Exhibit 10.1
LEASE
Lease (referred to herein as the "Lease") made as of the 1st day of
June 2000, between SPACELY LLC, a Delaware limited liability company, authorized
to transact business in New York State, having an office at 345 Park Avenue, New
York, New York, as Landlord (referred to herein as "Owner"), and PWR SYSTEMS,
INC., a Delaware corporation authorized to transact business in the State of New
York, having an office at 3512 Veterans Memorial Highway, Bohemia, New York
11716, as Tenant (referred to as "Tenant").
W I T N E S S E T H :
WHEREAS:
1. Owner is the owner of the buildings (referred to herein,
collectively, as the "Building") at 3500 Sunrise Highway known as the Long
Island Technology Center in the Town of Islip, County of Suffolk, State of New
York. The Building together with the plot of land upon which it stands is
referred to as the "Real Property".
2. Tenant desires to lease a portion of the Tech Building on
the first (1st) floor indicated by outlining and diagonal markings on the floor
plan annexed as Exhibit 1 for a period of five (5) years and three (3) months to
be used as general and/or executive offices; and
3. Owner is willing to lease such space to Tenant and Tenant
is willing to enter into such lease all under the terms, covenants and
conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein the parties agree as follows:
FIRST: Grant of Lease and Demised Term: Owner does hereby grant to
Tenant upon the terms and conditions of this Lease a lease to use a portion of
the Building which is delineated by outlining and diagonal markings on the floor
plan annexed hereto and made a part hereof as Exhibit 1 (referred to herein as
the "Demised Premises"). The Lease shall be for a term (referred to herein as
the "Demised Term") of five (5) years and three (3) months to commence on June
1, 2000, (such date is referred to herein as the "Commencement Date") and to end
on August 31, 2005, (the "Expiration Date"), unless the Demised Term shall
sooner terminate pursuant to any of the terms or conditions of this Lease or
pursuant to law. Tenant waives any right to recover
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any damages which may result from Owner's failure to deliver possession of the
Demised Premises to Tenant on the Commencement Date.
SECOND: Rent: (A) Tenant shall pay to Owner an annual rent (sometimes
referred to as "Fixed Rent") of EIGHTY TWO THOUSAND SIXTY FIVE and 50/100
($82,065.50) DOLLARS with respect to the period from the Commencement Date to
and including May 31, 2002 ("1st Rent Period"); EIGHTY FIVE THOUSAND EIGHT
HUNDRED EIGHTY TWO and 50/100 ($85,882.50) DOLLARS with respect to the next year
of the Demised Term ("2nd Rent Period") and EIGHTY NINE THOUSAND SIX HUNDRED
NINETY NINE and 50/100 ($89,699.50) DOLLARS with respect to the remainder of the
Demised Term ("3rd Rent Period"). Such Fixed Rent shall be payable in equal
monthly installments each in the sum of SIX THOUSAND EIGHT HUNDRED THIRTY EIGHT
and 79/100 ($6,838.79) DOLLARS with respect to the 1st Rent Period, SEVEN
THOUSAND ONE HUNDRED FIFTY SIX and 88/100 ($7,156.88) DOLLARS with respect to
the 2nd Rent Period and SEVEN THOUSAND FOUR HUNDRED SEVENTY FOUR and 96/100
($7,474.96) DOLLARS with respect to the 3rd Rent Period, and shall be payable in
advance on the first (1st) day of each month of the Demised Term without prior
demand therefor and without any offset or deduction whatsoever. The Owner shall
have all of the rights and remedies at law to collect Fixed Rent and shall be
paid in lawful money of the United States.
(B) Upon execution and delivery of this Lease, Tenant shall pay
to Owner the sum of SIX THOUSAND EIGHT HUNDRED THIRTY EIGHT and 79/100
($6,838.79) DOLLARS as the monthly installment of Fixed Rent for the period July
1, 2000 to July 31, 2000 both dates inclusive.
(C) Provided Tenant is not then in default under any of the
terms, covenants or conditions of this Lease on Tenant's part to be observed or
performed beyond the applicable grace period provided for the curing of such
default, tenant shall not be required to pay the then applicable Fixed Rent for
the periods from (i) June 1, 2000 to June 30,2000 both dates inclusive, (ii)
June 1, 2001 to June 30, 2001 both dated inclusive and (iii) June 1, 2002 to
June 30, 2002 both dates inclusive, but Tenant shall otherwise be required to
comply with all of the other terms, covenants and conditions of this Lease on
Tenant's part to be observed or performed.
THIRD: Use. (A) The Demised Premises shall be used by Tenant solely
for general and/or executive offices and for no other purpose. Tenant
acknowledges and agrees that no representations have been made to Tenant with
respect to the use, if any, to which the Demised Premises may be put.
(B) Tenant shall not use or occupy, or permit the use or
occupancy of the Demised Premises or any part thereof, for any purpose other
than the purpose specifically set forth in Paragraph A of this Article THIRD, or
in any manner which, in Owner's judgment, (a) shall adversely affect or
interfere with (i) any services required to be provided by Owner to Tenant or to
any other tenant or occupant of the Building, or (ii) the
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proper and economical rendition of any such service, or (iii) the use or
enjoyment or any part of the Building by any other tenant or occupant, or (b)
shall tend to impair the character or dignity of the Building. Without limiting
the aforesaid, Tenant shall conduct its business and control its agents,
employees, invitees and visitors in such manner as not to create any nuisance,
or interfere with, annoy or disturb Owner or any tenant, user or occupant of the
Building.
(C) Without in any way limiting the generality of Section (B) of
this Article THIRD, Tenant shall not use or occupy, or sublet or permit the use
or occupancy of the Demised Premises or any part thereof, for use as a call
center. For the purposes of this Article, a call center is defined as any group
of one hundred (100) or more employees or other persons that primarily perform a
task involving in-bound or out-bound telephone conversations with customers for
the purpose of selling goods or services or responding to customer inquiries.
Excluded from this definition are functions that are dedicated to providing
technical assistance to existing customers.
FOURTH: Alterations. Tenant shall not make any changes, additions,
improvements, alterations or other physical changes to the Demised Premises, the
Building or any portions thereof, or any of the systems therein or thereon
(referred to collectively as "Alterations" and singly as an "Alteration")
without the prior written consent of Owner in each instance, which consent shall
not be unreasonably withheld, and in the event that Owner grants such consent,
such Alteration shall be made in compliance with all Legal Requirements and
performed in a manner and at such times as Owner reasonably designates and such
Alterations or installations shall not, in any event, interfere with the use and
operation of the Building by Owner or any tenant, occupant or user thereof.
Without limiting the aforesaid, Tenant agrees that (a) prior to any Alterations
by Tenant or the installation of any of Tenant's equipment in the Demised
Premises, Tenant shall submit detailed plans and specifications of the planned
Alteration or installation to Owner for Owner's approval, provided that in no
event will Owner's approval of such plans be deemed a representation that they
comply with applicable Legal Requirements, and will not cause interference with
communication operations of Owner, or any tenant, user or occupant of the
Building and any such Alterations shall be made only in accordance with the
plans and specifications approved by Owner, (b) all contractors performing any
Alterations, modification or maintenance work on behalf of Tenant at the Demised
Premises or in the Building shall be subject to the prior written approval of
Owner prior to the commencement of such work, which approval shall not be
unreasonably withheld. In the event Owner or its agents employ any independent
architect or engineer to examine any plans or specifications submitted by Tenant
to Owner in connection with any proposed Alteration, Tenant agrees to pay to
Owner a sum equal to any reasonable fees incurred by Owner in connection
therewith. Nothing in this Lease shall be construed in any way as constituting
the consent or request of Owner, express or implied, by inference or otherwise,
to any contractor, subcontractor, laborer or material men, for the performance
of any labor or the furnishing of any material for any specific Alteration to,
or repair of, the Demised Premises, the Building, or any part thereof. Any
mechanic's or other lien filed against the Building, or the Real Property, for
work claimed to have been done for, or materials claimed to have been furnished
to, Tenant or any person claiming through or under Tenant or based upon any act
or
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omission or alleged act or omission of Tenant or any such person shall be
discharged by Tenant (by bond or otherwise) at Tenant's sole cost and expense,
within twenty (20) days after the filing of such lien.
FIFTH: Repairs and Maintenance. (1) Tenant shall, at its sole cost and
expense, maintain and take good care of (i) the Demised Premises and all
fixtures, installations and appurtenances contained therein and (ii) Tenant's
personal property and equipment, and all replacements and additions thereto and
Tenant shall make all repairs, structural or otherwise, foreseen or unforeseen
as and when needed to keep the Demised Premises, and Tenant's personal property
and equipment in good order and repair. Owner shall have no obligation to
maintain, repair, operate or safeguard Tenant's equipment.
(2) Supplementing the provisions of Section (1), Owner, at
Owner's sole cost and expense, shall timely make (i) all structural repairs to
the Demised Premises as and when required, (ii) all repairs necessary to furnish
the plumbing, electrical, air conditioning, ventilating, heating and elevator
services required to be furnished by Owner to Tenant under the provisions of
this Lease, and (iii) all necessary repairs to the public portions of the
Building which affect Tenant's use and enjoyment of the Demised Premises, except
that Owner shall not be required to make any of the repairs referred to in
subdivision (i), (ii) or (iii) of this sentence if Tenant is obligated to make
such repairs pursuant to the provisions of Section (1) of this Article FIFTH.
Notwithstanding the foregoing provisions of this Section, Owner shall have no
obligation to make any repairs unless and until specific actual notice of the
necessity therefor shall have been given to Owner.
SIXTH: Utilities and Services: Section 6.01. Electricity: A. Owner, at
Owner's expense, shall redistribute or furnish electrical energy to or for the
use of Tenant in the Demised Premises for the operation of the lighting fixtures
and the electrical receptacles installed in the Demised Premises on the
Commencement Date. There shall be no specific charge by way of measuring such
electrical energy on any meter or otherwise, as the charge for the service of
redistributing or furnishing such electrical energy has been included in the
Fixed Rent on a so-called "rent inclusion" basis. The parties agree that
although the charge for the service of redistributing or furnishing electrical
energy is included in the Fixed Rent on a so-called "rent inclusion" basis, the
value to Tenant of such service may not be fully reflected in the Fixed Rent.
Accordingly, Tenant agrees that Owner may cause an independent electrical
engineer or electrical consulting firm, selected by Owner, to make a
determination, following the commencement of Tenant's normal business activities
in the Demised Premises, of the full value to Tenant of such services supplied
by Owner, to wit: the potential electrical energy supplied to Tenant annually
based upon the estimated capacity of the electrical feeders, risers and wiring
and other electrical facilities serving the Demised Premises. Such engineer or
consulting firm shall certify such determination in writing to Owner and Tenant.
