Lease
notwithstanding the acquisition of equitable interests over the Premises by the
Confirmors.
13.12 EARLY TERMINATION
If the Landlord shall at any time during the Term enter into an agreement
for the sale of the Buildings or any part thereof including the Premises, the
Landlord shall be entitled to give to the Tenant six (6) months' notice in
writing to terminate this Lease and immediately upon the expiration of such
notice, this Lease shall absolutely determine but without prejudice to any right
of action by the Landlord in respect of any outstanding breach or non-observance
or non-performance by the Tenant of any of the terms of this Lease.
13.13 SALE SUBJECT TO LEASE
For the avoidance of doubt, it is hereby expressly declared and agreed
that if the Landlord shall at any time during the Term sell the Premises, then
as from the date of completion of the sale of the Premises by the Landlord and
subject to novation to the purchaser of the Premises of the Landlord's
obligation in respect of the Deposit, all the rights, powers, remedies, duties,
obligations and liabilities of the Landlord hereunder shall pass to and be
vested in the purchaser of the Premises and the Landlord shall be absolutely
released and discharged from all duties, obligations and liabilities hereunder
Provided that this Clause shall not in any way prejudice or affect the rights of
the Landlord or the Tenant hereunder which shall have accrued prior to the date
of completion of the sale of the Premises by the Landlord.
13.14 SPECIAL CONDITIONS
For the avoidance of doubt, it is hereby agreed that this Lease shall be
read and construed on the basis that the special conditions, if any, set out in
the Sixth Schedule hereto form an integral part of this Lease. In the event of
conflict between such special conditions and the terms and conditions
hereinbefore provided, the special conditions shall prevail.
13.15 LAW
This Lease shall be governed by and construed in accordance with the Laws
of Hong Kong. The Tenant hereby irrevocably submits to the non-exclusive
jurisdiction of the courts of Hong Kong and the States of New York and Delaware.
The Tenant hereby agrees that a judgement in any proceedings brought in any such
court may be enforced in any other jurisdiction by suit on the judgement or in
any other manner permitted by law. The submission aforesaid is non-exclusive and
the Landlord reserves the right to proceed in any other jurisdiction having or
claiming or accepting jurisdiction in respect of this Lease.
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THE FIRST SCHEDULE
THE LANDLORD: SHINE HILL DEVELOPMENT LIMITED whose registered office is
situate at 33rd Floor, Great Eagle Centre, 23 Harbour Road,
Hong Kong.
PART 2
THE CONFIRMORS: SHINE BELT LIMITED, FAIR PAGE LIMITED, PANHY
LIMITED and MAPLE COURT LIMITED all having their registered
offices situate at Suite 801, Asia Pacific Finance Tower,
Citibank Plaza, 3 Garden Road, Central, Hong Kong.
PART 3
THE TENANT: GOLDMAN SACHS (ASIA) FINANCE whose registered office is
situate at P.O. Box 309, Grand Cayman, Cayman Islands,
British West Indies.
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THE SECOND SCHEDULE
PART 1
THE BUILDINGS: Two (2) towers of office/commercial buildings, one
of which consisting of forty-seven (47) storeys and
called "CITIBANK TOWER" and the other of which
consisting of thirty-seven (37) storeys and called
"ASIA PACIFIC FINANCE TOWER" together with the
podium called "CITIBANK PLAZA" on which "CITIBANK
TOWER" and "Asia Pacific Finance Tower
PART 2
THE PREMISES: All That the whole of the Thirty-seventh Floor of
"ASIA PACIFIC FINANCE TOWER" which is for the
purpose of identification shown coloured Pink on the
Plan attached hereto.
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<PAGE> 38
THE THIRD SCHEDULE
THE TERM: The period of five (5) years and seven (7) months
commencing on 15 October 1993 and expiring on 14 May
1999 (both days inclusive).
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<PAGE> 39
THE FOURTH SCHEDULE
PART 1
The Rent (excluding management charges):
<TABLE>
<CAPTION>
Rent Payable (in Hong Kong Dollars) per
Period calendar month and exclusive of rates
------ -------------------------------------
<S> <C>
From 15 October 1993
To 14 December 1993 rent free period
From 15 December 1993
To 14 May 1996 HK$931,336.00
From 15 May 1996
To 14 May 1999 New Rent determined in accordance with
Special Condition 2 of the Sixth Schedule
</TABLE>
PART 2
MANAGEMENT CHARGES: HK$62,366.25 per calendar month (subject to increase
in accordance with Clause 4.2 hereof)
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<PAGE> 40
THE FIFTH SCHEDULE
INSURED AMOUNT
(a) THIRD PARTY LIABILITY
(i) HK$5,000,000.00 for any one (1) accident; and
(ii) unlimited cover for the insured period.
(b) GLASS The insured amount to be approved by the Landlord.
(c) WATER DAMAGE AND TENANT'S FITTINGS Minimum of HK$500.00 per square foot
of lettable area or a lump sum of HK$500,000.00, whichever is the
greater.
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<PAGE> 41
THE SIXTH SCHEDULE
SPECIAL CONDITIONS
1. RENT FREE PERIOD
The Tenant shall be entitled to occupy the Premises for the first two (2)
months of the Term (i.e. from 15 October 1993 to 14 December 1993) rent-free
Provided that the Tenant shall pay management charges, rates and utility charges
in accordance with the provisions of this Lease during the said period and
Provided that any delay in the completion of the fitting out work during the
said period caused by any reason whatsoever shall not in any way release the
Tenant from its obligations hereunder to pay the Rent, management charges, rates
and utility charges in accordance with the provisions of this Lease.
2. NEW RENT
2.1 The New Rent referred to in the Fourth Schedule shall be determined in
accordance with the provisions of this Paragraph 2.
2.2 The New Rent shall be determined by agreement between the Landlord and the
Tenant and such agreement shall be recorded in writing signed by the Landlord
and the Tenant.
2.3 If such agreement cannot be reached between the Landlord and the Tenant one
(1) month before the commencement of the period in respect of which the New Rent
is payable (hereinafter called "THE NEW RENT PERIOD"), the matter shall be
referred to an independent surveyor and valuer (hereinafter called "THE VALUER")
to be appointed by the Landlord and the Tenant within one (1) month before the
commencement of the New Rent Period and failing agreement as to the appointment,
shall be appointed by the Chairman for the time being of The Royal Institute of
Chartered Surveyors (Hong Kong Branch). The Valuer shall make a decision as to
the New Rent before the commencement of the New Rent Period and subject to
approval by the mortgagee of the Premises (the approval of the mortgagee not to
be unreasonably withheld), the decision of the Valuer shall be conclusive and
binding on the parties hereto.
2.4 In determining the New Rent, the Valuer shall act as an expert and not as an
arbitrator and shall take into account the open market rent for prime office
accommodation elsewhere in Central, Hong Kong and/or in similar office buildings
in Hong Kong having attributes comparable to those of the Buildings at the
commencement of the New Rent Period Provided that the Valuer shall take into
such open market rent per se and disregard all incentives (including without
limitation rent free period and decoration or removal allowances) that may have
the effect of reducing the effective return on such open market rent. The Valuer
shall act on the assumptions that as at that date:
(a) the Premises are fit for immediate occupation and use complete and
that the works, if any, carried out by the
- 40 -
<PAGE> 42
Tenant or its sub-tenants (if any and whether permitted hereunder
or otherwise) or the predecessor in title of the Tenant do not in
any way diminish or increase the rental value of the Premises and
that in case the Premises have been damaged or destroyed, they
have been fully reinstated and restored;
(b) the Premises are available for letting by a willing landlord to a
willing tenant with vacant possession and without a premium and
subject to the provisions of this Lease for a term equal to the
New Rent Period;
(c) the covenants herein contained on the part of the Tenant have been
duly performed, observed and complied with by the Tenant; and
(d) the Premises are being offered in the open market as a single
letting comprising not only the Premises but also the whole of the
33rd Floor, 36th Floor and Suites 3407, 3408, 3409, 3410 and 3411.
on the 34th Floor of Asia Pacific Finance Tower, but disregarding
the following factors:
(i) any effect on the rent of the fact that the Tenant has been
in occupation of the Premises;
(ii) any goodwill attached to the Premises by reason of the
carrying on thereat of the business of the Tenant; or
(iii) any increase in the rental value of the Premises
attributable to any improvements to the Premises or any
part thereof made during the Term including any fitting out
works carried out by and at the expense of the Tenant.
If the Valuer shall die, delay or become unwilling or incapable of acting or if
for any other reason the Chairman for the time being of the Royal Institute of
Chartered Surveyors (Hong Kong Branch) or the person acting on his behalf shall
in its absolute discretion think fit, he may by writing discharge the Valuer and
appoint another in his place.
2.5 Pending determination of the New Rent, the Tenant shall continue to pay on
account of the New Rent the Rent that was payable immediately before the
commencement of the New Rent Period and within fourteen (14) days after the
determination of the New Rent, the Tenant shall pay to the Landlord the
difference between the rent actually paid during the period pending
determination of the New Rent and the New Rent for the same period determined as
aforesaid plus such amount of interest as may be directed by the Valuer as being
reasonable.
2.6 The costs and expenses of the Valuer including the costs of his appointment
shall be borne by the Landlord and the Tenant in equal shares. The Landlord and
the Tenant shall each bear its own costs and expenses incurred in respect of or
in connection with the determination of the New Rent.
- 41 -
<PAGE> 43
3. OTHER CONDITIONS
The Tenant hereby acknowledges and agrees that the lease hereby granted
is subject to the condition that on or before 18 March 1994, the Tenant shall
deliver to the Landlord the following documents and the Tenant hereby undertakes
to deliver to the Landlord the following documents within the time limit
aforesaid:
(a) a certified copy of the Board resolutions of the Tenant relating to the
execution of this Lease;
(b) a Guarantee of even date herewith ("the Guarantee") executed by The
Goldman Sachs Group, L.P. ("the Guarantor") in favour of the Landlord in
the same form as that already given by the Guarantor in favour of the
Landlord in relation to the 36th and Part of the 34th Floors of Asia
Pacific Finance Tower, let by the Landlord to the Tenant; and
(c) a legal opinion (in form and substance reasonably acceptable to the
Landlord) issued by an in-house Counsel of the Guarantor regarding the
legality, validity and enforceability of the Guarantee.
If the Tenant fails to comply with the aforesaid condition, the Landlord may, by
notice in writing to the Tenant, terminate this Lease.
4. CROSS DEFAULT
(a) By a Lease ("THE FIRST LEASE") dated 24 June 1992, registered in the Land
Registry by Memorial No.5337973 and made between (1) the Landlord; (2)
the Confirmors; and (3) Goldman Sachs (Asia) Limited ("THE OUTGOING
TENANT"), the Landlord let to the Outgoing Tenant all those premises more
particulary described in the Second Schedule thereto ("THE FIRST
PREMISES") subject to the terms and conditions thereof.
(b) By an Assignment ("THE ASSIGNMENT") dated 22 June 1993 and made between
(1) the Outgoing Tenant; (2) the Tenant; (3) the Landlord; and (4) the
Confirmors, the Outgoing Tenant assigned to the Tenant all the estate
right benefit and interest of the Outgoing Tenant in the First Premises
comprised in the First Lease and all the rights of the Outgoing Tenant
under the First Lease To Hold the same unto the Tenant for the residue of
the term created by the First Lease subject to payment of the rent
reserved by and to the observance and performance of the covenants
agreements and conditions contained in the First Lease and on the part of
the Outgoing Tenant to be observed and performed.
(c) By a Lease ("THE SECOND LEASE") dated 22 June 1993 and made between (1)
the Landlord; (2) the Confirmors; and (3) the Tenant, the Landlord let to
the Tenant all those premises more
- 42 -
<PAGE> 44
particularly described in the Second Schedule thereto ("THE SECOND
PREMISES") subject to the terms and conditions thereof.
(d) By a Lease ("THE THIRD LEASE") dated 17 November 1993 and made between
(1) the Landlord; (2) the Confirmors; and (3) the Tenant, the Landlord
let to the Tenant all those premises more particularly described in the
Second Schedule thereto ("THE THIRD PREMISES") subject to the terms and
conditions thereof.
(e) The Tenant hereby expressly agrees that notwithstanding the provisions of
this Lease, the First Lease, the Second Lease and the Third Lease,
(i) the deposits made by the Tenant pursuant to Clause 11 of the First
Lease, the Second Lease and the Third Lease ("THE FIRST, SECOND
AND THIRD DEPOSITS") shall constitute security for the due payment
of the Rent payable under this Lease and the due performance and
observance by the Tenant of the terms and conditions of this Lease
as if the First, Second and Third Deposits form part of the
deposit paid by the Tenant pursuant to Clause 11 of this Lease;
and
(ii) the deposit made by the Tenant pursuant to Clause 11 of this Lease
("THE FOURTH DEPOSIT") shall constitute security for the due
payment of the Rent payable under the First Lease, the Second
Lease and the Third Lease and the due performance and observance
by the Tenant of the terms and conditions of the First Lease, the
Second Lease and the Third Lease as if the Fourth Deposit forms
part of the deposits paid by the Tenant pursuant to Clause 11 of
the First Lease, the Second Lease and the Third Lease.
(f) The Tenant further expressly agrees that any default under Clause 10.1 of
the First Lease, the Second Lease and the Third Lease will constitute a
default under Clause 10.1 of this Lease and vice versa thereby entitling
the Landlord to exercise all or any of its rights and remedies in respect
of the First Premises, the Second Premises, the Third Premises and the
Premises or any part thereof as if the First Premises, the Second
Premises, the Third Premises and the Premises had been let to the Tenant
under one single lease incorporating all the terms and conditions of this
Lease, the First Lease, the Second Lease and the Third Lease.
- 43 -
<PAGE> 45
IN WITNESS whereof the parties hereto have executed this Lease the day
and year first before written.
SEALED with the Common Seal of ) [SEAL]
)
SHINE HILL DEVELOPMENT LIMITED and )
Lo Ka Shui ) /s/ [signature]
SIGNED by Lo Ka Shui )
Directors ) /s/ [signature]
whose signature(s) is/are verified by:-)
/s/ K. C. Yeung
K. C. Yeung
Solicitor, Hong Kong
SEALED with the Common Seal of ) [SEAL]
)
SHINE BELT LIMITED and SIGNED by ) /s/ [signature]
Lo Ka Shui )
Tong Chun Wan whose )
Directors ) /s/ [signature]
signature(s) is/are verified by:- )
/s/ K. C. Yeung
Solicitor, Hong Kong
- 44 -
<PAGE> 46
SEALED with the Common Seal of ) [SEAL]
)
FAIR PAGE LIMITED and SIGNED by ) /s/ [signature]
Lo Ka Shui )
Tong Chun Wan whose ) /s/ [signature]
Directors )
signature(s) is/are verified by:- )
/s/ K. C. Yeung
Solicitor, Hong Kong
SEALED with the Common Seal of ) [SEAL]
)
PANHY LIMITED and SIGNED by ) /s/ [signature]
Lo Ka Shui )
Tong Chun Wan whose ) /s/ [signature]
Directors )
signature(s) is/are verified by:- )
/s/ K. C. Yeung
Solicitor, Hong Kong
SEALED with the Common Seal of ) [SEAL]
)
MAPLE COURT LIMITED and SIGNED by ) /s/ [signature]
Lo Ka Shui )
Tong Chun Wan whose ) /s/ [signature]
Directors )
signature(s) is/are verified by:- )
/s/ K. C. Yeung
Solicitor, Hong Kong
- 45 -
<PAGE> 47
SEALED with the Common Seal of )
)
GOLDMAN SACHS (ASIA) FINANCE AND ) /s/ MOSES TSANG
)
SIGNED by MOSES TSANG DIRECTOR )
)
)
)
)
whose signature(s) is/are verified by:-)
PETER MALLINSON /s/ PETER MALLINSON
whose signature are verified by
/s/ Charles Picken
C.M. PICKEN
Solicitor, Hong Kong
- 46 -
<PAGE> 48
[GRAPHIC OMITTED]
FLOOR PLAN 37TH FLOOR CITIBANK TOWER
<PAGE> 49
Dated the 19th day of November 1998
CITIREALTY (HONG KONG) LIMITED
(Landlord)
and
GOLDMAN SACHS (ASIA) FINANCE
(Tenant)
-------------------------------
SUPPLEMENTAL LEASE
of
Rear Portion of 39th Floor of Citibank Tower,
Citibank Plaza, 3 Garden Road, Hong Kong
(Inland Lot No. 8888)
-------------------------------
REGISTERED in the Land Registry
by Memorial No. 7626220
on 8 December 1998
/s/ [ILLEGIBLE]
for Land Registrar
Clifford Chance
Solicitors
30th Floor
Jardine House
1 Connaught Place
Hong Kong
Ref: C0828-00227.WKMW/jwyc
<PAGE> 50
THIS SUPPLEMENTAL LEASE is made this 19th day of November One
Thousand Nine Hundred and Ninety-eight
[STAMP]
BETWEEN:
(1) CITIREALTY (HONG KONG) LIMITED whose registered office is at 50th Floor,
Citibank Tower, Citibank Plaza, 3 Garden Road, Hong Kong (hereinafter
called "the Landlord" which expression shall where the context admits
include its successors and assigns); and
(2) GOLDMAN SACHS (ASIA) FINANCE having its principal place of business in
Hong Kong at 35th Floor, Asia Pacific Finance Tower, Citibank Plaza, 3
Garden Road, Central, Hong Kong (hereinafter called "the Tenant").
WHEREAS:
(A) This Supplemental Lease is supplemental to a Lease dated the 7th day of
July 1997 ("the Lease") made between the Landlord as landlord of the one
part and the Tenant as tenant of the other part and registered in the Land
Registry by Memorial No.7196720 whereby All That Rear Portion of 39th
Floor of Citibank Tower, Citibank Plaza, 3 Garden Road, Hong Kong ("the
Premises") was let by the Landlord to the Tenant for the period commencing
on 1 June 1997 and expiring on 14 May 1999 (both days inclusive) ("the
Term") at such rent and upon such terms and conditions as more
particularly mentioned therein.
(B) The Tenant has requested for and the Landlord has agreed to an extension
of the Term for 12 months from 15 May 1999 to 14 May 2000 (both days
inclusive) and on the following terms and conditions.
WHEREBY IT IS AGREED as follows:-
1. The Term shall be extended for 12 months from 15 May 1999 to 14 May 2000
(both days inclusive) and the Rent payable by the Tenant to the Landlord
for the period from 15 May 1999 to 14 May 2000 shall be HK$485,892.00 per
calendar month (exclusive of Management Charges and rates).
2. The Lease shall be amended by:-
(a) deleting Clauses 3.2, 3.3, 3.4. 3.5. 3.6, 16 and 17; and
(b) deleting the words "together with an option to renew for a further
term of thirty-six (36) months in accordance with Clause 3.2" on the
second and third lines of the Third Schedule to the Lease.
3. Each party hereto shall bear its own legal costs and disbursements of and
incidental to the preparation and completion of this Supplemental Lease
but the stamp duty and Land
[STAMPS]
2
<PAGE> 51
Registry registration fee payable on this Supplemental Lease shall be
borne by the parties hereto in equal shares.
4. Subject only to the variations and modifications herein contained, all the
other terms and conditions contained in the Lease shall remain in full
force and effect and shall be read and construed and be enforceable as if
the terms and conditions of this Supplemental Lease were inserted therein
by way of substitution or addition as the case may be.
IN WITNESS WHEREOF the parties hereto have executed this Supplemental
Lease the day and year first above written.
SIGNED by Gemay Shek )
)
)
)
for and on behalf of the Landlord ) /s/ Gemay Shek
whose signature is verified by: )
)
/s/ Clara Tang
CLARA TANG
Clifford Chance
Solicitor, Hong Kong SAR
SIGNED by )
)
Bradley I. Abelow ) /s/ Bradley Abelow
) ------------------------------
for and on behalf of the Tenant ) For and on behalf of
in the presence of/whose signature is ) Goldman Sachs (Asia) Finance
verified by :- )
/s/ Charles M. Picken
CHARLES M. PICKEN
Solicitor
Lovell White Durrant
Hong Kong SAR
3
<PAGE> 52
SIDE LETTER
1. LEASE AND SUPPLEMENTAL LEASE
Reference is made to a lease made the 7th day of July 1997 between (a)
Citirealty (Hong Kong) Limited as the landlord ("the Landlord") and (b)
Goldman Sachs (Asia) Finance as the tenant ("the Tenant") ("the Lease")
whereby the Landlord lets to the Tenant all those premises ("the
Premises") more particularly described in the Schedule hereto subject to
the terms and conditions thereof as extended by a supplemental lease made
the [19th] day of [November] 1998 between the same parties ("the
Supplemental Lease"). The terms defined in the Lease and Supplemental
Lease shall have the same meaning when used herein.
2. CONSTRUCTION
The parties hereto agree that the Lease and Supplemental Lease shall be
read and construed subject to the provisions hereof.
3. APPLICATION OF SIDE LETTER
(1) The parties hereto confirm and agree that the side letter previously
entered into by the parties hereto dated 7th July 1997 ("the Side
Letter") shall be amended to the extent that Clause 9 shall be
deleted and shall be replaced by the following wording:-
"Notwithstanding Clause 6.16 of the Lease, the Tenant may from time
to time during the residue of the Term assign the Lease into the
name of other companies within The Goldman Sachs Group, L.P. and
which are controlled, whether directly or indirectly as to ninety
per cent (90%) or more by the The Goldman Sachs Group, L.P. or any
entity to which all or ninety per cent (90%) or more of the assets
of The Goldman Sachs Group, L.P. may be transferred."
(2) The parties hereby confirm and agree that the Side Letter shall be
amended to the extent that Clause 6 thereof shall be deleted and
shall be replaced by the following:-
"Notwithstanding Clause 6.16 of the Lease, the Tenant may share
occupation of the Premises with Goldman Sachs (Asia) Securities
Limited and other companies which are within the group of the
companies controlled by The Goldman Sachs Group, L.P. and which are
controlled whether directly or indirectly as to ninety per cent
(90%) or more by The Goldman Sachs Group, L.P. or any entity to
which all or ninety per cent (90%) or more of the assets of The
Goldman Sachs Group L.P. may be transferred."
(3) The parties hereby confirm and agree that the Side Letter shall be
amended to the extent that Clause 3 thereof shall be deleted.
<PAGE> 53
(4) The parties hereby confirm and agree that the Side Letter shall be
amended to the extent that Clause 7.8 thereof shall be deleted.
(5) The parties hereby confirm and agree that the Side Letter shall be
amended to the extent that Clause 10 thereof shall be deleted.
4. MISCELLANEOUS
(1) Subject only to the variations and modifications herein contained
all the other terms and conditions contained in the Side Letter
shall remain in full force and effect and shall be construed and be
enforceable as if the terms and conditions of this side letter were
inserted therein by way of substitution deletion or addition as the
case may be.
(2) The parties further agree that this side letter shall not be lodged
for registration at the Land Registry and the content of this side
letter shall be kept strictly confidential.
THE SCHEDULE
The Premises
All That Rear Portion of the Thirty-ninth Floor of Citibank Tower, Citibank
Plaza, 3 Garden Road, Hong Kong as shown hatched pink on the Plan attached to
the Lease.
IN WITNESS whereof the Landlord and the Tenant executed this Side Letter this
19th day of November 1998.
)
SIGNED by Gemay Shek )
for and on behalf of the Landlord ) /s/ Gemay Shek [SEAL]
whose signature(s) is/are verified by:- )
)
/s/ Clara Tang
CLARA TANG
Clifford Chance
Solicitor Hong Kong SAR
SEALED with the Common Seal of )
GOLDMAN SACHS (ASIA) FINANCE ) /s/ Bradley Abelow [SEAL]
and SIGNED by )
Bradley I. Abelow )
whose signature(s) is/are verified by:- )
/s/ Charles M. Picken
CHARLES M. PICKEN
Solicitor
Lovell White Durrant
Hong Kong SAR
-2-
<PAGE> 54
SIDE LETTER
1. Tenancy Agreement
Reference is made to a Tenancy Agreement ("the Agreement") of even date
herewith and made between Kerry Real Estate Agency Limited as agent for the
registered owner of the Property, Fair Page Limited ("the Landlord") and Goldman
Sachs (Asia) Finance ("the Tenant") whereby the Landlord lets to the Tenant all
those premises ("the Premises") more particularly described in the Schedule
hereto subject to the terms and conditions of the Agreement. Terms defined in
the Agreement shall have the same meaning when used herein.
2. Construction of the Agreement
The parties hereby agree that the Agreement shall be read and construed
subject to the provisions hereof.
3. Charges for additional air-conditioning supply.
3.1 The Landlord hereby declares that the charges for additional
air-conditioning service referred to in Clause 4.04(b) of the Agreement is
currently estimated by the Manager to be:-
(a) at the rate of HK$13.40 for every two thousand (2,000) sq. ft. of lettable
area or part thereof for every hour or part thereof for long term standing
instructions; and
(b) at the rate of HK$45.00 for every two thousand (2,000) sq. ft. of lettable
area or part thereof for every hour or part thereof for ad hoc
instructions;
provided that whether instructions given shall qualify as long term standing
instructions or ad hoc instructions shall be determined by the Manager in its
absolute discretion.
3.2 Without prejudice to Clause 4.04(b) of the Agreement the Landlord shall use
its best endeavours to procure the Manager to provide the Tenant with additional
air-conditioning service if the same is required by the Tenant subject to the
Tenant complying with the terms of the Deed of Covenant relative to the
provision of additional air-conditioning service.
4. Power and Chilled Water Supply, etc.
4.1 Whereas the Landlord or its predecessor in title has permitted the Tenant
pursuant to three Side Letters dated 19th May 1994, 4th September 1995 and 11th
April 1997 in respect of prior leases or tenancy agreements in respect of the
Premises to make various connections to the tenants' main switchboards and to
install plant, machinery and equipment and make connections in the Building to
improve the power supply of the Premises and to allow for an additional chilled
water supply for the Premises, the Tenant agrees that the Tenant shall, at its
own costs and expense, keep all plant, machinery and
<PAGE> 55
-2-
equipment installed in connection therewith and exclusively for the benefit of
the Tenant in good order and condition and properly maintained and shall execute
such repairs or replacements as may be required by the Landlord, the Manager,
the relevant Government departments or any affected utility companies provided
that:-
(a) in so far as the Manager considers that the maintenance or repair of any
of the aforesaid items is closely connected with the maintenance or repair
of the common facilities of the Building the Tenant shall allow the
Manager to execute the maintenance and or repair on behalf of the Tenant
and to pay to the Manager forthwith on demand the reasonable costs and
expenses incurred by the Manager in so doing;
(b) the Tenant shall pay the Manager forthwith on demand a fair and reasonable
proportion of the costs and expenses incurred by the Manager in
maintaining and repairing modifications to the existing plant, machinery
and equipment forming part of the common facilities of the Building which
are not solely for the benefit of the Tenant.
For the avoidance of doubt, the Tenant hereby expressly acknowledges that the
Landlord shall not in any way be responsible for the act, neglect, default or
omission of the Manager. The Tenant shall indemnify the Landlord against all
costs, claims, demands, actions and legal proceedings whatsoever made upon the
Landlord by any person in respect of any loss, damage or injury caused to any
person whomsoever or any property whatsoever whether directly or indirectly as a
result of the installation of plant, machinery and equipment made by the Tenant
or the defective or damaged condition of such plant, machinery, equipment or the
connections made by the Tenant for the purposes of obtaining the power supply
and additional chilled water supply.
4.2 For avoidance of doubt, the Tenant hereby acknowledges and agrees that its
obligations under Clause 3.23 of the Agreement shall be extended to the plant,
machinery and equipment installed pursuant to the provisions of this paragraph
as if the same were fixtures, fittings and additions made in or to the Premises.
The Tenant also undertakes at the expiration or sooner determination of the Term
to comply with any obligations entered into under the aforementioned Side
Letters to remove the said connections, plant, machinery and equipment and to
restore or reinstate any parts of the Building affected by such removal.
5. Non-Application of Provisions of the Agreement
5.1 Notwithstanding Clause 5.22(c) of the Agreement, the take-over,
reconstruction, amalgamation, merger or voluntary liquidation of the Tenant or
change in the person or persons who owns or own a majority of the Tenant's
voting shares or who otherwise has or
<PAGE> 56
-3-
6. User of the Premises
Notwithstanding Clause 5.22 of the Agreement, the Tenant may share
occupation of the Premises with (i) Goldman Sachs (Asia) Securities Limited and
other companies which are within the group of companies controlled by the
Goldman Sachs Group, L.P. and which are controlled, whether directly or
indirectly as to ninety (90) percent or more by the Goldman Sachs Group, L.P.;
OR (ii) any entity previously approved by the Landlord in writing and to which
at least 90% of all the assets of the Goldman Sachs Group, L.P., has been
transferred ("the Licensee") provided that the Tenant ensures (and the Tenant
hereby undertakes to the Landlord that it will ensure) that:-
(i) the Licensee will occupy the Premises as a bare licensee only;
(ii) the Licensee will observe and perform the Tenant's obligations under
the Agreement;
(iii) prior to the expiration or determination (including but not limited
to the determination of the Term as a result of the breach of the
Agreement on the part of the Tenant) of the Term all and any right
of the Licensee to occupy the Premises or any part thereof shall be
fully and effectually extinguished and the Licensee shall cease to
occupy the Premises or any part thereof;
(iv) all the chattels, furniture, machines, plant, equipment and other
articles in on or at the Premises belonging to or in the possession
of the Licensee or the Tenant can be distressed or distrained by the
Landlord for non-payment of rent or other charges due under the
Agreement and execution can be levied upon the same; and
(v) the Licensee shall prior to its occupation sign and supply the
Landlord with an undertaking letter in the form set out in the
Appendix hereto.
7. Assignment of the Agreement
Notwithstanding Clause 5.22 of the Agreement, the Tenant may from time to
time during the residue of the Term assign the Agreement into the name of
another company within the Goldman Sachs Group, L.P. provided that the Tenant
shall obtain prior written approval of the Landlord (such approval not to be
unreasonably withheld).
8. Sub-letting
Notwithstanding Clause 5.22 of the Agreement, the Tenant may, with the
prior written consent of the mortgagee (if any) of the Premises (such consent
not to be unreasonably withheld) and subject to the consent of the Landlord as
hereinafter provided, sub-let not more than twenty-five (25) per cent of the
lettable area of Suites 3701 to 3707 on the 37th Floor of Citibank Tower ("the
Sub-lettable Portion") provided that the following provisions shall be complied
with by the Tenant:-
<PAGE> 57
-4-
(a) if the Tenant is desirous of sub-letting the Sub-lettable Portion or any
part thereof, the Tenant shall notify the Landlord of its intention to
sub-let and shall provide the Landlord with particulars of the following:-
(i) the name of the proposed sub-tenant and other particulars thereof
which are reasonably required by the Landlord for the purpose of
deciding whether or not to approve the identity of the sub-tenant;
(ii) the nature of business proposed to be carried on by the proposed
sub-tenant at that part of the Sub-lettable Portion to be sub-let;
(iii) that part of the Sub-lettable Portion to be sub-let together with a
plan (which shall be for identification purposes only) showing the
position and dimension thereof; and
(iv) the terms and conditions of the proposed sub-letting including the
terms of the incentives and allowances, if any, to be granted to the
sub-tenant.
(b) The Tenant shall obtain the prior written consent of the Landlord to the
identity of the proposed sub-tenant and the business proposed to be
carried on by the proposed sub-tenant at that part of the Sub-lettable
Portion to be sub-let.
(c) The rent per square foot at which the Tenant offers any part or parts of
the Sub-lettable Portion for sub-letting (taking into account incentives
and allowances, if any, granted by the Tenant) shall not be less than the
rent then offered by the Landlord to prospective tenants for other
premises of a comparable size and location in the Building provided that
in the event that there shall be no other premises of a comparable size
and location in the Building then offered for rent by the Landlord, the
minimum rent at which the Tenant may offer any part or parts of the
Sub-lettable Portion for sub-letting to a sub-tenant shall be fixed by
reference to the mean of the rent then offered by the Landlord to
prospective tenants for other premises of a comparable size but in a
better location in the Building and the rent then offered by the Landlord
for other premises of comparable size but in an inferior location in the
Building.
(d) The rent per square foot at which the proposed sub-letting shall be made
(taking into account incentives and allowances, if any, granted by the
Tenant) shall be mutually agreed between the Landlord and the Tenant
provided that the agreement of the parties shall not be unreasonably
withheld.
(e) The sub-letting shall not extend beyond the expiry date of the Term and
the exercise of any right of renewal thereof shall not result in the term
of the sub-letting extending beyond the expiry date of the Term.
(f) The form of the agreement for sub-letting shall be approved by the
Landlord (the Landlord's approval not to be unreasonably withheld) and the
terms and conditions of the sub-letting (other than the incentives and
allowances, if any, to be granted to the sub-tenant) shall in all respects
be compatible with those of the Agreement and
<PAGE> 58
-5-
shall contain agreements, undertakings and covenants no less onerous than
those imposed on the Tenant by the Agreement.
(g) All costs, charges and expenses associated with the sub-letting permitted
hereunder (including without limitation the costs of the partitioning to
be installed in the Sublettable Portion with the Landlord's prior written
consent) and the costs and expenses incurred by the Landlord in approving
the sub-letting shall be borne by the Tenant.
(h) If the Tenant shall derive a profit from the sub-letting (the said profit
being determined by comparing
(i) the effective rent per square foot of lettable area per month of the
Term payable by the Tenant to the Landlord and
(ii) the effective rent per square foot of lettable area per month of the
term of sub-letting payable by the sub-tenant to the Tenant and by
reference to the lettable area sub-let),
the Tenant shall share such profit with the Landlord in equal shares by
paying to the Landlord the appropriate amount as soon as possible and in
any event within seven (7) days after receipt of rent from the sub-tenant
on each occasion when rent is payable by the sub-tenant.
9. Fittings and Fixtures in the Premises
The Tenant hereby agrees with the Landlord to remove all fittings and
fixtures installed by any tenant of the Premises prior to the commencement of
occupation of the Premises by the Tenant and to deliver up the Premises in its
"bare-shell" condition together with the Landlord's fittings and fixtures upon
the expiry or sooner determination of the Term. For the avoidance of doubt it is
hereby declared that no warranty or representation on the part of the Landlord
is given or to be implied as to the repair, state, quality of fitness of any of
the previous tenants' fittings and fixtures.
10. Wall Separating Citibank Tower from Asia Pacific Finance Tower
Whereas the Tenant has been permitted by the Landlord or its predecessor
in title to break through the wall on the 37th Floor separating Citibank Tower
from Asia Pacific Finance Tower the Tenant shall at its costs reinstate the same
at the expiration or sooner determination of the Term.
11. Chilled Water Pipes
The Tenant shall not be responsible for the reinstatement of the chilled
water pipes running from Unit 3701-3702 which have been removed by the Tenant.
12. Glassed-in Stairs and Fire Doors
<PAGE> 59
-6-
The Landlord agrees that in the event that the glassed-in stairs and fire
doors do not conform in all respects with the Fire Services Department's
regulations the Landlord shall be responsible for the reinstatement of this
portion of the common areas of the Buildings at its own cost to ensure that they
do conform.
13. Non-registration
It is hereby agreed that this Side Letter shall not be lodged for
registration at the Land Registry. It is further agreed that the content of this
Side Letter shall be kept STRICTLY CONFIDENTIAL.
The Schedule
The Premises
All Those Suites 3606-3608 on the 36th Floor and 3701-3707 on the 37th
Floor of "CITIBANK TOWER" as shown coloured Pink and Pink hatched Black on the
36th and 37th Floor plans attached to the Agreement together with the right to
the exclusive use of this 4th day of December 1998.
<PAGE> 60
-7-
Appendix
Date:
Kerry Real Estate Agency Limited
as agent for the registered owner,
Fair Page Limited
Dear Sirs,
Re: Suites 3606-3608 on 36th Floor and 3701-3707
on 37th Floor, Citibank Tower, Citibank Plaza,
3 Garden Road, Hong Kong. ("the Premises")
We refer to a Tenancy Agreement of the Premises made between Kerry
Real Estate Agency Limited as agent for the registered owner of the Property,
Fair Page Limited and Goldman Sachs (Asia) Finance (the "Tenant") for a term of
one year commencing on 15th May 1999 ("the Tenancy Agreement").
