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Subject: Structural SC - status report
Please find attached a document which shows where the structural sub-committee is currently at, for discussion at the next TC meeting (and on list prior as people see fit). I've attached the "Hanover lease" - one of the examples we've been working with. It validates against the indicative DTD included within it and in the roadmap document. thanks, Jason
Structural-SC-Roadmap-20040327.pdf
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@style may go.
TODO: do we want to attach these to all inline elements as well?
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For example, we may do
<!ELEMENT ol (li | ili)+>
instead.
Also, not clear how to do numbering yet.
-->
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<!ELEMENT h (#PCDATA | %Inline;)*>
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<!ELEMENT blockquote (p)*>
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<html>
<head>
<title>XHTML2 Test: Hanover Lease Agreement</title>
</head>
<body>
<section>
<!-- DONE clause 1 to 6.2(m) on p21
TO DO clause 6.3-6.7
DONE clause 7 - 15.3(l) on p58
TO DO clause 16 and following to page 85
lots of inline lists still to be marked up. -->
<section>
<nr>1. </nr>
<h>Leased Premises; Term of Lease</h>
<section>
<nr>1.1 </nr>
<h>Leased Premises</h>
<p>Landlord leases to Tenant, and Tenant rents from Landlord, subject to the Permitted Encumbrances, the land located in the City, County and State of New York more particularly described on Exhibit A hereto (the "Land"),</p>
<p>TOGETHER WITH <ilist><ili>(i) all Improvements (excluding any thereof which pursuant to the final paragraph of this Section 1.1 are not Landlord's property), and</ili><ili>(ii) all personal property owned by Landlord now or hereafter attached to or used in connection with the Improvements,</ili></ilist></p>
<p>TOGETHER WITH all right, title and interest, if any, of Landlord in and to:
<ol>
<li><p>
(a) any strips and gores of land adjoining the Land on any side thereof;
</p></li>
<li><p>
(b) any land lying in the bed of any street or avenue abutting the Land, to the center line thereof; and
</p></li>
<li><p>
(c) any easements or other rights in adjoining property enuring to Landlord by reason of ownership of the Land;
</p></li>
</ol>
all of the foregoing (together with any Improvements excluded from clause (i) above) are collectively called the "Leased Premises".</p>
<p>The Land and the Improvements are collectively called the "Project". The term "Permitted Encumbrances" shall refer to the matters listed on Exhibit C hereto. Simultaneously with the execution of this Lease, Landlord and Tenant are executing an Initial Improvements Agreement of even date herewith (the "Initial Improvements Agreement") relating to certain work to be done to prepare the Leased Premises for occupancy by Tenant.</p>
<p>The term "Improvements" shall mean all buildings, structures, fixtures, equipment and improvements now or hereafter located on, or attached to or appurtenant to, the Land or to other Improvements, including any thereof installed <ilist><ili>(i) as Base Building Upgrade Work (as such term is defined in the Initial Improvements Agreement) or Fit-Out Work (as such term is defined in the Initial Improvements Agreement) pursuant to the Initial Improvements Agreement, or </ili><ili>(ii) by Tenant pursuant to Article 6;</ili></ilist> provided, that the term "Improvements" shall not include any furniture, furnishings, trade fixtures or business equipment furnished, installed or placed in the Improvements by Tenant at Tenant's sole cost and expense.</p>
<p>Except as otherwise provided in the next paragraph, all Improvements shall be (or if hereafter installed shall upon installation become) the property of Landlord, a part of the Leased Premises and subject to this Lease. Notwithstanding the provisions of Article 6, Tenant shall not remove from the Leased Premises
<ol>
<li><p>
(i) any Improvements constituting Base Building Upgrade Work, or
</p></li>
<li><p>
(ii) any Improvements constituting Fit-Out Work paid for by Landlord
</p></li>
</ol>
unless <ilist><ili>(x) such removal is required by Legal Requirements, or</ili><ili>(y) Tenant replaces the Improvements so removed with other Improvements of substantially equal value</ili></ilist>.</p>
<p>All Improvements constituting Fit-Out Work paid for by Tenant shall remain the property of Tenant, subject to removal by Tenant subject to the provisions of Article 6; provided, that unless and until so removed, the same shall nonetheless constitute Improvements for all purposes under this Lease. Any such Improvements that shall not have been so removed shall, upon the expiration or sooner termination of this Lease, become the property of Landlord. </p>
</section>
<section>
<nr>1.2</nr>
<h>Term.</h>
<p>Except as otherwise provided in Section 1.3, the term of this Lease shall commence on the Possession Date (as such term is defined in the Initial Improvements Agreement) and, unless sooner terminated pursuant to law or pursuant to any of the terms of this Lease, shall expire at 11:59 p.m. on Jun 30, 2018 (the "Expiration Date"). The term of this Lease is referred to herein as the "Term". </p>
</section>
<section>
<nr>1.3</nr>
<h>Stephaneze Premises.</h>
<!-- sections or list here? i go for sections -->
<section>
<nr>(a)</nr>
<p>
Landlord represents and warrants to Tenant that, as of the date of this Lease, the Leased Premises are vacant and free of any occupancy or tenancy or right thereto, other than the occupancy or tenancy by Stephaneze ("Stephaneze") of a portion of the Leased Premises (the "Stephaneze Premises"), and that Landlord has commenced a summary proceeding against Stephaneze seeking to recover possession of the Stephaneze Premises, and has furnished Tenant with copies of all material pleading and material motion papers filed or served by any party thereto. Landlord shall diligently prosecute such summary proceeding and if such summary proceeding is dismissed or terminated without Landlord having recovered possession of the Stephaneze Premises, then Landlord shall take such further action as may be available to Landlord to recover possession of the Stephaneze Premises.</p>
<p>Promptly after recovering possession of the Stephaneze Premises, Owner shall <ilist><ili>(i) perform and complete any Asbestos Removal Work, Refireproofing Work, and/or Demolition Work (as such terms are defined in the Initial Improvement Agreement), that may be required under the provisions of the Initial Improvement Agreement with respect to the Stephaneze Premises, and</ili><ili>(ii) notify Tenant that the foregoing has been performed and completed and, prior to or together with such notice, furnish Tenant with one or more Forms ACP-5 evidencing the removal from the Stephaneze Premises of all asbestos and asbestos-containing material</ili></ilist>.</p>
<p>The term of the Lease with respect to the Stephaneze Premises shall commence on (and the term "Leased Premises" shall not include the Stephaneze Premises until) the Stephaneze Possession Date. The term "Stephaneze Possession Date" shall mean the last of
<ol>
<li><p>
(x) the Possession Date,
</p></li>
<li><p>
(y) the date on which Landlord recovers possession of the Stephaneze Premises,
</p></li>
<li><p>
(z) the date on which <ilist><ili>(i) all Asbestos Removal Work, Refireproofing Work and Demolition Work throughout the Stephaneze Premises shall have been completed, </ili><ili>(ii) Tenant shall have been furnished with or obtained one or more Forms ACP-5 evidencing the removal from the Stephaneze Premises of all asbestos and asbestos-containing material, and</ili><ili> (iii) Tenant shall have received the Stephaneze Completion Notice</ili></ilist>,
</p></li>
</ol>
or, if Tenant shall so elect, such earlier date (not earlier than the later of the Possession Date or the date 30 days after the date on which Landlord recovers possession of the Stephaneze Premises) as Tenant shall elect by notice to Landlord.</p>
<p>If the Stephaneze Possession Date does not occur by the later of the Possession Date or October 15, 1997, then Tenant shall be entitled to a credit against the Basic Rent during the 12 month period beginning on the Rent Commencement Date equal to $347,000; one-twelfth of such credit shall be applied against each of the 12 monthly installments of Basic Rent during such 12 month period. If the Stephaneze Possession Date does not occur by the first or any later anniversary of October 15, 1997, then Tenant shall be entitled to a credit against the Basic Rent during the 12 month period beginning with the first or such later anniversary of the Rent Commencement Date equal to $347,000; one twelfth of such credit shall be applied against each of the 12 monthly installments of Basic Rent during such 12 month period. The preceding sentence may be applied repeatedly, so long as Landlord's inability to deliver vacant possession of the Stephaneze Premises by an anniversary of October 15, 1997 continues.</p>
<p>This Section 1.3(a) shall be an express provision to the contrary for purposes of Section 223-a of the New York Real Property Law and any other law of like import now or hereafter in effect. </p>
</section>
<section>
<nr>(b)</nr>
<p>The following provisions of this Section 1.3(b) shall be applicable until the Stephaneze Possession Date:
<ol>
<li><p>
(i) There shall be no direct access between the Stephaneze Premises and the Building (i.e., all access to or from the Stephaneze Premises shall be from the street only).
</p></li>
<li><p>
(ii) Tenant shall not be required to furnish any services or utilities to the Stephaneze Premises. If and to the extent that the electricity, water, sewer, gas and telephone lines currently serving the Stephaneze Premises run through the Leased Premises, Tenant shall permit the same to remain; provided, that Tenant shall have the right
<ol>
<li><p>(A) to relocate such lines at Tenant's expense; provided, that (i) any such relocation shall be performed only at times other than during the regular business hours of Stephaneze, and (ii) no such relocation shall be performed prior to the earlier of (1) October 15, 1997, or (2) the date on which Landlord recovers possession of the Stephaneze Premises (such earlier date being herein called the "Stephaneze Restriction Date"), and</p></li>
<li><p>(B) to shut down such lines or otherwise to interrupt, stop, suspend or curtail the delivery of services through such lines whenever and for so long as may be reasonably necessary by reason of damage to such lines, accidents, or any testing, maintenance, repairs, replacements, alterations, additions or other work being undertaken by Tenant, or by reason of any other cause beyond Tenant's reasonable control; provided, that, except in case of emergency, or reasonably foreseeable or actual criminal liability of Tenant, damage to such lines, accident or any other cause beyond Tenant's reasonable control, Tenant (i) shall not shut down such lines or otherwise interrupt stop, suspend or curtail the delivery of services through such lines prior to the Stephaneze Restriction Date, and (ii) shall use reasonable efforts to minimize interference with the ordinary conduct of the business of Stephaneze.</p></li></ol>
<!-- continuation -->Provided that Tenant complies with the provisions of this Section 1.3(b), Tenant shall have no liability to Landlord or any Occupant of the Stephaneze Premises for or on account of any shutdown of such lines or any interruption, stoppage, suspension or curtailment of service through such lines for any reason. In case of any damage to such lines, Tenant shall, with reasonable promptness and diligence, immediately after Tenant becomes aware of such damage, repair such damage (at Landlord's expense, unless such damage shall have arisen from any act, omission, negligence or intentional misconduct of Tenant). All electricity, gas and water and sewer service to the Stephaneze Premises shall be separately metered, and the charges therefor shall be paid by Landlord directly to the public or municipal utility supplier.
<!-- nb if we had another para here, it'd be neater to have wrapped the above in a para as well, although the DTD would also us not to! -->
</p></li>
<li><p>
(iii) If the term of this Lease shall not have commenced with respect to the Stephaneze Premises on or before March 1, 1998 then thereafter until the Stephaneze Possession Date: (A) Landlord shall keep (or cause to be kept) all portions of the Stephaneze Premises visible from without the Stephaneze Premises in a well-maintained, clean and attractive condition; (B) Landlord shall exterminate (or cause to be exterminated) the Stephaneze Premises as necessary to keep the Stephaneze Premises free of vermin; and (C) Landlord shall clean and maintain (or cause to be cleaned and maintained) the exterior surface of the exterior walls of the Stephaneze Premises, including any and all glass located thereon.
</p></li>
<li><p>
(iv) Landlord shall make (or cause to be made) all repairs and replacements in and to the Stephaneze Premises if the failure to make such repair or replacement would result in an adverse effect on the use, occupancy or appearance of the Leased Premises and the need for such repair or replacement is not the result of any act, omission, negligence or intentional misconduct of Tenant (in which latter event such repair or replacement shall be performed by Tenant). Landlord, at Landlord's expense (unless the need for such compliance arises out of any act, omission, negligence or intentional misconduct of Tenant, in which event Tenant shall reimburse Landlord for the cost of such compliance within 30 days after submission by Landlord to Tenant of invoices evidencing the cost of such compliance), shall promptly comply with all Legal Requirements, Insurance Requirements and Permitted Encumbrances relative to the Stephaneze Premises, whether or not compliance therewith shall require Alterations or interfere with the use or enjoyment of the Stephaneze Premises. Landlord may contest any such Legal Requirement, Insurance Requirement or Permitted Encumbrance (and not comply therewith pending the resolution of such contest); provided, that such contest has no adverse affect on Tenant's use or occupancy of the Leased Premises. Tenant shall not at any time use or occupy the Stephaneze Premises, or suffer or permit anyone to use or occupy the Stephaneze Premises, in any manner, or do anything in the Stephaneze Premises, or suffer or permit anything to be done, brought into or kept on the Stephaneze Premises which (A) constitutes a nuisance, public or private, (B) makes unobtainable from reputable insurance companies authorized to do business in New York State all risk property insurance, or liability, elevator, boiler or other insurance at standard rates, or (C) discharges objectionable fumes, vapors or odors.
</p></li>
<li><p>
(v) Landlord shall keep in effect commercial general liability insurance, including broad form bodily injury, personal injury, property damage and blanket contractual insurance, against claims arising out of or connected with the possession, use, operation or condition of the Stephaneze Premises ("Liability Insurance") with a combined single limit of not less than $10,000,000 for all claims with respect to bodily injury, property damage and personal injury with respect to any one occurrence. All such Liability Insurance shall name Tenant as an additional insured and provide that no cancellation, reduction in amount or material change in coverage thereof shall be effective until at least 30 days after receipt by Tenant of written notice thereof. Landlord may obtain the aforesaid insurance under blanket or umbrella policies. On the date hereof (with respect to Liability Insurance required to be carried by Landlord), and at least 7 days prior to each policy expiration, Landlord shall deliver (or cause to be delivered) to Tenant certificates of all such Liability Insurance.
