SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
_____________
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarter ended October 31, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File No. 1-25362
INFOSAFE SYSTEMS, INC.
(Exact Name of Small Business Issueras Specified in Its Charter)
Delaware 13-3645702
- ------------------------------- ----------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification Number)
342 Madison Avenue
Suite 622
New York, NY 10173
----------------------------------------
(Address of Principal Executive Offices)
(212) 867-7200
------------------------------------------------
(Issuer's Telephone Number, Including Area Code)
Not Applicable
----------------------------------------------------
(Former Name, Former Address and Former Fiscal Year,
if Changed Since Last Report)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
past 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes__X__ No_____
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date.
Class Outstanding at November 30, 1997:
------------------------------------ ---------------------------------
Class A Common Stock, $.01 par value 4,720,419 shares
Class B Common Stock, $.01 par value 1,372,137 shares
Traditional Small Business Disclosure Format
Yes__X__ No_____
INDEX TO FORM 10-QSB
PAGE
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets as of July 31, 1997 and
October 31, 1997 (Unaudited)........................................ 3
Consolidated Statements of Operations for the Three Months
ended October 31, 1996 and October 31, 1997 (Unaudited)
and for the period November 18, 1991 (Inception) through
October 31, 1997 (Unaudited).........................................4
Consolidated Condensed Statements of Cash Flows for the
Three Months ended October 31, 1996 and October 31, 1997
(Unaudited) and for the period November 18, 1991
(Inception) to October 31, 1997 (Unaudited)...........................5
Notes to Financial Statements...........................................6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.................................7-9
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K..............................10
SIGNATURES.............................................................11
INFOSAFE SYSTEMS, INC. AND SUBSIDIARY
(a development stage company)
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
July 31, 1997 October 31, 1997
--------------- ----------------
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 392,860 $ 157,732
Accounts receivable - net of allowance for doubtful accounts
of $6,500 ($5,000 July 31, 1997) 6,149 6,798
Marketable securities - available for sale 2,498,945 1,903,130
Prepaid expenses and other assets 169,853 162,153
--------------- ----------------
Total current assets 3,067,807 2,229,813
Fixed assets 232,838 249,319
Software development costs 0 222,561
Other assets 191,734 175,009
--------------- ----------------
Total assets $ 3,492,379 $ 2,876,702
LIABILITIES
Current liabilities:
Accounts payable $ 234,422 $ 160,012
Loan payable 27,180 27,180
Capital lease obligation 10,364 7,875
Purchase agreement 85,000 70,000
Accrued expenses 115,618 90,749
Due to stockholder 60,000 0
---------------- ----------------
Total current liabilities 532,584 355,816
---------------- ----------------
STOCKHOLDERS' EQUITY
Common stock:
Class A - par value $.01 per share, 40,000,000 shares authorized,
one vote per share; 4,720,419 shares issued and outstanding 47,204 47,204
Class B - par value $.001 per share, 2,000,000 shares authorized,
six votes per share; 1,372,566 shares issued and outstanding,
including 781,244 shares held in escrow 1,433 1,433
Class E-1 - par value $.01 per share 2,000,000 shares authorized,
one vote per share; 1,432,137 shares issued and to be issued
redemption value $.0001 per share 14,321 14,321
Class E-2 - par value $.01 per share 2,000,000 shares authorized,
one vote per share; 1,432,137 shares issued and to be issued
redemption value $.0001 per share 14,321 14,321
Additional paid-in capital 14,175,808 14,203,799
(Deficit) accumulated during development stage (11,302,220) (11,763,896)
Unrealized gain on marketable securities 8,928 3,704
---------------- ----------------
Total stockholder's equity 2,959,795 2,520,886
---------------- ----------------
Total liabilities and stockholders' equity $ 3,492,379 $ 2,876,702
---------------- ----------------
</TABLE>
Attention is directed to the accompanying notes to financial statments
INFOSAFE SYSTEMS, INC. AND SUBSIDIARY
(a development stage company)
Consolidated Statements of Operations
(Unaudited)
For the Three Months Period From
Ended October 31, November 18, 1991
----------------------------- (inception) through
1996 1997 October 31, 1997
----------------------------- -------------------
Revenue:
License Fees $ 350,000
Other $ 11,678 $ 3,150 262,313
------------ ------------ -------------------
Total 11,678 3,150 612,313
------------ ------------ -------------------
Expenses:
Cost of revenue 14,641 2,308 247,707
Operating expenses 505,590 504,152 10,880,982
Write-down of assets 30,000 0 977,356
------------ ------------ -------------------
Total 550,231 506,460 12,106,045
------------ ------------ -------------------
Operating (loss) (538,553) (503,310) (11,493,732)
Interest and investment
income 14,857 41,887 527,510
Settlement expense (394,828)
Minority interest 1,000
Interest expense (504) (253) (395,446)
------------ ------------ ------------------
Net (loss) $ (524,200) $ (461,676) $ (11,755,496)
------------ ------------ ------------------
Net (loss) per common
share $ (0.15) $ (0.09)
------------ ------------
Weighted average number
of common shares 3,468,614 5,311,741
------------ ------------
Attention is directed to the accompanying notes to finincial statements
INFOSAFE SYSTEMS, INC. AND SUBSIDIARY
(a development stage company)
Consolidated Condensed Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
For the Three Months Period From
Ended October 31, November 18, 1991
------------------------------- (inception) through
1996 1997 October 31, 1997
------------------------------- -------------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net (loss) $ (524,200) $ (461,676) $ (11,755,496)
Adjustments to reconcile net (loss) to
net cash (used in) operating activities:
Write-down of assets 30,000 0 977,356
Other net cash provided by (used in)
operating activities 124,676 (86,226) 1,398,809
-------------- ------------- -------------------
Net cash (used in) operating
activities (369,524) (547,902) (9,379,331)
-------------- ------------- -------------------
Cash flows from investing activities:
Purchases of marketable securities (339,238) (499,726) (15,804,276)
Sales of marketable securities 690,186 1,090,317 13,904,850
Other investing activities 10,650 (260,328) (1,845,884)
-------------- ------------- -------------------
Net cash provided by (used in)
investing activities 361,598 330,263 (3,745,310)
-------------- ------------- -------------------
Cash flows from financing activities:
Proceeds from issuance of common stock 16,075,260
Costs in connection with sale of
common stock (2,912,671)
Payment of purchase agreement (15,000) (157,840)
Exercise of warrants and options 60,000 424,895
Proceeds from bridge loan 1,500,000
Payment of bridge loan (1,500,000)
Payment of deferred financing costs (224,919)
Other financing activities (17,238) (2,489) 77,648
-------------- ------------- -------------------
Net cash provided by (used in)
financing activities 42,762 (17,489) 13,282,373
-------------- ------------- -------------------
Net increase (decrease) in cash and cash
equivalents 34,836 (235,128) 157,732
Cash and cash equivalents, beginning
of period 50,466 392,860
-------------- ------------- -------------------
Cash and cash equivalents, end of period $ 85,302 $ 157,732 $ 157,732
-------------- ------------- -------------------
</TABLE>
Attention is directed to the accompanying notes to financial statements
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
(Note A) Basis of Presentation and the Company:
(1) Basis of presentation:
The accompanying unaudited consolidated condensed financial statements
have been prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions
to Form 10-QSB and Article 3 of Regulation S-B. Accordingly, they do
not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In
the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for fair presentation have
been included. Operating results for the three-month period ended
October 31, 1997 and for the period from November 18, 1991 (inception)
to October 31, 1997 are not necessarily indicative of the results that
may be expected for the year ending July 31, 1998.
The consolidated balance sheet at July 31, 1997 has been derived from
the audited consolidated financial statements at that date but does
not include all the footnotes required by generally accepted
accounting principles for complete financial statements. For further
information, refer to the audited financial statements and footnotes
thereto included in the Form 10-KSB for the Company's fiscal year
ended July 31, 1997.
(2) Organization and business:
Infosafe Systems, Inc. (the "Company") is a development stage company
engaged in the design, development and marketing of systems for
securing, controlling, metering and auditing electronic products,
documents and programs for use in stand-alone applications, corporate
networks and open networks such as the Internet. The Company has
developed the AInfosafe7 System@ which meters the usage of
information and can release information on a "pay per use" basis. The
Company initially developed a hardware-based distribution system and
is currently developing software-based distribution systems utilizing
this technology.
(Note B) - Summary of Significant Accounting Policies:
Net loss per share of common shares is based on the weighted average
number of shares outstanding during the period excluding Class B
shares in escrow and all Class E-1 and Class E-2 shares.
Item 2: Management's Discussion and Analysis of Financial Condition
and Results of Operations
Except for the description of historical facts contained herein, this
Form 10-QSB contains certain forward-looking statements within the
meaning of the Asafe harbor@ provisions of the Private Securities
Litigation Reform Act of 1995 concerning applications of the Company's
technologies and the Company's proposed products and future prospects,
that involve risks and uncertainties, including the possibility that
the Company will (i) be unable to commercialize products based on its
technology, or (ii) that it will ever achieve profitable operations,
as detailed herein under AItem 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations@ and from time to
time in the Company's filings with Securities and Exchange Commission
and elsewhere. Such statements are based on management's current
expectations and are subject to a number of factors and uncertainties
which could cause actual results to differ materially from those
described in the forward-looking statements. The Company's actual
results could differ materially from those discussed herein.
Overview
The Company is a development stage company engaged in the design,
development and marketing of systems for securing, controlling,
metering and auditing electronic products, documents and programs, for
use in stand-alone applications, corporate networks and open networks
such as the Internet. From November 18, 1991 (inception) to October
31, 1997, the Company recognized revenues of approximately $612,000,
and had an accumulated deficit of approximately $11.8 million. The
Company has continued to operate at a deficit since inception and
expects to continue to operate at a deficit until such time, if ever,
as operations generate sufficient revenues to cover costs. The
Company ability to generate revenues and operate profitably, and
continue as a going concern, is dependent on its ability to launch and
market the new product lines developed by its majority-owned
subsidiary Internet Commerce Corporation (ICC), as well as its ability
to commercialize the advanced imaging applications licensed from Visus
Technologies Inc. The likelihood of the success of the Company must
be considered in light of the difficulties and risks inherent in a new
business. There can be no assurance that revenues will increase
significantly in the future or that the Company will ever achieve
profitable operations.
In February and March, 1997, the Company realized net
proceeds of approximately $4,165,000 from gross proceeds of $5,050,000
raised in a private placement (the "1997 Private Placement") of
1,603,200 IPO Units. Each IPO unit consists of one share of Class A
Common Stock, 1.1172 redeemable Class A Warrants and 1.1172 redeemable
Class B Warrants. As a result of the sale of the securities in the
1997 Private Placement, pursuant to the anti-dilution provisions
contained in the Class A Warrants and the Class B Warrants, the
purchase price to be paid upon exercise of each Class A Warrant and
Class B Warrant of the Company by the holder of such warrants has been
adjusted from $6.50 to $5.82 for the Class A Warrants and from $8.75
to $7.83 for the Class B Warrants. Further, as a result of the 1997
Private Placement, an additional 0.11721 Class A Warrants were issued
for each outstanding Class A Warrant and an additional 0.11721 Class B
Warrants were issued for each outstanding Class B Warrant.
Accordingly, an aggregate of an additional 494,623 Class A Warrants
and 396,830 Class B Warrants were issued by the Company to holders of
outstanding Class A Warrants and Class B Warrants respectively,
resulting in an aggregate of 4,714,718 Class A Warrants and 3,782,550
Class B Warrants outstanding. Additionally, the Company has extended
the expiration date of the Class A Warrants and the Class B Warrants
to February 18, 2002.
The Company has incurred substantial losses since inception and
anticipates losses to continue through the fiscal year ending July 31,
1998 ("Fiscal 1998") as the Company attempts to seek commercial
markets for its products and attempts to develop new applications for
its technology. The net proceeds of the 1997 Private Placement were
partially used to form and purchase a majority interest in ICC and to
license Visus' technology, and is being used for the development and
marketing of the new product lines. Although management believes that
the Company will develop and market the new line of Electronic
Commerce (EC) and advanced imaging products and services, there can be
no assurance that it will be able to do so or that its present
resources or access to additional financing will be adequate, if
available at all, to achieve these objectives or to continue as a
going concern.
Results of Operations
Three Months Ended October 31, 1997 Compared with Three Months Ended
October 31, 1996.
Revenues were approximately $3,000 and $12,000, respectively, for the
three months ended October 31, 1997 (the "1997 Three Months@), and for
the three months ended October 31, 1996 (the "1996 Three Months@).
The 1997 Three Months revenues were generated from ICC consulting.
The 1996 Three Months revenues were generated from Design Pallet which
is no longer supported by the Company.
Operating expenses were approximately $504,000 for the 1997 Three
Months and approximately $506,000 for the 1996 Three Months.
Administrative expenses increased approximately $77,000 and Technical
expenses increased approximately $144,000 from the comparable period a
year ago, but were offset by the capitalization of software
development costs of approximately $223,000 not present in the prior
year period.
For the 1996 Three months, assets held for lease were written down by
$30,000.
The Company had income from investments of approximately $42,000 for
the 1997 Three Months and approximately $15,000 in the 1996 Three
Months. The increase is due to an increase in average balances of
investment securities for the period.
Interest expense was approximately $400 in the 1997 Three Months and
approximately $500 in the 1996 Three Months. Interest expense is
attributed to the financing of capital assets.
The net loss for the 1997 Three Months was $461,676 compared to
$524,200 for the 1996 Three Months. Management believes that losses
will continue through fiscal 1998 as the Company is still in the
development stage and is in the process of commercializing and
marketing new products.
Liquidity and Capital Resources
The Company has incurred substantial losses since inception. Although
no assurance can be given, the Company anticipates that revenues may
be generated commencing with the fiscal quarter ending April 30, 1998,
although as a result of increased expenses associated with any such
revenues, losses may increase, or the decrease in losses realized in
fiscal 1998 compared to fiscal 1997 may not be similarly realized in
fiscal 1998 compared to fiscal 1997.
At October 31, 1997, the Company had working capital of approximately
$1.9 million. The Company has financed its operations through private
placements during fiscal 1994, its initial public offering during
fiscal 1995 (the "IPO") and a private placement in March 1997. The
Company anticipates losses through fiscal 1998 as the Company attempts
to market its products and develop new applications for its
technologies. The Company does not have sufficient financial
resources to continue its operations beyond fiscal 1998 without
obtaining additional financing. There can be no assurance that the
Company will be able to obtain the necessary financing or to generate
sufficient revenue to continue its operations and continue as a going
concern. Any additional equity financing would be dilutive to
stockholders, and debt financing, if available, may contain covenants
that might restrict the Company's ability to implement its current
objectives.
The Company has a net operating loss carryforward of approximately
$10.4 million to offset future taxable income for federal tax
purposes. The utilization of the loss carryforward to reduce future
income taxes will depend on the Company's ability to generate
sufficient taxable income prior to the expiration of the net operating
loss carryforwards. The carryforward expires from 2007 to 2012. The
Internal Revenue Code of 1986, as amended, contain provisions which
limit the use of available net operating loss carryforwards in any
given year should significant changes (greater than 50%) in ownership
interests occur. Due to the IPO, the net operating loss carryover of
approximately $1,900,000 incurred prior to the IPO will be subject to
an annual limitation of approximately $400,000 until that portion of
the net operating loss is utilized or expires.
PART II. OTHER INFORMATION
Item 5: Other Information
On September 18, 1997, Stanley Bielak was appointed to the Company's
Board of Directors to fill the vacancy created by the resignation of
Thomas H. Lipscomb.
Item 6: Exhibits and Reports on Form 8-K
(a) Exhibit(s).
Number Description Method of Filing
------ --------------------------- ------------------------
10.17 Lease for Executive Offices Filed with this Document
27 Financial Data Schedule Filed with this Document
(b) Reports on Form 8-K
There were no reports on Form 8-K filed for the quarter ending October
31, 1997.
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of
1934, the registrant has caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
INFOSAFE SYSTEMS, INC.
Dated: December 12, 1997 By:_/s/_Arthur R. Medici_________________
Arthur R. Medici, President, Chief
Executive Officer, Director (Principal
Executive Officer)
By:_/s/_Alan N. Alpern___________________
Alan N. Alpern, Chief Financial
Officer (Principal Financial Officer)
By:_/s/_Walter M. Psztur_________________
Walter M. Psztur, Controller and
Secretary (Principal Accounting
Officer)
INDENTURE OF LEASE made this day of ,
1997, between 805 THIRD AVE. CO., a New York limited partnership,
having an office at 750 Lexington Avenue, New York, New York 10022
("Landlord") and INFOSAFE SYSTEMS, INC., a New York corporation having
an office at 342 Madison Avenue, Suite 622, New York, New York 10173
("Tenant").
W I T N E S S E T H :
ARTICLE 1
Premises; Term
Landlord hereby leases to Tenant and Tenant hereby hires
from Landlord the following space ("Demised Premises"): part of the
9th floor as shown crosshatched on the floor plan (Schedule A)
attached hereto, in the office building known as and by the street
number 805 Third Avenue, in the Borough of Manhattan, City and State
of New York ("Building"), upon and subject to the terms, covenants and
conditions hereafter set forth.
TO HAVE AND TO HOLD the Demised Premises unto Tenant for a
term commencing on the "Commencement Date", as defined in Article 2
hereof, and ending on a date (the "Expiration Date") which shall be
seven (7) years after the Commencement Date, plus the number of days
required, if any, to have such term expire on the last day of a
calendar month, or on such earlier date upon which said term may
expire or terminate pursuant to the conditions of this Lease or
pursuant to law.