If it shall be determined that the full value to Tenant of such service is in
excess of FIVE THOUSAND SEVEN HUNDRED TWENTY FIVE and 50/100 ($5,725.50) DOLLARS
(such sum is referred to as the " Electrical Inclusion Factor"), the parties
shall enter into a written supplementary agreement, in form satisfactory to
Owner, modifying this Lease as of the Commencement Date by increasing the Fixed
Rent and the Electrical Inclusion Factor for the entire Demised Term by an
annual amount equal to such excess. However,
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if it shall be so determined that the full value to Tenant of such service does
not exceed the Electrical Inclusion Factor, no such agreement shall be executed
and there shall be no increase or decrease in the Fixed Rent or the Electrical
Inclusion Factor by reason of such determination. If either the quantity or
character of electrical service is changed by the corporation(s) and/or other
entity(ies) selected by Owner to supply electrical service to the Building or is
no longer available or suitable for Tenant's requirements, no such change,
unavailability or unsuitability shall constitute an actual or constructive
eviction, in whole or in part, or entitle Tenant to any abatement or diminution
of rent, or relieve Tenant from any of its obligations under this Lease, or
impose any liability upon Owner, or its agents, by reason of inconvenience or
annoyance to Tenant, or injury to or interruption of Tenant's business, or
otherwise, unless such change, unavailability or unsuitability is caused by
Owner's negligence or willful misconduct or the negligence or willful misconduct
of Owner's agents, employees or contractors.
B. Owner represents that the electrical feeder or riser capacity
serving the Demised Premises on the Commencement Date shall be adequate to serve
the lighting fixtures and electrical receptacles installed in the Demised
Premises on the Commencement Date. Subject to the provisions of Subsection C(1)
of this Section 6.01, any additional feeders or risers to supply Tenant's
additional electrical requirements, and all other equipment proper and necessary
in connection with such feeders or risers, shall be installed by Owner upon
Tenant's request, at the sole cost and expense of Tenant, provided that, in
Owner's judgment, such additional feeders or risers are necessary and are
permissible under applicable laws (including, but not limited to, the New York
State Energy Conservation Construction Code) and insurance regulations and the
installation of such feeders or risers will not cause permanent damage or injury
to the Building or the Demised Premises or cause or create a dangerous or
hazardous condition or entail excessive or unreasonable alterations or repairs
or interfere with or disturb other tenants or occupants of the Building. Tenant
covenants that at no time shall the use of electrical energy in the Demised
Premises exceed the capacity of the existing feeders or wiring installations
then serving the Demised Premises. Tenant shall not make or perform, or permit
the making or performance of, any Alterations to wiring installations or other
electrical facilities in or serving the Demised Premises or any additions to the
business machines, office equipment or other appliances in the Demised Premises
which utilize electrical energy without the prior consent of Owner in each
instance, which consent shall not be unreasonably withheld. Any such
Alterations, additions or consent by Owner shall be subject to the provisions of
Subsection C(1) of this Section 6.01, as well as to the other provisions of this
Lease including, but not limited to, the provisions of Article FOURTH.
C. (1) If, at any time or times prior to or during the Demised
Term, electrical feeders, risers, wiring or other electrical facilities serving
the Demised Premises shall be installed by Owner, Tenant or others, on behalf of
Tenant or any person claiming through or under Tenant in addition to feeders,
risers, wiring or other electrical facilities necessary to serve the lighting
fixtures and electrical receptacles installed in the Demised Premises on the
Commencement Date, the Fixed Rent and the Electrical Inclusion Factor shall be
increased in an annual amount which shall reflect the value to Tenant of the
additional service to be
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furnished by Owner, to wit: the potential additional electrical energy made
available to Tenant annually based upon the estimated capacity of such
additional electrical feeders, risers, wiring or other electrical facilities.
The amount of any such increase in the Fixed Rent and the Electrical Inclusion
Factor shall be finally determined by an independent electrical engineer or
consulting firm selected by Owner who shall certify such determination in
writing to Owner and Tenant. Following such determination, Owner and Tenant
shall enter into a written supplementary agreement, in form satisfactory to
Owner, modifying this Lease by increasing the Fixed Rent and the Electrical
Inclusion Factor for the remainder of the Demised Term in an annual amount equal
to the value of such additional service as so determined. Any such increase
shall be effective as of the date of the first availability to Tenant of such
additional service and shall be retroactive to such date if necessary.
(2) If, at any time or times after March 29, 2000, the rate
at which Owner purchases electrical energy from the corporation(s) and/or other
entity(ies) Owner has selected to supply electrical service to the Building or
any charges incurred or taxes payable by Owner in connection therewith shall be
increased or decreased, Owner shall notify Tenant of such increase or decrease
within ninety (90) days of the date thereof. The Fixed Rent and the Electrical
Inclusion Factor shall be increased or decreased, as the case may be, upon
demand of either party, in an annual amount which shall fairly and
proportionately reflect the estimated increase or decrease, as the case may be,
in the annual cost to Owner of purchasing electrical energy for the Building
provided that notwithstanding anything to the contrary contained in the
provisions of this Section 6.01 in no event shall (a) the Electrical Inclusion
Factor ever be decreased below the original amount thereof set forth in
Subsection A of this Section and (b) the Fixed Rent ever be decreased by more
than such decrease in the Electrical Inclusion Factor as so limited by the
provisions of the aforesaid Subdivision (a) of this Subsection C.(2). If, within
ten (10) days after any such demand, Owner and Tenant shall fail to agree upon
the amount of such increase or decrease, as the case may be, in the Fixed Rent
and the Electrical Inclusion Factor then, in lieu of such agreement, such
estimated increase or decrease, as the case may be, shall be finally determined
by an independent electrical engineer or consulting firm selected by Owner, at
the sole cost and expense of Owner, who shall certify such determination in
writing to Owner and Tenant. Following any such agreement or determination,
Owner and Tenant shall enter into a written supplementary agreement, in form
satisfactory to Owner, modifying this Lease by increasing, or decreasing, as the
case may be, the Fixed Rent and the Electrical Inclusion Factor for the
remainder of the Demised Term in an annual amount equal to such estimated
increase or decrease as so agreed or determined. Any such increase or decrease
in the Fixed Rent and the Electrical Inclusion Factor shall be effective as of
the effective date of such increase or decrease, and shall be retroactive to
such date if necessary.
(3) Any increase in the Fixed Rent pursuant to the
provisions of Subsection A of this Section or this Subsection C with respect to
the period from the effective date of such increase to the last day of the month
in which such increase shall be fixed by agreement or determination shall be
payable by Tenant upon demand of Owner. Any decrease in the Fixed Rent pursuant
to the provisions of this Subsection C with respect to the period from the
effective date of such decrease to the last day of the month in
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which such decrease shall be fixed by agreement or determination shall be
credited to Tenant against the next monthly installment of the Fixed Rent. The
monthly installments of the Fixed Rent payable after the date upon which any
such increase or decrease is so fixed shall be proportionately adjusted to
reflect such increase or decrease in the Fixed Rent.
D. Owner may, at any time, elect to discontinue the
redistribution or furnishing of electrical energy. In the event of any such
election by Owner, (i) Owner agrees to give reasonable advance notice of any
such discontinuance to Tenant, (ii) Owner agrees to permit Tenant to receive
electrical service directly from the corporation(s) and/or other entity(ies)
Owner has selected to supply electrical service to the Building and to permit
the existing feeders, risers, wiring and other electrical facilities serving the
Demised Premises to be used by Tenant for such purpose to the extent they are
suitable and safely capable, (iii) Owner agrees to pay such charges and costs,
if any, as such corporation(s) and/or other entity(ies) may impose in connection
with the installation of Tenant's meters, (iv) the Fixed Rent shall be
decreased, as of the date of such discontinuance, by an amount equal to the
Electrical Inclusion Factor to reflect such discontinuance; and (v) this Lease
shall remain in full force and effect and such discontinuance shall not
constitute an actual or constructive eviction, in whole or in part, or entitle
Tenant to any abatement or diminution of rent except as expressly provided in
subdivision (iv) of this Subsection D, or relieve Tenant from any of its
obligations under this Lease, or impose any liability upon Owner or its agents
by reason of inconvenience or annoyance to Tenant, or injury to or interruption
of Tenant's business, or otherwise.
E. The following method of computation shall be employed by any
electrical engineer or electrical consulting firm selected by Owner pursuant to
the provisions of Subsection C(2) of this Section 6.01 in finally determining
any estimated increase or decrease in the Fixed Rent and the Electrical
Inclusion Factor, under the provisions of this Section resulting from the
corporation(s) and/or other entity(ies) Owner has selected to supply electrical
service to the Building referred to individually and collectively as " The
Corporation") electrical rate and fuel charge changes and taxes (collectively "
Electrical Changes") payable in connection therewith:
(1) Owner's bills from The Corporation for the Building for
the twelve (12) month period immediately preceding the Electrical Change in
question shall be averaged for demand and consumption (Kw and Kwh) and the rate
structure in effect immediately prior to the Electrical Change in question shall
be applied to such average demand and consumption factors of Owner's billings
for the Building for said twelve (12) month period resulting in an agreed
determination of the cost to Owner of electricity for the Building immediately
prior to the Electrical Change in question; and
(2) The new rate structure pursuant to which Owner is billed
by The Corporation, i.e., the rate structure which includes the Electrical
Change in question, shall be applied to the
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average demand and consumption factors of Owner's billings for the Building for
said twelve (12) month period resulting in an agreed estimate of the cost to
Owner by reason of the Electrical Change in question; and
(3) The difference in the costs determined pursuant to the
foregoing subdivisions (1) and (2) shall be deemed to be the amount of the
estimated annual change in cost and the amount of such estimated annual change
in cost shall be divided by the cost determined pursuant to the foregoing
subdivision (1); and
(4) The resulting quotient shall be applied to Tenant's then
current Electrical Inclusion Factor to produce the increase or decrease in the
Fixed Rent and Electrical Inclusion Factor.
(For example: Assume (1) an Electrical Change i.e. a rate increase;
(2) an application of the rate schedule in effect immediately prior to such
Electrical Change to the averaged electrical demand and consumption factors
shown on Owner's electrical bills for the twelve (12) month period immediately
preceding such Electrical Change resulting in an estimated annual cost of
$100,000.00; (3) an application of the new rate schedule to the averaged
electrical demand and consumption factors shown on the bills in question
resulting in an estimated annual cost of $110,000.00; (4) deduction of the sum
of $100,000.00 referred to in step (2) from said sum of $110,000.00 referred to
in step (3), resulting in a difference of $10,000.00; and (5) that Tenant's
Electrical Inclusion Factor was $3,000.00. The $10,000.00 annual estimated
increase for the Building, when divided by $100,000.00, the estimated annual
cost to Owner of electricity for the Building prior to the Electrical Change in
question, results in a quotient of 10% which, when applied to Tenant's
Electrical Inclusion Factor increases the Fixed Rent and the Electrical
Inclusion Factor by $300.00.)
