Exhibit 10.1
AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of August 28, 2002
among
TAKE-TWO INTERACTIVE SOFTWARE, INC.
as the Borrower,
CERTAIN SUBSIDIARIES OF THE BORROWER,
as Guarantors,
THE LENDERS NAMED HEREIN
AND
BANK OF AMERICA, N.A.,
as Administrative Agent
Arranged by:
BANK OF AMERICA SECURITIES LLC,
as Sole Lead Arranger and Sole Book Manager
TABLE OF CONTENTS
Page
SECTION 1 DEFINITIONS............................................................................................. 1
1.1 Definitions......................................................................................... 1
1.2 Computation of Time Periods......................................................................... 23
1.3 Accounting Terms.................................................................................... 23
SECTION 2 CREDIT FACILITIES....................................................................................... 24
2.1 Commitments......................................................................................... 24
2.2 Borrowing Procedures for Loans...................................................................... 25
2.3 Interest............................................................................................ 26
2.4 Repayment........................................................................................... 26
2.5 Notes............................................................................................... 26
2.6 Increase in Revolving Commitments................................................................... 27
SECTION 3 OTHER PROVISIONS RELATING TO CREDIT FACILITIES.......................................................... 34
3.1 Default Rate........................................................................................ 34
3.2 Extension and Conversion............................................................................ 34
3.3 Prepayments......................................................................................... 34
3.4 Reduction and Termination of Commitments............................................................ 35
3.5 Fees................................................................................................ 35
3.6 Capital Adequacy.................................................................................... 36
3.7 Limitation on Eurodollar Loans...................................................................... 36
3.8 Illegality.......................................................................................... 37
3.9 Requirements of Law................................................................................. 37
3.10 Treatment of Affected Loans......................................................................... 38
3.11 Taxes............................................................................................... 38
3.12 Funding Losses...................................................................................... 40
3.13 Pro Rata Treatment.................................................................................. 40
3.14 Sharing of Payments................................................................................. 41
3.15 Payments, Computations, Etc. ....................................................................... 42
3.16 Certain Limitations................................................................................. 44
3.17 Evidence of Debt.................................................................................... 45
SECTION 4 GUARANTY................................................................................................ 45
4.1 The Guaranty........................................................................................ 45
4.2 Obligations Unconditional........................................................................... 46
4.3 Reinstatement....................................................................................... 47
4.4 Certain Additional Waivers.......................................................................... 47
4.5 Remedies............................................................................................ 47
4.6 Rights of Contribution.............................................................................. 48
4.7 Guarantee of Payment; Continuing Guarantee.......................................................... 48
SECTION 5 CONDITIONS.............................................................................................. 48
5.1 Closing Conditions.................................................................................. 48
5.2 Conditions to all Extensions of Credit.............................................................. 50
SECTION 6 REPRESENTATIONS AND WARRANTIES.......................................................................... 50
6.1 Financial Condition................................................................................. 51
6.2 No Changes or Restricted Payments................................................................... 51
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6.3 Organization; Existence; Compliance with Law........................................................ 51
6.4 Power; Authorization; Enforceable Obligations....................................................... 52
6.5 No Legal Bar........................................................................................ 52
6.6 No Material Litigation and Disputes................................................................. 52
6.7 No Defaults......................................................................................... 52
6.8 Ownership and Operation of Property................................................................. 53
6.9 Intellectual Property............................................................................... 53
6.10 Taxes............................................................................................... 53
6.11 ERISA............................................................................................... 54
6.12 Governmental Regulations, Etc....................................................................... 55
6.13 Subsidiaries........................................................................................ 55
6.14 Purpose of Extensions of Credit..................................................................... 56
6.15 Environmental Matters............................................................................... 56
6.16 No Material Misstatements........................................................................... 56
6.17 Labor Matters....................................................................................... 57
6.18 Collateral Documents................................................................................ 57
6.19 Collateral Matters.................................................................................. 58
6.20 Solvency............................................................................................ 58
6.21 No Other Broker's Fees.............................................................................. 58
SECTION 7 AFFIRMATIVE COVENANTS................................................................................... 58
7.1 Information Covenants............................................................................... 58
7.2 Preservation of Existence and Franchises............................................................ 62
7.3 Books and Records................................................................................... 62
7.4 Compliance with Law................................................................................. 62
7.5 Payment of Taxes and Other Indebtedness............................................................. 62
7.6 Insurance........................................................................................... 63
7.8 Performance of Obligations.......................................................................... 63
7.9 Use of Proceeds..................................................................................... 63
7.10 Audits; Field Exams; Appraisals..................................................................... 64
7.11 Financial Covenants................................................................................. 64
7.12 Additional Guarantors............................................................................... 65
SECTION 8 NEGATIVE COVENANTS...................................................................................... 66
8.1 Indebtedness........................................................................................ 66
8.2 Liens............................................................................................... 67
8.3 Nature of Business.................................................................................. 68
8.4 Merger and Consolidation, Dissolution and Acquisitions.............................................. 68
8.5 Asset Dispositions.................................................................................. 69
8.6 Investments......................................................................................... 69
8.7 Restricted Payments................................................................................. 69
8.8 Modifications and Payments in respect of Funded Debt................................................ 70
8.9 Transactions with Affiliates........................................................................ 70
8.10 Fiscal Year; Organizational Documents; Legal Name; State of Formation; Form of Organization......... 70
8.11 Limitation on Restricted Actions.................................................................... 71
8.12 Ownership of Subsidiaries........................................................................... 71
8.13 Sale Leasebacks..................................................................................... 71
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SECTION 9 EVENTS OF DEFAULT....................................................................................... 71
9.1 Events of Default................................................................................... 71
9.2 Acceleration; Remedies.............................................................................. 73
SECTION 10 AGENCY PROVISIONS...................................................................................... 74
10.1 Appointment and Authorization of Agents............................................................. 74
10.2 Delegation of Duties................................................................................ 75
10.4 Notice of Default................................................................................... 75
10.7 Indemnification of Agent............................................................................ 76
10.8 Credit Decision; Disclosure of Information by Agent................................................. 77
10.9 Successor Agents.................................................................................... 77
SECTION 11 MISCELLANEOUS.......................................................................................... 79
11.1 Notices............................................................................................. 79
11.2 Right of Set-Off; Adjustments....................................................................... 79
11.3 Successors and Assigns.............................................................................. 80
11.4 No Waiver; Remedies Cumulative...................................................................... 82
11.5 Expenses; Indemnification........................................................................... 83
11.6 Amendments, Waivers and Consents.................................................................... 84
11.7 Counterparts........................................................................................ 85
11.8 Headings............................................................................................ 85
11.9 Survival............................................................................................ 85
11.10 Governing Law; Submission to Jurisdiction; Venue.................................................... 85
11.11 Severability........................................................................................ 86
11.12 Entirety............................................................................................ 86
11.13 Binding Effect; Termination......................................................................... 86
11.14 Confidentiality..................................................................................... 87
11.15 Source of Funds..................................................................................... 87
11.16 Conflict............................................................................................ 88
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SCHEDULES
Schedule 2.1 Commitments
Schedule 2.2(a) Form of Notice of Borrowing
Schedule 2.5 Form of Revolving Note
Schedule 2.7(b) Existing Letters of Credit
Schedule 3.2 Form of Notice of Extension/Conversion
Schedule 5.1 Form of Officer's Certificate
Schedule 6.2 Material Asset Sales and Restricted Payments Prior to the Closing Date
Schedule 6.8 Liens
Schedule 6.9 Intellectual Property
Schedule 6.13 North American Subsidiaries
Schedule 6.19(a) Locations of Owned and Leased Real Property
Schedule 6.19(b) Locations of Tangible Personal Property
Schedule 6.19(c) Legal Name; State of Formation; Location of Chief Executive Office
Schedule 7.1(c) Form of Officer's Compliance Certificate
Schedule 7.12 Form of Joinder Agreement
Schedule 8.1 Indebtedness
Schedule 8.6 Investments
Schedule 11.1 Notice Addresses
Schedule 11.3(b) Form of Assignment and Acceptance
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AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT (the "Credit Agreement")
dated as of August 28, 2002 is by and among TAKE-TWO INTERACTIVE SOFTWARE, INC.,
a Delaware corporation (the "Borrower"), the Guarantors (defined herein), the
Lenders (defined herein) and BANK OF AMERICA, N.A., as Administrative Agent (in
such capacity, the "Administrative Agent").