</p></li>
<li><p>
(vi) Subject to the next sentence, Tenant shall have (A) the exclusive right to use, disconnect or close (x) any pipe, duct, conduit, utility line or similar installation running in or through but not serving the Stephaneze Premises, or (y) any exhaust duct running in or through or serving the Stephaneze Premises, (B) the right to install in and through the Stephaneze Premises new or additional pipes, ducts, conduits, utility lines or similar installations, in locations adjacent to ceiling slabs, demising walls or structural columns, in each case in a manner so as not to unreasonably interfere with the use or occupancy of the Stephaneze Premises as retail space, (C) the right to maintain, repair and replace any of the foregoing and (D) the right to enter the Stephaneze Premises for (1) all or any of the foregoing purposes, (2) to inspect the Stephaneze Premises or (3) to maintain or make repairs, replacements, alterations, additions or improvements in or to the Leased Premises; provided, that, except in case of emergency or reasonably foreseeable or actual criminal liability of Tenant, Tenant shall give Landlord reasonable prior notice of any such entry and shall use reasonable efforts to minimize interference with the use and occupancy of the Stephaneze Premises arising by reason of such entry. Notwithstanding the foregoing, except in case of emergency or reasonably foreseeable or actual criminal liability of Tenant, Tenant shall take no action pursuant to this Sectio 1.3(b)(vi) prior to the Stephaneze Restriction Date. The Stephaneze Premises shall consist only of the space within the inside surface of the structural (or centerline of any non-structural) walls, windows, doors, columns, and floor slabs bounding the Stephaneze Premises (exclusive of any such space used for pipes, ducts, conduits, utility lines or similar installations). If at any time any windows of the Stephaneze Premises are either temporarily darkened or obstructed by reason of maintenance, cleaning, repairs, replacements, alterations, additions or improvements in or about the Leased Premises or the Stephaneze Premises, including by way of a sidewalk bridge (or permanently darkened or obstructed if required by law), Tenant shall have no liability to Landlord or any Occupant of the Stephaneze Premises on account thereof; provided, that Tenant shall use reasonable efforts not to darken or obstruct any windows of the Stephaneze Premises and to minimize any such darkening or obstruction when the same cannot reasonably be avoided.
</p></li></ol></p>
</section><section> <nr>(c)</nr>
<p>Subject to the last sentence of this Section 1.3(c), if Landlord shall fail to make any payment or perform any act required to be made or performed by Landlord hereunder with respect or relating to the Stephaneze Premises Tenant may (but shall be under no obligation to) without waiving or releasing any obligation or default:
<ol>
<li><p>
(i) in case of emergency, or reasonably foreseeable or actual criminal liability of Tenant or interference with the use or occupancy of, or the performance of the Base Building Upgrade Work or the Fit-Out Work in, the Leased Premises, or
</p></li>
<li><p>
(ii) if Tenant shall give notice to Landlord referring to Tenant's intent to exercise its self-help right under this Sectio 1.3(c), which notice shall specify Landlord's failure with respect to the Stephaneze Premises and require such failure to be remedied, and Landlord shall not remedy such failure withi 30 days after the giving of such notice; provided, that in case such failure cannot with due diligence be remedied by Landlord within a period of 30 days, if Landlord proceeds as promptly as may be reasonably possible after the giving of such notice and with all due diligence to remedy such failure and thereafter to prosecute the remedying of such failure with all due diligence, the period of time after the receipt of such notice by Landlord within which to remedy such failure shall be extended for such period as may be necessary to remedy the same with all due diligence,</p></li></ol>
make such payment or perform such act for the account and at the expense of Landlord, and may enter upon the Stephaneze Premises or any part thereof for such purpose and take all such action therein as, in the opinion of Tenant, may be necessary or appropriate therefor. All payments so made by Tenant and all costs and expenses (including without limitation attorneys fees and expenses) incurred in connection with Tenant's exercise of its self-help right under this Section 1.3(c), together with interest thereon at the Interest Rate, shall be paid by Landlord to Tenant within 30 days after Landlord's receipt of Tenant's demand therefor, accompanied by invoices evidencing the costs incurred by Tenant. If Landlord objects to Tenant's exercise of its right of self-help under this Section 1.3(c), then Tenant shall not be entitled to any reimbursement under this Section 1.3(c) unless and until the matter is resolved in favor of Tenant by Expedited Arbitration. Except in case of emergency or reasonably foreseeable or actual criminal liability of Tenant, Tenant shall take no action under this Section 1.3(c) prior to the Stephaneze Restriction Date.</p>
</section>
<section> <nr>(d)</nr>
<p>Landlord shall protect, indemnify and save harmless Tenant from and against all liabilities, obligations, claims, damages, penalties, causes of actions, costs and expenses (including, without limitation, attorneys' fees and expenses) imposed upon or incurred by or asserted against Tenant by reason of any action by Landlord to recover possession of the Stephaneze Premises.</p>
</section>
<section>
<nr>(e)</nr>
<p>
Landlord shall reimburse Tenant for all incremental out-of-pocket costs incurred by Tenant prior to the commencement of the Term with respect to the Stephaneze Premises on account of the Stephaneze Premises, or the use or occupancy thereof, including any such costs arising out of any maintenance, repair or replacement of any utility lines serving the Stephaneze Premises (unless the need therefor arises out of any act, omission, negligence or intentional misconduct of Tenant). Such reimbursement shall be due from time to time within 30 days after Tenant's presentation of an invoice detailing such incremental out-of-pocket costs. </p>
</section>
</section>
<section>
<h>1.4 Tenant's Termination Options</h>
<section> <p>
(a) Subject to the further provisions of this Section 1.4, Tenant shall have the option (each, a "Termination Option") to terminate this Lease effective as of (i) September 30, 2004, (ii) September 30, 2006, (iii) June 30, 2008 or (iv) June 30, 2013 (each of the dates set forth in the preceding clauses (i) - (iv) is called a "Termination Date"), by giving an exercise notice (the "Termination Notice") to Landlord on or before the date that is (A) one year prior to the applicable Termination Date in the case of a termination as of September 30, 2004 or September 30, 2006 or (B) 18 months prior to the applicable Termination Date in the case of a termination as of Jun 30, 2008 or June 30, 2013. Time is of the essence with respect to the giving of any Termination Notice. Tenant may, by notice to Landlord at any time, waive any one or more of its Termination Options.
</p></section><section>
<p>
(b) If Tenant timely exercises a Termination Option providing for the termination of this Lease as of September 30, 2004, September 30, 2006 or June 30, 2008, then Tenant shall pay to Landlord, on or before September 1 2004, September 1, 2006 or June 1, 2008, as the case may be (the "Cancellation Payment Payment Date"), in addition to the Basic Rent, Supplemental Rent and Tax Payment due on the Cancellation Payment Payment Date, the applicable Cancellation Payment. "Cancellation Payment" means
<ol>
<li><p>
(i) the amount of the Unamortized Fit-Out Work Investment as of the applicable Cancellation Payment Payment Date, plus
</p></li>
<li><p>
(ii) in the case of a Termination Option providing for the termination of this Lease as of September 30, 2004 or September 30, 2006, the Basic Rent and the Tax Payments that would be payable for the six month period immediately following the applicable Termination Date if Tenant had not exercised the Termination Option (the portion of the Cancellation Payment referred to in this clause (iii) is called the "Rent Based Cancellation Payment").
</p></li>
</ol>
</p>
</section><section> <p>
(c) If Tenant timely exercises any Termination Option, then on the applicable Termination Date (i) this Lease shall terminate, (ii) Tenant shall deliver to Landlord vacant possession of the Leased Premises subject to and in accordance with all applicable provisions of this Lease as if the Termination Date were the Expiration Date, and (iii) Basic Rent, Supplemental Rent and Tax Payments due hereunder shall be payable through and apportioned as of the Termination Date, and (except as provided in Section 32(b) with respect to any holdover) Tenant shall have no liability for Basic Rent, Supplemental Rent or Tax Payments which would otherwise have been payable after the Termination Date.
</p>
</section><section>
<p>
(d) If (i) Tenant timely exercises a Termination Option as of September 30, 2004 or September 30, 2006 and (ii) any Reimbursable Alteration (other than Reimbursable Removal of Hazardous Substances) was performed prior to the applicable Termination Date, then on or before the applicable Termination Date, Landlord shall pay to Tenant, in respect of each such Reimbursable Alteration, an amount equal to the excess of (A) the Reimbursement Amount which would have been payable by Landlord with respect thereto if the Cost Division Date with respect to such Reimbursable Alterations had been the applicable Termination Date rather than the last day of the Second Rent Period, over (B) the Reimbursement Amount paid by Landlord with respect thereto; provided, that if with respect to any such Reimbursable Alteration Landlord shall have been required to pay the Limited Reimbursement Amount rather than the Reimbursement Amount and shall not have subsequently been required to make the payment described in Section 6.4(g)(vi), then rather than the excess of the amount described in clause (A) above over the amount described in clause (B) above Landlord shall pay to Tenant, in respect of such Reimbursable Alteration, an amount equal to the excess of (C) the Limited Reimbursement Amount which would have been payable by Landlord with respect thereto if the Cost Division Date with respect to such Reimbursable Alteration had been the applicable Termination Date rather than the last day of the Second Rent Period, over (D) the Limited Reimbursement Amount paid by Landlord with respect thereto.
</p>
</section>
</section>
<section>
<h>1.5 Landlord's Financing.</h>
<section> <p>
(a) Landlord shall make reasonable efforts, as promptly as reasonably possible, to cause the Financing Closing Date to occur. The term "Financing Closing Date" shall refer to the date on which
<ol><li><p>
(i) Landlord has received full disbursement of one or more new loans sufficient in amount to permit Landlord to deposit, and Landlord has deposited (a) $17,350,000 into the account described in Section 6 of the Initial Improvements Agreement, and (b) $50,000,000 into the account described in Section 7 of the Initial Improvements Agreement,
</p></li>
<li><p>
(ii) Landlord has caused the holders of all mortgages or other liens on the Project (including but not limited to the lender or lenders who shall have disbursed the new loan or loans referred to above) to execute and deliver to Tenant a Non-Disturbance Agreement, and
</p></li>
<li><p>
(iii) Tenant shall have received the certificate called for by the last paragraph of Section 5 of the Option Agreement of even date among Landlord, Tenant and certain others.
</p></li>
</ol>
Landlord represents that it has furnished to Tenant a true and complete copy of a commitment letter dated______ from Credit Suisse First Boston Mortgage Capital. On the Financing Closing Date, Landlord shall furnish Tenant with evidence that the deposits referred to in clause (i) above have been made. </p>
</section><section>
<p><!-- its odd that li doesn't contain p, but that section does, when content really looks the same on the page. Maybe the GP people always want li to be made up of p? -->
(b) If the Financing Closing Date does not occur on or before September 30, 1997, then either Landlord or Tenant may terminate this Lease by notice (the "Financing Termination Notice") to the other given at any time prior to the Financing Closing Date, in which event this Lease shall terminate as of the date of the receipt of such Financing Termination Notice and neither party shall have any further obligations or liabilities to the other, except that Landlord shall reimburse Tenant in an amount not to exceed $6,700,000 for any Qualified Prefinancing Costs incurred by Tenant. Tenant may make one or more demands for reimbursement under this Section 1.5(b), each to be accompanied by invoices paid or payable by Tenant, and each amount payable under this Sectio 1.5(b) shall be due within 30 days of such demand therefor. If any payment required to be made pursuant to this Section 1.5(b) is not made when due, the same shall bear interest in accordance with Section 3(c). Upon payment of any amount pursuant to this Section 1.5(b), Tenant shall assign to Landlord all of Tenant's right, title and interest in and to the plans and specifications, work, equipment or other property to which such payment related (including the benefit of any deposits or other payments made by Tenant and reimbursed by Landlord), without recourse or representation.</p>
<p>"Qualified Prefinancing Costs" means any and all Costs paid or incurred by Tenant for or in connection with the Base Building Work and/or the Fit-Out Work on or prior to the date of termination of this Lease under this Section 1.5(b), including any partial payments (e.g. deposits) with respect to any systems or equipment to be installed as a part of the Base Building Work and/or the Fit Out Work which were made by Tenant prior to the termination of this Lease pursuant to this Section 1.5(b) or for which under commitments made prior to the termination of this Lease pursuant to this Section 1.5(b) Tenant is obligated, excluding in all cases any sums of which Tenant would be entitled to a refund or which Tenant would be excused from paying if, promptly after receiving notice of termination of this Lease under Section 1.5(b), Tenant gave prompt notice of termination to Tenant's contractors, subcontractors or other suppliers.</p>
</section>
<section> <p>
(c) If the Financing Closing Date shall not occur by Septembe 30, 1997 Tenant shall have the right to arrange or provide on commercially reasonable terms financing in the amount required
<ol>
<li><p>
(i) to make the deposits referred to in Section 1.5(a) above,
</p></li>
<li><p>
(ii) to refinance the existing debt on the Property,
</p></li>
<li><p>
(iii) to pay all points, fees and other expenses, including, without limitation, legal fees, title insurance premiums and charges and mortgage recording taxes incurred by Landlord in connection with all such financing being provided under this Section 1(c),
</p></li>
<li><p>
(iv) to make all scheduled payments of principal and interest through August 1, 1998 on the portion of the financing being provided under this Section 1(c) applicable to the deposits referred to in clause (i) above and to a pro-rata share of the points, fees and other expenses referred to in clause (iii) above, and
</p></li>
<li><p>
(v) to make all scheduled payments of principal and interest through May 1, 1998 on the balance of the financing being provided under this Section 1(c).
</p></li>
</ol>
Notwithstanding the provisions of Section 1.5(b) above, Landlord shall not have the right to terminate this Lease prior to October 15, 1997 and if prior to that date Tenant shall arrange or provide a commercially reasonable commitment for such financing, Landlord shall accept the same and close the financing to be provided thereunder and shall not have the right to terminate this Lease pursuant to Section 1.5(b). </p>
</section>
</section>
<section>
<h>1.6 Certain Definitions</h>
<p>The term "Notional Fit-Out Work Loan Amount" shall refer to the sum of
<ol>
<li><p>
(i) $50,000,000, plus
</p></li>
<li><p>
(ii) a pro rata portion of all points, fees and other expenses, including, without limitation, legal fees, title insurance premiums and charges and mortgage recording taxes incurred by Landlord for or in connection with the new loan or loans referred to in clause (i) of Section 1.5(a), such proration to be made according to the ratio which the Notional Fit-Out Work Loan Amount bears to the total amount of such new loan or loans, plus
</p></li>
<li><p>
(iii) the amount of all scheduled payments (including principal and interest) which would be required to be paid on or before Augus 1, 1998 on a loan in the principal amount of the Notional Fit-Out Work Loan Amount bearing interest at the Fit-Out Work Interest Rate and disbursed on the Financing Closing Date if such loan had provided for constant monthly payments on the first day of each month equal to the constant monthly payment which would be required to fully amortize such principal amount over such constant monthly payments beginning on the first day of the month after the month in which such disbursement is made and ending December 1, 2009, with each such payment being applied first to accrued interest and then to a reduction in principal (except that if the Financing Closing Date is other than the first day of a month (x) the first payment shall be deemed to consist of interest only from the date of such disbursement to the first day of the month after the month in which such disbursement is made and to be due on such first day of such month and (y) the aforesaid constant monthly payments shall be deemed to begin on the first day of the next month).