F. Notwithstanding anything to the contrary set forth in this
Lease, any sums payable or granted in any way by the corporation(s) and/or other
entity(ies) Owner has selected to supply electricity to the Building resulting
from the installation in the Demised Premises of energy efficient lamping,
special supplemental heating, ventilation and air conditioning systems or any
other Alterations, which sums are paid or given by way of rebate, direct
payment, credit or otherwise, shall be and remain the property of Owner, and
Tenant shall not be entitled to any portion thereof, unless such lamping,
supplemental heating, ventilation and air conditioning systems or other
Alterations were installed by Tenant, solely at Tenant's expense, without any
contribution, credit or allowance by Owner, in accordance with all of the
provisions of this Lease. Nothing contained in the foregoing sentence, however,
shall be deemed to obligate Owner to supply or install in the Demised Premises
any such lamping, supplemental heating, ventilation and air conditioning systems
or other Alterations.
Section 6.02 Elevators: If all or any portion of the Demised Premises
is located on other than the ground floor of the Building, Owner, at Owner's
expense, shall have a passenger elevator
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subject to call at all times. Owner shall not be required to furnish any
operator service for automatic elevators. If Owner shall, at any time, elect to
furnish operator service for any automatic elevators, Owner shall have the right
to discontinue furnishing such service with the same effect as if Owner had
never elected to furnish such service.
Section 6.03 Heat: Owner, at Owner's expense, shall furnish heat to
the Demised Premises, as and when required by law, on business days from 8:00
A.M. to 7:00 P.M.
Section 6.04 Air Conditioning and Ventilation: Owner, at Owner's
expense, shall furnish and distribute to the Demised Premises (i) conditioned
air at reasonable temperatures, pressures and degrees of humidity and in
reasonable volumes and velocities, on business days from 8:00 A.M. to 7:00 P.M.
during the months of May, June, July, August, September and October when
required for the comfortable occupancy of the Demised Premises; and (ii)
mechanical ventilation through the Building air conditioning system on business
days from 8:00 A.M. to 7:00 P.M., except when conditioned air or heat is being
furnished, to the extent required pursuant to law. Notwithstanding the foregoing
provisions of this Section, Owner shall not be responsible if the normal
operation of the Building air conditioning system shall fail to provide
conditioned air at reasonable temperatures, pressures or degrees of humidity or
in reasonable volumes or velocities in any portions of the Demised Premises (a)
which, by reason of any machinery or equipment installed by or on behalf of
Tenant or any person claiming through or under Tenant, shall have an electrical
load in excess of four (4) watts per square foot of usable area for all purposes
(including lighting and power), or which shall have a human occupancy factor in
excess of one person per one hundred seventy-five (175) square feet of usable
area (the average electrical load and human occupancy factors for which the
Building air conditioning system is designed) or (b) because of any
rearrangement of partitioning or other Alterations made or performed by or on
behalf of Tenant or any person claiming through or under Tenant. Whenever said
air conditioning system is in operation, Tenant agrees to cause all the windows
in the Demised Premises to be kept closed and to cause the Venetian blinds in
the Demised Premises to be kept closed if necessary because of the position of
the sun. Tenant agrees to cause all the windows in the Demised Premises to be
closed whenever the Demised Premises are not occupied. Tenant shall cooperate
fully with Owner at all times and abide by all regulations and requirements
which Owner may reasonably prescribe for the proper functioning and protection
of the air conditioning and ventilating system. In addition to any and all other
rights and remedies which Owner may invoke for a violation or breach of any of
the foregoing provisions of this Section, Owner may discontinue heating, air
conditioning and/or, if Owner so provides same, ventilating service, during the
period of such violation or breach, and such discontinuance shall not constitute
an actual or constructive eviction, in whole or in part, or entitle Tenant to
any abatement or diminution of rent, or relieve Tenant from any of its
obligations under this Lease, or impose any liability upon Owner, or its agents,
by reason of inconvenience or annoyance to Tenant, or injury to or interruption
of Tenant's business, or otherwise.
Section 6.05 Cleaning: (1) Tenant, at Tenant's expense, shall keep the
Demised Premises in order, shall cause the Demised Premises to be cleaned and
shall cause Tenant's refuse and rubbish to be removed, all at regular intervals
in accordance with standards and practices adopted by Owner for the Build-
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ing. Tenant shall cooperate with any waste and garbage recycling program of the
Building and shall comply with all reasonable rules and regulations of Owner
with respect thereto. Tenant, at Tenant's expense, shall cause all portions of
the Demised Premises used for the storage, preparation, service or consumption
of food or beverages to be cleaned daily in a manner satisfactory to Owner, and
to be exterminated against infestation by vermin, roaches or rodents regularly
and, in addition, whenever there shall be evidence of any infestation.
(2) Owner, at Owner's expense, shall clean the public
portions of the Building at regular intervals in accordance with practices and
standards adopted by Owner for the Building.
(3) The removal of refuse and rubbish and the furnishing of
office cleaning services to Tenant by persons other than Owner and its
contractors shall be performed in accordance with such regulations and
requirements as, in Owner's judgment, are necessary for the proper operation of
the Building, and Tenant agrees that Tenant will not permit any person to enter
the Demised Premises or the Building for such purposes, or for the purpose of
providing extermination services required to be performed by Tenant pursuant to
Subsection A of this Section, other than persons first approved by Owner, such
approval not unreasonably to be withheld.
Section 6.06 Water: If Tenant requires, uses or consumes water for any
purpose in addition to ordinary lavatory and drinking purposes, Owner may
install a hot water meter and a cold water meter and thereby measure Tenant's
consumption of water for all purposes. Tenant shall pay to Owner the cost of any
such meters and their installation, and Tenant shall keep any such meters and
any such installation equipment in good working order and repair, at Tenant's
cost and expense. Tenant agrees to pay for water consumed as shown on said
meters, and sewer charges, taxes and any other governmental charges thereon, as
and when bills are rendered. In addition to any sums required to be paid by
Tenant for hot water consumed and sewer charges, taxes and any other
governmental charges thereon under the foregoing provisions of this Section,
Tenant agrees to pay to Owner, for the heating of said hot water, an amount
equal to three (3X) times the total of said sums required to be paid by Tenant
for hot water and sewer charges thereon. For the purposes of determining the
amount of any sums required to be paid by Tenant under this Section, all hot and
cold water consumed during any period when said meters are not in good working
order shall be deemed to have been consumed at the rate of consumption of such
water during the most comparable period when such meters were in good working
order.
Section 6.07 Overtime Periods: The Fixed Rent does not reflect or
include any charge to Tenant for the furnishing or distributing of any necessary
elevator facilities, heat, conditioned air or mechanical ventilation to the
Demised Premises during periods (referred to as " Overtime Periods") other than
the hours and days set forth above in this Article for the furnishing and
distributing of such services. Accordingly, if Owner shall furnish any such
elevator facilities, heat, conditioned air or mechanical ventilation to the
Demised Premises at the request of Tenant during Overtime Periods, Tenant shall
pay Owner for such services at the standard reasonable rates then fixed by Owner
for the Building or, if no such rates are then fixed, at reasonable
10
<PAGE>
rates. Owner shall not be required to furnish any such services during Overtime
Periods, unless Owner has received reasonable advance notice from Tenant
requesting such services. If Tenant fails to give Owner reasonable advance
notice requesting such services during any Overtime Periods, then, whether or
not the Demised Premises are habitable during such Overtime Periods, failure by
Owner to furnish or distribute any such services during such Overtime Periods
shall not constitute an actual or constructive eviction, in whole or in part, or
entitle Tenant to any abatement or diminution of rent, or relieve Tenant from
any of its obligations under this Lease, or impose any liability upon Owner or
its agents by reason of inconvenience or annoyance to Tenant, or injury to or
interruption of Tenant's business or otherwise.
Section 6.08 Owner's Right to Stop Service: Owner reserves the right
to stop the service of the heating, air conditioning, ventilating, elevator,
plumbing, electrical, communications or other mechanical systems or facilities
in the Building when necessary by reason of accident or emergency, or for
repairs, alterations, replacements or improvements, which, in the judgment of
Owner are desirable or necessary, until said repairs, alterations, replacements
or improvements shall have been completed. Except in an emergency for which no
notice is required, Owner shall provide Tenant with reasonable advance notice of
same. The exercise of such right by Owner shall not constitute an actual or
constructive eviction, in whole or in part, or entitle Tenant to any abatement
or diminution of rent, or relieve Tenant from any of its obligations under this
Lease, or impose any liability upon Owner or its agents by reason of
inconvenience or annoyance to Tenant, or injury to or interruption of Tenant's
business, or otherwise. Owner shall employ reasonable diligence in attempting to
restore the operation of any such systems or facilities without any obligation,
however, to employ labor at overtime or other premium pay rates.
Section 6.09 Parking Lot: The Real Property presently contains a
parking lot (referred to as the "Parking Lot") with 1,700 parking spaces. Tenant
shall be entitled to the nonexclusive use, in common with other tenants and
occupants of the Building and their business visitors, of the Parking Lot solely
for the parking of cars of Tenant's employees and business visitors on a first
come first serve basis. Owner shall have the right to reconfigure the Parking
Lot and add additional buildings in the Parking Lot and may increase or reduce
the number of spaces in the Parking Lot. No such reconfiguration, additional
buildings or reduction in the number of spaces in the Parking Lot for any
reason, including, but not limited to, the construction of additional buildings
therein or any acquisition or condemnation set forth in Article TWELFTH, shall
constitute an actual or constructive eviction, in whole or in part, or entitle
Tenant to any abatement or diminution of rent or relieve Tenant from any of its
obligations under this Lease or impose any liability upon Owner, or its agents,
or upon any lessor under any superior lease, or upon the holder of any mortgage.
Tenant shall have no rights in and to the Parking Lot other than the
nonexclusive use, in common with other tenants and occupants and their business
visitors, for Tenant and Tenant's business visitors to park their cars therein
on a first come first serve basis. The Building Rules referred to in Article
NINETEENTH may, at Owner's election, cover the Parking Lot.
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SEVENTH: Condition of the Demised Premises: Tenant shall take the Demised
Premises in the condition that the Demised Premises shall be in on the
Commencement Date "as is" and Owner shall have no obligation to do any work or
perform any installations in order to prepare the Demised Premises for tenant's
occupancy, except that on or about the Commencement Date, Owner shall repair the
sealing on the back door of the Demised Premises to the reasonable satisfaction
of Tenant.