W I T N E S S E T H
WHEREAS, the Borrower is a party to that Credit Agreement (as amended,
modified, supplemented and increased, the "Existing Credit Agreement") dated as
of December 7, 1999 among the Borrower, the guarantors identified therein, the
lenders identified therein and Bank of America, N.A., as administrative agent;
WHEREAS, at the request of the Borrower, the Lenders have agreed to
amend and restate the Existing Credit Agreement on the terms and conditions set
forth herein; and
WHEREAS, this Credit Agreement is given in amendment to, restatement of
and substitution for the Existing Credit Agreement, and evidences the same
indebtedness and obligations evidenced by, and is secured by the same collateral
as, the Existing Credit Agreement.
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1
DEFINITIONS
1.1 Definitions.
As used in this Credit Agreement, the following terms shall have the
meanings specified below unless the context otherwise requires:
"Acquisition" means the purchase or acquisition by any Person of any
Capital Stock of another Person or all or any substantial portion of the
Property (other than Capital Stock) of another Person, whether or not involving
a merger or consolidation with such other Person.
"Adjusted Base Rate" means the Base Rate plus the Applicable
Percentage.
"Adjusted Eurodollar Rate" means the Eurodollar Rate plus the
Applicable Percentage.
"Administrative Agent" means Bank of America, as referenced in the
opening paragraph, and its successors in such capacity.
"Administrative Agent's Fee Letter" means that letter agreement dated
as of July 16, 2002 between the Administrative Agent and the Borrower, as
amended, modified, supplemented or replaced from time to time.
"Administrative Agent's Office" means the Administrative Agent's
address as set forth on Schedule 11.1, or such other address as the
Administrative Agent may from time to time notify the Borrower and the Lenders.
"Affiliate" means (a) with respect to any member of the Consolidated
Group, any other Person (i) directly or indirectly controlling or controlled by
or under direct or indirect common control with such Person or (ii) directly or
indirectly owning or holding ten percent (10%) or more of the Capital Stock in
such Person, and (b) with respect to any other Person, any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such Person. For purposes of this definition, "control" when used
with respect to any Person means the power to direct the management and policies
of such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Agent-Related Persons" means the Administrative Agent, together with
its Affiliates (including, in the case of Bank of America in its capacity as the
Administrative Agent, the Arranger), and the officers, directors, employees,
agents and attorneys-in-fact of such Persons and Affiliates.
"Agents" means the Administrative Agent and the Collateral Agent.
"Aggregate Revolving Committed Amount" means FORTY MILLION DOLLARS
($40,000,000), as such amount may be increased pursuant to Section 2.6 or
reduced from time to time in accordance with the provisions hereof.
"Applicable Lending Office" means, for each Lender, the office of such
Lender (or of an Affiliate of such Lender) as such Lender may from time to time
specify to the Administrative Agent and the Borrower by written notice as the
office by which its Eurodollar Loans are made and maintained.
"Applicable Percentage" means for any day, the rate per annum set forth
below opposite the applicable Consolidated Leverage Ratio then in effect, it
being understood that the Applicable Percentage for (i) Base Rate Loans shall be
the percentage set forth under the column "Base Rate Margin", (ii) Eurodollar
Loans shall be the percentage set forth under the column "Eurodollar Margin and
Letter of Credit Fee", (iii) the Letter of Credit Fee shall be the percentage
set forth under the column "Eurodollar Margin and Letter of Credit Fee", and
(iv) the Commitment Fee shall be the percentage set forth under the column
"Commitment Fee":
Eurodollar Margin
Pricing Base Rate and Commitment
Level Consolidated Leverage Ratio Margin Letter of Credit Fee Fee
------- --------------------------------- --------- -------------------- ----------
I greater than or equal to 1.75:1.0 1.00% 2.75% 0.50%
II greater than or equal to 1.50:1.0
but less than 1.75:1.0 0.50% 2.50% 0.50%
III less than 1.50:1.0 0.25% 2.25% 0.50%
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The Applicable Percentage shall be determined and adjusted quarterly on
the date (each a "Rate Determination Date") five (5) Business Days
after the date by which each annual and quarterly compliance
certificates and related financial statements and information are
required in accordance with the provisions of Sections 7.1(a), (b) and
(c), as appropriate; provided, however, that:
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(a) the initial Applicable Percentages shall be based on
pricing level III and shall remain in effect at such pricing
level until the first Rate Determination Date to occur in
connection with the delivery of the quarterly financial
statements and appropriate compliance certificate for the
fiscal quarter ending October 31, 2002, and
(b) notwithstanding the foregoing, in the event an annual or
quarterly compliance certificate and related financial
statements and information are not delivered timely to the
Administrative Agent by the date required by Section 7.1(a),
(b) or (c), as appropriate, the Applicable Percentages shall
be based on pricing level I until the date five (5) Business
Days after the date by which the appropriate compliance
certificate and related financial statements and information
are delivered, whereupon the applicable pricing level shall be
adjusted based on the information contained in such compliance
certificate and related financial statements and information.
Subject to the qualifications set forth above, each Applicable
Percentage shall be effective from a Rate Determination Date until the
next such Rate Determination Date. The Administrative Agent shall
determine the appropriate Applicable Percentages in the pricing matrix
promptly upon receipt of and based on the quarterly or annual
compliance certificate and related financial information and shall
promptly notify the Borrower and the Lenders of any change thereof.
Such determinations by the Administrative Agent shall be conclusive
absent error. Adjustments in the Applicable Percentages shall be
effective as to existing Extensions of Credit as well as new Extensions
of Credit made thereafter.
"Appraisals" has the meaning specified in Section 7.10(b).
"Arranger" means Banc of America Securities LLC, in its capacity as
sole lead arranger and sole book manager.
"Asset Disposition" means, with respect to any Person, the sale, lease
or other disposition of any Property (including the Capital Stock of a
Subsidiary) by such Person; but for purposes hereof shall not include, in any
event, (A) the sale of inventory in the ordinary course of business, (B) the
sale, lease or other disposition of machinery and equipment no longer used or
useful in the conduct of business, (C) a sale, lease, transfer or disposition of
Property to the Borrower or any Domestic Subsidiary, (D) the assignment of
insured Receivables to the insurer in connection with a credit insurance claim
for such Receivable and (E) the sale of Receivables that do not constitute
Canadian Eligible Receivables or U.S. Eligible Receivables pursuant to a put
contract with a third party.
"Assignment and Assumption" means an Assignment and Assumption in
substantially the form of Schedule 11.3.
"Auto-Renewal Letter of Credit" has the meaning specified in Section
2.7(c)(iii).
"Bank of America" means Bank of America, N.A., and its successors.
"Bankruptcy Code" means the Bankruptcy Code in Title 11 of the United
States Code, as amended, modified, succeeded or replaced from time to time.
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"Bankruptcy Event" means, with respect to any Person, the occurrence of
any of the following with respect to such Person: (i) a court or governmental
agency having jurisdiction in the premises shall enter a decree or order for
relief in respect of such Person in an involuntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or
appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator
(or similar official) of such Person or for any substantial part of its Property
or ordering the winding up or liquidation of its affairs; or (ii) there shall be
commenced against such Person an involuntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or any
case, proceeding or other action for the appointment of a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or similar official) of such Person
or for any substantial part of its Property or for the winding up or liquidation
of its affairs, and such involuntary case or other case, proceeding or other
action shall remain undismissed, undischarged or unbonded for a period of sixty
(60) consecutive days; or (iii) such Person shall commence a voluntary case
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or consent to the entry of an order for relief in an
involuntary case under any such law, or consent to the appointment or taking
possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator
(or similar official) of such Person or for any substantial part of its Property
or make any general assignment for the benefit of creditors; or (iv) such Person
shall be unable to, or shall admit in writing its inability to, pay its debts
generally as they become due.
"Base Rate" means, for any day, the rate per annum equal to the higher
of (a) the Federal Funds Rate for such day plus one-half of one percent (0.5%)
and (b) the Prime Rate for such day. Any change in the Base Rate due to a change
in the Prime Rate or the Federal Funds Rate shall be effective on the effective
date of such change in the Prime Rate or Federal Funds Rate.