In consideration of your permitting us to share occupation of the
Premises with the Tenant, we hereby acknowledge and declare as follows:-
1. We have no legal or equitable interest, estate, right, title
or benefit of and in the Premises or the tenancy except as
licensee at will.
2. All the chattels, furniture, machines, plant, equipment or
other articles in on or at the Premises belonging to or in the
possession of ourselves or the Tenant can be distressed or
distrained by you for non-payment of rent or other charges due
under the Tenancy Agreement and execution can be levied upon
the same.
3. We will perform and observe all the terms covenants and
conditions on the part of the Tenant under the Tenancy
Agreement.
4. We will immediately vacate the Premises upon:
a. expiration or determination of the term of the Tenancy
Agreement;
b. any breach of the Tenancy Agreement;
c. (if applicable) if we cease to be within the same group
of companies as the Tenant.
5. We shall indemnify you and keep you indemnified against any
loss damage costs expenses claims proceedings or demands
suffered or
<PAGE> 61
-8-
incurred by you howsoever arising in respect of our occupation
of the Premises and/or any breach of the above.
Yours faithfully,
----------------------------
For and on behalf of
<PAGE> 62
-9-
SEALED with the Common Seal )
)
of KERRY REAL ESTATE )
)
AGENCY LIMITED and SIGNED )
) /s/ Ma Wing Kai, William [SEAL]
by Ma Wing Kai, William, )
Authorised Signatory )
)
whose signature(s) is/are verified )
)
by:- )
/s/ Avis Y.W. Lai
Solicitor
Kerry Properties (H.K.) Limited
Hong Kong SAR
SEALED with the Common Seal )
)
of GOLDMAN SACHS (ASIA) )
)
FINANCE and SIGNED by )
) /s/ Bradley Abelow [SEAL]
Bradley Abelow )
)
whose signature(s) is/are verified )
)
by:- )
Director
/s/ Charles M. Picken
CHARLES M. PICKEN
Solicitor
Lovell White Durrant
Hong Kong SAR
<PAGE> 63
Dated the 4th day of December 1998
KERRY REAL ESTATE AGENCY LIMITED
AND
GOLDMAN SACHS (ASIA) FINANCE
-----------------------------------
TENANCY AGREEMENT
FOR
PREMISES IN CITIBANK PLAZA
Suites 3606-8, 36th Floor and 3701-7,
37th Floor, Citibank Tower,
Citibank Plaza, 3 Garden Road,
Hong Kong.
-----------------------------------
REGISTERED in the Land Registry by
Memorial No.
on
p. Land Registrar
-----------------------------------
JOHNSON STOKES & MASTER
SOLICITORS, &C.,
HONG KONG.
Ref.: SYCW/188831/2
ac/D5233 (081098)
<PAGE> 64
CONTENTS
Page
SECTION I : AGREEMENT
1. Agreement 1
Parties 1
1.01 Premises 1
Term 1
Rent 1
SECTION II : PAYMENT OF RENT AND OTHER CHARGES
2.01 Rent 1
(i) Additional Rent 1
(ii) Management Charges 2
2.02 Rates etc. 2
2.03 Utility Charges and Deposits 2
2.04 Cleaning Charges 3
2.05 Other Facilities 3
SECTION III : TENANTS OBLIGATIONS
3.01 Compliance with Ordinances 3
3.02 Fitting out 4
3.03 To keep the interior in good repair 5
3.04 Repair of Glass Curtain Wall 6
3.05 Installation of wires cables and services 6
3.06 Repair of Electrical Installations 7
3.07 Good Repair of Toilets and Water Apparatus 7
3.08 Cleaning of Drains 7
3.09 Indemnification of Landlord and Insurance 7
3.10 Protection from typhoon 8
3.11 To permit Landlord to enter and view 8
3.12 To execute repairs on receipt of notice 8
3.13 Outside Windows 8
3.14 Inform Landlord of Damage 8
3.15 Cleaning and Cleaning Contractors 8
3.16 Refuse and Garbage Removal 8
3.17 Installation of Telephone Cables 8
3.18 Directory Boards 9
3.19 Contractors/Employees/Invitees and Licensees 9
3.20 Damage to Building 9
3.21 Regulations 9
3.22 User 9
3.23 Yield up Premises and Handover 9
3.24 Taxes 10
3.25 Common Facilities, etc. 10
<PAGE> 65
SECTION IV : LANDLORD OBLIGATIONS AND RIGHTS
4.01 Quiet Enjoyment 11
4.02 Government Rent 11
4.03 Roof and Main Structure 11
4.04 Air-conditioning 11
4.05 Rights Reserved to the Landlord 12
4.06 Sale and re-development 12
SECTION V : RESTRICTIONS AND PROHIBITIONS
5.01 Installation and Alterations 13
5.02 Injury to Walls 14
5.03 No Alterations to Exterior 14
5.04 Obstructions to Outside Windows 14
5.05 Not erect gates or grilles 14
5.06 Noise 14
5.07 Signs 14
5.08 Auctions Sales 14
5.09 Illegal or Immoral Use 14
5.10 Sleeping or Domestic Use 15
5.11 Storage of Merchandise and Hazardous Goods 15
5.12 User 15
5.13 Obstructions in Passages 15
5.14 Parking & Loading 15
5.15 Deliveries and use of Passenger Lifts 15
5.16 Preparation of food and Prevention of Odours 15
5.17 Not to misuse lavatories 16
5.18 Animals, Pets and Infestation 16
5.19 No Touting 16
5.20 Breach of Government Lease or Conditions or Deed of
Mutual Covenant 16
5.21 Breach of Insurance Policy 16
5.22 Alienation 16
5.23 Advertising of Premises 17
SECTION VI : EXCLUSIONS
6.01 Lifts/Air-conditioning/Utilities 17
6.02 Fire and Overflow of Water 18
6.03 Security 18
SECTION VII : ABATEMENT OF RENT
7.01 Suspension of Rent in case of Fire, etc 18
SECTION VIII : DEFAULT
<PAGE> 66
8.01 Default 19
8.02 Interest 19
8.03 Acceptance of Rent 20
8.04 Acts of Employees Invitees and Licensees 20
8.05 Distraint 20
SECTION IX : DEPOSIT
9.01 Deposit 20
9.02 Increase in Deposit 20
9.03 Repayment of Deposit 21
SECTION X : REGULATIONS
10.01 Introduction of Regulations 21
10.02 Conflict 21
SECTION XI : INTERPRETATION AND MISCELLANEOUS
11.01 Marginal Notes, Headings and Index 21
11 02 "the Building" 21
11.03 Normal Business Hours 21
11.04 Gender 21
11.05 Name of Building 22
11.06 Alterations To the Building 22
11.07 Condonation not a waiver 22
11.08 Letting Notices and Entry 22
11.09 Service of Notice 22
11.10 Stamp Duty and Costs 22
11.11 Deed of Mutual Covenant 22
11.12 No Key Money 23
11.13 Entire Agreement 23
SECTION XII : SPECIAL CONDITIONS
12 Special Conditions 23
FIRST SCHEDULE
Part I Parties 24
Part II The Building and the Premises 24
Part III Term 24
Part IV Rent free period 24
SECOND SCHEDULE
Part I Particulars of Rent 25
Part II Management Charges 25
Part III Deposit 25
<PAGE> 67
THIRD SCHEDULE
User 25
FOURTH SCHEDULE
Special Conditions 25
Signatures 28
plan(s) annexed
<PAGE> 68
SECTION 1
AGREEMENT
Agreement 1 This Tenancy Agreement is made this 4th day of
December One thousand nine hundred and ninety eight
BETWEEN
Parties (i) KERRY REAL ESTATE AGENCY LIMITED whose registered
office is at 14th floor, Cityplaza 3, 14 Taikoo
Wan Road, Taikoo Shing, Hong Kong ("the Landlord"
which expression shall include its successors in
title and assigns) of the one part and
(ii) The party of whom particulars are set out in Part
1 of the First Schedule hereto. ("the Tenant") of
the other part
NOW IT IS HEREBY AGREED as follows:-
Premises 1.01 The Landlord hereby agrees to let to the Tenant and
the Tenant hereby agrees to take a tenancy of ALL THOSE
the Premises ("the Premises") forming part of all that
Building ("the Building") respectively more particularly
described in Part II of the First Schedule TOGETHER WITH
the use in common with the Landlord and all others
having the like right of (i) the driveways, entrances,
staircases, landings and passages in or adjacent to the
Building in so far as the same are necessary for the
proper use and enjoyment of the Premises; (ii) the lift
service and air-conditioning service in the Building and
(iii) the free and uninterrupted passage and running of
water soil gas electricity and other services through
the sewers drains pipes cables wires and other service
media in or upon the Building or the raised floors
therein and serving the Premises except in so far as the
Landlord or the service company or agent for the time
being appointed as manager of the Building ("the
Manager") may from time to time
Term restrict such use FOR THE TERM specified in Part III of
the First Schedule hereto ("the Term") YIELDING AND
PAYING therefor throughout the Term the rent set
Rent out in Part I of the Second Schedule (subject to a
rent-free period as provided for and subject to the
terms as set out in Part IV of the First Schedule) and
by way of additional rent the additional
air-conditioning charges (from time to time payable) and
the Management Charges as set out in Part II of the
Second Schedule which rent and additional rent shall be
paid exclusive of rates in advance free and clear of all
deductions and set-off on the first day of each calendar
month throughout the Term the first and last of such
payments to be apportioned according to the number of
days in the calendar month in which the Term commences
or ends.
SECTION II
PAYMENT OF RENT AND OTHER CHARGES
2. The Tenant hereby agrees with the Landlord as
follows:-
Rent 2.01 To pay on the days and in the manner hereinbefore
provided without deduction or set off in Hong Kong
Currency the rent and by way of further or
Additional Rent additional rent in respect of the Premises.-
[STAMPS]
<PAGE> 69
-2-
Management Charges (i) Management Charges (which includes
air-conditioning during Normal Business Hours) for
management services provided and amounts expended
in relation to the management and maintenance of
the Building from time to time payable by the
Tenant as set out in Part II of the Second
Schedule
(ii) in addition to the Management Charges referred to
in Part II of the Second Schedule, if at any time
or times during the Term the cost of providing the
management service shall have increased, the
Landlord shall have the right to increase the
amount of the Management Charges payable by the
Tenant to cover the increase in the cost to the
Landlord since in the first instance the date of
commencement of the Term and thereafter since the
date of the last increase and a notice in writing
served by the Landlord on the Tenant notifying the
Tenant of an increase in the Management Charge
shall be served but (in the absence of manifest
error) the Landlord's assessment shall be
conclusive and binding upon the Tenant.
(iii) additional Management Charges (if any) payable by
the Tenant pursuant to the Deed of Mutual Covenant
for the Building for the use by the Tenant of
those Common Facilities (as defined in the Deed of
Mutual Covenant) which are not covered by the
Management Charges.
(iv) any charges for additional air-conditioning
services as provided in Clause 4.04(b) of Section
IV.
Rates etc 2.02 To pay and discharge all rates, water rates, taxes
assessments, duties, impositions, charges (including all
charges and outgoings (if any) imposed by the Deed of
Mutual Covenant and/or the regulations pursuant thereto)
and outgoings of an annual or recurring nature or as
approximately charged by the Manager now or hereafter to
be imposed or levied on the Premises or upon the owner
or occupier in respect thereof by the Manager,
Government of the Hong Kong Special Administrative
Region of the People's Republic of China or other lawful
authority (Government Rent, Property Tax alone excepted)
Without prejudice to the generality of this sub-clause
the Tenant shall pay all rates imposed on the Premises
quarterly in advance in the first place to the Landlord
who shall settle the same with the Government of the
Hong Kong Special Administrative Region of the People's
Republic of China and in the event of the Premises not
yet having been assessed to rates the Tenant shall until
such time as the Premises are assessed to rates pay to
the Landlord quarterly and in advance a sum equal to the
rates which would be charged by the Government of the
Hong Kong Special Administrative Region of the People's
Republic of China for each quarter on the basis of a
rateable value equal to twelve months' rent payable by
the Tenant, on account of the Tenant's liability under
this Clause;
Utility 2.03 To pay and discharge or reimburse the costs of all
Charges deposits and charges in respect of the installation of
meters and the supply of water, electricity,
<PAGE> 70
-3-
and Deposits telephone and other outgoings as may be shown by or
operated from the Tenant's own separately metered
supplies or by accounts rendered to the Tenant by the
appropriate utility companies in respect of all such
utilities consumed on or in the Premises.
Cleaning Charges 2.04 To pay the cost of the daily cleaning of the
Premises including where the Tenant occupies the entire
floor of the passenger and the service lift lobbies on
the floor(s) of the Building on which the Premises are
situated and of the removal of litter therefrom
Other Facilities 2.05 (a) The Tenant hereby acknowledges that the
Landlord has paid for the installation of a
certain number of lines for "High Speed Data
Link" and that the Tenant may subscribe for
the use of such lines subject to
availability as determined by the Landlord
or the Manager in their sole and absolute
discretion. In the event that the Tenant
subscribes for the use of such lines, the
Tenant shall pay to the Landlord such amount
as the Landlord or the Manager may determine
in respect of the use of and the
installation charges for such number of
lines as may be required by the Tenant
(b) The Tenant further acknowledges that
facilities for the following have been
installed within the Building.-
(i) transmission and broadcasting of
financial news and data,
(ii) video link; and
(iii) inter-floor communication
These facilities can, subject to availability as
determined by the Landlord or the Manager in its
sole and absolute discretion, be used by the
Tenant upon payment by the Tenant of such Charges
and upon such other terms and conditions as may
from time to time be determined or prescribed by
the Landlord or other person or persons entitled
thereto Provided that the Tenant shall be
responsible for making all necessary arrangement
with the relevant service companies or the Manager
for the provision of the necessary services.
SECTION III
TENANT'S OBLIGATIONS
3 The Tenant hereby agrees with the Landlord -
Compliance 3.01 To obey comply with and to indemnify the Landlord
with against the breach of all ordinances, regulations,
Ordinances bye-laws, rules and requirements of any Governmental or
other competent authority or the Manager or pursuant to
the Deed of Mutual Covenant, Deed of Mutual Grant and
all supplemental deeds and the
<PAGE> 71
-4-
regulations relating to the use and occupation of the
Premises by the Tenant or any other act, deed, matter or
thing done, permitted, suffered or omitted therein or
thereon by the Tenant or any employee agent licensee or
permitted sub-tenant of the Tenant and without prejudice
to the foregoing to obtain and maintain in force and to
observe and comply with the terms of any approval
licence or permit required by any Governmental or other
competent authority or the Manager in connection with
the Tenant's use and occupation of the Premises prior to
the commencement or in connection with the carrying on
of the Tenant's business and to indemnify the Landlord
against the consequences of any breach of this
provision;
Fitting out 3.02 To fit out the interior of the Premises in
accordance with such plans and specifications as shall
have been first submitted to and approved by the
Landlord and the Manager respectively in writing in a
good and proper workmanlike manner and in all respects
in a style and manner appropriate to a first class
office building, such fitting out to include but not be
limited to the following.-
(i) Connection and reticulation of all
electrical wiring including wiring to light
fittings together with control switching etc
within the Premises (whether underneath the
raised flooring above the false ceilings or
otherwise);
(ii) All floor finishes and partitioning within
the Premises provided that any partitioning
installed by the Tenant within the Premises
shall be dry partitioning only;
(iii) Any alteration to the sprinkler system
necessitated by the Tenant's layout of the
Premises the same to be in all respects in
accordance with all permits and consents and
in compliance with the requirements of the
Fire Services Department;
(iv) Any alteration to the air-conditioning
ducting that may be required by the Tenant's
internal layout of the Premises;
(v) Internal decoration, furnishings and
specialized Tenant's equipment;
(vi) Any alteration to the raised flooring
including the alignment, realignment or
removal of the raised flooring system, the
creation of openings in the raised floor
panels and the cutting or sub-division of
the raised floor panels;
(vii) Any other fitting out, installation,
alteration, decoration or partitioning
within the Premises,
Provided:
<PAGE> 72
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(A) that the Tenant will subject as hereinafter
mentioned use in connection with its
fitting-out and decoration and furnishing
works only contractors or sub- contractors
in respect of whom the prior approval in
writing of the Landlord and the Manager
shall have been obtained such approval not
to be unreasonably withheld or delayed or
who shall be nominated by the Landlord IT
BEING AGREED that in no circumstances shall
any work be commenced or be permitted to be
commenced by any contractor who shall not
first have been approved in writing by the
Landlord and the Manager AND THAT in any
event any and all work involving any
alteration to or modification of or in any
way associated with the sprinkler system,
the security system, the plumbing and
drainage system and piping and the fixed
air-conditioning ducting, chilled water
pipes and air-conditioning controls, raised
flooring, suspended ceilings, communications
networks and the Common Facilities (as
defined in the Deed of Mutual Covenant)
shall be carried out only by contractors
nominated by the Landlord. All works to be
carried out by the Tenant its contractors or
sub-contractors shall be carried out in
accordance with the FITOUT RULES to be
issued by the Landlord and/or the Manager
from time to time and to be signed by the
Tenant prior to commencement of Tenant's
works and the Tenant will pay to the
Landlord such reasonable fitting out fees
(including but not limited to (1) a fee for
approval of plans and (2) a fee for
temporary services during fit out) as may be
reasonably charged by the Landlord;
(B) that the Tenant will not cause or permit to
be made any subsequent variation to the
approved fitting out plans and
specifications or to the approved interior
design or layout of the Premises without the
previous approval in writing of the Landlord
and the Manager such approval not to be
unreasonably withheld or delayed and in the
event of such approval being requested it
shall be a condition precedent to the
granting thereof that the Tenant shall pay
to the Landlord any reasonable fees and or
costs properly incurred by the Landlord in
consulting its architect and/or specialist
consultants in respect of such variations;
To keep the 3.03 (a) To keep and maintain at the expense of the
Interior in Tenant all the interior parts of the
good repair Premises including the flooring raised
flooring and cables and wires installed
thereunder the interior plaster or other
finishing material or rendering to walls
floors and ceilings and the Landlord's
fixtures and fittings therein including
(without limitation) all doors, windows,
electrical installations and wiring, light
fittings, suspended ceilings, fire fighting
apparatus and air-conditioning ducting and
all waste, drain, water and other pipes and
sanitary apparatus and fittings therein and
all painting, papering and decoration
thereof in good clean tenantable substantial
and proper repair and condition and as may
be appropriate
<PAGE> 73
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from time to time properly painted and
decorated (fair wear and tear excepted);
(b) At the expense of the Tenant to replace from
time to time all Landlord's fixtures and
fittings and appurtenances in the Premises
which may be or become beyond repair at any
time;
(c) At the expiration or sooner determination of
the Term, to deliver up the Premises and all
fittings, fixtures and additions therein and
thereto other than tenants' fixtures and
fittings to the Landlord in good clean and
tenantable condition and repair in
accordance with its covenant to repair
contained herein;
Repair of Glass 3.04 The Tenant shall pay to or reimburse the Landlord
Curtain Wall such amount as may be payable to the Manager or other
owners of the Building under the Deed of Mutual Covenant
in respect of all broken or damaged parts of the glass
curtain wall corresponding to the Premises or other
parts of the Buildings (if any) whether used exclusively
by the Tenant or not.
Installation of 3.05 (i) To install all wires pipes and cables and
wires cables other services serving the Premises in and
and services through the ducts trunkings and conduits in
the Building provided for such purposes and
at all times in accordance with the
reasonable directions of the Landlord and
the Manager and not to install any such
wires pipes cables or other services without
first providing the Landlord and the Manager
with full particulars and a fully detailed
plan and diagram of such intended
installation and obtaining the Landlord's
and the Manager's consent such consent not to
be unreasonably withheld or delayed in
regard thereto;
(ii) To provide to the Landlord a full coloured
diagram of all electrical wiring to be
installed by the Tenant within or serving or
connected to the Premises and/or within the
ducts, trunkings or conduits provided within
the Building for the installation of
electrical and/or fibre-optical or other
wires or cables or means of passing
receiving or transmitting information and
all telephone and other service wires
conduits and cables installed by or at the
order of the Tenant and to clearly label and
in accordance with any directions given by
the Landlord colour-code all such wires
conduits and cables to identify the same as
being the Tenant's and if required by the
Landlord at the expiration or sooner
determination of the Term at the Tenant's
expense to remove the same from all ducts
conduits or trunkings within the Building
taking care not to disturb damage or
interfere with any wires cables or other
means of communication belonging to the
Landlord or to other occupiers of any part
or parts of the Building that may have been
installed within any such ducts conduits or
trunkings and making good any damage caused
by the Tenant in so doing and the Tenant
will indemnify and hold the
<PAGE> 74
-7-
Landlord harmless against any claim action
or demand that may be brought by any person
suffering any loss or damage or interference
with business or inconvenience caused by or
arising from the Tenant's actions in
complying with its obligations hereunder;
Repair of 3.06 To repair or replace if so required by the
Electrical appropriate utility company, authority or statutory
Installations undertaker as the case may be under the terms of the
Electricity Supply Ordinance or any statutory
modification or re-enactment thereof or any Orders in
Council or Regulations made thereunder all the
electrical wiring installations and fittings within the
Premises installed by the Tenant and the wiring from the
Tenant's Meter or Meters to the Premises and to permit
the Landlord, the Manager, their agents or servants to
test the Tenant's wiring in the Premises at any time
upon reasonable prior notice except in the case of
emergency;
Good Repair of 3.07 To maintain all toilets and sanitary and water
Toilets and apparatus located within the Premises (or elsewhere if
Water Apparatus used exclusively by the Tenant its employees invitees
and licensees) in good clean and tenantable state and in
proper repair and condition at all times during the Term
to the satisfaction of the Landlord and in accordance
with the Regulations of the Public Health or other
Government Authority concerned;
Cleaning 3.08 To pay on demand to the Landlord the cost incurred
of Drains by the Landlord in cleansing and clearing any of the
drains in the Building that become choked or stopped up
owing to the mis-use of any toilet or water or sanitary
or drainage equipment by the Tenant or its employees
invitees contractors or licensees;
Indemnification 3.09 To be wholly responsible for any loss damage or
of Landlord injury caused to any person whomsoever or to any
and Insurance property whatsoever directly or indirectly through the
defective or damaged condition or operation of any part
of the interior of the Premises or any machinery or
plant or any fixtures or fittings or wiring or piping
therein for which the Tenant is responsible hereunder or
in any way caused by or owing to the spread of fire
smoke or fumes or the leakage or overflow of water of
whatsoever origin from the Premises or any part thereof
or through the act default or neglect of the Tenant its
servants agents contractors licensees partners or
customers and to make good the same by payment or
otherwise and to indemnify the Landlord against all
costs claims demands actions and legal proceedings
whatsoever made upon the Landlord by any person in
respect of any loss damage or injury as aforesaid and
all costs and expenses incidental thereto AND for the
better observance of the Tenant's obligations in regard
to the foregoing TO INSURE or at the discretion of the
Landlord permit the Landlord at the Tenant's expense and
in the name of the Tenant to effect and maintain
insurance cover to the reasonable satisfaction of the
Landlord with Kerry Insurance Company Limited in respect
of all such risks as aforesaid the Policy of Insurance
so effected to be endorsed to show the interest of the
Landlord therein and to be in such amount as may
reasonably be determined by the Landlord and to contain
a provision that the insurance cover thereby effected
and the terms and conditions thereof may not be altered
modified restricted or cancelled without the express
prior written consent of the Landlord and whenever
required so to do by the Landlord to
<PAGE> 75
-8-
produce to the Landlord as and when required by the
Landlord such policy of insurance together with a
receipt for the last payment of premium;
Protection 3.10 To take all necessary and appropriate precautions
from typhoon to protect the interior of the Premises from storm or
typhoon damage;
To permit 3.11 To permit the Landlord its agents and all persons
Landlord to authorized by it with or without workmen or others and
enter and view with or without appliances at all reasonable times and
upon prior written notice (save in the case of an
emergency) to enter upon the Premises to view the
condition thereof and to take inventories of the
fixtures and fittings therein and to carry out any work
or repair required to be done provided that in the event
of an emergency the Landlord its servants or agents may
enter without notice and forcibly if need be and the
Landlord shall exercise its rights in this respect in a
manner that is reasonable in all the circumstances and
shall make good any damage caused;
To execute 3.12 To make good all defects and wants of repair to the
repair on Premises within the space of one month from the receipt
receipt of of written notice from the Landlord to repair and make
notice good the same, and if the Tenant shall fail to execute
such works or repairs as aforementioned to permit the
Landlord to enter upon the Premises and execute the same
and the cost thereof shall be a debt due from the Tenant
to the Landlord and be recoverable forthwith by action;
Outside Windows 3.13 To keep all windows of the Premises closed at all
times,
Inform Landlord 3.14 To give notice to the Landlord or its agent of any
of Damage damage that the Premises may suffer and of any defect in
the water and gas pipes electrical wiring or fittings,
fittings fixtures or other utility supply equipment
provided by the Landlord directly the Tenant becomes
aware of any such damage or defect,
Cleaning and 3.15 To keep the Premises including where the Tenant
Cleaning occupies the entire floor the passenger and service lift
Contractors lobbies on the floor(s) of the Building on which the
Premises are situated at all times in a clean and
sanitary state and condition, and for the better
observance hereof to employ as cleaners of the Premises
(at the expense of the Tenant) a firm of specialist
cleaners to be nominated or approved by the Landlord or
the Manager,
Refuse and 3.16 To be responsible for the removal of refuse and
Garbage garbage from the Premises to such location within or
Removal adjacent to the Building as shall be specified by the
Landlord or the Manager from time to time and to use
only such type of refuse container as is specified by
the Landlord or the Manager from time to time. In the
event of the Landlord or the Manager providing a
collection service for refuse and garbage the same shall
be used by the Tenant to the exclusion of any other
similar service and the Tenant shall bear the cost of
such service;
Installation 3.17 Subject to sub-clause 3.02(a)(A) of this Clause the
Tenant shall
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of Telephone make its own arrangements with regard to the
Cables installation of telephones or other communication
systems in the Premises, but the installation of
telephone and communication lines outside the Premises
must be in the common ducting provided in the Building
for that purpose and in all respects in accordance with
the directions of the Landlord and the Manager,
Directory 3.18 To pay the Landlord immediately upon demand the
Boards cost of affixing repairing or replacing as necessary the
Tenant's name in lettering to the directory board at
the entrances to the Building and to the directory
board on the floor on which the Premises are situated,
Contractors 3.19 To be liable for any act default negligence or
Employees omission of the Tenant's contractors employees invitees
Invitees and licensees or permitted sub-tenants as if it were the act
Licensees default negligence or omission of the Tenant and to
indemnify the Landlord against all costs claims demands
expenses or liability to any third party in connection
therewith,
Damage to 3.20 To pay to or indemnify the Landlord immediately on
Building demand the costs of repairing any part of the Building
or any of the lifts or other services and facilities
installed therein that may be damaged by reason of any
act default or neglect on the part of the Tenant its
agents servants invitees or licensees;
Regulations 3.21 To obey and comply with such Regulations as may
from time to time be made or adopted by the Landlord in
accordance with Section X hereof or the Manager in
accordance with the Deed of Mutual Covenant;
User 3.22 To use the Premises for the purposes described in
the Third Schedule and for no other purposes whatsoever;
Yield up 3.23 To yield up the Premises with all fixtures fittings
Premises & and additions therein and thereto (but excluding the
Handover Tenant's movable chattels) at the expiration or sooner
determination of this Agreement in good clean and
tenantable repair and condition in accordance with the
stipulations hereinbefore contained together with all
keys giving access to all parts of the Premises Provided
That where the Tenant has made any alterations or
installed any fixtures fittings or additions in or to
the Premises and notwithstanding that the Landlord's
consent for so doing may have been obtained or have been
given or be deemed to have been given the Landlord may
at its sole discretion require the Tenant at the
Tenant's sole cost and expense to reinstate or remove or
do away with all or any such alterations fixtures
fittings or additions or any part or portion thereof and
to make good and repair in a proper and workmanlike
manner any damage to the Premises and the Landlord's
fixtures and fittings therein as a result thereof before
delivering up the Premises to the Landlord PROVIDED
FURTHER THAT without limitation to the generality of the
foregoing it is hereby expressly agreed that:-
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(i) if the Tenant removes any of the raised floor
panels with or without the approval of the
Landlord the Tenant shall at its own risk cost and
expense store all panels so removed and shall upon
the expiration or sooner determination of this
Agreement at its cost and expense reinstate the
raised floor panels at the relevant part of the
Premises to the satisfaction of the Landlord, and
(ii) if the Tenant carries out any other work to the
raised flooring system with or without the
approval of the Landlord the Tenant shall upon the
expiration or sooner determination of this
Agreement, at its own cost and expense reinstate
the raised flooring system to the same condition
as at the commencement of this Agreement to the
satisfaction of the Landlord and to the extent to
which such reinstatement cannot be effected to the
satisfaction of the Landlord the Tenant shall at
its own cost and expense replace the relevant part
of the raised flooring system to the satisfaction
of the Landlord,
Taxes 3.24 To pay or reimburse the Landlord on demand as
additional rent any sales tax value added tax (or any
tax of a similar nature) if required by any applicable
law.
Common 3.25 The Tenant shall not make any alteration to or
Facilities, etc interfere or tamper or permit its servants, agents,
employees, contractors or licensees to make any
alteration to or interfere or tamper with any of the
following other than in the manner expressly permitted
hereunder:-
(a) the raised flooring within the Premises;
(b) the heating, ventilation and air-conditioning
system for the Building (including that part of
system installed within the Premises);
(c) the electrical installations for the Building;
(d) the fire services installations of the Building
(including those within the Premises);
(e) the installations for plumbing and drainage for
the Building (including those within the
Premises);
(f) the building management system of the Building;
(g) the communication network which forms part of the
Common Facilities (as defined in the Deed of
Mutual Covenant) of the Building;
(h) the suspended ceiling of the Building (including
that within the Premises); and
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(i) the conduits, pipes, wires, cables and ducts in,
on or under the Premises or the raised flooring
therein serving or intended to serve the Building
or any adjoining or neighbouring property
SECTION IV
LANDLORD'S OBLIGATIONS AND RIGHTS
4 The Landlord agrees with the Tenant as follows:-
Quiet Enjoyment 4.01 To permit the Tenant (duly paying the rent, the
additional air-conditioning charges, the Management
Charges, rates and other payments hereby agreed to be
paid on the days and in manner herein provided for
payment of the same and observing and performing the
agreements stipulations terms conditions and obligations
herein contained) to have quiet possession and enjoyment
of the Premises during the Term without unreasonable
interruption by the Landlord or any person lawfully
claiming under or through or in trust for the Landlord;
Government Rent 4.02 To pay the Government Rent, Property Tax and other
charges of a capital nature attributable to or payable
in respect of the Premises;
Roof and Main 4.03 To procure the Manager to maintain the main
Structure structure roofs main electricity supply cables main
drains water pipes main walls and exterior window frames
of the Building Provided that the Landlord shall not be
liable for breach of this Clause unless and until
written notice of any defect or want of repair shall
have been given to the Landlord by the Tenant and the
Landlord shall have failed to take reasonable steps to
procure the repair or remedy the same within a
reasonable period after the service on it of such
notice;
Air-conditioning 4.04 (a) The Landlord shall subject to Sub-clause
4.05(c) of this Section and to Sub-clause
6.01(i) of Section VI of this Agreement and
to the right of the Manager under the Deed
of Mutual Covenant to change the hours for
air-conditioning services procure the
Manager to provide for the Premises during
Normal Business Hours as hereinafter defined
an air-conditioning service;
(b) Subject to Sub-clause 4.05(c) of this
Section and to Sub-clause 6.01(i) of Section
VI of this Agreement the Landlord shall
procure the Manager to provide to the Tenant
an air-conditioning service outside Normal
Business Hours as specified hereunder upon
request being made by the Tenant to the
Landlord and/or the Manager as appropriate.
The cost for such additional hours of
air-conditioning service including the cost
of running the necessary air-conditioning
plant and equipment shall be reasonably
determined by the Landlord and/or the
Manager whose decision shall be final and
notified to the Tenant from time to
<PAGE> 79
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time and shall be paid on demand by the
Tenant to the Landlord as additional rent;
Rights Reserved 4.05 It is hereby agreed and expressly confirmed that
to the Landlord the following rights are excepted and reserved to the
Landlord (its successors and assigns and all persons
having the like right) and the Manager throughout the
Term:-
(a) the right of free and uninterrupted passage and
running of water, soil, gas, drainage, electricity
and all other services or supplies through such
sewers, watercourses, conduits, pipes, wires,
cables and ducts as are now or may hereafter be
in, on or under the Premises and serving or
capable of serving the Building or any adjoining
or neighbouring property TOGETHER WITH the right
to enter upon the Premises upon prior notice
(except in case of emergency) to inspect repair
replace or maintain any such sewers, watercourses,
conduits, pipes, wires, cables and ducts making
good any damage caused,
(b) the full and free right and liberty to enter upon
the Premises in the circumstances in which the
agreements by the Tenant contained in these
presents permit such entry and in particular but
without prejudice to the generality of the
foregoing the right to enter into and upon the
Premises at all times upon prior notice (except in
case of emergency) for the purpose of obtaining
access to and egress from any adjoining premises
or any machinery or switch rooms or the like
remaining under the control of the Landlord and/or
the Manager and located on any of the floors of
the Building on which any portion of the Premises
is situated making good any damage caused;
(c) the right from time to time on giving reasonable
notice to the Tenant (such notice not to be
required in case of emergency or breakdown) and
causing as little inconvenience to the Tenant as
reasonably possible to suspend the
air-conditioning system, lifts, escalators (if
any), electric power, water supply and any other
building service provided in or serving the
Building for the purpose of servicing,
maintaining, repairing, renewing, improving or
replacing the same and any of them
Sale and 4.06 If at any time during the Term the Landlord shall
re-development resolve to redevelop the Building or any part thereof
whether wholly by demolition and rebuilding or
otherwise, or partially by renovation, refurbishment or
otherwise (which intention shall be sufficiently
evidenced by a notification from the Landlord) then in
any of such events the Landlord shall be entitled to
give six months' notice in writing during the Term
terminating this Agreement and immediately upon the
expiration of such notice this Agreement and everything
herein contained shall cease and be void but without
prejudice to the rights and remedies of either party
against the other in respect of any antecedent claim or
breach of any of the agreements or stipulations herein
set out.
<PAGE> 80
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SECTION V
RESTRICTIONS AND PROHIBITIONS
5. The Tenant agrees with the Landlord and undertakes:-
Installation and 5.01 (a) Not to make or permit or suffer to be made
Alterations any alterations in or additions to the
Premises or to the sprinkler system,
electrical wiring installations,
air-conditioning ducting lighting fixtures
or other Landlord's fixtures or to install
any plant apparatus or machinery (other than
normal office machinery) therein without
first having obtained the written consent of
the Landlord and/or the Manager,
(b) Not to place on any part of the Premises any
object of any kind which imposes an
excessive load or strain on the Premises or
the Building at a location not previously
approved in writing by the Landlord. The
Tenant shall apply to the Landlord for a
written approval to the proposed positioning
of such object. Thereafter the Tenant shall
not move such object from the approved
location without the written approval of the
Landlord first having been obtained. All
reasonable and proper fees incurred by the
Landlord including the obtaining of the
approval of the Landlord's architects as to
the location of such object shall be borne
by the Tenant and payment therefor may be
imposed as a pre-requisite to the Tenant
receiving such permission.