</p></li>
</ol>
</p>
<p>The term "Fit-Out Work Investment" shall mean the Notional Fit-Out Work Loan Amount minus all amounts included therein in respect of principal under clause (iii) of the definition thereof (it being understood that in computing the Fit-Out Work Investment the amount of the interest under said clause (iii) shall not be deducted).</p>
<p>The term "Base Building Savings" shall mean the excess, if any, on the Base Building Savings Commencement Date of (i) $17,350,000 over (ii) all amounts disbursed by Landlord pursuant to Section 6 of the Initial Improvements Agreement.</p>
<p>The term "Fit-Out Work Constant Payment" shall mean the constant monthly payment which would be required to fully amortize, with interest at the Fit-Out Work Interest Rate, the Fit-Out Work Investment over such constant monthly payments on the first day of each month beginning September 1, 1998 and ending on December 1, 2009 with each such payment being applied first to interest accrued at the Fit-Out Work Interest Rate and then to amortization (and with interest commencing to accrue on the Fit Out Work Investment as of Augus 1, 1998).</p>
<p>The term "Base Building Savings Constant Payment" shall mean the constant monthly payment which would be required to fully amortize, with interest at the Main Interest Rate, the Base Building Savings over such constant monthly payments on the first day of each month beginning on the Base Building Savings Commencement Date (as such term is defined in the Initial Improvements Agreement) and ending June 1, 2008 with each such payment being applied first to interest accrued at the Main Interest Rate and then to amortization (and with</p>
<p>interest commencing to accrue on the Base Building Savings as of one month before the Base Building Savings Commencement Date).</p>
<p>The term "Main Interest Rate" shall mean the sum of the Base Rate plus 140 basis points per annum.</p>
<p>The term "Fit-Out Work Interest Rate" shall mean the sum of the Base Rate plus 90 basis points per annum.</p>
<p>The term "Base Rate" shall mean the straight line interpolation to seven years between (i) the interest rate on the on-the-run five year U.S. Treasury securities quoted by Credit Suisse First Boston to Landlord and Tenant at the time during the business day prior to the Financing Closing Date at which the rate being paid by Landlord on the corresponding new loan referred to in clause (i) of Section 1.5(a) is determined, and (ii) the interest rate on the on-the-run ten year U.S. Treasury securities quoted by Credit Suisse First Boston to Landlord and Tenant at such time.</p>
<p>The term "Unamortized Fit-Out Work Investment" shall mean, as of any date, that amount which would be unamortized on such date if the Fit-Out Work Investment were amortized with interest at the Fit-Out Work Interest Rate over constant monthly payments on the first of each month equal to the Fit-Out Work Constant Payment beginning on September 1, 1998 and ending on December 1, 2009, with each such payment being applied first to interest accrued at the Fit-Out Work Interest Rate and then to amortization (with interest commencing to accrue on the Fit-Out Work Investment as of August 1, 1998). The Unamortized Fit-Out Work Investment as of the first day of any month shall be computed as of after the application of such constant monthly payment due on such first day of such month.</p>
<p>The term "Notional Main Loan Original Balance" shall equal the excess of (i) the principal amount of all mortgage debt of Landlord outstanding (other than to affiliates) as of immediately after the Financing Closing Date over (ii) the sum of (a) the Notional Fit-Out Work Loan Amount, plus (b) the Base Building Savings.</p>
<p>The term "Notional Main Loan Outstanding Balance" shall mean, as of any date, the principal amount which would be outstanding on a loan having an original principal amount equal to the Notional Main Loan Original Balance, disbursed on the Financing Closing Date, providing for 216 constant monthly payments on the first day of each month, beginning on the lst day of the month after the month in which such disbursement is made, equal to the constant monthly payment which would be required to fully amortize the Notional Main Loan Original Balance over such 216 constant monthly payments, with each such payment being applied first to accrued interest and then to a reduction in principal (except that if the Financing Closing Date is other than the first day of a month (x) the first payment shall be deemed to consist of interest only from the date of such disbursement to the first day of the month after the month in which such disbursement is made and to be due on such first day of such month and (y) the aforesaid 216 constant monthly payments shall be deemed to begin on the first day of the next month).</p>
<p>The term "Notional Main Loan Debt Service" shall mean the amount of the constant monthly payment referred to in the definition of Notional Main Loan Outstanding Balance.</p>
<p>The term "Notional Make-Whole Amount" shall mean, as of any date, the excess, if any, of (i) the present value as of such date (determined by using a discount rate equal to Comparable Treasury Rate) of all Supplemental Rent scheduled to be paid by Tenant under Section 2.3 of this Lease after such date over (ii) the Unamortized Fit-Out Work Investment as of such date. In the making the determination under clause (i) above, it shall be assumed that Tenant has not exercised any of its Termination Options and any Termination Options actually exercised by Tenant shall be disregarded. As used above, the term "Comparable Treasury Rate" shall, as of any date, mean the yield to maturity of U.S. Treasury securities maturing on or about June 1, 2008 as published by The Wall Street Journal for the third business day prior to such date.</p>
<p>Promptly after the requisite facts are known, Landlord and Tenant shall join in one or more instruments confirming (a) the Base Rate, the Fit-Out Work Interest Rate, the Fit-Out Work Notional Loan Amount, the Fit-Out Work Investment, the Fit-Out Work Constant Payment, the Unamortized Fit-Out Work Investment as of September 1, 2004, the Unamortized Fit-Out Work Investment as of September 1, 2006, and the Unamortized Fit-Out Work Investment as of June 1 2008, and (b) the Main Interest Rate, the Base Building Savings, the Base Building Savings Constant Payment and the Notional Main Loan Debt Service. The failure of either party to execute such instrument referred to above shall not constitute a default hereunder or otherwise affect this Lease.</p>
<p>Any dispute as to the computations and determination to be made pursuant to this Section 1.6 shall be determined by Expedited Arbitration. </p>
</section>
</section>
<section>
<h>2. Basic Rent, etc.</h>
<section>
<h>2.1 Basic Rent</h>
<section> <p>
(a) Tenant shall pay to Landlord, as fixed annual rent for the Leased Premises, Basic Rent. Basic Rent shall be payable by Tenant to Landlord in advance, in equal monthly installments, on the Rent Commencement Date and on the first day of each and every month thereafter throughout the Term.
</p>
</section>
<section>
<p>
(b) As used herein:
<ol>
<li><p><!-- if a li has two paras in it, you end up nesting p within li within p :( -->
(i) "Basic Rent" means (A) during the period commencing on June 1, 1998 (the "Rent Commencement Date"), to and including May 31, 2003 (the "First Rent Period"), a per annum rate equal to $8,420,095.88, payable in equal monthly installments of $701,674.66, (B) during the period commencing on June 1, 2003 to and including June 30, 2008 (the "Second Rent Period"), a per annum rate equal to $10,573,515.14, payable in equal monthly installments of $881,126.26, (C) during the period commencing on July 1, 2008 to and including June 30, 2013 (the "Third Rent Period"), a per annum rate equal to 95% of the Fair Market Rent for such period and (D) during the period commencing on July 1, 2013 to and including the Expiration Date (the "Fourth Rent Period") a per annum rate equal to 95% of the Fair Market Rent for such period. Fair Market Rent shall be determined in accordance with Section 2.2 below.
</p></li>
<li><p>
(ii) If (a) Tenant shall give a notice pursuant to Section 6 of the Initial Improvements Agreement establishing the Base Building Savings Commencement Date, and (b) there are any Base Building Savings, then there shall be credited against the Basic Rent due for each of the months beginning with the Base Building Savings Commencement Date and ending June 1 2008, an amount equal to the Base Building Savings Constant Payment. The aforesaid credit is herein called the "Base Building Savings Credit". In no event shall Landlord ever be required to pay to Tenant any portion of the Base Building Savings Credit.
</p></li>
</ol>
</p>
</section>
</section>
<section>
<h>2.2 Determination of Fair Market Rent</h>
<section>
<p>(a) Each determination of Fair Market Rent shall be made, to the extent not inconsistent with this Section, in accordance with the rules from time to time in effect of the American Arbitration Association or, if the American Arbitration Association shall have ceased to function as an arbitration association, of a successor or comparable organization (the "Rules"). There shall be three arbitrators: one designated by Landlord; one designated by Tenant; and one designated in the manner hereinafter described. Each arbitrator shall, as of the date of his or her designation, be a real estate broker licensed in the State of New York doing business in the Borough of Manhattan and having at least 15 years experience in first-class Manhattan office building leases. Not more than 30 months and not less than 24 months before the first day of the Third Rent Period or the Fourth Rent Period, as applicable, Tenant shall give to Landlord a notice designating the name and address of Tenant's arbitrator ("Tenant's Designation Notice"). Landlord, by notice to Tenant given not later than 20 days after the giving of Tenant's Designation Notice, shall designate the name and address of Landlord's arbitrator.</p>
<p>If either party shall fail timely to designate its arbitrator, and such failure shall continue for 10 days after receipt by the failing party of notice of such failure, such other party may designate an arbitrator on behalf of the failing party. Promptly after the designation of the second of the two arbitrators to be designated, such two arbitrators shall meet and attempt to mediate between Landlord and Tenant an agreement upon the Fair Market Rent in question. If, within 15 days after the designation of the second of the two arbitrators to be designated, Landlord and Tenant have not agreed upon the Fair Market Rent in question, such two arbitrators shall jointly designate a third arbitrator. If, within 30 days after the designation of the second of the two arbitrators to be designated, no third arbitrator shall have been so jointly designated, such third arbitrator shall be designated pursuant to the Rules. The arbitrators shall render their decision within 60 days after the designation of the third arbitrator to be designated. Landlord and Tenant shall each pay the fees and disbursements of the arbitrator designated by or on behalf of it, and Landlord and Tenant shall share equally the fees and disbursements of the third arbitrator, if any.</p>
</section>
<section>
<p>
(b) "Fair Market Rent" means the fixed annual rent that would be payable for the Leased Premises by a third-party tenant having the then creditworthiness of Tenant under a five year lease commencing on the first day of the Third Rent Period or the Fourth Rent Period (as the case may be) upon all of the terms and conditions of this Lease to be applicable to the Third Rent Period or Fourth Rent Period (as the case may be), including, without limitation, the following:
<ol>
<li><p>
(i) that such fixed annual rent is payable from and after the first day of the Third Rent Period or the Fourth Rent Period (as the case may be),
</p></li>
<li><p>
(ii) that the Initial Improvements Agreement is not applicable to the Third Rent Period or the Fourth Rent Period (as the case may be), and that Tenant shall accept the Leased Premises in its "as-is" condition at the commencement of the Third Rent Period or the Fourth Rent Period (as the case may be), and that in connection with the Third Rent Period or the Fourth Rent Period (as the case may be) Landlord shall not be required to perform any work, pay any amount or render any services to make the Leased Premises ready for Tenant's use and occupancy or provide any abatement of Basic Rent or other sums due hereunder,
</p></li>
<li><p>
(iii) that during the Third Rent Period or the Fourth Rent Period (as the case may be), Tenant shall be responsible for any increases in Taxes above the Base Tax Amount, and
</p></li>
<li><p>
(iv) that the ground floor of the Improvements are legally permitted to be used for retail purposes, </p></li></ol>and taking into account all relevant factors.
</p>
</section><section>
<p>
(c) Each arbitrator shall render as his or her determination of the Fair Market Rent a fixed dollar amount per annum (in the aggregate, not per rentable square foot), and shall give a notice to the other arbitrators and Landlord and Tenant thereof. All notices pursuant to the preceding sentence shall be given simultaneously at a meeting (called by the third arbitrator on at least five Business Days' notice to Landlord and Tenant and the other arbitrators) at which all three arbitrators and Landlord and Tenant are present. The arithmetic average, of the two determinations closest to one another shall be and constitute the determination of the arbitration; provided, that if in any case the highest and lowest determinations are equidistant from the middle determination, then the middle determination shall be and constitute the determination of the arbitration.
</p>
</section></section>
<section>
<h>2.3 Supplemental Rent</h>
<p>In addition to Basic Rent, Tenant shall pay to Landlord additional rental (the "Supplemental Rent"), (a) in advance, on September 1, 1998 and on the first day of each and every month through and including June 1, 2008, in an amount equal to the Fit-Out Work Constant Payment and (b) on June 1, 2008 (in addition to the amount required to be paid on such date under clause (a) of this Section 2.3), an additional amount equal to the Unamortized Fit-Out Work Investment as of June 1, 2008. </p>
</section>
</section>
<section>
<h>3. Manner of Payment</h>
<section>
<p>
(a) Basic Rent, Supplemental Rent, Tax Payments and all other sums payable by Tenant to Landlord hereunder, all of which shall constitute rent, shall be payable in lawful money of the United States of America and shall be paid to Landlord (i) in the case of Basic Rent, Supplemental Rent and Tax Payments, by wire transfer of immediately available federal funds as directed by Landlord, and (ii) in the case of all other sums, either by wire transfer as aforesaid or by check (subject to collection) drawn on a New York Clearing House Association member bank at Landlord's address set forth above or at such other address of Landlord within the United States as Landlord from time to time may designate or to such agent or person or persons resident or having an office at such other address within the United States as Landlord from time to time may designate.
</p>
</section><section> <p>
(b) If Tenant fails timely to pay any Basic Rent, Supplemental Rent, Tax Payment or other sum payable by Tenant to Landlord under this Lease, Tenant shall pay interest thereon from the date when such amount became due to the date of Landlord's receipt thereof at the lesser of (i) the greater of (A) 18% per annum, or (B) the Prime Rate, and (ii) the maximum rate permitted by law (the lesser of such rates is called the "Interest Rate"). Any sums payable by Tenant for which no due date is specified in this Lease shall be due and payable on th 30th day after the giving of an invoice therefor.
</p>
</section><section> <p>
(c) If Landlord fails timely to pay any sum payable by Landlord to Tenant under this Lease other than (i) a payment which Landlord is required to make under Section 11.2, which failure to make such payments is governed by Article 38, or (ii) a payment which Landlord is required to make under Section 6 or Section 7 of the Initial Improvements Agreement, which failure to make such payment is governed by Article 39, or (iii) a payment of net annual rental payable under the Ground Lease which Landlord is required to make under Sectio 12.3, which failure to make such payment is governed by Article 38, Landlord shall pay interest thereon from the date when such amount became due to the date of Tenant's receipt thereof at the Interest Rate. Any sum payable by Landlord for which no due date is specified in this Lease shall be due and payable on th 30th day after the giving of an invoice therefor.