"Base Rate Loan" means any Loan bearing interest at a rate determined
by reference to the Base Rate.
"Borrower" means Take-Two Interactive Software, Inc., a Delaware
corporation, as referenced in the opening paragraph, and its successors and
permitted assigns.
"Business Day" means a day other than a Saturday, Sunday or other day
on which commercial banks in Charlotte, North Carolina or New York, New York are
authorized or required by law to close, except that, when used in connection
with a Eurodollar Loan, such day shall also be a day on which dealings between
banks are carried on in Dollar deposits in London, England.
"Canadian Eligible Inventory" means, as of any date of determination,
the aggregate book value based on an average cost valuation (as shown on the
books and records of the Canadian Subsidiaries) of all inventory owned by the
Canadian Subsidiaries on a consolidated basis after deducting allowances or
reserves relating thereto, but excluding in any event (without duplication) (a)
inventory which is subject to any other Lien that is not a Permitted Lien, (b)
inventory which is not in good condition or fails to meet standards for sale or
use imposed by governmental agencies, departments or divisions having regulatory
authority over such goods, (c) inventory which is leased or on consignment, (d)
displays and packaging supplies, (e) inventory in possession of a Person other
than a Canadian Subsidiary, and (f) inventory which fails to meet such other
specifications and requirements as may from time to time be established by the
Administrative Agent in its reasonable discretion.
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"Canadian Eligible Receivables" means, as of any date of determination,
the aggregate book value of all Receivables owned by or owing to any of the
Canadian Subsidiaries on a consolidated basis after deducting retainage and
allowances or reserves relating thereto, as shown on the books and records of
the Canadian Subsidiaries, but excluding in any event (without duplication) (a)
Receivables owing by an account debtor which is not solvent or is subject to any
bankruptcy or insolvency proceeding of any kind, (b) any Receivable which is
subject to any Lien that is not a Permitted Lien, (c) any insured Receivable
which is more than 60 days past due or any uninsured Receivable which is more
than 90 days past invoice date (in each case net of reserves for bad debts in
connection with any such Receivables), (d) any Receivable not otherwise excluded
by clause (c) above if more than 50% of the other Receivables owing from the
applicable account debtor are excluded by clause (c) above, (e) the sum of all
credit balances carried on Receivables that are more than 90 days past due, (f)
Receivables that are more than 90 days past the original invoice date but that
have been re-aged as a result of a dispute by the account debtor, (g)
Receivables for which any Subsidiary or any Affiliate of a member of the
Consolidated Group is the account debtor, (h) any Receivable if and to the
extent the amount of such Receivable, together with all other Receivables of the
applicable account debtor, exceeds an amount equal to 25% of all Receivables
owned by or owing to the members of the North American Group, (i) Receivables
owing by an account debtor located outside of the United States or Canada
(unless payment for the goods shipped is secured by an irrevocable letter of
credit in a form and from an institution acceptable to the Administrative
Agent), and (j) Receivables which fail to meet such other specifications and
requirements as may from time to time be established by the Administrative Agent
in its reasonable discretion.
"Canadian Subsidiary" means any Subsidiary that is incorporated or
organized under the laws of Canada or any province thereof.
"Capital Lease" means, as applied to any Person, any lease of any
Property by that Person as lessee which, in accordance with GAAP, is or should
be accounted for as a capital lease on the balance sheet of that Person.
"Capital Stock" means (i) in the case of a corporation, capital stock,
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
capital stock, (iii) in the case of a partnership, partnership interests
(whether general or limited) and (iv) in the case of a limited liability
company, membership interests.
"Cash Collateralize" has the meaning specified in Section 2.7(h).
"Cash Equivalents" means (a) securities issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof) having maturities of not more
than twelve months from the date of acquisition, (b) Dollar denominated time
deposits and certificates of deposit of (i) any Lender, (ii) any domestic
commercial bank of recognized standing having capital and surplus in excess of
$500,000,000 or (iii) any bank whose short-term commercial paper rating from S&P
is at least A-1 or the equivalent thereof or from Moody's is at least P-1 or the
equivalent thereof (any such bank being an "Approved Bank"), in each case with
maturities of not more than 270 days from the date of acquisition, (c)
commercial paper and variable or fixed rate notes issued by any Approved Bank
(or by the parent company thereof) or any variable rate notes issued by, or
guaranteed by, any domestic corporation rated A-1 (or the equivalent thereof) or
better by S&P or P-1 (or the equivalent thereof) or better by Moody's and
maturing within six months of the date of acquisition, (d) repurchase agreements
entered into by any Person with a bank or trust company (including any of the
Lenders) or recognized securities dealer having capital and surplus in excess of
$500,000,000 for direct obligations issued by or fully guaranteed by the United
States in which such Person shall have a perfected first priority security
interest (subject to no other Liens) and having, on the date of purchase
thereof, a fair market value of at least 100% of the amount of the repurchase
obligations and (e) Investments, classified in accordance with GAAP as current
assets, in money market investment programs registered under the Investment
Company Act of 1940, as amended, which are administered by reputable financial
institutions having capital of at least $500,000,000 and the portfolios of which
are limited to Investments of the character described in the foregoing
subdivisions (a) through (d).
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"Change of Control" means the occurrence of any of the following events
after the Closing Date: (i) any Person or two or more Persons acting in concert
shall have acquired beneficial ownership, directly or indirectly, of, or shall
have acquired by contract or otherwise, or shall have entered into a contract or
arrangement that, upon consummation, will result in its or their acquisition of
or control over, Voting Stock of the Borrower (or other securities convertible
into such Voting Stock) representing 25% or more of the combined voting power of
all Voting Stock of the Borrower or (ii) during any period of up to 24
consecutive months, commencing after the Closing Date, individuals who at the
beginning of such 24 month period were directors of the Borrower (together with
any new director whose election by the Borrower's board of directors or whose
nomination for election by the Borrower's shareholders was approved by a vote of
at least two-thirds of the directors then still in office who either were
directors at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to constitute a
majority of the directors of the Borrower then in office. As used herein,
"beneficial ownership" shall have the meaning provided in Rule 13d-3 of the
Securities and Exchange Commission under the Securities Exchange Act.
"Closing Date" means the date hereof.
"Collateral" means a collective reference to the collateral that is
identified in, and at any time is covered by, the Collateral Documents.
"Collateral Agent" means Bank of America, together with its successors
in such capacity.
"Collateral Documents" means a collective reference to the Security
Agreement, the Pledge Agreement and such other documents executed and delivered
in connection with the attachment and perfection of the security interests and
liens arising thereunder, including without limitation, UCC financing statements
and patent and trademark filings.
"Commitment Fee" shall have the meaning provided in Section 3.5(a).
"Commitment Period" means the period from and including the Closing
Date to but not including the earlier of (i) the Termination Date or (ii) the
date on which the Commitments terminate in accordance with the provisions of
this Credit Agreement.
"Commitments" means the Revolving Commitment, the LOC Commitment and
the Swingline Commitment.
"Committed Amount" means any of the Revolving Committed Amount, the LOC
Committed Amount and/or the Swingline Committed Amount.
"Consolidated Adjusted EBITDA" means, for any period for the
Consolidated Group, the sum of (i) Consolidated EBITDA minus (iii) cash taxes
paid, in each case on a consolidated basis in accordance with GAAP.
"Consolidated EBITDA" means, for any period for the Consolidated Group,
the sum of Consolidated Net Income, plus, to the extent deducted in determining
Consolidated Net Income, the sum of (i) Consolidated Interest Expense, (ii) all
provisions for federal, state and local income taxes, (iii) depreciation and
amortization, and (iv) one-time non-cash charges approved by the Administrative
Agent in its sole discretion, in each case on a consolidated basis in accordance
with GAAP.
"Consolidated Fixed Charge Coverage Ratio" means, as of the last day of
each fiscal quarter, the ratio of Consolidated Adjusted EBITDA for the period of
four consecutive fiscal quarters then ending to Consolidated Fixed Charges for
the period of four consecutive fiscal quarters then ending.
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"Consolidated Fixed Charges" means, for any period for the Consolidated
Group, the sum of (i) the cash portion of Consolidated Interest Expense, plus
(ii) current maturities of Consolidated Funded Debt (including, for purposes
hereof, current scheduled reductions in commitments), plus (iii) lease and rent
expense, in each case on a consolidated basis in accordance with GAAP.