(c) Not to install any air-conditioning plant or
equipment of any kind on or within or at any
part of the Premises without the prior
consent of the Landlord in writing AND the
Tenant shall comply with the directions and
instructions of the Landlord and the Manager
regarding installation and shall at its own
expense be responsible for their periodic
inspection maintenance and repair and for
the replacement of defective wiring and the
Tenant shall be strictly liable for any
damage caused by the installation operation
defect or removal of such units;
(d) Not to make or permit or suffer to be made
any alterations in or additions to the
mechanical or electrical installations in
the Building nor to install or permit or
suffer to be installed any equipment,
apparatus or machinery which exceeds the
loading of the electrical installations in
the Building nor to install or permit or
suffer to be installed any equipment,
apparatus or machinery which exceeds the
loading of the electrical main or wiring or
which consumes electricity not metered
through the Tenant's separate meter;
(e) Not to make or permit or suffer to be made
any alterations to any installation or
fixture so as to affect or be likely to
affect the supply of water, electricity or
other utility or service to or in the
Building;
<PAGE> 81
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Provided that where approval permission or
consent from the Landlord shall be required
it shall not be unreasonably withheld or
delayed,
Injury to 5.02 Not to cut maim or injure or permit or suffer to be
Walls or Floors cut maimed or injured any doors windows window frames
walls beams slabs structural members raised floors or
other part of the fabric of the Premises or lay or use
any floor covering or do anything which may damage or
penetrate the raised flooring or slab;
No Alterations 5.03 Not to affix anything or paint or make any
or Exterior alteration whatsoever to the exterior of the Premises,
Obstructions to 5.04 Not to block up, darken or obstruct or obscure any
Outside Windows of the windows or lights belonging to the Premises;
Not erect gates 5.05 Not without the prior written consent of the
grilles Landlord such consent not to be unreasonably withheld or
delayed to erect or install doors, gates, grilles,
shutters or other similar installation whatsoever
whether temporary or permanent at the doorway or
entrance to the Premises or at any of the fire exits
therefrom or erect any such door or grille or shutter or
gate that might in any way contravene the regulations
from time to time in force of the Fire Services
Department or other competent authority concerned, nor
in any other respect to contravene the said regulations,
Noise 5.06 Not to cause or produce or suffer or permit to be
produced on or in the Premises any sound or noise
(including sound produced by broadcasting from
Television, Radio and any apparatus or instrument
capable of producing or reproducing music and sound) or
any vibration or resonance or other form of disturbance
or other acts or things in or on the Premises which is
or are or may be or become a nuisance or annoyance to
the tenants or occupiers of adjacent or neighbouring
premises within the Building or in any neighbouring
building;
Signs 5.07 Not without the prior written approval of the
Landlord to exhibit or display within or on the exterior
of the Premises any writing sign signboard or other
device whether illuminated or not which may be visible
from outside the Premises nor without the Landlord's
prior written consent to affix any writing sign
signboard or other device in at or above any Common
Area, lobby, landings or corridors of the Building;
Auction Sales 5.08 Not to conduct or permit any auction fire
bankruptcy close out or similar sale of things or
properties of any kind to take place on the Premises;
Illegal or 5.09 Not to use or cause permit or suffer to be used any
Immoral Use part of the Premises for gambling or for any illegal
immoral or improper purposes or in any way so as to
cause nuisance annoyance inconvenience or damage or
danger to the Landlord or the tenants or occupiers of
adjacent or neighbouring premises;
<PAGE> 82
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Sleeping or 5.10 Not to use or permit the Premises or any part
Domestic Use thereof to be used as sleeping quarters or as domestic
premises within the meaning of any ordinance for the
time being in force or allow any person to remain on the
Premises overnight without first obtaining the
Landlord's permission in writing for so doing,
Storage of 5.11 Not to use the Premises for the manufacture of
Merchandise and goods or merchandise or for the storage of goods or
Hazardous Goods merchandise other than in small quantities consistent
with the nature of the Tenant's trade or business by way
of samples and exhibits nor to keep or store or cause or
permit or suffer to be kept or stored thereat any arms
or ammunition, gun-powder, salt-petre, petroleum,
liquified petroleum gas, butane gas, kerosene or other
explosive or dangerous hazardous or prohibited goods
within the meaning of the Dangerous Goods Ordinance (Cap
295) and the regulations made thereunder or any
Statutory modification or re-enactment thereof from time
to time in force;
User 5.12 Not to use the Premises for any purpose other than
the purpose specified in the Third Schedule and in
particular but without prejudice to the generality of
the foregoing not to use the Premises for the purpose of
a Buddhist hall or temple or for the performance of the
ceremony known as Ta Chai ([Chinese writing]) or for any
similar ceremony or for any other religious purpose or
the performance of any religious ceremony,
Obstructions in 5.13 Not to place or leave or suffer or permit to be
Passages placed or left by any contractor employee invitee
licensee or permitted sub-tenant of the Tenant any boxes
furniture articles or rubbish in the entrance or any of
the staircases passages or landings of the Building used
in common with other tenants or the Landlord or
otherwise encumber the same,
Parking & Loading 5.14 Not to park any vehicle in or obstruct or otherwise
use or permit any vehicle to be parked in or be
obstructed or otherwise used by any employee agent
licensee or permitted sub-tenant of the Tenant any of
those areas of the Building allocated to parking or for
the movement of or access for vehicles or designated as
loading/unloading areas other than in accordance with
the Regulations made from time to time by the Landlord;
Deliveries and 5.15 Not without the prior written consent of the
use of passenger Landlord and/or the Manager to take delivery to the
lifts Premises or furniture or other large objects during
Normal Business Hours as hereinafter defined and not to
cause or suffer or permit passenger lifts to be used for
delivery purposes at any time or load or permit or
suffer to be loaded into any service lift or passenger
lift in the Building an excessive weight;
Preparation of 5.16 Except for the reheating of pre-prepared food for
food and consumption by the Tenant's employees by an approved
prevention microwave oven Not to cook or prepare or permit or
suffer to be cooked or prepared any food in the Premises
or permit any offensive or unusual odours to be produced
upon or emanate from the Premises,
<PAGE> 83
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Not to misuse 5.17 Not to use or permit or suffer to be used any
lavatories lavatory facilities whether shared with other tenants or
occupiers of the Building or reserved exclusively for
the use of the Tenant for any purpose other than that
for which they are intended and not to throw or permit
or suffer to be thrown into any W.C. pan, urinal, basin
sink or other lavatory fitting any foreign or
deleterious substance of any kind and to pay to or
indemnify the Landlord on demand the cost of any
breakage, blockage or damage resulting from a breach of
this provision;
Animals, pets 5.18 Not to keep or permit or suffer to be kept any
and infestation animals or pets inside the Premises and to take all such
steps and precautions to the reasonable satisfaction of
the Landlord as shall be necessary to prevent the
Premises or any part thereof from becoming infested by
termites rats mice roaches or any other pests or vermin
and for the better observance hereof the Landlord may
require the Tenant to employ at the Tenant's cost such
pest extermination contractors as the Landlord may
nominate and at such reasonable intervals as the
Landlord may direct;
No Touting 5.19 Not to tout or solicit or procure or permit any
touting or soliciting for business or the distribution
of any pamphlets notices or advertising matter outside
the Premises or anywhere within the Building by any of
the Tenant's servants agents licensees or permitted
sub-tenants;
Breach of 5.20 Not to commit any breach of the provisions of the
Government Lease Government Lease or Conditions under which the Landlord
or Conditions holds the Premises or of the Deed of Mutual Covenants
or Deed of Mutual (if any) or any Sub-Deed of Mutual Covenants affecting
Covenants the Building and to indemnify the Landlord against the
consequences of any such breach;
Breach of 5.21 Not to cause suffer or permit to be done any act or
Insurance Policy thing whereby the policy or policies of insurance on the
Premises against damage by fire or liability to third
parties for the time being subsisting may become void or
voidable or whereby the rate of premium or premia
thereon may be increased and to repay to the Landlord on
demand all sums paid by the Landlord by way of increased
premium or premia thereon and all expenses incurred by
the Landlord in and about any renewal of such policy or
policies arising from or rendered necessary by such
breach;
Alienation 5.22 The Tenant shall not assign underlet or otherwise
part with the possession of the Premises or any part
thereof in any way whether by way of subletting lending
sharing or other means whereby any person or persons not
a party to this Agreement obtains the use or possession
of the Premises or any part thereof irrespective of
whether any rental or other consideration is given for
such use or possession and in the event of any such
transfer sub-letting sharing assignment or parting with
the possession of the Premises (whether for monetary
consideration or not) this Agreement shall absolutely
determine and the Tenant shall forthwith vacate the
Premises on notice to that effect from the Landlord. The
Tenancy shall be personal to the Tenant named in the
First Schedule to this Agreement and without in any way
<PAGE> 84
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limiting the generality of the foregoing the following
acts and events shall unless approved in writing by the
Landlord be deemed to be breaches of this Clause:-
(a) In the case of a tenant which is a partnership the
taking in of one or more new partners whether on
the death or retirement of an existing partner or
otherwise,
(b) In the case of a tenant who is an individual
(including a sole surviving partner of a
partnership tenant) the death insanity or
disability of that individual to the intent that
no right to use possess occupy or enjoy the
Premises or any part thereof shall vest in the
executors administrators personal representatives
next of kin trustee or committee of any such
individual;
(c) In the case of a tenant which is a corporation any
take-over reconstruction amalgamation merger
voluntary liquidation or change in the person or
persons who owns or own a majority of its voting
shares or who otherwise has or have effective
control thereof;
(d) The giving by the Tenant of a Power of Attorney or
similar authority whereby the donee of the Power
obtains the right to use possess occupy or enjoy
the Premises or any part thereof or does in fact
use possess occupy or enjoy the same;
(e) The Change of the Tenant's business name without
the previous written approval of the Landlord
which shall not be unreasonably withheld if the
change of the Tenant's business name does not in
the opinion of the Landlord conflict with or
prejudice the business or reputation or other
interests of the Landlord or of any associated
company of the Landlord;
Advertising of 5.23 Not to erect upon the Premises, the Building or any
Premises part thereof any sign or display advertising the
Premises or any part thereof available for letting or
sub-letting or issue any pamphlet publicity or
advertisement in any form whatsoever with regard to any
proposed letting or sub-letting of the Premises
SECTION VI
EXCLUSIONS
6.01 IT IS HEREBY FURTHER EXPRESSLY AGREED AND DECLARED
that except in the case of the Landlord's gross
negligence the Landlord shall not in any circumstances
be liable to the Tenant or any other person whomsoever:-
Lifts, (i) In respect of any loss of profit or of business or
Air-conditioning loss of life or loss, injury or damage to person
Utilities or property or for any disruption or inconvenience
caused to or suffered or sustained by the Tenant
or any other person caused by or through or in any
way owing to or arising out of or connected with
any
<PAGE> 85
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defect in or breakdown or suspension of service of
the lifts air-conditioning system, electric power
or water supplies, satellite and ancillary
distribution system, backbone distribution system,
the High Speed Data link or any other building
service provided in or serving the Building, or
Fire and overflow (ii) In respect of any loss of profit or of business or
of water loss of life or loss injury or damage to person or
property or for any disruption or inconvenience
caused to or suffered or sustained by the Tenant
or any other person caused by or through or in any
way owing to or arising out of or connected with
any escape of fumes smoke fire or any other
substance or thing or the overflow of water from
anywhere within the Building or in any way
attributable to fire storm tempest flood Act of
God or other inevitable accident, or
Security (iii) For the security or safekeeping of the Premises or
any contents therein and in particular but without
prejudice to the generality of the foregoing the
provision of watchmen and caretakers shall not
create any obligation on the part of the Landlord
as to the security of the Premises or any contents
therein and the responsibility for the safety of
the Premises and the contents thereof shall at all
times rest with the Tenant.
SECTION VII
SUSPENSION OF RENT
Suspension of 7.01 If the Premises or the Building or any part thereof
rent in case shall at any time during the Term be destroyed or
of fire etc. damaged or become inaccessible owing to fire water storm
typhoon defective construction white ants earthquake
subsidence of the ground or any calamity beyond the
control of the Landlord so as to render the Premises
unfit for commercial use or inaccessible and the policy
or policies of insurance for such risk effected by the
Landlord shall not have been vitiated or payment of the
policy moneys refused in whole or in part in consequence
of any act or default of the Tenant or if at any time
during the continuance of this tenancy the Premises
shall be condemned as a dangerous structure or a
demolition order or closing order shall become operative
in respect of the Premises then the rent and other
charges hereby reserved or a fair proportion thereof
according to the nature and extent of the damage
sustained or order made shall be suspended, rent and
other charges paid in advance in respect of the current
month being refunded, until the Premises shall again be
rendered accessible and fit for commercial use PROVIDED
THAT in circumstances when the whole or substantially
the whole of the Premises have been rendered
inaccessible or unfit for commercial use and should the
Premises not have been reinstated in the meantime either
the Landlord or the Tenant may at any time after six
months from the occurrence of such damage or destruction
or order give to the other of them notice in writing to
determine this Agreement and thereupon the same and
everything herein contained shall cease and be void as
from the date of the occurrence of such destruction or
damage or order or of the Premises becoming inaccessible
or unfit for commercial use but without prejudice to the
rights and
<PAGE> 86
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remedies of either party against the other in respect of
any antecedent claim or breach of the agreements
stipulations terms and conditions herein contained or of
the Landlord in respect of the rent payable hereunder
prior to the coming into effect of the suspension.
SECTION VIII
DEFAULT
8. It is hereby expressly agreed and declared as
follows:-
Default 8.01 If the rent and/or the additional air-conditioning
charges and/or the Management Charges and/or any other
moneys payable hereunder or any part thereof shall be in
arrear for seven (7) days after the same shall have
become payable (whether formally demanded or not) or if
there shall be any breach or non-performance of any of
the stipulations conditions or agreements herein
contained and on the part of the Tenant to be observed
or performed or if the Tenant shall stop or suspend
payment of its debts or be unable to or admit inability
to pay its debts as they fall due or enter into any
scheme of arrangement with its creditors or have an
encumbrancer take possession of any of its assets or
have a receiving order made against it or in such
circumstance as aforesaid fail to satisfy any judgement
that may be given in any action against it after final
appeal or go into liquidation (save for the purposes of
amalgamation or reconstruction) or if the Tenant shall
suffer execution to be levied upon the Premises or
otherwise on the Tenant's goods or if in such
circumstances as aforesaid the Tenant shall suspend or
cease or threaten to suspend or cease to carry on its
business or should any event occur or proceeding be
taken with respect to the Tenant in any jurisdiction to
which the Tenant is subject which has an effect
equivalent or similar to any of the events or
circumstances described above then and in any such case
it shall be lawful for the Landlord at any time
thereafter to re-enter on and upon the Premises or any
part thereof in the name of the whole and thereupon this
Agreement shall absolutely determine but without
prejudice to any right of action or non-observance or
non-performance by the Tenant of any of the terms of
this Agreement. A written notice served by the Landlord
on the Tenant in manner hereinafter provided to the
effect that the Landlord thereby exercises the power of
determination and/or re-entry hereinbefore contained
shall be a full and sufficient exercise of such power
without physical entry on the part of the Landlord
notwithstanding any statutory or common law provision to
the contrary. All costs and expenses including legal
costs incurred by the Landlord in demanding payment of
the rent and other charges payable hereunder (if the
Landlord elects to demand) and in exercising its rights
and/or remedies or in attempting to do so shall be paid
by the Tenant and shall be recoverable from the Tenant
as a debt,
Interest 8.02 Notwithstanding anything herein contained in the
event of default in payment of rent or other monies
payable by the Tenant hereunder (whether formally
demanded or not) the Tenant shall pay to the Landlord on
demand daily interest on all such sums outstanding at
the daily simple interest rate of 0.07% calculated from
the
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date on which the same shall be due for payment (in
accordance with the provisions contained in that behalf
herein) until the date of payment provided that the
demand and/or receipt by the Landlord of interest
pursuant to this Clause shall be without prejudice to
and shall not affect the right of the Landlord to
exercise any other right or remedy hereof (including but
without prejudice to the generality of the foregoing the
right of re-entry) exercisable under the terms of this
Agreement;
Acceptance of 8.03 The acceptance of any rent by the Landlord shall
Rent not be deemed to operate as a waiver by the Landlord of
any right to proceed against the Tenant in respect of
any breach non-observance or non-performance by the
Tenant of any of the agreements stipulations terms and
conditions herein contained and on the part of the
Tenant to be observed and performed,
Acts of Employees 8.04 For the purpose of these presents any act default
Invitees and neglect or omission of any guest visitor servant
Licensees contractor employee agent invitee licensee or permitted
sub-tenant of the Tenant shall be deemed to be the act
default neglect or omission of the Tenant,
Distraint 8.05 For the purposes of Part III of the Landlord and
Tenant (Consolidation) Ordinance (Chapter 7) and of
these presents, the rent payable in respect of the
Premises shall be and be deemed to be in arrear if not
paid in advance at the times and in the manner
hereinbefore provided for payment thereof.
SECTION IX
DEPOSIT
Deposit 9.01 The Tenant shall on the signing hereof deposit with
the Landlord the sum or sums specified in Part III of
the Second Schedule to secure the due observance and
performance by the Tenant of the agreements stipulations
terms and conditions herein contained and on the part of
the Tenant to be observed and performed which deposit
shall be held by the Landlord throughout the currency of
this Agreement free of any interest to the Tenant with
the right for the Landlord (without prejudice to any
other right or remedy hereunder) to deduct therefrom the
amount of any rent rates and other charges payable
hereunder and any costs expenses loss or damage
sustained by the Landlord as the result of any
non-observance or non-performance by the Tenant of any
of the agreements, stipulations obligations or
conditions. In the event of any deduction being made by
the Landlord from the deposit in accordance herewith
during the currency of this Agreement the Tenant shall
forthwith on demand by the Landlord make a further
deposit equal to the amount so deducted and failure by
the Tenant so to do shall entitle the Landlord forthwith
to re-enter upon the Premises and to determine this
Agreement as hereinbefore provided.
Increase in 9.02 The amount of the deposit shall be increased
Deposit following each and any review in rent to market rent or
increase Management Charges to a sum equal to THREE
months rent at the rate payable after the review in
question plus THREE
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months Management Charges at the rate at that time
payable by the Tenant pursuant to Sub-clause 2.01 of
Section II and the Tenant shall make payment to the
Landlord of such additional sum as shall be required to
bring the deposit up to the appropriate amount within
seven (7) days of each rent review or increase and the
provisions of this Section IX shall apply to such
further deposits
Repayment of 9.03 Subject as aforesaid the deposit and any further
Deposit deposits paid shall be refunded to the Tenant by the
Landlord without interest within thirty days after the
expiration or sooner determination of this Agreement and
delivery of vacant possession to the Landlord and after
settlement of the last outstanding claim by the Landlord
against the Tenant for any arrears of rent rates and
other charges and for any breach non-observance or
non-performance of any of the agreements stipulations
terms and conditions herein contained and on the part of
the Tenant to be observed or performed whichever shall
be the later.
SECTION X
REGULATIONS
Introduction of 10.01 The Tenant shall observe such Regulations as may
Regulations from time to time be in force for the proper operation
and maintenance of the Building.
Conflict 10.02 Such Regulations shall be supplementary to the
terms and conditions contained in this Agreement and
shall not in any way derogate from such terms and
conditions. In the event of conflict between such
Regulations and the terms and conditions of this
Agreement the terms and conditions of [ILLEGIBLE]
Normal Business [ILLEGIBLE] The term "Normal Business Hours" for the
Hours purposes or this Agreement means the hours other than on
Sundays and Public Holidays, between 8:00 a.m. and 6:30
p.m. on each Monday to Friday and between 8:00 a.m. and
2:00 p.m. on each Saturday (Public Holidays excepted).
Gender 11.04 In this Agreement unless the context otherwise
requires words importing the singular number shall
include the plural number and vice versa and words
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importing a gender shall include every gender and
references to persons include bodies corporate or
unincorporate
Name of Building 11.05 The Landlord is not liable to compensate the
Tenant for any loss expense or inconvenience caused to
the Tenant as a consequence of any change of name of the
Building.
Alterations To 11.06 The Landlord reserves the right from time to time
the Building to improve extend add to or reduce the Building or in
any manner whatsoever to alter or deal with the Building
and the Landlord shall exercise its rights in this
respect in a manner that is reasonable in all the
circumstances
Condonation not 11.07 No condoning, excusing or overlooking by the
a waiver Landlord of any default, breach or non-observance or
non-performance by the Tenant at any time or times of
any of the agreements stipulations terms and conditions
herein contained shall operate as a waiver of the
Landlord's rights hereunder in respect of any continuing
or subsequent default, breach or non-observance or
non-performance or so as to defeat or affect in any way
the rights and remedies of the Landlord hereunder in
respect of any such continuing or subsequent default or
breach and no waiver by the Landlord shall be inferred
from or implied by anything done or omitted by the
Landlord, unless expressed in writing and signed by the
Landlord. Any consent given by the Landlord shall
operate as a consent only for the particular matter to
which it relates and shall in no way be considered as a
waiver or release of any of the provisions hereof nor
shall it be construed as dispensing with the necessity
of obtaining the specific written consent of the
Landlord in the future, unless expressly so provided.
Letting Notices 11.08 During the three months immediately before the
and Entry expiration or sooner determination of the Term the
Landlord shall be at liberty to affix and maintain
without interference upon any external part of the
Premises a notice stating that the Premises are to be
let and such other information in connection therewith
as the Landlord shall reasonably require and upon prior
notice to enter the Premises with such other persons for
the purpose of viewing the Premises on reasonable notice
during Normal Business Hours
Service of Notice 11.09 Any notice required to be served on the Tenant
shall be sufficiently served if delivered or despatched
by post to or left at the Premises. Any notice required
to be served on the Landlord shall be sufficiently
served if delivered or despatched by registered post to
its registered office from time to time. A notice sent
by post or registered post shall be deemed to be given
at the time and date of posting
Stamp Duty and 11.10 Each of the parties hereto shall bear its own
Costs legal costs in relation to the preparation approval and
execution of this Agreement. The stamp duty hereon and
Land Registry fees (if any) shall be borne by the
Landlord and the Tenant in equal shares.
Deed of Mutual 11.11 The Tenant shall observe and comply with and
perform all the
<PAGE> 90
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Covenant covenants terms and provisions in any Deed of Mutual
Covenant and Management Agreement now or at any future
time in force relating to the Building so far as they
relate to the Premises and shall not in any way cause
the Landlord to be in breach of the provisions of the
same and shall indemnify the Landlord against the breach
non-observance or non-performance thereof.
No Key Money 11.12 The Tenant hereby expressly declares that for the
grant of the Term no key money or premium or
construction money or other consideration otherwise than
the rent and other payments herein expressly reserved
and expressed to be payable has been paid or will be
payable to the Landlord or to any person whomsoever.
Entire Agreement 11.13 This Agreement sets out the full agreement between
the parties. No warranties or representations express or
implied of any kind other than those set out herein (if
any) are or have been made or given by the Landlord or
by anybody on his behalf and if any such warranties or
representations express or implied have been made, the
same are withdrawn or deemed to have been withdrawn
immediately before the execution of this Agreement.
SECTION XII
SPECIAL CONDITIONS
Special 12. The parties hereto further agree that they shall
Conditions respectively be bound by and entitled to the benefit of
the Special Conditions set forth in Schedule 4.
IN WITNESS whereof the parties have caused this document to be
executed the day and year first above written.
<PAGE> 91
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THE FIRST SCHEDULE ABOVE REFERRED TO
PART I
LANDLORD : KERRY REAL ESTATE AGENCY LIMITED as agent for the
registered owner of the Property, Fair Page Limited.
REGISTERED : 14th Floor, Cityplaza 3, 14 Taikoo Wan Road,
OFFICE Taikoo Shing, Hong Kong.
TENANT : GOLDMAN SACHS (ASIA) FINANCE
PLACE OF : Cayman Islands
INCORPORATION
PRINCIPAL PLACE :
OF BUSINESS
PART II
THE BUILDING : The multi-storeyed commercial/office building erected as
part of the development erected on Inland Lot No. 8888
and known as: Citibank Tower, Citibank Plaza.
THE PREMISES : All That Portion of the Thirty Sixth (36th) Floor of the
Building known as Suites Nos.3606-3608 and All That
Portion of the Thirty Seventh (37th) Floor of the
Building known as Suites 3701-3707 as shown coloured
Pink and Pink hatched Black on the 36th and 37th Floor
Plans hereto annexed provided that the Tenant shall be
entitled to the exclusive use of the area coloured Green
on the 37th Floor Plan and all the rights, obligations
and liabilities of the Landlord and the Tenant under
this Agreement with respect to the Premises shall extend
to the said area.
PART III
TERM : A term of ONE (1) YEAR commencing on the 15th day of May
1999 and expiring on the 14th day of May 2000.
PART IV
RENT FREE : NIL
PERIOD
<PAGE> 92
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THE SECOND SCHEDULE ABOVE REFERRED TO
PART I
RENT
The rent shall be HK$1,213,992.00 per month (exclusive of government rates,
management fees and all other outgoings) payable monthly in advance by way of
cheque on its due date.
PART II
MANAGEMENT CHARGES
The Management Charge that will be payable with effect from the commencement of
the Term will be HK$124,902.00 per month (subject to review)
PART III
9.01 of Section IX (subject to review) shall be in the sum of HK$4,016,682.00
THE THIRD SCHEDULE ABOVE REFERRED TO
USER
The Tenant will use the Premises for commercial offices for the purposes of the
Tenant's business only and for no other purpose whatsoever
THE FOURTH SCHEDULE ABOVE REFERRED TO
SPECIAL CONDITIONS
1. FITTING OUT
All additional fitting out or decoration work of the Premises shall be at
the cost of the Tenant and the Tenant hereby agrees to the following:-
i. The Tenant's contractors shall be approved or nominated by the
Landlord in writing prior to commencement of any fitting out works
such approval not to be unreasonably withheld or delayed.
<PAGE> 93
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ii. Four complete sets of fitting out plans shall be submitted to the
Landlord for approval prior to commencement of any fitting out
works.
iii. The Tenant shall act and behave in accordance with the Fitting Out
Guide and House Rules set by the Landlord and/or the Manager.
iv. All decoration, fitting out works, installation works and all
adjustments of common facilities should be done in accordance with
the requirements of the Landlord and/or regulation of the government
or other relevant competent authorities and at the Tenant's costs.
2. DESIGNATED AREAS
The Tenant hereby agrees not to erect or install any fixtures or fittings
or put any heavy machinery or equipment over or in any way block the
access to the ceiling of that portion of the Premises as shown coloured
Pink hatched Black on the Plan(s) attached hereto so as to allow free and
easy access thereto by the Landlord and/or the Manager for the
installation, maintenance or alterations of the conduits, cables, wires,
ducts and trunkings below the raised flooring or above the suspended
ceiling thereof.
3. TRANSFER OF DEPOSIT
Notwithstanding any provision to the contrary contained herein, it is
hereby expressly agreed by the parties hereto that:-
(a) Upon the signing of this Agreement/upon the commencement of the
Tenancy Term herein (as the case may be) the total sum of
HK$3,922,356.34 being the deposit ("the previous deposit") held by
the Landlord under three Tenancy Agreements dated 19th May 1994,
19th May 1994 and 10th April 1997 made between the Landlord and the
Tenant in respect of the Premises ("the previous Tenancy Agreement")
shall be transferred and carried over to this Agreement as part
payment of the Deposit and the Tenant shall upon the signing of this
Agreement pay to the Landlord a further sum of HK$94,325.66 which
together with the previous deposit shall be the Deposit.
(b) In the event that the Tenant shall (either before or after the date
hereof) have breached any of the terms and conditions contained in
the previous Tenancy Agreement which on the part of the Tenant is to
be observed and performed up to and inclusive of the date of the
expiration of the contractual term or sooner determination of the
previous Tenancy Agreement, then the Landlord shall be entitled to
deduct from the Deposit such amount as may be required towards
remedying the same insofar as it may be possible (without prejudice
to any other rights or remedies available to the Landlord for breach
of the previous Tenancy Agreement) and in such circumstances and as
a condition precedent to the commencement of this Agreement the
Tenant shall forthwith on demand by the Landlord pay a further sum
to the Landlord (to be held as part of the Deposit) equal to the
amount so deducted and failure by the Tenant so to do shall entitle
the Landlord to forfeit the tenancy hereby created or maintained and
to re-enter upon the Premises and to determine this Agreement
(and/or the previous Tenancy Agreement (as appropriate)) without
prejudice to any other right which the Landlord may have against the
Tenant and the balance of the Deposit (if any) shall be absolutely
forfeited as and for liquidated damages (and not as penalty).
<PAGE> 94
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(c) For the avoidance of doubt this Agreement shall take effect subject to and
with the benefit of the previous Tenancy Agreement until expiry of the
contractual term or sooner determination of the previous Tenancy Agreement
and so that any breach in the obligations and restrictions on the part of
the Tenant in the previous Tenancy Agreement shall be a breach of this
Agreement and vice versa.
<PAGE> 95
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For and on behalf of
KERRY REAL ESTATE AGENCY LIMITED
SIGNED by /s/ [ILLEGIBLE] )
)
) /s/ [ILLEGIBLE]
)
for and on behalf of the Landlord )
)
in the presence of:- )
/s/ Whamly Lin
Whamly Lin
Legal Assistant
SIGNED by Bradley Abelow )
)
)
)
for and on behalf of The Tenant )
)
verified by ) /s/ Bradley Abelow Director
-----------------------------
For and on behalf of
Goldman Sachs (Asia) Finance
/s/ Charles M. Picken
CHARLES M. PICKEN
Solicitor
Lovell White Durrant
Hong Kong SAR
RECEIVED the day and year first above )
written the sum of HONG KONG DOLLARS FOUR )
MILLION AND SIXTEEN THOUSAND SIX HUNDRED AND )
EIGHTY TWO being the Deposit payable by the ) HK$4,016,682.00
Tenant hereunder on the signing hereof ) ===============
(whereof HK$3,922,356.34 is transferred from )
<PAGE> 96
[GRAPHIC OMITTED]
37TH FLOOR PLAN
<PAGE> 97
5.26 Tenant's Insurance
The Tenant shall effect and maintain during the Term insurance cover in
respect of the following:-
(a) Third party liability
In respect of liability for loss or injury or damage to any person
or property whatsoever caused through or by any act, neglect,
default or omission of the Tenant which might give rise to a claim
for indemnity pursuant to Clause 5.25 hereof.
(b) Glass
All glass, if any, now or hereafter on or in the Premises excluding
the glass curtain wall for its full replacement value.
(c) Water Damage
Against damage to the Landlord's Fixtures and installations to the
full insurable value occurring in respect of the use or misuse of
the fire-fighting installation installed within the Premises or the
incursion of water therein.
(d) Tenants Fittings
The Tenant's fittings, goods, personal effects, stock and equipment
within the Premises against fire and extraneous perils for their
full replacement value.
The policy of insurance shall be effected with an insurance company approved by
the Landlord, such approval not to be unreasonably withheld and shall be
endorsed to show the Landlord as registered owner of the Premises and shall be
in an amount of not less than that set out in the Fifth Schedule hereto payable
on each claim and shall contain a clause to the effect that the insurance cover
thereby effected and the terms and conditions thereof shall not be cancelled,
modified or restricted without the prior written consent of the Landlord. The
Tenant hereby further undertakes to produce to the Landlord as and when required
by the Landlord such policy of insurance together with a receipt for the last
payment of premium and a certificate from the insurance company that the policy
is fully paid up and in all respects valid and subsisting.
6. TENANT'S NEGATIVE COVENANTS
6.1 Injury To Walls
The Tenant shall not, without the prior written consent of the Landlord
(which may, in the absolute discretion of the Landlord, be withheld or granted
upon such terms and conditions as the Landlord may impose), cut, maim, injure,
drill into, mark or deface or permit or suffer to be cut, maimed, injured,
drilled into, marked or defaced any doors (other than those installed by the
Tenant), windows, window-frames, partition or structural walls (other than those
internal partition walls erected by the Tenant), glass curtain walls, ceilings,
raised floor, beams, structural members or other part of the fabric
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of the Premises or any of the plumbing or sanitary or air-conditioning apparatus
or installations included therein or lay or use any floor covering or do
anything which may damage or penetrate the existing raised flooring or slab.
6.2 Alteration to Exterior
The Tenant shall not, without the prior written consent of the Landlord
(which may, in the absolute discretion of the Landlord, be withheld or granted
upon such terms and conditions as the Landlord may impose), affix or attach
anything or paint or make any alteration whatsoever to the exterior of the
Premises or the common areas or allow anything to be affixed, attached, painted,
suspended or hung outside the Premises or drop anything from the Premises.
6.3 Inside Faces of Windows
The Tenant shall not paint, spray, put on or adhere any thing or substance
on the inside or outside faces of the windows or the window frames or the glass
curtain walls of the Premises.
6.4 Nuisance
The Tenant shall not cause or produce or suffer or permit to be produced
on or in the Premises any sound or noise or vibration (including sound produced
by broadcasting from television, radio or any apparatus or instrument capable of
producing or reproducing music or sound or vibration) or other acts or things in
or on the Premises which is or are or may be or become a nuisance or annoyance
to the tenants or occupiers of adjacent or neighbouring premises or to users or
customers of the same or to the Landlord or which in the opinion of the Landlord
may prejudicially affect or depreciate the Premises or the Buildings or any
adjacent or neighbouring premises. It as hereby agreed that a persistent breach
by the Tenant of this Clause shall amount to a breach of this Lease which will
entitle the Landlord to exercise its right of re-entry hereunder.
6.5 Auctions & Sales
The Tenant shall not conduct or permit any sale to the public by auction,
bankruptcy, close-out or other sale of things or properties of a similar nature
to take place on the Premises.
6.6 User
(a) The Tenant shall not use the Premises or any part thereof for any
purpose other than as offices Provided that no warranty is given or
deemed to be given by the Landlord as to the fitness of the Premises
for such use. In particular, the Tenant shall not alter the lavatory
comprised in the Premises for any other use.
(b) The Tenant shall not use or cause or permit or suffer to be used any
part of the Premises for gambling or for any illegal, immoral or
improper purpose or in any way so as to cause any nuisance,
annoyance, inconvenience, damage or danger to the Landlord or the
tenants or occupiers of adjacent or neighbouring premises.
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(c) The Tenant shall not tout or cause or permit or suffer any touting
or soliciting for business or the distribution of any pamphlet,
notice or advertising matter outside the Premises or anywhere within
the Buildings (except inside the Premises) by any of the Tenant's
servants, agents, employees, contractors or licensees.
(d) The Tenant shall not use the Premises or any part thereof as
sleeping quarters or as domestic premises within the meaning of the
Landlord and Tenant (Consolidation) Ordinance or similar legislation
for the time being in force and the Tenant shall not allow any
person to remain on the Premises overnight other than for working
purposes and with prior notice to the Landlord or the Manager
Provided that the Tenant may post watchmen to look after the
contents of the Premises and the names of the watchmen shall be
registered with the Landlord.
(e) Except for the reheating of pre-prepared food for consumption by the
Tenant's employees by an approved microwave oven, the Tenant shall
not cook, prepare, deliver or permit or suffer to be cooked or
prepared or delivered any food in the Premises save with the prior
written consent of the Landlord or permit any offensive or unusual
odours (as determined by the Landlord absolutely) to be produced
upon or emanate from the Premises.
(f) The Tenant shall not keep or permit or suffer to be kept any animals
or pets inside the Premises and shall take all such steps and
precautions to the satisfaction of the Landlord to prevent the
Premises or any part thereof from becoming infested by termites,
rats, mice, cockroaches or any other pests or vermin and for the
better observance of this provision, the Landlord may require the
Tenant to effect pest control for the Premises at the Tenant's cost
and expense at such intervals as the Landlord or any relevant
Government authority may direct by employing such pest extermination
contractors as the Landlord may nominate or approve such approval
not to be unreasonably withheld.
6.7 Heavy Machinery
The Tenant shall not, without the prior written consent of the Landlord
(such consent not to be unreasonably withheld but may be granted subject to such
reasonable conditions as the Landlord may impose), install or cause or permit or
suffer to be installed any equipment apparatus or machinery or any part thereof
which imposes a weight on any part of the flooring in excess of five (5) KPa or
which requires any additional electrical wiring or piping or which consumes
electricity or gas not metered through the Tenant's separate meter. The Landlord
shall be entitled to prescribe the maximum weight and permitted location of
safes and other heavy equipment and to require that the same stand on supports
of such dimensions and material to distribute the weight thereof as the Landlord
may deem necessary and the Tenant shall reimburse the Landlord all costs,
charges and expenses incurred by the Landlord in making such prescription.
6.8 Manufacture & Storage of Merchandise
The Tenant shall not use the Premises for the manufacture of goods or
17
<PAGE> 100
merchandise or for the storage of goods or merchandise other than as samples or
exhibits reasonably required in connection with the Tenant's business carried on
therein or keep or store or cause or permit or suffer to be kept or stored any
extra-hazardous, inflammable or dangerous goods within the meaning of the
Dangerous Goods Ordinance and the regulations thereunder.