</p>
</section><section>
<p>(d) If Tenant shall fail timely to pay the Cancellation Payment or the Supplemental Rent payable under clause (b) of Section 2.3 when due then, in addition to such Cancellation Payment or Supplemental Rent, Tenant shall pay as additional rental upon demand (x) an amount equal to interest at the Interest Rate on such Cancellation Payment (excluding the Rent-Based Cancellation Payment) or on such Supplemental Rent from the Cancellation Payment Payment Date or June 1, 2008 (as the case may be) until payment in full by Tenant of the Cancellation Payment or such Supplemental Rent and all amounts required by this sentence, and (y) in case of any failure timely to pay the Cancellation Payment when due on September 1, 2004 or September 1, 2006, interest at the Interest Rate on the Rent-Based Cancellation Payment from the Cancellation Payment Payment Date until payment in full of the Cancellation Payment and all other amounts required by this sentence. If Tenant shall fail timely to pay the Cancellation Payment or the Supplemental Rent payable under clause (b) of Section 2.3 when due then, in addition to the amounts which Tenant is required to pay under the preceding sentence, Tenant shall indemnify Landlord against all other losses, damages, costs and expenses arising out of such failure. </p>
</section> </section>
<section>
<h>4. Net Lease; No Abatement</h>
<p>Except as otherwise provided in the Initial Improvements Agreement, Landlord shall not be required to provide any services or utilities to the Leased Premises. Subject to the last sentence of this Article 4, this Lease is a net lease of the Leased Premises, and Tenant shall pay all costs, charges, taxes, assessments and other expenses of every character, foreseen or unforeseen, ordinary or extraordinary, for the payment of which Landlord or Tenant is or shall become liable by reason of its respective estate, right, title or interest in the Leased Premises or any part thereof, or which are connected with or arise out of the possession, use, occupancy, maintenance, addition to, repair or rebuilding of the Leased Premises, including, without limitation, those specifically referred to in this Lease. Except as provided in Article 16, Section 20(a), Article 38 and Article 39, the Basic Rent and all other sums payable by Tenant hereunder shall be paid without notice, demand, counterclaim, setoff, deduction or defense and without abatement, suspension, deferment, diminution or reduction. The foregoing provisions of this Article 4(a) shall not relieve Landlord of, or require Tenant to bear or reimburse Landlord for, the costs of performing (i) Landlord's obligations under the Initial Improvements Agreement, (ii) Landlord's obligations to make certain reimbursements pursuant to Article 6, or (iii) Landlord's obligations under Articles 3, 7, 11, 12, 38 or 39 or any other provision of this Lease which by its terms imposes any obligation on Landlord, and (b) shall not obligate Tenant to pay or reimburse Landlord for (A) any taxes or assessments which Tenant is not required by the provisions of Article 11 to pay or to reimburse to Landlord or (B) any interest, principal, or other costs or expenses relative to any indebtedness or other financing of Landlord; provided that the foregoing shall not relieve Tenant of its obligation to pay Supplemental Rent. </p>
</section>
<section>
<h>5. Condition and Use of Leased Premises</h>
<p>LANDLORD DOES NOT MAKE, AND TENANT ACKNOWLEDGES THAT LANDLORD HAS NOT MADE, ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO THIS LEASE, OR THE PRESENT OR FUTURE MERCHANTABILITY, HABITABILITY, CONDITION, QUALITY, DURABILITY, FITNESS OR SUITABILITY OF THE LEASED PREMISES IN ANY RESPECT OR IN CONNECTION WITH OR FOR THE PURPOSES AND USES OF TENANT, OR ANY OTHER REPRESENTATION OR WARRANTY OF ANY KIND OR CHARACTER, EXPRESS OR IMPLIED, WITH RESPECT THERETO, EXCEPT AS OTHERWISE PROVIDED IN THIS LEASE. Subject to the performance by Landlord of Landlord's obligations under the Initial Improvements Agreement, Tenant accepts the Leased Premises "as-is". Tenant may use the Leased Premises only as an office building and, subject to applicable Legal Requirements, for purposes reasonably ancillary thereto, including, without limitation, for one or more dining rooms, cafeterias, restaurants, bars or other food service or preparation facilities for use by Tenant's personnel and invitees and for one or more health or exercise facilities for the use of Tenant's personnel. In addition, Tenant may use any portion of the Improvements above the subcellar and below the 2nd floor for retail uses so long as there remains throughout the Term a first-class office building lobby on the ground floor of the Improvements. Tenant shall not suffer or permit the Leased Premises or any part hereof, to be used by the public in such a manner as would subject the Leased Premises or any part thereof to a claim of adverse possession by the public. </p>
</section>
<section>
<h>6. Maintenance; Alterations; Certain Reimbursements; Etc.</h>
<section>
<h>6.1 Generally</h>
<section> <p>
(a) Subject to the provisions of this Lease, Tenant:
<ol>
<li><p>
(i) shall, in accordance with first-class office building maintenance and operating standards generally applicable in 1998 (collectively, the "First-Class Standard"), keep the Leased Premises in overall first-class order, condition and repair;
</p></li>
<li><p>
(ii) shall promptly make all replacements in and to the Leased Premises (whether interior or exterior, structural or nonstructural, ordinary or extraordinary, foreseen or unforeseen) which are necessary or appropriate in a first-class office building according to the standards thereof generally applicable in 1998 (collectively, "Required Replacements"); and
</p></li>
<li><p>
(iii) may make additions, alterations and replacements (other than Required Replacements) in and to and, subject to the provisions of Section 1.1, removals from the Leased Premises (collectively, "Voluntary Alterations"; Required Replacements, Structural Work and Voluntary Alterations are collectively called "Alterations").</p></li></ol>
Notwithstanding the foregoing, (x) Tenant's obligation with respect to the shell of the Building (excluding the roof) shall be limited to maintaining the same in such condition as the same is required by applicable Legal Requirements to be maintained and also in a condition not materially worse than the condition in which the same was in on the date of this Lease, and (y) if Landlord shall give a Cost Participation Limitation Notice with respect to any Reimbursable Replacement or Reimbursable Legal Requirement Alteration, Tenant shall not be obligated to Landlord to make such Reimbursement Replacement or Reimbursable Legal Requirement Alterations nor, with respect to any such Reimbursable Replacement, to repair the item which was to have been replaced.</p>
</section>
<section> <p>
(b) No Alteration may be undertaken if such Alteration would (i) result in the Improvements not being a first-class office building or (ii) materially and adversely affect any structural element of the Improvements or any item of Major Building Equipment. Each Alteration shall be effected with due diligence, in a good and workmanlike manner, and in compliance with all Legal Requirements, Insurance Requirements and Permitted Encumbrances. All Structural Work and all replacements of items of Major Building Equipment shall be of a quality at least equal to the original installation. Landlord shall not be liable to any contractors, subcontractors, laborers, materialmen, suppliers or vendors for services performed or material provided on or in connection with the Leased Premises. Landlord shall not be required to maintain, alter, repair, rebuild or replace the Leased Premises or any part thereof. Tenant waives all rights to make Alterations at Landlord's expense, except that Landlord shall in accordance with the further provisions of this Article 6 make reimbursements to Tenant on account of Reimbursable Alterations. Except as provided in Section 1.1, all Improvements arising from the making of any Alterations shall immediately become the property of Landlord, shall be a part of the Leased Premises and shall be subject to this Lease, and Tenant shall, upon demand of Landlord, execute and deliver an appropriate instrument confirming Landlord's title thereto.
</p>
</section></section>
<section>
<h> 6.2 Certain Definitions</h>
<p>As used herein:
<ol>
<li><p>
(a) "Legal Requirement Alteration" means any Alteration undertaken in order to comply with a Legal Requirement.
</p></li>
<li><p>
(b) "Reimbursable Replacement" means the replacement of any item of Major Building Equipment in its entirety; provided, that (i) such replacement is performed after completion of the Base Building Upgrade Work, (ii) such replacement (in light of the physical condition of the item in question) is consistent with the First-Class Standard, (iii) the repair of the item in question is inconsistent with the First-Class Standard; (iv) such replacement shall not have been necessitated by fire, other casualty or a Taking, and (v) if the Witkoff Management Agreement shall have been terminated, such replacement shall not have been necessitated by the negligence (including, without limitation, failure to adhere to the manufacturer's suggested maintenance procedures) or intentional misconduct of Tenant or the Building management company employed by Tenant occurring after such termination.
</p></li>
<li><p>
(c) "Reimbursable Legal Recruitment Alteration" means any Alteration undertaken solely in order to comply with a Legal Requirement enacted after the date of this Lease and which (i) is performed after completion of the Base Building Upgrade Work, (ii) in accordance with generally accepted accounting principles consistently applied ("GAAP") should be capitalized, (iii) is not an Alteration in any area designed for tenant occupancy, and (iv) is not necessitated by fire, other casualty or a Taking.
</p></li>
<li><p>
(d) "Structural Work" consists solely of the following:
<ol>
<li><p>
(i) replacement and/or repair of the Building's curtain wall in whole or in part, except that Structural Work shall not include caulking treatment of the curtain wall except for any such caulking treatment done in conjunction with repairs or replacement of the portion of the curtain wall being caulked (other than any repairs or replacement undertaken in order to avoid the exclusion provided for in this clause (i)).
</p></li>
<li><p>
(ii) replacement and/or repair of the Building's steel frame, footings, foundations, columns, beams, floors (including concrete floors and the steel floors supporting the concrete floors) and core walls.
</p></li>
<li><p>
(iii) replacement (but not repair) of the roof in its entirety (but not in part) required in order to preserve the structural integrity of the Building or the watertightness and airtightness of the Building.
</p></li>
<li><p>
(iv) replacement of the watertight membrane or other watertight barrier under the Building's plaza, and any removal, reinstallation, repair or replacement of the Building's plaza arising out of such replacement
</p></li>
</ol>
</p></li>
<li><p>
(e) "Reimbursable Structural Work" means any Structural Work provided that (i) such Structural Work is performed after completion of the Base Building Upgrades, (ii) such Structural Work (in light of a physical condition) is consistent with the First-Class Standard, (iii) if such Structural Work is a replacement, then (A) such replacement (in light of the physical condition of the item in question) is consistent with the First-Class Standard and (B) the repair of the item in question is inconsistent with the First-Class Standard, (iv) such Structural Work shall not have been necessitated by fire, other casualty or a Taking, and (v) if the Witkoff Management Agreement shall have been terminated, such Structural Work shall not have been necessitated by the negligence of Tenant or the Building management company employed by Tenant occurring after such termination. Notwithstanding the foregoing, the first $100,000 of Structural Work performed by Tenant in any calendar year which, but for this sentence, would constitute Reimbursable Structural Work shall be deemed not to be Reimbursable Structural Work.
</p></li>
<li><p>
(f) "Reimbursable Removal of Hazardous Substances" means the removal of Qualified Hazardous Substances; provided, that (i) the term "Reimbursable Removal of Hazardous Substances" shall not include any Asbestos Removal Work or any Refireproofing Work except to the extent that Landlord fails to perform the same on or before (a) the Partial Possession Date applicable to the space in question with respect to any space other than the Stephaneze Premises or (b) the Stephaneze Possession Date, in the case of the Stephaneze Premises, and (ii) if the Costs of any removal of Qualified Hazardous Substances (as reasonably estimated by Tenant) shall be less than $500,000 then, unless Tenant, by notice to Landlord, shall elect to treat the same as a Reimbursable Removal of Hazardous Substances, such removal shall be deemed not to be a Reimbursable Removal of Hazardous Substance. In applying the provisions of this clause (ii) each removal contracted for separately (unless done so solely in order to avoid the provisions of this Section 6) shall be considered a separate removal.
</p></li>
<li><p>
(g) "Reimbursable Alterations" means, collectively, Reimbursable Replacements, Reimbursable Structural Work, Reimbursable Legal Requirement Alterations and Reimbursable Removal of Hazardous Substances.
</p></li>
<li><p>
(h) "Qualified Alteration" means (i) any Alteration (other than any Reimbursable Replacement, any Structural Work or any Legal Requirement Alteration) which affects any item of Major Building Equipment and (ii) any Restoration.
</p></li>
<li><p>
(i) "Major Building Equipment" means any item listed on Exhibit E and any replacement thereof.
</p></li>
<li><p>
(j) "Base Amount" means the lower of 1) the original contract price of the Retained Bidder, less any portion of the original contract price of the Retained Bidder not actually paid by Tenant, or 2) the original contract price of Landlord's Preferred Bidder or, if Tenant shall have timely given the Dispute Notice and the Appropriate Engineer shall have selected Tenant's Selected Bidder, the original contract price of Tenant's Selected Bidder.
</p></li>
<li><p>
(k) "Determined Amount" means the lower of 1) the original contract price of the Retained Bidder, or 2) the original contract price of Landlord's Preferred Bidder or, if Tenant shall have timely given the Dispute Notice and the Appropriate Engineer shall have selected Tenant's Selected Bidder, the original contract price of Tenant's Selected Bidder.
</p></li>
<li><p>
(l) "Cost Division Date" means, (i) with respect to any Reimbursable Alteration (other than Reimbursable Removal of Hazardous Substances) commenced during the First Rent Period or the Second Rent Period, the last day of the Second Rent Period, (ii) with respect to any Reimbursable Alterations commenced during the Third Rent Period, the last day of the Third Rent Period, or (iii) with respect to any Reimbursable Alterations commenced during the Fourth Rent Period, the last day of the Fourth Rent Period.
</p></li>
<li><p>
(m) "Measuring Fraction" means, with respect to any Reimbursable Alteration (other than any Reimbursable Removal of Hazardous Substances), the fraction whose numerator is the number of months in the period from the Cost Division Date with respect to such Reimbursable Alteration to the end of the expected useful life of such Reimbursable Alteration and whose denominator is the number of months in the period from the Estimated Substantial Completion Date of such Reimbursable Alteration to the end of the expected useful life thereof. Any dispute as to the reasonableness of any Estimated Substantial Completion Date, and any dispute as to the expected useful life of any Reimbursable Alteration, shall be determined by the Appropriate Engineer. As to any Reimbursable Removal of Hazardous Substances, the Measuring Fraction shall be one (1.00).