"Consolidated Funded Debt" means Funded Debt of the Consolidated Group
on a consolidated basis in accordance with GAAP.
"Consolidated Group" means the Borrower and its Subsidiaries as
determined in accordance with GAAP.
"Consolidated Interest Expense" means, for any period for members of
the Consolidated Group, all interest expense, including the amortization of debt
discount and premium, the interest component under capital leases and the
implied interest component under Securitization Transactions (without deduction
or reduction for interest income), on a consolidated basis in accordance with
GAAP.
"Consolidated Leverage Ratio" means, as of the last day of each fiscal
quarter, the ratio of (i) Consolidated Funded Debt on such day to (ii)
Consolidated EBITDA for the period of four consecutive fiscal quarters ending as
of such day.
"Consolidated Net Income" means, for any period for the Consolidated
Group, net income (or loss) determined on a consolidated basis in accordance
with GAAP, but excluding for purposes of determining the Consolidated Leverage
Ratio and the Consolidated Fixed Charge Coverage Ratio any extraordinary gains
or losses and related tax effects thereon.
"Consolidated Net Worth" means, as of any day, shareholders' equity or
net worth of the Consolidated Group determined in accordance with GAAP.
"Contractual Obligation" means, as to any Person, any material
provision of any security issued by such Person or of any material provision of
any material agreement, instrument or undertaking to which such Person is a
party or by which it or any of its property is bound.
"Credit Documents" means, collectively, this Credit Agreement, the
Notes, the LOC Documents, the Collateral Documents, each Joinder Agreement, the
Administrative Agent's Fee Letter, and all other related agreements and
documents issued or delivered hereunder or thereunder or pursuant hereto or
thereto.
"Credit Party" means any of Borrower and the Guarantors.
"Default" means any event, act or condition which with notice or lapse
of time, or both, would constitute an Event of Default.
"Defaulting Lender" means, at any time, any Lender that (a) has failed
to make a Loan or purchase a Participation Interest required pursuant to the
terms of this Credit Agreement within one Business Day of when due, (b) other
than as set forth in (a) above, has failed to pay to the Administrative Agent or
any Lender an amount owed by such Lender pursuant to the terms of this Credit
Agreement within one Business Day of when due, unless such amount is subject to
a good faith dispute or (c) has been deemed insolvent or has become subject to a
bankruptcy or insolvency proceeding or with respect to which (or with respect to
any of the assets of which) a receiver, trustee or similar official has been
appointed.
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"Dollars" and "$" means lawful currency of the United States of
America.
"Domestic Credit Party" means any Credit Party which is incorporated or
organized under the laws of any State of the United States or the District of
Columbia.
"Domestic Subsidiary" means any Subsidiary which is incorporated or
organized under the laws of any State of the United States or the District of
Columbia.
"Environmental Laws" means any and all lawful and applicable federal,
state, local and foreign statutes, laws, regulations, ordinances, rules,
judgments, orders, decrees, permits, concessions, grants, franchises, licenses,
agreements and other governmental restrictions relating to the environment or to
emissions, discharges, releases or threatened releases of Materials of
Environmental Concern into the environment including, without limitation,
ambient air, surface water, ground water, or land, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport, or handling of Materials of Environmental Concern.
"Environmental Liability" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower or any of its Subsidiaries directly
or indirectly resulting from or based upon (a) violation of any Environmental
Law, (b) the generation, use, handling, transportation, storage, treatment or
disposal of any Materials of Environmental Concern, (c) exposure to any
Materials of Environmental Concern, (d) the release or threatened release of any
Materials of Environmental Concern into the environment or (e) any contract,
agreement or other consensual arrangement pursuant to which liability is assumed
or imposed with respect to any of the foregoing.
"Equity Transaction" means, with respect to any member of the
Consolidated Group, any issuance of shares of its capital stock or other equity
interest, other than an issuance (i) to a member of the Consolidated Group, (ii)
in connection with a conversion of debt securities to equity, (iii) in
connection with exercise by a present or former employee, officer, director or
other eligible participant under a stock incentive plan, stock option plan or
other equity-based compensation plan or arrangement, (iv) in connection with the
exercise by any Person of stock options or warrants issued to such Person as
consideration for the licensing or acquisition of intellectual property rights,
or (v) of the capital stock of the Borrower in connection with an Acquisition
permitted hereunder.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute thereto, as interpreted by the rules and
regulations thereunder, all as the same may be in effect from time to time.
References to sections of ERISA shall be construed also to refer to any
successor sections.
"ERISA Affiliate" means an entity which is under common control with
any member of the Consolidated Group within the meaning of Section 4001(a)(14)
of ERISA, or is a member of a group which includes any member of the
Consolidated Group and which is treated as a single employer under Sections
414(b) or (c) of the Internal Revenue Code.
"ERISA Event" means (i) with respect to any Plan, the occurrence of a
Reportable Event or the substantial cessation of operations (within the meaning
of Section 4062(e) of ERISA); (ii) the withdrawal by any member of the
Consolidated Group or any ERISA Affiliate from a Multiple Employer Plan during a
plan year in which it was a substantial employer (as such term is defined in
Section 4001(a)(2) of ERISA), or the termination of a Multiple Employer Plan;
(iii) the distribution of a notice of intent to terminate or the actual
termination of a Plan pursuant to Section 4041(a)(2) or 4041A of ERISA; (iv) the
institution of proceedings to terminate or the actual termination of a Plan by
the PBGC under Section 4042 of ERISA; (v) any event or condition which might
constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan; (vi) the complete or partial
withdrawal of any member of the Consolidated Group or any ERISA Affiliate from a
Multiemployer Plan; (vii) the conditions for imposition of a lien under Section
302(f) of ERISA exist with respect to any Plan; or (viii) the adoption of an
amendment to any Plan requiring the provision of security to such Plan pursuant
to Section 307 of ERISA.
8
"Eurodollar Loan" means any Loan that bears interest at a rate based
upon the Eurodollar Rate.
"Eurodollar Rate" means, for any Eurodollar Loan for any Interest
Period therefor, the rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) determined by the Administrative Agent to be equal to the
quotient obtained by dividing (a) the Interbank Offered Rate for such Eurodollar
Loan for such Interest Period by (b) 1 minus the Eurodollar Reserve Requirement
for such Eurodollar Loan for such Interest Period.
"Eurodollar Reserve Requirement" means, for any day during any Interest
Period, the reserve percentage (expressed as a decimal, carried out to five
decimal places) in effect on such day, whether or not applicable to any Lender,
under regulations issued from time to time by the Board of Governors of the
Federal Reserve System of the United States for determining the maximum reserve
requirement (including any emergency, supplemental or other marginal reserve
requirement) with respect to Eurocurrency funding (currently referred to as
"Eurocurrency liabilities"). The Eurodollar Rate for each outstanding Eurodollar
Loan shall be adjusted automatically as of the effective date of any change in
the Eurodollar Reserve Requirement.
"Event of Default" shall have the meaning assigned to such term in
Section 9.1.
"Excluded Property" means, with respect to any member of the
Consolidated Group, including any Person joined as a Credit Party pursuant to
Section 7.12,
(i) any Property which, subject to the terms of Section 8.11
and Section 8.14, is subject to a Lien of the type described in clause
(viii) of the definition of "Permitted Liens" pursuant to documents
which prohibit such member of the Consolidated Group from granting any
other Liens in such Property; and
(ii) any Contract (including any license or use agreement),
any Trademark License for which a Grantor is licensee or any Copyright
License for which a Grantor is licensee if the terms thereof prohibit
the assignment thereof or grant of a security interest or lien therein
and the violation of such terms would constitute a default thereunder,
provided that such prohibition could not be rendered ineffective
pursuant to the UCC or any other applicable law (including the
Bankruptcy Code) or principles of equity; and
(iii) any Property (including any Trademark, Copyright or
Work) subject to a Contract (including any license or use agreement),
Trademark License for which a Grantor is licensee or Copyright License
for which a Grantor is licensee if the terms thereof prohibit the
assignment of such Property or grant of a security interest or lien in
such Property and the violation of such terms would constitute a
default thereunder, provided that such prohibition could not be
rendered ineffective pursuant to the UCC or any other applicable law
(including the Bankruptcy Code) or principles of equity.