6.9 Obstruction in Passages
The Tenant shall not place or leave or suffer or to permit to be placed or
left by any of its servants, agents, employees, contractors or licensees any
boxes, furniture, articles or rubbish in the entrance or any of the staircases,
passages or landings or other parts of the Buildings used in common with other
tenants or the Landlord or otherwise encumber the same. The Tenant hereby agrees
to keep the Landlord indemnified against all losses, claims, damages or expenses
suffered or incurred by the Landlord as a result of a breach of this Clause.
Without prejudice to any other remedy it may have under this Lease, the Landlord
or any of its servants or agents may without any prior notice to the Tenant
remove any such obstruction and dispose of the same as it may in absolute
discretion think fit without incurring any liability therefor to the Tenant or
any other person whomsoever and the Tenant shall pay to the Landlord forthwith
on demand all costs and expenses incurred in connection with such removal.
6.10 Goods & Merchandise Outside the Premises
The Tenant shall not place expose or leave or permit or suffer to be
placed exposed or left for display sale or otherwise any goods or merchandise or
thing whatsoever upon or over the ground or passages outside the Premises.
6.11 Air-Conditioning
(a) The Tenant shall not install air-conditioning plant, machinery or
equipment in addition to or in place of those provided by the
Landlord.
(b) Where any air-conditioning plant, machinery or equipment for cooling
or recirculating air is installed in or about the Premises (whether
by the Landlord or the Tenant with the Landlord's approval), the
Tenant shall to the extent of the Tenant's control over the same at
all times use and regulate the same to ensure that the
air-conditioning plant, machinery or equipment is employed to the
best advantage in the conditions from time to time prevailing.
(c) Where air-conditioning service is required by the Tenant outside the
normal business hours (normal business hours being from 8:00 a.m. to
6:30 p.m. every day (Sundays and public holidays excluded) for
Mondays to Fridays and from 8:00 a.m. to 2:00 p.m. on Saturdays
which are not public holidays) and is provided by the manager on the
Tenant giving the Manager reasonable advance notice of the Tenant's
requirements, the Tenant shall pay to the oblige the Landlord to
arrange for [ILLEGIBLE]
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<PAGE> 101
air-conditioning service the provision whereof is governed by the
Deed of Mutual Covenant.
6.12 Signs
The Tenant shall nor exhibit or display on or affix to the interior or
exterior of the Premises so as to be visible from outside the Building any
writing, sign, signboard or other device whether illuminated or not or affix any
writing, sign, sideboard or other device in, at or above any common area, lobby,
landing, passage or corridor of the Buildings Provided always that the Tenant
shall be entitled to have its name and business displayed in lettering and/or
characters to a design and standard of workmanship approved by the Landlord on a
signboard or name-plate at the entrance of the Premises. The Landlord and/or the
Manager or their respective authorized agents shall have the right to remove at
the expense of the Tenant any signboard, sign, name-plate and decorative device
associated therewith affixed or put up or displayed without the prior written
consent of the Landlord.
6.13 Aerials
The Tenant shall not erect any aerial on the roof or walls of the
Buildings or on the ceiling or walls of the Premises or interfere with, remove,
dismantle or alter the common aerials (if any) provided by the Landlord.
6.14 Parking
The Tenant shall not park in, obstruct or otherwise use or permit any of
its servants, agents, employees, contractors or licensees to park in, obstruct
or otherwise use those areas of the Buildings allocated to the parking or
movement of or access for vehicles or designated as loading/unloading areas
otherwise than in accordance with the permissions and directions of the Landlord
and/or the manager or as permitted under the House Rules.
6.15 Breach Of Insurance Policy
The Tenant shall not do or cause or permit or suffer to be done any act or
thing whereby the policy or policies of insurance on the Premises and/or the
Buildings against loss or damage by fire and/or other insurable risks and/or
claims by third parties for the time being subsisting may become void or
voidable or whereby the rate of premium or premia thereon may be increased and
the Tenant shall pay to the Landlord forthwith on demand all sums paid by the
Landlord by way of increased premium or premia thereon and all expenses incurred
by the Landlord in and about any renewal of such policy or policies arising from
or rendered necessary by a breach by the Tenant of this Clause.
6.16 No Subletting
The Tenant shall nor assign, underlet, part with the possession of or
transfer the Premises or any part thereof or any interest therein or permit or
suffer any arrangement or transaction whereby any person who is not a party to
this Lease obtains the use, possession, occupation or enjoyment of the Premises
or any part thereof irrespective of whether any rental or other consideration is
given therefor. The lease created hereby shall be personal to the Tenant named
in this Lease. Without limiting the generality of the
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foregoing, the following acts and events shall, unless approved in writing by
the Landlord, be deemed to be breaches of this Clause:-
(a) In the case of the Tenant being a partnership, the taking in of one
or more new partner whether on the death or retirement of an
existing partner or otherwise.
(b) In the case of the Tenant being an individual (including a sole
surviving partner of a partnership tenant), the death, insanity or
other disability of that individual to the intent that no right to
use, possess, occupy or enjoy the Premises or any part thereof shall
vest in the executors, administrators, personal representatives,
next of kin, trustee or committee of such an individual.
(c) In the case of the Tenant being a corporation, the take-over,
reconstruction, amalgamation, merger, voluntary liquidation or
change in the person or persons in whom the majority of its voting
shares are vested or who otherwise has/have effective control
thereof.
(d) The giving by the Tenant of a power of attorney or similar authority
whereby the donee of the power obtains the right to use, possess,
occupy and enjoy the Premises or any part thereof or does in fact
use, possess, occupy or enjoy the same.
{e) The change of the business name of the Tenant.
6.17 Common Facilities, etc.
The Tenant shall not make any alteration to or interfere or tamper or
permit its servants, agents, employees, contractors or licensees to make any
alteration to or interfere or tamper with any of the following other than in the
manner expressly permitted hereunder:-
(a) the raised flooring within the Premises;
(b) the heating, ventilation and air-conditioning system for the
Buildings (including that part of system installed within the
Premises);
(c) the electrical installations for the Buildings;
(d) the fire services installations of the Buildings (including those
within the Premises);
(e) the installations for plumbing and drainage for the Buildings
(including those within the Premises);
(f) the building management system of the Buildings;
(g) the communication network which forms part of the Common Facilities
(as defined in the Deed of Mutual Covenant) of the Buildings;
(h) the suspended ceiling of the Buildings (including that within the
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<PAGE> 103
Premises); and
(i) the conduits, pipes, wires, cables and ducts in, on or under the
Premises or the raised flooring therein serving or intended to serve
the Buildings or any adjoining or neighbouring property.
7. LANDLORD'S OBLIGATIONS
The Landlord hereby agrees with the Tenant as follows:-
7.1 Quiet Enjoyment
Subject to the Tenant duly paying the Rent and the other charges
hereinbefore mentioned on the days and in manner herein provided for and
observing and performing the agreements, stipulations, terms, conditions and
obligations herein contained, the Tenant shall have quiet possession and
enjoyment of the Premises during the Term without any interruption by the
Landlord or any person lawfully claiming under or through or in trust for the
Landlord.
7.2 Government Rent
The Landlord shall pay the Government Rent and Property Tax and all other
expenses of a capital and non-recurrent nature attributable to or payable in
respect of the Premises.
7.3 Main Structure
The Landlord shall use its best endeavours to procure that the Manager
shall keep the roof of the Buildings and the main structure and walls (including
the glass curtain walls) thereof and the mains, drains, pipes and cables therein
in a proper state of repair and condition Provided that the Landlord shall not
be liable for breach of this Clause unless and until prior written notice of any
defect or want of repair shall have been given by the Tenant to the Landlord and
the Landlord shall have failed to notify the Manager to carry out any such
necessary repair after the lapse of a reasonable time from the service of such
notice.
7.4 Air-Conditioning
(a) The Landlord shall use its best endeavours to procure that subject
to the right of the Manager under the Deed of Mutual Covenant to
change the hours for air-conditioning services, the Manager shall
provide air-conditioning services to the Premises daily from 8:00
a.m. until 6:30 p.m. everyday (Sundays and public holidays excluded)
for Mondays to Fridays and from 8:00 a.m. to 2:00 p.m. on Saturdays
(which are not public holidays). If the Tenant shall require
additional air-conditioning services outside the times specified by
the Landlord, the Landlord shall procure that the Manager shall
provide the same to the Tenant on receiving reasonable notice of the
Tenant's requirements. The charges for air-conditioning outside the
times specified by the Landlord shall be determined by the Landlord
and/or the Manager and notified to the Tenant from time to time.
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<PAGE> 104
(b) If the Tenant so requests, the Landlord shall use its best
endeavours to procure that the Manager shall permit the Tenant to
make connection from the chilled water supply system of the
Buildings so as to obtain daily 24 hours chilled water supply for
the air handling unit intended to serve the computer room to be
installed by the Tenant within the Premises with the prior approval
of the Landlord. The charges for such supply of chilled water shall
be determined by the Landlord and/or the Manager and notified to the
Tenant from time to time.
7.5 Facilities
The Landlord shall use its best endeavours to procure that the Manager
shall maintain the lifts, escalators, travelators, fire and security services
equipment, central air-conditioning system and other common facilities of the
Buildings in proper working order and keep the same in good repair.
7.6 Compliance with Conditions
The Landlord shall comply with the provisions of the Conditions of Sale or
the Government Lease under which the Landlord holds the Premises and shall not
do or permit any act or thing to be done (or omitted to be done) which results
in the whole or any part of the Premises being or becoming subject to re-entry
under the Conditions of Sale or the Government Lease.
7.7 Landlord's Repairs
The Landlord shall, upon receipt of the Tenant's request therefor and
within a reasonable period, effect such repairs to the interior of the Premises
as shall be necessitated by damage caused by any defects or want of repair in
the structure of the Buildings or any part thereof or any other services or
facilities if the Landlord is liable for such repairs hereunder.
8. EXCLUSIONS
8.1 It is hereby expressly agreed and declared that the Landlord shall not in
any circumstances be liable to the Tenant or any other person whomsoever:-
(a) Lifts, Air-Conditioning & Other Common Facilities - in respect of
any injury, loss, damage or loss of business whatsoever which may be
suffered or sustained by the Tenant or any other person or to any
property whatsoever caused by or through or in any way owing to any
malfunction, defect in or breakdown of the lifts, escalators,
travelators, fire and security services, central air-conditioning
system, satellite and the ancillary distribution system, backbone
distribution system, the "High Speed Data Link" system or any other
services or facilities provided in the Building or any failure,
malfunction, explosion, variation, interruption or suspension of
electricity or water supply or any other services or services
provided in the Building; or
(b) Fire & Overflow Water - in respect of any injury, loss, damage or
loss of business whatsoever which may be suffered or sustained by
the Tenant or any other person or to any property whatsoever caused
by or through or in any way owing to typhoon, landslide,
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<PAGE> 105
subsidence of the ground, the escape of fumes, smoke, fire or any
other substance or thing or the overflow of water or vibrations from
anywhere within the Buildings or in the neighbourhood or the influx
of rain water or sea water into the Buildings or the Premises or the
activity of rats or other vermin in the Buildings or the act,
neglect, default or omission of the tenants and occupiers of the
other parts of the Buildings or the defective or damaged condition
of the Premises or the Landlord's fixtures and Installations or any
part thereof or dropping or falling of any article whatsoever from
the Buildings; or
(c) Security - for the security or safekeeping of the Premises or any
contents therein and in particular but without prejudice to the
generality of the foregoing, the provision by the Landlord and/or
the Manager of watchmen and caretakers or any mechanical or
electrical alarm systems (if any) of whatever nature shall not
create any obligation on the part of the Landlord as to the security
of the Premises or any contents therein and the responsibility for
the safety of the Premises and the contents thereof shall at all
times rest with the Tenants; or
(d) Vehicles - for the supervision of or for any damage or loss to
vehicles or accessories or injury to persons or any other damage
resulting therefrom,
and the Tenant shall indemnify and keep the Landlord fully indemnified against
all claims and demands whatsoever made upon the Landlord by any of the servants,
agents, employees, contractors or licensees of the Tenant or any other person
claiming through or under the Tenant as a result of any such loss or damage or
injury aforesaid nor shall the Rent and other charges hereinbefore mentioned or
any part thereof abate or cease to be payable on account of the happening of any
of the foregoing.
9. SUSPENSION OF RENT IN CASE OF FIRE ETC.
If:-
(a) the Premises or the Buildings or any part thereof shall at any time
during the Term be destroyed or damaged or become inaccessible or
uninhabitable owing to fire, water, storm, typhoon, defective
construction, white ants, earthquake, subsidence of the ground or
any calamity beyond the control of the Landlord and not attributable
to the act, default, neglect or omission of the Tenant or any of its
servants, agents, employees, contractors or licensees so as to
render the Premises unfit for commercial use in accordance with
Clause 2.1; or
(b) at any time during the Term the Premises or the Buildings shall be
condemned as a dangerous structure or a demolition order or closing
order shall become operative in respect of the Premises or the
Buildings so as to prevent the occupation of the Premises the
happening of which is not attributable to the act, default, neglect
or omission of the Tenant or any of its servants, agents, employees,
contractors or licensees,
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<PAGE> 106
then the Rent hereby reserved or a fair proportion thereof according
to the nature and extent of the damage sustained or the order made
shall after the expiration of the then current calendar month be
suspended until the Premises shall be reinstated or fit for the use
as aforesaid or the said order lifted, as the case may be, Provided
that:-
(i) the Landlord shall not be obliged to reinstate the Premises or
the Buildings or carry out any repairs thereto if, by reason
of the condition of the Premises or any local regulations or
other circumstances beyond the control of the Landlord, it is
not practicable or reasonable so to do; and
(ii) should the Premises or the Buildings not have been reinstated
in the meantime, either the Landlord or the Tenant may at any
time after four (4) months from the date of occurrence of such
damage or the said order give to the other of them a notice in
writing to determine this Lease and thereupon the same and
everything herein contained shall cease and be of no effect as
from the date of such notice but without prejudice to the
rights and remedies of either party against the other in
respect of any antecedent claim or breach of the agreements,
stipulations, terms and conditions herein contained or of the
Landlord in respect of the Rent payable hereunder prior to the
date of such notice.
In the event of any disagreement between the parties hereto on the application
of this Section, the matter shall be referred to a single professional Surveyor
appointed by mutual, agreement or failing agreement to single professional
Surveyor nominated by the President for the time being of the Hong Kong
Institute of Surveyors and China branch) and the decision of the professional
Surveyor who shall be acting as an arbitrator shall be final and binding. The
costs of such appointment of the professional Surveyor shall be borne by the
Landlord and the Tenant in equal shares.
10. DEFAULT
It is hereby expressly agreed and declared as follows:-
10.1 If:-
(a) the Rent and/or any of the other charges payable hereunder or any
part thereof shall be in arrear for fourteen (14 days after the same
shall have become payable (whether formally demanded or not); or
(b) the Tenant shall suspend business without the Landlord's prior
written consent; or
(c) there shall be any other breach or non-performance of any of the
stipulations, conditions or agreements herein contained and on the
part of the Tenant to be observed or performed; or
(d) the Tenant shall become bankrupt or enter into composition with
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<PAGE> 107
his creditors generally or being a corporation go into liquidation
whether compulsory or voluntary (save for the purposes of
amalgamation or reconstruction approved by the Landlord) or shall
suffer a receiver to be appointed; or
(e) the Tenant shall suffer execution to be levied upon the Premises or
otherwise on the Tenant's goods in Hong Kong.
then and in any such case it shall be lawful for the Landlord at any time
thereafter to re-enter on and upon the Premises or any part thereof in the name
of the whole and thereupon this Lease shall absolutely determine but without
prejudice to any right of action by the Landlord in respect of any outstanding
breach or non-observance or non-performance by the Tenant of any of the terms of
this Lease. A written notice served by the Landlord on the Tenant to the effect
that the Landlord thereby exercises the power of re-entry herein contained shall
be a full and sufficient exercise of such power without physical entry on the
part of the Landlord notwithstanding any rule of law or equity to the contrary.
10.2 Notwithstanding anything herein contained if the Rent, management,
air-conditioning or other charges or moneys herein reserved or any part or parts
thereof shall be in arrears (hereinafter referred to as "the Arrears") and if
the Tenant persists in its failure to pay the same after three (3) days' notice
in writing is given by the Landlord, the Landlord shall be entitled to:-
(a) recover from the Tenant as a debt the expenses incurred by the
Landlord in the course of recovering the Arrears including without
limitation:-
(i) such sum as the Landlord shall reasonably determine being
collection charges for the additional work incurred by the
Landlord's staff and/or the Manager (as the case may be) in
collecting the Arrears;
(ii) all legal charges and expenses on an indemnity basis incurred
by the Landlord for the purpose of recovering the Arrears;
(iii) all other fees paid to debt-collectors appointed by the
Landlord for the purpose of collecting the Arrears; and
(b) disconnect or discontinue the supply of services to the Premises
and/or to the Tenant such as air-conditioning services, water, gas,
electric power, management and other services forthwith without
incurring any liability to the Tenant for any loss or damage
suffered by the Tenant as a result thereof,
Provided Always that the rights and remedies given to the Landlord by this
Clause shall be deemed cumulative remedies and shall not prejudice any right of
action or any remedy of the Landlord for the recovery of any Rent or money due
to the Landlord from the Tenant.
10.3 Any demand for or acceptance of any Rent by the Landlord or its agents
hereunder shall not be deemed to operate as a waiver by the Landlord of any
right to proceed against the Tenant in respect of any breach, non-observance
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<PAGE> 108
or non-performance by the Tenant of any of the agreements, stipulations, terms
and conditions herein contained and on the part of the Tenant to be observed and
performed and any such breach, non-observance or non-performance shall be deemed
to be a continuing breach of covenant and the Tenant shall not be entitled to
set up any such demand for or acceptance of rent as a defence in any action for
forfeiture or otherwise.
10.4 For the purpose of this Lease, any act, default, neglect or omission of any
servant agent employee contractor or licensee (which term shall include any
person present in using or visiting the Premises with the consent of the Tenant
express or implied) of the Tenant shall be deemed to be the act, default,
neglect or omission of the Tenant and any act, default, neglect or omission of
any servant agent employee contractor or licensee of the Landlord shall be
deemed to be the act, default, neglect or omission of the Landlord.
10.5 For the purposes of Part III of the Landlord and Tenant (Consolidation)
Ordinance or any statutory modification or re-enactment thereof for the time
being in force and of this Lease, the Rent and the management charges payable in
respect of the Premises shall be and be deemed to be in arrear if not paid in
advance at the times and in the manner hereinbefore provided for payment
thereof.
11. DEPOSIT
11.1 To secure the due payment of the Rent and the due performance and
observance of the terms and conditions herein contained and on the part of the
Tenant to be performed and observed, the Tenant shall on the signing hereof and
throughout the Term maintain a deposit ("the Deposit") in such sum or sums as
specified in Part 3 of the Fourth schedule hereto.
The Deposit shall remain deposited with the Landlord and shall not be withdrawn
throughout the Term and shall only be released as hereinafter provided.
The Landlord shall be entitled to deduct from the Deposit the amount of all
losses and damages sustained or incurred by the Landlord as a result of any
breach, non-observance or non-performance by the Tenant of any of the covenants,
terms or conditions herein contained. The Tenant shall forthwith on demand
deposit with the Landlord the amount so deducted.
11.2 The Deposit shall be retained by the Landlord until the expiration of the
Term and after all the Tenant's covenants terms and conditions shall have been
duly performed and observed, it shall be repaid to the Tenant without interest
or compensation within thirty (30) days from the date of the Tenant delivering
up vacant possession of the Premises together with all fixtures and fittings
therein and thereto to the Landlord or within thirty (30) days from the date of
the full and final settlement by the Tenant of all claims made by the Landlord
in respect of the Tenant's obligations hereunder whichever shall be the later
Provided that the Landlord may prior to refund of the Deposit require the Tenant
to produce receipts for rates and other utilities covering the Term or other
evidence showing that payment thereof has been made by the Tenant during the
Term.
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<PAGE> 109
12. BUILDING MANAGEMENT & REGULATIONS
12.1 Change of Common Areas, etc
The Landlord or the Landlord's agent shall have the right from time to
time and at any time without the same constituting an actual or constructive
eviction of the Tenant and without incurring any liability to the Tenant in
respect thereof but causing as little inconvenience as possible to the Tenant to
erect install, restrict and/or alter the arrangement and/or the location and/or
alter the arrangement and/or the accessibility of entrances, staircases,
landings, passages, doors, doorways, corridors, lobbies, lifts, escalators,
travelators, lavatories, counters, showcases or other common areas of the
Buildings or any services or apparatus or installations serving the Buildings.
12.2 Conflict with House Rules
The House Rules shall be supplementary to the terms and conditions
contained in this Lease and shall not in any way derogate from such terms and
conditions. In the event of conflict between such House Rules and the terms and
conditions of this Lease the terms and conditions of this Lease shall prevail.
12.3 Non-enforcement
The Landlord or the Landlord's agent shall not be liable for any loss or
damage howsoever caused arising from any non-enforcement of the Deed of Mutual
Covenant or the House Rules or non-observance thereof by any person.
12.4 Designation of Common Areas
The Landlord and/or the manager shall be entitled to restrict, designate,
cordon off and/or partition any part or parts of the common areas and/or the
common facilities for the sole use of any tenant and/or the manager and the
Tenant shall not raise any objection thereto and shall not have any recourse
against the Landlord and/or the Manager in any manner whatsoever.
12.5 Alteration and Displays
The Landlord reserves the right from time to time to improve extend add to
or reduce the Buildings or any part thereof or in any manner whatsoever alter or
deal with the Buildings or any part thereof (other than the Premises) cause as
little (ILLEGIBLE) the landlord will endeavour to circumstances.
12.6 Name of the Buildings
Subject to the terms of the Deed of Mutual Covenant, the Landlord hereby
reserves the right from time to time by giving less than three (3) months'
notice to the Tenant to change the names of the two (2) b1ocks of office
premises and the podium comprised in the Buildings or any one or more of them
without thereby becoming liable to the Tenant, its servants, agents or licensees
for any damages, claims, costs or expenses suffered or incurred as a result of
or in connection with any such change.
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<PAGE> 110
12.7 Public Address System
Notwithstanding anything herein contained or implied to the contrary, the
Landlord may provide and install a public address system throughout the common
areas and may play, relay or broadcast or permit any other person to play, relay
or broadcast recorded music or public announcement therein.
13. INTERPRETATION AND MISCELLANCEOUS
13.1 Condonation Not a Waiver
No condoning, excusing or overlooking by the Landlord of any default,
breach, non-observance or non-performance by the Tenant at any time or times of
any of the agreements, stipulations, terms and conditions herein contained shall
operate as a waiver of the Landlord's rights hereunder in respect of any
continuing or subsequent default, breach, non-observance or non-performance or
so as to defeat or affect in any way the rights and remedies of the Landlord
hereunder in respect of any such continuing or subsequent default or breach and
no waiver by the Landlord shall be inferred from or implied by anything done or
omitted by the Landlord unless expressed in writing and signed by the Landlord.
Any consent given by the Landlord shall operate as a consent only for the
particular matter to which it relates and shall in no way be considered as a
waiver or release of any of the provisions hereof nor shall it be construed as
dispensing with the necessity of obtaining the specific written consent of the
Landlord in the future in respect of similar or other matters unless expressly
so provided.
13.2 Service of Notices
Any notice required to be served on the Tenant shall be sufficiently
served if delivered to or dispatched by prepaid post to or left at the Premises
or at the last known address of the Tenant. Any notice to be served on the
Landlord shall be sufficiently served if delivered to or dispatched by pre-paid
post to the registered office of the Landlord. A notice sent by hand shall be
deemed to be given upon delivery to the addressee and a notice sent by pre-paid
post shall be deemed to be given two (2) days after the date of the notice.
13.3 Landlord and Tenant Legislation
To the extent that the Tenant may lawfully so do the Tenant hereby
expressly agrees to deprive himself of all rights (if any) to protection against
eviction or ejection provided by any existing legislation or by any future
enactment in substitution or amendment thereof or addition thereto to the intent
that the Tenant shall deliver up vacant possession of the Premises to the
Landlord at the expiration or sooner determination of the Term hereby created
notwithstanding any rule of law or equity to the contrary.
13.4 Gender, etc.
In this Lease, if the context permits or requires, words importing the
singular number shall include the plural number and vice versa and words
importing the masculine feminine or neuter gender shall include the other of
them and references to any Ordinance, regulation or other statutory provision
include references to such Ordinance, regulation or provision as from time to
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<PAGE> 111
time modified, codified or re-enacted.
13.5 Marginal Notes
The marginal notes, headings and index are intended for guidance only and
do not form a part of this lease nor shall any of the provisions of this Lease
be construed or interpreted by reference thereto or in any way affected or
limited thereby.
13.6 Stamp Duty
The stamp duty and Land Registry registration fees payable on this Lease
and its counterpart shall be borne by the Landlord and the Tenant hereto in
equal shares. Each of the Landlord and the Tenant shall pay its own legal costs
of and incidental to the Lease and its counterpart.
13.7 Exclusion of Warranties
(a) This Lease sets out the full agreement reached between the parties
hereto and no other representations have been made or warranties
given relating to the Landlord, the Tenant, the Buildings or the
Premises and if any such representations have been made or
warranties given the same are hereby waived.
(b) Nothing herein contained shall confer on the Tenant any right,
interest, privilege, easement or appurtenance whatsoever mentioned
or referred to in Section 16(1) of the Conveyancing and Property
Ordinance (Chapter 219 of the Laws of Hong Kong) save those
expressly set out herein.
13.8 No Fine or Premium Paid
The Tenant acknowledges that no fine premium key money or other
[ILLEGIBLE] Premises will be let to the Tenant by the Landlord in the state and
condition as at the date of the signing of this Lease and no warranty or
representation whatsoever has been given or is made by the Landlord or its
agents regarding the user of the Premises and the Tenant shall satisfy itself or
shall be deemed to have satisfied itself that they are suitable for the purpose
for which they are to be used and the Tenant hereby agrees that it will at its
own expense apply for any requisite licence or licences permit or permits from
all Government or Public Authorities in respect of the carrying on of the
Tenant's business therein and shall execute and comply with all ordinances,
regulation, Orders, Notices or Rules made by all competent Government or Public
Authorities in connection with the conduct of such business by the Tenant in the
Premises And the Tenant hereby further agrees to indemnify the Landlord in
respect of any breach by the Tenant of the aforesaid And in particular but
without limitation no warranty or representation is given or made by the
Landlord or its agents regarding:-
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<PAGE> 112
(a) the fittings and finishes or the installations and appliances (if
any) in the Premises and/or the Buildings;
(b) the state and condition of the premises or the Buildings and the
user thereof; or
(c) the composition of the Buildings.
13.10 Joint & Several Liability
Where more than one person are named in Part 2 of the First Schedule
hereto as the Tenant, the representations, warranties, agreements, undertakings
and covenants herein contained on the part of the Tenant shall be the joint and
several representations, warranties, agreements, undertakings and covenants of
such persons.
13.11 Sale Subject to Lease
For the avoidance of doubt, it is hereby expressly declared and agreed
that if the Landlord shall at any time during the Term sell the Premises or any
part thereof ("the Sale Portion), then as from the date of completion of the
sale of the Sale Portion by the Landlord and subject to novation to the
purchaser of the Sale Portion of the Landlord's obligation in respect of the
Deposit or the relevant portion of the Deposit, all the rights, powers,
remedies, duties, obligations and liabilities of the Landlord hereunder relating
to the Sale Portion shall pass to and be vested in the purchaser of the Sale
Portion and the Landlord shall be absolutely released and discharged from all
duties, obligations and liabilities hereunder relating to the Sale Portion
Provided that this Clause shall not in any way prejudice or affect the rights of
the Landlord or the Tenant hereunder which shall have accrued prior to the date
of completion of the sale of the Sale Portion by the Landlord.
13.12 Special Conditions
For the avoidance of doubt, it is hereby agreed that this Lease shall be
read and construed on the basis that the special conditions, if any, set out in
the Sixth Schedule hereto form an integral part of this Lease. In the event of
conflict between such special conditions and the terms and conditions
hereinbefore provided, the special conditions shall prevail.
13.13 Law
This Lease shall be governed by and construed in accordance with the laws
of Hong Kong. The Tenant hereby submits to the non-exclusive jurisdiction of the
courts of Hong Kong.
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<PAGE> 113
THE FIRST SCHDULE
PART 1
THE LANDLORD: SHINE HILL DEVLOPMENT LIMITED whose registered office is
situate at 33rd Floor, Great Eagle Centre, 23 Harbour Road,
Wan Chai, Hong Kong.
PART 2
THE TENANT: GOLDMAN SACHS (ASIA) FINANCE whose registered office is
situate at P O Box 2O9, Grand Cayman, Cayman Islands, British
Virgin Islands.
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<PAGE> 114
THE SECOND SCHEDULE
PART 1
The Buildings: Two (2) towers of office/commercial buildings, one of which
consisting of forty-seven (47) storeys and called "Citibank
Tower" and the other of which consisting of thirty-seven (37)
storeys and called "Asia Pacific Finance Tower" together with
the podium called "Citibank Plaza" on which "Citibank Tower"
and "Asia Pacific Finance Tower" stand. Provided that the
numbering of the floors has been made on the basis that the
highest floor of Citibank Tower is designated as the 50th
Floor.
PART 2
The Premises: All Those the whole of Thirty-fifth Floor, Thirty-sixth
Floor, Thirty-seventh Floor and Suites 3901, 3902, 3903,
3904, 3905, 3906, 3910 and 3911 on the Thirty-ninth
Floor of "Asia Pacific Finance Tower" as shown coloured
Pink and Pink hatched Black on the Plans attached
hereto.
32
<PAGE> 115
THE THIRD SCHEDULE
The Term: The period of One (1) YEAR commencing on l5 May 1999 and
expiring on 14 May 2000 (both days inclusive).
33
<PAGE> 116
THE FORTH SCHEDULE
PART 1
The Rent (exclusive of rates and management charges):
Rent payable (in Hong Kong Dollars) per
Period calendar month
From 15 May 1999
to 14 May 2000 HK$3,205,800.00 apportioned as follows:-
<TABLE>
<CAPTION>
Unit Rent
---- ----
<S> <C>
The whole of 35/F HK$856,544.00
The whole of 36/F HK$864,812.00
The whole of 37/F HK$864,812.00
Suites 3901, 3902, 3903,
3904, 3905, and 3906 HK$447,876.00
Suites 3910 and 3911 HK$171,756.00
</TABLE>
Part 2
Management Charges: HK$329,827.50 per calendar month (subject to increase in
accordance with Clause 4.2 hereof) apportioned as follows:-
<TABLE>
<CAPTION>
Unit Rent
---- ----
<S> <C>
The whole of 35/F HK$88,125.20
The whole of 36/F HK$88,975.85
The whole of 37/F HK$88,975.85
Suites 3901, 3902, 3903,
3904, 3905, and 3906 HK$46,079.55
Suites 3910 and 3911 HK$17,671.05
</TABLE>
Part 3
Deposit: HK$9,002,971.41 apportioned as follows:-
<TABLE>
<CAPTION>
Unit Rent
---- ----
<S> <C>
The whole of 35/F HK$2,661,206.42
The whole of 36/F HK$2,192,440.01
The whole of 37/F HK$2,490,024.01
Suites 3901, 3902, 3903,
3904, 3905, and 3906 HK$1,138,721.23
Suites 3910 and 3911 HK$520,579.74
</TABLE>
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<PAGE> 117
THE FIFTH SCHEDULE
INSURED AMOUNT
(a) Third Party Liability
(i) HK$5,000,000.00 for any one (1) accident; and
(ii) unlimited cover for the insured period.
(b) Glass
The insured amount to be approved by the Landlord.
(a) Water Damage and Tenant's Fittings
Minimum of HK$500.00 per square foot of lettable area or a lump sum
of HK$500,000.00, whichever is the greater.
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<PAGE> 118
THE SIXTH SCHEDULE
SPECIAL CONDITIONS
1. Landlord's Fixtures & Fittings
Without prejudice to Clause 13.8 of the Lease, the Landlord shall
provide the following fixtures and fittings which are based on the Landlord's
specifications:
(a) Concrete floor;
(b) The Buildings' proprietary raised flooring system to be installed
throughout the office to a standard height of approximately five (5)
inches above the structural floor level;
(c) internal surfaces of the external walls and core walls with plaster
finish and emulsion paint in white. colour up to false ceiling
soffit; whereas for any dry partition walls, there will be no finish
and touching-up on them;
(d) an acoustic ceiling system on a modular grid incorporating general
light fittings for office use (other than decorative lighting and
without wiring) and supply air ducts with VAV boxes linked from the
central, air-conditioning system of the Buildings;
(e) automatic sprinkler system;
(f) MCS boards for the Premises installed at the meter room; and
(g) curtain wall and/or windows.
The Landlord will also provide the Tenant with ceiling tiles in boxes and the
Tenant shall be solely responsible for the installation of the ceiling tites.
2. Designated Areas
Except as otherwise agreed by the Landlord the Tenant hereby agrees
not to erect or install any fixtures or fittings or put any heavy machinery or
equipment over or in any way block the access to the ceiling of the portion of
the Premises as shown coloured "Pink hatch Black" and the Area coloured "Green"
on the Plans attached hereto so as to allow free and easy access thereto by the
Landlord and/or the Manager for the installation, maintenance or alteration of
the conduits, cables, wires, ducts and trunkings below the raised flooring or
above the suspended ceiling thereof provided always that the Landlord and/or the
Manager shall have access upon prior appointment to be mutually agreed ( save
and except in case of an emergency) and provided that the Landlord and/or the
Manager shall cause as little disturbance to the Tenant's business as is
practicable and the Landlord shall make good any damage thereby caused with all
due diligence.
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<PAGE> 119
3. Exclusive Use of Corridor
The Tenant shall during the subsistence of the Term, be allowed to
have the exclusive use of a portion of the corridor on the 39th Floor adjacent
to Suites 3910 and 3911 of the Premises which for the purpose of identification
is shown coloured Green on the 39th Floor Plan attached hereto ("the Green
Area") and all the obligations and liabilities of the Tenant under the Lease
with respect to the Premises shall extend to the Green Area. The Landlord hereby
acknowledges that the Tenant may at its own expense with the Landlord's approval
erected a new entrance door at position as marked Red on the said 35th Floor
Plan Provide that the Tenant shall upon written demand by the Landlord forthwith
reinstate the Green Area to common corridor with such standard finishes and
accessories as specified by the Landlord.
The Tenant also agrees that exclusive use of the Green Area shall be subject to
the discretion of the Landlord. The Tenant further agrees to bear and pay any
rates payable on the Green Area as may be imposed by the Government from time to
time.
4. User of the Premises
Notwithstanding clause 6.6 of this Lease, the Tenant may share
occupation of the Premises with Goldman Sachs (Asia) L.L.C., Goldman Sachs (Asia
Securities) Limited and other companies which are within the group of companies
controlled by The Goldman Sachs Group, L.P. ("the Guarantor") and which are
controlled, whether directly or indirectly as to ninety percent (90%) or more by
Goldman Sachs Group, L.P. or any entity to which all or substantially all of the
assets of The Goldman Sachs Group, L.P. may be transferred.
5. Non-Registration
It is hereby agreed that this Lease shall not be lodged for
registration at the Land Registry.
6. Confidentiality
The Tenant hereby agrees and undertakes to keep the contents of this
Lease, in particular, the term and the rental of the Lease strictly confidential
and shall not disclose the same to any third party without the consent of the
Landlord. The above obligations shall not apply: where (a) disclosure is made as
a result of to which Goldman Sachs (Asia) Finance or its affiliates is subject
or submits a subpoena, requirement or official request made to Goldman Sachs
(Asia) Finance or its affiliates from any competent judicial, administrative,
legislative or regulatory or self-regulating authority or body or stock exchange
to which Goldman Sachs (Asia) Finance or its affiliates is subject or submits;
or (b) the information becomes available in the public domain other than as a
result of disclosure by Goldman Sachs (Asia) Finance, its affiliates, partners,
employees, directors, officers or advisors.
37
<PAGE> 120
IN WITNESS WHEREOF the parties hereto have executed this Lease the day
and year first before written.