</p></li>
</ol>
</p>
<p><!-- Note this p, since this is not a continuation -->
If Landlord and Tenant shall disagree (i) as to whether any item is an item of Major Building Equipment, or (ii) as to whether any replacement is a Reimbursable Replacement, or (iii) as to whether any work is Structural Work, or (iv) as to whether any Structural Work is Reimbursable Structural Work, or (v) as to whether a Legal Requirement requires an Alteration, or (vi) as to whether an Alteration is a Legal Requirement Alteration, or (vii) as to whether any Legal Requirement Alteration is a Reimbursable Legal Requirement Alteration, or (viii) as to whether any Alteration is a Qualified Alteration, or (ix) as to whether any removal of any Hazardous Substance is a Reimbursable Removal of Hazardous Substances, the matter shall in each case be determined by the Appropriate Engineer. Notwithstanding the foregoing, any dispute under clause (vii) - in so far as it relates to whether in accordance with GAAP an item should be capitalized - shall be determined by the Accountant. </p>
</section>
</section>
<!--
6.3 - 6.7 (approx 12 pages) left out
-->
<section>
<h>7. Hazardous Substances</h>
<p>If Tenant shall remove from the Leased Premises any Qualified Hazardous Substances, then Landlord shall (subject to the last sentence of this Article 7) reimburse Tenant for the actual reasonable costs incurred by Tenant to remove such Qualified Hazardous Substances, such reimbursement to be made within 30 days after Tenant notifies Landlord of the amounts incurred by Tenant, which notice shall be accompanied by paid invoices or other evidence reasonably satisfactory to Landlord of the Costs incurred; provided, that the foregoing provisions of this Article 7 shall not be applicable to any Reimbursable Removal of Hazardous Substances which are governed by the provisions of Article 6. As used in this Article 7 and in Article 6 the terms "remove" and "removal" (i) when used with respect to any Hazardous Substance used for fireproofing or other purpose necessary or appropriate for the continued occupancy and operation of the Leased Premises as a first-class office building shall include the replacement of such removed Hazardous Substance with suitable substitute materials, and (ii) when used with respect to any Hazardous Substance shall include, if Tenant shall elect, in lieu of removal, to enclose, encapsulate or otherwise remediate such Hazardous Substance, such enclosure, encapsulation or other remediation. Notwithstanding the foregoing, in no event shall Landlord have any obligation under this Article 7 to reimburse Tenant for the costs of any Asbestos Removal Work or Refireproofing Work except to the extent that Landlord fails to perform the same on or before (i) the Possession Date with respect to any space other than the Stephaneze Premises or (ii) the Stephaneze Possession Date, in the case of the Stephaneze Premises. </p>
</section>
<section>
<h>8. Utility Services</h>
<section>
<p>
(a) Tenant shall pay all charges for all public or private electrical, steam, gas, fuel, power and other utility services at any time rendered to or in connection with the Leased Premises. Tenant shall be a direct customer of the utility companies providing such services. If any rebates or benefits shall be available from the utility company as part of any utility company sponsored energy conservation program on account of the energy efficient nature of Tenant's lighting fixtures and/or equipment, then Landlord, at Tenant's sole expense, shall take such actions as Tenant may reasonably request to obtain such rebates or benefits and, if any such rebates or benefits are paid to or received by Landlord, Landlord shall promptly remit the same to Tenant. The term "ConEd" shall refer to the electric utility from time to time furnishing electricity to the Improvements.
</p>
</section><section>
<p>(b) Landlord hereby notifies Tenant that Landlord has applied for benefits under the Lower Manhattan Energy Program (Article 2-I of the General City Law) (the "LMEP") and a certification that the Improvements are an "eligible building" under subparagraph (a) of Section 25-aa of the General City Law. Landlord shall be responsible for the preparation of all applications (including revised applications) and any other documents, certificates and instruments that may be required to obtain such benefits and certification and/or in order to maintain such benefits and certification in effect. Tenant shall, at Landlord's request, cooperate with Landlord's efforts to obtain such benefits and certification (including, without limitation, the execution withi 5 Business Days after request of any forms required to be executed by Tenant or otherwise customarily executed by similarly situated tenants and supplying such information not considered by Tenant to be confidential as may be necessary to complete such forms and as Landlord is unable to obtain itself), provided, that Tenant shall not be required to alter, modify or delay the Base Building Upgrade Work or the Fit-Out Work or to alter its usage of electricity or alter in any manner adverse to Tenant any electrical equipment in or serving the Improvements. Landlord shall pay to Tenant, within 30 days after demand, Tenant's reasonable out-of-pocket costs and expenses (including without limitation attorneys fees' and disbursements) incurred in reviewing such applications and such other documents, certificates and instruments, or otherwise cooperating, at Landlord's request, with Landlord's efforts to obtain such benefits. In addition to all other rent required by this Lease to be paid by Tenant, Tenant shall pay to Landlord, within thirty (30) days of Tenant's receipt of each ConEd bill for electricity service to the Improvements an amount equal to the reduction shown thereon as a result of the Improvements receiving benefits under the LMEP. If the amount of any ConEd bill for electricity service to the Improvements shall reflect a reduction in the amount billed as a result of the Improvements receiving benefits under the LMEP, but the amount of such reduction is not shown thereon, the parties shall endeavor to agree upon the amount of such reduction and, if they have not agreed upon such amount within fifteen (15) days after Tenant's receipt of such</p>
</section><section>
<p>ConEd bill, the same shall be determined by arbitration. If in any such case the amount of such reduction shall not have been agreed upon or determined by arbitration by the date on which Tenant is required to make payment to Landlord under this Section 8(b), Tenant shall make payment in accordance with Tenant's determination of such amount, subject to adjustment (plus interest thereon at the Prime Rate from the 30th day after Tenant's receipt of the relevant ConEd bill to the date of payment of such adjustment) upon the amount of such determination being agreed upon or determined in arbitration.
</p>
</section><section>
<p>
(c) Landlord hereby notifies Tenant that Landlord intends to apply to ConEd for ConEd's Business Incentive Rate (the "BIR"). Landlord shall be responsible for the preparation of all applications (including revised applications) and any other documents, certificates and instruments that may be required to obtain the BIR and/or in order to maintain the BIR in effect. Tenant shall, at Landlord's request, cooperate with Landlord's efforts to obtain the BIR (including, without limitation, the execution within 5 Business Days after request of any forms required to be executed by Tenant or otherwise customarily executed by similarly situated tenants and supplying such information not considered by Tenant to be confidential as may be necessary to complete such forms and as Landlord is unable to obtain itself), provided that Tenant shall not be required to alter, modify or delay the Base Building Upgrade Work or the Fit-Out Work or to alter its usage of electricity or alter in any manner adverse to Tenant any electrical equipment in or serving the Improvements. Landlord shall pay to Tenant, within 30 days after demand, Tenant's reasonable out-of-pocket costs and expenses (including without limitation attorneys fees' and disbursements) incurred in reviewing such applications and such other documents, certificates and instruments, or otherwise cooperating, at Landlord's request, with Landlord's efforts to obtain such benefits. In addition to all other rent required by this Lease to be paid by Tenant, Tenant shall, within thirty (30) days of Tenant's receipt of each ConEd bill for electricity service to the Improvements, furnish Landlord with a copy of such bill and pay to Landlord, an amount equal to the reduction shown thereon as a result of the Improvements receiving the BIR. If the amount of any ConEd bill for electricity service to the Improvements shall reflect a reduction in the amount billed as a result of the Improvements receiving the BIR, but the amount of such reduction is not shown thereon, the parties shall endeavor to agree upon the amount of such reduction and, if they have not agreed upon such amount within fifteen (15) days after Tenant's receipt of such ConEd bill, the same shall be determined by arbitration. If in any such case the amount of such reduction shall not have been agreed upon or determined by arbitration by the date on which Tenant is required to make payment to Landlord under this Section 8(c), Tenant shall make payment in accordance with Tenant's determination of such amount, subject to adjustment (plus interest thereon at the Prime Rate from the 30th day after Tenant's receipt of the relevant ConEd bill to the date of payment of such adjustment) upon the amount of such determination being agreed upon or determined in arbitration.
</p>
</section>
</section>
<section>
<h>9. Indemnification by Tenant</h>
<section>
<p>(a) Tenant shall protect, indemnify and save harmless Landlord from and against all liabilities, obligations, claims, damages, penalties, causes of action, costs and expenses (including, without limitation, attorneys' fees and expenses) imposed upon or incurred by or asserted against Landlord or against the Leased Premises or any part thereof by reason of the occurrence or existence of any of the following during the Term: (1) the conduct, management or possession of the Leased Premises or any part thereof, (2) any accident, injury to or death of persons or loss of or damage to property occurring in, on or about the Leased Premises or any part thereof or the adjoining sidewalks, curbs, vaults and vault space, if any, streets or ways, (3) any use, nonuse or condition of the Leased Premises or any part thereof or the adjoining sidewalks, curbs, vaults and vault space, if any, streets or ways, (4) any failure on the part of Tenant to perform or comply with any of the terms, provisions or conditions of this Lease, (5) performance of any labor or services or the furnishing of any materials or other property in respect of the Leased Premises or any part thereof, (6) any negligence or tortious act or omission on the part of Tenant or any of its partners, agents, contractors, servants, employees, licensees or invitees, (7) any negligence or tortious act or omission on the part of any subtenant of Tenant, or of any partners, agents, contractors, servants, employees, licensees or invitees of any subtenant of Tenant, (8) any sublease of all or any part of the Leased Premises or (9) the execution by Landlord of any application, document or instrument under Section 35(1) below.
</p>
</section><section>
<p>
(b) In case any claim is made against Landlord or in case any action, suit or proceeding (a "proceeding") is brought against Landlord or the Leased Premises or any part thereof by reason of any of the foregoing, Landlord shall give prompt notice to Tenant and Tenant shall cause such claim or proceeding to be defended by counsel ("Tenant's Counsel") designated by Tenant and approved by Landlord (which approval shall not be unreasonably withheld). Tenant shall have the right to control the defense and settlement of any such claim or proceeding and shall not be required to indemnify Landlord from the costs and expenses of any settlement agreed to without Tenant's consent; provided, that Landlord shall have the right (i) to require Tenant and Tenant's Counsel to consult with Landlord and counsel retained and paid by Landlord, (ii) to assume control of the defense and settlement of any such claim or proceeding at any time if Landlord waives its right to be indemnified by Tenant on account thereof and (iii) to make any settlement without Tenant's consent if Landlord pays the amount of such settlement and waives its right to be indemnified by Tenant on account of the claim or proceeding to which such settlement relates; provided, further, that Tenant shall not settle any claim or proceeding without Landlord's consent if such settlement requires an admission of liability (civil or criminal) on the part of Landlord. Landlord shall cooperate with Tenant, at Tenant's expense, in the defense of any such claim or proceeding in such manner as Tenant may from time to time reasonably request.
</p>
</section>
</section>
<section>
<h>10. Entry by Landlord</h>
<p>Tenant shall permit Landlord to enter the Leased Premises or any part thereof at all reasonable times upon reasonable notice (except in case of emergency) for the purpose of inspecting the same or doing any work under Articles 7 and 19, and to keep and store all such materials therein as may be reasonably necessary or appropriate for any such purpose without the same constituting a partial or complete, constructive or actual eviction (but nothing contained herein shall create or imply any duty on the part of Landlord to do any work under Article 19). Landlord shall not have any duty to make any such inspection and shall not incur any liability or obligation by making or for not making any such inspection. Tenant shall also permit Landlord to enter the Leased Premises or any part thereof at all reasonable times upon reasonable notice for the purposes of exhibiting the Leased Premises for sale or mortgage. In addition, Tenant shall permit Landlord to enter the Leased Premises or any part thereof at all reasonable times upon reasonable notice during each of the 24 month periods prior to any Termination Date and the 24 month period prior to the Expiration Date for purposes of exhibiting the Leased Premises for lease; provided, that with respect to Landlord exhibiting the Leased Premises prior to any particular Termination Date, if the time for exercising the Termination Option that would result in this Lease terminating on such Termination Date shall have lapsed without exercise by Tenant or if such Termination Option shall have been waived, Landlord shall no longer be permitted to enter the Leased Premises for purposes of exhibiting same for lease during such 24 month period. Any entry pursuant to this Article 10 shall be subject to the condition that, except in case of emergency, if Tenant so desires, any representative of Landlord shall be accompanied at all times by a representative of Tenant. </p>
</section>
<section>
<h>11. Payment of Taxes </h>
<section>
<h>11.1 Definitions</h>
<section> <p>
(a) "Base Tax Amount" means, with respect to (i) the Third Rent Period, the Taxes (excluding any amounts described in Section 11.1(b)(ii)) for the Tax Year beginning July 1, 2008 or such other date closest to and on or after July 1, 2008 as may then be adopted as the beginning of the fiscal year for real estate tax purposes for the City of New York and (ii) the Fourth Rent Period, the Taxes (excluding any amounts described in Section 11.1(b)(ii)) for the Tax Year beginning July 1,2013 or such other date closest to and on or after July 1, 2013 as may then be adopted as the beginning of the fiscal year for real estate tax purposes for the City of New York.
</p>
</section>
<section>
<p>
(b) "Taxes" means (i) the real estate taxes, vault taxes, assessments and special assessments levied, assessed or imposed upon or with respect to the Project by any federal, state, municipal or other government or governmental body or authority and (ii) any expenses incurred by Landlord in contesting such taxes or assessments and/or the assessed value of the Project, which expenses shall be allocated to the Tax Year to which such expenses relate. If at any time the method of taxation shall be altered so that in lieu of or as a substitute for, the whole or any part of such real estate taxes, assessments and special assessments now imposed on real estate, there shall be levied, assessed or imposed (x) a tax, assessment, levy, imposition, fee or charge wholly or partially as a capital levy or otherwise on the rents received therefrom, or (y) any other such substitute tax, assessment, levy, imposition, fee or charge, including without limitation, transit taxes, fees and assessments, then all such taxes, assessments, levies, impositions, fees or charges or the part thereof so measured or based shall be included in "Taxes". If Landlord is an entity exempt from the payment of taxes described, in clauses
(i) and (ii), there shall be included in "Taxes" any amounts that such owner or Tenant is obligated to pay in lieu of the taxes described in clauses (i) and (ii). "Taxes" shall not include (A) any franchise, capital stock or transfer tax (except to the extent franchise or capital stock taxes may be included in "Taxes" under the preceding provisions of this Section 11.1), (B) personal property taxes, (C) any business improvement district fees and charges, (D) all taxes or charges imposed on Tenant with respect to the rentals payable under this Lease, including, without limitation, the Commercial Rent or Occupancy Taxes imposed pursuant to Title 11, Chapter 7 of the New York City Administrative Code, or (E) any water or sewer charges, license fees, permit fees, inspection fees or similar charges, all of which taxes, charges and fees described in clauses (B) through (E), subject to the provisions of Section 12.2 shall be payable directly by Tenant to the applicable taxing authority.
</p>
</section>
<section>
<p>
(c) "Tax Year" means each period of 12 months, commencing on the first day of July of each such period, in which occurs any part of the Term, or such other period of 12 months occurring during the Term as hereafter may be adopted as the fiscal year for real estate tax purposes of the City of New York.