9
"Executive Officer" of any Person means any of the chief executive
officer, chief operating officer, president, vice president, chief financial
officer or treasurer of such Person.
"Existing Credit Agreement" has the meaning set forth in the recitals
hereto.
"Existing Letters of Credit" means those Letters of Credit outstanding
on the Closing Date and identified on Schedule 2.7(b).
"Extension of Credit" means, as to any Lender, the making of, or
participation in, a Loan by such Lender (including continuations and conversions
thereof) or the issuance or extension of, or participation in, a Letter of
Credit by such Lender.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted average
of the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next succeeding such
day; provided that (a) if such day is not a Business Day, the Federal Funds Rate
for such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day, and (b) if no
such rate is so published on such next succeeding Business Day, the Federal
Funds Rate for such day shall be the average rate charged to Bank of America (in
its individual capacity) on such day on such transactions as determined by the
Administrative Agent.
"Fees" means all fees payable pursuant to Section 3.5.
"Foreign Lender" shall have the meaning given to such term in Section
3.11(d).
"Foreign Subsidiary" means a Subsidiary which is not a Domestic
Subsidiary.
"Funded Debt" means, with respect to any Person, without duplication,
(i) all obligations of such Person for borrowed money, (ii) all obligations of
such Person evidenced by bonds, debentures, notes or similar instruments, or
upon which interest payments are customarily made, (iii) all purchase money
Indebtedness (including for purposes hereof, indebtedness and obligations in
respect of conditional sale or title retention arrangements described in clause
(c) of the definition of "Indebtedness" and obligations in respect of the
deferred purchase price of property or services described in clause (d) of the
definition of "Indebtedness") of such Person, including without limitation the
principal portion of all obligations of such Person under Capital Leases, (iv)
all Support Obligations of such Person with respect to Funded Debt of another
Person, (v) the maximum available amount of all standby letters of credit or
acceptances issued or created for the account of such Person, (vi) all Funded
Debt of another Person secured by a Lien on any Property of such Person, whether
or not such Funded Debt has been assumed, provided that for purposes hereof the
amount of such Funded Debt shall be limited to the amount of such Funded Debt as
to which there is recourse to such Person or the fair market value of the
property which is subject to the Lien, if less, (vii) the outstanding attributed
principal amount under any Securitization Transaction, and (viii) the principal
balance outstanding under Synthetic Leases. The Funded Debt of any Person shall
include the Funded Debt of any partnership or joint venture in which such Person
is a general partner or joint venturer, but only to the extent to which there is
recourse to such Person for the payment of such Funded Debt.
"GAAP" means generally accepted accounting principles in the United
States applied on a consistent basis and subject to the terms of Section 1.3.
10
"Governmental Authority" means any Federal, state, local or foreign
court or governmental agency, authority, instrumentality or regulatory body.
"Guaranteed Obligations" means, without duplication, (i) all
obligations of the Borrower (including interest accruing after a Bankruptcy
Event regardless of whether such interest is allowed as a claim under the
Bankruptcy Code) to the Lenders and the Agents, whenever arising, under this
Credit Agreement, the Notes or the other Credit Documents, and (ii) all
liabilities and obligations, whenever arising, under any Hedging Agreement
between a Lender, or an Affiliate of a Lender, and a Credit Party relating to
the Obligations.
"Guarantors" means (i) the Subsidiaries identified as Guarantors on the
signature pages hereto and (ii) any other Persons which may hereafter join this
Credit Agreement as a Guarantor.
"Hedging Agreements" means any interest rate protection agreement or
foreign currency exchange or option agreement.
"Honor Date" has the meaning specified in Section 2.7(d)(i).
"Indebtedness" means, with respect to any Person, without duplication,
(a) all obligations of such Person for borrowed money, (b) all obligations of
such Person evidenced by bonds, debentures, notes or similar instruments, or
upon which interest payments are customarily made, (c) all obligations of such
Person under conditional sale or other title retention agreements relating to
Property purchased by such Person (other than customary reservations or
retentions of title under agreements with suppliers entered into in the ordinary
course of business), (d) all obligations of such Person issued or assumed as the
deferred purchase price of Property or services purchased by such Person (other
than trade debt incurred in the ordinary course of business and due within six
months of the incurrence thereof) which would appear as liabilities on a balance
sheet of such Person, (e) all obligations of such Person under take-or-pay or
similar arrangements or under commodities agreements, (f) all Indebtedness of
others secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on, or payable out of
the proceeds of production from, Property owned or acquired by such Person,
whether or not the obligations secured thereby have been assumed, (g) all
Support Obligations of such Person with respect to Indebtedness of another
Person, (h) the principal portion of all obligations of such Person under
Capital Leases, (i) all obligations of such Person under Hedging Agreements, (j)
the maximum amount of all standby letters of credit issued or bankers'
acceptances facilities created for the account of such Person and, without
duplication, all drafts drawn thereunder (to the extent unreimbursed), (k) all
preferred Capital Stock issued by such Person and which by the terms thereof
would be (at the request of the holders thereof or otherwise) subject to
mandatory sinking fund payments, redemption or other acceleration (other than as
a result of a Change of Control or an Asset Disposition that does not in fact
result in a redemption of such preferred Capital Stock) at any time during the
term of the Credit Agreement, (l) the principal portion of all obligations of
such Person under Synthetic Leases, and (m) with respect to any member of the
Consolidated Group, the outstanding attributed principal amount under any
Securitization Transaction. The Indebtedness of any Person shall include the
Indebtedness of any partnership or joint venture in which such Person is a
general partner or joint venturer, but only to the extent to which there is
recourse to such Person for the payment of such Indebtedness.
"Interbank Offered Rate" means, for such Interest Period:
(a) the rate per annum equal to the rate determined by the
Administrative Agent to be the offered rate that appears on the page of
the Telerate screen (or any successor thereto) that displays an average
British Bankers Association Interest Settlement Rate for deposits in
Dollars (for delivery on the first day of such Interest Period) with a
term equivalent to such Interest Period, determined as of approximately
11:00 a.m. (London time) two Business Days prior to the first day of
such Interest Period, or
11
(b) if the rate referenced in the preceding clause (a) does
not appear on such page or service or such page or service shall not be
available, the rate per annum equal to the rate determined by the
Administrative Agent to be the offered rate on such other page or other
service that displays an average British Bankers Association Interest
Settlement Rate for deposits in Dollars (for delivery on the first day
of such Interest Period) with a term equivalent to such Interest
Period, determined as of approximately 11:00 a.m. (London time) two
Business Days prior to the first day of such Interest Period, or
(c) if the rates referenced in the preceding clauses (a) and
(b) are not available, the rate per annum determined by the
Administrative Agent as the rate of interest at which deposits in
Dollars for delivery on the first day of such Interest Period in same
day funds in the approximate amount of the Eurodollar Rate Loan being
made, continued or converted by Bank of America and with a term
equivalent to such Interest Period would be offered by Bank of
America's London Branch to major banks in the London interbank
eurodollar market at their request at approximately 4:00 p.m. (London
time) two Business Days prior to the first day of such Interest Period.
"Interest Payment Date" means (i) as to any Base Rate Loan and any
Swingline Loan, the last day of each March, June, September and December, and
the Termination Date, and (ii) as to any Eurodollar Loan, the last day of each
Interest Period for such Loan, the date of repayment of principal of such Loan
and the Termination Date, and in addition where the applicable Interest Period
is more than three months, then also on the date three months from the beginning
of the Interest Period, and each three months thereafter. If an Interest Payment
Date falls on a date that is not a Business Day, such Interest Payment Date
shall be deemed to be the next succeeding Business Day.
"Interest Period" means a period of one, two, three or six months'
duration, as the Borrower may elect, commencing in each case on the date of the
borrowing (including conversions, continuations and renewals), commencing in
each case on the date of borrowing; provided, however, (A) if any Interest
Period would end on a day which is not a Business Day, such Interest Period
shall be extended to the next succeeding Business Day (except where the next
succeeding Business Day falls in the next succeeding calendar month, then on the
next preceding Business Day), (B) no Interest Period shall extend beyond the
Termination Date, and (C) where an Interest Period begins on a day for which
there is no numerically corresponding day in the calendar month in which the
Interest Period is to end, such Interest Period shall end on the last day of
such calendar month.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended, and any successor statute thereto, as interpreted by the rules and
regulations issued thereunder, in each case as in effect from time to time.