SEALED with the Common Seal of )
)
SHINE HILL DEVELOPMENT LIMITED )
)
and SIGNED by Lo Ka Shui )
) /s/ Lo Ka Shui [SEAL]
Lo Kai Shui )
)
whose signature(s) is/are verified )
)
by:- )
/s/ Patrick P.O. Hui
Patrick P.O. Hui
Solicitor Hong Kong SAR.
SEALED with the Common Seal of )
)
GOLDMAN SACHS (ASIA) FINANCE )
)
and SIGNED by )
) /s/ James M. Sheridan [SEAL]
James M. Sheridan )
)
whose signature(s) is/are verified )
)
by:- )
/s/ Gareth W. Batey
Gareth W. Batey
Solicitor
Hong Kong
38
<PAGE> 121
[GRAPHIC OMITTED]
35TH FLOOR PLAN
<PAGE> 122
[GRAPHIC OMITTED]
36TH FLOOR PLAN
<PAGE> 123
[GRAPHIC OMITTED]
37TH FLOOR PLAN
<PAGE> 124
[GRAPHIC OMITTED]
39TH FLOOR PLAN
<PAGE> 125
[GRAPHIC OMITTED]
39TH FLOOR PLAN
<PAGE> 126
SIDE LETTER
1. LEASE
Reference is made to a Lease ("the Lease") of even date herewith
and made between Shine Hi11 Development Limited as the Landlord and Goldman
Sachs (Asia) Finance as the Tenant whereby the Landlord lets to the Tenant all
those premises ("the Premises") more particularly described in the Schedule
hereto subject to the terms and conditions thereof. Terms defined in the Lease
shall have the same meaning when used herein.
2. CONSTRUCTION OF LEASE
The parties hereto hereby agree that the Lease shall be read and
construed subject to the provisions hereof.
3. Non-Application of Provisions of Leasing Documents
3.1 Clause 10.1(b) of the Lease shall not apply notwithstanding the inclusion
thereof in the Lease.
3.2 Notwithstanding Clause 6.16(c) of the Lease, the takeover, reconstruction,
amalgamation, merger or voluntary liquidation of the Tenant or change in the
person or persons in whom the majority of the voting shares of the Tenant are
vested or who otherwise has/have effective control thereof shall not be deemed
to be a breach of Clause 6.16 of the Lease if the same shall have been approved
by the Landlord, such approval not to be unreasonably withheld.
4. Sub-Letting
4.1 Notwithstanding Clause 6.16(c) of the Lease, the Tenant may, with the prior
written consent of the mortgagee of the Premises (such consent not to be
unreasonably withheld) and subject to the consent of the Landlord as hereinafter
provided, sub-let not more than twenty-five
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<PAGE> 127
percent (25%) of the lettable area of the Premises ("the Sub-lettable Portion")
Provided that the fol1owing provisions shall be complied with by the Tenant:-
(a) If the Tenant is desirous of sub-letting the Sub-lettable Portion or
any part thereof, the Tenant shall notify the Landlord of its
intention to sublet and shall provide the Landlord with the
particulars of the following:-
(i) the name of the proposed sub-tenant and other particulars
thereof which are reasonably required by the Landlord for the
purpose of deciding whether or not to approve the identity of
the sub-tenant;
(ii) the nature of business proposed to be carried on by the
proposed sub-tenant at that part of the Sub-lettable Portion
to be sub-let;
(iii) that part of the Sub-lettable Portion to be sub-let together
with a plan (which shall be for identification purposes only)
showing the position and dimension thereof; and
(iv) the terms and conditions of the proposed sub-letting including
the terms of the incentives and allowances, if any, to be
granted to the sub-tenant.
(b) The Tenant shall obtain the prior written consent of the Landlord to
the identity of the proposed sub-tenant and the business proposed to
be carried on by the proposed sub-tenant at that part of the
Sub-lettable Portion to be sub-let.
(c) The rent per square foot at which the Tenant offers any part or
parts of the Sub-lettable Portion for sub-letting (taking into
account incentives and allowances, if any, granted by the New
Tenant) shall not be less than the rent then offered by the Landlord
for other premises of a comparable size and location in the
Buildings Provided that in the event that there shall be no other
premises of a comparable size and location in the Buildings, the
minimum rent at which the Tenant offers any part
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<PAGE> 128
or parts of the Sub-lettable Portion for sub-letting shall be fixed
by reference to the mean of the rent then offered by the Landlord
for other premises of comparable size but in a better location in
the Buildings and the rent then offered by the Landlord for other
premises of comparable size but in an inferior location in the
Buildings.
(d) The rent per square foot at which the proposed sub-letting shall be
made (taking into account incentives and allowances, if any, granted
by the New Tenant) shall be mutually agreed between the Landlord and
the Tenant Provided that the agreement of the parties shall not be
unreasonably withheld.
(e) The sub-letting shall not extend beyond the expiry date of the Term
and the exercise of any right of renewal therefor shall not result
in the term of the sub-letting extending beyond the expiry date of
the Term.
(f) The form of the agreement for sub-letting shall be approved by the
Landlord (the Landlord's approval not to be unreasonably withheld)
and the terms and conditions of the sub-letting (other than the
incentives and allowances, if any, to be granted to the sub-tenant)
shall in all respect be compatible with those of the Second Lease
and shall contain agreements, undertakings and covenants no less
onerous than those imposed on the Tenant by the Lease.
(g) All costs, charges and expenses associated with the sub-letting
permitted hereunder (including without limitation the costs of the
partitioning to be installed in the Sub-lettable Portion with the
Landlord's prior written consent) and the costs and expenses
incurred by the Landlord in approving the sub-letting shall be borne
by the Tenant.
(h) If the Tenant shall derive a profit from the sub-letting (the said
profit being determined by comparing (i) the effective rent per
square foot of lettable area per month of the Term payable by the
Tenant to the Landlord and (ii) the effective rent per square foot
of lettable area per month of the term of sub-letting payable by the
sub-tenant to the Tenant and by reference to the
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<PAGE> 129
lettable area sub-let), the Tenant shall share such profit with the
Landlord in equal shares by paying to the Landlord an appropriate
amount as soon as possible and in any event within seven (7) days
after receipt of rent from the sub-tenant on each occasion when rent
is payable by the sub-tenant.
5. Power & Chilled Water Supply, etc.
5.1 The Landlord shall permit the Tenant to make connections from such tenants'
main switchboards in the Buildings as the Landlord may reasonably designate so
as to allow for the following normal power supply:
(a) a dedicated 500 AMP 3 phase power supply for the 35th Floor of the
Premises;
(b) a dedicated 500 AMP 3 phase power supply for the 36th Floor of the
Premises;
(c) a dedicated 300 AMP 3 phase power supply for the 37th Floor of the
Premises;
(d) a dedicated 200 AMP 3 phase power supply for Suites 3901-3906 on 39th
Floor of the Premises; and
(e) a dedicated 60 AMP 3 phase power supply for Suites 3910-3911 on 39th Floor
of the Premises;
The Tenant hereby acknowledges that prior to the date hereof, connections have
been made for part of the aforesaid normal power supply to the extent set out
below;
(i) a dedicated 500 AMP 3 phase power supply to the 35th Floor of the
Premises;
(ii) a dedicated 500 AMP 3 phase power supply for the 36th Floor of the
Premises;
(iii) a dedicated 350 AMP 3 phase power supply for the 37th Floor of
4
<PAGE> 130
the Premises;
(iv) a dedicated 200 AMP 3 phase power supply to Suites 3901-3906 on the 39th
Floor of the Premises; and
(v) a dedicated 60 AMP 3 phase power supply for Suites 3910-3911 on the 39th
Floor of the Premises.
5.2 The Landlord shall permit the Tenant to purchase connections from such
emergency generators in the Bui1ding as the Landlord may reasonably designate so
as to allow for the following emergency power supply:
(a) a dedicated 300 AMP 3 phase power supply for the 35th Floor of the
Premises;
(b) a dedicated 300 AMP 3 phase power supply for the 36th Floor of the
Premises.
(c) a dedicated 150 AMP 3 phase power supply for the 37th Floor of the
Premises;
(d) a dedicated 150 AMP 3 phase power supply for Suites 3901-3906 and
3910-3911 on the 39th Floor of the Premises; and
The Tenant hereby acknowledges that prior to the date hereof, connections have
been made for part of the aforesaid emergency power supply to the extent of 300
AMP 3 phase power supply for the 35th Floor of the Premises; 400 AMP 3 phase
power supply for the 36th Floor of the Premises; 150 AMP 3 phase power supply
for the 37th Floor of the Premises; 150 AMP 3 phase power supply for Suites
3901-3906 and 3910-3911 on the 39th Floor of the Premises.
5.3 The Landlord shall permit the Tenant to make connections from the chilled
water supply system for the buildings which is backed up by emergency power so
as to allow for the following chilled water supply:
(a) 10 litres per second for the 35th Floor of the Premises;
5
<PAGE> 131
(b) 10 litres per second for the 36th Floor of the Premises;
(c) 10 litres per second for the 37th Floor of the Premises;
(d) 4.0 litres per second for Suites 3901-3906 on the 39th Floor of the
Premises; and
(e) 0.7 litre per second for Suites 3910-3911 on the 39th Floor of the
Premises.
The Tenant shall pay to the Manager forthwith on demand such charges as the
Manager from time to time prescribe for the supply of chilled water as
aforesaid. The Tenant hereby acknowledges that prior to the date hereof, part of
the aforesaid chilled water supply has been provided to two (2) equipment rooms
and a dealing room within the Premises.
5.4 Except as expressly provided herein to the contrary, Clause 5.3 of the Lease
shall apply to all works to be carried out by the Tenant for the purposes of
obtaining power supply and chilled water supply referred to in this Paragraph 5.
For the avoidance of doubt, the Tenant shall at its own cost and expense prepare
and submit to the Landlord for the Landlord's approval detailed drawings and
specifications for the works proposed to be carried out by the Tenant for the
said purposes (including without limitation, modifications, if any, required to
be made to the existing plant, machinery and equipment forming part of the
Common Facilities of the Buildings).
5.5 The Tenant is permitted to use such part of the Common Areas of the
Buildings as may reasonably be required by the Tenant for the purpose of
erecting ducts for linking from the 35th Floor of the Premises to the 36th Floor
of the Premises computer cables, telephone cable and other wires and piping
reasonably required in connection with the business of the Tenant or the
permitted occupants of the Premises.
5.6 The Tenant shall be solely responsible for obtaining all necessary approvals
from all relevant Government departments and utility companies for the
connections required for the purpose of obtaining the power supply and chilled
water supply and for the erection of ducts referred to in the foregoing
provisions of this
6
<PAGE> 132
Paragraph 5 and the electricity consumption resulting from such connections and
erection.
5.7 The Tenant shall be solely responsible for all costs of such plant,
machinery and equipment (including without limitation, cables, wiring and
energy meters) as may be required for the purposes of making the necessary
connections in order to obtain the power supply and chilled water supply and
for the erection of ducts referred to in the foregoing provisions of this
Paragraph 5 and all costs, charges and expenses of and incidental to the
installation of such plant, machinery and equipment and such connections
(including without limitation, modifications to the existing plant, machinery
and equipment forming part of the Common Facilities of the Buildings which are
exclusively for the benefit of the Tenant) and such erection Provided that where
modifications to the existing plant, machinery and equipment forming part of the
Common facilities of the Buildings are not solely for the benefit of the Tenant,
the Tenant shall be responsible for a fair and reasonable proportion of the
costs, charges and expenses therefor.
5.8 The Tenant shall, at its own cost and expense, keep all plant, machinery and
equipment installed pursuant to Paragraph 5.7 which are exclusively for the
benefit of the Tenant and the ducts erected pursuant to Paragraph 5.5 in good
order and condition and properly maintained and execute such repair or
replacement as may be required by the Landlord, the Manager, the relevant
Government departments or utility companies Provided that:
(a) insofar as the Manager considers that the maintenance or repair of any of
the aforesaid items is closely connected with the maintenance or repair of
the Common Facilities of the Buildings, the Tenant shall allow the Manager
to execute the maintenance and/or repair on behalf of the Tenant and pay
to the Manager forthwith on demand the reasonable costs and expenses
incurred by the Manager in so doing; and
(b) the Tenant shall pay to the Manager forthwith on demand a fair and
reasonable proportion of costs and expenses incurred by the Manager in
maintaining and repairing modifications to the existing plant, machinery
and equipment forming part of the Common Facilities of the Buildings which
are not solely for the
7
<PAGE> 133
benefit of the Tenant.
For the avoidance of doubt, the Tenant hereby expressly acknowledges that
the Landlord shall not in any way be responsible for the act, neglect, default
or omission of the Manager. The Tenant shall indemnify the Landlord against all
costs, claims, demands, actions and legal proceedings whatsoever made upon the
Landlord by any person in respect of any loss, damage or injury caused to any
person whomsoever or any property whatsoever whether directly or indirectly as a
result of the installation of plant, machinery and equipment or erection of
ducts made by the Tenant pursuant to Paragraph 5.7 or 5.5 or the defective or
damaged condition of such plant, machinery, equipment or ducts or the
connections made by the Tenant for the purposes of obtaining the power supply
and chilled water supply referred to in this Paragraph 5.
5.9 For the avoidance of doubt, the Tenant hereby acknowledges and agrees that
its obligations under Clause 5.23 of the Lease shall be extended to the plant,
machinery and equipment installed and ducts erected pursuant to the provisions
of this Paragraph 5 as if the same were fixtures fittings and additions made in
or to the Premises.
6. Charges for Additional Air-conditioning Supply
6.1 The Landlord hereby declares that the charges for additional
air-conditioning service referred to in Clause 6.11(c) of the Lease is currently
estimated by the Manager to be:-
(a) at the rate of HK$13.40 for every Two Thousand (2,000) square feet of
lettable area or part thereof for every hour or part thereof for long term
standing instructions; and
(b) at the rate of HK$45 for every Two Thousand (2,000) square feet of
lettable area or part thereof for every hour or part thereof for ad hoc
instructions;
Provided that whether instructions given shall qualify as long term
standing instructions shall be determined by the Manager in its reasonable
discretion.
8
<PAGE> 134
6.2 Without prejudice to Clause 6.11(c) of the Lease, the Landlord shall use its
best endeavours to procure the Manager to provide the Tenant with additional
air-conditioning service if the same is required by the Tenant subject to the
Tenant complying with the terms of the Deed of Mutual Covenant relative to the
provision of additional air-conditioning service.
7. Staircases
7.1 The Tenant hereby confirms and the Landlord hereby acknowledges that the
Tenant has constructed one (1) staircase leading from the 34th Floor of the
Premises to the 35th Floor of the Premises, one (1) staircase leading from the
35th Floor of the Premises to the 36th Floor of the Premises and two (2)
staircases leading from the 35th Floor of the Premises to the 37th Floor of the
Premises (collectively "the Staircases") Provided that:
(a) no warranty is given or deemed to be given by the Landlord as to the
position at which the Staircases can be constructed or the time required
for the construction thereof;
(b) the Tenant shall be solely responsible for obtaining at its own cost and
expense all necessary approvals from the Building Authority and other
relevant Government authorities required for such Staircases and shall in
all respects comply with the provisions of Clause 5.3 of the Lease as if
the Staircases from part of the Tenant's Works therein mentioned; and
7.2 For the avoidance of doubt, the Tenant shall, if the Landlord so requires,
at its own costs and expenses remove and demolish the Staircases and make good
any damage to the Premises caused by such demolition including but not limited
to the reinstatement of the relevant portions of the ceiling and floor slab
within the Premises to its original state at the expiration or sooner
determination of the Term.
8. Car Parking Spaces
The Landlord shall, during the subsistence of the Term,
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<PAGE> 135
grant to the Tenant a licence to use ten (10) car parking spaces in the
Basements of the Buildings to be designated from time to time by the Landlord
subject to payment by the Tenant of such standard rate of licence fees and upon
such other standard terms and conditions as the Landlord may in its discretion
impose for car parking spaces in the Buildings.
9. Non-Registration
It is hereby agreed that this Side Letter shall not be lodged for registration
at the Land Registry. It is further agreed that the contents of this Side Letter
shall be kept STRICTLY CONFIDENTIAL.
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<PAGE> 136
THE SCHEDULE
THE PREMISES
All Those the whole of THIRTY-FIFTH FLOOR, THIRTY-SIXTH
FLOOR, THIRTY-SEVENTH FLOOR and SUITES 3901, 3902, 3903, 3904, 3905,
3906, 3910 and 3911 on the THIRTY-NINTH FLOOR of "Asia Pacific
Finance Tower" as shown coloured Pink and Pink hatched Black on the Plans
attached to the Lease.
11
<PAGE> 137
IN WITNESS whereof the Landlord and the Tenant have executed this Side
Letter this 2nd DAY day of November 1998.
SEALED with the Common Seal of )
)
SHINE HILL DEVELOPMENT LIMITED )
)
and SIGNED by Lo Ka Shui )
) /s/ Lo Ka Shui [SEAL]
Lo Ka Shui )
)
whose signature(s) is/are verified )
)
by:- )
/s/ Patrick P.O. Hui
Patrick P.O. Hui
Solicitor, Hong Kong SAR.
SEALED with the Common Seal of )
)
GOLDMAN SACHS (ASIA) FINANCE )
)
and SIGNED by )
) /s/ James M. Sheridan [SEAL]
James M. Sheridan )
)
whose signature(s) is/are verified )
)
by:- )
/s/ Gareth W. Batey
Gareth W. Batey
Solicitor
Hong Kong
Solicitor, Hong Kong SAR.
12
<PAGE> 1
EXHIBIT 10.12
DATED 17th November 1993
- --------------------------------------------------------------------------
SHINE HILL DEVELOPMENT LIMITED
(Landlord)
and
THE GOLDMAN SACHS GROUP, L.P.
(Guarantors)
--------------------------------------------------------------
G U A R A N T E E
--------------------------------------------------------------
Bateson Harris
in association with
Mallesons Stephen Jaques
Suite 801, Asia Pacific Finance Tower
Citibank Plaza
3 Garden Road, Central
Hong Kong
Ref: SHINZ040-116 (HK1748)
<PAGE> 2
THIS GUARANTEE AND INDEMNITY is made the 17th day of November One Thousand Nine
Hundred and Ninety-three
Between:
(1) The GOLDMAN SACHS GROUP, L.P. a limited partnership registered in the State
of Delaware and having its principal place of business at 85 Broad Street,
New York, NY10004, the United States of America ("the Guarantor"); and
(2) SHINE HILL DEVELOPMENT LIMITED a company incorporated in Hong Kong and
having its registered office is situate at 33rd Floor, Great Eagle Centre,
23 Harbour Road, Hong Kong ("the Landlord")
WHEREAS:-
(1) Goldman Sachs (Asia) Finance ("the Tenant") is a company incorporated in
the Cayman Islands.
(2) The Guarantor is the parent company of the Tenant.
(3) At the request of the Guarantor and on the condition that the Guarantor
execute this Guarantee and Indemnity ("this Guarantee") in favour of the
Landlord, the Landlord has agreed to:
(a) enter into a Lease ("the Lease") with the Tenant whereby the Landlord
would let to the Tenant all those premises more particularly described
in the Schedule here to in the form annexed hereto as Annexure I; and
(d) enter into a side letter ("the Side Letter") with the Tenant setting
out certain provisions relating to the construction of the Lease in
the form annexed hereto as Annexure II.
NOW THIS DEED WITNESSETH as follows:-
1. INTERPRETATION
1.1 In this Guarantee, unless otherwise provided herein or where the context
otherwise requires, terms defined in the Lease shall have the same meaning when
used herein.
1.2 The headings in this Guarantee are inserted for convenience only. Unless the
context otherwise requires, words denoting the singular number only shall
include the plural and vice versa and references to the masculine gender shall
include the feminine gender and neuter gender and vice versa.
- 1 -
<PAGE> 3
2. GUARANTEE AND INDEMNITY
2.1 In consideration of the Landlord agreeing to entering into the Lease and the
Side Letter, the Guarantor hereby IRREVOCABLY and UNCONDITIONALLY:
(a) guarantees to the Landlord:
(i) the due, full and punctual payment of rent, management fees, rates,
interest, costs charges, expenses and other sums payable by the Tenant
in respect of the Premises at the time and in the manner provided in
the Lease and the Side Letter ("the Secured Obligation");
(ii) the due, full, punctual and complete performance and observance by the
Tenant of all the covenants, agreements, conditions, obligations and
undertakings contained in t he Lease and the Side Letter to be
performed and observed by the Tenant by virtue of the Lease and the
Side Letter ("the Secured Obligations");
(b) undertakes and agrees with the Landlord that if and whenever the Tenant
shall fail to pay the Secured Indebtedness or any part thereof in
accordance with the provisions of the Lease and the Side Letter; or be in
breach of any of the Secured Obligations, the Guarantor shall, forthwith on
demand by the Landlord, pay to the Landlord all amount of the Secured
Indebtedness as may be due and outstanding as at the date of such demand or
(as the case may be) make good all such default; and
(c) undertakes to indemnify the Landlord and keep the Landlord indemnified
against all losses, damages, demands, suits, actions, proceedings, costs
and expenses that may be suffered or incurred by the Landlord by reason of
the default of the Tenant in performing or observing any of the Secured
Obligations.
2.2 In consideration of the Landlord agreeing to entering into the Lease and the
Side Letter and independently of any other terms, conditions and stipulations
herein contained, the Guarantor hereby agrees that in the event that, for any
reasons whatsoever, the obligations, undertakings and liabilities of the
Guarantor under any of the provisions of this Guarantee are or become or prove
to be unenforceable or shall be declared or adjudged to be illegal, invalid or
unenforceable or shall be declared or adjudged to be illegal, invalid or
unenforceable under any applicable law, the Guarantor shall nevertheless
indemnify the Landlord and keep the Landlord indemnified against all losses,
damages, costs and expenses suffered or incurred by the Landlord as a result of
such illegality, invalidity or unenforceability and shall forthwith on demand by
the Landlord pay to the Landlord all sums necessary to make good and to
compensate the Landlord for such losses, damages, costs and expenses.
2.3 In consideration of the Landlord agreeing to entering into the Lease and the
Side Letter and independently of any other terms, conditions and stipulations
herein contained, the Guarantor hereby agrees
- 2 -
<PAGE> 4
that if any sum payable by the Guarantor under this Deed or any part thereof is
not paid on demand or (as the case may be) when due, the Guarantor shall pay to
the Landlord interest on the outstanding amount of such sum at the best or prime
lending rate from time to time quoted by The Hongkong and Shanghai Banking
Corporation Limited for advances in Hong Kong Dollars from the date on which the
same is payable to the date of actual payment to the Landlord. Interest payable
under this Clause 2.3 shall be compounded on a monthly basis Provided always
that no interest shall be payable hereunder on any sum which shall at the same
time be accumulating interest under the terms of the Lease and the Side Letter.
3. REPRESENTATIONS & WARRANTIES
The Guarantor hereby represents and warrants to the Landlord as follows:
(a) the Guarantor takes full cognizance of the terms of the Lease and has
approved of the form and substance of the Lease and the Side Letter; and
(b) the Guarantor has full power and capacity and is duly qualified to enter
into and perform its obligations and undertakings under this Guarantee and
has obtained all consents, permissions and approvals required for the
Guarantor to enter into and perform its obligations and undertakings under
this Guarantee and shall such consent, permission and approvals are valid
and subsisting.
4. GENERAL PROVISIONS RELATING TO THE GUARANTOR'S COVENANTS
4.1 This Guarantee shall be a continuing guarantee and shall remain irrevocably
in full force and effect until:-
(a) fourteen (14) days after the expiration of the Term (as defined in the
Lease) and the performance and observance by the Tenant of the Secured
Obligations; or
(b) fourteen (14) days after the settlement of all claims made by the Landlord
against the Tenant in respect of non-payment of any part of the Secured
Indebtedness and/or non-observance or non-performance by the Tenant of any
of Secured Obligations whichever is the later.
4.2 The Guarantor hereby waives any right which the Guarantor may have of
requiring any proceeding first against the Tenant or any other person before
proceedings hereunder.
4.3 The obligations of the Guarantor under this Guarantee shall not be affected
by any act, omission, fact, circumstance, matter or thing which, but for this
provision, might operate to release or otherwise exonerate
- 3 -
<PAGE> 5
the Guarantor from its obligations hereunder including, without limitation:
(a) any time or indulgence granted to the Tenant; or
(b) any legal limitation, disability or incapacity of the Tenant or want of
authority of any person purporting to act on behalf of the Tenant; or
(c) any amendment to or variation of the terms of the Lease and the Side
Letter;
(d) the take-over, reconstruction, amalgamation, merger, liquidation,
bankruptcy or insolvency of the Tenant or change in the person or persons
in whom the majority of the voting shares of the Tenant are vested or who
otherwise has/have effective control thereof.
4.4 All payments to be made by the Guarantor hereunder shall be paid free and
clear of any deduction or withholding on account of any tax. If the Guarantor is
required by any law or regulation to make and deduction or withholding from any
sum payable by the Guarantor hereunder on account of any tax, the then sum
payable by the Guarantor in respect of which such deduction, withholding or
payment is required to be made shall be increased to the extent necessary to
ensure that after the making of such deduction, withholding or payment, the
Landlord receives and is beneficially entitled to, free from any such charge, a
net sum equal to the sum which the Landlord would have received and been
entitled to had no such deduction, withholding or payment been made.
4.5 A certificate of the Landlord as to the amount of the rent, management fees,
rates and interest payable by the Tenant in respect of the Premises and
outstanding and due at any time shall, in the absence of manifest error, be
conclusive and binding on the Guarantor and a certificate of the Landlord as to
the amount of other items of the Secured Indebtedness shall be presumptive.
4.6 Time shall be of the essence of this Guarantee. No failure or delay on the
part of the Landlord to exercise any power, right or remedy under this Guarantee
shall operate as a waiver thereof nor shall any waiver by the Landlord of any
particular default by the Guarantor affect or prejudice the power, right or
remedy of the Landlord in respect of any other default or any subsequent default
of the same or a different kind.
4.7 If at any time any provision of this Guarantee is or becomes illegal,
invalid or unenforceable in any respect under the laws of any jurisdiction,
neither the legality, validity or enforceability of the remaining provisions of
this Guarantee no the legality, validity or enforceability of such provision
under the laws of any other jurisdiction shall in any way be affected or
impaired thereby.
4.8 This Guarantee shall ensure to the benefit of the Landlord and its
successors and assigns. The Guarantor may not assign or otherwise dispose of any
of its undertakings, obligations or liabilities hereunder except that the
Guarantor may assign all (but not part) of its
- 4 -
<PAGE> 6
undertakings, obligations and liabilities hereunder to a partnership,
corporation, trust or other organization ("the Assignee") which shall have
succeeded to a substantial part of the Guarantor's business and to which a
substantial part of the Guarantor's assets shall have been transferred Provided
that:
(a) the Assignee has full power and capacity to assume the said undertakings,
obligations and liabilities; and
(b) upon the request of the Landlord, the Guarantor shall provide the Landlord
with a legal opinion as to the legality, validity and enforceability of the
assumption by the Assignee of the said undertakings, obligations and
liabilities and procure the Assignee of the said undertakings, obligations
and liabilities and procure the Assignee to give a direct covenant to the
Landlord that the Assignee has assumed the said undertakings, obligations
and liabilities.
Subject to valid assumption by the Assignee of the said undertakings,
obligations and liabilities, the Guarantor shall be discharged from and relieved
of its obligations hereunder.
4.9 The Landlord shall only be entitled to have recourse against the Guarantor
in respect of its undertakings, obligations and liabilities hereunder to the
extent of the assets of the Guarantor.
4.10 All demands and notices to be given to the Guarantor shall be in writing,
sent to the address of the Guarantor set out in this Guarantee (or such other
address as may from time or time be notified in writing by the Guarantee to the
Landlord), may be sent by courier or by personal delivery and shall be deemed to
have been duly given and received by the Guarantor (a) three (3) days after
delivery by the sender to the courier; or (b) when delivered if delivered by
personal delivery.
5. COSTS AND EXPENSES
All costs and expenses reasonably incurred by the Landlord in connection
with the preparation, execution and enforcement of this Guarantee shall be borne
by the Guarantor and shall be reimbursed by the Guarantor to the Landlord
forthwith on demand by the Landlord.
6. LAW AND JURISDICTION
6.1 This Guarantee shall be governed by and construed in accordance with the
laws of Hong Kong.
6.2 The Guarantor hereby irrevocably submits to the non-exclusive jurisdiction
of the courts of Hong Kong and the States of New York and Delaware. The
Guarantor hereby agrees that a judgement in any proceedings brought in any such
court may be enforced in any other jurisdiction by suit on the judgement or in
any other manner permitted by law. The submission aforesaid is non-exclusive and
the Landlord reserves the right to proceed in any other jurisdiction having or
claiming or accepting jurisdiction in respect of this Guarantee.
- 5 -
<PAGE> 7
The Schedule
The Premises
------------
All That the whole of 33rd Floor of Asia Pacific Finance Tower as shown
coloured Pink on the Plan attached to the Lease.
- 6 -
<PAGE> 8
IN WITNESS whereof the Guarantor executed this Guarantee the day and year
first above written.
SIGNED SEALED and DELIVERED by )
)
/s/ [signature] )
------------------------------ )
)
for and on behalf of )
)
THE GOLDMAN SACHS GROUP, L.P. )
)
in the presence of:- )
/s/ [signature]
------------------------------
/s/ PATRICIA A. McGRAW
------------------------------
Notary Public
PATRICIA A. McGRAW
Notary Public, State of New York
No. 31-4842966
Qualified in New York County
Commission Expires September 30, 1996
- 7 -
<PAGE> 1
EXHIBIT 10.13
================================================================================
DATED November 29, 1998
----------------------------------------------
TURBO TOP LIMITED
as Landlord
and
GOLDMAN SACHS (ASIA) FINANCE
as Tenant
----------------------------------------------
AGREEMENT FOR LEASE
relating to
Part of the 59th Floor and the whole of the 60th, 61st,
62nd, 63rd, 65th, 66th, 67th and 68th Floors
Cheung Kong Center, Queen's Road Central,
(Inland Lot No.8887)
----------------------------------------------
BAKER & McKENZIE
14th Floor Hutchison House
Hong Kong
================================================================================
<PAGE> 2
DATED November 12 1998
----------------------------------------------
TURBO TOP LIMITED
as Landlord
and
GOLDMAN SACHS (ASIA) FINANCE
as Tenant
----------------------------------------------
AGREEMENT FOR LEASE
relating to
Part of the 59th Floor and the whole of the 60th,
61st, 62nd, 63rd, 65th, 66th, 67th and 68th Floors
Cheung Kong Center, Queen's Road Central,
(Inland Lot No.8887)
----------------------------------------------
Registered at the
Land Registry
by
Memorial No.
on
P. Land Officer.
BAKER & McKENZIE
Solicitors
1401 Hutchison House
Hong Kong
<PAGE> 3
CONTENTS
Number Clause Heading Page
- ------ -------------- ----
1. DEFINITIONS AND INTERPRETATION
1.1 Definitions ................................................. 1
1.2 Interpretation .............................................. 1
2. LEASE
2.1 Start Date .................................................. 2
2.2 Completion of Lease ......................................... 2
3. GUARANTEE ......................................................... 2
4. TITLE ............................................................. 2
4.1 No Requisitions ............................................. 2
4.2 Matters to which Lease is subject ........................... 2
5. NO ASSIGNMENT ..................................................... 2
6. NO POSSESSION
6.1 Executory Agreement ......................................... 3
6.2 No Occupation ............................................... 3
7. LEGAL COSTS, STAMP DUTY AND OTHER FEES ............................ 3
8. NO MERGER ......................................................... 3
9. MISCELLANEOUS
9.1 Waiver ...................................................... 3
9.2 Notices ..................................................... 3
9.3 Illegality or Unenforceability .............................. 4
9.4 Amendments .................................................. 4
9.5 No Warranties ............................................... 4
10. GOVERNING LAW AND ARBITRATION
10.1 Governing Law ............................................... 5
10.2 Dispute Resolution .......................................... 5
Signatures ................................................................ 6
Schedule
<PAGE> 4
THIS AGREEMENT FOR LEASE is made 1998
BETWEEN:
(1) TURBO TOP LIMITED whose registered office is at 22nd Floor, Hutchison
House, 10 Harcourt Road, Hong Kong (the "Landlord");
(2) GOLDMAN SACHS (ASIA) FINANCE whose principal place of business in Hong
Kong is at 37th Floor, Asia Pacific Finance Tower, Citibank Plaza, 3
Garden Road, Hong Kong (the "Tenant").
WHEREAS:
(1) The Landlord is the registered owner of the land registered in the Land
Registry as Inland Lot No.8887 upon which the Building is now in the
course of being constructed.
(2) The Landlord and the Tenant have agreed to enter into the Lease on the
terms and conditions contained in this Agreement.
NOW IT IS AGREED as follows:
1. Definitions and Interpretation
1.1 Definitions. In this Agreement:
"Building" means the building, structures and erections from time to time
on the land registered in the Land Registry as Inland Lot No.8887;
"Lease" means a lease of the Premises to be entered into between the
Landlord and the Tenant in the form of the draft set out in the Schedule;
"Premises" means all those office units being part of the 59th floor and
the whole of the 60th, 61st, 62nd, 63rd, 65th, 66th, 67th and 68th floors
of the Building which are more particularly described in the Lease.
1.2 Interpretation. In this Agreement:
(a) words importing the singular include the plural and vice versa;
(b) words importing any gender include every gender;
(c) words importing persons include firms, companies and corporations
and vice versa;
(d) references to Clauses and the Schedule are references to the
relevant clause in or the schedule to this Agreement;
(e) the headings of the index, Clauses, the Schedule and paragraphs
shall not affect the interpretation of this Agreement;
1
<PAGE> 5
(f) references to any obligation on any person to do any act or thing
include an obligation to procure that act or thing to be done by
another person;
(g) references to the "Building" and the "Premises" are references to
each and every part thereof.
2. Lease
2.1 Start Date. The Landlord and Tenant shall enter into the Lease for a term
of 12 years starting on 1 January 2000.
2.2 Completion of Lease.
(a) The Landlord shall deliver the engrossed Lease to the Tenant or its
solicitors not later than 1 December 1999.
(b) The Tenant shall return the duly executed and attested Lease to the
Landlord or its solicitors within 7 days of delivery of the
engrossment to the Tenant or its solicitors.
(c) Subject to Clause 2.2(b), the Lease shall be executed and delivered
on or before 1 January 2000.
3. Guarantee
On or before 5 days from the date hereof, the Tenant shall deliver to the
Landlord an on-demand bank guarantee for an aggregate amount equal to
HK$23,864,750 from a bank first approved by the Landlord (such approval
not to be unreasonably withheld) and in a form reasonably required by the
Landlord.
4. Title
4.1 No Requisitions. The Tenant shall assume the right of the Landlord to
grant the Lease and shall not require any evidence of or raise any
objection, requisition or inquiry in respect of the Landlord's title to
the Premises or the Building.
4.2 Matters to which Lease is subject. The Tenant has entered into this
Agreement with notice of the matters set out or referred to in the Lease
subject to which the Premises shall be demised and shall raise no
objection, requisition or inquiry in respect of them.
5. No Assignment
The Tenant shall not assign, transfer, charge or otherwise deal with the
benefit of this Agreement in whole or in part and the Landlord shall not
be obliged to grant the Lease to any person other than the Tenant.
2
<PAGE> 6
6. No Possession
6.1 Executory Agreement. This Agreement is an executory agreement only and
shall not operate or be deemed to operate as a demise of the Premises.
6.2 No Occupation. The Tenant shall not be entitled to occupation or
possession of the Premises until the Lease has been executed and
delivered.
7. Legal Costs, Stamp Duty and other fees
Each party shall bear its own legal costs incidental to the negotiation,
preparation and completion of this Agreement and the Lease. The stamp duty
and registration fee (if any) for this Agreement, the Lease and their
counterparts shall be borne by the parties in equal shares.
8. No Merger
To the extent that they remain to be observed and performed, all the
provisions of this Agreement shall continue in full force and effect
notwithstanding completion of the Lease.
