AGREEMENT OF LEASE, made as of __________ between THE CITY OF NEW YORK, a municipal corporation of the State of New York, having an address at City Hall, New York, New York 10007, as landlord, and [_______________], a New York corporation having an address at __________, Bronx, New York ______, as tenant.?
W I T N E S S E T H:
WHEREAS, The City of New York is the owner of the Premises and the Permit Area (each as hereinafter defined); and
WHEREAS, The City of New York desires to develop and promote commercial activities on the Premises so as to preserve existing and produce new employment opportunities for its citizenry and generate new revenues to The City of New York; and
WHEREAS, the City desires that the wholesale seafood market (the “Market”) presently operated at the Fulton Fish Market district in Manhattan remain in the City of New York; and
WHEREAS, pursuant to Section 1301.2.a of the Charter of The City of New York, the City is authorized to enter into this lease of the Premises and the permit granted in respect of the Permit Area; and
NOW THEREFORE, it is hereby mutually covenanted and agreed by and between the parties hereto that this Lease is made upon and subject to the terms, covenants and conditions hereinafter set forth.
ARTICLE 1
DEFINITIONS
For all purposes of this Lease and all agreements supplemental hereto the terms defined in this Article shall have the following meanings:
"Accounting Principles" means the then current generally accepted accounting principles consistently applied.
"Administrator" means EDC or such other Person as Landlord may designate to administer this Lease.
"Affiliate" or "Affiliates" means (A) any Person that has, directly or indirectly, a five percent (5%) or greater ownership interest in Tenant, or any Person in which Tenant, any partner or shareholder of Tenant, or any shareholder or partner of any Person that is a partner or shareholder of Tenant, has a five percent (5%) or greater ownership interest, and (B) any individual who is a member of the immediate family (whether by birth or marriage) of an individual who is an Affiliate, which includes for purposes of this definition a spouse, a brother or sister of the whole or half blood (including an individual related by or through legal adoption) of such individual or his/her spouse, a lineal descendant or ancestor (including an individual related by or through legal adoption) of any of the foregoing, or a trust for the benefit of any of the foregoing. Ownership of or by Tenant referred to in this definition includes beneficial ownership effected by ownership of intermediate entities.
"Agreements" has the meaning provided in Section 18.01(a)(v) hereof.
"Architect" means any registered architect, architectural firm, professional engineer, or combined practice or association registered in the State of New York selected by Landlord.
"Assignee" has the meaning provided in Section 9.01(b)(ii) hereof.
"Assignment" has the meaning provided in Section 9.01(b)(i) hereof.
"Base Rent" has the meaning provided in Section 3.01 hereof.
"Building,” means the building containing the Market that exists on the Land as of the Commencement Date, which shall be depicted on Exhibit A hereto, and any and all alterations and replacements thereof, additions thereto and substitutions therefor.
"Building Index" has the meaning provided in Section 6.11 hereof.
"Bureau" has the meaning provided in Section 18.01 hereof.
"Capital Improvement" has the meaning provided in Section 12.01(b) hereof.
"Capital Transaction" has the meaning provided in Section 9.01(b)(iii) hereof.
"Certified Public Accountant" means any independent certified public accountant or accounting firms selected by Tenant and approved by Landlord, which approval shall not unreasonably be withheld or delayed; provided, however, that no accountant or accounting firm which shall have been disqualified from doing business with the City shall be the Certified Public Accountant.
"Certificate of Occupancy" means the earlier to be issued of a temporary or permanent certificate of occupancy, issued by the New York City Department of Buildings, or any successor agency, or, if applicable, the earlier to be issued of temporary or permanent certificate of completion, issued by the New York City Department of Business Services.
"City" means The City of New York, a municipal corporation of the State of New York.
"City's Payment Rate" has the meaning provided in Section 4.05 hereof.
"Commencement Date" has the meaning provided in Article 2 hereof.
"Commissioner" means the Commissioner of the New York City Department of Business Services.
"Comptroller" has the meaning provided in Section 34.03 hereof.
"CPI" shall mean the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics of the United States Department of Labor, New York, New York-Northeastern New Jersey area, All items (1982-84=100), or any successor index thereto, appropriately adjusted. If such Consumer Price Index ceases to be published, and there is no successor thereto, then such other index as Landlord reasonably determines shall be substituted for such Consumer Price Index.
"Date of Taking" has the meaning provided in Section 8.01(c) hereof.
"Default" means any condition or event, or failure of any condition or event to occur, which constitutes or would, after notice or the lapse of time, or both, constitute an Event of Default.
"Depository" means an Institutional Lender selected by Tenant and approved by Landlord, which approval shall not be unreasonably withheld or delayed, which (a) has an office in the City of New York, and (b) has entered into a written agreement with Tenant and Landlord to hold funds as provided in this Lease.
"Director" has the meaning provided in Section 18.01 hereof.
"EDC" means New York City Economic Development Corporation or its successor(s).
"E.O. 50" has the meaning provided in Section 18.01 hereof.
"E.O. 50 Regulations" has the meaning provided in Section 18.01 hereof.
"Equipment" means all fixtures and personal property incorporated in or attached to and used or usable in the operation of the Premises and the Permit Area and shall include, but shall not be limited to, all machinery, apparatus, devices, motors, engines, dynamos, compressors, pumps, boilers and burners, heating, lighting, plumbing, ventilating, air cooling and air conditioning equipment; chutes, ducts, pipes, tanks, fittings, conduits and wiring; incinerating equipment; elevators, escalators and hoists; partitions, doors, cabinets, hardware; floor, wall and ceiling coverings; washroom, toilet and lavatory equipment; windows, window washing hoists and equipment; and all additions thereto or replacements thereof, but shall exclude any trade fixtures or other personal property not listed above which is owned by any Subtenant or contractors engaged in maintaining same.
"Equity Interest" has the meaning provided in Section 9.01(b)(viii) hereof.
"Event of Default" has the meaning provided in Section 21.01 hereof.
"Expiration Date" means the Fixed Expiration Date or such earlier date upon which this Lease may be terminated as herein provided.
"Expiration of the Term" means the Expiration Date.
"Federal Courts" has the meaning provided in Section 36.14 hereof.
"Fixed Expiration Date" has the meaning provided in Section 2.03 hereof.
"Governmental Authority or Authorities" means the United States of America, the State of New York, the City and any agency, department, legislative body, commission, board, bureau, instrumentality or political subdivision of any of the foregoing, now existing or hereafter created, having or claiming jurisdiction over the Premises and the Permit Area or any portion thereof or any street, road, avenue, sidewalk or water immediately adjacent to the Premises and the Permit Area, or any vault in or under the Premises and the Permit Area.
“Gross Selling Area,” means the first floor area of the Rentable Area.
“Hazardous Materials” means (i) any “hazardous waste” as defined under the Resource Conservation and Recovery Act, 42 U.S.C. Section 9601 et seq., or (ii) “hazardous substance” as defined under the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. Section 9601 et seq., or (iii) “hazardous materials” as defined under the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801 et seq., or (iv) “hazardous waste” as defined under New York Environmental Conservation Law Section 27-0901 et seq., or (v) “hazardous substance” as defined under the Clean Water Act, 33 U.S.C. Section 1321 et seq., or (v) any other substances or materials which from time to time are classified or considered to be hazardous or toxic or a pollutant or contaminant under the laws of the State of New York or the United States of America or under any other Requirements.
"Imposition" or "Impositions" has the meaning provided in Section 4.01(b) hereof.
"Improvements" means the Building, Equipment, and any and all other improvements now or hereafter situated on the Land, or any portion thereof, including, but not limited to, landscaping, and any and all alterations thereto, replacements thereof, and substitutions therefor.
"Indemnitees" has the meaning provided in Section 17.01 hereof.
"Institutional Lender" means a savings bank, a savings and loan association, a commercial bank or trust company (whether acting individually or in a fiduciary capacity), a private pension fund, a credit union or company, an insurance company organized and existing under the laws of the United States or any state thereof, a religious, educational or eleemosynary institution, a federal, state or municipal employee's welfare, benefit, pension or retirement fund, any governmental agency or entity insured by a governmental agency or any syndicate, joint venture, or other combination of Institutional Lenders, provided that each member of any such syndicate, joint venture, or other combination would qualify individually as an Institutional Lender, and such other entities as may be approved in writing by Landlord, which approval will not be unreasonably withheld or delayed; provided, that each of the above entities shall qualify as an Institutional Lender only if it shall (a) be subject to the jurisdiction of the courts of the State of New York in any actions pertaining to this Lease or the Premises, (b) have a net worth of not less than $35,000,000 and assets of not less than $100,000,000, or such lower amounts as are deemed acceptable in Landlord's sole discretion, and (c) not be a Prohibited Person.
"Land" means the real property described in Exhibit A hereto, but excluding therefrom any land taken or condemned following the Commencement Date as provided in Section 8.02(b) and further excluding the Bulkhead and all land within twenty-five feet of the Bulkhead.
"Landlord" means the City, provided, however, that if the City or any successor to its interest hereunder transfers or assigns its interest in the Premises or its interest under this Lease, then from and after the date of such assignment or transfer, the term "Landlord" shall mean the assignee or transferee.
"Late Charge Rate" has the meaning provided in Article 5 hereof.
"Lease" means this Agreement of Lease and all exhibits hereto and all amendments, modifications and supplements hereof and thereof.
"Lease Year" means the year beginning on the Commencement Date and each succeeding year falling within the Term.
"Market Regulations" means any and all City laws, rules and regulations, whether now existing or hereinafter adopted or promulgated, that are applicable to wholesale food markets and/or seafood markets, including, without limitation, wholesaler registration requirements.
"New York State Courts" has the meaning provided in Section 36.14 hereof.
"Orders" has the meaning provided in Section 18.01 hereof.
"Organizational Documents" has the meaning provided in Section 10.01 hereof.
“Parking Lot” means the parking lot on the Land, as depicted in Exhibit A hereto.
"Partial Taking" has the meaning provided in Section 8.02(b) hereof.
"Permit Area" has the meaning provided in Section 2.03 hereof.
"Permitted Person" has the meaning provided in Section 9.01(b)(VI) hereof.
"Person" means an individual, corporation, partnership, limited liability company, joint venture, estate, trust, unincorporated association; any federal, state, county or municipal government or any bureau, department or agency thereof; and any fiduciary acting in such capacity on behalf of any of the foregoing.
"PILOT" has the meaning provided in Section 3.03(b)(i) hereof.
"PILOT Period" has the meaning provided in Section 3.03(b) hereof.
"Premises" means the Land and Improvements.
"Prohibited Person" has the meaning provided in Section 9.01(c) hereof.
"Rental" means all of the amounts payable by Tenant pursuant to this Lease, including, without limitation, Base Rent, PILOT, Impositions, the amounts, if any, payable pursuant to Article 17 hereof and any other sums, costs, expenses or deposits which Tenant is obligated, pursuant to any of the provisions of this Lease, to pay and/or deposit.
“Rentable Area” means the portions of the Premises that are intended for occupancy by a subtenant or other occupant on an exclusive basis.
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"Replacement Value" has the meaning provided in Section 6.11 hereof.
"Requirements" has the meaning provided in Section 13.01(b) hereof.
"Restoration" has the meaning provided in Section 7.01(a) hereof.
"Revaluation Date" has the meaning provided in Section 3.02(e) hereof.
"Revaluation Period" has the meaning provided in Section 3.02(e) hereof.
"Security Deposit" has the meaning provided in Article 26 hereof.
"Substantially All of the Premises" has the meaning provided in Section 8.01(b) hereof.
"Subtenant" has the meaning provided in Section 9.01(b)(vii) hereof.
"Taking" has the meaning provided in Section 8.01(a) hereof.
"Taxes" has the meaning provided in Section 3.03(e) hereof.
"Tax Year" means each tax fiscal year of New York City.
"Temporary Taking" has the meaning provided in Section 8.03(a) hereof.
"Tenant," on the Commencement Date, means the New Fulton Fish Market at Hunts Point, Inc. and thereafter Tenant shall mean the holder of the leasehold estate created by this Lease.
"Term" has the meaning provided in Section 2.01 hereof.
"Transfer" has the meaning provided in Section 9.01(b)(vii) hereof.
"Transferee" has the meaning provided in Section 9.01(b)(ix) hereof.
“Voluntary Clean-Up Agreement shall mean the Agreements that are attached hereto as Exhibit C.
"Zoning Resolution" has the meaning provided in Section 13.01(b)(i) hereof.
ARTICLE 2
DEMISE OF PREMISES AND TERM OF LEASE
Section 2.01. Demise of Premises.
(a) Landlord does hereby demise and lease to Tenant, and Tenant does hereby hire and take from Landlord, the Premises, together with all Improvements thereon and all easements, appurtenances and other rights and privileges now or hereafter belonging or appertaining to the Premises.
(b) The Premises are leased subject to the following and any other present or future encumbrances on Landlord's interest in the Premises provided that Tenant’s rights hereunder shall not be subject to any encumbrances that materially interfere with or impair the Seafood Distribution Uses, the operation of the Market, or Tenant’s rights hereunder:
(1) Any state of facts that an accurate survey may show;
(2) Governmental building restrictions and building regulations now or hereafter in force and present and future zoning laws, ordinances, resolutions and regulations of all boards, bureaus, commissions and bodies of any municipal, county, state or federal or other governmental department or authority now having or hereafter acquiring jurisdiction of the Premises or the use and improvement thereof;
(3) Rights, easements, licenses or privileges to use vaults, areas, tunnels, ramps or structures under highways, roads, streets, avenues or sidewalks on which the Premises abut or form a part of, and consents or grants prior to the date of this Lease for the erection of any structures on, under or above said highways, roads, streets, avenues or sidewalks and any grants, licenses or consents with respect to sewers, public utility lines, pipes, conduits and equipment;
(4) Violations of law, ordinances, regulations, orders or requirements, if any, whether or not of record and whether or not the same might be disclosed by an examination and inspection or search of the Premises, noted or issued by any federal, state, municipal or other governmental department or authority having jurisdiction, as the same may exist on the Commencement Date;
(5) The condition and state of repair of the Premises on the Commencement Date;
(6) Dedications, restrictions, covenants, consents, easements, agreements and any other liens or encumbrances affecting the Premises, if any; and
(7) Any encroachments existing on the Commencement Date.
(8) Any and all requirements of the Voluntary Clean-Up Plans
TO HAVE AND TO HOLD unto Tenant, its permitted successors and assigns, for the term specified in Sections 2.02 and 2.03.
Section 2.02. The Term.
(a) The term ("Term") of this Lease shall commence and this Lease shall be effective on the date of this Lease (the "Commencement Date").
(b) The Term shall expire at midnight on the day immediately preceding the forty-ninth (49th) anniversary of the Commencement Date (the “Fixed Expiration Date”), or on such earlier date upon which this Lease may be terminated as hereinafter provided.
Section 2.03. Permit Area.
(a) (i) Subject to subparagraph (ii) below, Landlord hereby grants to Tenant a permit to use, during the Term, the area then constituting the Permit Area (as defined in subparagraph (ii) below) on an exclusive basis, on the terms and conditions contained in this Lease, specifically including, but not limited to, those contained in this Section 2.03, and subject to the same encumbrances and other matters described in Section 2.01 insofar as any such matters concern the Permit Area. No ownership, leasehold or other property interest shall vest in Tenant in the Permit Area by virtue of this Section 2.03.
i) As of the date of this Lease, the Permit Area shall mean the area depicted in Exhibit A hereto. Landlord and Tenant acknowledge that the sole purpose of the Permit Area is to supplement the parking area within the Premises if and to the extent that such parking area is not adequate, in Landlord’s reasonable determination, to serve the parking needs of the businesses that occupy the Premises and their employees, suppliers, and customers. Therefore, Landlord shall have the right, at any time during the Term, from time to time, to reduce the size of the Permit Area and/or to designate any other parking area in close proximity to the Premises as a substitute for the then existing Permit Area, provided that at all times during the Term, the Permit Area is of a size that is reasonably adequate to supplement the parking area at the Premises as aforesaid. Landlord agrees that it shall not exercise its right to eliminate or reduce the size of the Permit Area as long as Tenant is making use of such area for parking purposes on a reasonably consistent basis during Market hours.
(b) The Permit Area shall be used solely for the purpose of the parking of vehicles of Tenant, Subtenants and other businesses at the Premises and their employees, agents, contractors, and customers, and for other persons visiting the Premises.
(c) If at any time during the term of the Lease, Tenant desire to use the Permit Area for some other purpose in connection with its wholesale seafood distribution business, it can request a change in usage by sending a written request to Landlord. Landlord agrees not to unreasonably withhold or delay its consent to such change in usage provided Landlord determines that such usage cannot be accommodated on the Premises, without materially adversely affecting the operations thereon, and is consistent with the overall designation of the Premises and the Permit Area for wholesale seafood market uses and is not inconsistent with the obligations of Landlord under the Voluntary Clean-Up Agreement applicable to the Premises. Landlord hereby agrees that Tenant may also use a portion of the Permit Area for temporary storage of pallets, and recycling of same, provided such usage cannot be accommodated at the Premises. Unless Landlord shall have previously consented to a change in usage as set forth above, Tenant shall not have the right to make any Capital Improvements to the Permit Area without Landlord’s prior written consent, which Landlord may withhold in its sole discretion.
(d) Tenant's use of the Permit Area is subject to all restrictions contained in this Lease and Permit and the Market Regulations and subject to all requirements of the Voluntary Cleanup Program.
ARTICLE 3
RENT
Section 3.01. Payment of Rent. Tenant shall pay to Landlord by check subject to collection which is drawn on a bank which is a member of the New York Clearing House Association and without any off-set or deduction whatsoever and without prior notice or demand, the net annual rental provided for in Section 3.02 (the "Base Rent"). Tenant shall pay the Base Rent, as increased pursuant to this Article or otherwise, in equal monthly installments in advance on the first day of each and every month of each Lease Year.
Section 3.02. Amount of Rent.
(a) The annual Base Rent during the Term of this Lease shall be the following:
(i) During the first (1st) Lease Year, an amount equal to the product of Three Dollars and Twenty Cents ($3.20) and the total size of the Gross Selling Area, as defined in subparagraph (b) below.
(ii) During the second (2nd) Lease Year, an amount equal to the product of Six Dollars and Forty Cents ($6.40) and the size of the Gross Selling Area.
(iii) During the third (3rd) Lease Year, an amount equal to the product of Nine Dollars and Sixty Cents ($9.60) and the size of the Gross Selling Area.
(iv) During the fourth (4th) Lease Year, an amount equal to the product of Twelve Dollars and Eighty Cents ($12.80) and the size of the Gross Selling Area.
(v) During the fifth (5th) Lease Year, an amount equal to the product of Sixteen Dollars ($16.00) and the size of the Gross Selling Area.
(vi) From the sixth (6th) Lease Year through and including the twentieth (20th) Lease Year, the Base Rent during each Lease Year shall be the product of (X) the Base Rent during the immediately preceding Lease Year and (Y) a fraction, the numerator of which shall be the CPI published for the last month of the immediately preceding Lease Year and the denominator of which shall be the CPI published for the last month of the Lease Year prior to the immediately preceding Lease Year, provided, however, that in no event shall the Base Rent during any Lease Year be less than the Base Rent during the previous Lease Year.
(vii) From the twenty-first (21st) Lease Year through the thirty-fifth (35th) Lease Year, the Base Rent shall be the greater of the following, provided, however, that in no event shall the Base Rent during any Lease Year be less than the Base Rent during the previous Lease Year:
(A) The Appraised Rental Value of the Premises as of the commencement of the twenty-first (21st) Lease Year, as determined by an appraisal conducted pursuant to Section 31, multiplied (except with respect to the twenty-first (21st) Lease Year), by a fraction, the numerator of which shall be the CPI published for the last month of the Lease Year immediately preceding the applicable Lease Year, and the denominator of which shall be the CPI published for the last month of the twentieth (20th) Lease Year.
(B) The Base Rent that was in effect during the twentieth (20th) Lease Year, multiplied by a fraction, the numerator of which shall be the CPI published for the last month of the Lease Year immediately preceding the applicable Lease Year, and the denominator of which shall be the CPI published for the last month of the nineteenth (19th) Lease Year.
(viii) From the thirty-sixth (36th) Lease Year through the end of the Term, the Base Rent shall be the greater of the following, provided, however, that in no event shall the Base Rent during any Lease Year be less than the Base Rent during the previous Lease Year:
(A) The Appraised Rental Value of the Premises as of the commencement of the thirty-sixth (36th) Lease Year, as determined by an appraisal conducted pursuant to Section 31, multiplied (except with respect to the thirty-sixth (36th) Lease Year), by a fraction, the numerator of which shall be the CPI published for the last month of the Lease Year immediately preceding the applicable Lease Year, and the denominator of which shall be the CPI published for the last month of the thirty-fifth (35th) Lease Year.
(B) The Base Rent that was in effect during the thirty-fifth (35th) Lease Year, multiplied by a fraction, the numerator of which shall be the CPI published for the last month of the Lease Year immediately preceding the applicable Lease Year, and the denominator of which shall be the CPI published for the last month of the thirty-fourth (34th) Lease Year. (The first day of the twenty-first (21st) Lease Year and the first day of the thirty-fifty (35th) Lease Year are referred to as “Revaluation Dates”).
(b) Determination of Size of Gross Selling Area. On or before the Commencement Date, Landlord shall cause a licensed architect to determine the total square footage of the Gross Selling Area, which shall be measured from the center-line of each wall comprising the Gross Selling Area, and shall provide written notice of such determination to Tenant.
(c) Abatement of Rent in Case of Vacancy. If, during the first three (3) years of the Term, any Sublease (as hereinafter defined) is terminated by Tenant, and despite commercially reasonable efforts to re-let the affected area, Tenant is unable to do so on commercially reasonable terms, then, subject to the terms and conditions below, Tenant shall be entitled to an abatement of a portion of the Base Rent, as follows. Provided that Tenant has given the requisite notice (described in Section 3.02(C)(i) below) to Landlord and qualifies for a Base Rent abatement, during the period commencing from the date that is the later of three (3) months after the termination of the Sublease and one (1) month after Tenant’s notice to Landlord of a termination of Sublease, through the earlier of (X) the end of the third (3rd) Lease Year of the Term, and (Y) the date on which the affected area is re-let, the amount of Base Rent shall be reduced by an amount equal to the amount of Base Rent payable according to subparagraph (a) above multiplied by a fraction, the numerator of which shall be the size of the first floor area of the premises under the terminated Sublease, and the denominator of which shall be the size of the Gross Selling Area.
(i) In order to obtain a Base Rent abatement pursuant to this paragraph, Tenant shall give written notice to Landlord of the termination by Tenant of a Sublease, which notice shall include evidence of such termination, that Tenant has advertised or marketed the affected space, and the business terms on which the affected premises has been offered.
(ii) Notwithstanding anything in the foregoing to the contrary, if Landlord submits to Tenant an offer from an appropriate business engaged in a Seafood Distribution Use to sublease the vacant space on terms no less favorable to Tenant than the terms of existing Subleases, and Tenant refuses such offer, then, as of the date of Landlord’s submission of such offer, Tenant shall have no right to any rent abatement in respect of the vacant space to which the offer applied.
Section 3.03. Payments in Lieu of Taxes.
(a) PILOT exemption period. During the first twenty-one (21) Lease Years, no PILOT (as hereinafter defined) shall be payable.
(b) Payment of PILOT.
(i) Commencing with the twenty-second (22nd) Lease Year and continuing for the remainder of the Term (the “PILOT Period”), for each Tax Year or portion thereof within the Term, Tenant shall pay to Landlord, c/o City Collector, Department of Finance, Bureau of Central Real Estate, 25 Elm Place, Brooklyn, New York 11201, Attention: PILOT Administration Unit (or such other entity or address of which the Landlord shall give Tenant notice) without notice or demand, an annual sum (each such sum being hereinafter referred to as a "PILOT") in the amounts provided in Section 3.03(c) hereof, payable in equal semi-annual installments during each such Lease Year in advance on or before the first business day of each January and July (or by such other method or on such other date as the City may generally require for the payment of real estate taxes without interest or penalty). The PILOT due for any period of less than six months shall be appropriately apportioned on a per diem basis for any Tax Year that does not fall entirely within the PILOT Period.