References to sections of the Internal Revenue Code shall be construed also to
refer to any successor sections.
"Investment" in any Person means (a) the acquisition (whether for cash,
property, services, assumption of Indebtedness, securities or otherwise) of
Capital Stock, bonds, notes, debentures, partnership, joint ventures or other
ownership interests or other securities of such other Person, (b) any deposit
with, or advance, loan or other extension of credit to, such Person (other than
deposits made in connection with the purchase of equipment or other assets in
the ordinary course of business) or (c) any other capital contribution to or
investment in such Person, including, without limitation, any Support
Obligations (including any support for a letter of credit issued on behalf of
such Person) incurred for the benefit of such Person, but excluding any
Restricted Payment to such Person.
12
"Issuing Lender" means Bank of America and its successors in such
capacity.
"Joinder Agreement" means a joinder agreement substantially in the form
of Schedule 7.12 hereto, in each case executed and delivered by a Subsidiary in
accordance with the provisions of Section 7.12.
"Lenders" means each of the Persons identified as a "Lender" on the
signature pages hereto, and their successors and assigns.
"L/C Advance" means, with respect to each Lender, such Lender's funding
of its participation in any L/C Borrowing in accordance with its Revolving
Commitment Percentage.
"L/C Borrowing" means an extension of credit resulting from a drawing
under any Letter of Credit that has not been reimbursed on the date when made or
refinanced as a Revolving Loan.
"Letter of Credit" means any Existing Letter of Credit and any standby
letter of credit issued by the Issuing Lender for the account of the Borrower in
accordance with the terms of Section 2.1(b).
"Letter of Credit Application" means an application and agreement for
the issuance or amendment of a Letter of Credit in the form from time to time in
use by the Issuing Lender.
"Letter of Credit Expiration Date" means the day that is seven days
prior to the Termination Date then in effect (or, if such day is not a Business
Day, the next preceding Business Day).
"Letter of Credit Fee" shall have the meaning assigned such term in
Section 3.5(b)(i).
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, security interest, encumbrance, lien (statutory or otherwise),
preference, priority or charge of any kind (including any agreement to give any
of the foregoing, any conditional sale or other title retention agreement, any
financing or similar statement or notice filed under the Uniform Commercial Code
as adopted and in effect in the relevant jurisdiction or other similar recording
or notice statute, and any lease in the nature thereof).
"Loans" means the Revolving Loans and the Swingline Loans, and the Base
Rate Loans, Eurodollar Loans and Quoted Rate Swingline Loans comprising the
Revolving Loans and the Swingline Loans.
"LOC Commitment" means, with respect to the Issuing Lender, the
commitment of the Issuing Lender to issue, and to honor payment obligations
under, Letters of Credit and, with respect to each Lender, the commitment of
such Lender to purchase participation interests in the Letters of Credit up to
such Lender's LOC Committed Amount.
"LOC Committed Amount" shall have the meaning assigned to such term in
Section 2.1(b).
"LOC Documents" means, with respect to any Letter of Credit, such
Letter of Credit, any amendments thereto, any documents delivered in connection
therewith, any application therefor, and any agreements, instruments, guarantees
or other documents (whether general in application or applicable only to such
Letter of Credit) governing or providing for (i) the rights and obligations of
the parties concerned or at risk or (ii) any collateral security for such
obligations.
13
"LOC Obligations" means, at any time, the sum of (i) the maximum amount
which is, or at any time thereafter may become, available to be drawn under
Letters of Credit then outstanding, assuming compliance with all requirements
for drawings referred to in such Letters of Credit plus (ii) the aggregate
amount of all drawings under Letters of Credit honored by the Issuing Lender but
not theretofore reimbursed.
"Material Adverse Effect" means a material adverse effect on (i) the
condition (financial or otherwise), operations, business, assets or liabilities
of the Consolidated Group taken as a whole, (ii) the ability of the Credit
Parties taken as a whole to perform any material obligation under the Credit
Documents, (iii) the material rights and remedies of the Agents and the Lenders
under the Credit Documents, or (iv) the perfection or priority of any Lien
granted under, or in connection with, any of the Credit Documents.
"Materials of Environmental Concern" means any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as such
in or under any Environmental Laws, including, without limitation, asbestos,
polychlorinated biphenyls and urea-formaldehyde insulation.
"Moody's" means Moody's Investors Service, Inc., or any successor or
assignee of the business of such company in the business of rating securities.
"Multiemployer Plan" means a Plan which is a "multiemployer plan" as
defined in Sections 3(37) or 4001(a)(3) of ERISA.
"Multiple Employer Plan" means a Plan (other than a Multiemployer Plan)
which any member of the Consolidated Group or any ERISA Affiliate and at least
one employer other than the members of the Consolidated Group or any ERISA
Affiliate are contributing sponsors.
"Nonrenewal Notice Date" has the meaning specified in Section
2.7(c)(iii).
"North American Borrowing Base" means the sum of:
(a) the sum of seventy-five percent (75%) of U.S. Eligible
Receivables plus thirty-five percent (35%) of U.S. Eligible Inventory,
plus
(b) the lesser of (i) $5,000,000 and (ii) the sum of (A)
seventy-five percent (75%) of Canadian Eligible Receivables plus (B)
thirty-five percent (35%) of Canadian Eligible Inventory;
in each case as set forth in the most recent of North American
Borrowing Base Certificate delivered to the Administrative Agent and
the Lenders in accordance with the terms of Section 7.1(d), provided,
however, that (1) the advance rates for U.S. Eligible Receivables, U.S.
Eligible Inventory, Canadian Eligible Receivables and Canadian Eligible
Inventory may be modified by the Administrative Agent after the Closing
Date (but in no event to an advance rate higher than those set forth
above) if the Administrative Agent reasonably determines that such
modification is appropriate based on the results of one or more
Appraisals or Field Exams, and (2) for purposes of calculating the
North American Borrowing Base, the sum of (x) fifty percent (50%) of
U.S. Eligible Inventory plus (y) fifty percent (50%) of Canadian
Eligible Inventory shall not at any time comprise more than an amount
equal to thirty percent (30%) of the North American Borrowing Base.
14
"North American Borrowing Base Certificate" shall have the meaning
assigned to such term in Section 7.1(d).
"North American Group" means, collectively, the Borrower, its Domestic
Subsidiaries and its Canadian Subsidiaries.
"North American Subsidiaries" means, collectively, the Domestic
Subsidiaries of the Borrower and the Canadian Subsidiaries of the Borrower.
"Notes" means the Revolving Notes.
"Notice of Borrowing" means a written notice of borrowing in
substantially the form of Schedule 2.2(a).
"Notice of Continuation/Conversion" means the written notice of
continuation or conversion in substantially the form of Schedule 3.2.
"Obligations" means, collectively, the Revolving Loans, the LOC
Obligations and the Swingline Loans.
"Operating Lease" means, as applied to any Person, any lease
(including, without limitation, leases which may be terminated by the lessee at
any time) of any Property which is not a Capital Lease other than any such lease
in which that Person is the lessor.
"Original Closing Date" means the date of the closing of the Existing
Credit Agreement, being December 7, 1999.
"Other Taxes" shall have the meaning assigned to such term in Section
3.11.
"Participation Interest" means the purchase by a Lender of a
participation in LOC Obligations as provided in Section 2.7(b), in Swingline
Loans as provided in Section 2.8 and in Loans as provided in Section 3.16.
"PBGC" means the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA and any successor thereof.