9. Miscellaneous
9.1 Waiver.
(a) No condoning, excusing or overlooking by any party of any default or
breach on the part of another, and no failure or delay by any party
in exercising any right, power or privilege provided by law or under
this Agreement, shall operate as a waiver of such right, power or
remedy, nor shall any single or partial exercise preclude any other
or further exercise thereof or the exercise or enforcement of any
other right, power or privilege. The rights, powers and remedies
provided in this Agreement are cumulative and not exclusive of any
rights, powers and remedies provided by law.
(b) No waiver of any right, power or remedy of any party and no consent
by any party shall:
(i) be valid unless signed by such party in writing and containing
an express statement that it is a waiver pursuant to this
Clause 9.1(b); and
(ii) be inferred from or implied by anything done or omitted to be
done by the relevant party unless expressed in writing and
agreed by it.
9.2 Notices
(a) Any notice, demand or other communication to the Tenant in
connection herewith shall be sent to it at its principal place of
business in Hong Kong or at such other address in Hong Kong as may
have been notified by the Tenant to the Landlord in accordance with
this Clause 9.2.
3
<PAGE> 7
(b) Any notice, demand or other communication to the Landlord in
connection herewith shall be sent to it at its registered office or
at such other address in Hong Kong as may have been notified by the
Landlord to the Tenant in accordance with this Clause 9.2.
(c) Any notice, demand or other communication required to be served
under this Agreement shall be in writing delivered personally or by
prepaid letter or facsimile transmission, confirmed (in the case of
a facsimile transmission) by letter delivered personally or sent by
prepaid mail within 24 hours of despatch of such facsimile
transmission provided that no failure to deliver or despatch and no
delay in delivering or despatching such confirmatory letter shall
affect the original notice given.
(d) Any notice served pursuant to this Clause 9.2 shall be deemed to
have been served:
(i) if delivered personally, on the third day following delivery;
(ii) if sent by pre-paid letter, on the third day following the
delivery; and
(iii) if sent by facsimile transmission, on the third day following
successful transmission.
(e) In proving service in the case of facsimile transmission, it shall
be sufficient proof that it was properly addressed and successfully
transmitted to the correct number.
9.3 Illegality or Unenforceability. Any provision of this Agreement prohibited
by or rendered unlawful by or unenforceable under any applicable law
actually applied by any court of competent jurisdiction shall, to the
extent required by such law, be severed from this Agreement and rendered
ineffective insofar as is possible without modifying the remaining
provisions of this Agreement. Where, however, the provisions of any such
applicable law may be waived, they are hereby waived by the parties to the
full extent permitted by such law to the end that this Agreement shall be
a valid and binding agreement enforceable in accordance with its terms.
9.4 Amendments. This Agreement may only be varied or modified by a
supplemental agreement or other document signed by all the parties hereto.
No provision of this Agreement may be waived, discharged or terminated
orally, except only by an instrument in writing signed by the party
against whom enforcement of the waiver, discharge or termination is
sought.
9.5 No Warranties.
(a) This Agreement supersedes any and all previous agreements between
the parties and constitutes the entire agreement among them and
there are no other oral or implied terms agreed between them and all
representations, warranties, statements or agreements, whether
orally or in writing, prior to this Agreement relating to any of the
matters referred to herein are hereby negated and excluded unless
otherwise agreed or confirmed by the parties in writing after the
date of
4
<PAGE> 8
this Agreement.
(b) Each party acknowledges that in entering into this Agreement, it is
not relying upon any representation, warranty, statement or
agreement, undertaking, promise or assurance made or given by the
other or any other person, whether or not in writing, at any time
prior to the execution of this Agreement which is not expressly set
out in this Agreement unless otherwise agreed or confirmed by the
parties in writing after the date of this Agreement.
10. Governing Law and Arbitration
10.1 Governing Law. The law of Hong Kong shall be the proper law of this
Agreement and in particular (but not so as to derogate from the generality
of the foregoing) the provisions of the Arbitration Ordinance or any
statutory modification thereof for the time being in force shall apply to
any arbitration under this Agreement wherever the same, or any part of it,
shall be conducted.
10.2 Dispute Resolution.
(a) In case any dispute or difference shall arise between the Landlord
and the Tenant, as to the construction of this Agreement or as to
any matter or thing of whatsoever nature arising under or in
connection with this Agreement, then the disputing party will notify
the other party in writing thereof ("Notice of Dispute"). Within ten
days of receiving the Notice of Dispute a director of the Tenant and
a director of the Landlord will meet and try in good faith to
resolve the dispute. If the dispute is not resolved within
twenty-eight days of the Notice of Dispute being served then the
dispute or difference shall be referred to the arbitration and final
decision of:
(i) a person already appointed to deal with a dispute or
difference between the parties arising out of or connected
with the Premises (and the parties agree to all such disputes
and differences being consolidated and heard at the same
time); or
(ii) if no such person has been appointed, a person to be agreed
between the parties, or
(iii) failing agreement within fourteen days after either party has
given to the other a written request to concur in the
appointment of an arbitrator, a person to be appointed on the
request of either party by the Chairman of Hong Kong
International Arbitration Centre.
(b) The award of such arbitrator shall be final and binding on the
parties.
AS WITNESS the hands of the parties hereto the day and year first above written.
5
<PAGE> 9
SIGNED by )
RAYMOND W K CHOW ) TURBO TOP-LIMITED
for and on behalf of the Landlord )
in the presence of :- ) /s/ [ILLEGIBLE]
--------------------------------
Director
/s/ [ILLEGIBLE]
HILARY CORDELL
Baker & McKenzie
14th Floor, Hutchison House
Hong Kong
SIGNED by )
) GOLDMAN For and on behalf of
for and on behalf of the Tenant ) SACHS GOLDMAN SACHS (ASIA) FINANCE
in the presence of :- )
/s/ [ILLEGIBLE]
--------------------------------
6
<PAGE> 10
THE SCHEDULE
DATED 199
----------------------------------------------------
TURBO TOP LIMITED
as Landlord
and
GOLDMAN SACHS (ASIA) FINANCE
as Tenant
----------------------------------------------------
LEASE
of
Part of the 59th Floor and the whole of the 60th,
61st, 62nd, 63rd, 65th, 66th, 67th and 68th Floors,
Cheung Kong Center, Queen's Road Central (Inland
Lot No.8887).
----------------------------------------------------
Registered at the
Land Registry
by
Memorial No.
on
BAKER & McKENZIE
14th floor, Hutchison House
Hong Kong
<PAGE> 11
CONTENTS
Number Clause Heading Page
- ------ -------------- ----
1. DEFINITIONS AND INTERPRETATION
1.1 Definitions ...................................................1
1.2 Interpretation ................................................3
2. DEMISE ...............................................................4
3. TENANT'S COVENANTS
3.1 Rent, Service Charges and other Payments ......................7
3.2 Fitting Out ...................................................8
3.3 Repair ........................................................9
3.4 Yielding Up ..................................................10
3.5 Landlord's Entry .............................................11
3.6 Use ..........................................................11
3.7 Alterations ..................................................13
3.8 Statutory Notices ............................................14
3.9 Alienation ...................................................14
3.10 Assignment ...................................................15
3.11 Sub-letting ..................................................15
3.12 Insurance and Fire Prevention ................................17
3.13 Indemnities ..................................................18
3.14 Exclusion of Liability .......................................18
3.15 Regulations ..................................................19
3.16 Costs ........................................................19
3.17 Evidence of Compliance .......................................20
4. LANDLORD'S COVENANTS
4.1 Quiet Enjoyment ..............................................20
4.2 Property Tax and Government Rent .............................20
4.3 Services .....................................................20
4.4 Back-up Generators ...........................................20
4.5 Additional Air-conditioning Service ..........................20
4.6 Maintenance ..................................................20
4.7 Generators and Chiller Plant .................................20
4.8 Television Services ..........................................21
4.9 Swimming Pool ................................................21
5. BANK GUARANTEE
5.1 Payment ......................................................21
5.2 Deductions ...................................................21
6. DEFAULT
6.1 Events of Default ............................................22
6.2 Notice .......................................................22
<PAGE> 12
7. EXPANSION AND TERMINATION RIGHTS
7.1 Expansion ....................................................23
7.2 Termination ..................................................23
8. FURTHER PROVISIONS
8.1 Lifts ........................................................23
8.2 Signage ......................................................23
8.3 Utilities Interruption .......................................23
8.4 Tenant's Property ............................................23
8.5 Destruction of Premises ......................................23
8.6 Change of Name ...............................................24
8.7 Waiver .......................................................25
8.8 Stamp Duty and Legal Costs ...................................25
8.9 Notices ......................................................25
8.10 Illegality or Unenforceability ...............................26
8.11 Amendments ...................................................26
8.12 No Warranties ................................................26
8.13 Rights and Easements .........................................27
8.14 Covenants Relating to Adjoining Property .....................27
8.15 Distraint ....................................................27
8.16 Confidentiality ..............................................27
8.17 Governing Law ................................................28
8.18 Ownership of Works ...........................................28
9. NO PREMIUM ..........................................................28
10. YEAR 2000 COMPLIANCE
10.1 Definitions ..................................................28
10.2 Landlord's Obligations .......................................29
10.3 Tenant's Obligations .........................................29
10.4 Proprietary Information ......................................30
Schedule 1 Particulars .....................................................31
Schedule 2 Rent Review .....................................................32
Schedule 3 Service Charges .................................................35
Schedule 4 Expansion Rights ................................................37
Schedule 5 Termination Rights ..............................................44
Schedule 6 Television Services .............................................46
Schedule 7 Initial floor Area ..............................................47
Signatures .................................................................48
<PAGE> 13
THIS LEASE is made on 199
BETWEEN:
(1) TURBO TOP LIMITED whose registered office is at 22nd Floor, Hutchison
House, 10 Harcourt Road, Hong Kong (the "Landlord");
(2) GOLDMAN SACHS (ASIA) FINANCE whose principal place of business in Hong
Kong is at 37th Floor, Asia Pacific Finance Tower, Citibank Plaza, 3
Garden Road, Hong Kong (the "Tenant").
WITNESSES as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 Definitions. In this Lease, the following meanings apply unless the
context requires otherwise:
"Building" means each and every part of the building described in Schedule
1;
"Building Management System" means the computerised apparatus relating to
the management and control of certain services and equipment within the
Building;
"Common Parts" means the pedestrian ways, entrances, staircases,
facilities, plant, machinery, equipment, systems and apparatus, lifts,
escalators, roads, forecourts, loading bays, toilet facilities and any
other areas and facilities and any Service Media within the Building all
of which may from time to time be designated by the Landlord for common
use by any of the occupiers of the Building and those authorised by them;
"Fit-Out Contract" means the contract in respect of the fitting out of the
Premises entered into between the Landlord and the Tenant on [ ];
"Government" means the government of Hong Kong;
"Guarantee" means an on-demand bank guarantee from a bank first approved
by the Landlord (such approval not to be unreasonably withheld) and in a
form reasonably required by the Landlord;
"Hong Kong" means the Hong Kong Special Administrative Region;
"Permitted Use" means the use specified in Schedule 1;
"Premises" means each and every part of the premises described in Schedule
1 including:
(a) all additions and improvements to the Premises made from time to
time;
(b) all fixtures in the Premises from time to time;
<PAGE> 14
1.2 Interpretation. In this Lease, the following shall apply unless the
context requires otherwise:
(a) The expression the "Landlord" includes the person for the time being
entitled to the immediate possession of the Premises on expiry of
the Term and any manager appointed by it;
(b) The expression the "Tenant" includes the executors and
administrators of the Tenant or, where the Tenant is a corporation,
its successors in title or any liquidator thereof, and the Tenant's
permitted assigns;
(c) Where the Tenant comprises more than one person or entity all
undertakings and agreements made by the Tenant shall be deemed to be
made jointly and severally by all the persons or entities comprising
the Tenant;
(d) Words importing the singular include the plural and vice versa;
(e) Words importing any gender include every gender;
(f) Words importing persons include firms, companies and corporations
and vice versa;
(g) The index and headings are for reference only and shall be ignored
in construing this Lease;
(h) References to Clauses and Schedules are references to the clauses of
and the schedules to this Lease and references to Paragraphs are
references to the paragraphs in the Schedule in which they appear;
(i) References to "losses" include all liabilities, injury, loss,
damage, damages, claims, compensation, penalties, costs,
disbursements and expenses;
(j) Any consent, approval or authorisation to be given by the Landlord
must be in writing and signed by it or a duly authorised person on
its behalf to be effective under this Lease. Nothing in this Lease
is to be construed as imposing any obligation on the Landlord or the
Tenant not to refuse any consent or approval unreasonably save where
expressed in this Lease;
(k) References to the "expiry of the Term" or to the "last year of the
Term" are to the end of the Term and the last year of the Term
whether it comes to an end by effluxion of time or in any other way;
(l) Any covenant by the Tenant not to do any act or thing includes an
obligation not to allow or suffer that act or thing to be done by
another person;
(m) Any covenant by the Tenant to do any act or thing includes an
obligation to procure that act or thing to be done by another
person;
3
<PAGE> 15
(n) Any reference to "legislation" includes any statutes, rules,
regulations and orders made by the Government or any governmental,
statutory, public or competent authority in Hong Kong;
(o) Any act, default or neglect of any contractor, servant, agent or
licensee of the Landlord or the Tenant (as the case may be) shall be
deemed to be the act, default or neglect of the Landlord or the
Tenant (as the case may be);
(p) For the purpose of Clause 3.11 the lettable floor area of the
Premises (from time to time) and the relevant sub-demised premises
shall be deemed to be that determined by the Landlord which
determination shall be conclusive (save in case of manifest error).
2. DEMISE
The Landlord LETS the Premises to the Tenant for the Term:
(a) SUBJECT TO all rights, privileges, restrictions, covenants,
agreements and stipulations of whatever nature affecting the
Premises and the terms and conditions of this Lease;
(b) TOGETHER WITH:
(i) the right to use, in common with the Landlord and all others
having the like right, the Common Parts which are necessary
for the proper use and enjoyment of the Premises;
(ii) the right in common with the Landlord and all others having
the like right at all times upon giving notice to the Landlord
(except in an emergency):
(1) to install, maintain, repair, renew, remove, replace and
connect cables from the Premises to the busbar plug-in
units within the Common Parts on each floor and to gain
access thereto for such purposes through such of the
Common Parts as the Landlord may from time to time
reasonably determine;
(2) to discharge exhaust air from the pantries in the
Premises to the Building's central exhaust system;
(iii) the sole and free right to install, maintain, repair and renew
appropriate Service Media and to run appropriate Utilities
through the duct shafts and risers, the electrical duct shaft,
the normal and UPS power risers, the generator power riser and
the dual chilled water risers located within the Building (but
outside the Premises) solely serving the Premises and the
right to gain access thereto for such purposes through such
Common Parts as the Landlord may from time to time reasonably
determine;
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<PAGE> 16
(iv) the sole and free right at all times to:
(1) use the Tenant's dedicated 4 generators and chiller
plant on the 73rd floor of the Building and such further
Tenant's dedicated generators and chiller plant as may
be installed from time to time;
(2) install, maintain, repair, renew, remove, replace and
connect cables from the Premises to the Tenant's
dedicated 4 generators and chiller plant on the 73rd
floor of the Building and such further Tenant's
dedicated generators and chiller plant as may be
installed from time to time and to use such generators
and to gain access thereto for such purposes through
such of the Common Parts as the Landlord may from time
to time reasonably determine;
(v) the free right to install or procure the installation of
copper and fibre optic cable services within the core of the
Building from time to time insofar as space is available
from time to time and other Service Media are not adversely
affected thereby;
(vi) the right at its own cost to install, maintain, repair and
renew:
(1) 100 x 100 mm metal trunking and 200 x 200 mm metal
trunking within a telephone duct shaft within the core
of the Building;
(2) 30 pairs of fibre optic cable and 400 pairs of copper
cable within a second telephone duct shaft within the
core of the Building;
provided that in exercising the rights in this paragraph (b) the
Tenant shall cause as little interference as reasonably practicable
to the Landlord and make good any damage caused thereby.
(c) EXCEPT AND RESERVED unto the Landlord and all persons authorised by
it or otherwise entitled:
(i) the right of free and uninterrupted passage of Utilities
through such Service Media in the Premises from time to time
which serve or are capable of serving the Building together
with the right to enter the Premises to inspect, maintain,
repair, renew, remove, replace and connect to any such Service
Media and to construct new Service Media;
(ii) the right to restrict the use of any Common Parts insofar as
is reasonably required of the purposes of inspecting,
repairing, maintaining, decorating, replacing, renewing or
connecting to them but so as not to deprive the Tenant of
access to the Premises;
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<PAGE> 17
(iii) the right to alter in any way whatsoever the Common Parts or
vary the parts of any Building which from time to time form
part of the Common Parts and to vary any building plans
relating to the Building from time to time provided that the
Tenant's use of the Premises is not materially affected
thereby;
(iv) the right to continue and complete the development of the
Building and to carry out all necessary works in relation
thereto including (without limitation) the fitting out of
other parts of the Building notwithstanding any noise,
disturbance or interference that the Tenant may suffer
provided that after 1 August 1999 any fit-out of the 70th and
71st floors by the Landlord shall be conducted in accordance
with the noise restriction requirements set out in the Fit-Out
Handbook at the date hereof;
(v) the right to install in or affix to any part of the Building
such Service Media, aerials, plant, machinery and other
apparatus, scaffolding, signs, advertisements (whether
illuminated or not) and other structures as the Landlord
decides and the right to inspect, maintain, repair, renew,
remove, replace and connect to the same;
(vi) the right upon reasonable notice (except in an emergency when
no notice is needed) to enter and remain in the Premises to
view the condition of the Building and do works to the
Building notwithstanding any inconvenience or nuisance caused
to the Tenant;
(vii) the right to carry out or consent to the carrying out by any
person of the demolition, rebuilding or alteration of the
Building or any building on any other land in the vicinity
notwithstanding (in the case of any works to the Building
carried out otherwise than by or on behalf of the Landlord or
in the case of any works to any building on any other land in
the vicinity) any inconvenience or nuisance caused to the
Tenant or interference with access of light or air to the
Premises;
(viii) the right to enter the Premises in the circumstances in which
this Lease permits such entry;
(ix) the right to subjacent and lateral support from the Premises
for the remainder of the Building;
(x) the right to use the external walls of the Building for
whatever purpose the Landlord decides and to assign or
delegate such right but so as not to obstruct the view from
and the light to the Premises except where necessary as a
result of maintenance or seasonal decorations;
(xi) all easements, quasi-easements, privileges and rights
whatsoever now enjoyed by any adjoining or neighbouring
property affecting the Premises as if such adjoining and
neighbouring property and the
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<PAGE> 18
Premises had at all times been in separate ownership and
occupation and such matters had been acquired by prescription
or formal grant;
provided that in exercising the rights in paragraphs (i), (iv), (v),
(vi) and (insofar as it relates to works to the Building carried out
by or on behalf of the Landlord) (vii) above, the Landlord shall
cause as little interference as reasonably practicable to the Tenant
and make good any damage caused to the Premises;
(d) SUBJECT to the Tenant paying to the Landlord the Rent, Service
Charges and other payments due under this Lease provided that the
Tenant shall be allowed a Rent free period of five months from and
including the Term Start Date and two further Rent free periods each
of five months from and including the 1st and 2nd anniversaries of
the Term Start Date but during such Rent free periods the Tenant
shall be required to pay rates, Service Charges and all outgoings
payable under this Lease in respect of the Premises except that
during the first such Rent free period the cost of supplying
air-conditioning shall only be included in the Service Charges
during such periods as the Landlord shall supply air-conditioning to
the Premises or parts of the Premises requested by the Tenant but
such parts of the Premises shall not be less than an entire
air-conditioning zone (within the confines of the air-conditioning
system).
3. TENANT'S COVENANTS
The Tenant covenants with the Landlord as follows:
3.1 Rent, Service Charges and other Payments.
(a) To pay the Rent and Service Charges in Hong Kong currency in advance
without any deduction, counterclaim or set off on the first day of
each calendar month, the first payment to be made on the date
following the expiration of the first rent free period referred to
in Clause 2(d) and the first and last payments being apportioned
appropriately on a daily basis.
(b) To pay all taxes, assessments, duties, charges, impositions and
outgoings imposed or charged from time to time on the Premises or
upon the owner or occupier of the Premises by the Government or
other competent authority (other than Government rent, Property Tax
and expenses of a capital or nonrecurring nature) or if the same are
imposed or charged upon the Premises and any other property, to
reimburse to the Landlord a fair proportion thereof properly
attributable to the Premises as decided by the Landlord whose
decision shall be final and binding save in case of manifest error.
(c) (i) To pay rates charged on the Premises as assessed by the
Government quarterly in advance on the first day of the months
of January, April, July and October in each year of the Term,
the first payment thereof to be paid on the date of this Lease
and the first and last payments being apportioned
appropriately on a daily basis.
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<PAGE> 19
(ii) If the Premises have not been separately assessed to rates by
the Government, to pay quarterly in advance to the Landlord on
the dates mentioned in Clause 3.1 (c)(i) a sum on account of
rates calculated in accordance with the following formula:
a x b
-----
4
where:
a = the annual Rent; and
b = the percentage of rateable values which is for the time
being payable as rates under the Rating Ordinance (Cap. 116);
and within 7 days of the actual rating assessment in respect
of the Premises being received from the Government, any
over-payment shall be repaid to the Tenant and any
under-payment shall be paid to the Landlord.
(d) To make the payments due to the Landlord under this Lease by cheque.
(e) To pay all deposits and charges for Utilities used at the Premises
and, if not separately metered at the date of this Lease, forthwith
to apply for separate metres in respect of all relevant Utilities.
(f) In addition to any other rights or remedies of the Landlord to pay
to the Landlord on demand interest at the Prescribed Rate on any
sum:
(i) payable by the Tenant to the Landlord under this Lease from
the due date until payment by the Tenant if the same is not
paid within 7 days of the due date;
(ii) paid by the Landlord in remedying any breach by the Tenant of
this Lease from the date of payment by the Landlord until
payment by the Tenant; and
(iii) not accepted by the Landlord so as not to waive a breach of
this Lease from the due date until payment is accepted by the
Landlord.
3.2 Fitting Out.
(a) To fit out the Premises at the Tenant's expense in accordance with
drawings and specifications approved by the Landlord (which approval
shall not be unreasonably withheld or delayed) in a good and proper
workmanlike and diligent manner with good quality materials and in a
style and manner appropriate to a first class commercial building to
the reasonable satisfaction of the Landlord but any such Landlord's
approval shall not impose on the
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<PAGE> 20
Landlord any liability in respect of any inadequacy or deficiency in
the drawings, specifications or works.
(b) Not to vary the approved fitting out drawings and specifications
without the Landlord's approval (which approval shall not be
unreasonably withheld or delayed).
(c) Not to start any fitting out works until the Landlord's approval
(which approval shall not be unreasonably withheld or delayed) and
all necessary approvals, licences or permits have been obtained from
the relevant competent authorities and to carry out all fitting out
works in compliance with the Landlord's reasonable requirements
(including (without limitation) the requirements set out in the
Fit-Out Handbook to be issued by the Landlord from time to time
(provided any amendment to the Fit-Out Handbook after the date
hereof shall be reasonable)) and with all legislation and all
requirements of the Building's insurers and of any Utility supplier
but any such Landlord's approval shall not constitute any
representation that such legislation and requirements have been
complied with.
(d) In installing, altering or connecting to the fire fighting apparatus
and system, any electrical Service Media connecting or between the
busbar plug-in units in the core of the Building and the electrical
switchboards in the Premises, and/or the Building Management System,
to use only a contractor nominated by the Landlord as set out in the
Fit-Out Handbook to be issued by the Landlord from time to time
(provided that any amendment to the Fit-Out Handbook after the date
hereof shall be reasonable) and for any other works to use only a
contractor approved by the Landlord (which approval shall not be
unreasonably withheld) but any such Landlord's nomination or
approval shall not impose on the Landlord any liability for anything
done or omitted by such contractor.
(e) To procure that the Tenant's contractors take out contractors' all
risks insurance in respect of the Tenant's fitting out works before
they are started and the provisions of Clause 3.12(a) and (b) shall
apply to such insurance mutatis mutandis and to procure that as soon
as reasonably practicable all money received under such policy is
applied in making good the loss or damage in respect of which it was
paid.
(f) To provide the Landlord with a copy of the as-built plans for the
Tenant's fitting out works as soon as such works have been
completed.
3.3 Repair.
(a) To keep the Premises in good, clean, substantial and proper repair
and condition appropriate to a first class commercial building and
properly preserved and painted (fair wear and tear and damage caused
by structural or inherent defects excepted).
(b) To reimburse to the Landlord the cost of replacing all broken or
damaged window glass which is of a material nature or which affects
materially the
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<PAGE> 21
reflective quality of the glass in the Premises or any part of the
curtain walls of the Building except where the cause of such
breakage or damage is beyond the control of the Tenant or its
contractors, servants, agents or licensees.
(c) To reimburse to the Landlord the cost of making good any damage of
any type to the Building or the Service Media in the Building (not
forming part of the Premises) caused by the act, default or neglect
of the Tenant or its contractors, servants, agents or licensees.
(d) To keep and if necessary replace any Service Media forming part of
the Premises excluding those Service Media installed by the Landlord
prior to the date hereof which run between the duct riser openings
in the core of the Building on each of the floors of the Premises
and the Tenant's dedicated chiller and generators (and such further
dedicated generators, chiller plant or such Service Media as may be
installed by the Landlord from time to time) on the 73rd floor of
the Building in good, clean, substantial and proper repair and
condition (fair wear and tear and damage caused by structural or
inherent defects excepted).
(e) To take all reasonable precautions to protect the Premises from
damage threatened by an approaching storm or typhoon.
(f) To employ for the cleaning of the Premises and the lift lobbies
referred to in Clause 3.3(g) such cleaning contractors as the
Landlord nominates from time to time and any such Landlord's
nomination shall not impose on the Landlord any liability for
anything done or omitted by such contractor Provided always that the
Tenant may opt to use its own cleaning contractor if it reasonably
considers the performance of the services provided by the contractor
nominated by the Landlord to be unsatisfactory and following a
reasonable time following written complaint the standard of such
services has not improved to the reasonable satisfaction of the
Tenant.
(g) Where the Tenant occupies an entire floor of the Building, to keep
the passenger and service lift lobbies on such floor in good, clean,
substantial and proper repair and condition (fair wear and tear and
damage caused by structural or inherent defects excepted).
3.4 Yielding Up. At the expiry of the Term, the Tenant shall reinstate the
Premises to a bare shell condition and reinstate the raised floor to the
Landlord's uniform standard except that the Tenant shall not be required
to:
(a) remove or reinstate the overhead air-conditioning system;
(b) remove or reinstate the ceiling system and light fixtures provided
that if this Lease is terminated under Clauses 6 or 7.2 in whole or
in part the Tenant shall reinstate the ceiling and lighting system
and fixtures to the Tenant's uniform standard for the floor or
floors in question if so required by the Landlord;
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<PAGE> 22
(c) reinstate the duct shafts provided that the Tenant shall remove all
cables from duct shafts;
(d) reinstate and reconvert the electrical user room back to the
disabled toilet provided that the Tenant shall remove all mechanical
and electrical installations therefrom;
(e) reinstate the holes in the floors provided for the internal
staircase provided that the Tenant shall remove the staircases if
required by the Landlord;
(f) reinstate the toilet on the 68th floor of the Building provided that
the Tenant shall remove the toilet if required by the Landlord;
and thereupon to surrender to the Landlord all keys or computer cards
giving access to all parts of the Premises and to remove at the Tenant's
expense all lettering and characters showing the Tenant's name from any
doors, walls or windows in the Building and to make good any damage caused
by such removal.
3.5 Landlord's Entry.
(a) To permit the Landlord and persons authorised by it with or without
appliances at all reasonable times (in the context of the Tenant's
business) after giving reasonable prior notice to enter upon the
Premises to view their condition, to take inventories of the
fixtures in them and to exercise any of the rights excepted and
reserved from this Lease by Clause 2(c) and to show the Premises to
prospective tenants or purchasers.
(b) To commence and diligently proceed to make good all defects and
wants of repair to the Premises for which the Tenant is under the
terms of this Lease liable under the terms of this Lease within the
period of one month from the Tenant's receipt of notice from the
Landlord to do such works and if the Tenant fails to do such works
to permit the Landlord and persons authorised by it to enter the
Premises and do such works and the cost shall be a debt due from the
Tenant to the Landlord.
(c) To permit the Landlord and persons authorised by it at reasonable
times after giving reasonable notice (but at any time and without
notice in an emergency) to enter the Premises (and by force if
necessary) for the purposes of security, fire fighting and
protection of the Building.
(d) To give to the Landlord a set of keys (to be used only in the event
of an emergency or forfeiture of this Lease or otherwise with the
Tenant's consent) to the entrance doors of or computer cards giving
access to the Premises and to inform the Landlord in writing of the
nature of any security system installed at the Premises.
3.6 Use.
(a) Not to use the Premises for any purpose other than the Permitted
Use.
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<PAGE> 23
(b) Not to commit waste or use the Premises for gambling or any
offensive trade or business or any illegal, immoral or improper
purposes or so as to cause nuisance, damage or danger or give
reasonable cause for complaint to the Landlord or the occupiers of
the Building or nearby premises.
(c) Not to use the Premises for the storage of goods other than in small
quantities consistent with the nature of the Tenant's trade or
business.
(d) Not to keep at the Premises any dangerous, inflammable or explosive
goods or firearms and ammunition.
(e) Not to make any noise (including, without limitation, music or sound
produced by broadcasting from television, radio and any equipment
capable of producing or reproducing music or sound) which is audible
outside the Premises or vibration in the Premises which is a
nuisance or gives reasonable cause for complaint to the Landlord or
the occupiers of nearby premises.
(f) Not to place on the Premises (other than those parts containing
reinforced flooring) anything of a weight in excess of 3kPa and on
those parts of the Premises containing reinforced flooring, anything
of a weight in excess of the appropriate weightings for which such
reinforcements were designed and to comply with any prescription by
the Landlord of the maximum weight and permitted location of safes
and other heavy equipment and any requirements of the Landlord that
the same stand on supports of such dimensions and materials as the
Landlord reasonably determines having regard to the weightings and
reinforcing referred to above.
(g) To use the raised flooring in the Premises with care and in
accordance with the Landlord's instructions and not to overload,
scratch or place any article which would release water onto the
raised flooring (fair wear and tear and damage caused by inherent
defects excepted).
(h) To comply with all legislation in relation to the Premises and the
conduct of the Tenant's business on the Premises and to apply for
any requisite licences or permits from all competent authorities in
respect of the Tenant's business in the Premises.
(i) Not to do anything which would amount to a breach of the negative
covenants in the Government grant under which the Landlord holds the
Premises, any deed of mutual covenant or sub-deed of mutual covenant
relating to the Building.
(j) To ensure that all refuse is disposed of by arrangement with and in
sealed containers specified by the Landlord and if the Landlord
provides a collection service for refuse, to use such service
exclusively at the sole cost of the Tenant.
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<PAGE> 24
(k) Not to place or leave anything in the Common Parts nor to tout or
solicit business or distribute anything within the Common Parts
without the permission of the Landlord.
(l) Not to take delivery of furniture, equipment, fittings or bulky
items in and out of the Building other than in the lift and along
the route reasonably designated for that purpose by the Landlord.
(m) Not to discharge into any Service Media any substance that may
obstruct them or cause damage or danger or anything likely to
pollute.
(n) Not to keep any animals or pets inside the Premises and to take all
precautions to the reasonable satisfaction of the Landlord to
prevent the Premises from becoming infested by pests including, if
the Landlord so requires, the employment at the Tenant's cost of
such pest extermination contractors and at such intervals as the
Landlord may reasonably determine.
3.7 Alterations.
(a) Not to make any alterations or additions to the Premises or to
install any plant, apparatus or machinery in the Premises or to cut
or injure any doors, windows, walls or other part of the Premises or
to drive or insert any nails, screws, hooks, brackets or similar
things into the ceiling, walls or floors of the Premises without the
Landlord's approval (which approval shall not to be unreasonably
withheld or delayed).
(b) Not to install any air-conditioning plant or equipment (whether in
the windows or elsewhere) or other mechanical apparatus whatsoever
on the Premises without the Landlord's approval (which approval
shall not be unreasonably withheld or delayed).
(c) Not to erect, install or alter any partitioning in the Premises or
to install additional locks, bolts or other fittings to the entrance
doors of the Premises without the Landlord's approval (which
approval shall not be unreasonably withheld or delayed).
(d) Not to erect, exhibit or display on the Premises or the Building any
writing, sign, aerial, flagpole or other device so as to be visible
from outside the Building provided that the Tenant may display its
name and business in the reception in the Premises or on the door
thereof in such lettering, characters and materials as the Landlord
approves (which approval shall not be unreasonably withheld or
delayed).
(e) Not to do anything which alters or affects the external appearance
of the Building.
(f) Not to make any alterations or additions to the Building or, without
limitation, the Common Parts.
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<PAGE> 25
(g) In carrying out any permitted works whatsoever to the Premises or
the Building to observe and perform the provisions of Clause 3.2
mutatis mutandis.
3.8 Statutory Notices. To notify the Landlord forthwith in writing of the
contents of any notice received by the Tenant from any competent authority
concerning the Premises or any of the Utilities serving the Premises.
3.9 Alienation. Except as provided in Clauses 3.10 and 3.11, not to transfer,
assign, sub-let, licence, charge, mortgage, share, hold on trust or for
the benefit of another or otherwise part with the possession or occupation
of the Premises or any part of them or the right to use them so that any
person not a party to this Lease obtains the use or possession of the
Premises or any part of them and, without limiting the generality of this,
the following acts and events shall be deemed to be breaches of this
Clause:
(a) In the case of a tenant which is a partnership, the taking in of one
or more new partners whether on the death or retirement of an
existing partner or otherwise;
(b) In the case of a tenant who is an individual (including a sole
surviving partner of a partnership) the death, insanity or other
disability of that individual;
(c) In the case of a tenant which is a corporation, any take-over,
reconstruction, amalgamation, merger or voluntary liquidation of the
tenant or change in the person or persons who owns or own a majority
of its voting shares or who otherwise has or have effective control
thereof provided that there shall be no breach of this provision if
any entity which is formed as a result of any reconstruction,
amalgamation, merger or voluntary liquidation is:
(i) of equal financial strength as or greater financial strength
than the Tenant;
(ii) financially and otherwise able to observe and perform all of
the agreements on the Tenant's part contained in this Lease;
and
(iii) the persons having ultimate control of the Tenant are of
equivalent reputation to the Tenant;
or if any entity which takes over the Tenant is:
(i) of equal financial strength as or greater financial strength
than the persons previously having ultimate control of the
Tenant; and
(ii) of equivalent reputation to the persons previously having
ultimate control of the Tenant;
(d) The giving by the Tenant of a power of attorney or similar authority
whereby the donee of the power obtains the right to use, possess or
occupy the Premises
provided that nothing herein contained shall prevent the Tenant from
sharing the Premises with any entity which is directly or indirectly
wholly owned or controlled by
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<PAGE> 26
The Goldman Sachs Group, L.P. or any entity to which all or substantially
all of the assets of The Goldman Sachs Group may be transferred in
accordance with this Lease provided that no relationship of landlord and
tenant is created thereby.
3.10 Assignment.
(a) Subject to the delivery of prior written notice to the Landlord and
subject to Clause 3.10(b), the Tenant shall have the right to assign
this Lease to The Goldman Sachs Group, L.P. or any affiliate of the
Tenant controlling or controlled by The Goldman Sachs Group, L.P. or
which succeeds to all or substantially all of the assets or
businesses of The Goldman Sachs Group, L.P. and for these purposes
references to "control" shall mean:
(i) control directly or indirectly of the composition of the
relevant board of directors; or
(ii) control directly or indirectly of more than half of the voting
power; or
(iii) holding directly or indirectly of more than half of the issued
share capital or partnership capital
in each case in respect of the relevant affiliate.
(b) Before any permitted assignment:
(i) the assignee enters into covenants with the Landlord to
observe all the Tenant's covenants and all other provisions of
this Lease during the residue of the Term; and
(ii) if the Landlord requires, a company or bank acceptable to the
Landlord (such acceptance not to be unreasonably withheld or
delayed) enters into covenants with the Landlord guaranteeing
the performance by the assignee of its obligations under this
Lease in such form as the Landlord reasonably requires
provided that the Landlord shall only require a guarantee of
the assignee's obligations in the event that the assignee is
not of comparable financial standing to the Tenant at the date
hereof or at the date of such assignment (as the Landlord
determines).