IT IS MUTUALLY COVENANTED AND AGREED between Landlord and
Tenant as follows:
ARTICLE 2
Commencement of Term
Section 2.01. The term of this Lease and the payment of
minimum rent hereunder shall commence on the date that Landlord's work
in the Demised Premises shall be deemed substantially completed (the
"Commencement Date"). The Demised Premises shall be deemed
substantially completed when Landlord has substantially performed the
work required to be performed pursuant to Schedule B hereof, and
Landlord shall deliver possession of the Demised Premises on the
Commencement Date. Except as set forth on Schedule B, Landlord shall
have no obligation to perform any other work in connection with
preparing the Demised Premises for Tenant's occupancy. Landlord's
work shall be deemed to be substantially completed even though minor
details or adjustments, none of which materially interfere with
Tenant's access to and use of the Demised Premises may not then have
been completed, but Landlord agrees, at its sole cost and expense, to
promptly thereafter complete all unfinished work. However, if Tenant
shall enter into possession of the Demised Premises and commence the
conduct of its business, the Commencement Date shall be the date of
such entry regardless of whether the foregoing events shall have
occurred.
Section 2.02. Tenant has fully inspected the Demised
Premises, is familiar with the condition thereof and agrees to accept
possession of the same on the Commencement Date in their present "As
Is" condition, except for Landlord's work set forth in Schedule B.
Section 2.03. If, prior to the Commencement Date, Tenant
shall enter the Demised Premises to make any installations, Landlord
shall have no liability or obligation for the care or preservation of
Tenant's property.
Section 2.04. Promptly after the Commencement Date,
Landlord and Tenant shall execute a statement in recordable form
confirming the agreed upon Commencement and Expiration Dates of this
Lease, in accordance with the foregoing provisions.
ARTICLE 3
Rent
Section 3.01. Tenant shall pay as rent for the Demised
Premises, the following:
(a) a fixed minimum rent (the "minimum rent") at
the annual rate of $203,150 per annum (or $16,929.17 per month),
provided if the Commencement Date is not the first day of a month,
then the minimum rent for such month shall be prorated; and
(b) all other sums and charges required to be paid
by Tenant under the terms of this Lease (including without limitation,
the payments required to be made under Article 22), which shall be
deemed to be and are sometimes referred to hereafter as additional
rent.
Section 3.02. Notwithstanding the provisions of Section
3.01 hereof and provided Tenant is not then in default under any of
the provisions of this Lease on its part to be performed, Tenant shall
be entitled to an abatement of part of the minimum rent only as
follows: the amount of $15,435.42 for each of the 1st, 2nd, 3rd,
4th, 5th, 6th, 7th and 8th months of the term succeeding the
Commencement Date and the balance of minimum rent for each such month
of $1,493.75 shall be payable by Tenant. Tenant acknowledges that the
consideration for the aforesaid abatement of minimum rent is Tenant's
agreement to perform all of the terms, covenants and conditions of
this Lease on its part to be performed. Therefore, if Tenant shall
default under any of such terms, covenants and conditions of this
Lease, the aggregate amount of all minimum rent that was abated shall
immediately thereafter become due and payable by Tenant to Landlord.
In the event of Tenant's failure to pay such aggregate amount to
Landlord, Landlord shall be entitled to the same rights and remedies
as in the event of Tenant's default in the payment of minimum rent.
Tenant shall be required to pay additional rent and all other sums
from and after the Commencement Date.
Section 3.03. The minimum rent shall be payable in equal
monthly installments in advance on the first day of each and every
month during the term of this Lease, except that the first installment
of $16,929.17 shall be paid upon the execution of this Lease and shall
be applied to payment of the minimum rent for the ninth (9th) month of
the term succeeding the Commencement Date.
Section 3.04. Tenant shall pay the minimum rent and
additional rent in lawful money of the United States which shall be
legal tender for the payment of all debts, public and private, at the
time of payment.
Landlord and Tenant agree that, from this day forward,
Tenant shall pay all rent, additional rent and other amounts now due
or hereafter to become due to the Landlord or its agents under or in
connection with this Lease, any tenant improvement or other similar
agreement(s) and/or any other agreement executed or delivered in
connection therewith (or the Demised Premises thereunder), including,
without limitation, minimum rent, additional rent, "escalations",
"pass-throughs", contributions or reimbursement on account of Tenant
or other work, and all other items of rent and additional rent
(collectively, the "Rents") (as and when due) directly to the
following lock-box account:
CRE-805 Third Avenue Rent
P.O. Box 7247-7552
Philadelphia, Pennsylvania 19170-7552
All Rent checks shall be made payable to the "805 Third Avenue Rent
Account."
Landlord hereby irrevocably and unconditionally authorizes
Tenant to rely upon and comply with any additional or other demands
from Citibank, N.A. for the payment of any Rents due or to become due
and, in each such case, Landlord will in no event have any claim or
right against Tenant for any Rents paid by Tenant as provided above in
this Section.
The provisions of this Section shall not be modified,
amended, terminated or supplemented without the prior written consent
of Citibank, N.A. in each instance.
Section 3.05. The minimum rent and additional rent shall
be payable by Tenant without any set-off, abatement or deduction
whatsoever and without notice or demand, except as otherwise expressly
provided herein.
ARTICLE 4
Use
Section 4.01. Tenant shall use and occupy the Demised
Premises for administrative, executive and general office purposes
only.
Section 4.02. Notwithstanding the provisions of Section
4.01, Tenant shall not use or allow the use of the Demised Premises or
any part thereof (1) for the cooking and/or sale of food; (2) for
storage for sale of any alcoholic beverage in the Demised Premises;
(3) for storage for and/or sale of any product or material from the
Demised Premises, subject to (1) above; (4) for manufacturing or
printing purposes; (5) for the conduct of a school or training
facility or conduct of any business which results in the presence of
the general public in the Demised Premises; (6) for the conduct of the
business of an employment agency or personnel agency; (7) for the
conduct of any public auction, gathering, meeting or exhibition; (8)
for occupancy by a foreign, United States, state, municipal or other
governmental or quasi-governmental body, agency or department or any
authority or other entity which is affiliated therewith or controlled
thereby and which has diplomatic or sovereign immunity or the like
with respect to a commercial lease; (9) for messenger or delivery
service (excluding Tenant's or any subtenant's own employees); (10) as
a public stenographer or typist; (11) as a telephone or telegraph
agency; (12) as medical offices; (13) as a travel agency; (14) as a
dating service; (15) as a restaurant.
Section 4.03. If any governmental license or permit,
other than a Certificate of Occupancy or any license or permit
required for the proper and lawful conduct of Tenant's business in the
Demised Premises, or any part thereof, and if failure to secure such
license or permit would in any way affect Landlord, Tenant, at its
expense, shall duly procure and thereafter maintain such license or
permit and submit the same for inspection by Landlord. Tenant shall
at all times comply with the terms and conditions of each such license
or permit.
Section 4.04. Tenant shall not at any time use or
occupy, or permit anyone to use or occupy, the Demised Premises, or do
or permit anything to be done in the Demised Premises, in violation of
the Certificate of Occupancy, for the Demised Premises or for the
Building, and will not permit or cause any act to be done or any
condition to exist on the Demised Premises which may be dangerous
unless safeguarded as required by law, or which in law constitutes a
nuisance, public or private, or which may make void or voidable any
insurance then in force covering the Building and building equipment.
ARTICLE 5
Alterations, Fixtures
Section 5.01. Tenant, without Landlord's prior consent,
shall make no alterations, installations, additions, decorations or
improvements in or to the Demised Premises ("work") including, but not
limited to, a water cooler, an air-conditioning or cooling system, or
any unit or part thereof or other apparatus of like or other nature,
railings, mezzanine floors, galleries and the like. If any
contractor, other than Landlord, shall perform work, such contractor
shall first be approved by Landlord, and as a condition of such
approval, Tenant shall pay to Landlord ten (10%) percent of the cost
of such work for supervision, coordination and other expenses incurred
by Landlord in connection therewith. Workers' Compensation and public
liability insurance and property damage insurance, all in amounts and
with companies and/or forms reasonably satisfactory to Landlord, shall
be provided and at all times maintained by Tenant's contractors
engaged in the performance of the work, and before proceeding with the
work, certificates of such insurance shall be furnished to Landlord.
If consented to by Landlord, all such work shall be done at Tenant's
sole expense and in full compliance with all governmental authorities
having jurisdiction thereover. Upon completion of such work, Tenant
shall deliver to Landlord full scale "as built" plans for the same.
All work affixed to the realty or if not so affixed but for which
Tenant shall have received a credit, shall become the property of
Landlord, and shall remain upon, and be surrendered with, the Demised
Premises as a part thereof at the end of the term or any renewal or
extension term, as the case may be, without allowance to Tenant or
charge to Landlord, unless Landlord elects otherwise on notice to
Tenant given at any time prior to or on any termination of this Lease.
However, if Landlord shall elect, otherwise, Tenant at Tenant's
expense, at or prior to any termination of this Lease, shall remove
all such work or such portion thereof as Landlord shall elect and
Tenant shall restore the Demised Premises to its original condition,
at Tenant's expense. If any Building facilities or services,
including but not limited to air-conditioning and ventilating
equipment installed by Landlord, are adversely affected or damaged by
reason of the work by Tenant, Tenant, at its expense, shall repair
such damage to the extent such damage has been caused by Tenant's work
and shall correct the work so as to prevent any further damage or
adverse effect on such facilities or services.
Section 5.02. Prior to commencing any work pursuant to
the provisions of Section 5.01, Tenant shall furnish to Landlord:
(a) Plans and specifications for the work to be
done.
(b) Copies of all governmental permits and
authorizations which may be required in connection with such work.
(c) A certificate evidencing that Tenant (or
Tenant's contractor) has procured workmen's compensation insurance
covering all persons employed in connection with the work who might
assert claims for death or bodily injury against Overlandlord, as
defined in Article 25, Landlord, Tenant or the Building.
(d) Such additional personal injury and property
damage insurance (over and above the insurance required to be carried
by Tenant pursuant to the provisions of Section 9.03) as Landlord may
reasonably require because of the nature of the work to be done by
Tenant.
(e) A bond or other security satisfactory to
Landlord, in the amount of one hundred ten (110%) percent of the cost
of the work, to insure completion of such work.
Section 5.03. Where furnished by or at the expense of
Tenant (except the replacement of an item theretofore furnished and
paid for by Landlord or for which Tenant has received a credit), all
movable property, furniture, furnishings, roller files, equipment and
trade fixtures ("personalty") other than those affixed to the realty
shall remain the property of and shall be removed by Tenant on or
prior to any termination or expiration of this Lease, and, in the case
of damage by reason of such removal, Tenant, at Tenant's expense,
promptly shall repair the damage. If Tenant does not remove any such
personalty, Landlord, at its election, (a) may cause the personalty to
be removed and placed in storage at Tenant's expense or (b) may treat
the personalty as abandoned and may dispose of the personalty as it
sees fit without accounting to Tenant for any proceeds realized upon
such disposal.
Section 5.04. Tenant agrees that the exercise of its
rights pursuant to the provisions of this Article 5 shall not be done
in a manner which would create any work stoppage, picketing, labor
disruption or dispute or violate Landlord's union contracts affecting
the Building or interfere with the business of Landlord or any Tenant
or occupant of the Building. In the event of the occurrence of any
condition described above arising from the exercise by Tenant of its
right pursuant to the provisions of this Article 5, Tenant shall,
immediately upon notice from Landlord, cease the manner of exercise of
such right giving rise to such condition. In the event Tenant fails
to cease such manner of exercise of its rights as aforesaid, Landlord,
in addition to any rights available to it under this Lease and
pursuant to law, shall have the right to injunction without notice.
With respect to Tenant's work, except for work done prior to the
Commencement Date, Tenant shall make all arrangements for, and pay all
expenses incurred in connection with, use of the freight elevators
servicing the Demised Premises during those hours other than as
provided in Section 21.01(a) in accordance with Landlord's customary
charges therefor.
ARTICLE 6
Repairs
Section 6.01. Tenant shall take good care of the Demised
Premises and the fixtures therein and all portions of the HVAC,
mechanical, plumbing and electrical systems within and exclusively
serving the Demised Premises, and at its sole cost and expense make
all repairs thereto as and when needed to preserve them in good
working order and condition. All damage or injury to the Demised
Premises or the Building or to any building equipment caused by Tenant
moving property in or out of the Building or by installation or
removal of personalty or resulting from negligence or conduct of
Tenant, its employees, agents, contractors, customers, invitees and
visitors, shall be repaired, promptly by Tenant at Tenant's expense,
and whether or not involving structural changes or alterations, to the
satisfaction of Landlord. All repairs shall include replacements or
substitutions where necessary and shall be at least equal to the
quality, class and value of the property repaired, replaced or
substituted and shall be done in a good and workmanlike manner.
Section 6.02. Landlord, at its expense, shall maintain
and make all repairs and replacements, structural and otherwise, to
the exterior and public portions of the Building and to the Demised
Premises, unless Tenant is required to make them under the provisions
of Section 6.01 or unless required as a result of the performance or
existence of alterations performed by Tenant or on Tenant's behalf, in
which event Tenant, at its expense, shall perform such maintenance,
repairs or replacements. Tenant shall notify Landlord of the
necessity for any repairs for which Landlord may be responsible in the
Demised Premises under the provisions of this Section. Landlord shall
have no liability to Tenant by reason of any inconvenience, annoyance,
interruption or injury to business 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 any portion of the
Building or the Demised Premises, or in or to the fixtures, equipment
or appurtenances of the Building or the Demised Premises.
Section 6.03. Tenant shall not store or place any
materials or other obstructions in the lobby or other public portions
of the Building, or on the sidewalk abutting the Building.
ARTICLE 7
Floor Load; Noise
Section 7.01. Tenant shall not place a load upon any
floor of the Demised Premises which exceeds the load per square foot
which such floor was designed to carry (50 lbs. live per square foot)
and which is allowed by law.
Section 7.02. Business machines and mechanical equipment
belonging to Tenant which cause noise, vibration or any other nuisance
that may be transmitted to the structure or other portions of the
Building or to the Demised Premises, to such a degree as to be
reasonably objectionable to Landlord or which interfere with the use
or enjoyment by other tenants of their premises or the public portions
of the Building, shall be placed and maintained by Tenant, at Tenant's
expense, in settings of cork, rubber or spring type vibration
eliminators sufficient to eliminate such objectionable or interfering
noise or vibration.
ARTICLE 8
Laws, Ordinances, Requirements of Public Authorities
Section 8.01. (a) Tenant, at its expense, shall
comply with all laws, orders, ordinances, rules and regulations and
directions of Federal, State, County and Municipal authorities and
departments thereof having jurisdiction over the Demised Premises and
the Building ("Governmental Requirements") referable to Tenant or the
Demised Premises, whether or not arising by reason of Tenant's
occupancy, use or manner of use of the Demised Premises or any
installations made therein by or at Tenant's request, or any default
by Tenant under this Lease.
(b) Landlord, at its expense, shall comply with and
cure Governmental Requirements relating to the public portions of the
Building and to the Demised Premises, provided non-compliance will
materially curtail Tenant's use or access to the Demised Premises and
provided that Tenant is not obligated to comply with them under the
provisions of subdivision (a) of this Section. Landlord, at its
expense, may contest the validity of any Governmental Requirements and
postpone compliance therewith pending such contest.
Section 8.02. If Tenant receives written notice of any
violation of any Governmental Requirements applicable to the Demised
Premises, it shall give prompt notice thereof to Landlord.
Section 8.03. Tenant will not clean, nor allow any
window in the Demised Premises to be cleaned, from the outside in
violation of Section 202 of the Labor Law or the rules of the Board of
Standards and Appeals or of any other board or body having or
asserting jurisdiction.
Section 8.04. Landlord represents that there are no
asbestos containing materials in the Demised Premises.
ARTICLE 9
Insurance
Section 9.01. Tenant shall not do or permit to be done
any act or thing in or upon the Demised Premises which will invalidate
or be in conflict with the Certificate of Occupancy for the Building
or the terms of the insurance policies covering the Building and the
property and equipment therein; and Tenant, at its expense, shall
comply with all rules, orders, regulations and requirements of the New
York Board of Fire Underwriters or any other similar body having
jurisdiction, and of the insurance carriers, and shall not knowingly
do or permit anything to be done in or upon the Demised Premises in a
manner which increases the rate of insurance for the Building or any
property or equipment therein over the rate in effect on the
Commencement Date.
Section 9.02. If, by reason of Tenant's failure to
comply with the provisions of Section 9.01 or any of the other
provisions of this Lease, the rate of insurance for the Building or
the property and equipment of Landlord shall be higher than on the
Commencement Date, Tenant shall pay to Landlord any additional or
increased insurance premiums to the extent resulting therefrom
thereafter paid by Landlord, and Tenant shall make such payment
forthwith on demand of Landlord. In any action or proceeding wherein
Landlord and Tenant are parties, a schedule or "make up" of any
insurance rate for the Building or Demised Premises issued by the New
York Fire Insurance Exchange, or other body establishing fire
insurance rates for the Building, shall be conclusive evidence of the
facts therein stated and of the several items and charges in the
insurance rates then applicable to the Building or Demised Premises.
Section 9.03. (a) Tenant covenants to provide on or
before the Commencement Date and to keep in force during the term
hereof, the following insurance coverage:
(i) For the benefit of Landlord, Tenant and
Overlandlord (as defined in Article 25), a comprehensive policy of
liability insurance protecting and indemnifying Landlord, Tenant and
the Overlandlord against any and all claims for personal injury, death
or property damage occurring upon, in or about the Demised Premises,
and the public portions of the Building in connection with any act of
Tenant, its employees, agents, contractors, customers, invitees and
visitors including, without limitation, personal injury, death or
property damage resulting from any work performed by or on behalf of
Tenant, with coverage of not less than $3,000,000.00 combined single
limit for personal injury, death and property damage arising out of
one occurrence or accident.