EIGHTH: End of Demised Term. Tenant shall vacate the Demised Premises upon
the Expiration Date broom clean and in good order and in the same condition that
the Demised Premises existed on the Commencement Date, ordinary wear and tear
and damage from fire or other casualty excepted, and Tenant shall, on or prior
to the Expiration Date, remove all of Tenant's personal property and all other
property and effects of Tenant and all persons claiming through or under Tenant
from the Demised Premises and the Building and Tenant shall repair all damage to
the Demised Premises and the Building occasioned by such removal. Owner shall
have the right to retain any property and effects of Tenant or such person which
shall remain in the Demised Premises after the Expiration Date and any net
proceeds from the sale thereof, without waiving any of Owner's rights with
respect to any "Event of Default" (as hereinafter defined) by Tenant. Tenant
hereby expressly waives for itself and for any person claiming through or under
Tenant any rights which Tenant or any such person may have under the provisions
of Section 2201 of the New York Civil Practice Law and Rules or any successor
law of like import then in force in connection with any holdover summary
proceedings which Owner may institute to enforce the foregoing provisions of
this Article EIGHTH. If the date upon which the Demised Term shall expire,
terminate or end shall fall on a Sunday or holiday, then Tenant's obligations
under the first sentence of this Article EIGHTH shall be performed on or prior
to the Saturday or business day immediately preceding such Sunday or holiday.
Tenant's obligations under this Article EIGHTH shall survive the Expiration
Date.
NINTH: Assignment and Subletting.Section 9.01 Tenant may not assign or
transfer this Lease, without the prior written consent of Owner in each
instance, which consent Owner may withhold in its sole discretion. The sale,
pledge, transfer or other alienation of (a) any of the issued and outstanding
capital stock of any corporate Tenant (unless such stock is publicly traded on a
recognized security exchange or over-the counter market) or (b) any interest in
any partnership or joint venture of Tenant, however accomplished, and whether in
a single transaction or in a series of related and/or unrelated transactions,
resulting in a change of more than forty-nine (49%) percent of the then issued
and outstanding capital stock of any corporate Tenant (unless such stock is
publicly traded on a recognized security exchange or over-the-counter market) or
the interests in any partnership or joint venture of Tenant, however
accomplished, and whether in a single transaction or in a series of
related/unrelated transactions, shall be deemed, for the purposes of this
Article NINTH, as an assignment of this Lease which shall require the prior
consent of Owner in each instance.
Section 9.02 As long as Tenant is not in default under any of the
terms, covenants or conditions of this Lease on Tenant's part to be observed and
performed beyond applicable notice and cure periods, Tenant shall have the right
without the prior consent of Owner, to permit the use or occupancy of all or any
part of the Demised Premises by any subsidiary or affiliate of Tenant named
herein for the use permitted in
<PAGE>
this Lease only for such period as it shall remain such subsidiary or affiliate.
For the purposes of this Article: (a) a "subsidiary" of Tenant named herein
shall mean any corporation not less than fifty-one (51%) percent of whose
outstanding voting stock at the time shall be owned by Tenant named herein, and
(b) an "affiliate" of Tenant named herein shall mean any corporation,
partnership or other business entity which controls or is controlled by, or is
under common control with Tenant named herein. For the purpose of the definition
of "affiliate" the word "control" (including, "controlled by" and "under common
control with") as used with respect to any corporation, partnership or other
business entity, shall mean the possession of the power to direct or cause the
direction of the management and policies of such corporation, partnership or
other business entity, whether through the ownership of voting securities or
contract. However, no such use and occupancy shall be valid unless, Tenant shall
give prompt notice to Owner of any such use or occupancy of all or any part of
the Demised Premises and such use or occupancy shall be subject and subordinate
to all of the terms, covenants and conditions of this Lease. No such use or
occupancy shall operate to vest in the user or occupant any right or interest in
this Lease or the Demised Premises.
Section 9.03 Sublet Rights: A. (1) As long as Tenant is not in default
under any of the terms, covenants or conditions of this Lease on Tenant's part
to be observed or performed, Owner agrees not to unreasonably withhold Owner's
prior consent to a subletting by Tenant of the entire Demised Premises to one
(1) subtenant for undivided occupancy by such subtenant, for the use expressly
permitted in this Lease i.e., as general offices for an information technology
business.
(2) Without Owner's prior consent, Tenant shall not (a)
negotiate or enter into a proposed subletting with any tenant, subtenant or
occupant of any space in the Building or (b) list or otherwise publicly
advertise the Demised Premises or any part thereof for subletting at a rental
lower than the rental at which the Owner is then offering to rent comparable
space in the Building.
(3) At least thirty (30) days prior to any proposed
subletting, Tenant shall submit to Owner a statement (the " Proposed Sublet
Statement") containing the name and address of the proposed subtenant, the
nature of the proposed subtenant's business and its current financial status, if
such status is obtained by Tenant, and all of the principal terms and conditions
of the proposed subletting including, but not limited to, the proposed
commencement and expiration dates of the term thereof.
(4) Owner may withhold consent to a proposed subletting if,
(a) in Owner's reasonable judgment, the occupancy of the proposed subtenant will
tend to impair the character or dignity of the Building or impose any additional
burden upon Owner in the operation of the Building, or (b) in Owner's reasonable
judgment, the occupancy of the proposed subtenant will tend to impair the
reputation of (i) the Building as an information technology center or (ii) the
floor on which the Demised Premises are located as a floor devoted to
information technology tenants or (c) the proposed subtenant shall be a person
or entity with
<PAGE>
whom Owner is then negotiating or discussing to lease space in the Building or
(d) if Owner shall have any other reasonable objections to such subletting.
(5) In the event of any dispute between Owner and Tenant as
to the reasonableness of Owner's failure or refusal to consent to any
subletting, such dispute shall be submitted to arbitration in accordance with
the provisions of Article TWENTY-THIRD.
(6) Tenant shall reimburse Owner on demand for any costs or
expense that may be incurred by Owner's review of any Proposed Sublet Statement
or in connection with any sublease consented to by Owner, including, without
limitation, any reasonable processing fee, reasonable attorneys' fees and
disbursements and the reasonable costs of making investigations as to the
acceptability of the proposed subtenant.
B. Notwithstanding the foregoing provisions of this Section 9.03,
Owner shall have the following rights with respect to each proposed subletting
by Tenant:
(1) in the event Tenant proposes to sublet the Demised
Premises, whether or not such subletting is for all or substantially all of the
remainder of the Demised Term, Owner, at Owner's option, may give to Tenant,
within thirty (30) days after the submission by Tenant to Owner of the Proposed
Sublet Statement, a notice terminating this Lease on the date (referred to as
the " Earlier Termination Date") immediately prior to the proposed commencement
date of the term of the proposed subletting, as set forth in the Proposed Sublet
Statement, and, in the event such notice is given, this Lease and the Demised
Term shall come to an end and expire on the Earlier Termination Date with the
same effect as if it were the Expiration Date, the Fixed Rent shall be
apportioned as of said Earlier Termination Date and any prepaid portion of Fixed
Rent for any period after such date shall be refunded by Owner to Tenant; or
(2) In the event Tenant proposes to sublet the Demised
Premises for less than substantially all of the remainder of the Demised Term,
Owner, at Owner's option, may give to Tenant, within thirty (30) days after the
submission by Tenant to Owner, of the Proposed Sublet Statement required to be
submitted in connection with such proposed subletting, a notice electing to
recapture the Demised Premises during the period (referred to as the " Recapture
Period") commencing on the date (referred to as " Recapture Date") immediately
prior to the proposed commencement date of the term of the proposed subletting,
as set forth in the Proposed Sublet Statement, and ending on the proposed
expiration date of the term of the proposed subletting, as set forth in the
Proposed Sublet Statement, and in the event such notice is given the following
shall apply:
(a) The Demised Premises shall be recaptured by Owner during the
Recapture Period;
<PAGE>
(b) Tenant shall surrender the Demised Premises to Owner on or prior
to the Recapture Date in the same manner as if said Date were the
Expiration Date;
(c) During the Recapture Period Tenant shall have no rights with
respect to the Demised Premises nor any obligations with respect to
the Demised Premises, including, but not limited to, any obligations
to pay Fixed Rent or any increases therein or any additional rent, and
any prepaid portion of Fixed Rent allocable to the Recapture Period
shall be refunded by Owner to Tenant;
(d) There shall be an equitable apportionment of any increase in the
Fixed Rent pursuant to Articles TWENTY-FIRST and TWENTY-SECOND for the
Escalation Year and Tax Escalation Year (as defined in said Articles)
in which said Recapture Date shall occur;
(e) Upon the expiration of the Recapture Period, the Demised Premises,
in its then existing condition, shall be deemed restored to Tenant and
Tenant shall have all rights with respect to the Demised Premises
which are set forth in this Lease and all obligations with respect to
the Demised Premises which are set forth in this Lease, including, but
not limited to, the obligations for the payment of Fixed Rent and any
increases therein and any additional rent (as they would have been
adjusted if Tenant occupied the Demised Premises during the Recapture
Period) during the period (referred to as the " Recapture Restoration
Period") commencing on the date next following the expiration of the
Recapture Period and ending on the Expiration Date, except in the
event that Owner is unable to give Tenant possession of the Demised
Premises at the expiration of the Recapture Period by reason of the
holding over or retention of possession of any tenant or other
occupant, in which event (x) the Recapture Restoration Period shall
not commence and the Demised Premises shall not be deemed available
for Tenant's occupancy and Tenant shall not be required to comply with
the obligations of Tenant under this Lease until the date upon which
Owner shall give Tenant possession of the Demised Premises free of
occupancies, (y) neither the Expiration Date nor the validity of this
Lease nor the obligations of Tenant under this Lease shall be affected
thereby, and (z) Tenant waives any rights to rescind this Lease and to
recover any damages which may result from the failure by Owner to
deliver possession of the Demised Premises at the end of the Recapture
Period; Owner agrees to institute, within thirty (30) days after the
expiration of the Recapture Period, possession proceedings against any
tenants and occupants who have not so vacated and surrendered all or
any portions of the Demised Premises and agrees to prosecute such
proceedings with reasonable diligence; and
<PAGE>
(f) There shall be an equitable apportionment of any increase in the
Fixed Rent pursuant to Articles TWENTY FIRST AND TWENTY SECOND for the
Escalation Year and Tax Escalation Year in which the Recapture
Restoration Period shall commence.
At the request of Owner, Tenant shall execute and deliver an instrument or
instruments, in form satisfactory to Owner, setting forth any modifications to
this Lease contemplated in or resulting from the operation of the foregoing
provisions of this Subsection 9.03; however, neither Owner's failure to request
any such instrument nor Tenant's failure to execute or deliver any such
instrument shall vitiate the effect of the foregoing provisions of this Section.