3.11 Sub-letting.
(a) Not to sub-let part of the Premises without the consent of the
Landlord such consent not to be unreasonably withheld or delayed
where the Tenant has complied with Clauses 3.11(b), (c) and (d)
Provided always that consent of the Landlord shall only be withheld
in relation to the credit quality of the sub-tenant.
(b) To ensure that not more than 35% of total lettable floor area of the
Premises from time to time is sub-let at any one time.
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<PAGE> 27
(c) In relation to every sub-lease, to ensure that:
(i) it is granted without a fine or a premium payable by either
party at a rent which is exclusive of service charges and
rates;
(ii) the rent is payable in advance on the same day as the Rent is
payable under this Lease;
(iii) it contains provisions which are consistent with this Lease
including:
(1) prohibiting the sub-tenant from doing or allowing any
act or thing in relation to the Premises inconsistent
with or in breach of the provisions of this Lease;
(2) for re-entry of the demised premises on breach of any
covenant by the sub-tenant;
(3) imposing an absolute prohibition against transferring,
assigning, sub-letting, charging, mortgaging, sharing,
holding on trust or for the benefit of another or
otherwise parting with possession or occupation of the
demised premises or any part of them.
(d) Before any permitted sub-letting to procure that any sub-tenant
enters into covenants with the Landlord to observe all the Tenant's
covenants and all other provisions of this Lease during the term of
the sub-lease insofar as they are applicable to the demised
premises.
(e) In relation to any permitted sub-lease:
(i) to enforce the performance by the sub-tenant of the provisions
of the sub-lease and not at any time to waive any breach of
the covenants or conditions on the part of any sub-tenant nor
without the consent of the Landlord (such consent not to be
unreasonably withheld or delayed) to vary the terms of any
sub-lease;
(ii) not to agree any appointment of a person as the third party
determining the revised rent (if any) without the approval of
the Landlord (such consent not to be unreasonably withheld or
delayed);
(iii) to incorporate as a part of its representations to that third
party proper representations required by the Landlord;
(iv) to give the Landlord details of every rent review (if any)
within 7 days of its outcome;
(v) within 14 days of any sub-lease to produce for registration
with the Landlord a copy of the relevant sub-lease.
(f) (i) To share any net profit rent (but not loss) from any
sub-letting between
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<PAGE> 28
the Landlord and the Tenant in accordance with the following
formula:
(a - b) x the lettable square footage of the sub-demised
------- premises
2
Where a = the monthly rent payable under the relevant
sub-lease per lettable square foot of the
sub-demised premises
b = the monthly Rent per lettable square foot of the
sub-demised premises payable under this Lease.
(ii) To pay the Landlord's share of the profit rent derived in
accordance with Clause 3.11(f)(i) to the Landlord within 7
days from the date the rent is received under the relevant
sub-lease is received by the Tenant and at the request of the
Landlord to make available its accounts to verify any
non-payment of such rent.
3.12 Insurance and Fire Prevention.
(a) To effect and maintain insurance in respect of:
(i) losses suffered or incurred by third parties which might give
rise to a claim for indemnity by the Landlord under Clause
3.13 such insurance shall be in the sum of not less than $5
million for any one claim or series of claims arising out of
any one event;
(ii) the Premises for the full reinstatement values thereof against
fire, lightning, storm, typhoon, bursting or overflowing of
water tanks, apparatus or pipes and such other risks as the
Landlord may from time to time reasonably decide in such
insurance office as the Landlord may approve (such approval
not to be unreasonably withheld or delayed) and with a note of
the Landlord's interest endorsed on the policy and containing
provisions that such policy shall not be cancelled or
materially altered as to affect the coverage afforded to the
Landlord without notification to the Landlord.
(b) To produce to the Landlord on demand reasonable evidence of the
terms of the policy effected under Clause 3.12(a)(i) and the fact
that the last premium has been paid and a certificate from the
insurer concerned that the policy is fully paid up and in all
respects valid and subsisting.
(c) As soon as reasonably practicable to apply all money received under
any policy effected under Clause 3.12(a)(i) in making good the
losses in respect of which it was paid.
(d) Not to do any thing whereby any policy of insurance on the Premises
and the Building (or either of them) against damage by fire and
other risks or against claims by third parties may become void or
voidable or whereby the rate of
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premium for any such policy may be increased and without prejudice
to the Landlord's other rights and remedies to repay to the Landlord
on demand all sums paid by the Landlord by way of increased premium
or otherwise rendered necessary by a breach of this Clause 3.12(d).
(e) To comply with all the recommendations of the Landlord's insurer and
the fire authority and other competent authorities.
(f) To keep the Premises supplied with such fire fighting equipment as
the Landlord's insurer and the fire authority may require and to
maintain it in working order and to the satisfaction of the
Landlord's insurer and to the reasonable satisfaction of the
Landlord and at least once every six months to have any fire
fighting equipment inspected by a competent person.
(g) Not to obstruct the access to any fire equipment or the means of
escape from the Premises.
(h) To notify the Landlord of any damage to or defects in the Premises
or any Common Parts immediately adjacent to the Premises.
3.13 Indemnities. To indemnify the Landlord against all losses arising during
the Term arising directly or indirectly from:
(a) the act, neglect or default (irrespective of whether wilful or not)
of the Tenant or any contractor, servant, agent or licensee of the
Tenant in the Premises or the Building other than the Landlord in
its capacity as contractor under the Fit-Out Contract before the
Term Start Date and its sub-contractors;
(b) any breach by the Tenant of this Lease;
(c) the defective or damaged condition of the Premises, the repair of
which is the Tenant's liability under this Lease other than where
caused by the Landlord in its capacity as contractor under the
Fit-Out Contract before the Term Start Date and its sub-contractors;
(d) the spread of fire or smoke or water or any other substance
originating from the Premises except where caused by structural or
inherent defects not due to the act, neglect or default of the
Tenant or its contractors, servants, agents or licensees (such
persons not including the Landlord in its capacity as contractor
appointed in relation to the Fit-Out Contract before the Term Start
Date and its sub-contractors)
3.14 Exclusion of Liability. Notwithstanding Clauses 4.1, 4.3 and 8.3, not to
hold the Landlord liable in any way to the Tenant or to any other person
for any losses which may be suffered or incurred by the Tenant or by any
other person or any property however caused (unless directly caused by the
default or neglect of the Landlord or its employees) and in particular,
but without limitation, caused by or in any way owing to:
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(a) any interruption, failure, malfunction, reduction or termination of
or defect in or any other condition of any of the Utilities, Service
Media, Common Parts or any machinery, plant, equipment,
installations or fixtures in the Building;
(b) the act, neglect or default of the tenants and occupiers of any
other parts of the Building and their contractors, servants, agents
and licensees;
(c) any typhoon, heat or humidity, landslide, subsidence, fire, leakage
or overflow of water (excluding any water escaping or overflowing
from the swimming pool on the 70th floor of the Building), fumes,
smoke or electricity from the Service Media or any other part of the
Building including plant, machinery, installations, apparatus and
other fixtures therein or dropping or falling of anything from any
part of the Building or neighbouring building or vibrations from any
part of the Building or in the neighbourhood or the influx of rain
into the Premises, or the activity of rats or other pests in the
Building;
(d) the defective or damaged condition of the Premises or the Building;
(e) any want of security or safekeeping at the Building;
(f) any non-enforcement of any regulations made by the Landlord;
(g) any exercise of the Landlord's rights under this Lease including
(without limitation) the carrying out of building works;
nor shall the Rent or Service Charges or any other sums due from the
Tenant under this Lease abate on account of any such event save as
provided in Clause 8.5.
3.15 Regulations. To comply with the Building rules from time to time made or
adopted by the Landlord provided that if there is a conflict between such
rules and this Lease, this Lease shall prevail.
3.16 Costs. To pay to the Landlord on an indemnity basis, as rent and within 14
days of demand, all costs and other expenses properly incurred by the
Landlord (including (without limitation) in-house costs and expenses) in
relation to:
(a) every application made by the Tenant for consent whether it is
granted, refused offered subject to any qualification or withdrawn;
(b) professional advice obtained by the Landlord following an
application by or on behalf of the Tenant for consent under this
Lease;
(c) the standard fees imposed by the Landlord from time to time in
respect of the vetting of any drawings and specifications for any
works proposed to be carried out by or on behalf of the Tenant;
(d) professional advice obtained by the Landlord in inspecting or
monitoring any works to the Premises carried out by or on behalf of
the Tenant;
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(e) the preparation and service of a schedule of dilapidation's during
or after the expiry of the Term;
(f) the recovery of Rent, Service Charges or other sums due from the
Tenant; and
(g) affixing, altering or replacing the Tenant's name on the directory
boards or directional signs in the lift cars in the Building
provided that such costs shall in the case of paragraphs (a) - (d) and (g)
be reasonable.
3.17 Evidence of Compliance. To produce to the Landlord such evidence as the
Landlord may reasonably require that this Lease has been complied with.
4. LANDLORD'S COVENANTS
The Landlord covenants with the Tenant (subject to the Tenant duly paying
the Rent and Service Charges and not breaching this Lease) as follows:
4.1 Quiet Enjoyment. Subject to Clause 2(c), that the Tenant may have quiet
possession, use and enjoyment of the Premises during the Term without any
interruption by the Landlord or anyone lawfully claiming under through or
in trust for the Landlord.
4.2 Property Tax and Government Rent. To pay any property tax and Government
Rent relating to the Premises and any other charges of a capital or
non-recurring nature imposed by the Government or any other competent
authority.
4.3 Services. To use its best endeavours to provide the Services.
4.4 Back-up Generators. To test the back-up generators on the 73rd floor of
the Building serving the Premises on a monthly basis and to send as soon
as is reasonably practicable to the Tenant the result of such tests and
details of any remedial measures needed and taken by the Landlord.
4.5 Additional Air-conditioning Service. To provide to the Tenant
air-conditioning on a 24 hours basis, the fee for the same having already
been included in the Service Charges.
4.6 Maintenance. To keep the structural parts of the Building and the main
drains, pipes and cables therein (but not in the Premises) in a proper
state of repair and condition provided that the Landlord shall incur no
liability whatsoever under this Lease including (without limitation) in
respect of defects or wants of repair in the structure of the Building
supporting or contiguous to the Premises unless and until notice of any
defects or wants of repair has been given to the Landlord by the Tenant
and the Landlord has failed to take reasonable steps to repair or remedy
the same after the lapse of a reasonable time.
4.7 Generators and Chiller Plant. To keep and maintain the chiller plant and
the 4 generators referred to in Clause 2(b)(iv) and the Service Media
installed by the
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Landlord prior to the date hereof which run between the duct riser
openings in the core of the Building on each of the floors of the Premises
and the Tenant's dedicated chiller and generators (and such further
dedicated generators or chiller plant and such Service Media as may be
installed by the Landlord from time to time) on the 73rd floor of the
Building in good working condition and to replace the same in the event of
one or more them being beyond repair and to adopt any reasonable
requirements of the Tenant regarding the frequency and quality of
maintenance.
4.8 Television Services. To provide and maintain the television services as
shown in Schedule 6 to the Premises through satellite dish and/or fibre
optic cable to the extent such services are reasonably available in the
central district of Hong Kong.
4.9 Swimming Pool. To prevent or procure the prevention of the escape or
overflow of water from the swimming pool on the 70th floor of the Building
entering or damaging the Premises.
5. BANK GUARANTEE
5.1 Payment. On the date of this Lease, the Tenant shall deposit with the
Landlord a Guarantee for an aggregate amount of 2 months' Rent and Service
Charges to secure compliance by the Tenant with this Lease and if the Rent
or Service Charges increase at any time the Tenant shall deposit with the
Landlord a further Guarantee so that the total amounts guaranteed equal to
2 months' Rent and Service Charges. Such Guarantee shall be for a period
of 12 months provided that not later than 3 months before the expiry of
such Guarantee the Tenant shall extend or renew such Guarantee for a
further period of 12 months from not later than the expiry thereof and
this obligation to extend or renew shall continue throughout the Term in
respect of each Guarantee in existence from time to time.
5.2 Deductions.
(a) The Guarantee and any replacement or additional Guarantee shall be
held by the Landlord during the Term and the Landlord shall have the
right (in addition to any other right or remedy) to call upon the
Guarantee and any replacement or additional Guarantee for payment of
the amount of any Rent, Service Charges and other charges payable
under this Lease and compensation for any losses sustained by the
Landlord as the direct or indirect result of any breach by the
Tenant of this Lease.
(b) If any call is made by the Landlord upon the Guarantee and any
replacement or additional Guarantee during the Term the Tenant shall
immediately following demand by the Landlord deposit a further
Guarantee for the amount deducted with the Landlord.
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6. DEFAULT
6.1 Events of Default. If:
(a) any part of the Rent, Service Charges or any other sum payable under
this Lease is unpaid for 14 days after becoming due (whether
formally demanded or not);
(b) there is any breach of this Lease by the Tenant;
(c) the Tenant is insolvent which for the purposes of this Lease means:
(i) the Tenant becomes bankrupt or goes into liquidation or a
receiving order is made against it;
(ii) a receiver is appointed in respect of any of the Tenant's
assets;
(iii) possession of any of the Tenant's assets is taken by a chargee
or mortgagee;
(iv) any distress or execution is levied on the Premises or on any
of the Tenant's assets in Hong Kong;
(v) the Tenant stops or suspends payment of its debts or is unable
or admits it is unable to pay them;
(vi) the Tenant enters into a scheme of arrangement with its
creditors;
(vii) the Tenant fails to satisfy any judgment given in any action
against it unless such judgment has been appealed within the
requisite time limit and that appeal has not yet been disposed
of;
(viii) any other similar event, action or proceeding occurs or is
taken in respect of the Tenant in any jurisdiction;
the Landlord may, without prejudice to the Landlord's other rights and
remedies, at any time re-enter the Premises or any part of them in the
name of the whole whereupon this Lease shall end but any right of action
of the Landlord under this Lease shall remain.
6.2 Notice. The Landlord may exercise its rights under Clause 6.1 by serving
written notice on the Tenant without physically entering the Premises
notwithstanding any statutory or common law provision to the contrary.
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7. EXPANSION AND TERMINATION RIGHTS
7.1 Expansion. The Landlord grants to the Tenant the expansion rights referred
to in Schedule 4 on the terms and conditions therein contained.
7.2 Termination. The Landlord grants to the Tenant the determination rights
referred to in Schedule 5 on the terms and conditions therein contained.
8. FURTHER PROVISIONS
8.1 Lifts. The Premises shall be served by all lifts serving the top lift zone
in the Building which shall comprise the 59th to the 71st floors
(inclusive) subject only to any temporary changes which are from time to
time necessary owing to the breakdown, repair, maintenance or renewal of
any lifts in the Building.
8.2 Signage. The Landlord will provide a tenants' directory in the upper and
lower ground floor lift lobbies of the Building and the Tenant shall be
entitled to have its name shown thereon and also displayed in the lift
cars serving the Premises all such lettering to be carried out by the
Landlord.
8.3 Utilities Interruption. The Landlord shall notify the Tenant at least 4
weeks in advance of its proposed scheduling of Utility supplies
interruption for periodic testing and inspection purposes which
interruption shall be limited to once a year and the Landlord shall liaise
in good faith with the Tenant as to the timing of such interruptions
provided that nothing in this Clause shall prevent the Landlord from
interrupting Utility supplies in the event of an emergency nor prevent the
Landlord interrupting the fresh water supply not less than once a month
for a reasonable period of time for the purposes of cleaning and
maintaining the fresh water tank.
8.4 Tenant's Property. If after the Tenant has vacated the Premises at the
expiry of the Term, any of its property remains in the Premises or if at
any time the Tenant leaves any property in the Common Parts, the Tenant
shall be deemed to have abandoned such property and the Landlord may
remove and sell or otherwise dispose of that property. The Tenant shall
indemnify the Landlord against any liability incurred by the Landlord to
any third party whose property is sold by it in the mistaken belief held
in good faith, which is to be presumed unless the contrary is proved, that
the property belongs to the Tenant. All proceeds of sale shall belong to
the Landlord absolutely. The Tenant shall indemnify the Landlord against
any damage occasioned to the Premises and the Common Parts (or either of
them) and any losses caused by or related to the presence of the property
in the Premises and the Common Parts (or either of them).
8.5 Destruction of Premises. If:
(a) the Premises or any part of them are rendered unfit for commercial
use or inaccessible by any cause other than as a direct or indirect
result of the Tenant's or its contractors', servants', agents' or
licensees' act, neglect or default and if any policy of insurance
effected by the Landlord has not been
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vitiated or payment of the policy moneys refused in whole or in part
due to any act, neglect or default of the Tenant or its contractors,
servants, agents or licensees; or
(b) any order is issued by the Government or any competent authority
preventing or restricting use of the Premises or any substantial
part of them other than due to any act, neglect or default of the
Tenant or its contractors, servants, agents or licensees;
then
(i) the Rent and Service Charges or a fair proportion of them
according to the nature and extent of the damage sustained or
order made (the Landlord's determination of which being
binding on the Tenant save in case of manifest error) shall
immediately cease to be payable until the Premises have been
again rendered fit for use and accessible or such order has
been complied with (as the case may be); and
(ii) if the Premises have not been rendered fit for use and
accessible or such order has not been complied with within 6
months of the damage or date such order became operative (as
the case may be) the Tenant (subject to the Tenant having
complied with Clause 3.12(h)) or the Landlord may end this
Lease by giving not less than one month's notice to the other
but any right of action which either party may have against
the other under this Lease shall remain.
8.6 Change of Name.
(a) The Landlord shall not from the date hereof until the sixth
anniversary of the Term Start Date permit the name of the Building
to be changed or any part of it to a name which includes the name of
any competitor of the Tenant in the field of investment banking or
broker dealing services but excluding for the avoidance of doubt
commercial or retail banking services but may otherwise during such
period without restriction change the name of the Building or any
part of it.
(b) After the sixth anniversary of the Term Start Date, the Landlord may
without restriction change the name of the Building or any part of
it provided that the Landlord shall give to the Tenant and, where
necessary, to the postal and other relevant Government authorities
not less than three months' notice of its intention to do so.
(c) The Landlord shall not be liable for any costs or expenses incurred
by the Tenant as a result of any change of name in accordance with
this Clause 8.6 provided that the Landlord shall give to the Tenant
and, where necessary, to the postal and other relevant Government
authorities not less than three months' notice of its intention to
do so.
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8.7 Waiver.
(a) No condoning, excusing or overlooking by the Landlord of any default
or breach on the part of the Tenant, and no failure or delay by the
Landlord in exercising any right, power or remedy provided by law or
under this Lease, shall operate as a waiver of such right, power or
remedy, nor shall any single or partial exercise preclude any other
or further exercise thereof or the exercise or enforcement of any
other right, power or remedy. The rights, powers and remedies
provided in this Lease are cumulative and not exclusive of any
rights, powers and remedies provided by law.
(b) No waiver of any right, power or remedy of the Landlord and no
consent by the Landlord shall:
(i) be valid unless signed by the Landlord in writing and
containing an express statement that it is a waiver pursuant
to this Clause 8.7(b); or
(ii) be inferred from or implied by anything done (including the
acceptance by the Landlord of rent and/or other amounts
payable under this Lease) or omitted to be done by the
Landlord unless expressed in writing and agreed by it.
(c) Any consent given by the Landlord shall operate as a consent only
for the particular matter to which it relates and not as a general
waiver or release of any of the provisions of this Lease nor shall
it be construed as dispensing with the necessity of obtaining the
specific consent of the Landlord in future, unless expressly so
provided.
8.8 Stamp Duty and Legal Costs. The stamp duty and any land registration fee
payable on this Lease shall be borne by the parties in equal shares. Each
party shall pay its own solicitors' costs and disbursements for the
preparation or approval of this Lease.
8.9 Notices.
(a) Any notice, demand or other communication to the Tenant in
connection with this Lease shall be sent to it at its registered
office, or at such other address in Hong Kong notified by the Tenant
to the Landlord in accordance with this Clause 8.9.
(b) Any notice, demand or other communication to the Landlord in
connection with this Lease shall be sent to it at its address set
out above or at such other address in Hong Kong notified by the
Landlord to the Tenant in accordance with this Clause 8.9.
(c) Any notice, demand or other communication required to be served
under this Lease shall be in writing delivered personally or by
prepaid letter or facsimile transmission, confirmed (in the case of
a facsimile transmission) by letter delivered personally or sent by
prepaid mail within 24 hours of dispatch of such facsimile
transmission provided that no failure to deliver or dispatch and no
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delay in delivering or dispatching such confirmatory letter shall
affect the original notice given.
(d) Any notice served pursuant to this Clause 8.9 shall be deemed to
have been served:
(i) if delivered personally, on the first Working Day following
delivery;
(ii) if sent by pre-paid letter, on the first Working Day following
the delivery; and
(iii) if sent by facsimile transmission, on the first Working Day
following successful transmission.
(e) In proving service in the case of facsimile transmission, it shall
be sufficient proof that it was properly addressed and successfully
transmitted to the correct number.
8.10 Illegality or Unenforceability. Any provision of this Lease prohibited by
or rendered unlawful by or unenforceable under any applicable law actually
applied by any court of competent jurisdiction shall, to the extent
required by such law, be severed from this Lease and rendered ineffective
insofar as is possible without modifying the remaining provisions of this
Lease. Where, however, the provisions of any such applicable law may be
waived, they are hereby waived by the parties to the full extent permitted
by such law to the end that this Lease shall be a valid and binding
agreement enforceable in accordance with its terms.
8.11 Amendments. This Lease may only be varied or modified by a supplemental
agreement or other document signed by all the parties hereto. No provision
of this Lease may be waived, discharged or terminated orally, except only
by an instrument in writing signed by the party against whom enforcement
of the waiver, discharge or termination is sought.
8.12 No Warranties.
(a) This Lease supersedes any and all previous agreements between the
parties and constitutes the entire agreement among them and there
are no other express terms (whether oral or in writing) or implied
terms agreed between them and all representations, warranties,
statements or agreements, whether orally or in writing, prior to and
simultaneously with the grant of this Lease relating to any of the
matters referred to herein are hereby waived, negated and excluded
unless otherwise agreed or confirmed by the parties in writing after
the date of this Lease.
(b) Each party acknowledges that in entering into this Lease, it is not
relying upon any representation, warranty, statement, agreement,
undertaking, promise or assurance made or given by the other or any
other person, whether or not in writing, at any time prior to or
simultaneously with the grant of this Lease which is not expressly
set out in this Lease.
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(c) The Landlord does not warrant that any or adequate insurance against
fire or any other risks exists in respect of the Building or the
property of the Tenant therein.
(d) The Landlord does not warrant that the Premises are fit for the
purposes for which they are let or for any other purpose and shall
not be responsible or liable to the Tenant for any losses in respect
thereof and the Landlord's consent to the use of the Premises is not
a warranty that the Premises are fit for such use.
(e) Nothing in this Lease implies or is to be treated as a
representation, warranty, statement, agreement, undertaking, promise
or assurance to the effect that the use of the Premises for the
purpose permitted under this Lease or the condition of the Premises
is in compliance with any lawful requirements and the Tenant takes
the Premises in their existing condition.
8.13 Rights and Easements.
(a) So far as the law allows, the Tenant is not entitled to any rights
affecting the Building and nothing in this Lease shall confer on the
Tenant any right mentioned or referred to in Section 16(1) of the
Conveyancing and Property Ordinance (Cap. 219) in either case other
than those expressly set out in this Lease.
(b) For the avoidance of doubt, it is hereby expressly agreed and
declared as between the parties that the Landlord shall not be
obliged to provide, nor shall the Tenant be entitled to require, the
provision or continuation of any rights, easements and appurtenances
(or any apparent rights, easements and appurtenances) which may be
(or may turn out to be) beyond the Landlord's own existing rights
and entitlements to so provide or continue (as the circumstances may
transpire).
8.14 Covenants Relating to Adjoining Property. The Tenant is not entitled to
the benefit of or the right to enforce or to prevent the release or
modification of any covenant, agreement or condition entered into by any
tenants of the Landlord in respect of the Building.
8.15 Distraint. For the purposes of Part III of the Landlord and Tenant
(Consolidation) Ordinance or any statutory modification or re-enactment
thereof, the Rent and Service Charges shall be in arrears if not paid in
accordance with Clause 3.1.
8.16 Confidentiality.
(a) Non-Disclosure. The Landlord and the Tenant shall not at any time
hereafter without the other's consent make any announcement or
release other publicity relating to any matter referred to in or
pertaining to this Lease or any other document entered into between
the Landlord and the Tenant relating to the Premises unless:
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(i) disclosure is required by any law, court order or the rules
and regulations of any stock exchange or other administrative,
governmental or regulatory authority to which the relevant
party may be subject; or
(ii) disclosure is to the party's lenders or legal, financial or
other professional advisers;
but nothing herein shall prevent the Landlord or Tenant registering
this Lease at the Land Registry.
(b) Extent of Obligation. The provisions of this Clause 8.16 shall
continue in full force and effect until the expiry of this Lease or
six years from the date hereof (whichever is later).
8.17 Governing Law. This Lease shall be governed by and construed according to
the law of Hong Kong and the parties shall submit to the non-exclusive
jurisdiction of the Hong Kong Courts.
8.18 Ownership of Works. Notwithstanding the other rights of the Tenant under
this Lease, the Tenant shall have no ownership rights in relation to any
works carried out to the Premises by the Tenant pursuant to Clause 3.2 of
this Lease provided that during the Term the Tenant shall have the
unfettered right free of cost to use and/or change the same but subject to
the provisions of this Lease.
9. NO PREMIUM
The Tenant acknowledges that no fine, premium, key money or other
consideration has been paid by the Tenant to the Landlord for the grant of
this Lease.
10. YEAR 2000 COMPLIANCE
10.1 Definitions. In this Clause 10:
"compliant" means that a software system or component individually and in
combination that under proper operable conditions:
(a) properly processes, uses, employs and refers to all dates after 31
December 1999 and the centuries in which they occur;
(b) correctly processes all dates and data related dates including
comparing, sequencing and calculating irrespective of whether the
dates are before or after 31 December 1999 and whether or not the
dates processed occurred before or after 31 December 1999;
(c) correctly recognises leap years, deals with the transition from 31
December 1999 to 1 January 2000 and interfaces with other computer
systems;
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without interruption, exception, error or inaccuracy arising by reason of
such dates being after 31 December 1999 and the term "compliance" is to be
interpreted accordingly;
"Computer System" means all software, systems, equipment and facilities
used by the Landlord in the Building including (without limitation) the
lifts, escalators, electrical and air-conditioning systems, databases and
integrated circuits;
"Crucial Date" means the date after which any failure of a system or
component to be compliant would have any adverse effect on the operation
or control of any component of the Computer Systems or the Tenant's
Building Equipment;
"Landlord's Tests" means the tests undertaken pursuant to Clause 10.2;
"Tenant's Building Equipment" means compliant systems or equipment
installed by the Tenant in the Building the operation or control of which
is connected with the Computer Systems;
"Tenant's Tests" means the tests undertaken pursuant to Clause 10.3.
10.2 Landlord's Obligations. The Landlord shall take all necessary actions to
ensure that the Computer Systems are compliant by the Crucial Date and
(a) test each system or component of the Computer Systems to confirm
that it is compliant;
(b) notify the scheduling of the Landlord's Tests to the Tenant in good
time for the Tenant to organise for the Landlord's Tests to be
monitored;
(c) carry out the Landlord's Tests in accordance with the notified
schedule and permit the Tenant and its consultants to observe them;
(d) if the Landlord's Tests are not passed, carry out steps (a) to (c)
inclusive again until the Landlord's Tests are passed.
10.3 Tenant's Obligations. The Tenant shall take all necessary actions to
ensure that the Tenant's Building Equipment, if not compliant upon
installation, becomes compliant as soon as possible and in any event
before the Crucial Date and
(a) test each system or component of the Tenant's Building Equipment to
confirm that is compliant;
(b) coordinate the scheduling of the Tenant's Tests with the Landlord
and permit the Landlord and/or its consultant to observe them,
(c) permit the Landlord and its consultants to inspect all plans,
specifications, vendor materials and other information on the
compliance of the Tenant's Building Equipment and to provide to the
Landlord copies of such documents;
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(d) if the Tenant's Tests are not passed, carry out steps (a) to (c)
again until the Tenant's Tests are passed.
10.4 Proprietary Information. Notwithstanding the foregoing, neither party
shall be required to permit the other to inspect proprietary information.
IN WITNESS whereof the parties have affixed their respective common seals to
this Lease on the date first above written.
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SCHEDULE 1
Particulars
Building : Cheung Kong Center, Queen's Road Central, Hong Kong
erected on Inland Lot No.8887.
Premises : All those office units being part of the 59th floor and
the whole of the 60th, 61st, 62nd, 63rd, 65th, 66th,
67th and 68th floors of the Building shown for
identification coloured pink on the plans annexed to
this Lease (there being no 69th floor and no floors for
commercial or residential occupation above the 7lst
floor).
Term : Start Date: [ ]
Expiry Date: [ ]
Rent : Hong Kong Dollars Ten million, one hundred and eighteen
thousand, six hundred and fifty-four (HK$10,118,654)
per calendar month subject to review on the dates and
in the manner set out in Schedule 2.
Rent commencement
date : [ ]
Service charges : Hong Kong Dollars One million, eight hundred and
thirteen thousand, seven hundred and twenty-one
(HK$1,813,721) per calendar month subject to review in
the manner set out in Schedule 3.
Use : Offices
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<PAGE> 43
SCHEDULE 2
Rent Review
1. Definitions
1.1 In this Schedule the following definitions apply unless the context
otherwise requires:
1.2 "Review Date" means the [ ] in the year 19[ ] and every third
anniversary of that date thereafter and "relevant Review Date" means the
Review Date at the beginning of the relevant Review Period.
1.3 "Review Period" means the period from any Review Date to the day before
the next Review Date (inclusive) or from the last or only Review Date to
the expiry of the Term (inclusive) (as the case may be).
1.4 "Assumptions" means the following assumptions at the relevant Review Date:
(a) that no work has been carried out on the Premises by or on behalf of
the Tenant its subtenants or their predecessors in title at any time
which has diminished the rental value of the Premises;
(b) that if the Premises have been destroyed or damaged they have been
fully restored;
(c) that the covenants contained in this Lease on the part of the
Landlord and the Tenant have been fully performed and observed;
(d) that the Premises are available to let by a willing landlord to a
willing tenant as a whole without a premium being paid by either
party and with vacant possession;
(e) to the extent that the Premises are actually sub-let at the relevant
Review Date that hypothetical undertenants are immediately available
to take underleases of such parts of the Premises;
(f) that the Premises are ready for and fitted out and equipped for
immediate occupation and use for the purpose or purposes required by
the willing tenant referred to in Paragraph 1.4(d) and that all the
services required for such occupation and use are connected to the
Premises so that the willing tenant would not require a rent-free
period or other allowance for fitting out;
(g) that the hypothetical lease is for a term equal in length to the
Term beginning on the relevant Review Date but which otherwise
contains the same terms as this Lease (except the amount of the Rent
and any rent free period in this Lease) but including (without
limitation) the provisions for rent review on the Review Dates and
at the same intervals as those in this Lease; and
32
<PAGE> 44
(h) that the Premises may be used for any of the purposes permitted by
this Lease or any licence or consent granted pursuant to this Lease.
1.5 "Disregarded Matters" means the following matters at the relevant Review
Date that must be disregarded:
(a) any effect on rent of the fact that the Tenant its sub-tenants or
their predecessors in title have been in occupation of the Premises;
(b) any goodwill attached to the Premises attributable to the business
of the Tenant or its sub-tenants' or their predecessors in title's
business;
(c) any increase in rental value of the Premises attributable to the
existence at the relevant Review Date of any works, alterations or
additions to the Premises carried out by the Tenant, its sub-tenants
or predecessors in title or by any lawful occupiers during or prior
to the Term Start Date with consent where required otherwise than in
pursuance of an obligation to the Landlord or its predecessors in
title (Clause 3.2 not being treated as an obligation to the Landlord
to fit out the Premises for the purpose of this Paragraph 1.5(c)
notwithstanding the provisions of Clause 8.18) but in making this
disregard no allowance is to be made for loss of use during any
hypothetical period while the improvement is being carried out.
1.6 the "President" means the President for the time being of the Hong Kong
Institute of Surveyors the duly appointed deputy of the President or any
person authorised by the President to make appointments on his behalf.
1.7 the "Valuer" means a person appointed by agreement between the parties or
in the absence of agreement nominated by the President on the application
of either party made not earlier than 6 months before the relevant Review
Date or at any time after the relevant Review Date. If the Valuer dies or
declines to act the President may on the application of either party
appoint another.
1.8 the "Difference" means any shortfall or surplus between the rent which
would have been payable had the revised rent been ascertained by the
relevant Review Date and the payments made by the Tenant on account under
Paragraph 3.1.
2. Ascertaining the Rent
2.1 The Rent shall be:
(a) until the first Review Date the Rent specified in Schedule 2;
(b) during each successive Review Period such Rent as may be ascertained
in accordance with this Schedule.
2.2 The revised Rent for any Review Period may be agreed in writing at any
time between the parties or (in the absence of agreement) will be
determined by the Valuer.
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<PAGE> 45
2.3 The revised Rent to be determined by the Valuer shall be such as he shall
decide to be the open market rent which would reasonably be expected to
become payable for the Premises after making the Assumptions but
disregarding the Disregarded Matters and the Valuer shall take into
account comparable rental evidence for premises of a similar size to the
Premises in the Building or other similar buildings and in considering and
evaluating any comparable rental evidence, the Valuer shall assume that
any rent-free period (and/or financial contributions or other similar
benefits) of up to five months in duration (or the equivalent in the case
of a financial contribution or other similar benefit) granted in such
comparable transaction was for genuine fitting out purposes and that any
part of any rent free period (and/or financial contribution or other
similar benefit) in excess of five months (or the equivalent in the case
of a financial contribution or other similar benefit) granted in such
comparable transaction was granted as an inducement and not for fitting
out purposes.
2.4 The Valuer shall act as an expert and not as an arbitrator and his
decision shall be conclusive and binding on the parties.
2.5 The Tenant must allow the Valuer access to the Premises to do anything
which the Valuer considers necessary to carry out his function.
2.6 The costs and expenses of the Valuer including the cost of his appointment
shall be paid by the parties hereto in equal shares.
2.7 When the revised Rent has been ascertained in accordance with this
Schedule, memoranda to this effect shall be signed by or on behalf of the
parties and annexed to this Lease and its duplicate and the parties shall
bear their own costs of this.
2.8 Notwithstanding anything hereinbefore contained, the revised Rent for the
first Review Period shall not increase or decrease by more than 30% from
the initial rent payable by the Tenant (i.e. HK$53.00 per square foot
lettable per month).
3. Payment of revised Rent
3.1 If the revised Rent payable during any Review Period has not been
ascertained by the relevant Review Date, Rent shall continue to be payable
at the rate previously payable on account of the revised Rent for that
Review Period.
3.2 If the revised Rent payable during any Review Period has not been
ascertained by the relevant Review Date then immediately after the date
when it is agreed or the date upon which the Valuer's decision is received
by one party, the Tenant shall pay to the Landlord or the Landlord shall
pay to the Tenant (as the case may be):
(a) any Difference; and
(b) interest at the prime rate of The Hongkong and Shanghai Banking
Corporation prevailing from time to time on each part of the
Difference for the period from the date upon which such part was due
or paid (as the case may be) up to the date of payment of the entire
Difference.
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<PAGE> 46
SCHEDULE 3
Service Charges
1. The "Services" means:
(a) Maintaining, cleaning, repairing, replacing, renewing, painting,
decorating or otherwise treating as the Landlord shall consider
appropriate the Building and the Service Media (not forming part of
the Premises) and any signs on or giving directions to the Building
(except where any tenant or occupier of the Building is liable for
the same) to a style and manner appropriate to a first class
commercial building.
(b) Operating, inspecting, maintaining, cleaning, repairing, replacing,
renewing, painting, decorating or otherwise treating the Common
Parts.
(c) Cooling the Premises to reasonably acceptable standards 24 hours a
day, 365 days a year and the Building during such hours as the
Landlord determines.
(d) Procuring the supply of Utilities to the Building.