(ii) Fire and extended coverage in an amount
adequate to cover the cost of replacement of all personal property,
fixtures, furnishings and equipment, including Landlord's work, as set
forth in Schedule B, and Tenant's work (as referred to in Section
5.01), located in the Demised Premises.
(b) All such insurance shall (i) be effected under
valid and enforceable policies, (ii) be issued by insurers of
recognized responsibility authorized to do business in the State of
New York, (iii) contain a provision whereby the insurer agrees not to
cancel the insurance without ten (10) days' prior written notice to
Landlord, and (iv) contain a provision that no act or omission of
Tenant shall result in forfeiture of the insurance as against
Landlord.
On or before the Commencement Date, Tenant shall deliver to
Landlord duplicate originals of the aforesaid policies or certificates
evidencing the aforesaid insurance coverage, and renewal policies or
certificates shall be delivered to Landlord at least thirty (30) days
prior to the expiration date of each policy with proof of payment of
the premiums thereof.
Section 9.04. Landlord and Tenant shall each secure an
appropriate clause in, or an endorsement upon, each fire or extended
coverage policy obtained by it and covering the Building, the Demised
Premises or the personal property, fixtures and equipment located
therein or thereon, pursuant to which the respective insurance
companies waive subrogation or permit the insured, prior to any loss,
to agree with a third party to waive any claim it might have against
said third party. The waiver of subrogation or permission for waiver
of any claim herein before referred to shall extend to the agents of
each party and its employees and, in the case of Tenant, shall also
extend to all other persons and entities occupying or using the
Demised Premises in accordance with the terms of this lease. If and
to the extent that such waiver or permission can be obtained only upon
payment of an additional charge, then, the party benefitting from the
waiver or permission shall pay such charge upon demand, or shall be
deemed to have agreed that the party obtaining the insurance coverage
in question shall be free of any further obligations under the
provisions hereof relating to such waiver or permission.
Subject to the foregoing provisions of this Section 9.05,
and insofar as may be permitted by the terms of the insurance policies
carried by it, (i) each party hereby releases the other with respect
to any claim (including a claim for negligence) which it might
otherwise have against the other party for loss, damages or
destruction with respect to its property by fire or other casualty
(including rental value or business interruption, as the case may be)
occurring during the term of this Lease covered by insurance and (ii)
Tenant releases other tenants but only to the extent that the policies
of such other tenants permit a similar waiver for the benefit of
Tenant and such other tenant gives such a waiver.
ARTICLE 10
Damage by Fire or Other Cause
Section 10.01. If the Demised Premises shall be damaged
by fire or other casualty, the damage shall be repaired by and at the
expense of Landlord and the minimum rent until such repairs shall be
made, shall be apportioned according to the part of the Demised
Premises which is usable by Tenant. Landlord shall have no
responsibility to repair any damage to Landlord's work performed
pursuant to Schedule B or Tenant's work (as referred to in Section
5.01), the same being the responsibility of Tenant. No penalty shall
accrue for delays which may arise by reason of adjustment of insurance
by Landlord, unavoidable delays (as hereinafter defined), or any other
cause beyond Landlord's reasonable control. Tenant shall give notice
to Landlord promptly upon learning thereof in case of fire or other
damage to the Demised Premises. If the Demised Premises are totally
or substantially damaged or are rendered wholly or substantially
unusable by fire or any such other casualty, or if the Building shall
be so damaged that Landlord shall decide to demolish it or to rebuild
it (whether or not the Demised Premises shall have been damaged),
Landlord at its election may terminate this Lease by written notice to
Tenant, within ninety (90) days after such fire or other casualty, and
thereupon the term of this Lease shall expire by lapse of time upon
the tenth (10th) day after such notice is given, and Tenant shall
vacate and surrender the Demised Premises to Landlord. Tenant shall
not be liable under this Lease for anything accruing after the date of
such expiration. Tenant hereby waives the provisions of Section 227
of the Real Property Law, and the provisions of this Article shall
govern and control in lieu thereof. If the damage is due to the fault
or neglect of Tenant, the debris shall be removed by, and at the
expense of, Tenant.
Section 10.02. No damages of compensation shall be
payable by Landlord nor shall Tenant make any claim for inconvenience,
loss of business or annoyance arising from any repair or restoration
of any portion of the Demised Premises or of the Building. Landlord
shall use its best efforts to commence and effect such repairs
promptly and in such manner as not to unreasonably interfere with
Tenant's occupancy.
ARTICLE 11
Assignment, Subletting, Mortgaging
Section 11.01. Tenant will not, by operation of law or
otherwise, assign, mortgage or encumber this Lease, or sublet or
permit the Demised Premises or any part thereof to be used by others,
without Landlord's prior written consent in each instance. If this
Lease be assigned, or if the Demised Premises or any part thereof be
underlet or occupied by anybody other than Tenant, Landlord, may,
after default by Tenant, collect rent from the assignee, undertenant
or occupant, and apply the net amount collected to the rent herein
reserved, but no assignment, underletting, occupancy or collection
shall be deemed a waiver of the provisions hereof, the acceptance of
the assignee, undertenant 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 any
assignment, subletting, mortgage or encumbrance shall not in any
manner be construed to relieve Tenant from obtaining Landlord's
express consent to any other or further assignment, subletting,
mortgage or encumbrance. In no event shall any permitted sublessee
assign or encumber its sublease or further sublet all or any portion
of its sublet space, or otherwise suffer or permit the sublet space or
any part thereof to be used or occupied by others, without Landlord's
prior written consent in each instance.
Section 11.02. 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 Demised Premises, Tenant shall give notice thereof
to Landlord, which notice shall be accompanied by (a) a conformed or
photostatic copy of the proposed assignment or sublease, the effective
or commencement date of which shall be not less than thirty (30) nor
more than 180 days after the giving of such notice, (b) a statement
setting forth in reasonable detail the identity of the proposed
assignee or subtenant, the nature of its business and its proposed use
of the Demised Premises, and (c) current financial information with
respect to the proposed assignee or subtenant, including, without
limitation, its most recent financial report. Such notice shall be
deemed an offer from Tenant to Landlord whereby Landlord (or
Landlord's designee) may, at its option, (i) sublease such space
(hereinafter called the "Leaseback Space") from Tenant upon the terms
and conditions hereinafter set forth (if the proposed transaction is a
sublease of all or substantially all or part of the Demised Premises),
(ii) terminate this Lease (if the proposed transaction is an
assignment or a sublease of all of substantially all of the Demised
Premises), or (iii) terminate this Lease with respect to the Leaseback
Space (if the proposed transaction is a sublease of part of the
Demised Premises). Said options may be exercised by Landlord by
notice to Tenant at any time within thirty (30) days after such notice
has been given by Tenant to Landlord; and during such thirty (30) day
period Tenant shall not assign this Lease nor sublet such space to any
person.
Section 11.03. If Landlord exercises its option to
terminate this Lease in the case where Tenant desires either to assign
this Lease or sublet all or substantially all of the Demised Premises,
then, this Lease shall end and expire on the date that such assignment
or sublet was to be effective or commence, as the case may be, and the
minimum rent and additional rent shall be paid and apportioned to such
date.
Section 11.04. If Landlord exercises its option to
terminate this Lease in part in any case where Tenant desires to
sublet part of the Demised Premises, then, (a) this Lease shall end
and expire with respect to such part of the Demised Premises on the
date that the proposed sublease was to commence; and (b) from and
after such date the minimum rent and additional rent shall be
adjusted, based upon the proportion that the rentable area of the
Demised Premises remaining bears to the total rentable area of the
Demised Premises; and (c) Tenant shall pay to Landlord, upon demand,
the costs incurred by Landlord in physically separating such part of
the Demised Premises from the balance of the Demised Premises and in
complying with any laws and requirements of any public authorities
relating to such separation.
Section 11.05. If Landlord exercises its option to
sublet the Leaseback Space, such sublease to Landlord or its designee
(as subtenant) shall be at the lower of (i) the rental rate per
rentable square foot of minimum rent and additional rent then payable
pursuant to this Lease or (ii) the rentals set forth in the proposed
sublease, and shall be for the same term as that of the proposed
subletting, and such sublease:
(a) shall be expressly subject to all of the
covenants, agreements, terms, provisions and conditions of this Lease
except such as are irrelevant or inapplicable, and except as otherwise
expressly set forth to the contrary in this Section;
(b) Such sublease shall be upon the same terms and
conditions as those contained in the proposed sublease, except such as
are irrelevant or inapplicable and except as otherwise expressly set
forth to the contrary in this Section;
(c) Such sublease shall give the sublessee the
unqualified and unrestricted right, without Tenant's permission, to
assign such sublease or any interest therein and/or to sublet the
Leaseback Space or any part or parts of the Leaseback Space and to
make any and all changes, alterations, and improvements in the space
covered by such sublease at no cost or liability to Tenant and if the
proposed sublease will result in all or substantially all of the
Demised Premises being sublet, grant Landlord or its designee the
option to extend the term of such sublease for the balance of the term
of this Lease less one (1) day;
(d) Such sublease shall provide that any assignee
or further subtenant, of Landlord or its designee, may, at the
election of Landlord, be permitted to make alterations, decorations
and installations in the Leaseback Space or any part thereof and shall
also provide in substance that any such alterations, decorations and
installations in the Leaseback Space therein made by any assignee or
subtenant of Landlord or its designee may be removed, in whole or in
part, by such assignee or subtenant, at its option, prior to or upon
the expiration or other termination of such sublease provided that
such assignee or subtenant, at its expense, shall repair any damage
and injury to that portion of the Leaseback Space so sublet caused by
such removal; and
(e) Such sublease shall also provide that (i) the
parties to such sublease expressly negate any intention that any
estate created under such sublease be merged with any other estate
held by either of said parties, (ii) any assignment or subletting by
Landlord or its designee (as the subtenant) may be for any purpose or
purposes that Landlord, in Landlord's uncontrolled discretion, shall
deem suitable or appropriate, (iii) Tenant, at Tenant's expense, shall
and will at all times provide and permit reasonably appropriate means
of ingress to and egress from the Leaseback Space so sublet by Tenant
to Landlord or its designee, (iv) Landlord, at Tenant's expense, may
make such alterations as may be required or deemed necessary by
Landlord to physically separate the Leaseback Space from the balance
of the Demised Premises and to comply with any laws and requirements
of public authorities relating to such separation, and (v) that at the
expiration of the term of such sublease, Tenant will accept the space
covered by such sublease in its then existing condition, subject to
the obligations of the sublessee to make such repairs thereto as may
be necessary to preserve the premises demised by such sublease in good
order and condition.
Section 11.06. (a) If Landlord exercises its option
to sublet the Leaseback Space, Landlord shall indemnify and save
Tenant harmless from all obligations under this Lease as to the
Leaseback Space during the period of time it is so sublet to Landlord.
(b) Performance by Landlord, or its designee, under
a sublease of the Leaseback Space shall be deemed performance by
Tenant of any similar obligation under this Lease and any default
under any such sublease shall not give rise to a default under a
similar obligation contained in this Lease, nor shall Tenant be liable
for any default under this Lease or deemed to be in default hereunder
if such default is occasioned by or arises from any act or omission of
the tenant under such sublease or is occasioned by or arises from any
act or omission of any occupant holding under or pursuant to any such
sublease.
(c) Tenant shall have no obligation, at the
expiration or earlier termination of the term of this Lease, to remove
any alteration, installation or improvement made in the Leaseback
Space by Landlord.
Section 11.07. In the event Landlord does not exercise
an option provided to it pursuant to Section 11.02 and provided that
Tenant is not in default in any of Tenant's obligations under this
Lease, Landlord's consent (which must be in writing and in form
reasonably satisfactory to Landlord) to the proposed assignment or
sublease shall not be unreasonably withheld or delayed, provided and
upon condition that:
(a) Tenant shall have complied with the provisions
of Section 11.02 and Landlord shall not have exercised its option
under said Section 11.02 within the time permitted therefor;
(b) In Landlord's judgment, the proposed assignee
or subtenant is engaged in a business and the Demised Premises, or the
relevant part thereof, will be used in a manner which (i) is limited
to the use expressly permitted under Sections 4.01 and 4.02 of this
Lease, and (ii) is in keeping with the then standards of the Building;
(c) The proposed assignee or subtenant is a
reputable person of good character and with sufficient financial worth
considering the responsibility involved, and Landlord has been
furnished with reasonable proof thereof;
(d) Neither (i) the proposed assignee or sublessee
nor (ii) any person which, directly or indirectly, controls, is
controlled by or is under common control with, the proposed assignee
or sublessee, is then an occupant of any part of the Building;
(e) The proposed assignee or sublessee is not a
person with whom Landlord is currently negotiating to lease space in
the Building;
(f) The proposed sublease shall be in form
reasonably satisfactory to Landlord and shall comply with the
provisions of this Article;
(g) At any one time there shall not be more than
two (2) subtenants (including Landlord or its designee) in the Demised
Premises;
(h) Tenant shall reimburse Landlord on demand for
any reasonable costs that may be incurred by Landlord in connection
with said assignment or sublease, including, without limitation, the
reasonable costs incurred in 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;
(i) Tenant shall not have (i) advertised in any way
the availability of the Demised Premises without prior notice to
Landlord, (ii) listed the Demised Premises for subletting or
assignment with a broker, agent or representative other than the then
managing agent of the Building or other agent designed by Landlord, or
(iii) listed the Demised Premises at a rental rate less than the
minimum rent or additional rent at which Landlord is then offering to
lease other space in the Building; and
(j) The proposed subtenant or assignee shall not be
entitled, directly or indirectly, to diplomatic or sovereign immunity
and shall be subject to the service of process in and the jurisdiction
of the courts of New York State.
Except for any subletting by Tenant to Landlord or its
designee pursuant to the provisions of this Article, each subletting
pursuant to this Article shall be subject to all of the covenants,
agreements, terms, provisions and conditions contained in this Lease.
Notwithstanding any such subletting to Landlord or any such subletting
to any other subtenant and/or acceptance of rent or additional rent by
Landlord from any subtenant, except with respect to the Leaseback
Space Tenant shall and will remain fully liable for the payment for
the minimum rent and additional rent 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. Tenant
further agrees that notwithstanding any such subletting, no other
person claiming through or under Tenant (except as provided in Section
11.05) shall or will be made except upon compliance with and subject
to the provisions of this Article. If Landlord shall decline to give
its consent to any proposed assignment or sublease, or if Landlord
shall exercise its option under Section 11.02, 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 sublessee or by any brokers or other persons
claiming a commission or similar compensation in connection with the
proposed assignment or sublease.
Section 11.08. In the event that (a) Landlord fails to
exercise its options under Section 11.02 and consents to a proposed
assignment or sublease, and (b) Tenant fails to execute and deliver
the assignment or sublease to which Landlord consented within ninety
(90) days after the giving of such consent, then, Tenant shall again
comply with all of the provisions and conditions of Section 11.02
before assigning this Lease or subletting all or part of the Demised
Premises.
Section 11.09. With respect to each and every sublease
or subletting authorized by Landlord under the provisions of this
Lease, it is further agreed:
(a) No subletting shall be for a term ending later
than one 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 such sublease has been delivered to Landlord;
(c) Each sublease shall provide that it is subject
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 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 (i) be
liable for any previous act or omission of Tenant under such sublease,
(ii) be subject to any offset, not expressly provided in such
sublease, which thereto accrued to such subtenant against Tenant, or
(iii) be bound by any previous modification of such sublease or by any
previous prepayment of more than one month's rent.
Section 11.10. If Landlord gives 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 of this Lease or
an assignment by any sublease, an amount equal to one-half of all sums
and other considerations paid to Tenant from the assignee for such
assignment or paid to Tenant by any sublessee or other person claiming
through or under Tenant for such assignment (including, but not
limited to sums paid for the sale of Tenant's or sublessee's fixtures,
leasehold improvements, less, in case of a sale thereof, the then net
unamortized or undepreciated cost thereof determined on the basis of
Tenant's or sublessee's federal income tax returns). The sums payable
to Landlord under this Section 11.10(a) shall be paid to Landlord as
and when paid by such assignee to Tenant; and
(b) in the case of a sublease, an amount equal to
one-half of the rents and charges and other consideration payable
under the sublease to Tenant by the subtenant or paid to Tenant by any
such sublessee or other person claiming through or under Tenant in
connection with such subletting which is in excess of the minimum rent
accruing during the term of the sublease in respect of the subleased
space (at the rate per square foot payable by Tenant hereunder or such
sublessee) pursuant to the terms of this Lease (including, but not
limited to, sums paid for the sale or rental of Tenant's fixtures,
leasehold improvements, less, in the case of the sale thereof, the
then net unamortized or undepreciated cost thereof determined on the
basis of Tenant's or sublessee's federal income tax returns). The
sums payable to Landlord under this Section 11.10(b) shall be paid to
Landlord as and when paid by such subtenant to Tenant.
Section 11.11. If Tenant is a corporation, a partnership
or other entity, the provisions of Section 11.01 shall apply to a
transfer (by one or more transfers) of a majority of the stock or
other ownership interests of Tenant, as the case may be, as if such
transfer of a majority of the stock or other ownership interests of
Tenant were an assignment of this Lease; but said provisions and the
provisions of Section 11.02 shall not apply to transactions with a
corporation, partnership or other entity into or with which Tenant is
merged or consolidated or to which substantially all of Tenant's
assets are transferred or to any corporation which controls or is
controlled by Tenant or is under common control with Tenant, provided
that in any of such events (i) the successor to Tenant has a net worth
computed in accordance with generally accepted accounting principles
at least equal to the greater of (1) the net worth of Tenant
immediately prior to such merger, consolidation or transfer, or (2)
the net worth of tenant herein named on the date of this Lease, and
(ii) proof satisfactory to Landlord of such net worth shall have been
delivered to Landlord at least ten (10) days prior to the effective
date of any such transaction. With respect to a Tenant which is a
corporation listed on a recognized exchange, the sale or transfer of
stock shall not be deemed an assignment under the provisions of this
Section 11.11.