(ii) Proration. PILOT which is calculated on a full Tax Year basis but which is due for any period of less than a full Tax Year shall be appropriately apportioned. If two or more methods of calculating PILOT for a Tax Year (as provided in subsection (b)(iv) below) are applicable to portions of a single Tax Year, the PILOT for such Tax Year will be calculated by applying each applicable method pro rata, based on the portion of the Tax Year during which each is applicable.
(iii) Adjustments. If, after a payment of PILOT with respect to a Tax Year has been made, the amount of PILOT due for such Tax Year increases, then, upon the occurrence of the event which results in the increase, the additional amount which would have been payable on the prior, scheduled payment date or dates for such Tax Year, if it had been known at the time that such event was going to occur during the Tax Year, shall be due and payable no later than thirty (30) days after notice from Landlord or Landlord's designee of such additional amounts due. If PILOT for a Tax Year decreases after a payment is made, Tenant shall be entitled to a credit, in the amount of the excess actually paid, against the next required PILOT payment.
(iv) Determination of Amount of Payment. For purposes of determining the amount of PILOT payments, it shall be assumed that the circumstances or prevailing methods of calculation of PILOT in effect on the date of such payment shall remain in effect throughout the Tax Year or remainder thereof (except for methods of calculation which are to change on a specific date solely as the result of the passage of time), with adjustments resulting from changes occurring thereafter during the Tax Year to be made pursuant to the preceding subsection (a)(iii).
(v) Photocopies. Tenant shall deliver a photocopy of each cancelled PILOT payment check to the Administrator within twenty (20) days of Tenant's receipt of such canceled check.
(c) Amount of PILOT. The amount of PILOT payable during each Lease Year of the PILOT Period shall be the product of (X) the applicable percentage set forth below and (Y) the full amount of Taxes that would be payable during the applicable Lease Year less the full amount of Taxes that would be payable during the first (1st) Lease Year (in each case, if the Premises were not exempt from real estate taxes).
(i) For the twenty-second (22nd) Lease Year, twenty percent (20%).
(ii) For the twenty-third (23rd) Lease Year, forty percent (40%).
(iii) For the twenty-forth (24th) Lease Year, sixty percent (60%).
(iv) For the twenty-fifth (25th) Lease Year, eighty percent (80%).
(v) From the twenty-sixth (26th) Lease Year through the end of the Term, one hundred percent (100%).
(d) Tax Contest. Tenant shall continue to pay the full amount of PILOT required under this Section 3.03, notwithstanding that Tenant may have instituted tax assessment reduction or other actions or proceedings pursuant to Section 32.01 hereof to reduce the assessed valuation of the Premises or any portion thereof, contest the tax rate or manner of assessment as applied to the Premises or otherwise. If any such tax reduction or other action or proceeding shall result in a final determination in Tenant's favor Tenant shall be entitled to a credit against Base Rent to the extent, if any, that the PILOT previously paid for the Tax Year for which such final determination was made exceeds the PILOT as so determined. In no event, however, shall Tenant be entitled to any cash refund of any such excess amount from Landlord.
(e) Taxes Defined. "Taxes" means the real property taxes assessed and levied against the Premises or any part thereof (or, if the Premises or any part thereof or the owner or occupant thereof is exempt from such real property taxes then the real property taxes assessed and which would be levied if not for such exemption) pursuant to the provisions of Chapter 58 of the Charter of New York City and Title 11, Chapter 2 of the Administrative Code of New York City, as the same may now or hereafter be amended, or any statute or ordinance in lieu thereof in whole or in part.
Section 3.04. Cap on Annual Increase in Base Rent and PILOT. Notwithstanding anything to the contrary contained in this Article 3, commencing with the twenty-seventh (27th) Lease Year and continuing for the remainder of the Term, the total of the increase in Base Rent and the increase in PILOT in any single Lease Year (excluding the increase from the thirty-fifth (35th) Lease Year to the thirty-sixth (36th) Lease Year) shall not exceed seven percent (7%) of the aggregate amount of Base Rent and PILOT payable during such immediately preceding Lease Year.
Section 3.05. Net Lease. It is the intention of Landlord and Tenant that except as provided in Sections 3.03(b) and 4.05 of this Lease (a) Rental be absolutely net to Landlord without any abatement, diminution, reduction, deduction, counterclaim, credit, setoff or offset whatsoever (except as expressly provided in this Lease and where not so expressly provided as may be required in any proceeding where the right to assert any claim against Landlord would be extinguished unless such a counterclaim, set off, or deduction is asserted in such proceeding) so that each Lease Year of the Term shall yield, net to Landlord, all Rental, and (b) Tenant shall pay all costs, expenses and charges of every kind relating to the Premises that may arise or become due or payable during or after (but attributable to a period falling within) the Term.
ARTICLE 4
IMPOSITIONS
Section 4.01. Payment of Impositions.
(a) Obligation to Pay Impositions. Tenant shall pay, in the manner provided in Section 4.01(c) hereof, all Impositions that, with respect to any period occurring during the Term, are, or would be, if the Premises or any part thereof or the owner thereof were not exempt therefrom, assessed, levied, confirmed, imposed upon, or would be charged to the owner of the Premises with respect to (i) the Premises, or (ii) the sidewalks or streets, in front of or adjoining the Premises, or (iii) any passageway or space in, over or under such sidewalk or street, or (iv) any other appurtenances of the Premises, or (v) any personal property or other facility used in the operation thereof, or (vi) the Rental (or any portion thereof) or any other amount payable by Tenant hereunder, or (vii) any document to which Tenant is a party creating or transferring an interest or estate in all or any part of the Premises, or (viii) the use and occupancy of the Premises, or (x) this transaction.
(b) Definition.
"Imposition" or "Impositions" means the following governmental exactions of general applicability to Persons or property or to classes of Persons or property within the City similarly situated to Tenant such that the imposition does not give rise to any discriminatory impact against Tenant:
(i) real property general and special assessments (including, without limitation, any special assessments for or imposed by any business improvement district or by any special assessment district) other than Taxes,
(ii) personal property taxes,
(iii) occupancy and rent taxes,
(iv) water, water meter and sewer rents, rates and charges,
(v) excises,
(vi) levies,
(vii) license and permit fees,
(viii) except for Taxes, any other governmental levies, fees, rents, assessments or taxes and charges, general and special, ordinary and extraordinary, foreseen and unforeseen, now or hereafter enacted, of any kind whatsoever, and
(ix) any fines, penalties and other similar govern?mental charges applicable to the foregoing, together with any interest or costs with respect to the foregoing, excluding therefrom any such fines, penalties or charges which may be imposed solely as a result of Landlord's acts or omissions in its proprietary capacity only, for which Landlord shall be responsible.
(c) Payments of Impositions.
(i) Subject to the provisions of Section 32.02 hereof, Tenant shall pay each Imposition or installment thereof not later than the date the same may be paid without interest or penalty. However, if by law, at Tenant's option, any Imposition may be paid in installments (whether or not interest shall accrue on the unpaid balance of such Imposition), Tenant may exercise the option to pay the Imposition in such installments and shall be responsible for the payment of such installments when due with such interest as may be required by law.
(ii) If Tenant twice fails within any twenty-four month period to make any payment of an Imposition (or installment thereof) on or before the date due, Tenant shall, at Landlord's request, and notwithstanding (i) above, pay all Impositions or installments thereof thereafter payable by Tenant not later than ten (10) days before the due date thereof. However, if Tenant thereafter makes all such payments as required in this paragraph (ii) for twenty-four consecutive months without failure, the Imposition payment date in (i) above shall again become applicable, unless and until there are two further failures. Nothing in this paragraph shall be construed to limit Landlord's default remedies as set forth elsewhere in this Lease after failure by Tenant to timely pay any Imposition.
Section 4.02. Evidence of Payment. Tenant shall furnish Landlord, on written request, within forty-five (45) days after the date when an Imposition is due and payable, official receipts of the appropriate taxing authority or other proof reasonably satisfactory to Landlord (canceled checks shall be satisfactory to Landlord), evidencing the payment thereof.
Section 4.03. Evidence of Non-Payment. Any certificate, advice or bill of the appropriate official designated by law to make or issue the same or to receive payment of any Imposition asserting non-payment of such Imposition shall be prima facie (but rebuttable) evidence that such Imposition is due and unpaid at the time of the making or issuance of such certificate, advice or bill, at the time or date stated therein.
Section 4.04. Apportionment of Imposition. Any Imposition relating to a fiscal period of the taxing authority, a part of which is included within the Term and a part of which is included in a period of time after the Expiration of the Term, shall be apportioned pro rata between Landlord and Tenant as of the Expiration of the Term (unless the Expiration Date has occurred as a result of an Event of Default, in which case Tenant shall not be entitled to an apportionment except for the purpose of applying such amount as a credit pursuant to Section 21.03(c) hereof).
Section 4.05. Taxes. Provided the City shall be Landlord, Landlord shall pay, cancel, or otherwise satisfy and discharge of record any and all Taxes on or before the due date thereof (which may be by bookkeeping entry, interdepartmental direction or other manner or procedure selected by Landlord). If the City shall cease to be Landlord, Landlord shall pay the Taxes on or before the due date thereof. The payment or other disposition of Taxes by Landlord under this Section 4.05 shall have no effect on Tenant's obligation to pay PILOT. If Landlord shall have failed to pay or discharge the Taxes as required hereunder and Tenant shall not have timely commenced a proceeding to contest the same as provided in Section 32.01 hereof, or if Tenant shall have timely commenced such a proceeding to contest the Taxes but failure to pay the Taxes during the pendency of such proceeding will result in the imminent loss or forfeiture of the Premises and the termination of Tenant's interest under this Lease or Tenant would by reason thereof be subject to any civil or criminal penalty or liability, then Tenant may pay such unpaid Taxes together with any interest or penalties thereon and deduct such payment from the next payment of Base Rent due, with interest at the rate (the "City's Payment Rate") which is the interest rate specified in Section 3-a(1) of the General Municipal Law of the State of New York, as it may be amended from time to time.
Section 4.06. Utility Service to Premises and Permit Area and Payment Therefor. Landlord, as part of its construction of the Building, shall install, at its sole expense, an electrical transformer of such capacity as will be reasonably required at the Premises, as further described in the specifications and drawings attached hereto and as such specifications and drawings may be amended from time to time by mutual agreement of the parties. Tenant shall be responsible for obtaining all utility services necessary for the proper operation and functioning of the Premises and the Permit Area, including, without limitation, gas, water, heat, electricity, air conditioning and telephone service. Tenant shall pay directly to the companies supplying such utility services all charges for such utility services, as the same shall become due, and the foregoing obligation shall survive the termination of this Lease. Tenant shall at its sole cost and expense, install meters for all such utility services including but not limited to, water, gas and electricity, and shall thereafter maintain such meters in good working order and repair.
Section 4.07. No Obligation on Landlord to Provide Utility Service. Notwithstanding Landlord’s obligation to install an electrical transformer as described in Section 4.06 above, Landlord shall have no obligation to provide any utility services to the Premises and the Permit Area, and Landlord shall have no responsibility or liability in the event any such utility services are not provided to the Premises and the Permit Area.
Section 4.08. Reduced Energy Rates. Without limiting Section 4.07, Landlord shall assist Tenant in its efforts to secure the benefits of any and all available energy rate reduction programs for which Tenant is eligible (whether presently existing or enacted in the future), including the City’s Energy Cost Savings Program.
ARTICLE 5
LATE CHARGES
If (a) any payment of Rental, or any other payment due hereunder, is not received by Landlord within ten (10) days after the day on which it first becomes due, or (b) Landlord has reasonably made a payment required to be made by Tenant hereunder, then a late charge on the sums so overdue or paid by Landlord, calculated at an annual rate of interest equal to eighteen percent (18%) (the "Late Charge Rate") from the date such Rental first becomes due or the date of payment by Landlord, as the case may be, to the date on which actual payment of such sums is received by Landlord, shall become due and payable to Landlord as liquidated damages for the administrative costs and expenses incurred by Landlord by reason of Tenant's failure to make payment on or before the dates such payments are due. Subject to all other provisions of this Lease, Tenant shall pay Landlord, within ten (10) days after demand, which may be made from time to time, all late charges. No failure by Landlord to insist upon the strict performance by Tenant of its obligations to pay late charges shall constitute a waiver by Landlord of its right to enforce the provisions of this Article 5 in any instance thereafter occurring. The provisions of this Article 5 shall not be construed in any way to extend the grace periods or notice periods provided for in Article 21 hereof.
ARTICLE 6
INSURANCE
Section 6.01. Insurance Requirements.
(a) Liability Insurance. At all times during the Term, Tenant, at its sole cost and expense, shall carry or cause to be carried insurance against liability with respect to the Premises and the Permit Area, and the Improvements and the operations related thereto, whether conducted on or off the Premises and the Permit Area, in an amount of not less than three million dollars ($3,000,000) per occurrence, combined single limit, and designating Tenant, Landlord, and the Administrator as additional insureds. Such insurance shall meet all of the standards, limits, minimums and requirements described in Section 6.07.
(b) Property Insurance. At all times during the Term, Tenant, at its sole cost and expense shall carry or cause to be carried all risk property damage insurance protecting Tenant and Landlord against loss to the Improvements and meeting all of the standards, limits, minimums and requirements described in Section 6.08.
(c) Other Insurance. At all times during the Term, Tenant shall carry insurance meeting all of the standards, limits, minimums, and requirements described in Section 6.09.
Section 6.02. Treatment of Proceeds.
(a) Proceeds of Insurance in General. Insurance proceeds payable with respect to a property loss shall be payable to Depository. The insurance proceeds with respect to such loss shall be held in trust by Depository for the purpose of paying the cost of the Restoration, and such proceeds shall be applied to the payment in full of the cost of such Restoration in accordance with Article 7 hereof. Notwithstanding the foregoing, insurance proceeds in respect of claims relating solely to the loss of Tenant’s personal property shall be payable to Tenant.
(b) Proceeds of Rent Insurance. Rent Insurance referred to in Section 6.09 hereof shall be carried in the name of Tenant as named insured and shall be payable to Depository. Depository shall pay Landlord, at the time and in the manner provided in Article 3 hereof, such proceeds to be applied to Base Rent and PILOT for the period from the occurrence of the damage or destruction until substantial completion of the Restoration.
(c) Cooperation in Collection of Proceeds. Tenant and Landlord shall cooperate in connection with the collection of any insurance moneys that may be due in the event of loss, and Tenant and Landlord shall as soon as practical execute and deliver such proofs of loss and other instruments as may be required of Tenant or Landlord, respectively, for the purpose of obtaining the recovery of any such insurance moneys.
(d) Adjustments for Claims. All property insurance policies required by this Article shall provide that all adjustments for claims with the insurers involving a loss be made with Landlord, except that adjustments for claims relating solely to the loss of Tenant’s personal property may be made with Tenant only.
Section 6.03. General Requirements Applicable to Policies.
(a) Insurance Companies. All of the insurance policies required by this Article shall be procured from companies licensed or authorized to do business in the State of New York that have a rating in the latest edition of "Bests Key Rating Guide" of "A:VII" or better or another comparable rating reasonably acceptable to Landlord and Tenant considering market conditions.
(b) Required Forms. All references to forms and coverages in this Article shall be those used by the Insurance Services Office of New York or equivalent forms satisfactory to Landlord and Tenant in all material respects.
(c) Required Certificates. Certificates of insurance evidencing the issuance of all insurance required by this Article, describing the coverage and guaranteeing twenty (20) days prior notice to Landlord by the insurance company of cancellation or non-renewal for non-payment and thirty (30) days prior notice to Landlord by the insurance company of any other cancellation or non-renewal for any other reason, shall have been delivered to Landlord by the Commencement Date, and in the case of any policies replacing or renewing any policies expiring during the Term, not later than thirty (30) days before the expiration dates of any expiring policies. The certificates of insurance shall be issued by the insurance company and shall bear the original signature of an officer or duly authorized agent having the authority to issue the certificate. The insurance company issuing the insurance shall also deliver to Landlord, together with the certificates, proof reasonably satisfactory to Landlord that the premiums for at least the first year of the term of each policy (or installment payments to the insurance carrier then required to have been paid on account of such premiums) have been paid. Tenant shall deliver a copy of each entire original policy, or other evidence satisfactory to Landlord of the validity and accuracy of said certificate, within ten (10) business days after request from Landlord. Notwithstanding the provisions of the prior sentence, the ten (10) day period referenced above shall be extended for as long as Tenant is diligently and in good faith attempting to obtain a copy of any policy so requested by Landlord from the insurer.
(d) Compliance With Policy Requirements. Tenant shall not violate or permit to be violated any of the conditions, provisions or requirements of any insurance policy required by this Article, and Tenant shall perform, satisfy and comply with or cause to be performed, satisfied and complied with all conditions, provisions and requirements of all such insurance policies.
(e) Required Insurance Policy Clauses. Each policy of insurance required to be carried pursuant to the provisions of this Article shall contain (i) a provision that no act or omission of Tenant shall affect or limit the obligation of the insurance company to pay the amount of any loss sustained by Landlord and/or the Administrator, other than those acts which are committed by Landlord and/or the Administrator, respectively, (ii) a written waiver of the right to subrogation with respect to all of the named insured and additional insured, including Landlord and the Administrator, (iii) a clause designating Landlord and the Administrator as loss payee or additional insured, as their interests may appear, and (iv) an agreement by the insurer that such policy shall not be canceled, modified, or denied renewal without at least thirty (30) days prior written notice to Landlord and the Administrator, specifically covering, without limitation, cancellation or non-renewal for non-payment of premium.
Section 6.04. Additional Coverage.
(a) Other Insurance. Tenant shall maintain such other insurance in such amounts as from time to time reasonably may be required by Landlord against such other insurable hazards as at the time are commonly insured against in the case of premises similarly situated to the Premises or business operations of a size, nature and character similar to the size, nature and character of the business operations being conducted at the Premises.
(b) Adjustment of Limits. All of the limits of insurance required pursuant to this Article 6 shall be subject to review by Landlord and, in connection therewith, Tenant shall carry or cause to be carried such additional amounts as Landlord may reasonably require from time to time. Landlord shall also have the right, throughout the Term, to approve the amount of any loss deductible contained in any insurance policy required pursuant to the provisions hereof, which approval Landlord shall not unreasonably withhold or delay, taking into account Tenant's financial capability to pay such deductible, market conditions, and the deductible commonly included in insurance coverages obtained with respect to premises similarly situated to the Premises or business operations of a size, nature, or character similar to the size, nature, or character of the business operations being conducted on the Premises.
Section 6.05. No Representation as to Adequacy of Coverage. The requirements set forth herein with respect to the nature and amount of insurance coverage to be maintained or caused to be maintained by Tenant hereunder shall not constitute a representation or warranty by Landlord or Tenant that such insurance is in any respect adequate.
Section 6.06. Intentionally Omitted
Section 6.07. Liability Insurance Requirements. The insurance required by Section 6.01(a) shall consist of commercial general liability insurance protecting against liability for bodily injury, death, property damage, and personal injury. Such insurance shall:
(a) include a broad form property damage liability endorsement with fire legal liability limit of not less than $50,000;
(b) contain blanket contractual liability insurance covering written and oral contractual liability as is provided under standard ISO forms, as in effect from time to time;
(c) contain contractual liability insurance specifically covering Tenant's indemnification obligations under Article 17 hereof as is provided under standard ISO forms, as in effect from time to time;
(d) contain independent contractors coverage;
(e) contain a notice of occurrence clause;
(f) contain a knowledge of occurrence clause;
(g) contain an unintentional errors and omissions clause;
(h) contain coverage for suits arising from the use of reasonable force to protect persons and property;
(i) contain a cross liability endorsement;
(j) contain coverage for water damage and sprinkler leakage legal liability?;
(k) contain coverage for owned and non-owned automobiles;
(l) contain Products Liability/Completed Operations coverage;
(m) provision for a deductible of not more than $5,000 per loss; and
(n) contain no non-standard exclusions or deductibles unless specifically approved in each instance by Landlord, which approval will not be unreasonably withheld, delayed or conditioned.
Section 6.08. Property Insurance Requirements. The insurance required by Section 6.01(b) shall consist at least of property damage insurance under an "All Risk" policy or its equivalent covering the Premises and all Improvements with replacement cost valuation and a stipulated value endorsement in an amount not less than the full Replacement Value (determined in
accordance with Section 6.11) and including the following coverages or clauses:
(i) coverage for physical loss or damage to the Improvements;
(ii) a replacement cost valuation without depreciation or obsolescence clause;
(iii) debris removal coverage;
(iv) provision for a deductible of not more than $5,000 per loss, except for flood and earthquake coverage, which shall have a deductible of $25,000;
(v) contingent liability from operation of building laws;
(vi) demolition cost for undamaged portion coverage;
(vii) increased cost of construction coverage;
(viii) an agreed or stipulated amount endorsement negating any coinsurance clauses;
(ix) flood coverage;
(x) earthquake coverage;
(xi) hurricane coverage;
(xii) coverage for explosion caused by steam pressure-fired vessels (which coverage may be provided under a separate policy reasonably approved by Landlord);
(xiii) a clause designating Landlord as insured; and
(xiv) contain no non-standard exclusion or deductible unless approved in writing by Landlord, which approval will not be unreasonably withheld or delayed.
If Tenant elects to insure Tenant's personal property used in connection with the Premises, the replacement value of such personal property shall be added to the amount of insurance required by this Section. If not included within the All Risk coverage above, Tenant shall also carry or cause to be carried coverage against damage due to water and sprinkler leakage and collapse, flood and earthquake, which shall be written with limits of coverage of not less the full Replacement Value per occurrence.
Section 6.09. Other Insurance Requirements. The insurance required by Section 6.01(c) shall consist at least of the following:
(a) Rent Insurance on an "All Risk" basis in an amount not less than the aggregate Base Rent and PILOT payable for the one year period immediately following the loss. The insurance specified in this subsection shall:
(i) provide coverage against all insurable risks of physical loss or damage to the Improvements;
(ii) provide for a twelve (12) month coverage period;
(iii) contain flood and hurricane coverage if obtainable at commercially reasonable rates;
(iv) contain earthquake coverage, if obtainable at commercially reasonable rates;
(v) contain explosion caused by steam pressure-
fired vessels coverage;
(vi) provide for a deductible of not more than $5,000;
(vii) designate Landlord and Tenant as loss payees; and
(viii) contain no exclusion or deductible unless approved in writing by Landlord, which approval will not be unreasonably withheld or delayed.
(b) Statutory Workers' Compensation and Disability Benefits Insurance and any other insurance required by law covering all persons employed by Tenant, contractors, subcontractors, or any entity performing work on or for the Premises and the Permit Area or the Improvements (unless and to the extent provided by such other parties), including Employers Liability coverage, all in amounts not less than the statutory minimum, except that Employers Liability coverage shall be in an amount not less than $500,000.
(c) Boiler and Machinery Insurance, covering the entire heating, ventilating and air-conditioning systems, in all its applicable forms, including Broad Form, boiler explosion, extra expense and loss of use in an amount not less than the replacement cost of such heating, ventilating and air-conditioning systems, located on any portion of the Premises and other machinery located on such portion of the Premises, which shall name Landlord and Tenant as insured and the Depository as loss payee for the benefit of Landlord and Tenant, as their interests may appear.
Section 6.10. Annual Aggregates. If there is imposed under any liability insurance policy required hereunder an annual aggregate which is applicable to claims other than products liability and completed operations, such an annual aggregate shall not be less than two (2) times the per occurrence limit required for such insurance.
Section 6.11. Determination of Replacement Value.
(a) Definition. The current replacement value of the Premises (the "Replacement Value") shall be the full cost of replacing the Premises, including, without limitation, all hard costs of construction as well as the costs of post-casualty debris removal, and soft costs, including without limitation, architect's and development fees, but exclusive of the cost of foundation and excavation. Replacement Value shall be determined by an appraiser or other qualified professional, selected and paid by Tenant and reasonably approved by Landlord, initially on the Commencement Date and at such additional times as Landlord may reasonably request, which shall not be more often than once every five (5) years. The parties agree that if the insurance required by Section 6.08 above is not sufficient to cover the Replacement Value, then within fifteen (15) days after such appraisal or other permitted determination, said insurance shall be increased or supplemented to fully cover such Replacement Value. In no event shall such Replacement Value be reduced by depreciation or obsolescence of the Improvements.