"Permitted Acquisition" means any Acquisition by a member of the North
American Group, provided (i) in the case of an Acquisition of Capital Stock, the
Person which is the subject of such Acquisition shall be in the same or similar
line of business as that of any member of the Consolidated Group or otherwise
consistent with its strategic objectives, (ii) in the case of a merger or
consolidation, and in other cases where appropriate, the board of directors or
other governing body of the other Person which is the subject of the transaction
of merger or consolidation shall have approved such Acquisition, (iii) no
Default or Event of Default shall exist immediately after giving effect to such
Acquisition, (iv) the Borrower shall have delivered to the Administrative Agent
a Pro Forma Compliance Certificate demonstrating that, upon giving effect to
such Acquisition on a Pro Forma Basis, the Credit Parties shall be in compliance
with all of the covenants set forth in Section 7.11, (v) if the Acquisition
involves an interest in a partnership and a requirement that a member of the
North American Group be a general partner, the general partner shall be a newly
formed special purpose Subsidiary of the Borrower, (vi) if the Acquisition
involves acquisition of more than 50% of the Capital Stock of a Person, the
Credit Parties shall, and shall cause the party which is the subject of the
Acquisition, to execute and deliver such joinder and pledge agreements and take
such other action as may be necessary for compliance with the provisions of
Sections 7.12 and 7.13, and (vii) the aggregate consideration (including cash,
Indebtedness assumed, deferred purchase price obligations and obligations to
make contingent payments based on performance, but excluding any Capital Stock
of the Borrower issued to the seller) paid shall not exceed $10 million in any
instance (or series of related transactions) or $20 million in the aggregate in
any twelve month period beginning on or after the Closing Date.
15
"Permitted Investments" means Investments which are (i) cash and Cash
Equivalents; (ii) accounts receivable created, acquired or made in the ordinary
course of business and payable or dischargeable in accordance with customary
trade terms; (iii) Investments consisting of Capital Stock, obligations,
securities or other Property received in settlement of accounts receivable
(created in the ordinary course of business) from bankrupt obligors; (iv)
Investments existing as of the Closing Date and set forth in Schedule 8.6; (v)
advances or loans to directors, officers and employees that do not exceed
$1,000,000 in the aggregate at any one time outstanding; (vi) Investments
consisting of Capital Stock of developers in an amount not to exceed in the
aggregate an amount equal to ten percent (10%) of Consolidated Net Worth as of
the end of the immediately preceding fiscal year, (vii) advances to customers
and suppliers in the ordinary course of business that do not exceed $1,000,000
in the aggregate at any one time outstanding; (viii) recoupable advances,
guarantees or payments made to third parties in the ordinary course of business
with respect to the licensing or acquisition of intellectual property rights or
for development services for specific titles, (ix) Investments made prior to the
Closing Date by members of the North American Group in their Subsidiaries and
Affiliates, (x) Investments by Domestic Credit Parties in and to other Domestic
Credit Parties, (xi) Investments (including loans and advances) in Canadian
Subsidiaries of up to $5,000,000 outstanding at any time; (xii) Investments
(including loans and advances) by members of the North American Group in UK
Subsidiaries, provided that the sum of (A) the aggregate amounts outstanding
under the UK Subsidiary Credit Facility plus (B) the aggregate amount of
Investments in UK Subsidiaries does not exceed the UK Borrowing Base; (xiii)
Investments which constitute Permitted Acquisitions and (xiv) Investments of a
nature not contemplated in the foregoing subsections in an amount not to exceed
$5,000,000 in the aggregate at any time outstanding.
"Permitted Liens" means:
(i) Liens in favor of the Administrative Agent granted under
the Collateral Documents;
(ii) Liens in favor of a Lender or an Affiliate of a Lender
pursuant to a Hedging Agreement permitted hereunder, but only (A) to
the extent such Liens secure obligations under such agreements
permitted under Section 8.1, (B) to the extent such Liens are on the
same collateral as to which the Lenders hereunder also have a Lien, and
(C) so long as the obligations under such Hedging Agreement and the
loans and obligations hereunder and under the other Credit Documents
shall share pari passu in the collateral subject to such Liens;
(iii) Liens (other than Liens created or imposed under ERISA)
for taxes, assessments or governmental charges or levies not yet due or
Liens for taxes being contested in good faith by appropriate
proceedings for which adequate reserves determined in accordance with
GAAP have been established (and as to which the Property subject to any
such Lien is not yet subject to foreclosure, sale or loss on account
thereof);
16
(iv) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and suppliers and other Liens
imposed by law or pursuant to customary reservations or retentions of
title arising in the ordinary course of business, provided that such
Liens secure only amounts not yet due and payable or, if due and
payable, are unfiled and no other action has been taken to enforce the
same or are being contested in good faith by appropriate proceedings
for which adequate reserves determined in accordance with GAAP have
been established (and as to which the Property subject to any such Lien
is not yet subject to foreclosure, sale or loss on account thereof);
(v) Liens (other than Liens created or imposed under ERISA)
incurred or deposits made by any member of the Consolidated Group in
the ordinary course of business in connection with workers'
compensation, unemployment insurance and other types of social
security, or to secure the performance of tenders, statutory
obligations, bids, leases, government contracts, performance and
return-of-money bonds and other similar obligations (exclusive of
obligations for the payment of borrowed money);
(vi) Liens in connection with attachments or judgments
(including judgment or appeal bonds) provided that the judgments
secured shall, within 45 days after the entry thereof, have been
discharged or execution thereof stayed pending appeal, or shall have
been discharged within 45 days after the expiration of any such stay;
(vii) easements, rights-of-way, restrictions (including zoning
restrictions), minor defects or irregularities in title and other
similar charges or encumbrances not, in any material respect, impairing
the use of the encumbered Property for its intended purposes;
(viii) Liens on Property of any Person securing purchase money
Indebtedness (including Capital Leases and Synthetic Leases) of such
Person to the extent permitted under Section 8.1(c), provided that any
such Lien attaches only to the Property financed or leased and such
Lien attaches concurrently with or within 90 days after the acquisition
thereof;
(ix) leases or subleases granted to others not interfering in
any material respect with the business of any member of the
Consolidated Group;
(x) any interest or title of a lessor under, and Liens arising
from UCC financing statements (or equivalent filings, registrations or
agreements in foreign jurisdictions) relating to, leases permitted by
this Credit Agreement;
(xi) Liens in favor of customs and revenue authorities arising
as a matter of law to secure payment of customs duties in connection
with the importation of goods;
(xii) Liens deemed to exist in connection with Investments in
repurchase agreements which constitute Permitted Investments;
(xiii) normal and customary rights of setoff upon deposits of
cash in favor of banks or other depository institutions;
(xiv) Liens of a collection bank arising under Section 4-210
of the Uniform Commercial Code on items in the course of collection;
17
(xv) Liens on all Property of Jack of All Games, Inc. to
secure obligations of Jack of All Games, Inc. under the floor planning
line of credit for Nintendo inventory described in Section 8.1(g);
(xvi) Liens on Property of the UK Subsidiaries securing the UK
Subsidiary Credit Facility referenced in Section 8.1(f); and
(xvii) Liens existing as of the Closing Date and set forth on
Schedule 6.8; provided that no such Lien shall at any time be extended
to or cover any Property other than the Property subject thereto on the
Closing Date.
"Person" means any individual, partnership, joint venture, firm,
corporation, limited liability company, association, trust or other enterprise
(whether or not incorporated) or any Governmental Authority.
"Plan" means any employee benefit plan (as defined in Section 3(3) of
ERISA) which is covered by ERISA and with respect to which any member of the
Consolidated Group or any ERISA Affiliate is (or, if such plan were terminated
at such time, would under Section 4069 of ERISA be deemed to be) an "employer"
within the meaning of Section 3(5) of ERISA.
"Pledge Agreement" means the Amended and Restated Pledge Agreement
dated as of the Closing Date given by the Borrower and certain other Credit
Parties identified therein to the Collateral Agent to secure the obligations of
the Credit Parties under the Credit Documents, as such Amended and Restated
Pledge Agreement may be amended and modified from time to time.
"Prime Rate" means, for any day, the rate of interest per annum in
effect for such day as publicly announced from time to time by Bank of America
as its "prime rate". Such rate is a rate set by Bank of America based upon
various factors including Bank of America's costs and desired return, general
economic conditions and other factors, and is used as a reference point for
pricing some loans, which may be priced at, above, or below such announced rate.
Any change in such rate announced by Bank of America shall take effect at the
opening of business on the day specified in the public announcement of such
change.