Section 11.12. Any assignment or transfer, whether made
with Landlord's consent pursuant to Section 11.07 or without
Landlord's consent pursuant to Section 11.11, shall be made only if,
and shall not be effective until, the assignee shall execute,
acknowledge and deliver to Landlord an agreement in form and substance
reasonably satisfactory to Landlord whereby the assignee shall assume
the obligations of this Lease on the part of Tenant to be performed or
observed and whereby the assignee shall agree that the provisions in
this Article 11 shall, notwithstanding such assignment or transfer,
continue to be binding upon it in respect of all future assignments
and transfers. The original named Tenant covenants that,
notwithstanding any assignment or transfer, whether or not in
violation of the provisions of this Lease, and notwithstanding the
acceptance of minimum rent and/or additional rent by Landlord from an
assignee, transferee, or any other party, the original named Tenant
shall remain fully liable for the payment of the minimum rent and
additional rent and for the other obligations of this Lease on the
part of Tenant to be performed or observed.
Section 11.13. 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.
Section 11.14. The listing of any name other than that
of Tenant, whether on the doors of the Demised Premises, or the
Building directory, if any, or otherwise, shall not operate to vest
any right or interest in this Lease or in the Demised Premises, nor
shall it be deemed to be the consent of Landlord to any assignment or
transfer of this Lease, to any sublease of the Demised Premises, or to
the use or occupancy thereof by others.
ARTICLE 12
Liability of Landlord and Indemnity by Tenant
Section 12.01. Tenant shall indemnify Landlord against
and save Landlord harmless from any liability to and claim by or on
behalf of any person, firm, governmental authority, corporation or
entity for personal injury, death or property damage, arising:
(a) from the use by Tenant of the Demised Premises,
or from any work whatsoever done or omitted to be done by Tenant, its
employees, agents, contractors, customers, invitees or visitors, or
from any accident thereat other than Landlord's Work as defined in
Schedule B; and
(b) from any breach or default by Tenant of and
under any of the terms, covenants and conditions of this Lease on
Tenant's part to be performed.
Tenant also shall indemnify Landlord against and save
Landlord harmless from all costs, reasonable counsel fees, expenses
and penalties incurred by Landlord in connection with any such
liability or claim other than such liability or claim incurred as a
result of Landlord's negligence or willful misconduct.
If any action or proceeding shall be brought against
Landlord in connection with any such liability or claim, Tenant, on
notice from Landlord, shall defend such action or proceeding, at
Tenant's expense, by counsel reasonably satisfactory to Landlord, or
by the attorney for Tenant's insurance carrier whose insurance policy
covers the liability or claim.
Section 12.02. Landlord shall not be liable for any
damage to property of Tenant or of others entrusted to employees of
the Building, nor for the loss of or damage to any property of Tenant
by theft or otherwise. Landlord and its agents shall not be liable
for any injury or damage to persons or property resulting from fire,
explosion, falling plaster, steam, gas, electricity, water, rain or
snow or leaks from any part of the Building or from the pipes,
appliances or plumbing works or from the roof, street or sub-surface
or from any other place or by dampness or by any other cause of
whatsoever nature; nor shall Landlord be liable for any such damage
caused by other tenants or persons in the Building or caused by
operations in construction of any public or quasi-public work. If, at
any time any windows of the Demised Premises are permanently closed,
darkened or bricked up by reason of the requirements of law or
temporarily closed or darkened by reason of repairs, alterations or
maintenance by Landlord, Landlord shall not be liable for any damage
Tenant may sustain thereby and Tenant shall not be entitled to any
compensation therefor nor abatement of rent nor shall the same release
Tenant from its obligations hereunder nor constitute an eviction.
(Reference hereinabove to Landlord shall for all purposes be deemed to
include the Overlandlord as defined in Article 25.)
Tenant shall reimburse and compensate Landlord, as
additional rent, within ten (10) days after rendition of a statement
for all expenditures made and for all losses, liabilities, claims,
damages, fines, penalties and expenses incurred by Landlord arising
from any default by Tenant under this Lease.
Tenant shall give immediate notice to Landlord upon its
discovery of accidents in the Demised Premises.
Section 12.03. If in this Lease it is provided that
Landlord's consent or approval as to any matter will not be
unreasonably withheld, and it is established by a court or body having
final jurisdiction thereover that Landlord has been unreasonable, the
only effect of such finding shall be that Landlord shall be deemed to
have given its consent or approval; but Landlord shall not be liable
to Tenant in any respect for money damages by reason of withholding
its consent.
ARTICLE 13
Moving of Heavy Equipment
Tenant shall not move any safe, heavy equipment or bulky
matter in or out of the Building without Landlord's written consent,
which shall not be unreasonably withheld or delayed. If the movement
of such items requires special handling, Tenant agrees to employ only
persons holding a Master Rigger's License to do said work and all such
work shall be done in full compliance with the Administrative Code of
the City of New York and other municipal requirements. All such
movements shall be made during hours which will least interfere with
the normal operations of the Building, and all damage caused by such
movement shall be promptly repaired by Tenant at Tenant's expense.
ARTICLE 14
Condemnation
Section 14.01. In the event that the whole of the
Demised Premises shall be 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. In the event that only a part of the Demised Premises shall
be so condemned or taken, then, effective as of the date of vesting of
title, the minimum rent and additional rent hereunder for such part
shall be equitably abated and this Lease shall continue as to such
part not so taken. In the event that only a part of the Building
shall be so condemned or taken, then (a) if substantial structural
alteration or reconstruction of the Building shall, in the reasonable
opinion of Landlord, be necessary or appropriate as a result of such
condemnation or taking (whether or not the Demised Premises be
affected), Landlord may, at its option, terminate this Lease and the
term and estate hereby granted as of the date of such vesting of title
by notifying Tenant in writing of such termination within sixty (60)
days following the date on which Landlord shall have received notice
of the vesting of title, or (b) if Landlord does not elect to
terminate this Lease, as aforesaid, this Lease shall be and remain
unaffected by such condemnation or taking, except that the minimum
rent and additional rent shall be abated to the extent, if any,
hereinbefore provided. In the event that only a part of the Demised
Premises shall be so condemned or taken and this Lease and the term
and estate hereby granted are not terminated as hereinbefore provided,
Landlord, out of the portion of the award allocated for such purpose
and to the extent such award is sufficient, will restore with
reasonable diligence the remaining structural portions of the Demised
Premises as nearly as practicable to the same condition as it was in
prior to such condemnation or taking.
Section 14.02. In the event of termination in any of the
cases hereinabove provided, this Lease and the term and estate hereby
granted shall expire as of the date of such termination with the same
effect as if that were the Expiration Date and the rent hereunder
shall be apportioned as of such date.
Section 14.03. 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 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 such award or any part thereof,
and Tenant shall be entitled to receive no part of such award.
Notwithstanding the foregoing, Tenant may make a separate claim for
Tenant's moveable trade fixtures and moving expenses, provided the
same shall not affect or reduce Landlord's award.
ARTICLE 15
Entry, Right to Change Public Portions of the Building
Section 15.01. Tenant shall permit Landlord to erect,
use and maintain pipes and conduits in and through the walls, within
the ceiling or below the floors of the Demised Premises. Landlord, or
its agents or designee shall have the right, on prior written notice
(except no notice in an emergency), to enter the Demised Premises for
the purpose of making such repairs or alterations as Landlord shall
desire, shall be required or shall have the right to make under the
provisions of this Lease, provided such work is made in a manner not
to unreasonably interfere with Tenant's regular business operations in
the Demised Premises; and shall also have the right at reasonable
times to enter the Demised Premises for the purpose of inspecting them
or exhibiting them to prospective purchasers or lessees of the
Building or to prospective mortgagees or to prospective assignees of
any such mortgagees. Landlord shall, during the progress of any work
in the Demised Premises, be allowed to take all material into and upon
the Demised Premises that may be required for the repairs or
alterations above mentioned without the same constituting an eviction
of Tenant in whole or in part and the rent reserved shall in no wise
abate, except as otherwise provided in this Lease, while said repairs
or alterations are being made.
Section 15.02. During the twelve (12) months prior to
the expiration of the term of this Lease, Landlord may exhibit the
Demised Premises to prospective tenants, at reasonable times.
Section 15.03. Landlord shall have the right at any time
without thereby creating an actual or constructive eviction or
incurring any liability to Tenant therefor, to change the arrangement
or location of such of the following as are not contained within the
Demised Premises: entrances, passageways, doors and doorways,
corridors, elevators, stairs, toilets, and other like public service
portions of the Building, provided such changes do not interfere with
Tenant's access to the Demised Premises.
Section 15.04. Landlord shall have the right at any time
to name the Building as it desires and to change any and all such
names at any time thereafter.
ARTICLE 16
Conditional Limitations, Etc.
Section 16.01. If at any time during the term of this
Lease:
(a) Tenant shall file a petition in bankruptcy or
insolvency or for reorganization or arrangement or for the appointment
of a receiver of all or a portion of Tenant's property, or
(b) Any petition of the kind referred to in
subdivision (a) of this Section shall be filed against Tenant and such
petition shall not be vacated, discharged or withdrawn within ninety
(90) days, or
(c) Tenant shall be adjudicated a bankrupt by any
court, or
(d) Tenant shall make an assignment for the benefit
of creditors, or
(e) a permanent receiver shall be appointed for the
property of Tenant by order of a court of competent jurisdiction by
reason of the insolvency of Tenant (except where such receiver shall
be appointed in an involuntary proceeding, if he shall not be
withdrawn within ninety (90) days after the date of his appointment),
then Landlord, at Landlord's option, may terminate this Lease on five
(5) days' notice to Tenant, and upon such termination, Tenant shall
quit and surrender the Demised Premises to Landlord.
Section 16.02 (a) If Tenant assumes this Lease and
proposes to assign the same pursuant to the provisions of the
Bankruptcy Code, 11 U.S.C. 101 et seq. (the "Bankruptcy Code") to any
person or entity who shall have made a bona fide offer to accept an
assignment of this Lease on terms acceptable to Tenant, then notice of
such proposed assignment, setting forth (i) the name and address of
such person, (ii) all of the terms and conditions of such offer, and
(iii) the adequate assurance to be provided Landlord to assure such
person's future performance under the Lease, including, without
limitation, the assurance referred to in section 365(b)(3) of the
Bankruptcy Code, shall be given to Landlord by Tenant not later than
twenty (20) days after receipt by Tenant but in no event later than
ten (10) days prior to the date that Tenant shall make application to
a court of competent jurisdiction for authority and approval to enter
into such assignment and assumption, and Landlord shall thereupon have
the prior right and option, to be exercised by notice to Tenant given
at any time prior to the effective date of such proposed assignment,
to accept an assignment of this Lease upon the same terms and
conditions and for the same consideration, if any, as the 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.
(b) If this Lease is assigned to any person or
entity pursuant to the provisions of the Bankruptcy Code, any and all
monies or other considerations payable or otherwise delivered in
connection with such assignment shall be paid or delivered to
Landlord, shall be and remain the exclusive property of Landlord and
shall not constitute property of Tenant or of the estate of Tenant
within the meaning of the Bankruptcy Code. Any and all monies or
other considerations constituting Landlord's Property under the
preceding sentence not paid or delivered to Landlord shall be held in
trust for the benefit of Landlord and shall be promptly paid to
Landlord.
(c) Any person or entity to which this Lease is
assigned pursuant to the provisions of the Bankruptcy Code, shall be
deemed without further act or deed to have assumed all of the
obligations arising under this Lease on and after the date of such
assignment. Any such assignee shall upon demand execute and deliver
to Landlord an instrument confirming such assumption.
(d) Nothing contained in this Section shall, in any
way, constitute a waiver of the provisions of this Lease relating to
assignment. Tenant shall not, by virtue of this Section, have any
further rights relating to assignment other than those granted in the
Bankruptcy Code.
(e) Notwithstanding anything in this Lease to the
contrary, all amounts payable by Tenant to or on behalf of Landlord
under this Lease, whether or not expressly denominated as rent, shall
constitute rent for the purposes of Section 502(b)(6) of the
Bankruptcy Code.
(f) The term "Tenant" as used in this Section
includes any trustee, debtor in possession, receiver, custodian or
other similar officer.
Section 16.03. If this Lease shall terminate pursuant to
the provisions of Section 16.01:
(a) Landlord shall be entitled to recover from
Tenant arrears in minimum rent and additional rent and, in addition
thereto as liquidated damages, an amount equal to the difference
between the minimum rent and additional rent for the unexpired portion
of the term of this Lease which had been in force immediately prior to
the termination effected under Section 16.01 of this Article and the
fair and the reasonable rental value of the Demised Premises, on the
date of termination, for the same period, both discounted at the rate
of eight (8%) percent per annum to the date of termination; or
(b) Landlord shall be entitled to recover from
Tenant arrears in minimum rent and additional rent and, in addition
thereto as liquidated damages, an amount equal to the maximum allowed
by 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 or less than the amount referred to in
subdivision (a) of this Section.
Section 16.04. (a) If Tenant shall fail to make any
payment of any minimum rent or additional rent when the same becomes
due and payable and such default shall continue for a period of five
(5) business days after notice thereof by Landlord, or
(b) If Tenant shall be in default in the
performance of any of the other terms, covenants and conditions of
this Lease and such default shall not have been remedied within thirty
(30) days after notice by Landlord to Tenant specifying such default
and requiring it to be remedied; or where such default reasonably
cannot be remedied within such period of thirty (30) days, if Tenant
shall not have commenced the remedying thereof within such period of
time and shall not be proceeding with due diligence to remedy it,
then Landlord, at Landlord's election, may terminate this Lease on
five (5) days' notice to Tenant, and upon such termination Tenant
shall quit and surrender the Demised Premises to Landlord.
Section 16.05. If this Lease shall terminate as provided
in this Article, or if Tenant shall be in default in the payment of
minimum rent or additional rent when the same become due and payable,
or if Tenant shall fail to cancel or discharge any lien referred to in
Section 17.02, or if the Demised Premises become vacant or deserted,
and any such default shall continue for a period of five (5) business
days after notice by Landlord to Tenant.
(a) Landlord may re-enter and resume possession of
the Demised Premises and remove all persons and property therefrom
either by summary dispossess proceedings or by a suitable action or
proceeding, at law or in equity, or by force or otherwise, without
being liable for any damages therefor, and
(b) Landlord may re-let the whole or any part of
the Demised Premises for a period equal to, greater or less than the
remainder of the then term of this Lease, at such rental and upon such
terms and conditions as Landlord shall deem reasonable to any tenant
it may deem suitable and for any use and purpose it may deem
appropriate. Landlord shall not be liable in any respect for failure
to re-let the Demised Premises or, in the event of such re-letting,
for failure to collect the rent thereunder and any sums received by
Landlord on a re-letting in excess of the rent reserved in this Lease
shall belong to Landlord.
Section 16.06. If this Lease shall terminate as provided
in this Article or by summary proceedings (except as to any
termination under Section 16.01), Landlord shall be entitled to
recover from Tenant as damages, in addition to arrears in minimum rent
and additional rent,
(a) an amount equal to (i) all expenses incurred by
Landlord in recovering possession of the Demised Premises and in
connection with the re-letting of the Demised Premises, including,
without limitation, the cost of repairing, renovating or remodeling
the Demised Premises, (ii) the cost of performing any work required to
be done by Tenant under this Lease, (iii) the cost of placing the
Demised Premises in the same condition as that in which Tenant is
required to surrender them to Landlord under this Lease, and (iv) all
brokers' commissions and legal fees incurred by Landlord in re-letting
the Demised Premises, which amounts set forth in this subdivision (a)
shall be due and payable by Tenant to Landlord at such time or times
as they shall have been incurred; and
(b) an amount equal to the deficiency between the
minimum rent and additional rent which would have become due and
payable had this Lease not terminated and the net amount, if any, of
rent collected by Landlord on re-letting the Demised Premises. The
amounts specified in this subdivision shall be due and payable by
Tenant on the several days on which such minimum rent and additional
rent would have become due and payable had this Lease not terminated.
Tenant consents that Landlord shall be entitled to institute separate
suits or actions or proceedings for the recovery of such amount or
amounts, and Tenant hereby waives the right to enforce or assert the
rule against splitting a cause of action as a defense thereto.
Landlord, at its election, which shall be exercised by
the service of a notice on Tenant, at any time after such termination
of this Lease, may collect from Tenant and Tenant shall pay, in lieu
of the sums becoming due, under the provisions of subdivision (b) of
this Section, an amount equal to the difference between the minimum
rent and additional rent which would have become due and payable had
this Lease not terminated (from the date of the service of such notice
to the end of the term of this Lease which had been in force
immediately prior to any termination effected under this Article) and
the then fair and reasonable rental value of the Demised Premises for
the same period, both discounted to the date of the service of such
notice at the rate of eight (8%) percent per annum.
Section 16.07. Tenant, for itself and for all persons
claiming through or under it, hereby waives any and all rights which
are or may be conferred upon Tenant by any present or future law to
redeem the Demised Premises after a warrant to dispossess shall have
been issued or after judgment in an action of ejectment shall have
been made and entered.
Section 16.08. The words "re-enter" and "re-entry", as
used in this Article, are not restricted to their technical legal
meanings.
Section 16.09. Landlord shall not be required to give
any notice of its intention to re-enter, except as otherwise provided
in this Lease.