(b) Adjustment. The amount of Replacement Value shall be adjusted on each anniversary of the initial determination of Replacement Value and of each subsequent redetermination of Replacement Value throughout the Term by a percentage equal to the percentage change in the Building Index in effect on such anniversary date as compared to the Building Index, if any, in effect on the Commencement Date or latest date of redetermination, or as determined by the appraiser or other qualified professional referred to in Section 6.11(a) hereof.
(c) Building Index. As used herein, the "Building Index" shall mean the Dodge Building Cost Index or such other published index of construction costs which shall be selected from time to time by Landlord and reasonably agreed to by Tenant, provided that such index shall be a widely recognized measure of construction costs in the insurance industry and appropriate to the type and location of the Improvements.
Section 6.12. Subleases. All Subleases shall require the Subtenant to carry liability insurance in any amount of not less than one million dollars ($1,000,000) per occurrence, combined single limit, and naming Tenant, Landlord, and the Administrator, as additional insureds.
Section 6.13. Additional Interests. All liability policies shall contain a provision substantially to the effect that the insurance provided under the policy is extended to apply to Landlord and Landlord's agent, if any.
ARTICLE 7
DAMAGE, DESTRUCTION AND RESTORATION
Section 7.01. Obligation of Tenant to Restore. If all or any part of the Improvements shall be destroyed or damaged, in whole or in part, by fire or other catastrophe of any kind or nature (including any catastrophe for which insurance was not obtained or obtainable), foreseen or unforeseen, Tenant shall give to Landlord prompt notice thereof, and whether or not such damage or destruction shall have been insured, and whether or not insurance proceeds, if any, shall be sufficient to pay the cost of repairs, alterations, restorations, replacements and rebuilding (collectively "Restoration"), Tenant, with reasonable promptness and reasonable diligence, subject to reasonable delays due to reservations made by insurers which delay the payment of proceeds provided the Tenant shall diligently pursue all insurance claims, shall repair, alter, restore, replace and rebuild (collectively "Restore") the same, at least to the extent of the value and as nearly as reasonably possible to the character of the Improvements immediately existing prior to such occurrence. Landlord, in no event, shall be called upon to Restore any of the Improvements now or hereafter existing or any portion thereof, or pay any of the costs or expenses thereof. If Tenant shall fail or neglect to Restore the Improvements or the portion thereof so damaged or destroyed with reasonable diligence or having so commenced such Restoration shall fail to complete the same with reasonable diligence in accordance with the terms of this Lease or if, prior to the completion of any such Restoration by Tenant, this Lease shall expire or be terminated for any reason, Landlord may, after giving Tenant fifteen (15) days' notice, complete the same at Tenant's expense. All such Restoration work shall be done in accordance with the provisions of this Lease.
Section 7.02. Treatment of Insurance Proceeds. Proceeds of insurance shall be deposited by Landlord with the Depository. Subject to and in accordance with the provisions of this Section and Section 7.03 hereof, Landlord shall cause to be paid over to Tenant from time to time any moneys in held by Depository. Prior to the making of any Restoration, Tenant shall furnish Landlord with an estimate of the cost of such Restoration prepared by a licensed architect selected and paid for by Tenant and approved by Landlord which approval shall not be unreasonably withheld, delayed, or conditioned, and such insurance proceeds shall be paid to Tenant promptly from time to time thereafter in installments as the restoration progresses upon application to be submitted by Tenant to Landlord showing the cost of labor and material incorporated in the Restoration, or incorporated therein since the last previous application, paid for or which is then payable by Tenant and certified by an architect. If any vendor's, mechanic's, laborer's, or materialman's lien is filed against the Premises or the Permit Area or any part thereof, or if any public improvement lien is created or permitted to be created by Tenant and is filed against Landlord, Tenant shall not be entitled to receive any further installment until such lien is bonded, satisfied or otherwise discharged. Upon substantial completion of and payment for the Restoration by Tenant, the balance of any and all insurance proceeds shall be paid over to Tenant. If the insurance proceeds are insufficient for the purpose of paying for the Restoration, Tenant shall nevertheless be required to make the Restoration and pay any additional sums required for the Restoration. If Tenant fails to make the Restoration, such failure shall be a default for which Landlord may declare an Event of Default and terminate this Lease pursuant to Article 21. If Landlord so terminates the Lease, the insurance proceeds shall be paid over to Landlord as its sole property, and the security deposit provided for in Article 26 shall be forfeited to Landlord. Notwithstanding the foregoing, if Landlord makes the Restoration at Tenant's expense, as provided in Section 7.01 hereof, then Landlord shall have the right to retain all insurance proceeds for that purpose.
Section 7.03. Conditions to Disbursements of Insurance Proceeds. The following shall be conditions precedent to each disbursement paid to Tenant as provided in Section 7.02 above:
(a) there shall be submitted to Landlord the certificate of the Tenant's architect aforesaid stating (i) that the sum then requested to be withdrawn either has been paid by Tenant and/or is justly due (in which case Tenant undertakes to receive such sum in trust and to immediately pay such amounts due) to contractors, subcontractors, materialmen, engineers, architects or other persons (whose names and addresses shall be stated) who have rendered or furnished services or materials for the work and giving a brief description of such services and materials and the principal subdivisions or categories thereof and the several amounts so paid or due to each of said persons in respect thereof, and stating in reasonable detail the progress of the work up to the date of said certificates; (ii) that no part of such expenditures has been or is being made the basis, in any previous or then pending request, for the withdrawal of insurance received by Tenant; (iii) that the sum then requested does not exceed the reasonable value of the services and materials described in the certificate; and (iv) the architect's then current estimate of the cost of completing the Restoration;
(b) there shall be furnished to Landlord lien waivers and releases from the contractors, subcontractors, laborers or materialmen who performed work or furnished materials for the Restoration with respect to such work performed or materials furnished.
(c) the balance of money on deposit with the Depository shall not be reduced below the amount specified in the architect's estimate of the then cost of completing the Restoration.
(d) there shall be furnished to Landlord an official search, or a certificate of a title insurance company or other such assurances reasonably satisfactory to Landlord, showing that there has not been filed any vendor's, mechanics, laborer's or materialman's statutory or other similar lien affecting the Premises or the Permit Area or any part thereof, or any public improvement lien created or permitted to be created by Tenant affecting Landlord, which will not be discharged upon payment of the amount then requested to be withdrawn, or if a search shows any such lien, then there shall be retained in the undisbursed proceeds of insurance an amount sufficient to complete the Restoration plus an amount equal to the mechanics' lien or liens shown on the search report, provided that Tenant demonstrates to Landlord that it is in good faith contesting the underlying claim of the mechanics' lienor; and
(e) at the time of making such payment, Tenant shall not be in default in the payment of Rental and there shall be no unremedied Event of Default on the part of Tenant.
Section 7.04. Restoration Costs in Excess of Insurance Proceeds. If the estimated cost of any Restoration required by the terms of this Article 7 exceeds the net insurance proceeds, then, prior to the commencement of any Restoration, Tenant shall deposit with Landlord cash or a surety bond, or other security, reasonably satisfactory to Landlord in the amount of such excess, to be held and applied by Landlord in accordance with the provisions of Section 7.02 hereof, as security for the completion of the work, free of public improvement, vendor's, mechanic's, laborer's or materialman's statutory or other similar liens. If Tenant is contesting the underlying claim of any mechanics' lienors as provided in Section 7.03(d) hereof and the estimated cost of completing the Restoration plus the cost of satisfying all outstanding mechanics' liens being contested in good faith exceeds undisbursed insurance proceeds, Tenant shall deposit with Landlord cash or a surety bond or other security, reasonably satisfactory to Landlord, to be held and applied as above.
Section 7.05. Destruction During Last Five Years of Term. If the Premises are destroyed or substantially destroyed by fire or other catastrophe at any time during the last five (5) years of the Term of this Lease, then Tenant shall be under no obligation to restore if Tenant shall have terminated this Lease by giving sixty (60) days' notice to Landlord and upon assigning over to Landlord all of Tenant's right, title and interest in and to all available insurance proceeds but subject to the continuing obligation of Tenant to assist in the prosecution of all insurance claims.
Section 7.06. No Rights of Tenant to Surrender Upon Destruction; No Abatement of Rental. Except as set forth in Section 7.05 hereof, this Lease shall not terminate or be forfeited or be affected in any manner by reason of damage to or total, substantial, or partial destruction of the Premises or any part thereof or by reason of the untenantability of the same or any part thereof, for or due to any reason or cause whatsoever, and Tenant, notwithstanding any law or statute present or future, waives any and all rights to quit or surrender the Premises or any part thereof. Tenant expressly agrees that its obligations hereunder, including the payment of Rental payable by Tenant, shall continue as though the Premises had not been damaged or destroyed and without abatement, suspension, diminution or reduction of any kind. Notwithstanding the provisions of the prior sentence, the parties agree that if the Premises are destroyed or substantially destroyed by fire or other catastrophe and provided that Tenant is diligently and in good faith proceeding with rebuilding the Premises in accordance with all of the provisions of this Lease, the Base Rent obligations of Tenant shall be abated in proportion to the untenantable portion of the Premises after the first year anniversary of the damage or destruction until such date as the Building has been substantially completed, provided Tenant continues such restoration work, diligently, in good faith, and in accordance with all provisions of the Lease. Landlord and Tenant intend that the foregoing is an express agreement to the contrary" as provided in Section 227 of the Real Property Law of the State of New York.
ARTICLE 8
CONDEMNATION
Section 8.01. Certain Definitions.
(a) "Taking" shall mean a taking of the Premises or any part thereof for any public or quasi-public purpose by any lawful power or authority by the exercise of the right of condemnation or eminent domain or by agreement among Landlord, Tenant and those authorized to exercise such right irrespective of whether the same affects the whole or Substantially All of the Premises or a lesser portion thereof but shall not include a taking of the fee interest in the Premises or any portion thereof if, after such taking, Tenant's rights under this Lease are not affected.
(b) "Substantially All of the Premises" shall be deemed to mean such portion of the Premises as would leave remaining after a Taking a balance of the Premises which would not readily accommodate a facility to support the uses described in Section 20.01 hereof on a commercially reasonable basis due either to the area so taken or the location of the part so taken in relation to the part not so taken in light of economic conditions, zoning laws, physical constraints, or building regulations then existing or prevailing and after performance by Tenant of all covenants, agreements, terms and provisions contained herein or by law required to be observed by Tenant.
(c) "Date of Taking" shall be deemed to be the date on which title to the whole or Substantially All of the Premises or a lesser portion thereof, as the case may be, shall have vested in any lawful power or authority pursuant to the provisions of applicable federal, state, or local condemnation law or the date on which the right to the temporary use of the same has so vested in any lawful power or authority as aforesaid.
Section 8.02. Permanent Taking.
(a) Taking of the whole etc. If during the Term there shall be a Taking of the whole or Substantially All of the Premises (other than a temporary Taking), the following consequences shall result:
(i) this Lease and the Term shall terminate and expire on the Date of Taking and the Rental payable by Tenant hereunder shall be apportioned to the Date of Taking, and all such Rental shall be paid to Landlord on the Date of Taking; and
ii) the entire award payable in respect of such Taking shall be paid to Landlord, except that Landlord shall pay to Tenant an amount equal to the unamortized portion, as of the Expiration Date, of the costs of any Capital Improvements to the Premises that were made by Tenant in accordance with the terms of this Lease, provided that such costs are documented to Landlord’s reasonable satisfaction. For the purpose of the foregoing, the amortization period for all Capital Improvements shall be deemed to be ten (10) years. Notwithstanding the foregoing, Tenant shall be entitled to any award made on account of trade fixtures.
(iii) Notwithstanding anything herein to the contrary, if Landlord determines, in its sole and absolute discretion, to apply the proceeds of the condemnation award to create a new Wholesale Seafood Distribution Market, which contains approximately the same Gross Selling Area as the Building (the “Replacement Market”), Landlord shall retain the entire condemnation award payable to Landlord. If Landlord determines not to use the award to create the Replacement Market, Landlord agrees it shall seek to receive an award for reasonable fair market value of the Premises and that after receipt of any such award, it shall pay to Tenant the greater of: (i) ten percent (10%) of the amount of the award actually received by Landlord, or (ii) the cost of Tenant’s moving expenses to new premises, provided (a) such moving expenses do not exceed Landlord’s award, and (b) Tenant has not otherwise been compensated for such moving expenses. If Tenant is otherwise compensated for its moving expenses, and such moving expenses do not exceed ten (10%) of Landlord’s award, then such moving expenses shall be credited against the ten (10%) of the Landlord’s award that is payable to Tenant.
(b) "Partial Taking." If there shall be a Taking of less than Substantially All of the Premises (as defined in Section 801(b)) (other than a temporary Taking), the following consequences shall result:
(i) this Lease and the Term shall continue without diminution of any of Tenant's obligations hereunder, except that this Lease shall terminate as to the portion of the Premises so taken, and from and after the Date of Taking, a just proportion of Base Rent as fixed by mutual agreement of Landlord and Tenant, according to the extent and nature of such Taking, shall abate for the remainder of the Term; and
(ii) Tenant shall at its sole cost and expense proceed with diligence to effect a restoration of the remaining portion of the Premises not so taken, so that the remaining Premises shall be a complete, self-contained architectural unit.
Section 8.03. Temporary Taking.
(a) Not extending beyond Term. If during the Term there shall be a Taking of the temporary use of the whole or Substantially All of the Premises or a lesser portion thereof for a period not extending beyond the Term (a "Temporary Taking"), the following consequences shall result:
(i) this Lease and the Term shall continue without reduction or diminution of any of Tenant's obligations hereunder and Tenant shall continue to pay in full the Rental payable by Tenant hereunder without reduction or abatement, but Tenant shall be entitled to receive for itself any award or payments for such use to the extent provided in Section 8.03(a)(iii) hereof;
(ii) if such Taking results in changes or alterations to the Premises or any part thereof, Tenant shall effect a restoration with respect thereto;
(iii) the award or payment payable with respect to such Taking shall be paid to and held by the Depository and (X) shall, to the extent Tenant has not already paid the Rental for such period in question, first be disbursed by the Depository to Landlord on account of the Rental payable by Tenant as and when the same shall become due and payable hereunder, and the balance shall be disbursed to Tenant; provided however, that if Tenant shall be required to effect a restoration pursuant to Section 8.03(a)(ii) hereof, then (Y) a portion of such award or payment equal to the estimated cost of such restoration shall instead be retained by the Depository for the purpose of paying the restoration and shall be disbursed by the Depository to Tenant hereof with any balance remaining thereafter to be applied in accordance with Section 8.03(a)(iii)(X) hereof.
(b) Extending Beyond Lease Term. If during the Term there shall be a Taking of the temporary use of the whole or Substantially All of the Premises or a lesser portion thereof for a period extending beyond the Term, the consequences specified in clauses(i), (ii) and (iii) of Section 8.03(a) hereof shall result, except that the award or payment payable with respect to such Taking shall be apportioned between Landlord and Tenant as of the last day of the Term. The amount of the award or payment attributable to the period up to and including the last day of the Term shall be paid and applied in accordance with the provisions of Section 8.03(a)(iii) hereof, and the portion of the award attributable to the period after the last day of the Term shall belong to Landlord; provided, however, that the amount of any award or payment allowed or retained to pay for a restoration which shall not have been previously applied for that purpose, shall remain the property of, and shall be paid over to Landlord if this Lease shall terminate for any reason prior to completion of the restoration in accordance with the provisions of this Article.
Section 8.04. Governmental Action Not Resulting in a Taking. In case of any governmental action not resulting in a Taking but creating a right to compensation therefor, such as the changing of the grade of any street upon which the Premises abut, then this Lease shall continue in full force and effect without reduction or abatement of Rental; provided, however, that if such governmental action results in changes or alterations of the Premises, then Tenant shall effect a restoration with respect thereto. Any award payable in the case of such governmental action shall be paid to and held by the Depository and shall be applied first to Tenant by Depository for the purpose of paying for the cost of the restoration. Any balance of the award remaining after completion of the restoration shall be shared by Tenant and Landlord based upon the value of their respective interests in the Premises at that time.
Section 8.05. Insufficient Award. If Tenant is required to effect a restoration pursuant to this Article 8 and the award is insufficient for the purpose of paying for such restoration in full, Tenant may elect not to make such restoration, with the consequences contained in Section 8.02(a); provided, however that if Landlord elects to make such a restoration, (i) this Lease and the term shall continue without reduction or diminution of any of Tenant's obligations, except as provided for in Section 8.02(b)(i), and (ii) the entire award payable on account of such award shall be paid to Landlord.
Section 8.06. Collection of Awards. Each of the parties shall execute documents that are reasonably required to facilitate collection of any awards made in connection with any condemnation proceeding referred to in this Article and shall cooperate with each other to permit collection of the award.
Section 8.07. Landlord's Right To Award on Termination. Notwithstanding anything to the contrary contained herein, the amount of any award or payment allowed or retained to effect a restoration which shall not have been previously applied to that purpose shall become the property of and shall be paid over to the Landlord, if this Lease shall terminate for any reason prior to completion of said restoration in accordance with the provisions of this Article 8.
Section 8.08. Allocation of Award. Upon a Taking, the parties shall make every effort to agree to an allocation of the award or payment as delineated in Section 8.02.
Section ?8.09. Tenant's Appearance at Condemnation Proceedings?. Tenant shall have the right to appear in any condemnation proceedings and to participate in any and all hearings, trials, and appeals in connection therewith.
Section 8.10. Intention of the Parties. The existence of any present or future law or statute notwithstanding, Tenant waives all rights to quit or surrender the Premises or any part thereof by reason of any Taking of less than Substantially All of the Premises. It is the intention of Landlord and Tenant that the provisions of this Article 8 shall constitute an "express agreement to the contrary" as provided in Section 227 of the Real Property Law of the State of New York and shall govern and control in lieu thereof.
ARTICLE 9
ASSIGNMENT, TRANSFER AND SUBLETTING
Section 9.01. Tenant's Right to Assign, Transfer, Etc.
(a) Limitations on Right to Assign, Transfer or Enter into a Sublease. Except as otherwise provided in this Article 9, Tenant shall not, without the prior written consent of Landlord in its sole discretion, in each instance, at any time during the Term enter into or authorize a Capital Transaction.
(b) Definitions.
(i) "Assignment" means the sale, exchange, assignment or other disposition, whether by operation of law or otherwise, of all or any portion of (X) Tenant's interest in this Lease or the leasehold estate created hereby; (Y) a Subtenant's interest in a Sublease or the leasehold estate created thereby, or (Z) a Vendor’s interest in a Vendor Contract.
(ii) "Assignee" means an assignee under an Assignment.
(iii) "Capital Transaction" means (X) an Assignment, a Transfer, a Sublease, or any other transaction by which any of the benefits of ownership or control of the leasehold estate created hereby are transferred in a manner which would constitute the functional equivalent of an Assignment, Transfer, or Sublease, or (Y) an Assignment of a Vendor Contract or a Transfer that concerns the contractor under a Vendor Contract.
(iv) "Equity Interest" means, with respect to any entity, (A) the beneficial ownership of (i) outstanding stock, or the right to buy outstanding stock, of such entity if such entity is a corporation, a real estate investment trust or a similar entity, (ii) a capital, profits, or partnership interest in such entity, or the right to buy such an interest, if such entity is a partnership or joint venture, (iii) interest in a trust, or the right to buy such an interest, if such entity is a trust, (B) any right of a mortgagee to participate in cash flow, gross or net profits, gain or appreciation, or (C) any other beneficial interest that is the functional equivalent of any of the foregoing.
(v) "Permitted Person" shall mean any Person which shall have met the following conditions: (A) such Person submits to the City's "Vendex" background investigation system (or any successor system serving the same function) sixty days prior to the anticipated date of the proposed Capital Transaction for the purpose of determining whether such Person is a Prohibited Person; (B) such Person is found not to be a Prohibited Person; and (C) such Person has been registered and/or approved pursuant to the Market Regulations.
(vi) "Sublease" means any sublease (including a sublease or any further level of subletting), occupancy, license, franchise or concession agreement applicable to the Premises or any part thereof.
(vii) "Subtenant" means any subtenant operator, licensee, franchisee, concessionaire or other occupant of the Premises or any portion thereof other than Tenant.
(viii) "Transfer" means any disposition of an Equity Interest in Tenant, any Subtenant or any Vendor, or in any direct or indirect constituent entities of any of the foregoing (such as the members or shareholders of Tenant), where such disposition directly or indirectly produces any change in the direct or indirect beneficial ownership of an interest in, or control of Tenant, any Subtenant or any Vendor. The term "Transfer" also includes any (i) transaction or series of transactions, including, without limitation, the issuance of additional Equity Interests in, or (ii) direct or indirect revision of the beneficial ownership structure or control of, Tenant, any Subtenant, or any Vendor, or any direct or indirect constituent entity of any of the foregoing which, in either case, produces any change in the direct or indirect beneficial ownership of an interest in, or control of, Tenant, any Subtenant or any Vendor.
(ix) "Transferee" means a Person to whom a Transfer is made.
(x) “Vendor” means a Person providing services to Tenant and/or any Subtenant(s) at or in respect of the Premises or in connection with any operations thereat (e.g., property management, security services, distribution services, parking lot/gate operations, carting, loading and unloading, and ice and refrigeration services).
(xi) “Vendor Contract” means a contract with a Vendor for services at or in respect of the Premises or in connection with any operations thereat.
(c) Definition of Prohibited Persons. The term "Prohibited Person" as used in this Lease shall mean:
(i) Any Person (A) that is in default or in breach, beyond any applicable grace period, of its obligations under any written agreement with EDC or the City, or (B) that directly or indirectly controls, is controlled by, or is under common control with a Person that is in default or in breach, beyond any applicable grace period, of its obligations under any written agreement with EDC or the City, unless such default or breach has been waived in writing by EDC or the City, as the case may be.
(ii) Any Person (A) that has been convicted in a criminal proceeding for a felony or any crime involving moral turpi?tude or that is an organized crime figure or is reputed to have substantial business or other affiliations with an organized crime figure, or (B) that directly or indirectly controls, is controlled by, or is under common control with a Person that has been convicted in a criminal proceeding for a felony or any crime involving moral tur?pitude or that is an organized crime figure or is reputed to have substantial business or other affiliations with an organized crime figure.
(iii) Any government, or any Person that is directly or indirectly controlled (rather than only regulated) by a govern?ment, that is finally determined to be in violation of (including, but not limited to, any participant in an international boycott in violation of) the Export Administration Act of 1979, or its successor, or the regulations issued pursuant thereto, or any government that is, or any Person that, directly or indirectly, is controlled (rather than only regulated) by a government that is subject to the regulations or controls thereof.
(iv) Any government, or any Person that, directly or indirectly, is controlled (rather than only regulated) by a government, the effects of the activities of which are regulated or controlled pursuant to regulations of the United States Treasury Department or executive orders of the President of the United States of America issued pursuant to the Trading with the Enemy Act of 1917, as amended.
(v) Any Person that has received written notice of default in the payment to the City of any Taxes (as defined in Section 3.03(d) hereof), sewer rents or water charges, unless such default is then being contested with due diligence in proceedings in a court or other appropriate forum.
(vi) Any Person (A) that has owned at any time in the preceding three (3) years any property which, while in the ownership of such Person, was acquired by the City by in rem tax foreclosure, other than a property in which the City has released or is in the process of releasing its interest to such Person pursuant to the Administrative Code of the City, or (B) that, directly or indirectly controls, is controlled by, or is under common control with a Person that has owned at any time in the preceding three (3) years any property which, while in the ownership of such Person, was acquired by the City by in rem tax foreclosure, other than a property in which the City has released or is in the process of releasing its interest to such Person pursuant to the Administrative Code of the City.
With respect to the determination of which Persons are Prohibited Persons, (i) Landlord's determination that a particular Person is not a Prohibited Person shall be made only once with respect to any such Person, and shall not be subject to change by Landlord, except (X) in the event of a material change in any facts or circumstances concerning such Person, or (Y) in the event that Landlord’s initial determination was affected by fraud or misstatement by any Person, and (ii) contacts by a Person with a Prohibited Person that are made solely in connection with the review and negotiation of a proposed Capital Transaction shall not, alone, cause a Person to be deemed a Prohibited Person.