</p>
</section>
</section>
<section>
<h>11.2 Payment of Taxes</h>
<p>Landlord shall pay, before any fine, penalty, interest or cost may be added for non-payment, all Taxes, and upon request shall furnish Tenant with an Officer's Certificate certifying to the payment of all Taxes and copies of official receipts or other proof of payment satisfactory to Tenant. </p>
</section>
<section>
<h>11.3 Initial Tax Payments</h>
<p>On the first day of July, 1998 and on the first day of each and every month thereafter through the end of the Second Rent Period, Tenant shall pay to Landlord the respective monthly amounts set forth on Exhibit B (each, an "Initial Tax Payment"); provided, that if the term of this Lease shall terminate prior to the end of the Second Rent Period and on a day other than the last day of the calendar month, the Initial Tax Payment for the month in which the term of this Lease shall terminate shall be appropriately prorated. The Initial Tax Payments shall not be affected by any changes in the Taxes assessed against the Project, and Tenant shall have no right to share in any refund of Taxes received by Landlord with respect to any periods occurring prior to Jun 30, 2008. </p>
</section>
<section>
<h>11.4 Extended Tax Payments</h>
<section>
<p>
(a) During each of the Third Rent Period and the Fourth Rent Period, if Taxes for any Tax Year exceed the Base Tax Amount applicable to such period, Tenant shall pay to Landlord (each, an "Extended Tax Payment"; Initial Tax Payments and Extended Tax Payments are collectively called "Tax Payments") the amount by which Taxes for such Tax Year are greater than the applicable Base Tax Amount. If there shall be any increase in the Taxes for any Tax Year, whether during or after such Tax Year, or if there shall be any decrease in the Taxes for any Tax Year, the Extended Tax Payments for such Tax Year shall be appropriately adjusted and paid or refunded, as the case may be, in accordance herewith. In no event, however, shall Taxes be reduced below the applicable Base Tax Amount.
</p>
</section><section>
<p>
(b) If Landlord shall receive a refund of Taxes for any Tax Year in respect of which Tenant has paid Extended Tax Payments, Landlord shall pay to Tenant the net refund (i.e., after deducting the costs and expenses of obtaining the same, including, without limitation, appraisal, accounting, consulting and legal fees, to the extent that such costs and expenses were not included in the Taxes for such Tax Year); provided, that such payment to Tenant shall in no event exceed Tenant's Tax Payment paid for such Tax Year. If Landlord shall have received from the taxing authority any interest on such refund, Landlord shall also pay to Tenant the portion of such interest allocable to the portion of the refund being paid to Tenant.
</p>
</section>
<section>
<p>
(c) If the Taxes comprising the applicable Base Tax Amount are reduced as a result of an appropriate proceeding or otherwise, the Taxes as so reduced shall for all purposes be deemed to be the Base Tax Amount and Landlord shall notify Tenant of the amount by which the Tax Payments previously made were less than the Tax Payments required to be made under this Section 11.3, and Tenant shall pay the deficiency within 10 days after demand therefor.
</p>
</section>
<section>
<p>(d) Subject to the provisions of this Section 11.4(d), Landlord shall have the sole right to contest the assessed valuation of the Project for each Tax Year and to control the prosecution or settlement of such contest. Notwithstanding the foregoing, Landlord shall not settle any tax reduction proceedings with respect to any Tax Year commencing on or after July 1, 2009 without Tenant's consent, which consent (x) shall not be unreasonably withheld and (y) if Landlord's request for consent shall include the following statement in block capital letters: <blockquote><p> THIS NOTICE IS BEING GIVEN UNDER SECTION 11.4 OF OUR LEASE WITH YOU AND SEEKS YOUR CONSENT TO A PROPOSED SETTLEMENT OF TAX REDUCTION PROCEEDINGS. YOUR FAILURE TO GIVE NOTICE DENYING YOUR CONSENT WITHIN TEN DAYS AFTER THE DATE OF THIS NOTICE</p></blockquote> shall be deemed granted if not withheld in writing within 10 days after request by Landlord. If on or before the 60th day prior to the last day on which a party may contest the assessed valuation of the Project with respect to any such Tax Year commencing on or after July 1, 2009, Tenant (by notice referring to this Section 11.4(d)) shall request that Landlord advise Tenant whether or not Landlord will contest the assessed valuation of the Project with respect to such Tax Year, then (i) if Landlord shall not on or before the 30th day prior to such last day advise Tenant that Landlord will contest the assessed valuation of the Project with respect to such Tax Year then (subject to the last sentence of this Section 11.4(d)) Tenant shall have the sole right to do so and to control the prosecution or settlement of such contest, and (ii) if Landlord shall on or before the 30th day prior to such last day advise Tenant that Landlord will contest the assessed valuation of the Project with respect to such Tax Year then Landlord shall do so. In any instance where pursuant to the foregoing provisions of this Section 11.4(d) any such action or proceeding is being undertaken by Tenant, (x) Landlord shall cooperate with Tenant, execute any and all documents reasonably required in connection therewith and, if required by Legal Requirements, join with Tenant in the prosecution thereof, and (y) Tenant shall be entitled to recover first out of any refund obtained the costs and expenses of obtaining the same, including, without limitation, appraisal, accounting, consulting and legal fees and the balance of such refund shall be apportioned between the parties subject to the provisions of Section 11.4(b). Notwithstanding the foregoing, Tenant shall not settle any tax reduction proceedings brought by Tenant pursuant to clause (i) above without Landlord's consent, which consent (x) shall not be unreasonably withheld and (y) if Tenant's request for consent shall include the following statement in block capital letters:<blockquote><p>THIS NOTICE IS BEING GIVEN UNDER SECTION 11.4 OF OUR LEASE WITH YOU AND SEEKS YOUR CONSENT TO A PROPOSED SETTLEMENT OF TAX REDUCTION PROCEEDINGS. YOUR FAILURE TO GIVE NOTICE DENYING YOUR CONSENT WITHIN TEN DAYS AFTER THE DATE OF THIS NOTICE</p></blockquote> shall be deemed granted if not withheld in writing within 10 days after request by Tenant. </p>
</section></section>
<section>
<h>11.5 General Provisions Applicable to Taxes</h>
<section> <p>
(a) The Extended Tax Payment for each Tax Year shall be due and payable in installments in the same manner that Taxes for such Tax Year are due and payable by Landlord, whether to the City of New York or to a Superior Mortgagee. Tenant shall pay each such installment no later than the later of (i 10 days after the rendering of a statement therefor by Landlord to Tenant, or (ii) 20 days prior to the date on which the corresponding installment of Taxes are due. The statement to be rendered by Landlord shall set forth in reasonable detail the computation of the particular installment being billed.
</p>
</section>
<section>
<p>
(b) Landlord's failure to render or delay in rendering any statement with respect to any Tax Payment or installment thereof shall not prejudice Landlord's right to thereafter render such a statement, nor shall the rendering of a statement for any Tax Payment or installment thereof prejudice Landlord's right to thereafter render a corrected statement therefor.
</p>
</section>
<section>
<p>
(c) Except for amounts included in Taxes, subject to the provisions of Section 12.2 Tenant shall pay, before any fine, penalty, interest or cost may be added for nonpayment, (i) all personal property taxes, (ii) all business improvement district fees and charges, (iii) all taxes or charges imposed on Tenant with respect to the rentals payable under this Lease, including, without limitation, the Commercial Rent or Occupancy Taxes imposed pursuant to Title 11, Chapter 7 of the New York City Administrative Code, and (iv) all water or sewer charges, license fees, permit fees, inspection fees or similar charges, (collectively, "Tenant Impositions")
</p>
</section></section>
<section>
<h>11.6 Industrial and Commercial Incentive Program</h>
<p>Landlord hereby notifies Tenant that Landlord intends to avail itself of the Industrial and Commercial Incentive Program ("ICIP") with respect to the Base Building Upgrade Work and the Fit-Out Work to the extent in either case that the same qualify for the ICIP. In contracting pursuant to the Initial Improvements Agreement for the Base Building Upgrade Work and, to the extent that the same qualifies for the ICIP, the Fit-Out Work, Tenant shall include provisions requiring all of the construction managers, contractors and subcontractors to comply with the New York City Office of Labor Services/Construction</p>
<p>Division ("OLS") requirements applicable to construction projects benefiting from the ICIP. Such compliance, as of the date hereof, includes the following: the submission and approval of a Construction Employment Report, attendance at a pre-construction conference with representatives of the OLS and adherence to the provisions of Article 22 of the ICIP Rules and Regulations, the provisions of New York City Charter Chapter 13-B and the provisions of Executive Order No. 50 (1980). Furthermore, at Landlord's request, Tenant shall (A) report to Landlord the number of workers permanently engaged in employment in the Leased Premises, the nature of each worker's employment and, to the extent applicable, the New York City residency of each worker, (B) provide access to the Leased Premises by employees and agents of the Department (as such term is defined in the ICIP Rules and Regulations) at all reasonable times, and (C) enforce the contractual obligations of such construction managers, contractors and subcontractors to comply with the OLS requirements. Landlord shall be responsible for the preparation of all applications (including any revised applications), certificates of continuing eligibility and any other documents, certificates and instruments that may be required in order to obtain benefits under the ICIP and/or in order to maintain the benefits in effect. Tenant shall, at Landlord's request, (i) make available to Landlord the Plans and Specifications and all cost records relative to the Base Building Upgrade Work and the Fit-Out Work, and (ii) otherwise cooperate with Landlord's efforts to obtain such benefits (including, without limitation, the execution within 5 Business Days after request of any forms required to be executed by Tenant or otherwise customarily executed by similarly situated tenants), provided, that Tenant shall not be required to alter, modify or delay the Base Building Upgrade Work or the Fit-Out Work. Landlord shall pay to Tenant, within 30 days after demand, Tenant's reasonable out-of-pocket costs and expenses (including, without limitation, attorneys' fees and disbursements) incurred in reviewing such applications, certificates of continuing eligibility and such other documents, certificates and instruments, or otherwise cooperating, at Landlord's request, with Landlord's efforts to obtain such benefits. All benefits obtained under ICIP shall, to the extent legally permissible, accrue to Landlord (and if paid to or received by Tenant, Tenant shall pay same to Landlord). Landlord shall indemnify and hold harmless Tenant from and against any and all liability, damages, claims, costs or expenses (including legal fees) incurred by or asserted against Tenant by reason of or arising out of to the ICIP, any benefits granted thereunder, or any application, certificates, documents or instruments prepared or filed in connection therewith unless such liability, damages, claims, cost or expenses arise out of Tenant's failure to comply with Article 11.
</p>
</section>
</section>
<section>
<h> 12. Compliance with Legal and Insurance Requirements and Permitted Encumbrances</h>
<section>
<h>12.1 Generally</h>
<p>Subject to the Provisions of Article 6 and Section 12.2, Tenant shall promptly comply (at Tenant's expense, unless the need for such compliance arises out of any act, omission, negligence or intentional misconduct of Landlord or any agent, employee, contractor, licensee of Landlord, in which case Landlord shall reimburse Tenant for the costs of compliance within 30 days after submission by Tenant to Landlord of invoices evidencing the costs of compliance) with all Legal Requirements, Insurance Requirements and Permitted Encumbrances (exclusive of the lease described in item 1 of Exhibit C (the "Ground Lease") and mortgages and related documents described in items 2, 3, 4 and 5 of Exhibit C (the "Pre-Existing Mortgages"), as to which Tenant's obligations shall be only as provided in Section 12.3), whether or not compliance therewith shall require Alterations or interfere with the use and enjoyment of the Leased Premises or any part thereof. </p>
</section>
<section>
<h>12.2 Permitted Contests</h>
<p>Tenant, without Landlord's consent may contest, by appropriate legal proceedings conducted in good faith and with due diligence, the amount or validity or application, in whole or in part, of any Tenant Imposition, Legal Requirement, or Permitted Encumbrance and may withhold payment or performance of the same pending such contest, provided, that (a) such proceedings shall suspend the collection thereof from Landlord and the Leased Premises or any part thereof, (b) neither the Leased Premises nor any part thereof or interest therein would be in any danger of being sold, forfeited or lost, (c) Landlord shall not be in any danger of any criminal liability by reason thereof and (d) in the case of a contest involving any Legal Requirement or any Permitted Encumbrance, if at any time Landlord determines that Landlord is in danger of any civil liability in an amount in excess of one year's Basic Rent, Tenant shall (within 5 Business Days after Tenant receives Landlord's request therefor) furnish to Landlord such security against such civil liability as Landlord may reasonably request. Tenant shall give prompt notice to Landlord of the commencement of or of Tenant's desire to commence any contest permitted by the preceding sentence and Landlord shall, at Tenant's expense, reasonably cooperate with Tenant with respect to any such contest and, if in connection with the commencement, prosecution or settlement of such contest only Landlord can execute any report, certificate, instrument, application or other document or take any other action, in each case reasonably required in connection with such contest, then, upon Tenant's request and at Tenant's expense, Landlord shall execute or take the same. If in connection with any such request Landlord consults with an engineer, an attorney or other professional, Tenant shall, within 10 days after Tenant's receipt of demand therefor accompanied by copies of the bills paid by Landlord, reimburse Landlord for the reasonable out-of-pocket expenses incurred by Landlord for the services of such professionals. If such professional advises Landlord in writing that Landlord's executing such document or taking such action might result in the Leased Premises or any part thereof or interest therein being sold, forfeited or lost or in Landlord becoming criminally liable, and if such professional furnishes a reasonably detailed explanation of the foregoing and the reasons therefor, Landlord shall promptly advise Tenant and furnish Tenant with a copy of such professional's advice and explanation and Landlord need not execute such document or take such action. If, while contesting any amount, Tenant withholds payment of the same, Tenant shall maintain the amount withheld (together with penalties and interest from time to time accruing thereon) on deposit in a separate interest bearing account in Landlord's name with a bank or trust company selected by Tenant having an office in the Borough of Manhattan and a combined shareholders equity of at least $200 million (or, if Tenant and Landlord so agree, with Landlord). If any of the conditions set forth in the proviso to the first sentence of this Section 12.2 are violated, Landlord shall be entitled to withdraw the funds on deposit in said account in order to make payment of the amount being contested. All interest earned on funds in such an account shall be credited to such account and Tenant shall pay all taxes thereon. Upon termination or settlement of such contest, any required payment of the amount contested shall be made from such account and the balance remaining in such account shall be paid to Tenant. If the amount in the account is insufficient, Tenant shall pay the amount of the deficiency. </p>
</section>
<section>
<h>12.3 Ground Lease and Pre-Existing Mortgages.</h>
<p> Landlord shall comply with the Ground Lease and the Pre-Exiting Mortgages; provided, that this Sectio 12.3 shall not be deemed to release Tenant from or require Landlord to perform any of Tenant's obligations under this Lease and if and to the extent that any action is required to be taken both by Landlord as tenant under the Ground Lease or mortgagor under the Pre-Existing Mortgages and by Tenant as tenant hereunder, such action shall be taken by Tenant hereunder at Tenant's expense. Notwithstanding the foregoing, Landlord shall be solely responsible for the payment of (i) the net annual rental payable under the Ground Lease, and (ii) all principal and interest on any debt secured by any of the Pre-Existing Mortgages. If and to the extent that Landlord shall be required by the provisions of this Section 12.3 to perform any work in or to the Leased Premises, Tenant shall have the right to perform such work at Landlord's expense, in which case Landlord shall reimburse Tenant for the reasonable costs of performance within 30 days after submission by Tenant to Landlord of invoices evidencing the costs of performance. Landlord shall exercise all renewal options required to keep the Ground Lease in effect so long as this Lease is in effect. If Landlord shall acquire the lessor's interest under the Ground Lease, Landlord shall have the right to terminate the same and, if Landlord acquires such interest and terminates the Ground Lease, this Lease shall continue in full force and effect, except that all provisions relating to the Ground Lease shall be deemed deleted. </p>
</section>
</section>
<section>
<h>13. Liens</h>
<section> <p>
(a) Within 60 days after the date on which Landlord gives Tenant notice, referring to this Article 13 and Section 19(a)(v), of the existence of any mechanic's, laborer's or materialman's lien, any lien arising under any Permitted Encumbrance or any security interest which might be or become a lien, encumbrance or charge upon the Leased Premises or any part thereof (other than any such lien, encumbrance or charge caused by Landlord) and directs Tenant to remove or discharge the same, Tenant shall either (i) remove or discharge the same, by bonding or otherwise, or (ii) if Landlord shall consent thereto, provide Landlord with an unconditional and irrevocable letter of credit (issued by a New York Clearing House Association member bank satisfactory to Landlord and in form satisfactory to Landlord) or other security satisfactory to Landlord indemnifying Landlord against such lien or security interest.