Section 16.10. In any action or proceeding brought by
Landlord against Tenant, predicated on a default in the payment of
minimum rent or additional rent, Tenant shall not have the right to
and shall not interpose any set-off or counterclaim of any kind
whatsoever, other than a claim which would be legally barred for
failure to raise as a counterclaim in such action or proceeding. If
Tenant has any claim, Tenant shall be entitled only to bring an
independent action therefor; and if such independent action is brought
by Tenant, Tenant shall not be entitled to and shall not consolidate
it with any pending action or proceeding brought by Landlord against
Tenant for a default in the payment of minimum rent or additional
rent.
ARTICLE 17
Mechanic's Liens
Section 17.01. If, subject to and notwithstanding
Landlord's consent as required under this Lease, Tenant shall cause
any changes, alterations, additions, improvements, installations or
repairs to be made to or at the Demised Premises or shall cause any
labor to be performed or material to be furnished in connection
therewith, neither Landlord nor the Demised Premises, under any
circumstances, shall be liable for the payment of any expense incurred
or for the value of any work done or material furnished, and all such
changes, alterations, additions, improvements, installations and
repairs and labor and material shall be made, furnished and performed
upon Tenant's credit alone and at Tenant's expense, and Tenant shall
be solely and wholly responsible to contractors, laborers, and
materialmen furnishing and performing such labor and material.
Nothing contained in this Lease shall be deemed or construed in any
way as constituting the consent or request of Landlord, express or
implied, to any contractor, laborer or materialman to furnish to
perform any such labor or material.
Section 17.02. If, because of any act or omission (or
alleged act or omission) of Tenant any mechanic's or other lien,
charge or order for the payment of money shall be filed against the
Demised Premises or the Building or Landlord's estate as tenant under
any ground or underlying lease (whether or not such lien, charge or
order is valid or enforceable as such), for work claimed to have been
for, or materials furnished to, Tenant, Tenant, at Tenant's expense,
shall cause it to be cancelled or discharged of record by bonding or
otherwise within twenty (20) days after such filing, and Tenant shall
indemnify Landlord against and save Landlord harmless from and shall
pay all reasonable costs, expenses, losses, fines and penalties,
including, without limitation, reasonable attorneys' fees resulting
therefrom.
ARTICLE 18
Landlord's Right to Perform Tenant's Obligations
If Tenant shall default in the performance of any of the
terms or covenants and conditions of this Lease, Landlord, without
being under any obligation to do so and without hereby waiving such
default, may remedy such default for the account and at the expense of
Tenant. Any payment made or expense incurred by Landlord for such
purpose (including, but not limited to, reasonable attorneys' fees)
with interest at the maximum legal rate, shall be deemed to be
additional rent hereunder and shall be paid by Tenant to Landlord on
demand, or at Landlord's election, added to any subsequent installment
or installments of minimum rent.
ARTICLE 19
Covenant of Quiet Enjoyment
Landlord covenants that upon Tenant paying the minimum rent
and additional rent and observing and performing all the terms,
covenants and conditions of this Lease on Tenant's part to be observed
and performed, Tenant may peaceably and quietly enjoy the Demised
Premises, subject nevertheless to the terms and conditions of this
Lease, and provided, however, that no eviction of Tenant by reason of
paramount title, the foreclosure of any mortgage nor or hereafter
affecting the Demised Premises or by reason of any termination of any
ground or underlying lease to which this Lease is subject and
subordinate, whether such determination is by operation of law, by
agreement or otherwise, shall be construed as a breach of this
covenant nor shall any action be brought against Landlord by reason
thereof.
ARTICLE 20
Excavation
In the event that construction is to be commenced or an
excavation is made or authorized for building or other purposes upon
land adjacent to the Building, Tenant shall, if necessary, afford to
the person or persons causing or authorized to commence construction
or cause such excavation or to engage in such other purpose, license
to enter upon the Demised Premises for the purpose of doing such work
as shall reasonably be necessary to protect or preserve the Building,
from injury or damage and to support the Building and any new
structure to be built by proper foundations, pinning and/or
underpinning, or otherwise.
ARTICLE 21
Services and Equipment
Section 21.01. Landlord shall, at its cost and expense:
(a) Provide operatorless passenger elevator service
Mondays through Fridays from 8:00 A.M. to 6:00 P.M., holidays
excepted. A passenger elevator will be available at all other times.
A service elevator shall be available Mondays through Fridays,
holidays excepted, only from 9:00 A.M. to 11:30 A.M. and from 2:30
P.M. to 5:30 P.M.
(b) Maintain and keep in good order and repair the
central heating, ventilating and air-conditioning system installed by
Landlord. The system will be operated by Landlord on Mondays through
Fridays, holidays excepted, from 8:00 A.M. to 6:00 P.M.
(c) Provide Building standard cleaning services in
Tenant's office space and public portions of the Building, except no
services shall be performed Saturdays, Sundays and holidays, in
accordance with Schedule "E" annexed hereto and made part hereof.
(d) Furnish hot and cold water for lavatory and
drinking purposes. If Tenant requires, uses or consumes water for any
other purposes, Landlord may install a meter or meters or other means
to measure Tenant's water consumption, and Tenant shall reimburse
Landlord for the cost of the meter or meters and the installation
thereof, and shall pay for the maintenance of said meter equipment
and/or pay Landlord's cost of other means of measuring such water
consumption by Tenant. Tenant shall pay to Landlord on demand the
cost of all water consumed as measured by said meter or meters or as
otherwise measured, including sewer rents.
(e) If Tenant shall require and request any of the
foregoing services at times other than above provided, and if such
request is made at least twenty-four (24) hours prior to the time when
such additional services are required, Landlord will provide them and
Tenant shall pay to Landlord promptly thereafter the charges therefor
at the then Building standard rate charged to other tenants in the
Building.
Section 21.02. Holidays shall be deemed to mean all
federal holidays, state holidays and Building Service Employees Union
Contract holidays.
Section 21.03. Landlord reserves the right to interrupt,
curtail or suspend the services required to be furnished by Landlord
under this Lease when necessary by reason of accident, emergency,
mechanical breakdown or when required by any law, order or regulation
of any Federal, State, County or Municipal authority, or for any other
cause beyond the control of Landlord. Landlord shall use due
diligence to complete all required repairs or other necessary work as
quickly as possible so that Tenant's inconvenience resulting therefrom
may be for as short a period of time as circumstances will reasonably
permit. Tenant shall not be entitled to nor shall Tenant make claim
for any diminution or abatement of minimum rent or additional rent or
other compensation, nor shall this Lease or any of the obligations of
Tenant be affected or reduced by reason of such interruption,
curtailment, suspension, work or inconvenience.
Section 21.04. Tenant shall reimburse Landlord promptly
for the actual out-of-pocket cost to Landlord of removal from the
Demised Premises and the Building of any refuse and rubbish of Tenant
not covered by the Cleaning Specifications (Schedule E) and Tenant
shall pay all bills therefor when rendered.
Section 21.05. If Tenant shall request Landlord to
furnish any services in addition to those hereinabove provided or
perform any work not required under this Lease, and Landlord agrees to
furnish and/or perform the same, Tenant shall pay to Landlord promptly
thereafter the charges therefor, which charges are deemed to be
additional rent and payable as such.
ARTICLE 22
Escalation
Section 22.01. Taxes. Tenant shall pay to Landlord, as
additional rent, tax escalation in accordance with this Section:
(a) Definitions: For the purpose of this Section,
the following definitions shall apply:
(i) The term "Tax Base Factor" shall mean the
real estate taxes for the Building Project for the period from January
1, 1998 to December 31, 1998, as finally determined.
(ii) The term "The Building Project" shall
mean the parcel of land described in Schedule C of this Lease with all
the present improvements existing and erected thereon.
(iii) The term "comparative tax year" shall
mean the New York City real estate tax year commencing on July 1, 1998
and each subsequent New York City real estate tax year. If the
present use of July 1-June 30 New York City real estate tax year shall
hereafter be changed, then such changed tax year shall be used with
appropriate adjustment for the transition.
(iv) The term "Real Estate Taxes" shall mean
the total of all taxes and special or other assessments levied,
assessed or imposed at any time by any governmental authority: (a)
upon or against the Building Project, and (b) in connection with the
receipt of income or rents from the Building Project to the extent
that same shall be in lieu of all or a portion of any of the aforesaid
taxes or assessments, or additions or increases thereof. Income,
franchise, transfer, inheritance, corporate, mortgage recording or
capital stock taxes of Landlord, or penalties or interest thereon,
shall be excluded from "Real Estate Taxes" for the purposes hereof.
If, due to a future change in the method of taxation or in the taxing
authority, or for any other reason, a franchise, income, transit,
profit or other tax or governmental imposition, however designated,
shall be levied against Landlord in substitution in whole or in part
for the Real Estate Taxes, or in lieu of or addition to or increase of
Real Estate Taxes, then such franchise, income, transit, profit or
other tax or governmental imposition shall be included within "Real
Estate Taxes." Tenant acknowledges that the Tax Escalation Payment
(as hereinafter defined) constitutes a method by which Landlord is
seeking to compensate for increases in expenses and that the Tax
Escalation Payment shall be calculated and paid by Tenant to Landlord
whether or not Real Estate Taxes have then been paid by Landlord.
(v) The term "the Percentage" for purposes of
computing tax escalation, shall mean 1.10%.
(b) (i) In the event that the Real Estate Taxes
payable for any comparative tax year shall exceed the Tax Base Factor,
Tenant shall pay to Landlord, as additional rent for such comparative
tax year, an amount for tax escalation ("Tax Escalation Payment")equal
to the Percentage of the excess. Before or after the start of each
Comparative Tax Year, Landlord shall furnish to Tenant a statement of
the Tax Escalation Payment payable for such Comparative Tax Year,
together with a copy of the tax bill. Tenant shall make its aforesaid
Tax Escalation Payment to Landlord, in installments in the same manner
and not later than thirty (30) days prior to the last date that Real
Estate Taxes are payable by Landlord to the governmental authority.
If a statement is furnished to Tenant after the commencement of the
Comparative Tax Year in respect of which such statement is rendered,
Tenant shall, within ten (10) days thereafter, pay to Landlord an
amount equal to those installments of the total Tax Escalation Payment
then due. If, during the term of this Lease, Real Estate Taxes are
required to be paid, in full or in monthly or other installments, on
any other date or dates than as presently required, or if Landlord
shall be required to make monthly deposits of Real Estate Taxes to the
holder of any mortgage, then Tenant's Tax Escalation Payment(s) shall
be correspondingly adjusted so that the same are due to Landlord in
corresponding installments not later than thirty (30) days prior to
the last date on which the applicable installment of such Real Estate
Taxes shall be due and payable to the governmental authority or such
mortgagee.
(ii) If in any tax certiorari proceeding
regarding Real Estate Taxes payable for any Comparative Tax Year or in
otherwise establishing such taxes, Landlord has incurred expenses for
legal and/or consulting services rendered in applying for, negotiating
or obtaining a reduction of the assessment upon which the Real Estate
Taxes are predicated, Tenant shall pay an amount equal to the
Percentage of such expenses.
(iii) The statements of the Tax Escalation
Payment to be furnished by Landlord as provided above shall constitute
a final determination as between Landlord and Tenant of the Tax
Escalation Payment for the periods represented thereby, except for
mathematical error in computation.
(iv) In no event shall the fixed minimum rent
under this Lease be reduced by virtue of this Section 22.01.
(v) Upon the date of any expiration or
termination of this Lease, whether the same be the date hereinabove
set forth for the expiration of the term or any prior or subsequent
date, a proportionate share of the Tax Escalation Payment for the
Comparative Tax Year during which such expiration or termination
occurs shall immediately become due and payable by Tenant to Landlord,
if it was not theretofore already billed and paid, or due and payable
by Landlord to Tenant if the amount paid by Tenant exceeded such
proportionate share. The said proportionate share shall be based upon
the length of time that this Lease shall have been in existence during
such Comparative Tax Year. Prior to or promptly after said expiration
or termination, Landlord shall compute the Tax Escalation Payment due
from or owed to Tenant, as aforesaid and Tenant shall promptly pay
Landlord any amount unpaid. If Landlord shall receive a refund or a
tax credit of any amount of Real Estate Taxes for any Comparative Tax
Year for which Tenant has made a payment, Landlord shall pay to Tenant
within fifteen (15) days of its receipt of such refund the Percentage
of any such refund, less the Percentage of any legal fees and other
expenses provided for in Section 22.01(b)(ii) to the extent the same
have not theretofore been paid by Tenant.
(vi) Landlord's and Tenant's obligations to
make the adjustments referred to in subdivision (v) above shall
survive any expiration or termination of this Lease.
(vii) Any delay or failure of Landlord in billing
any Tax Escalation Payment hereinabove provided shall not constitute a
waiver of or in any way impair the continuing obligation of Tenant to
pay such Tax Escalation Payment hereunder.
Section 22.02. Porter's Wage Rate. Tenant shall pay to
the Landlord, as additional rent, a porter's wage rate escalation in
accordance with this Section:
(a) For the purpose of this Section, the following
definitions shall apply:
(i) "Wage Rate" shall mean the minimum regular
hourly rate of wages in effect as of January 1st of each year (whether
paid by Landlord or any contractor employed by Landlord) computed as
paid over a forty hour week to Porters in Class A office buildings
pursuant to an Agreement between Realty Advisory Board on Labor
Relations, Incorporated, or any successor thereto, and Local 32B-32J
of the Building Service Employees International Union, AFL-CIO, or any
successor thereto; and provided, however, that if there is no such
agreement in effect prescribing a wage rate for Porters, computations
and payments shall thereupon be made upon the basis of the regular
hourly wage rate actually payable in effect as of January 1st of each
year, and provided, however, that if in any year during the term, the
regular employment of Porters shall occur on days or during the hours
when overtime or other premium pay rates are in effect pursuant to
such Agreement, then the term "hourly rate of wages" as used herein
shall be deemed to mean the average hourly rate for the hours in a
calendar week during which Porters are regularly employed (e.g., if
pursuant to an agreement between Realty Advisory Board and the Local
the regular employment of Porters for forty hours during a calendar
week is at a regular hourly wage rate of $3.00 for the first thirty
hours, and premium or overtime hourly wage rate of $4.50 for the
remaining ten hours, then the hourly rate of wages under this Article
during such period shall be the total weekly rate of $135.00 divided
by the total number of regular hours of employment, forty or $3.375).
Notwithstanding the foregoing, if at any time such hourly wage rate is
different for new hire and old hire Porters, then thereafter such
hourly wage rate shall be based on the weighted average of the wage
rates for the different classifications of Porters.
(ii) "Base Wage Rate" shall mean the Wage Rate
in effect during the calendar year 1998.
(iii) The term "Porters" shall mean that
classification of non-supervisory employees employed in and about the
Building who devote a major portion of their time to general cleaning,
maintenance and miscellaneous services essentially of a non-technical
and non-mechanical nature and are the type of employees who are
presently included in the classification of "Class A-Others" in the
Commercial Building Agreement between the Realty Advisory Board and
the aforesaid Union.
(iv) The term "minimum regular hourly rate of
wages" shall not include any payments and fringe benefits and
adjustments of any kind.
(v) The term "fringe benefits" shall include,
without limitation, holiday and vacation pay, sick pay, welfare and
pension fund contributions, accident, health and welfare programs,
pension plans, guaranteed pay plans and supplemental unemployment
benefit plans, training fund contributions, pay for days allowed for
clinics, birthdays and other days off, and other benefit plans,
payments and programs of similar or dissimilar nature, whether or not
required under any applicable law, regulation or otherwise.
(vi) The term "Multiplication Factor" shall
mean 5,975.
(b) If the Wage Rate for any calendar year during
the term shall be increased above the Base Wage Rate, then Tenant
shall pay, as additional rent, an amount equal to the product obtained
by multiplying the Multiplication Factor by 100% of the number of
cents (including any fraction of a cent) by which the Wage Rate is
greater than the Base Wage Rate, such payment to be made in equal one-
twelfth (1/12th) monthly installments commencing with the first
monthly installment of minimum rent falling due on or after the
effective date of such increase in Wage Rate (payable retroactive from
said effective date) and continuing thereafter until a new adjustment
shall have become effective in accordance with the provisions of this
Article. Landlord shall give Tenant notice of each change in Wage
Rate which will be effective to create or change Tenant's obligation
to pay additional rent pursuant to the provisions of this Section
22.02 and such notice shall contain Landlord's calculation in
reasonable detail and certified as true by an authorized partner of
Landlord or of its managing agent, of the annual rate of additional
rent payable resulting from such increase in Wage Rate. Such amounts
shall be prorated for any partial calendar years during the term.
(c) Every notice given by Landlord pursuant to
Section 22(b) hereof shall be conclusive and binding upon Tenant,
except for error in computation.
(d) The "Wage Rate" is intended to be a substitute
comparative index of economic costs and does not necessarily reflect
the actual costs of wages or other expenses of operating the Building.
The Wage Rate shall be used whether or not the Building is a Class A
office building and whether or not Porters are employed in the
Building and without regard to whether such employees are members of
the Union referred to in subsection (a) hereof.
ARTICLE 23
Electric Inclusion
Section 23.01.
(a) Landlord shall furnish electric energy on a
rent inclusion basis to the Demised Premises, the charges therefor
being included in the minimum rent. The amount included in the
minimum rent is based upon the normal use of such electric energy
between the hours of 9:00 A.M. to 5:30 P.M. on Mondays through
Fridays, holidays excepted, for lighting and for the normal use of
lamps, typewriters, personal computers and similar customary office
machines. Landlord shall not be liable in any way for any loss,
damage or expense that Tenant may sustain or incur by reason of for
any failure, change, interruption or defect in the supply or character
of electric energy furnished to the Demised Premises by reason of any
requirement, act or omission of the Electric Service Provider or
Alternate Service Provider (as said terms are hereinafter defined)
serving the Building with electricity and no such failure, change,
interruption or defect shall constitute an actual of constructive
eviction, in whole or in part, or entitle Tenant to any abatement of
minimum rent or additional rent or relieve Tenant of its obligations
under this Lease. Tenant shall furnish and install, at its sole cost
and expense, all lighting fixtures, tubes, lamps, bulbs, ballasts and
outlets relating to Tenant's electrical equipment.