(d) Determination of Organized Crime Figure. The determination as to whether any Person is an organized crime figure or is reputed to have substantial business or other affiliations with an organized crime figure or directly or indirectly controls, is controlled by, or is under common control with a Person that is an organized crime figure or is reputed to have substantial business or other affiliations with an organized crime figure shall be within the sole discretion of Landlord exercised in good faith.
(e) Invalidity of Transactions. Any Capital Transaction entered into without Landlord's consent to the extent required in this Lease, or which in any other respect fails to comply with the provisions of this Lease, shall have no validity and shall be null and void and without any effect.
Section 9.02. Permitted Subleases. Notwithstanding the provisions of Section 9.01(a) hereof, Landlord hereby consents to each Sublease from Tenant to each of the Wholesalers who have executed the Development Agreement and who have become initial members of the Cooperative, provided that (i) each such Wholesaler is a Permitted Person and is otherwise in compliance with all provisions of this Lease and the Development Agreement, and, (ii) except as provided in section 9.02(d)(i), such Sublease Agreement is in a form approved by Landlord, in its sole discretion. Each such Sublease shall grant non-disturbance protection to, and require attornment from, each Sublessee in the event that this Lease is terminated. Tenant may further, at any time during the Term, enter into any other Subleases for any portion of the Rentable Area for Seafood Distribution Uses to a Subtenant who is a Permitted Person, subject to the following:
(a) Notice to Landlord. Tenant shall notify Landlord of its intention to enter into any Sublease not less than thirty (30) days before the proposed effective date of such Sublease.
(b) Contents of Notice. The notice required by subparagraph (a) above shall contain the name and address of the proposed Subtenant, and the following information:
(i) in the case of a proposed corporate Subtenant, or in the case of a corporate general partner or joint venturer of a partnership or joint venture that is the proposed Subtenant, a certificate of an authorized officer of such corporation giving the names and addresses of all current directors and officers of the corporation and Persons having more than a ten percent (10%) interest in such Subtenant;
(ii) in the case of a proposed partnership or joint venture Subtenant, a certificate of the managing general partner or other authorized general partner or managing venturer of the proposed Subtenant, giving the names and addresses of all current general and limited partners and joint venturers of the partnership or joint venture and describing their respective interests in said partnership or joint venture;
(iii) evidence that the proposed Subtenant is registered and approved pursuant to all Market Regulations; and
(iv) a copy of the proposed Sublease.
(c) Change in Circumstances. If Tenant becomes aware of any change in circumstances prior to the closing of the transaction that renders the information provided in (b) above incomplete or incorrect, Tenant shall notify Landlord of the change, which notification, if relating to a change which is material in any respect in Landlord's reasonable judgment, shall recommence the period for Landlord's notification to Tenant under subparagraph (g) below. In connection with this subparagraph, Tenant shall use reasonable efforts to keep apprised of any change in circumstances that would give rise to an obligation to notify Landlord under this paragraph.
(d) Required Form or Provisions of Sublease
(i) If the proposed Sublease is a proprietary Sublease, it is in the form of Proprietary Sublease that has been approved by Landlord, or such other form as may be approved in writing by Landlord in its reasonable discretion.
(ii) If the proposed Sublease is not a proprietary Sublease, it shall:
(A) contain a diagram of the proposed Sublease area;
(B) state the percentage of the Gross Selling Area covered by the Sublease;
(C) provide that Subtenant shall maintain liability insurance, naming Landlord, Administrator and Apple Industrial Development Corp. as additional insureds, in the minimum amount of $1,000,000;
(D) state the amount of rental and other charges under the Sublease;
(E) provide that the Sublease is subject and subordinate to this Lease;
(F) provide that, except for security deposits and any other amounts deposited with Tenant in connection with the payment of insurance premiums or real property taxes and assessments and other similar charges or expenses, the Subtenant shall not pay rent or other sums payable under the Sublease to Tenant for more than two (2) months in advance;
(G) provide that, at Landlord's option, on the termination of this Lease pursuant to Tenant’s default, the Subtenant shall attorn to, or shall enter into a direct lease on terms identical to its Sublease with Landlord for the balance of the unexpired term of the Sublease;
(H) provide that Subtenant shall comply with the Non-Discrimination and Affirmative Action requirements of this Lease;
(I) provide that Subtenant shall comply with all Requirements, including the Market Regulations;
(J) provide that Subtenant agrees to defend, indemnify and hold the Indemnitees harmless substantially to the same extent and in the same manner as does Tenant pursuant to Article 17 hereof; and
(K) provide that during the Term of the Sublease, Subtenant shall not, without the prior written consent of Landlord and Tenant, (1) make an Assignment of the Subtenant's interest in its Sublease or the leasehold estate created thereby, (2) enter into a further Sublease, or (3) convey any Equity Interest or issue additional Equity Interests in the Subtenant except to a Permitted Person.
(L) provide that Subtenant shall maintain full and accurate books of account and records of Subtenant's business operation or enterprise for at least six (6) years after the end of each Lease Year; and shall make such books and records available if required by law or regulation.
(f) Tenant as Shareholder or Member. If the Subtenant is not a shareholder or member of Tenant, the proposed Sublease shall not cause more than ten percent (10%) of the Gross Selling Area to be subleased to Persons who are not shareholders or members of Tenant.
(g) Objections and Waiver. Landlord shall notify Tenant, within thirty (30) days after receipt of notice from Tenant pursuant to subparagraph (a) above and submission of all necessary information, whether Landlord's consent to such assignment is given or denied and if denied, the reasons therefor.
(h) Delivery of Sublease. Within fifteen (15) days after the execution of the Sublease, Tenant shall deliver to Landlord an executed counterpart of the Sublease.
Section 9.03. Subleases Other than For Seafood Distribution Uses. Tenant shall not have the right to enter into Subleases other than for the use of the Rentable Area for Seafood Distribution Uses without Landlord’s prior written consent.
Section 9.04. Tenant's Obligation to Enforce Subleases. During the Term, Tenant shall cause all Subtenants and Vendors to comply with their obligations under their respective Subleases and Vendor Contracts. A violation or breach of any of the terms, provisions or conditions of this Lease that results from, or is caused by, an act or omission by a Subtenant or a Vendor shall not prevent such violation or breach from being an Event of Default hereunder nor relieve Tenant of Tenant's obligation to cure such violation or breach, provided that Landlord shall provide Tenant with a reasonable period to cause such Subtenant or Vendor to cure such violation or breach.
Section 9.05. Security Assignment.
(a) Assignment of Subleases to Landlord. As security for Tenant's obligations hereunder, Tenant hereby assigns, transfers and sets over unto Landlord, all of Tenant's right, title and interest in and to all Subleases and hereby confers upon Landlord, its agents and representatives, a right of entry in, and sufficient possession of, the Premises to permit and ensure the collection by Landlord of all sums payable under the Subleases and enforcement of all other rights of Tenant under the Subleases. The exercise of such right of entry and qualified posses?sion by Landlord shall not constitute an eviction of Tenant from the Premises or any portion thereof. If such right of entry and pos?session is denied to Landlord, its agents or representatives, Land?lord, in the exercise of this right, may use all requisite force to gain and enjoy the Premises with neither responsibility for, nor liability to Tenant, its servants, employees, guests or invitees, or any Person whatsoever. This assignment, although presently effective, shall be operative only upon the occurrence and during the continuance of an Event of Default and not before.
(b) Schedule of Subleases. At any time upon Landlord's demand, and in any event, no less frequently than once per year, Tenant shall deliver to Landlord, within fifteen (15) days of such demand, (i) a schedule of all Subleases giving the names of all Subtenants, a description of the space that has been sublet, expiration dates, rentals and such other information as Landlord reasonably may request, and (ii) a photostatic copy of all Subleases and any amendments thereto. In addition, upon entering into a Sublease at any time Tenant shall deliver to Landlord, within fifteen (15) days after the date of such Sublease, the information and documents(s) described in clauses (i) and (ii). Upon reasonable request of Landlord, Tenant shall permit Landlord and its agents and representatives to inspect original counterparts of all Subleases.
Section 9.06. Collection of Subrent by Landlord. After an Event of Default, Landlord may collect rent and all other sums due under any Subleases and apply the net amount collected to the Rental payable by Tenant hereunder. No such collection shall be, or shall be deemed to be, a waiver of any agreement, term, covenant or condition of this Lease nor the recognition by Landlord of any Sub?tenant as a direct tenant of Landlord nor a release of Tenant from performance by Tenant of its obligations under this Lease.
Section 9.07. Permitted Transfers. Notwithstanding the provisions of Section 9.01(a) hereof, Landlord shall not unreasonably withhold its consent to a proposed Transfer by a Subtenant who is a member or shareholder of Tenant of such Subtenant’s Equity Interest in Tenant, or a portion thereof, to a Permitted Person. Tenant shall notify Landlord of the proposed Transfer no less than thirty (30) days prior to the proposed effective date thereof, and Landlord shall notify Tenant within thirty (30) days after receipt of such notice whether Landlord's consent is given or denied.
Section 9.08. Permitted Sub-subleases.
(a) Notwithstanding the provisions of Section 9.01(a) hereof, except as otherwise provided in subparagraph (b) below, Tenant may authorize any Subtenant at any time during the Term to enter into a Sub-sublease for any portion of the Subtenant’s Rentable Area for the purpose of Seafood Distribution Uses with a Sub-subtenant that is a Permitted Person, subject to the following:
(i) Tenant must comply with and satisfy (or cause its Subtenant to comply with and satisfy) all of the conditions set forth in Section 9.02(a) through (h) as to the proposed Sub-sublease and Sub-subtenant.
(ii) No Subtenant may sub-sublease more than forty-nine percent (49%) of its Gross Selling Area (other than to Affiliates of the Subtenant) without Landlord’s prior written consent, which Landlord may withhold in its sole discretion.
(b) During the first three (3) years of the Term, no Subtenant may enter into a Sub-sublease for any portion of the Subtenant’s premises without the prior written consent of Landlord in its sole discretion, except that (without limiting subparagraph (a) above) such approval right shall not apply to a proposed Sub-sublease pursuant to which a Subtenant that was an occupant of the Fulton Fish Market in Manhattan shall sublease to a Sub-subtenant an equal or lesser amount of space than such Subtenant subleased to such Sub-subtenant at the Fulton Fish Market in Manhattan.
Section 9.09. Permitted Vendor Contracts. Notwithstanding the provisions of Section 9.01(a) hereof, Landlord shall not unreasonably withhold or delay its approval of any proposed Vendor Contract with a Permitted Person.
ARTICLE 10
TENANT ORGANIZATION
Section 10.01. Monitoring of Transfers of Direct Ownership Interests. All of Tenant's organizational documents (the "Organizational Documents") shall provide that no new partner or joint venturer will be admitted, nor will any transfer of stock ownership or of a beneficial interest in Tenant or in any direct or indirect constituent entity in Tenant be effective, nor will the Organizational Documents be amended to reflect any such changes in partnership or joint venture interests or transfers of stock ownership or beneficial interests, except in compliance with the terms hereof. In addition, any instrument evidencing a direct ownership interest in Tenant shall contain a legend giving notice of, or a complete description of, the foregoing transfer restrictions, in form and substance satisfactory to Landlord.
Section 10.02. Validity of Capital Transactions; Reporting. Annually on or before the last day of March of each Lease Year during the Term, Tenant shall deliver to Landlord a certificate, subscribed by a duly authorized representative, expressly referring to this Section 10.02, and setting forth the names, addresses and beneficial and record interest of all holders of all Equity Interests as of the first day of January.
ARTICLE 11
REPAIRS, MAINTENANCE, OPERATION
Section 11.01. Maintenance of the Premises and the Permit Area, Etc.
a) Landlord Repairs. Landlord agrees that its repair and maintenance obligations under this Lease shall be strictly limited to the following, which shall be performed at the sole cost and expense of Landlord: (i) repairs to and maintenance of any machinery and equipment installed upon or used at the Premises pursuant to the requirements of the Voluntary Clean-Up Agreements, or (ii) repairs necessitated due to any defective or damaged conditions to the structural elements of the Building, to the extent such conditions are caused solely by faulty or improper designs, construction methods or materials implemented or used by Landlord. Tenant acknowledges and agrees that if any of the conditions referenced in (i) and (ii) above are caused, in whole or in part, by the negligence or willful misconduct of Tenant or any of its Sublessees, occupants or invitees, that Tenant, not Landlord, shall be responsible for such repairs, at its sole cost and expense, to the extent such repairs are necessitated due the negligence or willful misconduct ot Tenant or any of its Sublessees, occupants or invitees. Tenant further agrees that Landlord shall only be required to perform any repairs described in (ii) above, if Tenant provides notice of any such damaged or defective condition to Landlord within six (6) months of the Commencement Date. During such six (6) month period Tenant shall employ an engineer and any other professionals it desires to inspect the Building for any defects and to produce a conditions assessment report for the Premises. Tenant agrees that if Tenant fails to hire any engineers or other professionals to inspect the Premises, and Tenant later discovers a defect that would have been discoverable by a professional during said six month period, Tenant shall be solely responsible for the repair of such condition. The parties agree that such six (6) month time period may be extended for any defects to the structural portions of the Building, such as the foundation or the roof, if such conditions were not discovered by Tenant and its engineers and other professionals within such six (6) month period. In such event the time period for discovery shall be extended until the date that is thirty (30) days from the earlier of (i) the date that Tenant, or its agents, actually discover such defective or damaged condition, or (ii) the date when such damaged or defective condition should reasonably have been discovered by Tenant or its agents. Tenant acknowledges that notwithstanding anything to the contrary that may be contained herein, as of the sixth (6th) anniversary of the Commencement Date, Tenant shall be solely responsible for all repairs and maintenance affecting the Premises and Landlord shall no longer have any repair obligations. Landlord agrees that it will maintain any warranties it received during the course of construction of the Premises and will to the extent such warranties are assignable; it will seek to assign any such warranties to Tenant.
(b) Tenant Repairs. Tenant shall take good care of the Premises and the Permit Area, including without limitation, the Improvements, the surfaces, roofs, and appurtenances thereto, all sidewalks, grounds, plazas, sidewalk hoists, railings, gutters, curbs, flagpoles, and the water, sewer and gas connections, pipes and mains appurtenant thereto, and shall keep and maintain the Premises and the Permit Area (including all of the foregoing) in good and safe order and condition, and shall make all repairs therein and thereon, interior and exterior, structural and nonstructural, ordinary and extraordinary, foreseen and unforeseen, necessary or desirable to keep the Premises and the Permit Area in good and safe order and condition, however the necessity or desirability therefor may occur. Tenant shall neither commit nor suffer, and shall use all reasonable precautions to prevent, waste, damage or injury to the Premises and the Permit Area. All repairs and maintenance shall be made at no cost or expense to Landlord and shall be made in compliance with the Requirements and all materials therefor shall be substantially equal in quality and class to the original work. As used in this Section, the term "repairs" shall include all necessary (a) replacements, (b) removals, (c) alterations, and (d) additions.
Section 11.02. Removal of Equipment. Tenant shall not, without the consent of Landlord, which consent will not be unreasonably withheld, remove or dispose of any Equipment unless such Equipment (a) is promptly replaced by Equipment of substantially equal utility and quality, or (b) is removed for repairs, clean?ing or other servicing, provided Tenant reinstalls such Equipment on the Premises or the Permit Area with reasonable diligence; except, however, Tenant shall not be required to replace any Equipment that has become obsolete, or that performed a function that has become obsolete, unnecessary or undesirable in connection with the operation of the Premises or the Permit Area.
Section 11.03. Free of Dirt, Snow, Etc. Tenant, at its sole cost and expense, shall at all times keep reasonably clean and free from dirt, snow, ice, rubbish, obstructions and encumbrances the Premises and the Permit Area, and the sidewalks, sidewalk hoists, railings, gutters, or curbs located in front of, or adjacent to, the Premises or the Permit Area or any of such areas or spaces adjacent to the Premises or the Permit Area for which Tenant or the fee owner of the Premises or the Permit Area has or would have responsibility under applicable law.
Section 11.04. No Obligation of Landlord to Repair or to Supply Utilities. Landlord shall not be required to supply any facilities, services or utilities whatsoever to the Premises or the Permit Area and Landlord shall not have any duty or obligation to make any repair, alteration, change, improvement, replacement, Restoration or repair to the Premises or the Permit Area, and Tenant assumes the full and sole responsibility for the condition, operation, alteration, change, improvement, replacement, restoration, repair, maintenance and management of the Premises and the Permit Area, except to the extent such is not normally the responsibility of a fee owner or tenant.
Section 11.05. Window Cleaning. Tenant shall not clean, nor require, permit, suffer or allow to be cleaned, any window in the Project from the outside in violation of Section 202 of the Labor Law of the State of New York or of the rules of the Industrial Board or any other Governmental Authority.
Section 11.06. Operation of Premises and Permit Area
(a) Without limiting any of Tenant’s other obligations under this Article 11, Tenant shall be responsible for all operation and management of the Premises and the Permit Area and the market thereat, including, without limitation, all loading and unloading activities, security, cleaning, and sanitation services.
(b) Subject to all Requirements and this Lease, Tenant shall have the right to determine the manner of operation of the Premises and the Permit Area, including the hours of operation of the market thereat, to establish reasonable rules and regulation in connection therewith, provided that Tenant may not do any of the foregoing in a manner that discriminates against Subtenant or unreasonably interferes with the business operations of any of the Subtenants.
Section 11.07. Parking Lot Revenues. Tenant shall have the right to charge and retain entry and parking fees in respect of the use of the Parking Lot, provided that the amount of such fees shall be subject to Landlord’s reasonable approval.
Section 11.08. Capital Reserve Fund.
a) Tenant shall establish a fund (the "Capital Reserve Fund") that shall be available exclusively to pay for maintenance, repair and replacement of the Premises and Installations (defined below) therein. Within one month of the Commencement Date, Tenant shall fund the Capital Reserve Fund in an initial amount, from funds provided by Landlord, equal to fifty percent (50%) of the amount collected by Landlord from sales of Gross Selling Area (the “Initial Capital Reserve Amount”).
(b) As used in this Lease, the term “Installation” shall include, but not be limited to, all Building systems, elements and Improvements at the Premises which would reasonably require replacement during the Term, including but not limited to the following: (i) the roof and the roof covering; (ii) the heating system; (iii) the HVAC systems; (iv) the elevators; (v) the plumbing systems; (vi) the sprinkler systems; (vii) the electrical systems; (viii) the parking lot, pavings, entrance gate and fencing located on the Premises, and (ix) all Equipment, machinery, lines, pipes and conduits forming a part thereof.
(c) Within three (3) months of the Commencement Date, Tenant shall obtain, at its sole cost and expense, an estimate (the “Estimate”) of (i) the replacement cost (as of the date of the Estimate) of each Installation, and (ii) the remaining useful life of each Installation. Each Estimate shall be obtained from a licensed engineer selected by Tenant, subject to the approval of Landlord, which approval shall not be unreasonably withheld or delayed. Each such Estimate shall be subject to the approval of Landlord, which approval shall not be unreasonably withheld or delayed, and shall be updated by a licensed engineer selected in accordance with the preceding sentence at five-year intervals throughout the Term, or at such shorter intervals as Landlord in its reasonable judgment may require to reflect cost increases not adequately provided for in the then current Estimates. If Tenant fails to obtain any required Estimate, Landlord may do so at Tenant’s sole cost and expense.
(d) (i) Within six (6) months of the Commencement Date, and thereafter on the first day of each Fiscal Quarter during the Term, Tenant shall deposit with an Institutional Lender (to be selected in accordance with the provisions of this Lease) in an amount and at a rate sufficient, subject to the limitation set forth below, to deposit the full amount of the then current Estimate for each Installation by the end of the useful life of each Installation, so that quarterly deposits over the useful life of each Installation will cover the full amount of the then current Estimate for each Installation; the amounts so deposited, together with the interest earned thereon, are hereinafter collectively called the “Capital Reserve”. However, notwithstanding the foregoing, except with the consent of Landlord, in no event shall the total amount on deposit in the Capital Reserve (i) be less than the Initial Capital Reserve Amount. Tenant shall be obligated to continue to make quarterly deposits to the Capital Reserve, notwithstanding that the total amount held in the Capital Reserve is sufficient to pay the then estimated costs of all Installations, until such time as the parties shall mutually agree to reduce or suspend such deposits or to permit withdrawals from the Capital Reserve, it being expressly understood that no withdrawals shall be permitted without the consent of both Landlord and Tenant.
i) Notwithstanding anything to the contrary that may be contained in Section 11.08(d)(i) above, during the first ten (10) years of the Lease Term, Tenant shall not be required to deposit more than the sum of Three Hundred Sixty Thousand Dollars ($360,000) annually into the Capital Reserve Fund (the “Annual Minimum Deposit”); provided however, that: (1) the balance at the end of any such Lease Year shall not be less than the Initial Capital Reserve Amount plus the aggregate sum of all Annual Minimum Deposits, and interest earned thereon; (2) Tenant shall replenish any amounts withdrawn from the Capital Reserve Fund prior to the end of such Lease Year; and (3) to the extent that there is a discrepancy between the Reserve Fund Amount and the sum of the Estimates at the end of such ten (10) year period, Tenant shall set forth a plan, subject to Landlord’s reasonable approval, to eliminate such discrepancy by one or more of the following means: (a) special assessments to shareholders; (b) increased monthly charges; or (c) securing third-party financing.
(e) The Capital Reserve shall be held in an interest-bearing depositary account in New York City with an Institutional Lender designated by Tenant and approved by Landlord, which approval shall not be unreasonably withheld or delayed, pursuant to a depositary agreement in form and substance approved by Tenant and Landlord, but any fees of such depositary shall be paid by Tenant. Concurrently with the rendition to Landlord of Tenant’s annual statements pursuant to Article 34 of this Lease, Tenant shall also furnish to Landlord a statement setting forth the deposits, withdrawals (including a statement of the purpose of the withdrawal), if any, the interest earned and the balance remaining during and as of the end of the Fiscal Year in the Replacement Reserve account.
b) Tenant shall maintain, repair and replace all Installations if, when and to the extent Tenant is required to do so in accordance with the terms of the Lease.
c) Subject to the provisions of this Article, withdrawals from the Capital Reserve account shall be made solely for the purpose of paying for the cost of replacement of any of the Installations, other than for normal maintenance and repairs of any of such Installations. If the funds deposited in the Capital Reserve in respect of any particular Installation, including the interest earned on such funds, shall be inadequate to pay for the cost of replacement of such Installation as and when necessary, Tenant may, upon obtaining Landlord’s approval thereof, which shall not be unreasonably withheld or delayed, withdraw other available funds from the Capital Reserve to pay for the replacement of such Installation, provided that in each such instance Tenant shall simultaneously adjust the then current Estimates by increasing the same to an amount sufficient to replenish the additional amount drawn from the Capital Reserve to make up for the deficiency in the existing Capital Reserve available for the Installation required to be replaced.
d) Except as described in sub-section (j) below, if the Lease is terminated for any reason the entire amount of the Capital Reserve shall be paid to Landlord.
(i) Tenant shall account annually to the Landlord with respect to the Capital Reserve and shall further notify Landlord of its intention to make a withdrawal from any Capital Reserve account, the amount of the intended withdrawal and the purpose thereof. Tenant shall thereafter notify Landlord of the fact of withdrawal for the intended purpose within five (5) business days of the withdrawal. The use of the withdrawn funds shall be supported by adequate documentation. Landlord shall have a right of audit with respect to all Capital Reserve accounts.
(j) If Tenant shall fully and faithfully comply with all of the terms, covenants and conditions of this Lease, upon the expiration of the Term, after Tenant has vacated the Premises and the Permit Area and delivered possession thereof to Landlord, the remainder of the Capital Reserve at the time of the expiration of the Term shall become the property of Tenant. If the Lease terminates prior to the Fixed Expiration Date as a result of any material Default by Tenant, Landlord shall have the right to retain the entirety of such remainder.
Section 11.09. Operating Reserve Fund.