The failure by Owner to exercise any option under this Section 9.03 with respect
to any subletting shall not be deemed a waiver of such option with respect to
any extension of such subletting or any subsequent subletting of the premises
affected thereby or any other portion of the Demised Premises. Tenant shall
indemnify Owner from all loss, cost, liability, damage and expense, including,
but not limited to, reasonable counsel fees and disbursements, arising from any
claims against Owner by any broker or other person, for a brokerage commission
or other similar compensation in connection with any such proposed subletting,
in the event (a) Owner shall (i) fail or refuse to consent to any proposed
subletting, or (ii) exercise any of its options under this Section 9.03, or (b)
any proposed subletting shall fail to be consummated for any reason whatsoever.
C. Tenant agrees that (1) any increase in the rental value of the
Demised Premises over and above the Fixed Rent payable pursuant to the
provisions of this Lease, as such Fixed Rent may be increased from time to time
pursuant to the provisions of this Lease, and (2) any consideration paid to
Tenant or any subtenant or other person claiming through or under Tenant in
connection with an assignment of Tenant's interest in this Lease or the interest
of any subtenant or other person claiming through or under Tenant under any
sublease whether or not such assignment shall be effected with court approval in
a proceeding of the types described in Article SIXTEENTH (A)(iii), or in any
similar proceeding, or otherwise, shall accrue to the benefit of Owner and not
to the benefit of Tenant, or of any subtenant or other person claiming through
or under Tenant, or of the creditors of Tenant or of any such subtenant or other
person claiming through or under Tenant. Accordingly, Tenant agrees that if
Owner shall fail to exercise its option to sooner terminate this Lease or its
option to recapture the Demised Premises in connection with any proposed
subletting by Tenant, or if any subtenant or other person claiming through or
under Tenant shall sublet all or any portion of the Demised Premises, Tenant
shall pay to Owner a sum equal to any Subletting Profit, as such term is
hereinafter defined. All rentals and other sums (including, but not limited to,
sums payable for the sale or rental of any fixtures, leasehold improvements,
equipment, furniture or other personal property, less, in the case of the sale
thereof, the then net unamortized [on a straight-line basis over the term of
this Lease or, in the event of a further subletting, over the term of the
initial sublease, as the case may be] cost thereof, which were provided and
installed in the sublet premises at the sole cost and expense of Tenant or such
subtenant or other person claiming through or under Tenant and for which no
allowance or other credit has been given by Owner) payable by any subtenant to
<PAGE>
Tenant or to any subtenant or other person claiming through or under Tenant in
connection with any subletting in excess of the Fixed Rent then payable by
Tenant to Owner under this Lease are referred to, in the aggregate, as "
Subletting Profit"; in computing any Subletting Profit it shall be deemed that
the rental reserved under any such subletting shall commence to accrue as of the
commencement of the term of such subletting even if such rental actually
commences to accrue as of a date subsequent to such commencement and there shall
be deducted a reasonable single brokerage commission, if any such commission
shall be paid by Tenant or any such subtenant or other person claiming through
or under Tenant in connection with such subletting which deduction for such
reasonable single brokerage commission shall be amortized on a straight line
basis over the entire term of such subletting. Owner and Tenant agree that if
Tenant, or any subtenant or other person claiming through or under Tenant, shall
assign or have assigned its interest as Tenant under this Lease or its interest
as subtenant under any sublease as the case may be, whether or not such
assignment shall be effected with court approval in a proceeding of the types
described in Article SIXTEENTH (A)(iii), or in any similar proceeding, or
otherwise, Tenant shall pay to Owner a sum equal to any consideration paid to
Tenant or any subtenant or other person claiming through or under Tenant for
such assignment. All sums payable hereunder to Tenant shall be paid to Owner as
additional rent immediately upon such sums becoming payable to Tenant or to any
subtenant or other person claiming through or under Tenant and, if requested by
Owner, Tenant shall promptly enter into a written agreement with Owner setting
forth the amount of such sums to be paid to Owner, however, neither Owner's
failure to request the execution of such agreement nor Tenant's failure to
execute such agreement shall vitiate the provisions of this Section. For the
purposes of this Section, a trustee, receiver or other representative of the
Tenant's or any subtenant's estate under any federal or state bankruptcy act
shall be deemed a person claiming through or under Tenant.
D. Neither Owner's consent to any subletting nor anything
contained in this Section shall be deemed to grant to any subtenant or other
person claiming through or under Tenant the right to sublet all or any portion
of the Demised Premises or to permit the occupancy of all or any portion of the
Demised Premises by others. Neither any subtenant referred to in this Section
nor its heirs, distributees, executors, administrators, legal representatives,
successors nor assigns, without the prior consent of Owner in each instance,
shall (i) assign, whether by merger, consolidation or otherwise, mortgage or
encumber its interest in any sublease, in whole or in part, or (ii) sublet, or
permit the subletting of, that part of the Demised Premises affected by such
subletting or any portion thereof, or (iii) permit such part of the Demised
Premises affected by such subletting or any part thereof to be occupied or used
for desk space, mailing privileges or otherwise, by any person other than such
subtenant and any sublease shall provide that any violation of the foregoing
provisions of this sentence shall be an event of default thereunder. The sale,
pledge, transfer or other alienation of (a) a controlling interest in the issued
and outstanding capital stock of any corporate subtenant (unless such stock is
publicly traded on any recognized security exchange or over-the-counter market)
or (b) a controlling interest in any partnership or joint venture subtenant,
however accomplished, and whether in a single transaction or in a series of
related or unrelated transactions, shall be deemed for the purposes of this
Section to be an assignment of such sublease which shall require the prior
consent of Owner in each instance and any sublease shall so provide.
<PAGE>
TENTH: Owner Access. (A) (1) Owner and its agents shall have the following
rights in and about the Demised Premises: (i) to enter the Demised Premises at
all times to examine the Demised Premises or for any of the purposes set forth
in this Article TENTH or for the purpose of performing any obligation of Owner
under this Lease or exercising any right or remedy reserved to Owner in this
Lease, or complying with any Legal Requirement which Owner is obligated to
comply with hereunder, and if Tenant, its officers, partners, agents or
employees shall not be personally present or shall not open and permit an entry
into the Demised Premises at any time when such entry shall be necessary or
permissible, to use a master key or to forcibly enter the Demised Premises; (ii)
to erect, install, use and maintain pipes, ducts and conduits in and through the
Demised Premises; (iii) to exhibit the Demised Premises to others; (iv) to make
such decorations, repairs, alterations, improvements or additions, or to perform
such maintenance, including, but not limited to, the maintenance of all heating,
air conditioning, ventilating, elevator, plumbing, electrical, telecommunication
and other mechanical facilities, as Owner may deem necessary or desirable; (v)
to take all materials into and upon the Demised Premises that may be required in
connection with any such decorations, repairs, alterations, improvements,
additions or maintenance; and (vi) to alter, renovate and decorate the Demised
Premises at any time during the Demised Term if Tenant shall have removed all or
substantially all of Tenant's property from the Demised Premises. The lessors
under any superior lease and the holders of any mortgage shall have the right to
enter the Demised Premises from time to time through their respective employees,
agents, representatives and architects to inspect the same or to cure any
default of Owner or Tenant relating thereto. Owner shall have the right, from
time to time, to change the name, number or designation by which the Building is
commonly known which right shall include, without limitation, the right to name
the Building after any tenant of the Building.
(2) Supplementing the provisions of this Paragraph A, Owner,
agrees that, except in cases of emergency, any entry upon the Demised Premises
shall be made at reasonable times, and only after reasonable advance notice
(which may be mailed, delivered or left at the Demised Premises, notwithstanding
any contrary provisions of this Lease), and any work performed or installations
made by Owner shall be made with reasonable diligence and any such entry, work
or installations shall be made in a manner designed to minimize interference
with Tenant's normal business operations (however, nothing contained in this
Section shall be deemed to impose upon Owner any obligation to employ
contractors or labor at so-called overtime or other premium pay rates).
(B) Owner's Reservation of Rights to Portions of the Building:
All parts (except surfaces facing the interior of the Demised Premises) of all
walls, windows and doors bounding the Demised Premises (including exterior
Building walls, core corridor walls, doors and entrances), all balconies,
terraces and roofs adjacent to the Demised Premises, all space in or adjacent to
the Demised Premises used for shafts, stacks, stairways, chutes, pipes,
conduits, ducts, fan rooms, heating, air conditioning, ventilating, plumbing,
electrical, telecommunication and other mechanical facilities, closets, service
closets and other Building facilities, and the use thereof, as well as access
thereto through the Demised Premises for the purposes of
<PAGE>
operation, maintenance, alteration and repair, are hereby reserved to Owner.
Owner also reserves the right at any time to change the arrangement or location
of entrances, passageways, doors, doorways, corridors, elevators, stairs,
toilets and other public parts of the Building, provided any such change does
not permanently and unreasonably obstruct Tenant's access to the Demised
Premises. Nothing contained in this Article TENTH shall impose any obligation
upon Owner with respect to the operation, maintenance, alteration or repair of
the Demised Premises or the Building, except as provided in Article Fifth.
(C) Access to Third Parties: Owner and its agents shall have the
right to permit access to the Demised Premises, whether or not Tenant shall be
present, to any receiver, trustee, assignee for the benefit of creditors,
sheriff, marshal or court officer entitled to, or reasonably purporting to be
entitled to, such access for the purpose of taking possession of, or removing,
any property of Tenant or any other occupant of the Demised Premises, or for any
other lawful purpose, or by any representative of the fire, police, building,
sanitation or other department of the City, State or Federal Governments.
Neither anything contained in this Article TENTH, nor any action taken by Owner
under this Paragraph (C), shall be deemed to constitute recognition by Owner
that any person other than Tenant has any right or interest in this Lease or the
Demised Premises.
(D) No Actual or Constructive Eviction: The exercise by Owner or
its agents or by the lessor under any superior lease or by the holder of any
mortgage of any right reserved to Owner in this Article TENTH shall not
constitute an actual or constructive eviction, in whole or in part, or entitle
Tenant to any abatement or diminution of rent, or relieve Tenant from any of its
obligations under this Lease, or impose any liability upon Owner, or its agents,
or upon any lessor under any superior lease or upon the holder of any such
mortgage, by reason of inconvenience or annoyance to Tenant, or injury to or
interruption of Tenant's business, or otherwise.