(b) Landlord has advised Tenant that presently Con
Edison ("Electric Service Provider") is the utility company selected
by Landlord to provide electricity service for the Building.
Notwithstanding the foregoing, if permitted by law, Landlord shall
have the right at any time and from time to time during the term of
this Lease to either contract for service from a different company or
companies providing electricity service (each such company shall
hereinafter be referred to as an "Alternate Service Provider") or
continue to contract for service from the Electric Service Provider.
(c) Tenant shall cooperate with Landlord, the
Electric Service Provider, and any Alternate Service Provider at all
times and, as reasonably necessary, shall allow Landlord, Electric
Service Provider, and any Alternate Service Provider reasonable access
to the Building's electric lines, feeders, risers, wiring, and any
other machinery within the Demised Premises.
Section 23.02. Tenant's use of electric energy in the
Demised Premises, including lighting, shall not at any time exceed the
capacity of any of the electrical conductors and equipment in or
servicing the Demised Premises. In order to insure that such capacity
is not exceeded and to avert possible adverse effect upon the Building
electric service, Tenant shall not, without Landlord's prior consent
in each instance, connect any additional fixtures, appliances or
equipment (other than as set forth in Section 23.01) or make any
alteration or addition to the electric system of the Demised Premises
existing on the Commencement Date. Should Landlord grant such
consent, all additional risers or other equipment required therefor
shall be provided by Landlord and the cost thereof shall be paid by
Tenant upon Landlord's demand. As a condition to granting such
consent, Landlord may require Tenant to agree to an increase in the
annual minimum rent by an amount which will reflect the value to
Tenant of the additional service to be furnished by Landlord, that is
the potential additional electrical energy to be made available to
Tenant based upon the estimated additional capacity of such additional
risers or other equipment. If Landlord and Tenant cannot agree
thereon, the amount of such increase shall be determined by a
reputable, independent electrical engineer or consultant, to be
selected by Landlord whose fees or charges shall be paid by Tenant.
When the amount of such increase is so determined, Tenant shall pay to
Landlord within ten (10) days following notification to Tenant of such
determination the amount thereof retroactive to the date of such
increased usage, unless within such ten (10) day period Tenant
disputes such determination. If Tenant disputes such determination,
it shall, at its own expense, obtain from a reputable, independent
electrical engineer or consultant, its own survey of the additional
electrical energy consumed by Tenant. Tenant's consultant and
Landlord's consultant shall then seek to agree on a finding of such
determination of such change in the consumption of electrical energy.
If they cannot agree, they shall choose a third reputable, independent
electrical engineer or consultant, whose cost shall be shared equally
by Landlord and Tenant, to make a similar survey, and the
determination of such third consultant shall be controlling. If they
cannot agree on such third consultant, within ten (10) days, then
either party may apply to the Supreme Court in the County of New York,
for the appointment of such third consultant. However, pending such
determination, Tenant shall pay to Landlord the amount as determined
by Landlord's engineer or consultant. If the amount determined as
aforesaid is different from that determined by Landlord's engineer or
consultant, then Landlord and Tenant shall make adjustment for any
deficiency owed by Tenant or overage paid by Tenant. Following the
final determination, the parties shall execute an agreement
supplementary hereto to reflect such increase in the annual minimum
rent and in the amount set forth in Section 23.03; but such increase
shall be effective even if such supplementary agreement is not
executed.
Section 23.03. If, during the term of this Lease, the
public utility rate for the supply of electric current to the Building
by the Electric Service Provider shall be increased or if there shall
be an increase in taxes or if additional taxes shall be imposed upon
the sale or furnishing of such electric energy (hereafter collectively
as the "cost") the annual minimum rent shall be increased by an amount
arrived at by multiplying $17,925 (or the sum to which said sum may
have been increased pursuant to the provisions of Section 23.02 or
this Section 23.03 prior to the effective date of the cost increases;
such sum being referred to herein as the "Rent Inclusion Factor") by
the percentage of the increase of such cost. When the amount of such
increase is so determined, Landlord and Tenant shall execute an
agreement supplementary hereto to reflect such increase in the amount
of the minimum rent payable and effective from the effective date of
such increase, but such increase shall be effective from such date
whether or not such a supplementary agreement is executed.
Section 23.04. Landlord reserves the right to
discontinue furnishing electric energy at any time, whether or not
Tenant is in default under this Lease, upon not less than thirty (30)
days' notice to Tenant. If Landlord exercises such right of
discontinuance, this Lease shall continue in full force and effect and
shall be unaffected thereby, except only that, from and after the
effective date of such discontinuance, Landlord shall not be obligated
to furnish electric energy to Tenant, and the minimum rent payable
under this Lease shall be reduced by an amount per annum equal to the
then prevailing Rent Inclusion Factor. If Landlord so elects to
discontinue furnishing electric energy to Tenant, Tenant shall arrange
to obtain electric energy directly from the public utility company
furnishing electric service to the Building. Notwithstanding the
foregoing, Landlord shall not discontinue furnishing electric energy
until Tenant is able to obtain such electric energy directly from said
public utility. Such electric energy may be furnished to Tenant by
means of the then existing Building system feeders, risers and wiring
to the extent that they are available, suitable and safe for such
purposes. All meters and additional panel boards, feeders, risers,
wiring and other conductors and equipment which may be required to
obtain electric energy directly from such public utility company, and
which are to be located within the Demised Premises, shall be
installed and maintained by Tenant at its expense.
Section 23.05. At no time shall Tenant's connected
electrical load in the Demised Premises, including lighting, exceed
six (6) watts per usable square foot.
Section 23.06. If any additional charge or tax is
imposed upon Landlord with respect to electric energy furnished to
Tenant by any federal, state or municipal authority, Tenant, unless
prohibited by law or by any governmental authority having jurisdiction
thereover, shall pay to Landlord, within ten (10) days following
Landlord's demand, accompanied by copies of all relevant bills or back-
up documentation, Tenant's pro rata share of such additional charge or
tax.
ARTICLE 24
Broker
Landlord and Tenant covenant and represent that the sole
broker who negotiated and brought about this transaction was Cohen
Brothers Realty Corporation and Landlord agrees to pay a commission
therefor as per separate agreement. Landlord and Tenant agree to hold
the other harmless against any claims for a brokerage commission
arising out of a breach by the other of the representations contained
in this Article.
ARTICLE 25
Subordination and Ground Lease
Section 25.01. This Lease is subject and subordinate to
(a) the ground and underlying lease, dated as of September 1, 1978
between The Durst Buildings Corporation, landlord, and 805 Third
Avenue Corporation, tenant, a memorandum of which was recorded in the
Office of the City Register, New York County, in Reel 451, Page 1816
and to the rights of the landlord thereunder (the landlord under said
ground and underlying lease being sometimes referred to in this Lease
as the "Overlandlord"), (b) any other ground and underlying lease, and
(c) to all mortgages which may now or hereafter affect any such ground
and underlying lease on the Building, and to all renewals,
modifications, amendments, consolidations, replacements or extensions
of any of the foregoing. This clause shall be self-operative and no
further instrument of subordination shall be required. However, in
confirmation of such subordination, Tenant, at any time and from time
to time, shall execute promptly, and within fifteen (15) days of such
request, any certificate and document that Landlord may reasonably
request which reasonably evidences such subordination.
Section 25.02. (a) The Tenant covenants and agrees
that if by reason of a default under any underlying lease (including
an underlying lease through which the Landlord derives its leasehold
estate in the Demised Premises), or under any mortgage such underlying
lease and the leasehold estate of the Landlord in the Premises demised
hereby is terminated, the Tenant will attorn to the then holder of the
reversionary interest in the premises demised by this Lease and will
recognize such holder as the Tenant's Landlord under this Lease,
unless the lessor under such underlying lease or the holder of any
such mortgage shall, in any proceeding to terminate such underlying
lease or foreclose such mortgage, elects to terminate this Lease and
the rights of Tenant hereunder provided, however, the holder of the
reversionary interest shall not be (i) liable for any act or omission
or negligence of Landlord under this Lease; (ii) subject to any
counterclaim, defense or offset, not expressly provided for in this
Lease and asserted with reasonable promptness which theretofore shall
have accrued to Tenant against Landlord; (iii) obligated to perform
any work; (iv) bound by any previous modification or amendment of this
Lease or by any previous prepayment of more than one (1) month's rent,
unless such modification or prepayment shall have been approved in
writing by the holder of such Mortgage; (v) obligated to repair the
Demised Premises, or the Building, or any part thereof, in the event
of any damage beyond such repair as can reasonably be accomplished
from the net proceeds of insurance actually made available to the then
holder of the reversionary interest; or (iv) obligated to repair the
Demised Premises or the Building, or any part thereof, in the event of
partial condemnation of the Demised Premises or the Building. Nothing
contained in this subparagraph shall be construed to impair any right
otherwise exercisable by any such holder. Tenant agrees to execute
and deliver, at any time and from time to time, upon the request of
the Landlord of or the lessor under any such underlying lease or the
holder of any such mortgage any instrument which may be necessary or
appropriate to evidence such attornment. The Tenant further waives
the provisions of any statute or rule or law now or hereafter in
effect which may give or purport to give Tenant any right of election
to terminate this Lease or to surrender possession of the premises
demised hereby in the event any proceeding is brought by the lessor
under any underlying lease or the holder of any such mortgage to
terminate the same, and agrees that unless and until any such lessor,
in connection with any such proceeding, shall elect to terminate this
Lease and the rights of Tenant hereunder, this Lease shall not be
affected in any way whatsoever by any such proceeding.
(b) Upon Tenant's receipt of a written notice from
the lessor under any underlying lease or the holder of any such
mortgage to the effect that (i) the lessor of said underlying lease or
the holder of any such mortgage is entitled to send a notice to the
Landlord, as tenant under said underlying lease, terminating said
lease, and (ii) the Tenant should pay the minimum rent and additional
rent thereafter due and payable under this Lease to said lessor or the
holder of any such mortgage at a place designated in such notice,
Tenant shall pay such minimum rent and additional rent to said lessor
under said underlying lease or the holder of any such mortgage at such
designated place until such time as said lessor or holder shall notify
Tenant that Landlord is no longer in default under said underlying
lease or such mortgage and that Tenant may resume paying all minimum
rent and additional rent thereafter due and payable under this Lease
to Landlord. Tenant shall have no liability to the Landlord for
paying any minimum rent or additional rent to said lessor under the
underlying lease or holder of any such mortgage or otherwise acting in
accordance with the provisions of any notice sent to it under this
paragraph and shall be relieved of its obligations to pay Landlord any
minimum rent or additional rent under this Lease to the extent such
payments are made to said lessor under the underlying lease.
Section 25.03. In the event of any act or omission by
Landlord which would give Tenant the right to terminate this Lease or
to claim a partial or total eviction, pursuant to the terms of this
Lease, if any, Tenant will not exercise any such right until:
(a) it has given written notice to cure (whether
concurrently with or subsequent to any notice given to Landlord),
regarding such act or omission to the holder of any leasehold mortgage
and to the landlord of any ground or underlying lease, whose names and
addresses shall previously have been furnished to Tenant, addressed to
such holder and landlord at the last addresses so furnished, and
(b) a reasonable period of time (not to exceed the
period in this Lease or the ground lease or the mortgage, as the case
may be) for remedying such act or omission shall have elapsed
following such giving of notice during which such parties, or any of
them, with reasonable diligence, following the giving of such notice,
shall not have commenced and is or are not continuing to remedy such
act or omission or to cause the same to be remedied.
Section 25.04. If, in connection with obtaining
financing for the Building, or of Landlord's interest in any ground or
underlying lease, a banking, insurance or other recognized
institutional lender shall request modifications in this Lease as a
condition to such financing, Tenant will not withhold, delay or defer
its consent thereto and its execution and delivery of such
modification agreement, provided that such modifications do not
increase the obligations of Tenant hereunder or adversely affect the
leasehold interest hereby created or Tenant's use and enjoyment of the
Demised Premises.
ARTICLE 26
Estoppel Certificate
Each party shall at any time, and from time to time, within
ten (10) days after so requested by the other execute, acknowledge and
deliver to the other, a statement addressed to the other (a)
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), (b) stating the
dates to which the minimum rent and additional rent have been paid,
(c) stating whether or not, to the knowledge of such party, there
exists any default by the other under this Lease, and, if so,
specifying each such default, and (d) such other information as may be
required by Landlord or any mortgagee, it being intended that any such
statement may be relied upon by the other, by any mortgagee or
prospective mortgagee of any mortgage affecting the Building or the
leasehold estate under any ground or underlying lease affecting the
land described in Schedule C and/or Building and improvements thereon,
or may be relied upon by the landlord under any such ground or
underlying lease or a purchaser of Lessee's estate under any such
ground or underlying lease or any interest therein.
ARTICLE 27
Waiver of Jury Trial
Tenant hereby waives the right to trial by jury in any
summary proceeding that may hereafter be instituted against it or in
any action or proceeding that may be brought by Landlord on matters
which are connected with this Lease, or any of its provisions or
Tenant's use or occupancy of the Demised Premises, including any
claims for injury or damage, or any emergency or other statutory
remedy with respect thereto.
ARTICLE 28
Surrender of Premises
Section 28.01. Upon the expiration or other termination
of the term of this Lease, Tenant shall quit and surrender the Demised
Premises in good order and condition, ordinary wear and tear and
damage by fire or other casualty excepted, and shall remove all its
property therefrom, except as otherwise provided in this Lease.
Tenant's obligation to observe or perform this covenant shall survive
the expiration or other termination of the term of this Lease.
Section 28.02. In the event Tenant shall remain in
possession of the Demised Premises after the expiration or other
termination of the term of this Lease, such holding over shall not
constitute a renewal or extension of this Lease. Landlord, may, at
its option, elect to treat Tenant as one who is not removed at the end
of the term, and thereupon be entitled to all of the remedies against
Tenant provided by law in that situation or Landlord may elect to
construe such holding over as a tenancy from month-to-month, subject
to all of the terms and conditions of this Lease, except as to the
duration thereof, and the minimum rent shall be due, in either of such
events, at a monthly rental rate equal to two (2) times the monthly
installment of minimum rent which would otherwise be payable for such
month, together with any and all additional rent.
ARTICLE 29
Rules and Regulations
Section 29.01. Tenant, its servants, employees, agents,
visitors and licensees shall observe faithfully and comply with the
rules and regulations set forth in Schedule "D" attached hereto and
made a part hereof. Landlord shall have the right from time to time
during the term of this Lease to make reasonable changes in and
additions to the rules thus set forth provided such changes and
additions are applicable to all other office tenants in the Building.
All rules and regulations shall be enforced in a non-discriminatory
manner.
Section 29.02. Any failure by Landlord to enforce any
rules and regulations now or hereafter in effect, either against
Tenant or any other tenant in the Building, shall not constitute a
breach hereunder or waiver of any such rules and regulations.
ARTICLE 30
Successors and Assigns and Definitions
Section 30.01. The covenants, conditions and agreements
contained in this Lease shall bind and enure to the benefit of
Landlord and Tenant and their respective distributees, legal
representatives, successors and, except as otherwise provided herein,
their assigns.
Section 30.02. The term "Landlord" as used in this
Lease, so far as the covenants and agreements on the part of Landlord
are concerned shall be limited to mean and include only the owner or
owners at the time in question of the tenant's estate under any ground
or underlying lease covering the land described in Schedule C hereto
annexed and/or the Building and improvements thereon. In the event of
any assignment or assignments of such tenant's estate, Landlord herein
named (and in case of any subsequent assignment, the then assignor)
shall be automatically freed and relieved from and after the date of
such assignment of all personal liability as respects to performance
of any of Landlord's covenants and agreements thereafter to be
performed, and such assignee shall be bound by all of such covenants
and agreements; it being intended that Landlord's covenants and
agreements shall be binding on Landlord, its successors and assigns
only during and in respect of their successive periods of such
ownership.
However, in any event, the partners in Landlord shall not
have any personal liability or obligation by reason of any default by
Landlord under any of Landlord's covenants and agreements in this
Lease. In case of such default, Tenant will look only to Landlord's
estate, as tenant, under such ground or underlying lease and its
interest in the Building, to recover any loss or damage resulting
therefrom; and Tenant shall have no right to nor shall Tenant assert
any claim against nor have recourse to Landlord's other property or
assets to recover such loss or damage.
Section 30.03. All pronouns or any variation thereof
shall be deemed to refer to masculine, feminine or neuter, singular or
plural as the identity of the person or persons may require; and if
Tenant shall consist of more than one (1) person, the obligations of
such persons, as Tenant, under this Lease, shall be joint and several.
Section 30.04. The definitions contained in Schedule F
annexed hereto are hereby made a part of this Lease.
ARTICLE 31
Notices
Any notice, statement, certificate, request, approval,
consent or demand required or permitted to be given under this Lease
shall be in writing sent by registered or certified mail (or
reputable, commercial overnight courier service) return receipt
requested, addressed, as the case may be, to Landlord, at 750
Lexington Avenue, New York, New York 10022, and to Tenant prior to the
Commencement Date at 342 Madison Avenue, Suite 622, New York, New York
10173, and after the Commencement Date at the Demised Premises, or to
such other addresses as Landlord or Tenant respectively shall
designate in the manner herein provided. Such notice, statement,
certificate, request, approval, consent or demand shall be deemed to
have been given on the date when mailed, as aforesaid, or on the date
of delivery by overnight courier.