(a) Tenant shall establish a fund (the "Operating Reserve Fund") that shall be available exclusively for the unforeseen non-capital expenses with respect to the Premises. Within one month after the Commencement Date, Tenant shall fund the Operating Reserve Fund in an initial amount, from funds provided by Landlord, in an amount equal to fifty percent (50%) of the amount collected by Landlord from sales of Gross Selling Area (the “Initial Operating Reserve Amount”). During the first three (3) years of the Lease term, Tenant shall insure that the principal balance of the Operating Reserve Fund, at all times during such period, is equal to or greater than the Initial Operating Reserve Amount. For the remaining balance of the Lease term, Tenant shall make such deposits to the Operating Reserve Fund so that at all times during the term, the Operating Reserve Fund maintains a principal balance equal to or greater than the amount that is equal to twenty five percent (25%) of the average annual gross operating expenses of Tenant, exclusive of capital expenses, during the three (3) years immediately preceding the applicable Lease year.
(b) Tenant shall account annually to the Landlord with respect to the Operating Reserve Fund. If Tenant desires to make a withdrawal from any Operating Reserve Fund account at such time as when the balance of the Operating Reserve Fund is less than eighty percent (80%) of the required amount set forth in Section 11.09(a) above, Tenant shall be required to send a prior notice to Landlord advising Landlord of the amount of the intended withdrawal and the purpose thereof. Tenant shall thereafter notify Landlord of the fact of withdrawal for the intended purpose within five business (5) days of the withdrawal. The use of the withdrawn funds shall be supported by adequate documentation. Landlord shall have a right of audit with respect to all Operating Reserve Fund accounts. Notwithstanding the provisions set forth above, the parties agree that Tenant may make withdrawals from the Operating Reserve Fund if the aggregate sum of all outstanding withdrawal amounts do not exceed twenty percent (20%) of the principal balance of the Operating Reserve Fund, without prior notification to Landlord, provided (i) Tenant provides notice of each such withdrawal to Landlord within five (5) business days after the date of such withdrawal, and (ii) the full amount of each sum withdrawn from the Operating Reserve Fund is fully replenished within one hundred twenty (120) days of the date of withdrawal.
(c) If Tenant shall fully and faithfully comply with all of the terms, covenants and conditions of this Lease, upon the expiration of the Term, after Tenant has vacated the Premises and the Permit Area and delivered possession thereof to Landlord, the remainder of the Operating Reserve Fund at the time of the expiration of the Term shall become the property of Tenant. If the Lease terminates prior to the Fixed Expiration Date as a result of any material Default by Tenant, Landlord shall have the right to retain the entirety of such remainder.
(d) The Operating Reserve Fund shall be held in an interest-bearing depositary account in New York City with an Institutional Lender designated by Tenant and approved by Landlord, which approval shall not be unreasonably withheld or delayed, pursuant to a depositary agreement in form and substance approved by Tenant and Landlord, but any fees of such depositary shall be paid by Tenant. Concurrently with the rendition to Landlord of Tenant’s annual statements pursuant to Article 34 of this Lease, Tenant shall also furnish to Landlord a statement setting forth the deposits, withdrawals (including a statement of the purpose of the withdrawal), if any, the interest earned and the balance remaining during and as of the end of the Fiscal Year in the Operating Reserve Fund.
Section 11.10 Application of Proceeds from Redevelopment of Old Fulton Fish Market. If and to the extent any monies become payable to Tenant pursuant to those certain Lease Surrender Agreements, of even date herewith, by and between the Landlord and, respectively, the Fulton Market Fish Mongers Association of the City of New York and the New York Wholesale Fish Dealers Association, Inc., Tenant shall apply such funds only to operations, Improvements and/or to the Capital and Operating Reserves for the Premises.
Section 11.11. Landlord’s Right to Inspect. Landlord shall have the right to inspect the Premises and the Permit Area and any and all maintenance and repair work performed by Tenant at the Premises and the Permit Area on reasonable notice and at reasonable times for the purpose of ensuring that Tenant is complying with its obligations under this Lease. However, no such inspection or any failure to do so by Landlord shall relieve Tenant of any of its obligations hereunder, or impose upon Landlord any obligations or responsibilities in respect of Tenant’s maintenance and repair obligations.
ARTICLE 12
CAPITAL IMPROVEMENTS
Section 12.01. Capital Improvements.
(a) Tenant's Right to Make Capital Improvements. Provided that there shall not then exist any Event of Default hereunder, and subject to the other provisions of this Article 12, Tenant shall be permitted to make any Capital Improvement that satisfy both of the following criteria: (X) the cost of the Capital Improvement is less than $250,000, (which $250,000 amount shall be increased during each year of the Lease term by the same percentage as the increases in the CPI for such period, and (Y) the Capital Improvement does not constitute structural changes or alterations to the Premises. Tenant shall not have the right to make any Capital Improvements that do not satisfy both of the foregoing conditions without Landlord’s prior written consent, which shall not be unreasonably withheld, delayed or conditioned.
(b) "Capital Improvement" means a change, alteration or addition to the Premises other than a Restoration.
(c) Prior to performing any Capital Improvement, Tenant shall provide written notice to Administrator which shall contain a description of the proposed Capital Improvement, Tenant’s good faith estimate of the cost thereof, and shall include documentation supporting Tenant’s estimate. Within ten (10) business days of Administrator’s receipt of such notice, Administrator shall consent to or deny Tenant’s request, or request additional documentation on which to base its response. Without limiting the foregoing, Administrator shall have the right to reject, on a reasonable basis, Tenant’s estimate that the cost of the Capital Improvement shall be less than $200,000.
Section 12.02. Performance of Restorations and Capital Improvements.
(a) All Restorations and Capital Improvements will be made in accordance with this Section.
(b) All Restorations and Capital Improvements will be performed in accordance with such reasonable requirements as the Administrator may determine in its reasonable discretion and with plans and specifications reasonably approved by the Administrator. Tenant will submit proposed plans and specifications for any Restoration or permitted Capital Improvement to the Administrator and will promptly make any and all reasonable changes thereto as may be requested by the Administrator. Tenant will resubmit revised plans and specifications for the Administrator's review until the Administrator has approved a complete set of plans and specifications for the applicable Restoration or Capital Improvement.
(c) Tenant shall promptly commence and diligently prosecute to completion any Restoration or permitted Capital Improvement.
ARTICLE 13
REQUIREMENTS OF GOVERNMENTAL AUTHORITIES
Section 13.01. Requirements.
(a) Obligation to Comply. Landlord agrees that as of the Commencement Date, the Premises, the Permit Area and the Building shall be in compliance with the requirements set forth in Section 13.01(b)(i) below. If the Premises, Permit Area and Building are not in compliance with such Requirements as of the Commencement Date, it shall be the responsibility of Landlord, at its sole cost and expense, to cure any non-complying conditions. Except as set forth in the prior sentence, Tenant shall have full responsibility for compliance with all Requirements during the Lease term, including all costs associated therewith. Tenant further agrees that in connection with any maintenance, management, use and operation of the Premises and the Permit Area and Tenant's performance of each and every of its obligations hereunder, Tenant shall, at its sole cost and expense, comply promptly with all Requirements, without regard to the nature of the work required to be done, whether extraordinary or ordinary, and whether requiring the removal of any encroachment, or affecting the maintenance, use or occupancy of the Premises or the Permit Area or involving or requiring any structural changes or additions in or to the Premises or the Permit Area, and regardless of whether such changes or additions are required by reason of any particular use to which the Premises or the Permit Area, or any part thereof, may be put. No actual or deemed consent to, approval of or acquiescence in any plans or actions of Tenant by Administrator, Landlord, in its proprietary capacity as landlord under this Lease, or Landlord's designee, shall be relied upon or construed as being a determination that such are in compliance with the Requirements, or, in the case of construction plans, are structurally sufficient.
(b) Definition.
"Requirements" means:
(i) the Zoning Resolution of The City of New York (as the same may be amended and/or replaced) (the "Zoning Resolution") and any and all laws, rules, regulations, orders, ordinances, statutes, codes, executive orders, resolutions, and requirements of all Governmental Authorities (currently in force or hereafter adopted) applicable to the Premises or the Permit Area, any street, road, avenue, service areas, or sidewalk comprising a part of, or lying in front of, the Premises or the Permit Area, (including, without limitation, the Building Code of New York City, and any applicable equivalent, and the laws, rules, regulations, orders, ordinances, statutes, codes and requirements of LPC, SHPO, and any applicable Fire Rating Bureau or other body exercising similar functions),
(ii) any and all provisions and requirements of any property, casualty or other insurance policy required to be carried by Tenant under this Lease, and
(iii) the Regulations and Market Rules.
ARTICLE 14
DISCHARGE OF LIENS; BONDS
Section 14.01. Creation of Liens. Tenant shall not create or cause to be created (a) any mortgage, lien, encumbrance or charge upon this Lease, the leasehold estate created hereby, the income therefrom or the Premises or the Permit Area or any part thereof, (b) any lien, encum?brance or charge upon any assets of, or funds appropriated to, Landlord, or (c) any other matter or thing whereby the estate, rights or interest of Landlord in and to the Premises or the Permit Area or any part thereof might be impaired. Notwithstanding the foregoing, Tenant shall have the right to execute Subleases as provided by, and in accordance with, the provisions of this Lease.
Section 14.02. Discharge of Liens. If any mechanic's, laborer's, vendor's, materialman's or similar statutory lien (including tax liens, provided the underlying tax is an obligation of Tenant by law or by a provision of this Lease) is filed against the Premises or the Permit Area or any part thereof, or if any public improve?ment lien created, or caused or suffered to be created by Tenant shall be filed against any assets of, or funds appropriated to, Land?lord, then, Tenant shall, within sixty (60) days after receipt of notice of the filing of such mechanic's, laborer's, vendor's, materialman's or similar statutory lien or public improvement lien, cause it to be vacated or discharged of record by payment, deposit, bond, order of a court of competent jurisdiction or otherwise. However, Tenant shall not be required to discharge any such liens if Tenant shall have (a) furnished Landlord with, at Tenant's option, a cash deposit, bond, letter of credit from an Institutional Lender (in form reasonably satisfactory to Landlord) or other security (such as personal guaranty reasonably satisfactory to Landlord in an amount sufficient to discharge the lien with interest and penalties) and (b) brought an appropriate proceeding, within three (3) months of learning about the filing of same, to discharge or vacate such lien and is prosecuting such proceeding with diligence and continuity; except that if, despite Tenant's efforts to seek discharge of the lien, Landlord reasonably believes such lien is about to be foreclosed and so notifies Tenant, Tenant shall immediately cause such lien to be discharged of record or Landlord may use the security furnished by Tenant in order to so discharge the lien.
Section 14.03. No Authority to Contract in Name of Landlord. Nothing contained in this Lease shall be deemed or construed to constitute the consent or request of Landlord, express or implied, by implication or otherwise, to any contractor, sub?contractor, laborer or materialman for the performance of any labor or the furnishing of any materials for any specific improvement of, alteration to, or repair of, the Premises or the Permit Area or any part thereof, nor as giving Tenant any right, power or authority to contract for, or permit the rendering of, any services or the furnishing of materials that would give rise to the filing of any lien, mortgage or other encumbrance against the Premises or the Permit Area or any part thereof or against assets of, or funds appropriated to, Landlord.
ARTICLE 15
REPRESENTATIONS
Section 15.01. No Brokers. Landlord and Tenant each represents to the other that it has not dealt with any broker, finder or like entity in connection with this Lease or the transactions contemplated hereby and such mutual representations with regard to this Lease shall survive the termination of this Lease.
Section 15.02. Tenant's Representations, Warranties, and Covenants.
(a) Tenant represents, warrants, and covenants that: (a) all shareholders of Tenant are Subtenants, (b) all Subtenants are shareholders of Tenant, and (c) no officer, agent, employee or representative of the City of New York has received or will receive any payment or other consideration for the making of this Lease and that no officer, agent, employee or representative of the City of New York has or will have any interest, directly or indirectly, in this Lease or the proceeds thereof. Tenant further represents, warrants and covenants that a true and accurate copy of the most current organizational documents of the Tenant have been submitted to the Landlord and that Tenant will periodically, upon demand of Landlord, certify a list of its members, stockholders, officers and directors.
(b) Tenant represents, warrants, and covenants that at no time during the Term shall it admit into the Tenant entity as a member, stockholder or beneficial owner thereof any person who, to Tenant’s knowledge is a Prohibited Person, and it shall not engage a person who, to Tenant’s knowledge, is a Prohibited Person to be an officer or director. Tenant covenants that, within thirty (30) days of demand by Landlord, Tenant will commence to terminate, and diligently prosecute to terminate, the membership or stock ownership interest in Tenant (or any entity having an ownership interest in Tenant) and any other involvement as a member, stockholder, officer or director of Tenant, of any Person which is a Prohibited Person or is subject to action under Section 35.03 hereof. The termination of any stock ownership interest shall be effected by assignment of such stock ownership interest, redemption or purchase of such stock ownership interest by the Tenant entity or by any other means satisfactory to Landlord so long as such stock ownership interest is not acquired directly or indirectly by any Person within the category of Prohibited Persons or by any Person subject to action under Section 35.03 hereof.
(c) Hazardous Materials. Without limiting Tenant’s obligations under Section 17.01(h), Tenant shall not cause or permit the use, storage, installation, release, discharge, generation spilling, leaking, pumping, pouring, emitting, dumping, leaching, handling, disposal or transportation of any Hazardous Materials over, under into or on the Premises or the Permit Area or any portion thereof in violation of any federal, state, or local law or regulation.
Section 15.04. Hazardous Materials.
(a) Except as otherwise provided in subparagraph (b), Landlord shall be responsible for performing, at its cost and expense, all environmental reviews and studies in respect of the Premises and the Permit Area and all mitigation, clean-up and removal of Hazardous Materials at, on or under the Premises or the Permit Area that may be required pursuant to any Requirement, including, without limitation, the New York City Environmental Quality Review (“CEQR”) or the New York City Environmental New York State Environmental Quality Review Act (“SEQR”).
(b) Tenant shall be responsible for performing, at its cost and expense, all environmental reviews and studies in respect of the Premises and the Permit Area and all mitigation, clean-up and removal of Hazardous Materials at, on or under the Premises or the Permit Area that may be required pursuant to any Requirement, including, without limitation, CEQR or SEQR, due to or in connection with:
(i) the storage, transportation, disposal, or release of any Hazardous Materials at the Premises or the Permit Area by Tenant or any of its members, representatives, or agents or by any other occupants or users of the Premises or the Permit Area.
(ii) the negligent or otherwise unlawful acts or omissions on the part of Tenant or any of its members, representatives, or agents or of any other occupants or users of the Premises or the Permit Area during the term of the Lease with respect to any Hazardous Materials existing at, on or under the Premises or the Permit Area as of the Commencement Date.
Section 15.05. Landlord’s Representations. Landlord represents that, as of the Commencement Date, the Premises are in good and tenantable condition and have been constructed in accordance with proper building practices. The Premises are free of asbestos and have been constructed in accordance with the requirements of the Leasing and Development Agreement, a copy of which is attached hereto as Exhibit B and incorporated hereby by reference and made apart hereof. The parties agree that incorporation by reference of the provisions of the Development Agreement herein shall not be construed to extend the expiration date of the Development Agreement provided therein. The parties confirm that the Development Agreement shall expire and be of no further force and effect as of the date which is the sixth (6th) month anniversary of the Commencement Date. The parties agree that, until the expiration of the Development Agreement, in the event of any conflict between any of the terms and provisions of the this Lease with the terms and provisions of the Development Agreement, the terms and provisions of the Development Agreement shall control.
ARTICLE 16
LANDLORD NOT LIABLE FOR INJURY OR DAMAGE, ETC.
Section 16.01 Landlord shall not be liable for any injury or damage to Tenant or to any Person happening on, in or about the Premises or the Permit Area or its appurtenances, nor for any injury or damage to the Premises or the Permit Area or to any property belonging to Tenant or to any other Person that may be caused by fire, by breakage, or by the use, misuse or abuse of any portion of the Premises or the Permit Area (including, but not limited to, any of the common areas within the Building, hatches, openings, installations, stairways or hallways or other common facilities, the streets, sidewalk areas or water within or adjacent to the Premises or the Permit Area) or that may arise from any other cause whatsoever, except if and to the extent caused by the negligence or otherwise wrongful conduct of Landlord or its agents or representatives.
Section 16.02. Landlord shall not be liable to Tenant or to any Person for any failure of water supply, gas or electric current, nor for any injury or damage to any property of Tenant or of any Person or to the Premises or the Permit Area caused by or resulting from gasoline, oil, steam, gas, electricity, or hurricane, tornado, flood, wind or similar storm or disturbance or by or from water, rain or snow which may leak or flow from the street, sewer, gas mains or subsurface area or from any part of the Premises or the Permit Area, or body of water under or adjacent to the Premises or the Permit Area, or by or from leakage of gasoline or oil from pipes, appliances, sewer or plumbing works therein or from any other place, nor for interference with light or other incorporeal heredita?ments by any Person, or caused by any public or quasi-public work, except if and to the extent caused by the negligence or otherwise wrongful conduct of Landlord or its agents or representatives.
ARTICLE 17
INDEMNIFICATION
Section 17.01. Tenant’s Obligation to Indemnify. Tenant shall not do or permit any act or thing to be done upon the Premises or the Permit Area, or any portion thereof, which subjects Landlord to any liability or responsibility for injury or damage to Persons or property or to any liability by reason of any violation of law or of any legal requirement of any public authority, but shall exercise such control over the Premises and the Permit Area so as to protect fully Landlord against any such liability. To the fullest extent permitted by law, Tenant shall indemnify and save Landlord, the Administrator, and their respective officers, directors, employees, agents and servants (collectively, the "Landlord Indemnitees") harmless from and against any and all liabilities, suits, obligations, fines, damages, penalties, claims, costs, charges and expenses, including, without limitation, reasonable architects' and attorneys' fees and disbursements, that may be imposed upon or incurred by or asserted against any of the Landlord Indemnitees by reason of any of the following, except that no Landlord Indemnitee shall be so indemnified and saved harmless to the extent the liabilities, etc., arise out its negligence or tortious conduct:
(a) Construction Work. Construction work or any other work or act done in, on, or about the Premises or the Permit Area or any part thereof;
(b) Control. The control or use, non-use, posses?sion, occupation, alteration, condition, operation, maintenance or management of the Premises or the Permit Area or any part thereof or of any street, plaza, sidewalk, curb, or space comprising a part thereof or adjacent thereto, including, without limitation, any violations imposed by any Governmental Authorities in respect of any of the foregoing;
(c) Acts or Failure to Act of Tenant/Subtenant. Any act or failure to act on the part of Tenant or any Subtenant or any of its or their respective partners, joint venturers, officers, shareholders, directors, agents, contractors, servants, employees, licensees or invitees;
(d) Accidents, Injury to Person or Property. Any acci?dent, injury (including death at any time resulting therefrom) or damage to any Person or property occurring in, on, or about the Premises or the Permit Area or any part thereof, or in, on, or about any street, plaza, sidewalk, curb, vault, or space comprising a part thereof or immediately adjacent thereto;
(e) Lease Obligations. With respect to liabilities, etc., which are not Tenant's direct liabilities, etc., to the Landlord Indemnitee, Tenant's failure to make any payment or to perform or comply with any of the other covenants, agreements, terms or conditions contained in this Lease on Tenant's part to be kept, observed, performed or complied with and/or the exercise by Landlord or its designee of any remedy provided in this Lease with respect to such failure;
(f) Lien, Encumbrance or Claim Against Premises or Permit Area. Any lien or claim that may be alleged to have arisen against or on the Premises or the Permit Area, or any lien or claim created or permitted to be created by Tenant or any Subtenant or any of its or their partners, joint venturers, officers, shareholders, directors, agents, contractors, servants, employees, licensees or invitees against any assets of, or funds appropriated to, Landlord or any liability that may be asserted against Landlord with respect thereto;
(g) Default of Tenant. Any failure on the part of Tenant to keep, observe and perform any of the terms, covenants, agreements, provisions, conditions or limitations contained in any construction agreements, the Subleases or other contracts and agreements affecting the Premises or the Permit Area, on Tenant's part to be kept, observed or performed;
(h) Hazardous Materials. The presence, storage, transportation, disposal, release or threatened release of any Hazardous Materials over, under, in, on, from or affecting the Premises or the Permit Area or any persons, real property, personal property, or natural substances thereon or affected thereby, except to the extent that such Hazardous Materials were present, stored, disposed of, or released at the Premises or the Permit Area prior to the Commencement Date, unless any such claim or liability arises out of, in whole or in part, any wrongful actions or omissions on the part of Tenant or its members, agents or representatives or any Subtenants or Vendors or other occupants or users of the Premises.
(i) Contest and Proceedings. Liabilities, etc., to City as Landlord, relating to any contest or proceeding brought or permitted to be brought pursuant to the provisions of Article 32 hereof; or
(j) Brokerage. Any claim for brokerage commissions, fees or other compensation by any Person who alleges to have acted or dealt with Tenant in connection with this Lease or the transactions contemplated by this Lease.
a) Section 17.02. Landlord’s Obligation to Indemnify. To the fullest extent permitted by law, Landlord shall indemnify and save Tenant and the Subtenants and their respective officers, directors, employees, agents and servants (collectively, the "Tenant Indemnitees") harmless from and against any and all liabilities, suits, obligations, fines, damages, penalties, claims, costs, charges and expenses, including, without limitation, reasonable architects' and attorneys' fees and disbursements, that may be imposed upon or incurred by or asserted against any of the Tenant Indemnitees by reason of Landlord’s failure to satisfy its obligations under Section 15.04(a) (as such obligations are limited by the terms of Section 15.04(b)).
Section 17.03. Contractual Liability. The obligations of the parties under this Article shall not be affected in any way by the absence of insurance coverage, or by the failure or refusal of any insurance carrier to perform an obligation on its part under insurance policies affecting the Premises or the Permit Area.
Section 17.04. Defense of Claim, Etc. If any claim, action or proceeding is made or brought against any Landlord Indemnitee or Tenant Indemnitee by reason of any event to which reference is made in Section 17.01 or Section 17.02. hereof, then upon demand by Landlord or Tenant, as applicable, Landlord or Tenant, as applicable, shall either resist, defend or satisfy such claim, action or proceeding in the Indemnitee's name, by the attorneys for, or approved by, Tenant's insurance carrier or Landlord’s insurance carrier, as applicable (if such claim, action or proceeding is covered by insurance) or by such other attorneys as Landlord or Tenant, as applicable, shall reasonably approve. The foregoing notwithstanding, such Indemnitee or another Indemnitee may engage its own attorneys to defend such Indemnitee, or to assist such Indemnitee in such Indemnitee's defense of such claim, action or proceeding, as the case may be, at its own cost and expense. To the extent Landlord may be the Indemnitor, Tenant hereby expressly approves the Corporation Counsel of the City of New York as attorney to defend the claim, action or proceeding.
Section 17.05. Notification and Payment. Each Landlord Indemnitee and Tenant Indemnitee shall notify Tenant or Landlord, as applicable, of the incurrence by or assertion against such Indemnitee, or the imposition of any cost or expense as to which Tenant or Landlord, as applicable has agreed to indemnify such Indemnitee pursuant to any of the provisions of this Article 17. Tenant or Landlord, as applicable agrees to pay such Indemnitee all amounts due under this Article 17 within ten (10) days after such payment is determined to be the obligation of Tenant or Landlord, as applicable. Any non-payment thereof by Tenant shall constitute a Default for which Landlord may declare an Event of Default in accordance with the provisions of Section 21.01(c) hereof.
Section 17.06. Survival Clause. The provisions of this Article shall survive the Expiration of the Term.
ARTICLE 18
NON-DISCRIMINATION AND AFFIRMATIVE ACTION
Section 18.01. Non-Discrimination and Affirmative Action. So long as the City or its designee shall be Landlord and subject to any applicable future amendments to E.O. 50, the Regulations, and/or Orders, Tenant shall be subject to the requirements of Executive Order No. 50 (April 25, 1980), as amended ("E.O. 50"), or any successor thereto, as long as E.O. 50 or any successor thereto, in whatever form and whenever enacted, is in force, in whole or in part, and the regulations promulgated thereunder ("E.O. 50 Regulations") and orders ("Orders") of the Director ("Director") of the Bureau of Labor Services ("Bureau"), and Tenant shall be bound for such period or periods by the following requirements, which will be deemed amended by such applicable future amendments:
(a) Non-Discrimination.