ELEVENTH: Legal Compliance:(A) Tenant agrees that its use of the Demised
Premises and the installation, operation and maintenance of Tenant's personal
property and equipment shall at all times, at Tenant's expense, strictly comply
with all applicable "Legal Requirements", and the orders and requirements of all
"Government Authorities". The term " Legal Requirements" shall mean all present
and future laws, codes, ordinances, statutes, requirements, orders and
regulations, ordinary and extraordinary, foreseen and unforeseen, of any
Governmental Authority (hereinafter defined) and all directions, requirements,
orders and notices of violations thereof. The term " Governmental Authority"
shall mean the United States of America, the State of New York, the County of
Suffolk, Town of Islip, any political subdivision thereof and any agency,
department, commission, board, bureau or instrumentality of any of the
foregoing, now existing or hereafter created, having jurisdiction over Owner,
Tenant, the use of the Demised Premises or the Building.
(B) In addition to the aforesaid, Tenant shall (i) not generate,
store, install, dispose of or otherwise handle any substance, waste or material
which is deemed hazardous, toxic, a pollutant or contami-
<PAGE>
nant, under any Legal Requirement now or hereinafter in effect (referred to
herein as "Hazardous Substances") in the Demised Premises, or in or around the
Building, in any manner contrary to any applicable Legal Requirements; (ii) not
install or place in the Demised Premises any asbestos or asbestos-containing
materials (iii) at Tenant's cost and expense remove, clean-up and remedy any
Hazardous Substance in the Demised Premises or the Building to the extent and in
the manner required by any applicable Legal Requirements, if the presence of
such Hazardous Substances resulted from the action or inaction of Tenant, its
employees, contractors, subcontractors, agents, occupants or invitees. Tenant
shall not remove, clean up, abate, or disturb any asbestos or
asbestos-containing material in or about the Demised Premises except as Owner
shall direct.
TWELFTH: Casualty and Condemnation.(A) In the event that the Demised
Premises shall be damaged by fire or other casualty, Owner shall have no
obligation to repair such damage provided that if Owner gives Tenant notice that
it intends to repair such damage within ninety (90) days of such damage or
casualty then, this Lease shall remain in full force and effect provided that
Owner shall undertake such repairs with reasonable diligence. If the Tenant
shall be unable to use all or substantially all of the Demised Premises or
Tenant's equipment by reason of a fire or casualty which was not the result of
the act or negligence of Tenant, then, during such period of inability the Fixed
Rent, increases therein or other sums payable by Tenant to Owner shall abate
until the earlier of the date (i) such damage is repaired or (ii) Tenant begins
to use Demised Premises or (iii) this Lease and the Demised Term shall end as
provided in this Article TWELFTH, provided however, that in the event that only
a portion of the Demised Premises is so rendered unusable then, the Fixed Rent
shall be abated in the same portion that the usable portion of the Demised
Premises bears to the total amount of the Demised Premises. In the event that
Owner shall not give notice that it intends to repair such damage, then, Tenant
shall have the option, by notice to Owner within thirty (30) days after the
initial ninety (90) day period, to cancel this Lease and the Demised Term in
which event this Lease and the Demised Term shall terminate and be of no further
force and effect as of the date of such notice and except for those obligations
which survive expiration of the Demised Term, neither party shall have any
further obligation or liability under this Lease for any period after such
effective termination date.
(B) Notwithstanding anything contained in this Lease to the
contrary, in the event that any of the following listed events shall occur
(sometimes referred to herein as the "Termination Events"), then this Lease and
the Demised Term shall terminate and be of no further force and effect as of the
effective date that this Lease shall so terminate. For the purposes hereof the
Termination Events shall be any of the following:
(i) if (a) the Demised Premises or (b) the Building shall be
damaged by fire or other casualty (whether or not in such instance the
Demised Premises shall be so damaged) and Owner shall decide not to
repair or restore such damage, the Demised Term shall terminate as of
the date of such fire or casualty, if the Demised Premises was damaged
thereby.
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(ii) the Demised Premises or a substantial part of the
Building shall be acquired or condemned by any legal authority or for
public use or purpose in which event the Lease granted hereunder shall
terminate upon a notice by Owner to Tenant terminating this Lease and
the Demised Term as of the date of such taking and Owner shall be
entitled to the entire award therefor. However, nothing contained
herein shall prohibit Tenant from seeking a separate award, provided
same shall not reduce Owner's award. (C) Tenant acknowledges that it
has been advised that Owner's insurance policies do not cover Tenant's
personal property or any other property of Tenant in the Demised
Premises; accordingly, it shall be Tenant's obligation to obtain and
maintain insurance covering its property in the Demised Premises.
Tenant shall attempt to obtain and maintain, throughout the Demised
Term, in Tenant's casualty and other insurance policies covering
Tenant's personal property and other property of Tenant in the Demised
Premises, so-called "waiver subrogation" provisions to the effect that
such policies shall not be invalidated should the insured waive, in
writing, prior to a loss, any or all right of recovery against any
party for loss occasioned by fire or other casualty. If Tenant is
unable to obtain such provisions in Tenant's property and other
insurance policies, Tenant shall name Owner as an additional insured
but not as a loss payee under such policies, it being understood and
agreed that Owner shall have no right whatsoever to any of the
proceeds of such insurance. As long as such or similar provisions are
included in such insurance policies then in force, Tenant hereby
waives (and agrees to cause any other permitted occupants of the
Demised Premises to execute and deliver to Owner written instruments
waiving) any right of recovery against Owner, any lessors under any
ground or underlying lease, the holders of any mortgage, and all other
tenants or occupants of the Building, and any servants, employees,
agents or contractors of Owner, or of any such lessor, or holder or
any such other tenants or occupants, for any loss occasioned by fire
or other casualty. In the event that at any time such insurance
carriers shall not include such or similar provisions in any such
insurance policy, the waiver set forth in the foregoing sentence (or
in any written instrument executed by any other permitted occupant of
the Demised Premises) shall, upon notice given by Tenant to Owner, be
deemed of no further force or effect from and after the giving of such
notice. During any period while any such waiver of right of recovery
is in effect, Tenant, or any other permitted occupant of the Demised
Premises, as the case may be, shall look solely to the proceeds of
such policies to compensate Tenant or such other permitted occupant
for any loss occasioned by fire or other casualty.
THIRTEENTH: Indemnity and Insurance: (A) Tenant covenants and agrees to
defend, protect, indemnify and hold harmless Owner, Rudin Management Company,
Inc. and Cogswell Realty Group, LLC, and their agents (including, but not
limited to CRG Management, LLC, which is Owner's managing agent), and the
agents, servants and employees of each of the foregoing and such other entities
as may be designated by the Owner (individually, "Indemnitee" and collectively
the "Indemnitees") from and against each and every claim, demand, cause of
action, liability, cost, damage, loss, penalty, fine, judgment or expense
(including, but not limited to, attorneys' fees and expenses incurred in defense
of the Indemnitees) which (i) may be made, asserted,
<PAGE>
brought or recovered by any person, firm or corporation arising out of any death
or bodily or personal injury (including sickness or disease) or any damage to
property to the extent caused by, resulting from or in any way directly or
indirectly incidental to or in connection with the use of the Demised Premises
or the operation of the Tenant's equipment, and/or any act, omission or
negligence of Tenant and its agents contractors or employees and (ii) shall
arise or result from or be incurred in connection with or in any way be
incidental to (1) any breach by Tenant of its obligations under this Lease or
(2) any violation of any Legal Requirement by Tenant or any fine, penalty or
governmental order issued to or enforced against Owner or any Indemnitee by any
relevant Governmental Authority with regard to such violation; the term
"expense" shall include, but not be limited to, any attorneys' fees or expenses
incurred by Owner in connection with the aforesaid and attorneys' fees or
expenses incurred in connection with any action to recover such attorneys' fees
or expenses. The obligations of Tenant hereunder shall survive the expiration,
cancellation or termination of this Lease and the Demised Term.
(B) Without limiting the aforesaid, Tenant agrees to be
responsible for any damage caused to the Building, and/or any other property
owned by Owner or any tenant, Tenant, user or occupant of the Building which may
be caused by Tenant or any of its agents or representatives. Throughout the
Demised Term and for so long as Tenant (or any person through or under Tenant)
shall use or occupy the Demised Premises, Tenant shall, at Tenant's cost and
expense, obtain and maintain throughout the Demised Term comprehensive public
liability and water legal liability insurance against any claims by reason of
personal injury, death and property damage occurring in or about the Demised
Premises covering, without limitation, the operation of any private air
conditioning equipment and any private elevators, escalators or conveyors in or
serving the Demised Premises or any part thereof, whether installed by Owner,
Tenant or others, and shall furnish to Owner certificates of such insurance at
least ten (10) days prior to the Commencement Date and at least ten (10) days
prior to the expiration of the term of any such policy previously furnished by
Tenant, in which policies Owner, and Owner's Indemnitees shall be named as
additional insureds, which policies shall be issued by companies, and shall be
in form and amounts, satisfactory to Owner.
FOURTEENTH: Subordination. This Lease and all of Tenant's rights hereunder
shall remain, subject and subordinate in all respects to all ground or
underlying leases now or hereafter in effect and to all mortgages which may now
or hereafter affect such leases and/or the Building and/or the Real Property,
and to all advances made or hereafter to be made under such mortgages, and to
all renewals, modifications, consolidations, correlations, replacements and
extensions of, and substitutions for, such leases and mortgages. The foregoing
provisions of this Article shall be self-operative and no further instrument of
subordination shall be required.
FIFTEENTH: Owner Liability Limitation. Except as provided for herein, Owner
shall incur no liability to Tenant or to any person, firm or corporation
claiming by, through or under Tenant in connection with this Lease or the
revocation thereof, or the use by Tenant of all or any portions of the Demised
Premises or the Building. Owner shall have no responsibility or liability for
any loss or damage that may occur to Tenant's property or effects while located
in the Demised Premises or the Building unless such damage is due to the
<PAGE>
negligence of Owner. No general or limited partner, officer, director, employee
or shareholder of Owner or any agent thereof shall be personally liable for the
performance of Owner's obligation under this Lease. The liability of Owner for
any of Owner's obligations under this Lease shall be limited to Owner's interest
in the Building, and Tenant shall not look to any of Owner's other assets for
enforcement or satisfaction of any such obligation, nor shall Tenant seek
recourse for such enforcement or satisfaction against any general or limited
partner, officer, director, employee or shareholder of Owner or any agent
thereof. Tenant acknowledges and agrees that (i) Owner shall not be obligated to
provide security or any other type of protection for any equipment, personal
property or installation in the Demised Premises, (ii) neither Owner nor its
agents shall be liable or responsible to Tenant for any loss or damage to any
property or person occasioned by theft, fire, act of God, public enemy,
injunction, riot, strike, insurrection, war, court order, requisition or other
order of governmental body or authority, or for any damage or inconvenience
which may arise through maintenance, repair or alteration of any part of the
Building. Owner and Tenant agree that neither party shall be liable to the other
for any special or consequential damages, including lost profits or revenues, as
a result of such parties' default of its obligations under this Lease, provided
that nothing contained herein shall otherwise limit, modify or violate any claim
or remedy in law or equity by one party hereof against the other by reason of a
breach or default in the other's obligations under this Lease.