ARTICLE 32
No Waiver; Entire Agreement
Section 32.01. The specific remedies to which Landlord
may resort under the provisions of this Lease are cumulative and are
not intended to be exclusive of any other remedies or means of redress
to which Landlord may be lawfully entitled in case of any breach or
threatened breach by Landlord of any of the terms, covenants and
conditions of this Lease. The failure of Landlord to insist upon the
strict performance of any of the terms, covenants and conditions of
this Lease, or to exercise any right or remedy herein contained, shall
not be construed as a waiver or relinquishment for the future of such
term, covenant, condition, right or remedy. A receipt by Landlord of
minimum rent or additional rent with knowledge of the breach of any
term, covenant or condition of this Lease shall not be deemed a waiver
of such breach. This Lease may not be changed or terminated orally.
In addition to the other remedies in this Lease provided, Landlord
shall be entitled to seek to restrain by injunction, the violation or
attempted or threatened violation of any of the terms, covenants and
conditions of this Lease or to a decree, any court having jurisdiction
in the matter, compelling performance of any such terms, covenants and
conditions.
Section 32.02. No receipt of monies by Landlord from
Tenant, after any re-entry or after the cancellation or termination of
this Lease in any lawful manner, shall reinstate the Lease; and after
the service of notice to terminate this Lease, or after commencement
of any action, proceeding or other remedy, Landlord may demand,
receive and collect any monies due, and apply them of account of
Tenant's obligations under this Lease but without in any respect
affecting such notice, action, proceeding or remedy, except that if a
money judgment is being sought in any such action or proceeding, the
amount of such judgment shall be reduced by such payment.
Section 32.03. If Tenant is in arrears in the payment of
minimum rent or additional rent, Tenant waives its right, if any, to
designate the items in arrears against which any payments made by
Tenant are to be credited and Landlord may apply any of such payments
to any such items in arrears as Landlord, in its sole discretion,
shall determine, irrespective of any designation or request by Tenant
as to the items against which any such payments shall be credited.
Section 32.04. No payment by Tenant nor receipt by
Landlord of a lesser amount than may be required to be paid hereunder
shall be deemed to be other than on account of any such payment, nor
shall any endorsement or statement on any check or any letter
accompanying any check tendered as 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 of such payment
due or pursue any other remedy in this Lease provided.
Section 32.05. This Lease and the Schedules annexed
hereto constitute the entire agreement between Landlord and Tenant
referable to the Demised Premises, and all prior negotiations and
agreements are merged herein.
Section 32.06. If any term or provision of this Lease or
the application thereof to any person or circumstance shall, to any
extent, be invalid or unenforceable, the remainder of this Lease, or
the application of such term or provision to persons or circumstances
other than those 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.
ARTICLE 33
Captions
The captions of Articles in this Lease are inserted only as
a matter of convenience and for reference and they in no way define,
limit or describe the scope of this Lease or the intent of any
provision thereof.
ARTICLE 34
Inability to Perform
Tenant's obligation to pay minimum rent and additional rent
and to perform all of the other terms, covenants and conditions of
this Lease shall not be affected, diminished, or excused if by reason
of unavoidable delays (as hereinafter defined) Landlord fails or is
unable to supply any services or make any repairs or perform any work
which under this Lease Landlord has expressly agreed to supply, make
or perform, and the time for the performance or observance thereof
shall be extended for the period of time as Landlord shall have been
so delayed.
The words "unavoidable delays", as used in this Lease shall
mean (a) the enactment of any law or issuance of any governmental
order, rule or regulation (i) prohibiting or restricting performance
of work of the character required to be performed by Landlord under
this Lease, or (ii) establishing rationing or priorities in the use of
materials, or (iii) restricting the use of labor, and (b) strikes,
lockouts, acts of God, inability to obtain labor or materials, enemy
action, civil commotion, fire, unavoidable casualty or other similar
types of causes beyond the reasonable control of Landlord, other than
financial inability.
ARTICLE 35
No Representations by Landlord
Neither Landlord nor any agent or employee of Landlord has
made any representation whatsoever with respect to the Demised
Premises except as expressly set forth in this Lease.
ARTICLE 36
Security Deposit
Section 36.01. Concurrently with the execution of this
Lease, Tenant shall deposit with Landlord the sum of $85,000, by
Letter of Credit as provided in Section 36.02, as security for the
faithful performance and observance by Tenant of the terms, provisions
and conditions of this Lease. Tenant agrees that, in the event that
Tenant defaults in respect of any of the terms, provisions and
conditions of this Lease (including the payment of minimum rent and
additional rent), after any applicable notice and expiration of any
applicable cure period, Landlord may notify the "Issuing Bank" (as
such term is defined in Section 36.02) and thereupon receive all of
the monies represented by the said Letter of Credit and use, apply, or
retain the whole or any part of such proceeds, as the case may be, to
the extent required for the payment of any rent, additional rent, or
any other sum as to which Tenant is in default, or for any sum that
Landlord may expend or may be required to expend by reason of Tenant's
default, in respect of any of the terms, covenants and conditions of
this Lease (including any damages or deficiency accrued before or
after summary proceedings or other re-entry by Landlord). In the
event that Landlord applies or retains any portion or all of the
proceeds of such Letter of Credit Tenant shall, within five (5)
business days after demand by Landlord, restore the amount so applied
or retained so that, at all times, the amount deposited shall be
$85,000 or the amount then required hereunder. Upon Tenant's making
such additional deposit, Landlord is hereby authorized to act as
Tenant's agent to use the proceeds of the Letter of Credit to obtain a
new Letter of Credit and Tenant hereby irrevocable appoints Landlord
as Tenant's agent and attorney-in-fact to obtain a replacement Letter
of Credit from the Issuing Bank or any other qualifying bank (such
qualifying bank shall then be the Issuing Bank). If Tenant shall fail
or refuse to make such additional deposit, Landlord shall have the
same rights in law and in equity and under this Lease as it has with
respect to a default by Tenant in the payment of minimum rent. In the
event that Tenant shall fully and faithfully comply with all of the
terms, provisions, covenants and conditions of this Lease, the cash
security or Letter of Credit, as the case may be, shall be returned to
Tenant within twenty (20) days after the expiration date and after
delivery of possession of the entire Demised Premises to Landlord in
the condition provided in this Lease for such delivery of possession.
Section 36.02. Such letter of credit (the "Letter of
Credit") shall be a clean, irrevocable and unconditional Letter of
Credit issued by and drawn upon any commercial bank (the "Issuing
Bank") with offices for banking purposes in the City of New York and
having a net worth of not less than $250,000,000.00, which Letter of
Credit shall have an initial term of not less than one year or
thereafter having a term expiring not less than ninety (90) days
following the expiration of the term of this Lease, shall permit
multiple drawings, shall be transferable by the beneficiary to a
successor landlord at one or more occasions at no charge to the
beneficiary and otherwise be in form and content satisfactory to
Landlord, be for the account of Landlord and be in the amount of
$85,000 or the amount then required hereunder. Notwithstanding the
foregoing, if at any time the net worth of the Issuing Bank is less
than $250,000,000.00 or its rating is downgraded from its current
rating, and provided Tenant does not replace the existing Letter of
Credit with a Letter of Credit meeting the criteria of Section 36.02
within the sooner of thirty (30) days following Tenant's receipt of
Landlord's notice to Tenant of either of the foregoing events or the
number of days remaining until the expiration date of the existing
Letter of Credit, Landlord shall have the right, at any time
thereafter, to draw down the entire proceeds pursuant to the terms of
Section 36.01 as cash security pending the replacement of such Letter
of Credit. The Letter of Credit shall provide that:
(a) the Issuing Bank shall pay to Landlord or its
duly authorized representative an amount up to the face amount of the
Letter of Credit upon presentation of the Letter of Credit and a sight
draft, in the amount to be drawn;
(b) it shall be deemed automatically renewed,
without amendment, for consecutive periods of one (1) year each
thereafter during the term of this Lease, unless Issuing Bank sends
written notice (hereinafter referred to as the Non-Renewal Notice) to
Landlord by certified or registered mail, return receipt requested,
not less than sixty (60) days next preceding the expiration date of
the Letter of Credit that it elects not to have the Letter of Credit
renewed, and it being agreed that the giving of such Non-Renewal
Notice shall for the purpose of this Article 37 be deemed a default
under this Lease, unless Tenant replaces the Letter of Credit with a
substitute Letter of Credit meeting the criteria of this Section 36.02
or with a cash deposit in the amount then required hereunder at least
thirty (30) days prior to the expiration date of the Letter of Credit.
(c) Landlord, subsequent to its receipt of a Non-
Renewal Notice, and prior to the expiration date of the Letter of
Credit, shall have the right, exercisable by means of sight draft, to
receive the monies represented by the Letter of Credit and hold such
proceeds pursuant to the terms of Section 36.01 as cash security
pending the replacement of such Letter of Credit; and
(d) upon Landlord's sale or assignment of its
estate as Tenant under any ground or underlying lease, the Letter of
Credit shall be transferable by Landlord, as provided in Section
36.03.
Section 36.03. In the event Landlord's estate as tenant
under any ground or underlying Lease is sold or assigned, Landlord
shall have the right to transfer the Letter of Credit then held by
Landlord to the vendee or assignee, and Landlord shall thereupon be
released by Tenant from all liability for the return of such Letter of
Credit. In such event, Tenant agrees to look solely to the new
Landlord for the return of said Letter of Credit. It is agreed that
the provisions hereof shall apply to every transfer or assignment made
of the Letter of Credit to a new Landlord.
Section 36.04. Tenant covenants that it will not assign
or encumber, or attempt to assign or encumber, the Letter of Credit
deposited hereunder as security, and that neither Landlord nor its
successors or assigns shall be bound by any such assignment,
encumbrance, attempted assignment, or attempted encumbrance.
Section 36.05. The use of the security, as provided in
this Article, shall not be deemed or construed as a waiver of Tenant's
default or as a waiver of any other rights and remedies to which
Landlord may be entitled under the provisions of this Lease by reason
of such default, it being intended that Landlord's rights to use the
whole or any part of the security shall be in addition to but not in
limitation of any such other rights and remedies; and Landlord may
exercise any of such other rights and remedies independent of or in
conjunction with its rights under this Article.
Section 36.06. Provided Tenant is not then and shall not
have been in default under any of the terms, covenants and conditions
of this Lease, the amount of the security deposit hereunder shall be
reduced to $50,000 after Landlord has collected twenty-four (24)
consecutive months of minimum rent and escalation rent under Article
22, and shall be further reduced to $40,000 after Landlord has
collected thirty-six (36) consecutive months of such minimum rent and
escalation rent. In either of such events, Tenant shall deliver to
Landlord a replacement Letter of Credit in the then applicable reduced
amount in compliance with the provisions of Section 36.02 and
otherwise in form and substance satisfactory to Landlord and Landlord
will then return to Tenant the existing Letter of Credit, or Tenant
will deliver to Landlord an amendment of the existing Letter of Credit
reducing the amount thereof to the then applicable required amount as
aforesaid.
ARTICLE 37
Late Payment Charges
If Tenant shall fail to pay any minimum rent or additional
rent within ten (10) days after its due date, Tenant shall pay a late
charge of $.05 for each $1.00 which remains unpaid after such period
to compensate Landlord for additional expense in processing such late
payment. In addition, if Tenant fails to pay any minimum rent or
additional rent within fifteen (15) days after its due date, Tenant
shall pay interest thereon from the date due until the date paid at
the rate of one and one-half percent (1 1/2%), per month. If any
check of Tenant in payment of any sum due under this Lease, including
but not limited to minimum rent and additional rent, fails to clear
the bank, Tenant shall pay a charge of $100.00.
ARTICLE 38
Rent Control
In the event the minimum rent and/or additional rent or any
part thereof provided to be paid by Tenant under the provisions of
this Lease during the demised term shall become uncollectible or shall
be reduced or required to be reduced or refunded by virtue of any
federal, state, county or city law, order or regulation, or by any
direction of a public officer or body pursuant to law, or the orders,
rules, code or regulations of any organization or entity formed
pursuant to law, Tenant shall enter into such agreement(s) and take
such other steps (without additional expense or liability to Tenant)
as Landlord may reasonably 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 (and not in excess of the amounts reserved
therefor under this Lease). Upon the termination of such legal rent
restriction, (a) the minimum rent and/or additional rent 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 promptly upon being billed, to the maximum
extent legally permissible, an amount equal to (i) minimum rent and/or
additional rent 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.
IN WITNESS WHEREOF, Landlord and Tenant have duly executed
this Lease as of the day and year first above written.
805 THIRD AVE. CO.
By:_____________________________
Charles Steven Cohen, Agent
Landlord
INFOSAFE SYSTEMS, INC.
By:_____________________________
Tenant
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On the day of , 1997, before
me personally came Charles Steven Cohen, to me known and known to me
to be an agent of the firm of 805 THIRD AVE. CO., the partnership
described in and which executed the foregoing instrument, and
acknowledged that he executed the same as agent for and on behalf of
and with the authority of the said firm of 805 THIRD AVE. CO., for the
uses and purposes therein mentioned.
______________________________
Notary Public
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On the day of , 199 , before me
personally came
, to me known, who, being by me duly sworn,
did depose and say that he resides at
; that he is the
of Infosafe Systems, Inc., 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.
___________________________
Notary Public
SCHEDULE A
Floor Plan
SCHEDULE B
Work
Lease
Between
805 THIRD AVE. CO.
As Landlord
and
INFOSAFE SYSTEMS, INC.
As Tenant
Relating to part of the 9th floor in Building
805 Third Ave., New York, New York
1. Tenant, at its expense, has caused to be prepared
preliminary plans and specifications by IRI Design Associates, Inc.,
Tenant's architect, Nos. A-1 through A-8, dated September 19, 1997,
which have been delivered to and initialed and approved by Landlord
and attached hereto. Tenant, at Tenant's expense, shall cause to be
prepared by Tenant's architect the following final architectural plans
and specifications and by Jack Sotnikow, Tenant's engineer the
following mechanical plans and specifications, for the work to be
performed by Landlord under Article 2 of this Schedule B:
(a) One sepia plus 12 prints of complete, finished,
detailed architectural drawings and specifications for Tenant's
partition layout, reflected ceiling and other installations.
(b) One sepia plus 12 prints of complete mechanical and
structural plans and specifications where necessary for installation
of air conditioning system and ductwork, electrical, plumbing,
sprinkler, structural support for file area, library and safe in
bookkeeping area, and other mechanical plans if required by reason of
other mechanical work by Tenant.
All such final plans and specifications are subject to
Landlord's written approval, which approval shall not be unreasonably
withheld provided the same are substantially similar to said
preliminary plans and specifications.
Tenant covenants and agrees to cause said final plans
and specifications to be delivered to Landlord on or before October
31, 1997. Upon approval by Landlord, Tenant shall cause said plans to
be filed promptly, at Tenant's expense, with the appropriate
governmental agencies in such form (building notice, alteration or
other form) as Landlord may direct, including filing of Building
Department Form No. TR-1. Tenant, at Tenant's expense, shall obtain a
building permit for such work.
Landlord shall not be obligated to commence its work
until such permit is obtained. Tenant shall be responsible for the
coordination of all architectural and engineering design drawings
including applicable code and local law compliance, project dimensions
and existing field conditions.
2. (a) In accordance with and as indicated on the
plans and specifications, Landlord, at Landlord's expense, except as
otherwise specified in this Schedule B and the Lease, will perform and
install the work and installations therein set forth, all of which
shall be of material, manufacture, design, capacity, finish and color
of the building standard adopted by Landlord for the Building:
(b) Landlord, at Landlord's expense, will do the
following above building standard work, as shown on the aforesaid
plans:
(i) One (1) set of bi-fold doors @ Projection Room
(ii) Wall type 7, clerestory glass
(iii) Millwork, wood partition caps
(iv) Provide blocking for folding wall
(c) Notwithstanding the foregoing, Landlord, at
Tenant's expense, will do the following above building standard work,
as shown on the aforesaid preliminary plans:
(i) Wall type 2, above
building standard $3,000.00
(ii) Folding wall in Conference Room to be
furnished and installed by Tenant
Less:
Existing lighting fixtures are to be
cleaned, relamped and reused ($1,800.00)
-----------
Total Net Cost: $1,200.00
Said cost is to be paid to Landlord concurrently with
the execution of this Lease.
3. If Tenant shall request Landlord to perform any
additional or non-standard work, Tenant shall submit to Landlord the
necessary plans and specifications therefor. Landlord, at its sole
option, may perform such work, at Tenant's expense, as a Tenant's
extra, together with twenty-one (21%) percent of such price for
Landlord's overhead. Prior to commencing any such work requested by
Tenant, Landlord will submit to Tenant written itemization of the
price of any such work. If Tenant shall fail to approve any such
prices(s) within seven (7) days, they shall be deemed disapproved in
all respects by Tenant and Landlord shall not be authorized to proceed
thereon, and Tenant shall then have the work performed by other
contractors subject to the provisions of Section 5.01 of the Lease.
Concurrently with Tenant's approval, Tenant shall pay Landlord as
additional rent, fifty (50%) percent of the price of such work or one
hundred (100%) of the price of the work if the price is less than
$10,000, together with 21% of the aggregate price of all work for
Landlord's overhead, and thereafter, within seven (7) days after being
billed therefor, Tenant shall pay Landlord as additional rent the pro
rata portion of the price of such work for which Tenant is obligated
to pay or toward which Tenant is obligated to contribute, which has
been previously completed. If Tenant shall default in making such
payment within seven (7) days after being billed, Landlord shall have
the same rights as in the event of default by Tenant in the payment of
minimum rent and additional rent, and Landlord shall have the further
right to discontinue performing any additional work without the same
affecting the date of substantial completion as provided in Paragraph
4 below. Upon Landlord advising Tenant that Landlord has
substantially completed its work, Tenant shall pay to Landlord the
entire price of such work remaining unpaid, notwithstanding that minor
details or adjustments which shall not materially interfere with
Tenant's use of the Demised Premises may not then have been completed,
as provided in Section 2.01.