(i) Tenant will not engage in any unlawful discrimination against any employee or job applicant because of race, creed, color, national origin, sex, age, disability, marital status, or sexual orientation with respect to all employment decisions including, but not limited to, recruitment, advertising, hiring, compensation, fringe benefits, leaves, promotion, upgrading, demotion, downgrading, transfer, training and apprenticeship, lay-off and termination and all other terms and conditions of employment;
(ii) Tenant will not engage in any unlawful discrimination in the selection of contractors on the basis of the owner's, partner's or shareholder's race, creed, color, national origin, sex, age, disability, marital status, or sexual orientation;
(iii) Tenant will state in all solicitations or advertisements for employees placed by or on behalf of Tenant (i) that all qualified job applicants will receive consideration for employment without unlawful discrimination based on race, creed, color, national origin, sex, age, disability, marital status, or sexual orientation, or (ii) that Tenant is an equal opportunity employer;
(iv) Tenant will inform its employees in writing that it "treats all employees and job applicants without unlawful discrimination as to race, creed, color, national origin, sex, age, disability, marital status, or sexual orientation in all employment decisions, including but not limited to recruitment, hiring, compensation, training and apprenticeship, transfer, lay-off and termination and all other terms and conditions of employment," and that "[i]f you feel that you have been unlawfully discriminated against, you may call or write the Bureau of Labor Services, General Counsel's Office, 66 Leonard Street, 4th Floor, New York, New York 10013, (212) 431-1772";
(v) Tenant will send to each labor organization or representative of workers with which it has a collective bargaining agreement or other employment contract, memorandum of agreement or understanding, written notification of its equal employment opportunity commitments under E.O. 50, the E.O. 50 Regulations, Orders and all employment programs and other agreements between Tenant and the Bureau (collectively, "Agreements");
(vi) Tenant will permit the Bureau to have access to all relevant books, records, accounts and work sites, to investigate compliance with this Lease and E.O. 50, the E.O. 50 Regulations, Orders, and all other Agreements;
(vii) Tenant will refrain from entering into any contract, other written or oral agreement or contract modification subject to E.O. 50 submission requirements with a contractor who has not been approved by the Bureau.
(b) Defaults. Tenant's failure (i) to file or cause the timely filing of complete and accurate Employment Reports or other information required by E.O. 50, the E.O. 50 Regulations, Orders, or other Agreements or (ii) to comply with nondiscrimination clauses (i) through (vii) of Section 18.01(a) requirements imposed on contractors or subcontractors by such clauses at the direction of the Bureau, shall constitute a material breach of this Lease. If Landlord, acting through the Bureau, as a result either of the Bureau's review or the complaint by a job applicant, employee or former employee, finds that Tenant or a contractor or subcontractor may not be in compliance, Landlord, acting through the Bureau, may notify Tenant describing the extent of non-compliance. If the non-compliance is not remedied within thirty (30) days of Tenant's receipt of notice, the Bureau shall request a meeting with Tenant to negotiate an employment program of corrective actions to achieve Tenant's full compliance with these clauses, E.O. 50, the E.O. 50 Regulations and Orders. Nothing hereinbefore stated in these requirements shall limit Landlord from pursuing any other remedy available by law to enforce the E.O. 50 Requirements and Agreements or from seeking additional damages.
ARTICLE 19
LANDLORD'S RIGHT TO PERFORM TENANT'S COVENANTS
Section 19.01. Landlord's Right to Perform. If the Tenant shall at any time fail to pay for or maintain any of the insurance policies required to be provided by Tenant pursuant to Article 6 hereof, or to make any other payment or perform any other act on its part to be made or performed hereunder, including, without limitation, the obligation to cause the discharge of liens pursuant to Article 14, then Landlord, after thirty (30) days' notice to Tenant (or, in case of any emergency or any other circumstances which may materially adversely affect Landlord or Landlord's interest in the Premises or the Permit Area, on such notice, or without notice, as may be reasonable under the circumstances), and without releasing Tenant from any obligation of Tenant hereunder and without waiving the right to terminate this Lease upon an Event of Default in accordance with the provisions hereof or any other right or remedy permissible hereunder, may (but shall not be required to):
(a) pay for and maintain any of the insurance policies required to be furnished by Tenant pursuant to Article 6 hereof, or
(b) make any other payment or perform any other act on Tenant's part to be made or performed as in this Lease provided (except for (x) any maintenance or repair obligation imposed on Tenant pursuant to Article 11 hereof, or (y) any act which would require Landlord, its agent, employee, contractor, or any other person acting on Landlord's behalf to enter upon the Premises or the Permit Area or any portion thereof for any such purpose), and may take all such action as may be necessary therefor. Notwithstanding the foregoing, neither Landlord nor any agent, employee, contractor or any other person acting on Landlord's behalf may enter upon the Premises or any portion thereof for any such purpose. Landlord further agrees that as long Tenant is diligently, reasonably and in good faith pursuing any repair, Landlord will not perform such repair on behalf of Tenant provided (i) Tenant has in good faith commenced such repair within the time frames required by this Lease, (ii) does not pose a risk to public health or safety, (iii) will not subject Landlord or Tenant to any fines, penalties or other legal liability due to the continuance of the condition of non-repair, and (iv) Tenant continues to diligently, reasonably and in good faith pursue such repair.
Section 19.02. Amount Paid by Landlord as Additional Rental. All reasonable sums so paid by Landlord and all reasonable costs and expenses incurred by Landlord in connection with the performance of any such act, together with interest thereon at the Late Charge Rate from the respective dates of Landlord's making of each such payment or incurring of each such cost and expense, shall constitute, following notice from Landlord to Tenant, additional Rental under this Lease and shall be paid by Tenant to Landlord with and in addition to the Base Rent payable on the latter of (i) the first day of the month following the giving of such notice, or (ii) ten (10) business days following the giving of such notice.
Section 19.03. Waiver, Release and Assumption of Obligations. Landlord's payment or performance pursuant to the provisions of this Article shall not be, nor be deemed to be (a) a waiver or release of the Default or Event of Default with respect thereto (or any past or future Default or Event of Default) or of Landlord's right to terminate this Lease in accordance with the provisions hereof and/or to take such other action as may be permissible hereunder, or (b) Landlord's assumption of Tenant's obligations to pay or perform any of Tenant's past, present or future obligations hereunder.
Section 19.04. Proof of Damages. Landlord shall not be limited in the proof of any damages that it may claim against Tenant arising out of, or by reason of, Tenant's failure to provide and keep insurance in force in accordance with the provisions of this Lease to the amount of the insurance premium or premiums not paid. However, Landlord shall be entitled to seek, and if successful, to recover, as damages for such Default or Event of Default, the uninsured amount of any loss and damage sustained or incurred by it and the reasonable costs and expenses of any suit in connection therewith, including, without limitation, reasonable attorneys' fees and disbursements.
ARTICLE 20
PERMITTED USE; NO UNLAWFUL OCCUPANCY
Section 20.01. Permitted Uses.
(a) Except as otherwise provided in subparagraph (b), Tenant shall use and occupy the Premises solely for the selling, buying, receiving, brokering, processing, handling (including packaging) and distribution of fish and seafood products and other food products commonly sold or distributed at wholesale seafood distribution centers (“Seafood Distribution Uses”), and for uses ancillary thereto, including offices, storage, parking, locker rooms, a restaurant and/or commissary, banking facilities, and the sale of materials and supplies. The Premises is acknowledged to be a "market" under former § 259 et seq. of the New York Agriculture and Markets Law. In exercising its rights under this Lease, the Landlord shall apply the Market Rules and Regulations and all amendments thereto as the same shall have been promulgated by the City’s Department of Business Services (or successor or replacement thereto) in its regulatory capacity.
(b) (i) During the Lease term, Tenant shall have the right to request from time to time, by written notice to Landlord, that the scope of the Permitted Uses be modified to include the selling, buying, receiving, brokering, processing, handling (including packaging) and distribution of foods products other than seafood on the grounds that (X) that there has been a significant decline in the availability of seafood product for wholesale distribution by the Subtenants, and/or (Y) there has been a material change in wholesale seafood market conditions that materially and adversely affects the long-term viability of the wholesale seafood distribution businesses at the Premises. Tenant shall include with any such request all information reasonable necessary to substantiate the foregoing, and any other information that Landlord shall request.
(ii) Landlord shall have the right to accept or deny Tenant’s request to modify the scope of Permitted Uses, in whole or in part, in its reasonable discretion, provided that Landlord shall give prompt and good faith consideration to such request, and, in responding thereto, shall endeavor to take into account the designation of the premises as a wholesale seafood market, the market conditions and any other factors that concern the long-term viability of the wholesale seafood distribution businesses at the Premises.
Section 20.02. Compliance with Laws and Insurance Policies. Tenant agrees that it will not use or permit any person to use the Premises or the Permit Area or any part thereof for any use or purpose in violation of this Lease, or of any present or future Requirements, orders, directions, rules or regulations. Tenant shall not use or occupy the Premises or the Permit Area, or permit the Premises or the Permit Area be used or occupied, nor do or permit anything to be done in or on the Premises or the Permit Area, in whole or in part, for any unlawful or illegal business use or purpose or for any purpose or in any way in violation nor this Article or any other provision of this Lease, or in a manner which would in any way violate any certificate of completion or occupancy affecting the Premises or the Permit Area, or make void or voidable any insurance then in force with respect thereto, or which may make it difficult or impossible to obtain fire or other insurance thereon, or as will cause or be apt to cause structural injury to the Premises or the Permit Area or any part thereof, or as will constitute a public or private nuisance. During the term of this Lease, Tenant, at its sole cost and expense, shall promptly comply with all Requirements foreseen and unforeseen, ordinary as well as extraordinary, which may be applicable to the Premises or the Permit Area, or any part thereof, or to the use or manner of use of the Premises or the Permit Area, or the owners, tenants or occupants thereof, even though such Requirement shall necessitate structural changes, repairs or improvements, or the use or application of portions of the Premises or the Permit Area, for compliance therewith, and even though compliance with the provisions of this Section 20.02 may interfere with the use and enjoyment of the Premises or the Permit Area.
Section 20.03. No Representation of Landlord. Except for the uses identified in and permitted by Section 20.01 of this Lease, Landlord makes no representation as to the legality of the use of the Premises or the Permit Area for Tenant's intended purposes. If any use or proposed use is determined to be illegal by a court of competent jurisdiction or an administrative law judge, Tenant agrees that neither Landlord nor Administrator nor any of their respective agents, officers and employees, or any person whatsoever, shall be liable for any damages arising out of or related to such illegal use or proposed use.
Section 20.04. Restriction on New Seafood Markets. During the Term, Landlord shall not actively promote or develop in the City of New York any other “public wholesale market” (as defined in Section 22-251(h) of the City’s Administrative Code) for the wholesale distribution of seafood, provided that this provision is not intended to and shall not preclude Landlord, acting in its governmental capacity, from designating any area(s) in the City as a public wholesale market or a public seafood market for the primary purpose of regulating the same.
ARTICLE 21
EVENTS OF DEFAULT, CONDITIONAL
LIMITATIONS, REMEDIES, ETC.
Section 21.01. Definition. Each of the following events shall be an "Event of Default" hereunder:
(a) (i) if Tenant shall fail to make any payment (or any part thereof) of Rental as and when due hereunder and such failure shall continue for a period of ten (10) days after notice;
(ii) if Tenant shall fail to maintain the Premises or the Permit Area as provided in Sections 11.01 and 11.03 hereof and if such failure shall continue for a period of thirty (30) days after notice (unless such failure requires work to be performed, acts to be done or conditions to be removed which cannot, by their nature, reasonably be performed, done or removed within such thirty (30) day period, in which case no Event of Default shall exist as long as Tenant shall have commenced curing the same within the thirty (30) day period and shall diligently and continuously prosecute the same to completion within a reasonable period);
(b) if Tenant shall enter into (or permit to be entered into) a Capital Transaction, or any other transaction, in violation of the provisions of this Lease and such Capital Transaction or other transaction shall not be made to comply with the provisions of this Lease or canceled within fifteen (15) days after Landlord's notice thereof to Tenant;
(c) if Tenant shall fail to observe or perform one or more of the other terms, conditions, covenants or agreements of this Lease and such failure shall continue for a period of thirty (30) days after Landlord's notice thereof to Tenant specifying such failure (unless such failure requires work to be performed, acts to be done, or conditions to be removed which cannot, by their nature, reasonably be performed, done or removed within such thirty (30) day period, in which case no Event of Default shall be deemed to exist as long as Tenant shall have commenced curing the same within the thirty (30) day period and shall diligently and continuously prosecute the same to completion);
(d) if Tenant (or any shareholder or Subtenant) shall fail to observe, enforce and comply with the Regulations and Market Rules and such failure shall continue for a period of thirty (30) days after notice;
(e) if Tenant or any Tenant Agent (as such term is defined in Article 35) violate any of the provisions of Article 35.
(f) to the extent permitted by law, if Tenant shall admit, in writing, that it is unable to pay its debts as such become due;
(g) Intentionally Omitted;
(h) to the extent permitted by law, if Tenant shall make an assignment for the benefit of creditors;
(i) to the extent permitted by law, if Tenant shall file a voluntary petition under Title 11 of the United States Code or if a petition under Title 11 of the United States Code shall be filed against Tenant and an order for relief shall be entered, or if Tenant shall file a petition or an answer seeking, consenting to or acquiescing in, any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under the present or any future Federal bankruptcy code or any other present or future applicable Federal, state or other bankruptcy or insolvency statute or law, or shall seek, or consent to, or acquiesce in, or suffer the appointment of, any trustee, receiver, custodian, assignee, sequestrator, liquidator or other similar official of Tenant, or of all or any substantial part of its properties, or of the Premises or the Permit Area or any interest of Tenant therein, or if Tenant shall take any partnership, joint venture or corporate action in furtherance of any action described in Sections 21.01(f) or 21.01(h) or this Section 21.01(i);
(j) to the extent permitted by law, if within sixty (60) days after the commencement of a proceeding against Tenant seeking any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under the present or any future Federal bankruptcy code or any other present or future applicable Federal, state or other bankruptcy or insolvency statute or law, such proceeding shall not be dismissed, or if, within one hundred twenty (120) days after the appointment, without the consent or acquiescence of Tenant, of any trustee, receiver, custodian, assignee, sequestrator, liquidator or other similar official of Tenant, or of all or any substantial part of its properties, or of the Premises or the Permit Area or any interest of Tenant therein, such appointment shall not be vacated or stayed on appeal or otherwise, or if, within one hundred twenty (120) days after the expiration of any such stay, such appointment shall not be vacated;
(k) if any of the representations made by Tenant herein is or shall become false or incorrect in any material respect; or
(l) if a levy under execution or attachment shall be made against the Premises or the Permit Area or any part thereof, the income therefrom, this Lease or the leasehold estate created hereby and such execution or attachment shall not be vacated or removed by court order, bonding or otherwise within a period of sixty (60) days.
Section 21.02. Enforcement of Performance. If an Event of Default occurs, Landlord may elect to proceed by appropriate judicial proceedings, either at law or in equity, to enforce performance or observance by Tenant of the applicable provisions of this Lease and/or to recover damages for breach thereof.
Section 21.03. Expiration and Termination of Lease.
(a) If an Event of Default occurs and Landlord, at any time thereafter, at its option, gives Tenant notice stating that this Lease and the Term shall terminate on the date specified in such notice, which date shall not be less than ten (10) days after the giving of the notice, then this Lease and the Term and all rights of Tenant under this Lease shall expire and terminate as if the date specified in the notice were the Fixed Expiration Date, and Tenant shall quit and surrender the Premises and the Permit Area forthwith. If such termination is stayed by order of any court having jurisdiction over any case described in Sections 21.01(i) or (j) hereof or by federal or state statute, then following the expiration of any such stay, or if the trustee appointed in any such case, Tenant or Tenant as debtor-in-possession fails to assume Tenant's obligations under this Lease within the period prescribed therefor by law or within thirty (30) days after entry of the order for relief or as may be allowed by the court, or if the trustee, Tenant or Tenant as debtor-in-possession fails to provide adequate protection of Landlord's right, title and interest in and to the Premises and the Permit Area and adequate assurance of the complete and continuous future performance of Tenant's obligations under this Lease as provided in Section 21.09 hereof, Landlord, to the extent permitted by law or by leave of the court having jurisdiction over such case, shall have the right, at its election, to terminate this Lease on ten (10) days notice to Tenant, Tenant as debtor-in-possession or the trustee. Upon the expiration of the ten (10) day period this Lease shall cease and Tenant, Tenant as debtor-in-possession and/or the trustee immediately shall quit and surrender the Premises and the Permit Area.
(b) If this Lease is terminated as provided in Section 21.03(a) hereof, Landlord may dispossess Tenant by summary proceedings or otherwise.
(c) If this Lease shall be terminated as provided in Section 21.03(a) hereof, Tenant shall pay to Landlord all Rental payable under this Lease by Tenant to Landlord to the Expiration Date and Tenant shall remain liable for Rental thereafter falling due on the respective dates when such Rental would have been payable but for the termination of this Lease.
Section 21.04. Receipt of Moneys after Notice of Termination. No receipt of moneys by Landlord from Tenant after the termination of this Lease, or after the giving of any notice of the termination of this Lease, shall reinstate, continue or extend the Term or affect any notice theretofore given to Tenant, or operate as a waiver of the right of Landlord to enforce the payment of Rental payable by Tenant hereunder or thereafter falling due, or operate as a waiver of the right of Landlord to recover possession of the Premises and the Permit Area by proper remedy. After the service of notice to terminate this Lease or the commencement of any suit or summary proceedings or after a final order or judgment for the possession of the Premises and the Permit Area, Landlord may demand, receive and collect any moneys due or thereafter falling due without in any manner affecting the notice, proceeding, order, suit or judgment, all such moneys collected being deemed payments on account of the use and occupation of the Premises or the Permit Area or, at the election of Landlord, on account of Tenant's liability hereunder.
Section 21.05. Waiver of Rights. Tenant hereby, for and on behalf of itself and all Persons claiming through or under Tenant, also waives and releases any and all rights (a) of redemption provided by any law or statute now in force or hereafter enacted or otherwise, or (b) of re-entry, or (c) of repossession, or (d) to restore the operation of this Lease, if Tenant is dispossessed by a judgment or by warrant of a court or judge or in case of re-entry or repossession by Landlord or in case of any expiration or termination of this Lease. The terms "enter", "re-enter", "entry" or "re-entry", as used in this Lease, are not restricted to their technical legal meanings. Tenant shall execute, acknowledge, and deliver within ten (10) business days after request by Landlord any instrument evidencing such waiver or release that Landlord may request.
Section 21.06. Strict Performance. No failure by either party to insist upon the other's strict performance of any covenant, agreement, term or condition of this Lease or to exercise any right or remedy available to it hereunder, including, without limitation, Landlord's acceptance of full or partial Rental during the continuance of any Default or Event of Default, shall constitute a waiver of any such Default or Event of Default or of such covenant, agreement, term or condition. No covenant, agreement, term or condition of this Lease to be performed or complied with by either party, and no Default by Tenant, shall be waived, altered or modified except by a written instrument executed by the other party. No waiver of any Default shall affect or alter this Lease, but each and every covenant, agreement, term and condition of this Lease shall continue in full force and effect with respect to any other then existing or subsequent Default.
Section 21.07. Right to Enjoin Defaults or Threatened Defaults. In the event of Tenant's Default or threatened Default, Landlord shall be entitled to enjoin, in accordance with applicable law, the Default or threatened Default and shall have the right to invoke any rights and remedies allowed at law or in equity or by statute or by this Lease, other remedies that may be available to Landlord notwithstanding. Each right and remedy of Landlord provided for in this Lease shall be cumulative and shall be in addition to every other right or remedy provided for in this Lease or now or hereafter existing at law or in equity or by statute, and the exercise or beginning of the exercise by Landlord of any one or more of the rights or remedies provided for in this Lease or now or hereafter existing at law or in equity or by statute shall not preclude the simultaneous or later exercise by Landlord of any or all other rights or remedies provided for in this Lease or now or hereafter existing at law or in equity or by statute.
Section 21.08. Payment of All Costs and Expenses. Tenant shall pay Landlord all reasonable costs and expenses, including, without limitation, reasonable attorneys' fees and disbursements, actually incurred by Landlord in any action or proceeding to which Landlord may be made a party by reason of any act or omission of Tenant. Tenant shall also pay Landlord all costs and expenses, including, without limitation, reasonable attorneys' fees and disbursements, incurred by Landlord in enforcing any of the covenants or provisions of this Lease (provided that it is finally determined or agreed that Tenant was in fact not conforming with a covenant or provision hereof). All of the sums paid or obligations incurred by Landlord, with interest (at the Late Charge Rate, accruing from the date incurred) and costs, shall be paid by Tenant to Landlord as Rental within fifteen (15) days after demand. The parties agree that if Landlord brings an action against under this Lease and Tenant is the prevailing party in any such action, Tenant shall be entitled to receive its reasonable costs and expenses, including without limitation, reasonable attorneys’ fees and expenses, actually incurred by Tenant in defending such action. The parties further agree that any such awards of costs and legal fees described in this Section shall be subject to any contrary determinations as to payment thereof, as may be determined by the Court in any such proceeding.
Section 21.09. Remedies Under Bankruptcy and Insolvency Codes. If an order for relief is entered or if any stay of proceeding or other act becomes effective against Tenant or Tenant's interest in this Lease in any proceeding which is commenced by or against Tenant under the present or any future Federal Bankruptcy Code or in a proceeding which is commenced by or against Tenant seeking a reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any other present or future applicable federal, state or other bankruptcy or insolvency statute or law, Landlord shall be entitled to invoke any and all rights and remedies available to it under such bankruptcy or insolvency code, statute or law or this Lease, including, without limitation, such rights and remedies as may be necessary to protect adequately Landlord's right, title and interest in and to the Premises and the Permit Area or any part thereof and adequately assure the complete and continuous future performance of Tenant's obligations under this Lease. Adequate protection of Landlord's right, title and interest in and to the Premises and the Permit Area, and adequate assurance of the complete and continuous future performance of Tenant's obligations under the Lease, shall include, without limitation, all of the following requirements:
(a) that Tenant shall comply with all of its obligations under this Lease;
(b) that Tenant shall pay Landlord, on the first day of each month occurring after the entry of such order, or on the effective date of such stay, a sum equal to the amount by which the Premises and the Permit Area diminished in value during the immediately preceding monthly period, but, in no event, an amount which is less than the aggregate Rental payable for such monthly period;
(c) that Tenant shall continue to use the Premises and the Permit Area in the manner required by this Lease;
(d) that Landlord shall be permitted to supervise the performance of Tenant's obligations under this Lease;
(e) that Tenant shall hire such security personnel as may be necessary to insure the adequate protection and security of the Premises and the Permit Area;
(f) that Tenant shall pay Landlord, within thirty (30) days after entry of such order or the effective date of such stay, as partial adequate protection against future diminution in value of the Premises and the Permit Area and adequate assurance of the complete and continuous future performance of Tenant's obligations under this Lease, a security deposit in an amount acceptable to Landlord, but in no event less than the Base Rent payable hereunder, for the then current Lease Year;
(g) that Tenant shall have and will continue to have unencumbered assets after the payment of all secured obligations and administrative expenses to assure Landlord that sufficient funds will be available to fulfill the obligations of Tenant under this Lease;
(h) that Landlord shall be granted a security interest acceptable to it in property of Tenant to secure the performance of Tenant's obligations under this Lease; and
(i) that if Tenant's trustee, Tenant or Tenant as debtor-in-possession shall assume this Lease and propose to assign it (pursuant to Title 11 U.S.C. § 365, as it may be amended) to any Person who shall have made a bona fide offer therefor, the notice of such proposed assignment, giving (i) the name and address of such Person, (ii) all of the terms and conditions of such offer, and (iii) the adequate assurance to be provided Landlord to assure such Person's future performance under the Lease, including, without limitation, the assurances referred to in Title 11 U.S.C. § 365(b), as it may be amended, shall be given to Landlord by the trustee, Tenant or Tenant as debtor-in-possession no later than twenty (20) days after receipt by the trustee, Tenant or Tenant as debtor-in-possession of such offer, but in any event no later than ten (10) business days before the date the trustee, Tenant or Tenant as debtor-in-possession shall make application to a court of competent jurisdiction for authority and approval to enter into such assignment, and Landlord shall thereupon have the prior right and option, to be exercised by notice to the trustee, Tenant or Tenant as debtor-in-possession, given at any time before the effective date of such proposed assignment, to accept an assignment of this Lease upon the same terms and conditions and for the same consideration, if any, as the bona fide offer made by such Person, less any brokerage commissions which may be payable by Tenant out of the consideration to be paid by such Person for the assignment of this Lease.