SIXTEENTH: Default/Remedies.(A) If at any time prior to or during the
Demised Term, any one or more of the following events (referred to as "Events of
Default") shall occur: (i) if Tenant shall default in the payment when due of
any installment of Fixed Rent or in the payment when due of any other sums due
Owner hereunder, and such default shall continue for a period of ten (10) days
after notice by Owner to Tenant of such default, or (ii) if Tenant shall default
in the observance or performance of any term, covenant or condition (other than
the covenants to make payment of Fixed Rent or other sums due Owner) of this
Lease on Tenant's part to be observed or performed and Tenant shall fail to
remedy such default within thirty (30) days after notice by Owner to Tenant of
such default; or (iii) if Tenant shall file a voluntary petition in bankruptcy
or insolvency, or such proceeding shall be commenced against Tenant or Tenant
shall be adjudicated a bankrupt or insolvent, or Tenant shall file or there
shall be filed against Tenant any petition or answer seeking any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief under present or any future federal bankruptcy act or any other present
or future applicable federal, state or other statute or law, or Tenant shall
make an assignment for the benefit of creditors, or Tenant shall seek or consent
to or acquiesce in the appointment of any trustee, receiver or liquidator for
Tenant or of all or any part of Tenant's property; or (iv) if Tenant shall
default in the observance or performance of any term, covenant or condition on
the part of Tenant to be observed or performed under any other agreement with
Owner and such default shall continue beyond any grace period set forth in such
other agreement for the remedying of such default; or (v) if Tenant shall desert
or abandon the Demised Premises or Tenant's equipment; or (vi) if Tenant's
interest in this Lease shall devolve upon or pass to any person, whether by
operation of law or otherwise except as provided in Article NINTH hereof then,
upon the occurrence, at any time prior to or during the Demised Term, of any one
or more of such Events of Default, Owner, at any time thereafter, at Owner's
option, may give to Tenant a ten (10) days' notice of
<PAGE>
termination of this Lease and, in the event such notice is given, this Lease and
the Demised Term shall come to an end and expire upon the expiration of said ten
(10) days with the same effect as if the date of expiration of said ten (10)
days were the expiration date of the Demised Term and this Lease, but Tenant
shall remain liable for damages and all other sums payable pursuant to law. Any
notice given by Owner to Tenant under this Article SIXTEENTH shall be deemed a
"ten day notice to quit" under the provisions of Section 713 of the Real
Property Actions and Proceedings Law.
(B) In the event that this Lease shall end, Owner and its agents
and servants may immediately, or at any time after such default or after the
date upon which this Lease and the Demised Term shall expire and come to an end,
re-enter the Demised Premises or any part thereof, without notice, either by
summary proceedings or by any other applicable action or proceeding, or by force
or otherwise (without being liable to indictment, prosecution or damages
therefor), and may repossess the Demised Premises and dispossess Tenant and any
other persons from the Demised Premises and remove any and all of their property
and effects from the Demised Premises including Tenant's equipment and Owner, at
Owner's option, may release the whole or any part or parts of the Demised
Premises, from time to time, either in the name of Owner or otherwise, to such
tenant or tenants, for such term or terms ending before, on or after the
expiration date of the Demised Term, at such rental or rental fees or otherwise
and upon such other conditions, which may include concessions and free rent
periods, as Owner, in its sole discretion, may determine. Tenant hereby waives
the service of any notice of intention to re-enter or to institute legal
proceedings to that end which may otherwise be required to be given under any
present or future law. Tenant, on its own behalf and on behalf of all persons
claiming through or under Tenant, including all creditors, does further hereby
waive any and all rights which Tenant and all such persons might otherwise have
under any present or future law to redeem the Demised Premises, or to re-enter
or repossess the Demised Premises, or to restore the operation of this Lease,
after (i) Tenant shall have been dispossessed by a judgment or by warrant of any
court or judge, or (ii) any re-entry by Owner, or (iii) any expiration or
termination of this Lease and the Demised Term, whether such dispossess,
re-entry, expiration or termination shall be by operation of law or pursuant to
the provisions of this Lease.
SEVENTEENTH: Inability to Perform. (A) If, by reason of strikes or other
labor disputes, fire or other casualty (or reasonable delays in adjustment of
insurance), accidents, Legal Requirement or any orders of any Government
Authority, or any other cause beyond Owner or Tenant's reasonable control,
whether or not such other cause shall be similar in nature to those hereinbefore
enumerated, Owner or Tenant, as the case may be, is unable to perform, fulfill
or is delayed in fulfilling any of their respective obligations under this Lease
or any instrument collateral thereto, then the performance or observance of such
obligation shall be suspended to the extent of and during the duration of such
inability and (i) no such inability or delay shall constitute an actual or
constructive eviction of Tenant, in whole or in part, or entitle Tenant to any
abatement or diminution of any of the Fixed Rent or any other sum due Owner from
Tenant hereunder, or (ii) no such inability or delay shall relieve Owner or
Tenant, as the case may be, from any of their respective obligations under this
Lease which are not affected by such inability or delay, or impose any liability
upon Owner, or Tenant as the case may be, or their
<PAGE>
agents, by reason of inconvenience or annoyance to the other party, or injury to
or interruption of Tenant's business, or otherwise. The provisions of this
Article SEVENTEENTH shall not apply to the obligations of either Owner or Tenant
to pay any monies due the other party. Owner and Tenant, as the case may be
applicable, each agrees to employ reasonable diligence to eliminate the cause of
any inability or delay referred to in this Article, however, the provisions of
this sentence shall not apply in the event of any strike or labor dispute and
neither party shall be required to employ labor at overtime or any other premium
pay rates unless there is a danger or threatened danger to the health or safety
of any occupant of the Building or the environmental condition thereof.
(B) If by reason of strikes or other labor disputes, fire or
other casualty (or reasonable delays in adjustment of insurance) accidents,
orders or regulations of any Federal, State, County or Municipal authority, or
any other cause beyond Tenant's reasonable control, Tenant is unable to fulfill
any of Tenant's obligations under this Lease or any collateral instrument [with
the exception of any obligations on Tenant's part to pay any sum of money due
Owner, including, without limitation, the payment of Fixed Rent or increases
thereof, or any additional rent, which monetary obligation shall remain
unaffected by the provisions of this Section (B)], Tenant shall not be required
to fulfill such non-monetary obligations during the period that Tenant is so
unable to fulfill them by reason of the above, provided however, that Tenant
shall employ reasonable diligence to attempt to eliminate the cause of such
inability referred to in this Section (B).
EIGHTEENTH: Notices. Any bills, statements, notices, demands, requests or
other communications given or required to be given pursuant to this Lease shall
be effective only if rendered or given in writing, sent by registered or
certified mail, return receipt requested, addressed (a) to Tenant, Att: Vinny
DiSpigno (i) at the address set forth above, or (ii) at any place where Tenant
or any agent or employee of Tenant may be found if mailed subsequent to Tenant's
vacating, abandoning or surrendering the Demised Premises, with a copy to
Kaufman & Moomjian,LLC, 50 Charles Lindbergh Blvd., Mitchel Field, New York
11533, Attn: Neil M. Kaufman and to Vizacom, Glenpointe Centre East, 300 Frank
W. Burr Blvd., 7th Floor, Teaneck, New Jersey 07666, Attn: Judy Kumreuther, or
(b) to Owner at the address set forth above, with a copy to Goldfarb & Fleece,
345 Park Avenue, New York, New York 10154, Att.: PARTNER IN CHARGE. Any such
bill, statement, notice, demand, request or other communication shall be deemed
to have been rendered or given on the date when it shall have been mailed as
provided herein.
NINETEENTH: Miscellaneous. (A) This Lease embodies and constitutes the
entire understanding between the parties with respect to the transaction
contemplated herein. This Lease may not be modified, amended or terminated, and
Tenant's obligations hereunder shall in no way be discharged, except as
expressly provided in this Lease or by written instrument executed by the
parties hereto. This Lease shall be governed by and construed in accordance with
the laws of the State of New York. This Lease shall not be binding or effective
until this Lease is executed and delivered by Owner and Tenant. This Lease may
be executed in several counterparts, each of which shall constitute an original,
but all of which together shall constitute one and the same instrument.
<PAGE>
(B) The term " business days" as used in this Lease shall exclude
Saturdays, Sundays and holidays, the term " Saturdays" as used in this Lease
shall exclude holidays and the term " holidays" as used in this Lease shall mean
all days observed as legal holidays by either the New York State Government or
the Federal Government. The terms " Person" and "persons" as used in this Lease
shall be deemed to include natural persons, firms, corporations, associations
and any other private or public entities, whether any of the foregoing are
acting on their own behalf or in a representative capacity. If any term,
covenant or condition of this Lease or any application thereof shall be invalid
or unenforceable, the remainder of this Lease and any other application of such
term, covenant or condition shall not be affected thereby. This Lease shall be
construed without regard to any presumption or other rule requiring construction
against the party causing this Lease to be drafted. In the event of any action,
suit, dispute or proceeding affecting the terms of this Lease, no weight shall
be given to any deletions or striking out of any of the terms of this Lease
contained in any draft of this Lease and no such deletion or strike out shall be
entered into evidence in any such action, suit or dispute or proceeding given
any weight therein.
(C) Owner and Tenant mutually represent and warrant to the other
that they had no dealings with any brokers, consultants, individuals or any
other entities in the negotiation and/or consummation of this Lease. Owner and
Tenant hereby mutually agree to indemnify and hold the other party harmless from
and against any claims, costs, expenses (including, without limitation, legal
fees) and other liabilities incurred by the other party by reason of any claim
or action for a commission or fee or other compensation by any person or broker
in connection with this Lease with whom the indemnifying party may have dealt.
The provisions of this Paragraph (C) shall survive the expiration or earlier
termination of the Demised Term and this Lease.
(D) This Lease shall be binding upon and inure to the benefit of
the parties hereto and their respective legal representatives, successors and
assigns.
(E) Tenant shall have no right to record this Lease or any
memorandum thereof.
(F) Tenant shall comply with all reasonable building rules Owner
may from time to time adopt and of which Owner shall notify Tenant thereof.
(G) Owner covenants and agrees with Tenant that upon Tenant's
paying Fixed Rent and additional rent reserved in this Lease and observing and
performing all of 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 during the Demised Term, subject, however to the terms,
covenants and conditions of this Lease.
<PAGE>
(H) Owner shall provide a space for Tenant's back up generator
behind the rear of the Demised Premises provided Tenant shall comply with
Owner's rules and regulations with respect thereto.