4. Tenant acknowledges that Landlord will be delayed in
substantially completed the work to be performed by Landlord under
Article 1 of this Schedule B, as a result of:
(i) Tenant's delay in furnishing the final
plans and specifications; or
(ii) Tenant's request for materials, finishes
or installations other than Landlord's building standard; or
(iii) Tenant's changes in said plans; or
(iv) Delays in the completion of work
performed on behalf of Tenant by a person, firm or corporation
employed by Tenant; or
(v) Any other delay caused by Tenant,
therefore the Commencement Date of the Lease, and the payment of
minimum rent thereunder shall be accelerated by the number of days of
such delay.
Tenant shall approve mechanical shop drawings within three
(3) days after receipt thereof and shall approve all other shop
drawings within five (5) days after receipt.
5. Following Landlord's installation of any ceiling
materials, if by reason of any work performed by or on behalf of
Tenant any of the ceiling materials are damaged and/or removed by
Tenant's contractor, such damaged ceiling materials shall be replaced
by Landlord at the expense of Tenant.
6. Landlord will permit Tenant and its agents to enter
the Demised Premises prior to the Commencement Date of the Lease in
order that Tenant may perform through its own contractors, to be first
approved by Landlord, such other work and decorations as Tenant may
desire, at the same time that Landlord's contractors are working in
the space. The foregoing license to enter prior to the Commencement
Date is conditioned upon Tenant's workmen and mechanics working in
harmony and not interfering with the labor employed by Landlord,
Landlord's mechanics or contractors or by any other tenants or their
contractors. If at any time such entry shall cause disharmony or
interference therewith, this license may be withdrawn by Landlord upon
24 hours notice to Tenant.
Workers' Compensation and public liability insurance and
property damage insurance, all in amounts and with companies and on
forms reasonably satisfactory to Landlord, shall be provided and at
all times maintained by Tenant's contractors engaged in the
performance of the work, and before proceeding with the work,
certificates of such insurance shall be furnished to Landlord.
Such entry shall be deemed to be under all of the terms,
covenants, and conditions of the Lease except as to the covenant to
pay fixed rent. Landlord shall not be liable in any way for any
injury, loss or damage which may occur to any of Tenant's decorations
or installations so made prior to the Commencement Date, the same
being solely at Tenant's risk.
805 THIRD AVE. CO.
By:___________________________
Charles Steven Cohen, Agent
Landlord
Accepted by:
INFOSAFE SYSTEMS, INC.
By:________________________
Tenant
SCHEDULE C
Description of Land
All that lot, piece and parcel of land situate in the
Borough of Manhattan, City, County and State of New York, bounded and
described as follows:
BEGINNING at the corner formed by the intersection of the
southerly side of East 50th Street and the easterly side of Third
Avenue; running
THENCE southerly along the easterly side of Third Avenue 150
feet 5 inches;
THENCE easterly, parallel with East 49th Street 115 feet 2-
1/2 inches;
THENCE southerly parallel with Third Avenue 50 feet 5 inches
to the northerly side of East 49th Street;
THENCE easterly along the northerly side of East 49th Street
40 feet 11-1/2 inches;
THENCE northerly parallel with Third Avenue 14 feet;
THENCE northwesterly 37 feet 3 inches to a point distant 149
feet 2-1/2 inches easterly of the easterly side of Third Avenue;
THENCE westerly parallel with East 49th Street 3 feet to the
center line of Old Post Road;
THENCE northerly along the center line of Old Post Road 74
feet 2-3/8 inches to a point distant 481 feet 3 inches west of the
westerly side of Second Avenue, and 78 feet 1-1/2 inches south of the
southerly side of West 50th Street along a line drawn at right angles
thereto;
THENCE easterly parallel with East 50th Street 31 feet 3
inches;
THENCE still easterly 6 feet 3 inches to a point distant 78
feet 1 inch from the southerly side of East 50th Street measured along
a line drawn at right angles thereto;
THENCE northerly parallel with Third Avenue and part of the
distance through a party wall, 78 feet 1 inch to the southerly side of
East 50th Street;
THENCE westerly along the southerly side of East 50th Street
166 feet 3 inches to the corner aforesaid, the point or place of
BEGINNING.
SCHEDULE D
Rules and Regulations
1. The rights of tenants in the entrances, corridors,
elevators and escalators of the Building are limited to ingress to and
egress from the tenants' premises for the tenants and their employees,
licensees, guests, customers and invitees, and no tenant shall use, or
permit the use of, the entrances, corridors, escalators or elevators
for any other purpose. No tenant shall invite to the tenant's
premises, or permit the visit of, persons in such numbers or under
such conditions as to interfere with the use and enjoyment of any of
the plazas, entrances, corridors, escalators, elevators and other
facilities of the Building by other tenants. Fire exits and stairways
are for emergency use only, and they shall not be used for any other
purposes by the tenants, their employees, licensees or invitees. No
tenant shall encumber or obstruct, or permit the encumbrance or
obstruction of any of the sidewalks, plazas, entrances, corridors,
escalators, elevators, fire exits or stairways of the Building. The
Landlord reserves the right to control and operate the public portions
of the Building and the public facilities, as well as facilities,
furnished for the common use of the tenants, in such manner as it
deems best for the benefit of the tenants generally.
2. The reasonable cost of repairing any damage to the
public portions of the Building or the public facilities or to any
facilities used in common with other tenants, caused by a tenant or
the employees, licensees or invitees of the tenant, shall be paid by
such tenant.
3. The Landlord may refuse admission to the Building
outside of ordinary business hours to any person not known to the
watchman in charge or not having a pass issued by the Landlord or not
properly identified, and may require all persons admitted to or
leaving the Building outside of ordinary business hours to register.
Tenant's employees, agents and visitors shall be permitted to enter
and leave the building after ordinary business hours whenever
appropriate arrangements have been previously made between the
Landlord and the Tenant with respect thereto. Each tenant shall be
responsible for all persons for whom he requests such permission and
shall be liable to the Landlord for all acts of such persons. Any
person whose presence in the Building at any time shall, in the
judgment of the Landlord, be prejudicial to the safety, character,
reputation and interests of the Building or its tenants may be denied
access to the Building or may be rejected therefrom. In case of
invasion, riot, public excitement or other commotion the Landlord may
prevent all access to the Building during the continuance of the same,
by closing the doors or otherwise, for the safety of the tenants and
protection of property in the Building. The 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 and enforcement of such
requirement shall not impose any responsibility on the Landlord for
the protection of any tenant against the removal of property from the
premises of the tenant. The Landlord shall, in no way, be liable to
any tenant for damages or loss arising from the admission, exclusion
or ejection of any person to or from the tenant's premises or the
Building under the provisions of this rule.
4. No tenant shall obtain or accept for use in its
premises towel, barbering, boot blacking, floor polishing, lighting
maintenance, cleaning or other similar services from any persons not
authorized by the Landlord in writing to furnish such services,
provided always that the charges for such services by persons
authorized by the Landlord are comparable to the industry charge.
Such services shall be furnished only at such hours, in such places
within the tenant's premises and under such reasonable regulations as
may be fixed by the Landlord.
5. No awnings or other projections over or around the
windows shall be installed by any tenant, and only such window blinds
as are supplied or permitted by the Landlord shall be used in a
tenant's premises.
6. There shall not be used in any space, or in the
public halls of the Building, either by the Tenant or by jobbers or
others, in the delivery or receipt of merchandise, any hand trucks,
except those equipped with rubber tires and side guards.
7. All entrance doors in each tenant's premises shall be
left locked when the tenant's premises are not in use. Entrance doors
shall not be left open at any time. All windows in each tenant's
premises shall be kept closed at all times and all blinds therein
above the ground floor shall be lowered when and as reasonably
required because of the position of the sun, during the operation of
the Building air conditioning system to cool or ventilate the tenant's
premises.
8. No noise, including the playing of any musical
instruments, radio or television, which, in the judgment of the
Landlord, might disturb other tenants in the Building shall be made or
permitted by any tenant. Nothing shall be done or permitted in any
tenant's premises, and nothing shall be brought into or kept in any
tenant's premises, which would impair or interfere with any of the
Building services or the proper and economic heating, cleaning or
other servicing of the Building or the premises, or the use or
enjoyment by any other tenant of any other premises, nor shall there
be installed by any tenant any ventilating, air conditioning,
electrical or other equipment of any kind which, in the judgment of
the Landlord, might cause any such impairment or interference. No
dangerous, flammable, combustible or explosive object or material
shall be brought into the Building by any tenant or with the
permission of any tenant.
9. Tenant shall not permit any cooking or food odors
emanating within the Demised Premises to seep into other portions of
the Building.
10. No acids, vapor or other materials shall be
discharged or permitted to be discharged into the waste lines, vents
or flues of the Building which may damage them. the water and wash
closets and other plumbing fixtures in or serving any tenant's
premises shall not be used for any purpose other than the purpose for
which they were designed or constructed, and no sweepings, rubbish,
rags, acids or other foreign substances shall be deposited therein.
All damages resulting from any misuse of the fixtures shall be borne
by the tenant who, or whose servants, employees, agents, visitors or
licensees, shall have caused the same.
11. No signs, advertisement, notice or other lettering
shall be exhibited, inscribed, painted or affixed by any tenant on any
part of the outside or inside the premises or the Building without the
prior written consent of the Landlord. In the event of the violation
of the foregoing by any tenant, Landlord may remove the same without
any liability, and may charge the expense incurred by such removal to
the tenant or tenants violating this rule. Interior signs and
lettering on doors and elevators shall be inscribed, painted, or
affixed for each tenant by Landlord at the expense of such tenant,
(the charge not to exceed that which a reputable outside contractor
would charge), and shall be of a size, color and style reasonably
acceptable to Landlord. Landlord shall have the right to prohibit any
advertising by any tenant which impairs the reputation of the building
or its desirability as a building for offices, and upon written notice
from Landlord, Tenant shall refrain from or discontinue such
advertising.
12. No additional locks or belts of any kind shall be
placed upon any of the doors or windows in any tenant's premises and
no lock on any door therein shall be changed or altered in any
respect. Upon the termination of a tenant's lease, all keys of the
tenant's premises and toilet rooms shall be delivered to the Landlord.
13. No tenant shall mark, paint, drill into or in any
way deface any part of the Building or the premises demised to such
tenant. No boring, cutting or stringing of wires shall be permitted,
except with the prior written consent of Landlord, which will not be
unreasonably withheld or delayed, and as Landlord may reasonably
direct. No tenant shall install any resilient tile or similar floor
covering in the premises demised to such tenant except in a manner
approved by Landlord.
14. No tenant shall use or occupy, or permit any portion
of the premises demised to such tenant to be used or occupied, as an
office for a public stenographer or typist, or as a barber or manicure
shop, or as an employment bureau. No tenant or occupant shall engage
or pay any employees in the Building, except those actually working
for such tenant or occupant in the Building, nor advertise for
laborers giving an address at the Building.
15. No premises shall be used, or permitted to be used,
at any time, as a store for the sale or display of goods, wares or
merchandise of any kind, or as a restaurant, shop, booth, bootblack or
other stand, or for the conduct of any business or occupation which
predominantly involves direct patronage of the general public in the
premises demised to such tenant, or for manufacturing or for other
similar purposes.
16. The requirements of tenants will be attended only
upon application at the office of the Building. Employees of Landlord
shall not perform any work or do anything outside of the regular
duties, unless under special instructions from the office of the
Landlord.
17. Each tenant shall, at its expense, provide
artificial light in the premises demised to such tenant for Landlord's
agents, contractors and employees while performing janitorial or other
cleaning services and making repairs or alterations in said premises.
18. The tenant's employees shall not loiter around the
hallways, stairways, elevators, front, roof or any other part of the
Building used in common by the occupants thereof.
19. If the premises demised to any tenant become
infested with vermin, such tenant, at its sole cost and expense, shall
cause its premises to be exterminated, from time to time, to the
satisfaction of Landlord and shall employ such exterminators therefor
as shall be approved by Landlord.
SCHEDULE E
Cleaning Specifications
for
805 Third Avenue
Landlord will perform cleaning services in the Demised Premises and
related areas as follows:
NIGHTLY
Empty and wipe clean all ash trays.
Empty and wipe clean all waste receptacles.
Wipe clean all areas within hand high reach; including but
not limited to window sills, wall ledgers, chairs, desks, tables,
baseboards, file cabinets, convector enclosures, pictures and all
manner of office furniture.
Wipe clean all glass top desks and tables.
Sweep with treated cloths all composition tile flooring.
Carpet sweep all carpeted areas, and vacuum clean weekly.
PUBLIC LAVATORIES (Nightly or as otherwise designated)
Wash and dry all bowls, seats urinals, washbasins and mirrors.
Wash and wipe dry all metal work.
Supply and insert toilet tissue, toweling and soap in dispensers.
Empty paper towel and sanitary napkin disposal receptacles
and remove to designated area.
Sweep and wash floors.
Wipe clean all sills, partitions and ledges.
Wipe clean exterior of waste cans and dispensing units.
Wash both partitions monthly.
Wash tile walls monthly.
Wash and dry interior of waste cans and sanitary disposal
containers weekly. Machine scrub flooring monthly.
Dust exterior of light fixtures monthly.
FLOOR MAINTENANCE
A. Public Corridors in Multi-Tenanted Floors only.
Damp mop and buff all composition flooring monthly.
B. High Dusting Public Areas.
High dust all walls, ledges, pictures, anemostats,
registers, grilles, etc., not reached in normal nightly cleaning
quarterly.
WINDOW CLEANING SERVICES
Clean all exterior windows, inside and out periodically
during the year, as Landlord deems necessary.
RUBBISH REMOVAL SERVICES
Remove all ordinary dry rubbish and paper only from the
office premises of the Demised Premises daily, Monday through Friday,
holidays excepted.
SCHEDULE F
Definitions
(a) The term mortgage shall include an indenture of
mortgage and deed of trust to a trustee to secure an issue of bonds,
and the term mortgagee shall include such a trustee.
(b) The terms include, including and such as shall each
be construed as if followed by phrase "without being limited to".
(c) The term obligations of this lease, and words of
like import, shall mean the covenants to pay rent and additional rent
under this lease and all of the other covenants and conditions
contained in this lease. Any provision in this lease that one party
or the other or both shall do or not do or shall cause or permit or
not cause or permit a particular act, condition, or circumstance shall
be deemed to mean that such party so covenants or both parties so
covenant, as the case may be.
(d) The term Tenant's obligations hereunder, and words
of like import, and the term Landlord's obligations hereunder, and
words of like import, shall mean the obligations of this lease which
are to be performed or observed by Tenant, or by Landlord, as the case
may be. Reference to performance of either party's obligations under
this lease shall be construed as "performance and observance".
(e) Reference to Tenant being or not being in default
hereunder, or words of like import, shall mean that Tenant is in
default in the performance of one or more of Tenant's obligations
hereunder, or that Tenant is not in default in the performance of any
of Tenant's obligations hereunder, or that a condition of the
character described in Section 25.01 has occurred and continues or has
not occurred or does not continue, as the case may be.
(f) References to Landlord as having no liability to
Tenant or being without liability to Tenant, shall mean that Tenant is
not entitled to terminate this lease, or to claim actual or
constructive eviction, partial or total, or to receive any abatement
or diminution of rent, or to be relieved in any manner of any of its
other obligations hereunder, or to be compensated for loss or injury
suffered or to enforce any other kind of liability whatsoever against
Landlord under or with respect to this lease or with respect to
Tenant's use or occupancy of the Demised Premises.
(g) The term laws and/or requirements of public
authorities and words of like import shall mean laws and ordinances of
any or all of the Federal, state, city, county and borough governments
and rules, regulations, orders and/or directives of any or all
departments, subdivisions, bureaus, agencies or offices thereof, or of
any other governmental, public or quasi-public authorities, having
jurisdiction in the premises, and/or the direction of any public
officer pursuant to law.
(h) The term requirements of insurance bodies and words
of like import shall mean rules, regulations, orders and other
requirements of the New York Board of Fire 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 of the Building and/or the Demised Premises.
(i) The term repair shall be deemed to include
restoration and replacement as may be necessary to achieve and/or
maintain good working order and condition.
(j) Reference to termination of this lease includes
expiration or earlier termination of the term of this lease or
cancellation of this lease pursuant to any of provisions of this lease
or to law. Upon a termination of this lease, the term and estate
granted by this lease shall end at noon of the date of termination as
if such date were the date of expiration of the term of this lease and
neither party shall have any further obligation or liability to the
other after such termination (i) except as shall be expressly provided
for in this lease, or (ii) except for such obligation as by its nature
or under the circumstances can only be, or by the provisions of this
lease, may be, performed after such termination, and, in any event,
unless expressly otherwise provided in this lease, any liability for a
payment which shall have accrued to or with respect to any period
ending at the time of termination shall survive the termination of
this lease.
(k) The term Tenant shall mean Tenant herein named or
any assignee or other successor in interest (immediate or remote) of
Tenant herein named, while such Tenant or such assignee or other
successor in interest, as the case may be, is in possession of the
Demised Premises as owner of the Tenant's estate and interest granted
by this lease and also, if Tenant is not an individual or a
corporation, all of the persons, firms and corporations then
comprising Tenant.
(l) Words and phrases used in the singular shall be
deemed to include the plural and vice versa, and nouns and pronouns
used in any particular gender shall be deemed to include any other
gender.
(m) The rule of ejusdem generis shall not be applicable
to limit a general statement following or referable to an enumeration
of specific matters to matters similar to the matters specifically
mentioned.
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