Section 21.10. Funds held by Tenant. From and after the date, if any, on which Tenant receives notice from Landlord that a Default or an Event of Default shall have occurred hereunder (but only, in the case of a Default, until such Default has been cured), it shall not pay, disburse or distribute any rents, issues or profits of the Premises and the Permit Area, or any portion thereof, the proceeds of any insurance policies covering or relating to the Premises or the Permit Area or any portion thereof, or any awards payable in connection with the condemnation of the Premises or any portion thereof (except to the extent such insurance proceeds or condemnation awards are required in connection with any restoration to be performed pursuant to Article 7 or 8), any undistributed cash, certificates of deposit, United States Treasury bills or similar cash equivalents arising out of or in any way connected with the Premises or the Permit Area or this Lease or any portion thereof or any other sums or receivables appurtenant to the Premises or the Permit Area or this Lease or any portion thereof except to creditors which are not Affiliates, in payment of amounts then due and owing by Tenant to such creditors with respect to work at the Premises or the Permit Area.
Section 21.11 Arbitration. Notwithstanding anything else to the contrary that may be stated in this Article or elsewhere in this Lease, the parties agree that except for the following Events of Defaults (i) any failure by Tenant to timely and fully pay any Base Rent or Rental, or (ii) any defaults under the provisions of Article 9 hereof; or (iii) any defaults under the provisions of Article 35 hereof, all other disputes between the parties under this Lease, including any disputes as to the existence of any Events of Default (except for any Events of Default described in (i), (ii) and (iii) above) shall be settled pursuant to the arbitration procedures set forth in Article 36 of this Lease. The parties agree that any defaults involving Rental payments or the provisions of Articles 9 and 35 shall be adjudicated pursuant to court proceedings pursuant to the provisions of this Article 21.
ARTICLE 22
NOTICES
Section 22.01. All Notices, Communications, Etc. in Writing. Whenever it is provided herein that notice, demand, request, consent, approval or other communication shall or may be given to, or served upon, either of the parties by the other, or whenever either of the parties desires to give or serve upon the other any notice, demand, request, consent, approval or other communication with respect hereto or to the Premises or the Permit Area, each such notice, demand, request, consent, approval or other communication shall be in writing and shall be effective for any purpose only if given or served as follows:
(a) If to Tenant, in duplicate, by hand with proof of delivery or by mailing the same to Tenant by recognized overnight courier service or certified mail, postage prepaid, return receipt requested, one addressed to
The New Fulton Fish Market Cooperative at Hunts Point
(at an address to be hereafter provided to Landlord in writing)
and one, to an attorney for Tenant whose identity and address may hereafter be provided to Landlord in writing)
or to such other address as Tenant may from time to time designate by notice given to Landlord by recognized overnight courier service or certified mail, return receipt requested.
(b) If to Landlord, in triplicate, by hand with proof of delivery or by mailing the same to Landlord by recognized overnight courier service or certified mail, postage prepaid, return receipt requested, one addressed to
The City of New York
c/o New York City Economic Development Corporation
110 William Street
New York, New York 10038
Attention: Senior Vice President, Wholesale Markets Division
and one to
The City of New York
c/o New York City Economic Development Corporation
110 William Street
New York, New York 10038
Attention: General Counsel
and one to
The New York City Law Department
100 Church Street
New York, New York 10007
Attn.: Chief, Economic Development Division
or to such other address(es) and attorneys as Landlord may from time to time designate by notice given to Tenant by recognized overnight courier service or certified mail, return receipt requested.
Section 22.02. Service. Every notice, demand, request, consent, approval or other communication hereunder shall be deemed to have been given or served five (5) business days after the time that the same shall have been actually deposited in the United States mails, postage prepaid, as aforesaid, except that notice by express or certified mail, return receipt requested, shall be deemed effective on the date such receipt is dated by the Post Office or express mail carrier, as the case may be, and notice by hand shall be effective upon delivery, as evidenced by a signed receipt.
ARTICLE 23
NO SUBORDINATION
Landlord's interest in the Premises and the Permit Area and in this Lease, as the same may be modified, amended or renewed, shall not be subject or subordinate to (a) any mortgage now or hereafter existing, (b) any other liens or encumbrances hereafter affecting Tenant's interest in this Lease and the leasehold estate created hereby, or (c) any Sublease or any mortgages, liens or encumbrances now or hereafter placed on any Subtenant's interest in the Premises. This Lease and the leasehold estate of Tenant created hereby and all rights of Tenant hereunder are and shall be subject to the Title Matters described in Article 2B.
ARTICLE 24
STREET WIDENING
Section 24.01. Proceedings for Widening Street. If any proceedings are instituted or orders made for the widening or other enlargement of any street contiguous to the Premises or the Permit Area requiring removal of any projection or encroachment from the Premises or the Permit Area on, under or above any such street, or any changes or alterations upon the Premises or the Permit Area, or in the appurtenant sidewalks, grounds, plazas, areas, gutters, alleys, curbs or other appurtenances, Tenant shall comply promptly with such requirements, at its sole cost and expense, and if Tenant shall fail to comply with such requirements within thirty (30) days after notice thereof by Landlord to Tenant specifying such failure (or if compliance with such requirements requires work to be performed, acts to be done or conditions to be removed which cannot, by their nature, reasonably be performed, done or removed, as the case may be, within such thirty (30) day period, if, within such thirty (30) day period, Tenant shall fail to commence to remedy such failure or shall fail to diligently and continuously, prosecute the same to completion), then Landlord, upon notice to Tenant may comply with the same, and the reasonable amount expended therefor, together with any interest, fines, penalties, reasonable architects' and attorneys' fees and disbursements or other costs and expenses incurred by Landlord in effecting such compliance or as a result of Tenant's failure to so comply, shall constitute Rental hereunder and shall be payable by Tenant to Landlord on demand.
Section 24.02. Contest of Proceedings. Tenant shall be permitted to contest in good faith any proceeding or order to which Section 24.01 pertains, provided that such contest shall be brought in accordance with the provisions of Section 32.03 hereof as though Tenant were contesting a Requirement thereunder.
Section 24.03. Distribution of Award. Any award made or damages paid in connection with such proceedings shall be deemed to be an award made in connection with a Partial Taking (other than a temporary Taking) and shall be first paid to Tenant to the extent of its reasonable costs and expenses actually incurred in effecting compliance therewith and the remainder shall be paid, distributed and applied in accordance with provisions of Section 8.02(b) hereof.
ARTICLE 25
EXCAVATIONS AND SHORING
In accordance with Section 26-229 of the Administrative Code of the City, if any excavation is contemplated for construction or other purposes upon property adjacent to the Premises or the Permit Area, Tenant, at its option, shall either:
(a) afford to Landlord, or, at Landlord's option, to the Person or Persons causing or authorized to cause such excavation, the right to enter upon the Premises and the Permit Area in a reasonable manner upon reasonable notice for the purpose of doing such work, at Landlord's or such other Person's expense, as may be necessary to preserve any of the walls of the Improvements from injury or damage and to support them by proper foundations. If so requested by Tenant, such entry and work shall be done in the presence of a representative of Tenant, provided that such representative is available when the entry and work are scheduled to be done, and in all events such work shall be performed with reasonable diligence, in accordance with, and subject to, any applicable Requirements and, to the extent possible, with minimum interference with the on-going operations of Tenant and Subtenants; or
(b) perform or cause to be performed, at Tenant's expense, unless otherwise agreed in writing, all such work as may be necessary to preserve any of the walls of the Improvements from injury or damage and to support them by proper foundations.
Tenant shall not, by reason of such excavation or work, have any claim against Landlord for damages or for indemnity or for suspension, diminution, abatement or reduction of the Rental payable by Tenant hereunder.
ARTICLE 26
SECURITY DEPOSIT
Section 26.01. Amount and Use.
(a) Tenant shall, and hereby does covenant to, deposit with Landlord immediately prior to and also as a condition of the commencement of this Lease pursuant to Section 2.02 a good check in an amount equal to two (2) months of the Base Rent payable during the fifth (5th) Lease Year, as security for the faithful performance and observance by Tenant of the terms, provisions and conditions of this Lease. It is agreed that in the event Tenant defaults in respect of any of the terms, provisions and conditions of this Lease, including, but not limited to, the payment of the Rental, Landlord may use, apply or retain the whole or any part of the security so deposited to the extent required for the payment of any Rental or any other sums as to which Tenant is in default or for any sum which Landlord may expend or may be required to expend by reason of Tenant's default in respect of any of the terms, covenants and conditions of this Lease. In the event that Tenant shall fully and faithfully comply with all of the terms, covenants and conditions of this Lease, Landlord agrees to return the security to Tenant with interest within thirty (30) days, when this Lease is terminated in accordance with the terms hereof and after Tenant has vacated the Premises and the Permit Area and delivered possession thereof to Landlord.
(b) If Landlord at any time uses any portion of the security deposit as a result or by reason of default by Tenant (after applicable notice and grace periods), Tenant shall, within ten (10) days after written demand, restore and pay Landlord the amount so used.
(c) Commencing with the sixth (6th) Lease Year, concurrently with each increase in the Base Rent pursuant to Article 3, Tenant shall deposit with Landlord, as additional security, an amount equal to the difference between two (2) months of the Base Rent then in effect and the amount then held by Landlord as security for Tenant's faithful performance and observance of the terms, provisions and conditions of this lease (the additional security deposit together with the amount then held - collectively, "Security Deposit"). The application of any security deposit proceeds to the cure of any default of Tenant hereunder shall not be deemed to have cured such default unless the entire outstanding amount due or damages suffered by Landlord shall have been paid in full.
(d) Said Security Deposit will be placed by Landlord in an interest-bearing account. Interest that may accrue thereon shall belong to Tenant, except such portion thereof as shall be equal to one-half per cent (0.5%) per annum which percentage shall belong to and be the sole property of Landlord and which Landlord may withdraw from time to time and retain. That portion of the interest belonging to Tenant shall be accumulated and paid to Tenant annually following the end of each calendar year and upon the expiration of this Lease (unless otherwise applied in accordance with this Article 26). The obligation to pay any taxes, if any, related to or affecting any interest earned on the Security Deposit (except as to that portion thereof which belongs to Landlord) shall be the sole responsibility of Tenant, and Tenant hereby agrees to pay same and to forever indemnify and save harmless Landlord with respect thereto. Tenant shall, within fifteen (15) days after demand, furnish Landlord or its agent with a tax identification number for use with respect to such deposit.
e) Notwithstanding anything to the contrary that may be contained in this Article, Landlord agrees that in lieu of providing a cash security deposit, Tenant may provide a clean, unconditional and irrevocable letter of credit, in the face value of the required security deposit amount, to Landlord, in such form and from such Lending Institution that (i) is reasonably acceptable to Landlord, (ii) is a member of the New York Clearing House and (iii) which has a branch office located in the City of New York at which such letter of credit may be drawn. Such letter of credit shall have an expiration date no earlier than the first anniversary of the Commencement Date and shall provide that it shall be automatically renewed from year to year unless terminated by the Lending Institution by notice to Landlord not less than sixty (60) days prior to the then expiration date thereof by certified or registered mail. If Tenant does not replace any letter of credit prior to its expiration date, Landlord may draw-down on the letter of credit and hold onto such proceeds unless and until a proper replacement letter of credit is provided to Landlord from Tenant. Landlord may unilaterally use, apply or retain the proceeds of the letter of credit to the same extent it may use, apply or retain the security deposit. Tenant shall also replenish the face amount of the letter of credit in the case of a partial drawdown by Landlord in the same manner, as Tenant is required to replenish the security deposit in the event of a partial drawdown. Tenant may not assign or encumber the letter of credit, and any purported assignment or encumbrance thereof shall be void and of no effect.
ARTICLE 27
CONSENTS AND APPROVALS
Section 27.01. Effect of Granting or Failure to Grant Approvals or Consents. All consents and approvals which may be required under this Lease shall, as a condition of their effectiveness, be in writing. The granting of any consent or approval by a party to perform any act requiring consent or approval under the terms of this Lease, or the failure on the part of a party to object to any such action taken without the required consent or approval, shall not be deemed a waiver by the party whose consent was required of its right to require such consent or approval for any further similar act.
ARTICLE 28
SURRENDER AT END OF TERM
Section 28.01. Surrender of Premises and Permit Area. Upon the Expiration of the Term (or upon a re-entry by Landlord upon the Premises pursuant to Article 21 hereof), Tenant, without any payment or allowance whatsoever by Landlord, shall surrender the Premises and the Permit Area to Landlord in reasonably good order, condition and repair, reasonable wear and tear excepted, free and clear of all Subleases, liens and encumbrances. Tenant hereby waives any notice now or hereafter required by law with respect to vacating the Premises and the Permit Area on the Expiration of the Term.
Section 28.02. Delivery of Subleases, Etc. Upon the Expiration of the Term (or upon a re-entry by Landlord upon the Premises pursuant to Article 21 hereof), Tenant shall deliver to Landlord Tenant's executed counterparts of all Subleases and any service and maintenance contracts then affecting the Premises or the Permit Area, all true and complete maintenance records for the Premises and the Permit Area, all other agreements then pertaining to the Premises or the Permit Area , and all warranties and guarantees then in effect which Tenant has received in connection with any work or services performed or Equipment installed in the Premises or the Permit Area, together with a duly executed assignment thereof, without recourse except as provided in Section 36.06(b), to Landlord, and all financial reports, books and records required by Article 34 hereof and any and all other documents of every kind and nature whatsoever relating to the operation of the Premises or the Permit Area and the condition of the Premises or the Permit Area which are in Tenant's control at such time (or copies thereof, to the extent Tenant is required by law or Accounting Principles to retain the originals).
Section 28.03. Trade Fixtures and Personal Property Tenant, or any Subtenants which entered into a Sublease in accordance with the provisions of this Lease, may remove trade fixtures (for which it was not reimbursed by Landlord or other Governmental Authority), but upon removal of any such fixtures from the Premises or the Permit Area, Tenant shall immediately and at its sole expense repair and restore, or cause to be repaired and restored, the Premises and the Permit Area to the condition existing prior to installation of such fixtures or equipment, subject to normal wear and tear and repair any damage to the Premises or the Permit Area due to such removal. Any trade fixtures or other personal property of Tenant or of any Subtenant which shall remain on the Premises or the Permit Area after the Expiration of the Term (or upon a re-entry by Landlord upon the Premises pursuant to Article 21 hereof) and after the removal of Tenant or such Subtenant from the Premises or the Permit Area, may, at the option of Landlord, be deemed to have been abandoned by Tenant or such Subtenant, and either may be retained by Landlord as its property or be disposed of at Tenant's expense without accountability, in such manner as Landlord may see fit. Landlord shall not be responsible for any loss or damage occurring to any such property owned by Tenant or any Subtenant.
Section 28.04. Survival Clause. The provisions of this Article shall survive the Expiration of the Term.
ARTICLE 29
ENTIRE AGREEMENT
This Lease, together with the Exhibits hereto, and the Leasing and Development Agreement, which Agreement is attached as Exhibit B hereto and made apart hereof , contain all of the promises, agreements, conditions, inducements and understandings between Landlord and Tenant concerning the Premises and the Permit Area, and there are no promises, agreements, conditions, understandings, inducements, warranties or representations, oral or written, expressed or implied, between them other than as expressly set forth herein or as may be expressly contained in any enforceable written agreements or instruments executed simultaneously herewith by the parties hereto.
ARTICLE 30
QUIET ENJOYMENT
Landlord covenants that, as long as Tenant faithfully shall perform the agreements, terms, covenants and conditions hereof, Tenant shall and may, subject to the exceptions, reservations, terms and conditions of this Lease, peaceably and quietly have, hold and enjoy the Premises for the Term without molestation or disturbance by or from Landlord or any Person claiming through or under Landlord. This covenant shall run with the land and shall bind Landlord (and all assigns and successors of Landlord) and shall inure to the benefit of Tenant (and all assigns and successors of Tenant).
ARTICLE 31
APPRAISAL
Section 31.01. Procedure for Appraisals. In each instance under this Lease where an appraisal is required or it shall become necessary to resort to appraisal, such appraisal shall be conducted as follows:
(a) (i) With respect to appraisals to be performed in connection with Section 3.02, Landlord shall give notice to Tenant no earlier than twelve (12) months before each Revaluation Date, specifying therein the name and address of the person designated to act as appraiser on its behalf and setting forth the proposed scope of the appraisal, including any directions given pursuant to clause (ii) of this subsection. Tenant shall have fifteen (15) calendar days to review and comment on the scope of such appraisals, which comments shall not, in any way, be binding on Landlord. Such appraisals shall be made by an appraiser selected by Landlord and will be subject to the requirements and restrictions of any Governmental Authority with jurisdiction over such matters. Within fifteen (15) calendar days after delivery of an appraisal to Tenant, Tenant may, at its option, select another MAI certified appraiser, and proceed as provided in subsection (b). If Tenant does not so elect, such appraisal shall be binding on the parties.
(ii) Each Appraisal of the fair market rental value of the Premises, whether or not made pursuant to Section 3.02, shall be determined by considering all available appraisal approaches and shall be based on the Premises as then improved and as encumbered by this Lease, excluding therefrom the value of long term capital improvements made and paid for by Tenant without any reimbursement by any Governmental Authority, and subject to the Zoning Resolution.
(b) The appraisers so chosen shall meet within fifteen (15) business days after the second appraiser is appointed. If, within fifteen (15) business days after such first meeting, the said two appraisers shall be able to agree on the valuation, such appraisal shall be binding on the parties. If they are unable to agree upon the valuation, the appraiser selected second shall make a second appraisal within sixty (60) business days after such first meeting and during the period between thirty (30) and sixty (60) business days after such first meeting, the two appraisers shall appoint a third appraiser. Within a period of thirty (30) business days after the appointment of such third appraiser, such third appraiser shall be required to choose between the two appraisals previously given.
(c) In the event the two appraisers are unable to agree upon the appointment of a third appraiser within fifteen (15) days after their being unable to agree upon a valuation, such third appraiser shall be selected by the parties themselves if they can agree thereon within a further period of fifteen (15) days. If the parties do not so agree, then either party, on behalf of both, may apply to the AAA for the appointment of such third appraiser.
(d) All appraisers chosen or appointed pursuant to this Section shall be sworn fairly and impartially to perform their duties as such appraiser. In the event of the failure, refusal or inability of any appraiser to act, his successor shall be appointed within ten (10) business days by the party who originally appointed him or in the event such party shall fail so to appoint such successor, or in case of the third appraiser, his successor shall be appointed as hereinabove provided.
(e) The reasonable costs of all appraisals shall be equally split between the parties. Photocopies of the reports of all appraisals shall be provided to all the parties. In rendering their decision, the appraisers shall have no power to modify or reform any of the provisions of this Lease.
ARTICLE 32
ADMINISTRATIVE AND JUDICIAL PROCEEDINGS, CONTESTS, ETC.
Section 32.01. Tax Contest Proceedings. Tenant, at any time during the Lease term, shall have the exclusive right, at its sole cost and expense, to seek reductions in the valuation of the Premises assessed for real property tax purposes and to prosecute any action or proceeding in connection therewith by appropriate proceedings diligently conducted in good faith, in accordance with the Charter and Administrative Code of New York City.
Section 32.02. Imposition Contest Proceedings. Tenant, at any time during the Lease term, shall have the right to contest, at its sole cost and expense, the amount or validity, in whole or in part, of any Imposition by appropriate proceedings diligently conducted in good faith, in which event, notwithstanding the provisions of Section 4.01 hereof, payment of such Imposition may be postponed if, and only as long as:
(a) none of the Premises or any part thereof, could be, by reason of such postponement or deferment, in the reasonable judgment of Landlord, in danger of being forfeited and Landlord is not in danger of being subjected to criminal liability or penalty or civil liability or penalty in excess of the amount for which Tenant has furnished security as provided in Section 32.02(b) hereof by reason of nonpayment thereof; and
(b) Tenant has either (i) deposited cash, or (alternatively, at Tenant's option) given to Landlord a letter of credit in form and substance reasonably satisfactory to Landlord, issued by an Institutional Lender located in New York City, in the amount so contested and unpaid together with all interest and penalties in connection therewith and all charges relating to such contested Imposition that may or might, in Landlord's reasonable judgment, be assessed against, or become a charge on, the Premises, or any part thereof in or during the pendency of such proceedings, or (ii) provided other equivalent security in form, substance and amount, and on terms, reasonably satisfactory to Landlord. Upon the termination of such proceedings, Tenant shall pay the amount of such Imposition or part thereof as finally determined in such proceedings, the payment of which was deferred during the prosecution of such proceedings, together with any costs, fees (including, without limitation, reasonable attorneys' fees and disbursements), interest, penalties or other liabilities in connection therewith, and, upon such payment, deposited with it with respect to such Imposition, together with the interest, if any, earned thereon and Landlord shall return any form of security being held by it together with interest, if any, earned thereon. If Tenant shall not pay the amounts referred to in the preceding sentence of this paragraph, then Depository shall, at Landlord's direction, disburse any moneys deposited with it by Tenant pursuant to the first sentence of this paragraph directly to the Person to whom or to which such Imposition is payable, and the Landlord shall likewise be entitled to apply the proceeds of any security deposited with it by Tenant pursuant to said sentence to such Person in payment of said amounts. Tenant shall remain liable for any unpaid balance of said amounts remaining after application by Depository or Landlord as aforesaid, and Tenant shall pay said balance to Landlord or the Person entitled to receive it within ten (10) business days after Landlord's demand. If at any time during the continuance of such proceedings Landlord, in its sole judgment, shall deem insufficient the amount or nature of the security deposited, Tenant, within ten (10) business days after Landlord's demand, shall make an additional deposit with Depository of such additional sums or deliver to Landlord such other acceptable security as Landlord may request, and upon failure of Tenant to so do, the amount theretofore deposited (or made available by alternative security), together with the interest, if any, earned thereon, may be applied by Depository (or Landlord, if it is the holder of the security) to the payment, removal and discharge of such Imposition and the interest and penalties in connection therewith and any costs, fees (including, without limitation, reasonable attorneys' fees and disbursements) or other liability accruing in any such proceedings and the balance, if any, remaining thereafter, together with the interest, if any, earned thereon and remaining after application by Depository or Landlord as aforesaid, shall be returned to Tenant or to the Person entitled to receive it. If there is a deficiency, Tenant shall pay the deficiency to Landlord or the Person entitled to receive it, within ten (10) business days after Landlord's demand.
Section 32.03. Requirement Contest. Tenant shall have the right to contest the validity of any Requirement or the application thereof. During such contest, compliance with any such contested Requirement may be deferred by Tenant on the condition that before instituting any such proceeding, Tenant shall furnish a cash deposit to Depository or, alternatively at Tenant's option, furnish to Landlord a letter of credit or other security, securing compliance with the contested Requirement and payment of all interest, penalties, fines, civil liabilities, fees and expenses in connection therewith, all such forms of security to be satisfactory to Landlord in form, substance, amount, and identity of the issuing party. Any such proceeding instituted by Tenant shall be commenced as soon as is possible after the issuance of any such contested Requirement and shall be prosecuted with diligence to final adjudication, settlement, compliance or other mutually acceptable disposition of the Requirement so contested. The furnishing of any bond, deposit, letter of credit or other security notwithstanding, Tenant shall comply with any such Requirement in accordance with the provisions of Section 13.01(a) hereof if the Premises, or any part thereof, are in danger of being forfeited or if Landlord is in danger of being subjected to criminal liability or penalty, or civil liability in excess of the amount for which Tenant shall have furnished security as hereinabove provided, by reason of noncompliance therewith, or if failure to comply is hazardous to persons or property or would violate any mortgage or insurance policy provisions.