TWENTIETH. Security. The sum of FOURTEEN THOUSAND NINE HUNDRED FORTY NINE
and 92/100 ($14,949.92) DOLLARS representing security (referred to as "
Security") for the faithful performance and observance by Tenant of the terms,
covenants and conditions of this Lease on Tenant's part to be observed and
performed is due and payable at the time of the execution and delivery of this
Lease. In the event of any default by Tenant in the observance or performance of
any of the terms, covenants or conditions of this Lease on the part of Tenant to
be observed or performed including, but not limited to, any default in the
payment when due of any monthly installment of the Fixed Rent or increase in the
Fixed Rent payable pursuant to the provisions of Articles TWENTY-FIRST or
TWENTY-SECOND or of any additional rent, Owner may use or apply all or any part
of the Security for the payment to Owner for Tenant's account of any sum or sums
due under this Lease, without thereby waiving any other rights or remedies of
Owner with respect to such default. Tenant agrees to replenish all or any part
of the Security so used or applied during the Demised Term. After (i) the
Expiration Date or any other date upon which the Demised Term shall expire and
come to an end, and (ii) the full observance and performance by Tenant of all of
the terms, covenants and conditions of this Lease on Tenant's part to be
observed and performed, including, but not limited to, the provisions of Article
EIGHTH, Owner shall return to Tenant the balance of the Security, together with
accrued interest thereon, then held or retained by Owner. Owner agrees that,
unless prohibited by law or by the general policies of lending institutions in
New York City, Owner shall deposit the Security in an interest-bearing savings
account with a bank selected by Owner, in which event all interest accruing
thereon shall be added to and become part of the Security and shall be retained
by Owner under the same conditions as the sum originally deposited as Security.
Tenant agrees that Tenant shall not assign or encumber any part of the Security,
and no assignment or encumbrance by Tenant of all or any part of the Security
shall be binding upon Owner, whether made prior to, during, or after the Demised
Term. Owner shall not be required to exhaust its remedies against Tenant or
against the Security before having recourse to any other form of security held
by Owner and recourse by Owner to any form of security shall not affect any
remedies of Owner which are provided in this Lease or which are available to
Owner in law or equity. In the event of any sale, assignment or transfer by
Owner named herein (or by any subsequent Owner) of its interest in the Building
as owner or lessee, Owner (or such subsequent owner) shall have the right to
assign or transfer the Security to its grantee, assignee or transferee and, in
the event of such assignment or transfer, Owner named herein, (or such
subsequent Owner) shall have no liability to Tenant for the return of the
Security and Tenant shall look solely to the grantee, assignee or transferee for
such return. A lease of the entire Building shall be deemed a transfer within
the meaning of the foregoing sentence. Notwithstanding anything to the contrary
set forth in the foregoing provisions of this Article, Owner shall be entitled
to retain the one (1%) percent administrative fee permitted by law to be
retained by landlords with respect to security deposits.
<PAGE>
TWENTY-FIRST. Tax Escalation. A. Definitions: In the determination of any
increase in the Fixed Rent under the provisions of this Article, Owner and
Tenant agree that the following terms shall have the following meanings:
(1) The term "Tax Escalation Year" shall mean each fiscal
year commencing December 1st and ending on the following November 30th which
shall include any part of the Demised Term.
(2) The term " Taxes" shall be deemed to mean a sum equal to
all real estate taxes and assessments, special or otherwise, upon or with
respect to the Real Property imposed by the Town of Islip, County of Suffolk or
any other taxing authority to create a source of revenue through taxation of
real estate as such. If, due to any change in the method of taxation, any
franchise, income, profit, sales, rental, use and occupancy or other tax or
payments in lieu of any such taxes shall be substituted for, or levied against
Owner or any owner of the Building or the Real Property, in lieu of any real
estate taxes or assessments upon or with respect to the Real Property, such tax
or payments in lieu of any such taxes shall be included in the term Taxes for
the purposes of this Article.
(3) The term " Tenant's Proportionate Share" shall mean the
fraction, 3,817/355,000.
(4) The term "Owner's Basic Tax Liability" shall mean a sum
equal to Taxes, as finally determined, payable for the Tax Escalation Year
commencing December 1st 1999 expiring November 30th 2000.
(B) If Taxes payable in any Tax Escalation Year shall be in such
amount as shall constitute an increase above Owner's Basic Tax Liability, the
Fixed Rent for such Tax Escalation Year shall be increased by a sum equal to
Tenant's Proportionate Share of any such increase. Tenant shall pay any such
amounts owing to Owner pursuant to the foregoing provisions of this Article
within ten (10) days after the submission by Owner to Tenant of a bill therefor,
Tenant's obligation to make such payments shall survive the expiration or sooner
termination of this Lease. All sums payable under this Article shall be
collectible by Owner in the same manner as Fixed Rent.
TWENTY-SECOND. Consumer Price Index Escalation
A. Definitions. In the determination of any increase in the Fixed
Rent under the provisions of this Article, Owner and Tenant agree as follows:
<PAGE>
(1) The term "Escalation Year" shall mean each calendar year
which shall include any part of the Demised Term.
(2) The term "Owner's CPI Statement" shall mean a writing
setting forth a computation of any increase in the Fixed Rent for the preceding
Escalation Year pursuant to the provisions of this Article.
(3) The term "Price Index" shall mean the Consumer Price
Index for Urban Wage Earners and Clerical Workers based on the United States
Cities national monthly average for all group commodities and items, published
by the U.S. Department of Labor, Bureau of Labor Statistics, or a successor
substitute index. If in any Escalation Year, the 1982-84 average of 100 is no
longer used as the basis of calculation of the Price Index, then, for the
purposes of this Article, the Price Index for such Escalation Year shall be
recalculated as though such 1982-84 average of 100 was still the basis of
calculation of the Price Index for such Escalation Year. In the event such Price
Index (or a substitute successor index) is not available, a reliable
governmental or other non-partisan publication evaluating the information
theretofore used in determining the Price Index shall be used to reflect the
increase in the national cost of living.
(4) The term "Base Price Index Rate" shall mean the Price
Index for the month in which the Commencement Date shall occur.
B. The Fixed Rent for each Escalation Year shall be increased by
a sum determined by multiplying (i) the Fixed Rent for such Escalation Year, by
(ii) the percentage increase in the Price Index for the month of December in
such Escalation Year above the Base Price Index Rate. Appropriate Proration
shall be made for any partial Escalation Year. Tenant shall pay any such amounts
owing to Owner pursuant to the foregoing provisions of this Article within ten
(10) days after the submission by Owner to Tenant of a bill therefor. Tenant's
obligation to make such payments shall survive the expiration or sooner
termination of this Lease. All sums payable under this Article shall be
collectible by Owner in the same manner as Fixed Rent.
<PAGE>
TWENTY-THIRD. Arbitration Any dispute with respect to the reasonability of
any failure or refusal of Owner to grant its consent or approval to any request
for such consent or approval pursuant to the provisions of Section 9.03 with
respect to which request Owner has agreed, in such Section, not unreasonably to
withhold such consent or approval which is submitted to arbitration shall be
finally determined by arbitration in the City of New York in accordance with the
rules and regulations then obtaining of the American Arbitration Association or
its successor. Any such determination shall be final and binding upon the
parties, whether or not a judgment shall be entered in any court. In making
their determination, the arbitrators shall not subtract from, add to, or
otherwise modify any of the provisions of this Lease. Owner and Tenant may, at
their own expense, be represented by counsel and employ expert witnesses in any
such arbitration. Any dispute with respect to the reasonability of any failure
or refusal of Owner to grant its consent or approval to any request for such
consent or approval pursuant to any of the provisions of this Lease (other than
Section 9.03) with respect to which Owner has covenanted not unreasonably to
withhold such consent or approval, and any dispute arising with respect to the
increases in Fixed Rent due to the provisions of Article TWENTY-FIRST and
Article TWENTY-SECOND shall be determined by applicable legal proceedings. If
the determination of any such legal proceedings, or of any arbitration held
pursuant to the provisions of this Section with respect to disputes arising
under Section 9.03 shall be adverse to Owner, Owner shall be deemed to have
granted the requested consent or approval, or be bound by any determination as
to Taxes and Consumer Price Index Escalation and the increases in Fixed Rent
relating thereto, but that shall be Tenant's sole remedy in such event and Owner
shall not be liable to Tenant for a breach of Owner's covenant not unreasonably
to withhold such consent or approval, or otherwise. Each party shall pay its own
counsel and expert witness fees and expenses, if any, in connection with any
arbitration held pursuant to the provisions of this Section and the parties will
share all other expenses and fees of any such arbitration.
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands and
seals as of the day and year first above written.
SPACELY LLC, Owner
By: Rudin LITC Associates, Managing Member
--------------------------------------
By: /s/ William Rudin
--------------------------------------
Name: William Rudin
Title: Managing Member
Owner
PWR SYSTEMS, INC.
By: /s/ David Salav
--------------------------------------
Name: David Salav
Title: President
<PAGE>
UNIFORM FORM CERTIFICATE OF ACKNOWLEDGMENT
(Within New York State)
State of New York )
:ss.:
County of Suffolk )
On the 26th day of May, in the year 2000, before me, the undersigned,
personally appeared David N. Salar, personally known to me or proved to me on
the basis of satisfactory evidence to be the individual whose name is subscribed
to the within instrument and acknowledged to me that he executed the same in
his/her/their capacity(ies), and that by his signature on the instrument, the
individual(s), or the person upon behalf of which the individual(s) acted,
executed the instrument.
/s/ Mary Greene
----------------------------------------------------------
(Signature and Office of individual taking acknowledgment)
UNIFORM FORM CERTIFICATE OF ACKNOWLEDGMENT
(Outside of New York State)
State, District of Columbia, Territory,
Possession or Foreign Country
____________________________________):ss.:
On the _____ day of _______ in the year _________, before me, the
undersigned, personally appeared ___________________________________________,
personally known to me or proved tome on the basis of satisfactory evidence to
be the individual(s) whose name(s) is (are) subscribed to the within instrument
and acknowledged to me that he/she/they executed the same in his/her/their
capacity(ies), that by his/her/their signature(s) on the instrument, the
individual(s), or the person upon behalf of which the individual(s) acted,
executed the instrument, and that such individual made such appearance before
the undersigned in the ___________________. (Insert the city or other political
subdivision and the state or country or other place the acknowledgment was
taken.)
----------------------------------------------------------
(Signature and office of individual taking acknowledgment)
<PAGE>
EXHIBIT 1
This floor plan is annexed to
the Lease and made a part
thereof solely to indicate by
outlining and diagonal
markings the Demised Premises.
All areas, dimensions,
locations and conditions are
approximate.