</p>
</section>
<section><p>
(b) Nothing contained in this Lease shall be deemed or construed in any way as constituting the consent or request of Landlord, express or implied by inference or otherwise, to any contractor, subcontractor, laborer or materialman for the performance of any labor or the furnishing of any materials for any specific improvement, alteration to or repair of the Leased Premises or any part thereof.
</p></section>
</section>
<section>
<h>14. Insurance</h>
<section>
<h>14.1 Risks to be Insured</h>
<section> <p>(a) Tenant shall maintain or cause to be maintained with insurers and pursuant to insuring agreements approved by Landlord:
<ol>
<li><p>
(i) insurance with respect to all buildings, improvements, equipment and machinery constituting a part of the Leased Premises against loss or damage by perils customarily included under standard "all-risk" policies (including specifically damage by water), in amounts sufficient to prevent Landlord or Tenant from becoming a co-insurer of any partial loss under the applicable policies, and in any event in amounts not less than 90% of the then full replacement cost (without deducting depreciation) of such buildings, improvements, equipment and machinery (exclusive of the costs of foundations, excavations and footings) (the "full replacement cost") as determined at the request of Tenant (or at the request of Landlord, made not sooner than one year after the previous determination), and (in either case) at Tenant's expense by the insurer or insurers or by an expert selected by Tenant and approved by Landlord;
</p></li>
<li><p>
(ii) boiler and machinery coverage, either, as Tenant shall elect, as part of the policy referred to in clause (i) of this Sectio 14.1(a) or, if by a secondary policy, in an amount not less than $100,000,000 or such greater amount as Landlord may reasonably require by notice to Tenant (the insurance described in clause (i) above and this clause (ii) is collectively called "Property Insurance");
</p></li>
<li><p>
(iii) commercial general liability insurance, including broad form bodily injury, personal injury, property damage and blanket contractual insurance, against claims arising out of or connected with the possession, use, operation or condition of the Leased Premises with a combined single limit of not less than $100,000,000 (or, such greater amount as Landlord may reasonably require by notice to Tenant) for all claims with respect to bodily injury, property damage and personal injury with respect to any one occurrence;
</p></li>
<li><p>
(iv) appropriate builder's risk insurance with respect to any Alterations (including, without limitation, any Restoration) or other work on or about the Leased Premises or any part thereof;
</p></li>
<li><p>
(v) appropriate workers compensation and employer's liability insurance with respect to any Alteration (including, without limitation, any Restoration) or other work on or about the Leased Premises or any part thereof; and
</p></li>
<li><p>
(vi) such other insurance with respect to the Leased Premises or any part thereof in such amounts and against such insurable casualties as Landlord from time to time may reasonably require by notice to Tenant.
</p></li>
</ol>
</p>
</section><section>
<p>
(b) All insurance required to be maintained under clause (ii) or (iii) of Section 14.1(a) may be subject to a deductible of not more than the Deductible Amount. Landlord shall not unreasonably withhold any of the approvals referred to in Section 14.1(a). Any dispute whether Landlord has unreasonably withheld such an approval and any dispute regarding the dollar amounts of the limits of coverage under clause (ii) or (iii) of Section 14.1(a) and any dispute under clause (iv), (v), or (vi) of Section 14.1(a) shall be resolved by arbitration. Pending the outcome of such arbitration, Tenant may act as if the dispute had been resolved in its favor.
</p>
</section>
<section>
<p>
(c) The insurance required to be maintained by Tenant under clause (i) of Section 14.1(a) shall also include (1) flood coverage of not less than $25 million, (2) earthquake coverage of not less than $25 million, (3) broad form water coverage (including backup of sewers and drains) of not less than $5 million, (4) demolition coverage of not less than $10 million, (5) increased cost of construction coverage of not less than $10 million, and (6) law and ordinance coverage of not less than $10 million.
</p>
</section>
<section>
<p>
(d) Whenever in connection with any Alterations Tenant causes its general contractor to name Tenant as an insured under any commercial general liability insurance, Tenant shall also cause its general contractor also so to name Landlord.
</p>
</section>
</section>
<section>
<h>14.2 Policy Provisions</h>
<p>All insurance maintained by Tenant pursuant to Section 14.1(a) shall: (a) except for any workers' compensation insurance and employers' liability insurance, name as insureds, as their respective interests may appear, Landlord and Tenant and any Superior Mortgagee who shall have executed and delivered a Non-Disturbance Agreement; (b) include a stipulation that premiums will be paid by and are the responsibility of Tenant; (c) except for any comprehensive general liability, worker's compensation insurance or employer's liability insurance, provide that no act or omission of Tenant shall impair or affect the rights of the insureds to receive and collect the proceeds under the relevant policy; and (d) provide that no cancellation, reduction in amount or material change in coverage thereof shall be effective until at least 30 days after receipt by Landlord of written notice thereof. Tenant shall have the sole authority to settle claims under insurance policies; provided, that in case of any damage or destruction affording Tenant the right to terminate this Lease pursuant to Section 15.4(a), Tenant may not settle all or any of the claims under the policies referred to in clauses (i), (ii), (iv) or (vi) of Sectio 14.1(a) arising from any damage or destruction unless it shall waive such right with respect to such damage or destruction. Tenant may obtain any of the insurance required hereby under blanket or umbrella policies; provided, that any such policy of insurance provided for under clauses (i), (ii), (iv) or (vi) of Section 14.1(a): (i) shall permit recovery in the amount required by the clause in question to be carried without regard to other insured events with respect to other properties, and (ii) shall not contain any clause which would result in the insured thereunder being required to carry insurance with respect to the property covered thereby in an amount equal to a minimum specific percentage of the full insurable value of such property in order to prevent the insured therein named from becoming a co-insurer of any loss with the insurer under such policy.</p>
<p>Tenant shall also cause the members, partners or shareholders of Landlord whose names shall have been furnished to Tenant and, so long as The Witkoff Group LLC is an affiliate of Landlord, The Witkoff Group LLC as additional named insureds under the insurance required to be maintained by Tenant under clause (iii) of Section 14.1(a).</p>
</section>
<section>
<h>14.3 Delivery of Insurance Certificates; Payment of Premium</h>
<p>On the date hereof and not less than 7 days prior to each policy expiration Tenant shall deliver to Landlord certificates of all insurance policies required by this Lease to be maintained. Tenant shall pay all premiums on each such insurance policy within the time required under such policy and furnish Landlord with evidence of payment thereof within 10 Business Days after payment. </p>
</section>
<section>
<h>14.4 No Limitation of Damages</h>
<p>Landlord shall not be limited in the proof of any damages which Landlord may claim against Tenant arising out of or by reason of Tenant's failure during the Term (or thereafter in case of insurance required to be provided under Section 15.4(k)) to provide and keep in force the insurance required under this Lease to the amount of the insurance premium or premiums not paid or incurred by Tenant and which would have been payable upon such insurance, but Landlord shall also be entitled to recover as damages for such breach the uninsured amount of any loss to the extent of any deficiency between the insurance required by the provisions of this Lease and the insurance carried by Tenant, together with all costs and expenses incurred by Landlord which Landlord would not have incurred if the required insurance had been maintained by Tenant. However, any such damages so recovered by Landlord shall be subject to and limited by the provisions of Article 25. </p>
</section>
</section>
<section>
<h>15. Damage to or Destruction of Property </h>
<section>
<h>15.1 Waiver of ss. 227; Tenant to Give Notice</h>
<p>Tenant hereby waives the provisions of Article 227 of the Real Property Law and confirms that the provisions of this Article 15 shall govern and control in lieu thereof. In case of any damage to or destruction of the Leased Premises or any part thereof, if, in Tenant's reasonable opinion, the cost to repair or rebuild the same will exceed $1,000,000, Tenant shall promptly give notice thereof to Landlord, generally describing the nature and extent of such damage or destruction. </p>
</section>
<section>
<h>15.2 Restoration</h>
<p>In case of any damage to or destruction of the Leased Premises or any part thereof, this Lease shall continue in full force and effect without abatement of any Basic Rent, Supplemental Rent or other amounts payable by Tenant hereunder. Tenant, whether or not the insurance proceeds, if any, on account of such damage or destruction shall be sufficient for the purpose, shall (subject to the applicable provisions of Article 6 and Section 15.4(c)) promptly commence and proceed with due diligence to complete the restoration, replacement or rebuilding of the Leased Premises (which may include demolition of the remaining portions of the Leased Premises prior to rebuilding) as nearly as possible to its condition immediately prior to such damage or destruction with such Voluntary Alterations as Tenant shall (subject to the applicable provisions of Article 6) elect (such restoration, replacement and rebuilding, together with any</p>
<p>temporary repairs and protection pending completion of the work, being herein called "Restoration"). </p>
</section>
<section>
<h>15.3 Application of Insurance Proceeds</h>
<section> <p>
(a) Promptly after the occurrence of any damage to or destruction of the Leased Premises or any part thereof the insurance proceeds with respect to which are expected by Tenant to exceed the Significant Proceeds Amount, Tenant by notice to Landlord and the institution appointed, shall appoint a depositary of the insurance proceeds under this Section 15.3 (the "Depositary"). Without limiting the foregoing, Tenant may appoint a Depositary at any other time. The Depositary shall be a bank or trust company having an office in the Borough of Manhattan and a combined shareholders equity of at least $200 million. Funds held by the Depositary shall be invested by the Depositary, upon the instructions of Tenant, in Permitted Investments.
</p>
</section>
<section>
<p>(b) All insurance proceeds on account of any damage to or destruction of the Leased Premises or any part thereof shall be payable as follows:
<ol>
<li><p>
(i) to Tenant, to the extent that such proceeds are equal to or less than the Significant Proceeds Amount, and
</p></li>
<li><p>
(ii) to the Depositary, to the extent that such proceeds are in excess of the Significant Proceeds Amount;
</p></li>
</ol>
provided, that if an Event of Default shall have occurred and be continuing, the amounts paid or payable to Tenant in accordance with the foregoing clause (i) shall be paid to the Depository and shall (without the necessity of Tenant's compliance with the provisions of Article 17) be returned (together with the interest thereon) to Tenant only upon the curing of such Event of Default, but less the portion, if any, applied and disbursed by the Depositary in accordance with the provisions of Article 17.
</p>
</section>
</section>
<section>
<h>15.4 Termination in Lieu of Restoration</h>
<section>
<p>(a) If:
<ol>
<li><p>
(i) (x) after September 30, 2004 the Leased Premises shall be so damaged or destroyed that the Costs of Restoration shall exceed the product of $10,000,000 multiplied by a fraction whose numerator is the Index for the month which is three months prior to the month in which the damage or destruction occurred and whose denominator is the Index for April, 1997, and (y) on the date of such damage or destruction Tenant's right to terminate this Lease as of June 30, 2008 shall not have lapsed without exercise,
</p></li>
<li><p>
(ii) (x) after September 30, 2009 the Leased Premises shall be so damaged or destroyed that the Costs of Restoration shall exceed the product of $10,000,000 multiplied by a fraction whose numerator is the Index for the month which is three months prior to the month in which the damage or destruction occurred and whose denominator is the Index for April, 1997, and (y) on the date of such damage or destruction Tenant's right to terminate this Lease as of June 30, 2013 shall not have lapsed without exercise,
</p></li>
<li><p>
(iii) after September 30, 2014 the Leased Premises shall be so damaged or destroyed that the Costs of Restoration shall exceed the product of $10,000,000 multiplied by a fraction whose numerator is the Index for the month which is three months prior to the month in which the damage or destruction occurred and whose denominator is the Index for April, 1997, or
</p></li>
<li><p>
(iv) at any time the Leased Premises shall be so damaged or destroyed that 50% or more of the useable area thereof cannot, with the exercise by Tenant of all due diligence, be rendered tenantable and fit for the normal conduct of business withi 90 days after the date of the damage or destruction (the condition described in this clause (iv) being called "50% Untenantability"), </p></li></ol>
then (subject to the further provisions of this Section 15.4) Tenant may, by notice (the "Damage Termination Notice") to Landlord given within the 180-day period (the "Election Period") following the date (the "Damage Date") of damage or destruction, elect to terminate this Lease as of a date specified in the Damage Termination Notice (the "Specified Damage Termination Date"), which Specified Damage Termination Date shall be no earlier than 20 days after the giving of such Damage Termination Notice and no later than one year after the giving of such Damage Termination Notice.
</p>
</section>
<section><p>
(b) If Tenant shall timely give the Damage Termination Notice then, subject to Section 15.4(i), this Lease shall terminate on the Specified Damage Termination Date; provided, that if on or prior to the date which is 15 days after the giving of such Damage Termination Notice Landlord shall by notice to Tenant dispute Tenant's right to terminate this Lease pursuant to Sectio 15.4(a), the matter shall be determined by the Appropriate Engineer and (i) if the Appropriate Engineer's determination is in Landlord's favor, then this Lease shall continue in full force and effect or (ii) if the Appropriate Engineer's determination is in Tenant's favor, then, subject to Section 15.4(i), this Lease shall terminate effective as of the Specified Damage Termination Date. At any time at the request of Landlord or Tenant, the Appropriate Engineer shall make a determination as to whether Tenant has the right to terminate this Lease pursuant to this Section 15.4.