Section 32.04. Landlord's Participation in Contest Proceedings. Landlord shall not be required to join in any action or proceeding brought by Tenant referred to in this Article or permit the action to be brought by Tenant in Landlord's name unless the provisions of any law, rule or regulation at the time in effect require that such action or proceeding be brought by and/or in the name of Landlord. If so required, Landlord shall join and cooperate in such proceedings or permit them to be brought by Tenant in Landlord's name, in which case Tenant shall pay all costs and expenses (including, without limitation, attorneys' fees and disbursements) incurred by Landlord in connection therewith.
ARTICLE 33
INVALIDITY OF CERTAIN PROVISIONS
If any term or provision of this Lease or the application thereof to any Person or circumstances shall, to any extent, be invalid and unenforceable, the remainder of this Lease, and the application of such term or provision to Persons or circumstances other than those as to which it is held invalid and unenforceable, shall not be affected thereby and each term and provision of this Lease shall be valid and enforceable to the fullest extent permitted by law.
ARTICLE 34
FINANCIAL REPORTS
Section 34.01. Statements. Tenant shall furnish to Landlord the following:
(a) as soon as practicable after the end of each Lease Year and, in any event, within ninety (90) days thereafter, financial statements of Tenant and of the operations of the Premises and the Permit Area (including, without limitation, balance sheets, income statements and funds statements showing changes in financial position) in detail reasonably satisfactory to Landlord, for the Lease Year, setting forth, in accordance with Accounting Principles, in each case, in comparative form, the corresponding figures for the previous Lease Year, all in reasonable detail and examined and reported upon by a Certified Public Accountant in accordance with Accounting Principles (which may be a compilation).
(b) for as long as the City is Landlord and to the extent that City Administrative Code Section 11-208.1 (or successor thereto) is then in force and effect, income and expense statements of the type required by such code section (or successor thereto) as if Tenant were the "owner" of the Premises and the Permit Area as such term is used in said Section 11-208.1 (or successor thereto), such statements to be submitted within the time periods and to the address provided for in said Section 11-208.1 and shall be submitted notwithstanding that the City holds fee title to the Premises and the Permit Area, that the Premises and the Permit Area may therefore not be "income-producing property" as that concept is used in Section 11-208.1, or that PILOT rather than real estate taxes are being paid with respect to the Premises.
Section 34.02. Maintenance of Books and Records. Tenant shall keep and maintain at an office in New York City complete and accurate books and records of accounts of the operations of the Premises and the Permit Area from which Landlord may determine for each Lease Year the items to be shown or set forth on the statements to be delivered to Landlord pursuant to Section 34.01 hereof and shall preserve, for a period of at least six (6) years after the end of each Lease Year during the term, the records of its operations of the Premises and the Permit Area for such Lease Year. However, if, at the expiration of such six (6) year period, Landlord is seeking to contest or is contesting any matter relating to such records or any matter to which such records may be relevant, Tenant shall preserve such records until one (1) year after the final adjudication, settlement or other disposition of any such contest.
Section 34.03. Inspection and Audits of Books and Records Landlord, the Comptroller of the City (the "Comptroller") and/or Landlord's agents or representatives shall have the right from time to time during regular business hours, upon two (2) business days notice, to inspect, audit, and, at its option, duplicate, at Landlord's expense, all of Tenant's books and records and all other papers and files of Tenant, relating in any manner to the Premises or the Permit Area or to this Lease. Tenant shall produce all such books, records, papers and files, upon request of Landlord, the Comptroller and/or Landlord's agents and representatives.
Section 34.04. Survival Clause. The obligations of Tenant under this Article shall survive the Expiration of the Term.
ARTICLE 35
INVESTIGATIONS, SOLICITATIONS, ETC.
Section 35.01. Cooperation by Tenant. Tenant shall cooperate fully and faithfully with any investigation, audit or inquiry conducted by any Governmental Authority that is empowered directly or by designation to compel the attendance of witnesses and to examine witnesses under oath, or conducted by the Inspector General of a Governmental Authority that is a party in interest to this Lease. If:
(a) any Person (as defined in Section 35.06) who is either an officer, director or employee of (i) Tenant (a “Tenant Agent”) or (ii) a Subtenant or any further subtenant or sub-subtenant of Subtenant (a “Subtenant Agent”), who has been advised that his or her statement, and any information from such statement, will not be used against him or her in any subsequent criminal proceeding refuses to testify before a grand jury or other Governmental Authority empowered directly or by designation to compel the attendance of witnesses and to examine witnesses under oath concerning the award of, or performance under, any transaction, agreement, lease, permit, contract, or license entered into with the City, the State of New York or any political subdivision or public authority thereof, or the Port Authority of New York and New Jersey, EDC or any local development corporation, or any public benefit corporation organized under the laws of the State of New York, or
(b) any Tenant Agent or Subtenant Agent refuses to testify for a reason other than the assertion of his or her privilege against self-incrimination in an investigation, audit or inquiry conducted by a Governmental Authority empowered directly or by designation to compel the attendance of witnesses and to take testimony under oath, or by the Inspector General of a Governmental Authority that is a party in interest in, and is seeking testimony concerning the award of, or performance under this Lease,
then the commissioner or agency head whose agency is a party in interest to the submitted bid, submitted proposal, transaction, contract, lease, permit or license shall convene a hearing, upon not less than five (5) days written notice to the parties involved, to determine if any penalties should attach for the failure of such Tenant Agent or Subtenant Agent to testify.
Section 35.02. Adjournments of Hearing, Etc If any Tenant Agent or Subtenant Agent, as to whom such hearing is convened, to a hearing requests an adjournment of the proceeding, the commissioner or agency head who convened the hearing may, in a hearing involving (i) a Tenant Agent, suspend this Lease, pending the final determination pursuant to Section 35.03 below without the City's incurring any penalty or damages for delay or otherwise, or (ii) a Subtenant Agent, cause the Tenant to suspend the particular Sublease with which Subtenant Agent is associated, pending the final determination pursuant to Section 35.03 below without the City’s incurring any penalty or damages for delay or otherwise.
Section 35.03. Penalties. The penalties which may attach after such hearing and a final determination by the commissioner or agency head may include but shall not exceed:
(a) The disqualification for a period not to exceed five (5) years from the date of an adverse determination of any Tenant Agent or Subtenant Agent, or any entity of which such Tenant Agent or Subtenant Agent Person was a member at the time the testimony was sought, from submitting bids for, or transacting business with, or entering into or obtaining any contract, lease, permit or license with or from the City or EDC; and/or
(b) The cancellation or termination of any and all such existing City or EDC contracts, leases (not including this Lease or any Subleases, except as described below) permits or licenses that the refusal to testify concerns and that have not been assigned as permitted under this Lease, nor the proceeds of which pledged, to an unaffiliated and unrelated Institutional Lender for fair value prior to the issuance of the notice scheduling the hearing, shall occur without the City or EDC incurring any penalty or damages on account thereof. The parties agree that if the witness in question is a Subtenant Agent, the particular Sublease, but not this Lease, shall be subject to cancellation or termination as described above and Tenant shall diligently pursue all actions necessary to effect cancellation thereof. If the witness in question is a Tenant Agent, the Lease shall be subject to cancellation or termination as described above.
Section 35.04. Criteria for Determination. The commissioner or agency head shall consider and address, in reaching his or her determination and in assessing an appropriate penalty, the factors in subsections (a) and (b) below. He or she may also consider, if relevant and appropriate, the criteria established in subsections (c) and (d) below in addition to any other information that may be relevant and appropriate. An appropriate penalty shall not include Lease or any Sublease cancellation, except as specifically provided in Section 35.03(b) above.
(a) The entity's good faith endeavors, or lack thereof, to cooperate fully and faithfully with any governmental investigation or audit, including but not limited to the discipline, discharge or disassociation of any Tenant Agent or Subtenant Agent in failing to testify, the production of accurate and complete books and records, and the forthcoming testimony of all other members, agents, assignees or fiduciaries whose testimony is sought.
(b) The relationship of the Tenant Agent or Subtenant Agent who refused to testify to any entity that is a party to the hearing, including, but not limited to, whether the person whose testimony is sought has an ownership interest in the entity and/or the degree of authority and responsibility the person has within the entity.
(c) The nexus of the testimony sought to the subject entity and its contracts, leases, permits or licenses with the City.
f) The effect a penalty may have on an unaffiliated and unrelated party or entity that has a significant interest in an entity subject to penalties under Section 35.03 above, provided that the party or entity has given actual notice to the commissioner or agency head upon the acquisition of the interest, or at the hearing called for in Section 35.03 above gives notice and proves that such interest was previously acquired. Under either circumstance the party or entity must present evidence at the hearing demonstrating the potential adverse impact a penalty will have on such party or entity.
Section 35.05. Tenant Action. Tenant hereby covenants and agrees that Tenant shall provide a clause in any Sublease (and require any Subtenant to require such clause in any Sub-Sublease) that if any Subtenant Agent shall violate the provisions of this Section, such violation shall be a material default under such Sublease and shall grant Tenant the right to immediately terminate such Sublease. Tenant shall also provide in its appropriate charter documents that any default by any Subtenant Agent hereunder shall be grounds for Tenant to terminate any ownership interest in Tenant of any Subtenant that is associated with such Subtenant Agent. Tenant agrees that in the case of any such default, Tenant shall diligently pursue all available legal remedies to terminate the Sublease, terminate the ownership interest of any such Subtenant and evict such Subtenant and all other occupants claiming possession by through or under Subtenant. Tenant further acknowledges that if either (i) Tenant fails to properly terminate any Sublease as required above or (ii) any Tenant Agent shall violate the provisions of this Article, Tenant shall be in material default of this Lease and that Landlord will terminate this Lease due to any such default. Landlord agrees that in the case of any such default by Tenant it will diligently pursue all legal proceedings to terminate the Lease and to evict Tenant and all other occupants claiming possession by, through or under Tenant.
Section 35.06. Definitions. As used in this Article:
(a) The term "license" or "permit" shall mean a license, photo identification, permit, franchise or concession not granted as a matter of right.
(b) The term "Person" as used herein shall be defined as any natural person doing business alone or associated with another Person or entity as partner, director, officer, principal, or employee.
(c) The term "entity" shall mean any firm, partnership, corporation, limited liability company, association or Person that receives monies, benefits, licenses, leases or permits from or through the City or otherwise transacts business with the City.
(d) The term "member" shall mean any Person associated with another Person or entity as a partner, director, officer, principal or employee.
Section 35.07. Failure to Report Solicitations. In addition to and notwithstanding any other provision of this Lease, the commissioner or agency head may in his or her sole discretion terminate this Lease upon not less than three (3) days written notice in the event Tenant fails to promptly report in writing to the Commissioner of Investigation of the City any solicitation of money, goods, requests for future employment or other benefit or thing of value, by or on behalf of any employee of the City or other person or entity for any purpose which may be related to the procurement or obtaining of this Lease by the Tenant, or affecting the performance of this Lease.
ARTICLE 36
ARBITRATION
Except where this Lease expressly requires that a settlement of a dispute be determined through legal proceedings, all disputes relating to this Lease and collateral documents made a part hereof shall be settled by binding arbitration, which shall be conducted as follows: the party desiring arbitration shall appoint a disinterested person, who satisfies the requirements below, as arbitrator on its behalf and give notice thereof to the other party who shall, within fifteen (15) days thereafter, appoint a second disinterested person, who satisfies the requirements below, as arbitrator on its behalf and give notice thereof to the first party. The two (2) arbitrators thus appointed shall together appoint a third disinterested person, who satisfies the requirements below, within fifteen (15) days after the appointment of the second arbitrator, and said three (3) arbitrators shall, as promptly as possible, determine the matter which is the subject of the arbitration and the decision of the majority of them shall be conclusive and binding on all parties and non-appealable and judgment upon the award may be entered in any court having jurisdiction. If a party who shall have the right pursuant to the foregoing to appoint an arbitrator fails or neglects to do so, then and in such event, the other party (or if the two (2) arbitrators appointed by the parties shall fail to appoint a third arbitrator when required hereunder, then either party) may apply to the AAA (or any organization successor thereto), or in its absence, refusal, failure or inability to act, may apply for a court appointment of such arbitrator. The arbitration shall be conducted in the City and County of New York and, to the extent applicable and consistent with this Article 36, shall be in accordance with the Commercial Arbitration Rules then obtaining of the AAA or any successor body of similar function. Each party shall have the right to present evidence in the arbitration. The expenses of arbitration, including the reasonable attorneys fees of the prevailing party, shall be born by the losing party, unless otherwise specifically directed by the arbitrator. Landlord and Tenant shall sign all documents and to do all other things necessary to submit any such matter to arbitration and further shall, and hereby do, waive any and all rights they or either of them may at any time have to revoke their agreement hereunder to submit to arbitration and to abide by the decision rendered thereunder. The arbitrators shall have no power to vary or modify any of the provisions of this Lease and their jurisdiction is limited accordingly. Each of the arbitrators shall have at least ten (10) years experience in the particular subject matter that is the subject of the arbitration.
ARTICLE 37
MISCELLANEOUS
Section 37.01. Captions. The captions of this Lease are for the purpose of convenience of reference only, and in no way define, limit or describe the scope or intent of this Lease or in any way affect this Lease.
Section 37.02. Table of Contents. The table of contents is for the purpose of convenience of reference only, and is not to be deemed or construed in any way as part of this Lease.
Section 37.03. Reference to Landlord and Tenant. The use herein of the neuter pronoun in any reference to Landlord or Tenant shall be deemed to include any individual Landlord or Tenant. The use herein of the words "successors and assigns" or "successors or assigns" of Landlord or Tenant shall be deemed to include the heirs, legal representatives and assigns of any individual Landlord or Tenant.
Section 37.04. Person Acting on Behalf of a Party Hereunder. If more than one Person is named as, or becomes a party hereunder, the other party may require the signatures of all such Persons in connection with any notice to be given or action to be taken hereunder by the party acting through such Persons. Each Person acting through or named as a party shall be fully and jointly and severally liable for all of such party's obligations hereunder. Any notice by a party to any Person acting through or named as the other party shall be sufficient and shall have the same force and effect as though given to all Persons acting through or named as such other party.
Section 37.05. [INTENTIONALLY OMITTED].
Section 37.06. Limitation on Liability.
(a) Landlord Exculpation. The liability of Landlord, or of any other Person who has at any time acted as Landlord hereunder, for damages or otherwise, shall be limited to Landlord's interest in the Premises, the proceeds, payable to Landlord, of any insurance policies covering or relating to the Premises, and any awards payable to Landlord in connection with any condemnation of part or all of the Premises. In no event, however, shall Landlord's interest in the Premises include: (i) any rights, claims, or interests of Landlord that at any time may exist pursuant to a loan document to which the Landlord is a party or any note or mortgage given to Landlord in connection with the Premises; (ii) any rights, claims, or interests of Landlord that at any time may arise from or be a result of Landlord's governmental powers or rights or Landlord's actions in its governmental capacity; (iii) any rents, issues, or proceeds from or in connection with the Premises, or that would otherwise be within Landlord's interest in the Premises, from and after such time as such items have been received by the Landlord; or (iv) any proceeds resulting from a levy under execution or attachment against Landlord's fee interest in the Premises (it being understood and agreed that Tenant shall not seek to effect such a levy under execution or attachment). None of the directors, officers, partners, joint venturers, principals, shareholders, employees, agents or servants of Landlord or EDC shall have any liability (personal or otherwise) hereunder or be subject to levy, execution or other enforcement procedure for the satisfaction of any remedies of Tenant available hereunder.
(b) Tenant's Exculpation. Except for (i) liability for conversion, fraud, fraud of creditors, breach of trust, or intentional damage to the Premises or the Permit Area, (ii) liability of Tenant when Landlord is acting in or pursuant to its governmental capacity, and (iii) liability with respect to Tenant's obligation to pay any and all Rental that has accrued prior to termination of this Lease but not yet been paid, the liability of Tenant hereunder for damages or other monetary amounts or otherwise by reason of any Default under this Lease shall be limited to Tenant's interest in the Premises and the Permit Area, including, without limitation, (A) rents or profits collected or collectible after a Default has occurred (in the case of non-payment of Rental) or notice of Default has been given (in the case of Defaults other than non-payment of Rental); (B) the proceeds of any insurance policies payable to Tenant covering or relating to the Premises and the Permit Area; (C) any awards payable to Tenant in connection with any condemnation of the Premises or any part thereof; (D) any other rights, privileges, licenses, franchises, claims, causes of action or other interests, sums or receivables appurtenant to the Premises and the Permit Area; and (E) the Security Deposit and any security pledged hereunder by Tenant from time to time. None of the directors, officers, partners, joint venturers, principals, shareholders, employees, agents or servants of Tenant shall have any liability (personal or otherwise) hereunder, except for liability arising with respect to any individual(s) who have committed conversion, fraud, breach of trust, or intentional damage and with respect to individuals who are individually liable when Landlord is acting in or pursuant to its governmental capacity, beyond Tenant's interest in the Premises and the Permit Area, and no other property or assets of Tenant or any of the directors, officers, partners, joint venturers, principals, shareholders, employees, agents or servants of Tenant shall be subject to levy of execution or other enforcement procedure for the satisfaction of Landlord's remedies hereunder.
(c) Governs Lease. The provisions of this Section 37.06 shall govern every other provision of this Lease. The absence of explicit reference to this Section 37.06 in any particular provision of this Lease shall not be construed to diminish the application of this Section 37.06 to such provision. This Section 37.06 shall survive the Expiration of the Term.
(d) Other Remedies. Nothing in this Section 37.06 is intended to limit the remedies available to any party under this Lease other than by limiting the enforcement of those remedies to a party's interest in the Premises and the Permit Area, in the manner and to the extent provided in this Section 37.06. Nothing in this Section 37.06 is intended to prevent or preclude any person from obtaining injunctive or declaratory relief with respect to any claim arising under this Lease or in connection with the Premises or the Permit Area.
Section 37.07. Remedies Cumulative. Each right and remedy of either party provided for in this Lease shall be cumulative and shall be in addition to every other right or remedy provided for in this Lease, or now or hereafter existing at law or in equity or by statute or otherwise, and the exercise or beginning of the exercise by either party of any one or more of the rights or remedies provided for in this Lease, or now or hereafter existing at law or in equity or by statute or otherwise shall not preclude the simultaneous or later exercise by such party of any or all other rights or remedies provided for in this Lease or now or hereafter existing at law or in equity or by statute or otherwise.
Section 37.08. Merger. Unless Landlord and Tenant sign and record an agreement to the contrary, there shall be no merger of this Lease or the leasehold estate created hereby with the fee estate in the Premises or any part thereof by reason of the same Person acquiring or holding, directly or indirectly, this Lease and the leasehold estate created hereby or any interest in this Lease or in such leasehold estate as well as the fee estate in the Premises.
Section 37.09. Performance at Tenant's Sole Cost and Expense. All of Tenant's obligations hereunder shall be performed at Tenant's sole cost and expense.
Section 37.10. Relationship of Landlord and Tenant. This Lease is not to be construed to create a partnership or joint venture between the parties, it being the intention of the parties hereto only to create a landlord and tenant relationship.
Section 37.11. Waiver, Modification, Etc. No covenant, agreement, term or condition of this Lease shall be changed, modified, altered, waived or terminated except by a written instrument of change, modification, alteration, waiver or termination executed by Landlord and Tenant. No waiver of any Default shall affect or alter this Lease, but each and every covenant, agreement, term and condition of this Lease shall continue in full force and effect with respect to any other then existing or subsequent Default thereof.
Section 37.12. [INTENTIONALLY OMITTED].
Section 37.13. Governing Law. This Lease shall be governed by, and be construed in accordance with, the laws of the State of New York.
Section 37.14. Claims. Except for disputes that are required to settled pursuant to arbitration pursuant to the terms of this Lease, any other claims asserted by or against Landlord arising under this Lease or related hereto shall be heard and determined either in the courts of the United States ("Federal Courts") located in the City of New York or in the courts of the State of New York ("New York State Courts") located in the City of New York. To effect this agreement and intent, Landlord and Tenant agree and, where appropriate, shall require each contractor and Subtenant to agree, as follows:
(i) If Landlord initiates any action against Tenant in Federal Court or in New York State Court, service of process may be made on Tenant either in person, wherever Tenant may be found, or by registered mail (return receipt requested) addressed to Tenant at its address as set forth in this Agreement, or to such other address as Tenant may provide to Landlord in writing.
(ii) With respect to any action between Landlord and Tenant in New York State Court, Tenant hereby expressly waives and relinquishes any rights it might otherwise have (i) to move to dismiss on grounds of forum non conveniens, (ii) to remove to Federal Court outside New York City, and (iii) to move for a change of venue to New York State Court outside New York City.
(iii) With respect to any action between Landlord and Tenant in Federal Court located in New York City, Tenant expressly waives and relinquishes any right it might otherwise have to move to transfer the action to a Federal Court outside the City of New York.
(iv) If Tenant commences any action against Landlord in a court located other than in the City and State of New York, then, upon request of Landlord, Tenant shall either consent to a transfer of the action to a court of competent jurisdiction located in the City and State of New York or, if the court where the action is initially brought will not or cannot transfer the action, then Tenant shall consent to dismiss such action without prejudice and may thereafter reinstitute the action in a court of competent jurisdiction in New York City.
Section 37.15. Successors and Assigns. The agreements, terms, covenants and conditions herein shall be binding upon, and inure to the benefit of, Landlord and Tenant and, except as otherwise provided herein, their respective successors and assigns.
Section 37.16. Effect of Other Transactions. No Sublease or Capital Transaction, whether executed simultaneously with this Lease or otherwise, and whether or not consented to by Landlord, shall be deemed to modify this Lease in any respect.
Section 37.17. City as Landlord. The obligations of the City in its governmental capacity are not to be construed as obligations of the City in its capacity as Landlord under this Lease.
Section 37.18. Waivers. Landlord and Tenant hereby waive trial by jury in any action, proceeding or counterclaim brought by either of the parties hereto against the other on any matters whatsoever arising out of or in any way connected with this Lease, the relationship of Landlord and Tenant, Tenant's use or occupancy of the Premises, and/or any claim for injury or damages. In the event Landlord commences any proceeding for nonpayment of Rental or any other sums required to be paid by Tenant under the terms of this Lease, Tenant will not interpose any counterclaim of whatever nature or description in any such proceedings.
Section 37.19. Designee References to Landlord in this Lease shall be deemed to refer also to any designee named by Landlord to act in its behalf with respect to this Lease. Actions to be taken by the Administrator hereunder may instead, at Landlord's option, be taken by Landlord or Landlord's designee.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of the day and year first above written.
THE CITY OF NEW YORK
By: ________________
Attest:
_________________
City Clerk
Approved as to Form:
___________________________
Acting Corporation Counsel
[________________].
By: ______________________________
STATE OF NEW YORK )
) ss.:
COUNTY OF )
On the ____ day of ____________ in the year 2001 before me, the undersigned, personally appeared ____________________ , personally known to me or proven to me on the basis of satisfactory evidence to be the individual whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her capacity, and that by his/her signature on the instrument, the individual or the person upon behalf of which the individual acted, executed the instrument.
_______________________________
Signature and Office of individual
taking acknowledgment
STATE OF NEW YORK )
) ss.:
COUNTY OF )
On the _____ day of ____________ in the year 2001 before me, the undersigned, personally appeared ____________________, personally known to me or proven to me on the basis of satisfactory evidence to be the individual whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her capacity, and that by his/her signature on the instrument, the individual or the person upon behalf of which the individual acted, executed the instrument.
_______________________________
Signature and Office of individual
taking acknowledgment
STATE OF NEW YORK )
) ss.:
COUNTY OF )
On the _____ day of ____________ in the year 2001 before me, the undersigned, personally appeared ____________________, personally known to me or proven to me on the basis of satisfactory evidence to be the individual whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her capacity, and that by his/her signature on the instrument, the individual or the person upon behalf of which the individual acted, executed the instrument.
_______________________________
Signature and Office of individual
taking acknowledgment
AGREEMENT OF LEASE
between
THE CITY OF NEW YORK,
Landlord,
and
[_______________________]
Tenant.
Premises
__________
Bronx, New York
Dated as of ________
EXHIBIT A
PERMIT AREA
EXHIBIT B
DEVELOPMENT AND LEASING AGREEMENTS
EXHIBIT C
VOLUNTARY CLEANUP AGREEMENT
Agreement for Premises (Site B)
Voluntary Agreement for Permit Area shall be in substantially the same form as for the Premises.