(e) Providing (where appropriate) toilet requisites and hygiene services
in the toilet facilities in the Common Parts including the supply,
maintenance, repair and renewal of associated receptacles, plant and
equipment.
(f) Planting, maintaining, tending and replanting any landscaped or
planted areas at the Building.
(g) Cleaning the outside of the windows of the Building.
(h) Disposing of refuse from the Building including its collection (and
if deemed appropriate by the Landlord its compaction) and the
provision of associated receptacles, plant and equipment.
(i) Providing staff and administration and providing replacing and
renewing machinery and equipment in each case required to provide
the Services referred to in this Schedule.
(j) Effecting insurance cover in respect of the Building in such amounts
and against such risks as the Landlord deems appropriate from time
to time.
(k) Providing any other service which the Landlord shall reasonably
think appropriate for the benefit of the Building, its facilities
and amenities and the tenants of the Building or any of them or
visitors to it.
2. If any time after the first year of the Term the costs of providing the
Services have increased the Landlord may serve one month's notice upon the
Tenant increasing the Service Charges by an appropriate amount to reflect
such increase in cost such notice being accompanied by an explanatory
memorandum setting out in reasonable detail the
35
<PAGE> 47
nature of such increases and thereafter such increased Service Charges
shall then be payable and the Landlord's assessment of the appropriate
increase shall be conclusive (save in case of manifest error and provided
that the Tenant shall not be obliged to make payments in respect of:
(a) any capital expenditure of an extraordinary nature incurred in the
renewal or replacement of the structure of the Building or the
substantial refurbishment or redevelopment of any Common Parts; or
(b) any charges incurred in respect of the maintenance of the Tenant's
dedicated chiller and generators on the 73rd floor of the Premises
and such further dedicated generators and chiller plant as may be
installed by the Landlord from time to time or the Service Media
installed by the Landlord prior to the date hereof which run between
the duct riser openings in the core of the Building on each of the
floors of the Premises and the Tenant's dedicated chiller and
generators (and such further dedicated generators or chiller plant
and such Service Media as may be installed by the Landlord from time
to time) on the 73rd floor of the Building.
3. Further increases in the Service Charges may be made after an earlier
notice of increase has become operative.
4. Notwithstanding Paragraphs 2 and 3, any increase in the Service Charges
shall not exceed 10% per annum.
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<PAGE> 48
SCHEDULE 4
Expansion Rights
1. Definitions. In this Schedule:
"Average Passing Rent" means a rent calculated by multiplying the lettable
floor area of the Relevant Premises and the average per lettable square
footage Rent payable by the Tenant for the Premises at the start of the
term of the relevant Supplemental Lease or where a rent free period is
subsisting at that time, the Rent payable for the Premises immediately
after the expiry of such rent free period (and for this purpose the
lettable floor area of the Relevant Premises and the average per lettable
square footage Rent for the Premises shall be determined by the Landlord
(it being accepted for this purpose that the lettable area of the floors
of Premises as at the date of this Lease are as shown in Schedule 7) whose
determination shall be conclusive (save in case of manifest error);
"Available Premises" means the whole or any part of a floor in the
Building which is not comprised in the Premises which may from time to
time become available for Letting during the Term;
"Further Floor Option" means the option granted under Paragraph 2(c);
"Landlord's Offer" means any offer given by the Landlord to the Tenant
pursuant to Paragraph 4.1(a);
"Letting" means making an open offer or accepting an open offer or
entering into an agreement for lease or tenancy, or entering into a lease
or tenancy and "Let" shall be construed accordingly;
"Relevant Premises" means the premises in respect of which the relevant
Option has been exercised pursuant to Paragraph 3 or in respect of which a
Landlord's Offer has been accepted pursuant to Paragraph 4.1(b) (as the
case may be);
"Rights of Second Refusal" means the rights of second refusal granted
under Paragraph 2(d);
"Option" means any of the 58th Floor Option, the 59th Floor Option or the
Further Floor Option;
"Supplemental Lease" means any lease to be entered into pursuant to
Paragraph 5;
"58th Floor Option" means the option granted under Paragraph 2(b);
"59th Floor Option" means the option granted under Paragraph 2(a);
the definitions in Schedule 2 shall have the same meaning.
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<PAGE> 49
2. Grant of Options and Rights of Second Refusal.
Subject to there being no subsisting material breach of this Lease on the
relevant Option exercise date or (as the case may be) on the date of
acceptance of a Landlord's Offer under Paragraph 4.1(b) and subject to
Paragraphs 3.2(b) and (c), the Landlord grants to the Tenant the
following:
(a) the option to lease the whole or part of the 59th floor of the
Building not comprised in the Premises;
(b) the option to lease the whole or part of the 58th floor of the
Building;
(c) the option to lease the whole or part of any floor of the Building
to be designated by the Landlord following the exercise of such
option which designation may include the part of the 59th floor of
the Building not comprised in the Premises and the 58th floor of the
Building (if the 58th floor Option and/or the 59th floor Option have
not been exercised) Provided always that the Landlord shall make
available to the Tenant the space required upon a single floor; and
(d) the rights of second refusal to lease Available Premises in
accordance with Paragraph 4.
3. Options.
3.1 (a) The 59th Floor Option is exercisable by the Tenant at any time from
the Term Start Date to the end of the 15th month of the Term.
(b) The 58th Floor Option is exercisable by the Tenant at any time from
the Term Start Date to the end of the 39th month of the Term.
(c) The Further Floor Option is exercisable by the Tenant at any time
from the Term Start Date to the end of the 63rd month of the Term.
3.2 (a) Each Option shall be exercisable by the Tenant serving notice on the
Landlord specifying in sufficient detail the Relevant Premises.
(b) The Tenant is only entitled to exercise each Option once, whether or
not it is exercised in respect of the whole or part of the floor the
subject of such Option.
(c) Notwithstanding any other provision of this Schedule, each Option
may only be exercised in respect of part of a floor of the Building
which is demised to a third party where that part comprises, at the
exercise of such Option, the whole of the space on that floor
demised to that third party.
3.3 (a) If the 59th Floor Option is exercised and a Supplemental Lease has
been completed in accordance with Paragraph 5, the Landlord shall on
the last day of the 24th month of the Term deliver to the Tenant
vacant possession of the
38
<PAGE> 50
Relevant Premises.
(b) If the 58th floor Option is exercised and a Supplemental Lease has
been completed in accordance with Paragraph 5, the Landlord shall on
the last day of the 48th month of the Term deliver to the Tenant
vacant possession of the Relevant Premises.
(c) If the Further Floor Option is exercised, the Landlord shall as soon
as reasonably practicable following its receipt of the notice
exercising the Further Floor Option and in any event by the last day
of the 64th month of the Term, notify the Tenant of the floor
designated by the Landlord in accordance with paragraph 2(c) and of
the date on which the Landlord will deliver vacant possession of the
Relevant Premises to the Tenant which shall be at any time from and
including the 1st day of the 70th month of the Term to and including
the last day of the 74th month of the Term and subject to a
Supplemental Lease being completed in accordance with Paragraph 5,
the Landlord shall deliver to the Tenant vacant possession of the
Relevant Premises on the date so notified to the Tenant.
3.4 The rent payable by the Tenant for the Relevant Premises following the
exercise of an Option shall be the Average Passing Rent and such rent
shall be subject to review on the same dates and in the same manner as set
out in this Lease including (without limitation) on the agreement or
determination of any rent review pending at the start of the term of the
relevant Supplemental Lease.
4. Rights of Second Refusal.
4.1 (a) Subject to Paragraph 4.3, before Letting any Available Premises, the
Landlord shall make a written offer to the Tenant to lease the
Available Premises to the Tenant specifying a term start date which
shall not be earlier than 22 Working Days from and including the
date of the Landlord's Offer.
(b) The Tenant may accept the Landlord's Offer within 10 Working Days
from and including the date of its receipt of the Landlord's Offer
and the parties shall complete a Supplemental Lease under Paragraph
5 in respect of the Relevant Premises.
(c) If the Tenant does not accept the Landlord's Offer in accordance
with Paragraph 4.1(b), the Landlord may Let the Available Premises
specified in the Landlord's Offer to a third party within 6 months
from the date of the Landlord's Offer but thereafter, before Letting
such Available Premises to a third party, the Landlord must again
offer to lease such Available Premises to the Tenant in accordance
with this Paragraph 4.1 and the procedures set out in this Paragraph
4.1 shall be repeated as often as is necessary.
4.2 The rent reserved by any Supplemental Lease for the Relevant Premises
following the Tenant's acceptance of a Landlord's Offer under Paragraph
4.1(b) shall be the Average Passing Rent and such rent shall be subject to
review on the same dates and in the same manner as set out in this Lease
including (without limitation) on the agreement or
39
<PAGE> 51
determination of any rent review pending at the start of the term of the
relevant Supplemental Lease.
4.3 The Rights of Second Refusal are subject to the Landlord's rights to Let
any Available Premises to:
(a) any existing tenant of the relevant part of the Available Premises
whether or not pursuant to an option or a right of first refusal;
(b) any other third party pursuant to any option or rights of first
refusal granted to that third party.
4.4 The Tenant shall use its reasonable endeavours to inform the Landlord as
soon as possible of its intention to lease Available Premises.
5. Supplemental Leases.
5.1 (a) Following the exercise by the Tenant of an Option under Paragraph 3
and subject to there being no subsisting material breach of this
Lease, the parties shall on or before the date for delivery of
vacant possession of the Relevant Premises under Paragraph 3.3 enter
into a Supplemental Lease of the Relevant Premises.
(b) Following the Tenant's acceptance of a Landlord's Offer under
Paragraph 4.1(b) and subject to there being no subsisting material
breach of this Lease, the parties shall within 10 Working Days from
and including the date of the Tenant's said acceptance enter into a
Supplemental Lease of the Relevant Premises.
5.2 Any Supplemental Lease shall be on the following terms:
(a) the rent shall be the amount referred to in Paragraphs 3.4 or 4.2
(as the case may be);
(b) the Relevant Premises shall be aggregated with the Premises for the
purposes of the sub-letting rights granted under Clause 3.11 and the
rent review provisions contained in Schedule 2;
(c) (i) where the Supplemental Lease follows the exercise of an Option
the relevant term start date shall be the date on which vacant
possession of the Relevant Premises concerned are to be
delivered by the Landlord to the Tenant under Paragraph 3.3;
(ii) where the Supplemental Lease follows the exercise of the
Rights of Second Refusal, the relevant term start date shall
be the date specified in the Landlord's Offer;
(d) the term shall expire or determine on the same date as the Term;
40
<PAGE> 52
(e) the rent shall be payable from and including the first day of the
fourth month from the relevant term start date; and
(f) otherwise on the same terms and conditions as this Lease other than:
(i) the rent;
(ii) the rent free periods referred to in Clause 2(d);
(iii) this Schedule;
(iv) the service charges which shall nevertheless be charged at the
same per square footage rate as the Service Charges for the
Premises;
(v) Clause 8.1 (except in respect of a Supplemental Lease of the
59th floor of the Building);
(vi) Clause 3.4 which shall be amended to require reinstatement to
bare shell condition save insofar as the items to be
reinstated, reconnected or removed referred to in paragraphs
(a) - (f) thereof are or have been installed within the
Relevant Premises by the Landlord pursuant to Paragraph 6 or
any other agreement between the Landlord and the Tenant;
(vii) Clause 2(b)(iii) and (iv) which shall be amended to grant
shared rights in common with the Tenant and its sub-tenants;
(viii) Clause 3.10 which shall be amended to permit assignment only
to an assignee of this Lease;
(ix) Schedule 5 which shall be amended so the compensation payable
under paragraph 3 thereof shall be calculated in accordance
with the following formula:
a
---- x b
72
where:
a = each whole month of the unexpired term of the
Supplemental Lease on the date of termination
b = an amount equal to the rent which would otherwise have
been payable during the 3 months rent-free period
granted under the Supplemental Lease
(x) such other modifications as the circumstances reasonably
require;
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<PAGE> 53
but including (without limitation) the provisions for rent
review provided that paragraph 2.8 of Schedule 2 shall only be
incorporated in such Supplemental Lease if the rent under such
Supplemental Lease falls to be reviewed on the same date as
the first Review Date under this Lease or if such first review
is pending at the start of the term of the Supplemental Lease.
6. Works.
(a) Without prejudice to any other agreement between the Landlord and
the Tenant, and without prejudice to Paragraph 6(b), (c) and (d),
the Relevant Premises shall be delivered in bare shell condition.
(b) Following the exercise by the Tenant of an Option under Paragraph
3.1(c) and subject in either case to there being no subsisting
material breach of this Lease, if the Tenant notifies the Landlord
before the start of the term of the relevant Supplemental Lease that
such construction, installation and modification is required, the
Landlord shall at its own cost carry out and complete the following
works by the start of the term of the relevant Supplemental Lease or
within 4 months from the date of such notice (whichever is the
later):
(i) the modification of the underfloor air-conditioning system in
the Expansion Premises to a system comprising a control VAV
system with duct works, VAV boxes and controls above the
suspended ceiling, the system being DDC controlled with the
following design conditions:
(1) Ceiling plenum-free return;
(2) Indoor conditions: 23+/-1(degree)C and 50+/-5% RH in
summer and about 20(degrees)C in winter;
(ii) the construction of inter tenancy walls;
(iii) the installation of a separate electricity meter and
modifications to the air-conditioning and other associated
mechanical and electrical systems to suit the control
mechanism for the remaining tenants on the same floor.
(c) Following the exercise by the Tenant of an Option under Paragraph
3.1(c) and/or the Tenant's acceptance of a Landlord's Offer under
Paragraph 4.1(b) and subject in either case to there being no
subsisting material breach of this Lease, if the Tenant notifies the
Landlord before the start of the term of the relevant Supplemental
Lease that such works are required, the Landlord shall at its own
cost carry out and complete the following works by the start of the
term of the relevant Supplemental Lease or within 4 months from the
date of such notice (whichever is the later):
(i) additional electricity to meet the relevant requirements from
the Relevant Premises;
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<PAGE> 54
(ii) additional normal and supplementary cooling capacity; and
(iii) a dedicated duct shaft if the Relevant Premises are on the
58th floor and any other floor immediately below where all
contiguous floors are demised to the Tenant and the duct shaft
is capable of being dropped vertically;
provided that the works referred to in Paragraphs 6(c)(i) and (ii)
shall be of a standard commensurate with the remainder of such
Service Media in the Premises and of such capacity as is specified
in the Engineering Summary attached hereto in relation to a maximum
aggregate lettable floor area in the Building demised or to be
demised to the Tenant under any document to the intent that the
Landlord shall have no liability to carry out such works in respect
of any greater aggregate demised area.
(d) The Landlord shall procure that the works referred to in Paragraphs
6(a) and (b) are constructed and carried out:
(i) in a good and workmanlike manner and in accordance with good
building practice;
(ii) with good and suitable materials;
(iii) in accordance with the Government grant under which the
Landlord holds the Premises.
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<PAGE> 55
SCHEDULE 5
Termination Rights
1. Subject to Paragraph 2, the Tenant may terminate this Lease in respect of
(a) the whole of the Premises;
(b) one or more whole floors of the Premises; or
(c) part of any whole floor or floors of the Premises (but such part
shall be not less than 5,000 square foot lettable on any one floor
and shall provide for sufficient corridor access to the common parts
of the Building and to the emergency exits on the relevant floor);
on the 6th anniversary of the Term Start Date and on every subsequent
anniversary of the Term Start Date by giving to the Landlord at least six
months' prior written notice and upon the expiry of such notice this Lease
shall, insofar as it relates to the part or whole of the Premises
specified in any such notice, cease to be of further effect but any right
of action of the parties shall remain.
2. The rights set out in Paragraph 1 are conditional upon there being no
material subsisting breach of this Lease at the due date for the
termination of this Lease (in whole or in part) pursuant to such notice.
3. (a) The rights set out in Paragraph 1 are conditional upon the Tenant
paying to the Landlord on the relevant date of termination an amount
in compensation calculated as follows:
(i) termination on the 6th anniversary of the Term Start Date, 14
months' Rent;
(ii) termination on the 7th anniversary of the Term Start Date, 12
months' Rent;
(iii) termination on the 8th anniversary of the Term Start Date, 10
months' Rent;
(iv) termination on the 9th anniversary of the Term Start Date, 8
months' Rent;
(v) termination on the 10th anniversary of the Term Start Date, 6
months' Rent; and
(vi) termination on the 11th anniversary of the Term Start Date, 4
months' Rent.
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<PAGE> 56
(b) For the purposes of Paragraph 3(a), the Rent shall be deemed to be
HK$53 per lettable square foot of the Premises the subject of the
Tenant's notice under Paragraph 1.
(c) If the Tenant surrenders the whole (but not a part) of the Premises,
the amount payable under Paragraph 3(a) shall be reduced by the
following amounts:
(i) termination on the 6th anniversary of the Term Start Date, by
HK$4,800,000.00
(ii) termination on the 7th anniversary of the Term Start Date, by
HK$3,840,000.00
(iii) termination on the 8th anniversary of the Term Start Date, by
HK$3,072,000.00
(iv) termination on the 9th anniversary of the Term Start Date, by
HK$2,457,600.00
(v) termination on the 10th anniversary of the Term Start Date, by
HK$1,966,080.00
(vi) termination on the 11th anniversary of the Term Start Date, by
HK$1,572,864.00.
4. Notwithstanding the provisions of this Schedule, the Tenant shall
use all reasonable endeavours to inform the Landlord as soon as it
intends or is likely to exercise the rights set out in Paragraph 1.
5. Following any termination of this Lease in respect of any part of
the Premises pursuant to Paragraph 1:
(a) the Rent and Service Charges shall be adjusted so as to be
calculated on the basis of the lettable floor area of the
remaining Premises which shall be determined by the Landlord
and such determination shall be conclusive (save in case of
manifest error) but all other terms and conditions of this
Lease shall remain unchanged; and
(b) the Guarantee shall be replaced by a new Guarantee for an
amount totalling two month's Rent and Service Charges then
payable.
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<PAGE> 57
SCHEDULE 6
Television Services
For Asiasat 1
CCTV 1
CHANNEL (V)
PHOENIX
STAR TV
STAR PLUS
For Palapa C2
GUJARAT TV
TV5 ASIA
RCTI
TVRI
ATV (TV SHOPPING NETWORK-TVSN)(AUST)
SCTV
ABN - ASIA BUSINESS NEWS
RTB
CFI - CANAL FRANCE INT.
TPI
For Asiasat-2
CCTV 4
MONGOLIAN TV
EGYPTIAN SATELLITE CHANNEL - ESC
WORLDNET/C.SPAN/BLOOM-BERG USA
RTP
46
<PAGE> 58
SCHEDULE 7
Initial floor Area
<TABLE>
<CAPTION>
Estimated Area
Floor of Building (sq. ft. lettable)
----------------- ------------------
<S> <C>
68 22,381
67 22,381
66 22,381
65 22,381
63 22,381
62 22,381
61 22,027
60 22,027
59 12,578
-------
Total 190,918
</TABLE>
47
<PAGE> 59
SEALED with the Common Seal of )
the Landlord and SIGNED by )
)
)
whose signature(s) is/are verified )
by: )
Solicitor, Hong Kong SAR
SEALED with the Common Seal of )
the Tenant and SIGNED by )
)
)
whose signature(s) is/are verified )
by: )
Solicitor, Hong Kong SAR
48
<PAGE> 60
[GRAPHIC OMITTED]
59/F FLOOR PLAN
================================================================================
Hutchison Whampoa Property JOB NO.: 51219502 [ILLEGIBLE]
(Management & Agency) Ltd. ----------------------------------
JOB: CHEUNG KONG CENTER [ILLEGIBLE]
Hutchison Whampoa Property QUEEN'S ROAD CENTRAL / GARDEN ROAD [ILLEGIBLE]
- -------------------------- IL 8887 [ILLEGIBLE]
The property group of DWG TITLE: 59/F FLOOR PLAN
Hutchison Whampoa Property [LOGO] [ILLEGIBLE]
================================================================================
ALL PLANS ARE SUBJECT TO THE
AMENDED PLANS TO BE APPROVED
BY THE BUILDING AUTHORITY FOR IDENTIFICATION PURPOSE ONLY
<PAGE> 61
[GRAPHIC OMITTED]
60/F FLOOR PLAN
================================================================================
Hutchison Whampoa Property JOB NO.: 51219502 [ILLEGIBLE]
(Management & Agency) Ltd. ----------------------------------
JOB: CHEUNG KONG CENTER [ILLEGIBLE]
Hutchison Whampoa Property QUEEN'S ROAD CENTRAL / GARDEN ROAD [ILLEGIBLE]
- -------------------------- IL 8887 [ILLEGIBLE]
The property group of DWG TITLE: 60/F FLOOR PLAN
Hutchison Whampoa Property [LOGO] [ILLEGIBLE]
================================================================================
ALL PLANS ARE SUBJECT TO THE
AMENDED PLANS TO BE APPROVED
BY THE BUILDING AUTHORITY FOR IDENTIFICATION PURPOSE ONLY
<PAGE> 62
[GRAPHIC OMITTED]
61/F FLOOR PLAN
================================================================================
Hutchison Whampoa Property JOB NO.: 51219502 [ILLEGIBLE]
(Management & Agency) Ltd. ----------------------------------
JOB: CHEUNG KONG CENTER [ILLEGIBLE]
Hutchison Whampoa Property QUEEN'S ROAD CENTRAL / GARDEN ROAD [ILLEGIBLE]
- -------------------------- IL 8887 [ILLEGIBLE]
The property group of DWG TITLE: 61/F FLOOR PLAN
Hutchison Whampoa Property [LOGO] [ILLEGIBLE]
================================================================================
ALL PLANS ARE SUBJECT TO THE
AMENDED PLANS TO BE APPROVED
BY THE BUILDING AUTHORITY FOR IDENTIFICATION PURPOSE ONLY
<PAGE> 63
[GRAPHIC OMITTED]
62/F FLOOR PLAN
================================================================================
Hutchison Whampoa Property JOB NO.: 51219502 [ILLEGIBLE]
(Management & Agency) Ltd. ----------------------------------
JOB: CHEUNG KONG CENTER [ILLEGIBLE]
Hutchison Whampoa Property QUEEN'S ROAD CENTRAL / GARDEN ROAD [ILLEGIBLE]
- -------------------------- IL 8887 [ILLEGIBLE]
The property group of DWG TITLE: 62/F FLOOR PLAN
Hutchison Whampoa Property [LOGO] [ILLEGIBLE]
================================================================================
ALL PLANS ARE SUBJECT TO THE
AMENDED PLANS TO BE APPROVED
BY THE BUILDING AUTHORITY FOR IDENTIFICATION PURPOSE ONLY
<PAGE> 64
[GRAPHIC OMITTED]
63/F FLOOR PLAN
================================================================================
Hutchison Whampoa Property JOB NO.: 51219502 [ILLEGIBLE]
(Management & Agency) Ltd. ----------------------------------
JOB: CHEUNG KONG CENTER [ILLEGIBLE]
Hutchison Whampoa Property QUEEN'S ROAD CENTRAL / GARDEN ROAD [ILLEGIBLE]
- -------------------------- IL 8887 [ILLEGIBLE]
The property group of DWG TITLE: 63/F FLOOR PLAN
Hutchison Whampoa Property [LOGO] [ILLEGIBLE]
================================================================================
ALL PLANS ARE SUBJECT TO THE
AMENDED PLANS TO BE APPROVED
BY THE BUILDING AUTHORITY FOR IDENTIFICATION PURPOSE ONLY
<PAGE> 65
[GRAPHIC OMITTED]
65/F FLOOR PLAN
================================================================================
Hutchison Whampoa Property JOB NO.: 51219502 [ILLEGIBLE]
(Management & Agency) Ltd. ----------------------------------
JOB: CHEUNG KONG CENTER [ILLEGIBLE]
Hutchison Whampoa Property QUEEN'S ROAD CENTRAL / GARDEN ROAD [ILLEGIBLE]
- -------------------------- IL 8887 [ILLEGIBLE]
The property group of DWG TITLE: 65/F FLOOR PLAN
Hutchison Whampoa Property [LOGO] [ILLEGIBLE]
================================================================================
ALL PLANS ARE SUBJECT TO THE
AMENDED PLANS TO BE APPROVED
BY THE BUILDING AUTHORITY FOR IDENTIFICATION PURPOSE ONLY
<PAGE> 66
[GRAPHIC OMITTED]
66/F FLOOR PLAN
================================================================================
Hutchison Whampoa Property JOB NO.: 51219502 [ILLEGIBLE]
(Management & Agency) Ltd. ----------------------------------
JOB: CHEUNG KONG CENTER [ILLEGIBLE]
Hutchison Whampoa Property QUEEN'S ROAD CENTRAL / GARDEN ROAD [ILLEGIBLE]
- -------------------------- IL 8887 [ILLEGIBLE]
The property group of DWG TITLE: 66/F FLOOR PLAN
Hutchison Whampoa Property [LOGO] [ILLEGIBLE]
================================================================================
ALL PLANS ARE SUBJECT TO THE
AMENDED PLANS TO BE APPROVED
BY THE BUILDING AUTHORITY FOR IDENTIFICATION PURPOSE ONLY
<PAGE> 67
[GRAPHIC OMITTED]
67/F FLOOR PLAN
================================================================================
Hutchison Whampoa Property JOB NO.: 51219502 [ILLEGIBLE]
(Management & Agency) Ltd. ----------------------------------
JOB: CHEUNG KONG CENTER [ILLEGIBLE]
Hutchison Whampoa Property QUEEN'S ROAD CENTRAL / GARDEN ROAD [ILLEGIBLE]
- -------------------------- IL 8887 [ILLEGIBLE]
The property group of DWG TITLE: 67/F FLOOR PLAN
Hutchison Whampoa Property [LOGO] [ILLEGIBLE]
================================================================================
ALL PLANS ARE SUBJECT TO THE
AMENDED PLANS TO BE APPROVED
BY THE BUILDING AUTHORITY FOR IDENTIFICATION PURPOSE ONLY
<PAGE> 68
[GRAPHIC OMITTED]
68/F FLOOR PLAN
================================================================================
Hutchison Whampoa Property JOB NO.: 51219502 [ILLEGIBLE]
(Management & Agency) Ltd. ----------------------------------
JOB: CHEUNG KONG CENTER [ILLEGIBLE]
Hutchison Whampoa Property QUEEN'S ROAD CENTRAL / GARDEN ROAD [ILLEGIBLE]
- -------------------------- IL 8887 [ILLEGIBLE]
The property group of DWG TITLE: 68/F FLOOR PLAN
Hutchison Whampoa Property [LOGO] [ILLEGIBLE]
================================================================================
ALL PLANS ARE SUBJECT TO THE
AMENDED PLANS TO BE APPROVED
BY THE BUILDING AUTHORITY FOR IDENTIFICATION PURPOSE ONLY
<PAGE> 69
ENGINEERING SUMMARY
<PAGE> 70
ppe <1
Summary of Engineering Requirements
([ILLEGIBLE] General Power Back-up for Banking Floors Based on Additional Floor
for Every 2 Year Growth)
<TABLE>
<CAPTION>
Year Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8
- ---- ------ ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Area Requirement
Total area requirements (sf) 180000 180000 202500 202500 225000 225000 247500 247500 270000
Number of Floors Required 8 8 9 9 10 10 11 11 12
Space [ILLEGIBLE] (per existing facilities)
Office 68% 68% 68% 68% 68% 68% 68% 68% 68%
Trading 25% 25% 25% 25% 25% 25% 25% 25% 25%
Equipment Room 7% 7% 7% 7% 7% 7% 7% 7% 7%
Area Summary (Approx.)
Offices (sf) 122400 122400 137700 137700 153000 153000 168300 168300 183600
Trading (sf) 45000 45000 50625 50625 56250 56250 61875 61875 67500
Equipment room (sf) 12600 12600 14175 14175 15750 15750 17325 17325 18900
Engineering Requirements
Trading Floor (kw)
Cooling capacity (solar load not included) 828 828 932 932 1035 1035 1139 1139 1242
Equipment power supply (generator maintained) 644 644 724 724 804 804 885 885 965
Lighting power 90 90 101 101 113 113 124 124 135
Banking Floor (kw)
Cooling capacity (solar load not included) 979 979 1102 1102 1224 1224 1346 1346 1469
Equipment power supply (generator maintained) 490 490 551 551 612 612 673 673 734
Lighting power 245 245 275 275 306 306 337 337 367
Equipment Room (kw)
Cooling capacity (solar load not included) 977 977 1099 1099 1221 1221 1343 1343 1465
Equipment power supply (generator maintained) 927 927 1043 1043 1159 1159 1275 1275 1391
Lighting power 25 25 28 28 32 32 35 35 38
Total cooling capacity (solar load not included) (kw) 2784 2784 3132 3132 3480 3480 3820 3820 4176
Total normal power (kw) 2420 2420 2723 2723 3026 3026 3328 3328 3631
Total general power (kw) 2060 2060 2318 2318 2576 2576 2833 2833 3091
<CAPTION>
Year Year 9 Year 10 Year 11 Year 12
- ---- ------ ------- ------- -------
<S> <C> <C> <C> <C>
Area Requirement
Total area requirements (sf) 270000 292500 292500 315000
Number of Floors Required 12 13 13 14
Space [ILLEGIBLE] (per existing facilities)
Office 68% 68% 68% 68%
Trading 25% 25% 25% 25%
Equipment Room 7% 7% 7% 7%
Area Summary (Approx.)
Offices (sf) 183600 198900 198900 214200
Trading (sf) 67500 73125 73125 78750
Equipment room (sf) 18900 20475 20475 22050
Engineering Requirements
Trading Floor (kw)
Cooling capacity (solar load not included) 1242 1346 1346 1449
Equipment power supply (generator maintained) 965 1046 1046 1126
Lighting power 135 146 146 158
Banking Floor (kw)
Cooling capacity (solar load not included) 1469 1591 1591 1714
Equipment power supply (generator maintained) 734 796 796 857
Lighting power 367 398 398 428
Equipment Room (kw)
Cooling capacity (solar load not included) 1465 1587 1587 1709
Equipment power supply (generator maintained) 1391 1507 1507 1623
Lighting power 38 41 41 44
Total cooling capacity (solar load not included) (kw) 4176 4524 4524 4871
Total normal power (kw) 3631 3933 3933 4236
Total general power (kw) 3091 3348 3348 3606
</TABLE>
Notes
1. Cooling capacities do not include base building cooling such as solar
load.
2. Cooling plant for trading and equipment room shall be operating 7 days 24
hours with plant equipment backed up by generator supply.
3. Dedicated clean earthing [ILLEGIBLE] shall be provided to the leased
floors.
<PAGE> 1
Exhibit 21.1
Significant Subsidiaries of the Registrant
The following are significant subsidiaries of The Goldman Sachs Group, L.P.
as of November 27, 1998 and the states or jurisdictions in which they are
organized. Upon consummation of the Incorporation Transactions, such
subsidiaries will become subsidiaries of The Goldman Sachs Group, Inc., as
successor to The Goldman Sachs Group, L.P. Indentation indicates the
principal parent of each subsidiary. Except as otherwise specified, in each case
The Goldman Sachs Group, L.P. owns, directly or indirectly, at least 99% of the
voting securities of each subsidiary. The names of particular subsidiaries have
been omitted because, considered in the aggregate as a single subsidiary, they
would not constitute, as of the end of the year covered by this report, a
"significant subsidiary" as that term is defined in Rule 1.02(w) of Regulation
S-X under the Securities Exchange Act of 1934.
<TABLE>
<CAPTION>
<S> <C>
Name State or Jurisdiction of Entity
- ---- -------------------------------
The Goldman Sachs Group, L.P. Delaware
Goldman, Sachs & Co. New York
Goldman Sachs (Asia) Finance Holdings L.L.C. Delaware
Goldman Sachs (Asia) Finance Mauritius
Goldman Sachs (UK) L.L.C. Delaware
Goldman Sachs Holdings (U.K.) United Kingdom
Goldman Sachs International United Kingdom
J. Aron & Company (U.K.) United Kingdom
Goldman Sachs Equity Securities (U.K.) United Kingdom
Goldman Sachs International Finance United Kingdom
Goldman Sachs Capital Markets, L.P. Delaware
Goldman Sachs (Japan) Ltd. British Virgin Islands
J. Aron Holdings, L.P. Delaware
J. Aron & Company New York
Goldman Sachs Mortgage Company New York
Goldman Sachs Canada Canada
Goldman Sachs Credit Partners, L.P. Bermuda
Goldman Sachs Holdings (Netherlands) B.V. Netherlands
Goldman Sachs Mitsui Marine Derivative Products, L.P.(1) Delaware
GS Equity Markets, L.P. (Bermuda) Bermuda
Goldman Sachs Holdings L.L.C.(2) Delaware
Goldman Sachs International Bank United Kingdom
Goldman Sachs (Cayman) Holding Company Cayman Islands
Goldman, Sachs & Co. Bank Switzerland
Goldman, Sachs & Co. oHG Germany
</TABLE>
- ------------------------
(1) Represents a joint venture owned by Goldman Sachs Holdings (Netherlands)
B.V. (49%), Mitsui Marine and Fire Insurance Co., Ltd. (50%) and GSMMDPGP,
Inc. (1%).
(2) Represents a limited liability company owned by Goldman Sachs London
Holdings LLC (49%), Caterpillar Financial Services Corp. (50%) and The
Goldman Sachs Group, L.P. (1%).
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
------------------------
We consent to the inclusion in the Prospectus constituting part of this
Registration Statement on Form S-1 of, (i) our report dated January 22, 1999, on
our audits of the consolidated financial statements, selected historical
consolidated income statement and balance sheet data (other than adjusted
assets) and the financial statement schedule of The Goldman Sachs Group, L.P.
and Subsidiaries (the "Firm"); (ii) our report dated March 15, 1999 on our
examination of the Pro Forma Consolidated Financial Information as of November
27, 1998 and for the fiscal year then ended; and (iii) our report dated March
15, 1999 on our examination of Management's Discussion and Analysis of Financial
Condition and Results of Operations of the Firm for the three-year fiscal period
ended November 27, 1998. We also consent to the references to our firm under the
captions "Experts", "Summary Consolidated Financial Data", and "Selected
Consolidated Financial Data".
PricewaterhouseCoopers LLP
New York, New York
March 16, 1999.
<PAGE> 1
EXHIBIT 23.3
SECURITIES DATA COMPANY
We hereby consent to the use of the information we provided for use in the
Registration Statement relating to the offering shares of Common Stock by The
Goldman Sachs Group, Inc. and to the references to our name in the Registration
Statement, including under the caption "Experts".
Securities Data Company,
A division of Thomson Information Services
/s/ Kenneth J. Seng
- --------------------
Kenneth J. Seng
Director, Accounting Management
& Client Training
<TABLE> <S> <C>
<ARTICLE> BD <F1>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> NOV-27-1998
<PERIOD-START> DEC-01-1997<F2>
<PERIOD-END> NOV-27-1998
<CASH> 10,723
<RECEIVABLES> 19,274
<SECURITIES-RESALE> 37,484
<SECURITIES-BORROWED> 69,158
<INSTRUMENTS-OWNED> 70,679
<PP&E> 956<F3>
<TOTAL-ASSETS> 217,380
<SHORT-TERM> 27,430
<PAYABLES> 36,909
<REPOS-SOLD> 36,257
<SECURITIES-LOANED> 21,117
<INSTRUMENTS-SOLD> 55,895
<LONG-TERM> 19,906
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 210,996
<TRADING-REVENUE> 2,015<F4>
<INTEREST-DIVIDENDS> 15,010
<COMMISSIONS> 1,368<F5>
<INVESTMENT-BANKING-REVENUES> 3,368
<FEE-REVENUE> 717<F5>
<INTEREST-EXPENSE> 13,958
<COMPENSATION> 3,838
<INCOME-PRETAX> 2,921
<INCOME-PRE-EXTRAORDINARY> 2,921
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,428
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1>The amounts disclosed in the financial data summary should be read in
conjunction with the consolidated financial statements and the notes thereto.
<F2>Represents the first Monday of the period.
<F3>Included in other assets in the consolidated statement of financial condition.
<F4>Includes principal investments, which mainly represents revenues from
investments in merchant banking funds.
<F5>Included in revenues from asset management and securities services in the
consolidated statement of earnings.
</FN>
</TABLE>