</p>
</section>
<section> <p>(c) At all times prior to the giving of the Damage Termination Notice, Tenant shall prosecute the Restoration with all due diligence and in accordance with the Plans and Specifications therefor (as approved by Landlord or as determined by the Appropriate Engineer to have been required to be approved by Landlord pursuant to this Lease); provided, that unless
<ol>
<li><p>
(i) Tenant waives in writing Tenant's termination right under this Section 15.4 with respect thereto, or
</p></li>
<li><p>
(ii) Tenant does not give the Damage Termination Notice on or prior to the end of the applicable Election Period,</p></li></ol>
Tenant shall not be obligated to (i) expend more than the Significant Proceeds Amount with respect to the Restoration of such damage or destruction, or (ii) expend any Costs which are not Qualified Restoration Costs. The term "Qualified Restoration Costs" shall mean Costs of any Restoration to the extent undertaken to (i) secure or prevent further damage to the Leased Premises and/or (ii) effect Restoration of Building systems but only to the extent the same are not located in any area designed for tenant occupancy.
</p>
</section>
<section><p>(d) Simultaneously with the giving of the Damage Termination Notice, Tenant shall:
<ol>
<li><p>
(i) assign to Landlord (by instruments reasonably satisfactory to Landlord) all of Tenant's right, title and interest in and to the Plans and Specifications (if any) for the Restoration;
</p></li>
<li><p>
(ii) assign to Landlord (by instruments reasonably satisfactory to Landlord) all of Tenant's right, title and interest in and to that portion (if any) of the proceeds of Tenant's Property Insurance which has not yet been received by Tenant from the insurer (provided, that if and when Landlord receives such portion of the proceeds of Tenant's Property Insurance from the insurer, Landlord shall, within 10 Business Days after receipt of a request therefor from Tenant, pay to Tenant an amount equal to the lesser of (x) such portion of the proceeds of Tenant's Property Insurance received by Landlord from the insurer or (y) the amount, if any, by which the aggregate amount expended by Tenant for Qualified Restoration Costs in connection with the Restoration on or prior to the date of the Damage Termination Notice exceeds the sum of (l) the portion of the proceeds of Tenant's Property Insurance (if any) received by Tenant from the insurer on or prior to the date of the Damage Termination Notice and (2) the Deductible Amount under the insurance policy required to be maintained by Tenant under Section 14.1(a));
</p></li>
<li><p>
(iii) pay to Landlord, in immediately available funds, an amount (the "Damage Payment") equal to the sum of the positive remainder, if any, obtained by subtracting the aggregate amount theretofore expended by Tenant for Qualified Restoration Costs in connection with the Restoration from the sum of (A) that portion (if any) of the proceeds of Tenant's Property Insurance which Tenant received from the insurer on or prior to the date of the Damage Termination Notice plus (B) the Deductible Amount under the insurance policy required to be maintained by Tenant under Section 14.1(a) (the computation of the payment under this clause (iii) shall not be affected by any amount of proceeds of Tenant's Property Insurance that Tenant may have spent on other than Qualified Restoration Costs) ; and
</p></li>
<li><p>
(iv) if the insurance policy required to be maintained by Tenant under Section 14.1(a) was for less than the full replacement cost most recently determined pursuant to said Section, deposit with the Depositary, in immediately available funds, an amount equal to the excess of (x) the amount which would have been recoverable from the insurer if such policy had been for the full replacement cost most recently determined pursuant to said Section over (y) the amount which is recoverable from the insurer under such policy on account of the damage or destruction. </p>
<p><!-- presumed to be an example of a second p in the list item -->If the insurer under the insurance policy required to be maintained by Tenant under Section 14.1(a) shall pay to Tenant any amount which is required by Section 15.3 to be paid to the Depositary, Tenant shall immediately deposit such amount with the Depositary. </p>
</li>
</ol>
</p>
</section>
<section>
<p>
(e) Subject to Section 15.4(f), during the period commencing on the date of the Damage Termination Notice and ending on the Specified Damage Termination Date, Landlord shall have full control over the Restoration and may use the Damage Payment and the amounts on deposit with the Depositary to defray the costs of the Restoration. Landlord and Tenant shall reasonably cooperate with one another to effectuate the Restoration in an efficient manner, and during the Restoration Landlord shall use reasonable efforts to minimize interference with Tenant's use of the undamaged portion (if any) of the Leased Premises. Landlord shall not be liable to Tenant for any matter relating to or arising out of the Restoration unless due to Landlord's gross negligence or willful misfeasance; provided, that Landlord shall retain reputable contractors who carry reasonable and customary public liability insurance.
</p>
</section>
<section>
<p>(f) If following the giving of the Damage Termination Notice, Landlord shall timely dispute Tenant's right to terminate this Lease pursuant to Section 15.4(a) and the Appropriate Engineer shall determine that Tenant had no right to terminate this Lease pursuant to Section 15.4(a), then:
<ol>
<li><p>
(i) Tenant shall thereupon assume full control of the Restoration and shall prosecute the same with all due diligence to completion in accordance with the requirements of this Lease; and
</p></li>
<li><p>
(ii) within 10 Business Days after the Appropriate Engineer's determination, Landlord shall (x) reassign to Tenant that which was assigned to Landlord pursuant to Section 15.4(d)(i) and (ii) and (y) pay to Tenant in immediately available funds an amount equal to the positive remainder, if any, obtained by subtracting the aggregate amount theretofore expended by Landlord in connection with the Restoration (exclusive, however, of any amount disbursed to Landlord by the Depositary) from the sum of (a) the amount, if any, received by Landlord from the insurer by reason of the assignment referred to in Section 15.4(d)(ii) (exclusive, however, of any portion of such amount paid by Landlord to Tenant pursuant to Section 15.4(d)(ii)), and (b) the Damage Payment.
</p></li>
</ol>
</p>
</section>
<section><p>
(g) Prior to the termination of this Lease pursuant to this Sectio 15.4 there shall be no abatement of the Basic Rent, Supplemental Rent or any other sum payable by Tenant hereunder. Basic Rent, Supplemental Rent and Tax Payments due hereunder shall be payable through and apportioned as of the Specified Damage Termination Date, and (except as provided in Section 32(b) with respect to any holdover) Tenant shall have no liability for Basic Rent, Supplemental Rent or Tax Payments which would otherwise have been payable after the Specified Damage Termination Date.
</p>
</section><section>
<p>(h) If this Lease is terminated pursuant to this Section 15.4, then, in addition to all amounts payable under Section 15.4(d), Tenant shall pay to Landlord, on or before the Specified Damage Termination Date, a cancellation payment (the "Damage Cancellation Payment") equal to the sum of<ol>
<li><p>
(i) the Basic Rent and the Tax Payments that would be payable for the period commencing on the Specified Damage Termination Date and ending on the earlier of (x) the date six months after the Specified Damage Termination Date, or (y) (i) if the damage or destruction shall have occurred on or before the end of the Second Rent Period and Tenant shall have timely exercised Tenant's option to terminate the Lease as of June 30, 2008, the last day of the Second Rent Period, (ii) if the damage or destruction shall have occurred during the Third Rent Period and Tenant shall have timely exercised Tenant's option to terminate the Lease as of June 30, 2013, the last day of the Third Rent Period, or (iii) if the damage or destruction shall have occurred during the Fourth Rent Period, the last day of the Fourth Rent Period, plus
</p></li>
<li><p>
(ii) if the Specified Damage Termination Date shall occur prior to June 1, 2008, the sum of (x) the amount of the Unamortized Fit-Out Work Investment as of the Specified Damage Termination Date, (y) if the Specified Damage Termination Date shall be other than the first day of a month, interest at the Fit-Out Work Interest Rate on such Unamortized Fit-Out Work Investment from the first day of the month in which the Specified Damage Termination Date shall occur to the Specified Damage Termination Date, and (z) the Notional Make-Whole Amount as of the Specified Damage Termination Date
</p></li>
</ol>
provided, that (a) Tenant shall be entitled to a credit against the amount required to be paid pursuant to clause (i) above equal to all Basic Rent and Tax Payments previously paid, if any, which is attributable to the period after the Specified Damage Termination Date, and (b) if under Section 15.4(b) Landlord shall timely dispute Tenant's right so to terminate this Lease, then Tenant shall not be required to make the Damage Cancellation Payment unless the Appropriate Engineer's determination is in Tenant's favor. In any case under clause (b) of the preceding sentence, the Damage Cancellation Payment shall be due within 5 days after the determination.
</p>
</section><section>
<p>
(i) It shall be a condition to the effectiveness of the Damage Termination Notice and the termination of this Lease pursuant to this Sectio 15.4, that on or before the Specified Damage Termination Date Tenant pays either (1) all amounts required to be paid by Tenant under Section 15.4(d) and Sectio 15.4(h), or (2) all amounts which Tenant believes in good faith are required to be paid by Tenant under Section 15.4(d) and Section 15.4(h). Any dispute with respect to the determination of any amount required to be paid by Tenant under Section 15.4(d) shall be resolved by arbitration and any dispute with respect to the determination of any amount required to be paid by Tenant under Sectio 15.4(h) shall be resolved by Expedited Arbitration. If in such arbitration or Expedited Arbitration it is determined that Tenant underpaid, Tenant shall pay the amount of the underpayment to Landlord within 5 days after the such determination, together with interest thereon at the Prime Rate from the Specified Damage Termination Date until paid by Tenant. If in such arbitration or Expedited Arbitration it is determined that Tenant overpaid, Landlord shall pay the amount of the overpayment to Tenant within 5 days after such determination, together with interest thereon at the Prime Rate from the Specified Damage Termination Date until paid by Landlord.
</p>
</section>
<section>
<p>
(j) If by reason of the termination of this Lease pursuant to Section 15.4 or Tenant's failure to effect Restoration by reason of Tenant's having so terminated this Lease
<ol>
<li><p>
(p) the insurer under the insurance policy required to be maintained by Tenant under clauses (i) and (ii) of Section 14.1(a) is released under the terms of the policy from its obligation to make payment on account of the loss arising out of such damage or destruction, or
</p></li>
<li><p>
(q) the amount which under the terms of the policy such insurer is required to pay on account of the loss arising out of such damage or destruction is less than the amount which under the terms of the policy such insurer would have been required to pay if this Lease had not been terminated and Tenant had effected such restoration as Landlord, within the time period provided by the policy, actually commits to such insurer to effect (such lesser amount being herein called the "Reduced Proceeds Amount"),
</p></li>
</ol>
then Tenant shall, within 30 days after Landlord's demand, <ol>
<li><p>(x) in the case of (p) above, pay to Landlord the amount which under the terms of the policy such insurer would have been required to pay on account of the loss arising out of such damage or destruction if this Lease had not been terminated and Tenant had effected such restoration as Landlord, within the time period provided by the policy, actually commits to such insurer to effect (the "Full Proceeds Amount"), or</p></li>
<li><p>(y) in the case of (q) above, pay to Landlord the excess of the Full Proceeds Amount over the Reduced Proceeds Amount.</p></li>
</ol>
</p>
<p>Together with the assignment delivered under Section l5.4(d) (ii), Tenant shall furnish Landlord with a notice, in block capital letters, of the period provided by the policy within which Tenant must make its restoration commitment to the insurer.</p>
<p>Landlord, at Tenant's expense, shall prosecute all insurance claims the proceeds of which have been assigned to Landlord under Section 15.4(d)(ii) diligently and in accordance with the terms of the applicable policies and, notwithstanding the provisions of Section 14.2 to the contrary, Landlord shall have the sole right to settle such claims.
</p>
</section>
<section>
<p>
(k) If Tenant shall terminate this Lease pursuant to this Sectio 15.4, Tenant shall maintain in effect the insurance required by clauses (i) and (ii) of Sections 14.1(a) ("Post-Termination Insurance") until the earliest of
<ol>
<li><p>
(1) the later of (a) the end of Tenant's then current policy period, or (b) the date two years after the Specified Damage Termination Date,
</p></li>
<li><p>
(2) the date on which Landlord receives the proceeds of the insurance required to be maintained by Tenant under clauses (i) and (ii) of Section 14.1(a) with respect to the damage or destruction giving rise to such termination (including any amounts payable under Sectio 15.4(j)), or
</p></li>
<li><p>
(3) the date on which Landlord commences restoration of such damage or destruction (other than protective work or demolition).
</p></li>
</ol>
</p>
<p>All of the provisions of Article 14, in so far as they relate to the insurance required by clauses (i) and (ii) of Sections 14.1(a), shall be applicable to such Post-Termination Insurance, except that (a) Landlord shall be solely entitled to all proceeds of such Post-Termination Insurance arising out of any casualty occurring after the Specified Damage Termination Date, and (b) Landlord, at its expense, shall prosecute all insurance claims to the proceeds of which it is so entitled diligently and in accordance with the terms of the applicable policies and, notwithstanding the provisions of Section 14.2 to the contrary, Landlord shall have the sole right to settle such claims. At Landlord's request, Tenant shall join in the execution of any documents reasonably required by the insurer to be executed by Tenant in connection with such claims. If Tenant shall fail, within 10 Business Days of Landlord's request to execute any such document, Landlord is hereby appointed Tenant's attorney-in-fact to do so.</p>
<p>On or before the Specified Damage Termination Date, Tenant shall furnish Landlord with a certificate of the insurance required by this Sectio 15.4(k) showing as the expiration date thereof the end of Tenant's then current policy period. So long as Tenant is required by this Section 15.4(k) to maintain insurance, Tenant shall, no later than 7 days prior to the end of each of Tenant's policy periods, furnish Landlord with a certificate of the insurance required by this Section 15.4(k) showing as the expiration date thereof the end of Tenant's next policy period or, if such next policy period will end after two years after the Specified Damage Termination Date, two years after the Specified Damage Termination Date. No certificate delivered pursuant to this paragraph shall be effective to extend the date through which Tenant is required by this Section 15.4(j) to maintain insurance. If at any time Tenant does not maintain the insurance required by this Section 15.4(k) to be maintained by it, Landlord, after 2 Business Days notice to Tenant, may purchase insurance providing the same coverage, and if Landlord does so Tenant shall reimburse Landlord on demand for all of the costs incurred by Landlord in maintaining such insurance.
</p>
</section>
<section><p>
(l) If this Lease is terminated pursuant to this Section 15.4 on or prior to June 1, 2008, Tenant shall also reimburse Landlord, within 10 days of Landlord's demand, any document preparation fee, recording fee, attendance fee or similar fee charged by any of Landlord's lenders, not exceeding $10,000 in the aggregate for all lenders, by reason of Landlord applying the sum received under Section 15.4(h)(ii) to prepayment of any of Landlord's mortgage debt due to such lender.
</p>
</section>
</section>
</section>
</section>
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