"Pro Forma Basis" means that any Asset Disposition, Acquisition or
Restricted Payment (as used in this definition, each a "Transaction") shall be
deemed to have occurred as of the first day of the most recent four fiscal
quarter period preceding the date of such Transaction for which the
Administrative Agent has received the Required Financial Information. In
connection with the foregoing, (a) with respect to any Asset Disposition, income
statement items (whether positive or negative) attributable to the Property
disposed of shall be excluded to the extent relating to any period occurring
prior to the date of such transaction and (b) with respect to any Acquisition,
(i) income statement items attributable to the Person or Property acquired
shall, to the extent not otherwise included in such income statement items for
the members of the Consolidated Group in accordance with GAAP or in accordance
with any defined terms set forth in Section 1.1, be included to the extent (A)
relating to any period applicable in such calculations and (B) evidenced by
financial information reasonably satisfactory to the Administrative Agent, and
(ii) pro forma adjustments may be included to the extent that such adjustments
would be permitted under GAAP and give effect to items that are (A) directly
attributable to such transaction, (B) expected to have a continuing impact on
the Consolidated Group and (C) factually supportable.
"Pro Forma Compliance Certificate" means a certificate of an Executive
Officer of the Borrower containing reasonably detailed calculations of the
financial covenants set forth in Section 7.11 as of the most recent fiscal
quarter end for which the Administrative Agent shall have received the Required
Financial Information after giving effect to the applicable transaction on a Pro
Forma Basis.
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"Property" means any interest in any kind of property or asset, whether
real, personal or mixed, or tangible or intangible.
"Quoted Rate" means, with respect to a Quoted Rate Swingline Loan, the
fixed or floating percentage rate per annum, if any, offered by the Swingline
Lender and accepted by the Borrower in accordance with the provisions hereof.
"Quoted Rate Swingline Loan" means a Swingline Loan bearing interest at
the Quoted Rate.
"Rate Determination Date" shall have the meaning assigned to such term
in the definition of "Applicable Percentage".
"Receivables" means all accounts, accounts receivable, receivables, and
obligations for payment created or arising from the sale of inventory or the
rendering of services in the ordinary course of business.
"Register" shall have the meaning given such term in Section
11.3(c)(i).
"Regulation D, T, U, or X" means Regulation D, T, U or X, respectively,
of the Board of Governors of the Federal Reserve System as from time to time in
effect and any successor to all or a portion thereof.
"Reportable Event" means any of the events set forth in Section 4043(c)
of ERISA, other than those events as to which the notice requirement has been
waived by regulation.
"Required Financial Information" means the annual and quarterly
compliance certificates and related financial statements and information
required by the provisions of Sections 7.1(a), (b) and (c), as referenced in the
definition of "Applicable Percentage".
"Required Lenders" means, at any time, Lenders having at least
sixty-six and two-thirds percent (66-2/3%) of the Commitments, or if the
Commitments have been terminated, Lenders having at least sixty-six and
two-thirds percent (66-2/3%) of the aggregate principal amount of the
Obligations outstanding (taking into account in each case Participation
Interests or obligation to participate therein); provided that the Commitments
of, and outstanding principal amount of Obligations (taking into account
Participation Interests therein) owing to, a Defaulting Lender shall be excluded
for purposes hereof in making a determination of Required Lenders.
"Requirement of Law" means, as to any Person, the certificate of
incorporation and by-laws or other organizational or governing documents of such
Person, and any law, treaty, rule, regulation or ordinance (including, without
limitation, Environmental Laws) or determination of an arbitrator or a court or
other Governmental Authority, in each case applicable to or binding upon such
Person or to which any of its material Property is subject.
"Restated Financial Statements" means the restatement of the Borrower's
financial statements for each fiscal quarter of 2000 and the first three fiscal
quarters of 2001, as filed with the Securities and Exchange Commission on
February 12, 2002
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"Restricted Payment" means (a) any dividend or other payment or
distribution, direct or indirect, on account of any shares of any class of
Capital Stock of any member of the North American Group, now or hereafter
outstanding (including without limitation any payment in connection with any
dissolution, merger, consolidation or disposition involving any member of the
North American Group), or to the holders, in their capacity as such, of any
shares of any class of Capital Stock of any member of the North American Group,
now or hereafter outstanding (other than (i) dividends or distributions payable
in Capital Stock, or options in respect thereof, of the applicable Person, (ii)
distributions of rights to purchase Capital Stock as part of an anti-takeover
plan, or (iii) dividends or distributions payable to any Credit Party (directly
or indirectly through Subsidiaries)), (b) any redemption, retirement, sinking
fund or similar payment, purchase or other acquisition for value, direct or
indirect, of any shares of any class of Capital Stock of any member of the North
American Group, now or hereafter outstanding, (c) any payment made to retire, or
to obtain the surrender of, any outstanding warrants, options or other rights to
acquire shares of any class of Capital Stock of any member of the North American
Group, now or hereafter outstanding.
"Revolving Commitment" means, with respect to each Lender, the
commitment of such Lender to make Revolving Loans in an aggregate principal
amount at any time outstanding of up to such Lender's Revolving Commitment
Percentage of the Aggregate Revolving Committed Amount, as such amount may be
reduced from time to time in accordance with the provisions hereof.
"Revolving Commitment Percentage" means, with respect to each Lender, a
fraction (expressed as a percentage) the numerator of which is the Revolving
Committed Amount of such Lender at such time and the denominator of which is the
Aggregate Revolving Committed Amount at such time. The initial Revolving
Commitment Percentage of each Lender is set forth on Schedule 2.1.
"Revolving Committed Amount" means, with respect to each Lender, the
amount of each Lender's Revolving Commitment, as such amount may be reduced from
time to time in accordance with the provisions hereof. The initial Revolving
Committed Amount of each Lender is set forth on Schedule 2.1.
"Revolving Loans" shall have the meaning assigned to such term in
Section 2.1(a).
"Revolving Note" or "Revolving Notes" means the promissory notes of the
Borrower in favor of each of the Lenders evidencing the Revolving Loans and the
Swingline Loans in substantially the form attached as Schedule 2.5, individually
or collectively, as appropriate, as such promissory notes may be amended,
modified, supplemented, extended, renewed or replaced from time to time.
"S&P" means Standard & Poor's Ratings Group, a division of The McGraw
Hill Companies, Inc., or any successor or assignee of the business of such
division in the business of rating securities.
"Sale and Leaseback Transaction" means any arrangement pursuant to
which any member of the North American Group, directly or indirectly, becomes
liable as lessee, guarantor or other surety with respect to any lease, whether
an Operating Lease or a Capital Lease, of any Property (a) which such member of
the North American Group has sold or transferred (or is to sell or transfer) to
a Person which is not a member of the North American Group or (b) which such
member of the North American Group intends to use for substantially the same
purpose as any other Property which has been sold or transferred (or is to be
sold or transferred) by such member of the North American Group to another
Person which is not a member of the North American Group in connection with such
lease.
"Securities Exchange Act" means the Securities Exchange Act of 1934.
20
"Securitization Transaction" means any financing transaction or series
of financing transactions that have been or may be entered into by a member of
the Consolidated Group pursuant to which such member of the Consolidated Group
may sell, convey or otherwise transfer to (i) a Subsidiary or affiliate (a
"Securitization Subsidiary"), or (ii) any other Person, or may grant a security
interest in, any accounts receivable, notes receivable, rights to future lease
payments or residuals or other similar rights to payment (the "Securitization
Receivables") (whether such Securitization Receivables are then existing or
arising in the future) of such member of the Consolidated Group, and any assets
related thereto, including without limitation, all security interests in
merchandise or services financed thereby, the proceeds of such Securitization
Receivables, and other assets which are customarily sold or in respect of which
security interests are customarily granted in connection with securitization
transactions involving such assets.
"Security Agreement" means the Amended and Restated Security Agreement
dated as of the Closing Date given by the Credit Parties to the Collateral Agent
to secure the obligations of the Credit Parties under the Credit Documents, as
such Amended and Restated Security Agreement may be amended and modified from
time to time.
"Shareholder Litigation" means each of the lawsuits filed by
shareholders of the Borrower regarding the Restated Financial Statements and
settled prior to the Closing Date by the Borrower and the other parties thereto.
"Single Employer Plan" means any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan or a Multiple Employer Plan.
"Subsidiary" means, as to any Person at any time, (a) any corporation
more than 50% of whose Capital Stock of any class or classes having by the terms
thereof ordinary voting power to elect a majority of the directors of such
corporation (irrespective of whether or not at such time, any class or classes
of such corporation shall have or might have voting power by reason of the
happening of any contingency) is at such time owned by such Person directly or
indirectly through Subsidiaries, and (b) any partnership, association, joint
venture or other entity of which such Person directly or indirectly through
Subsidiaries owns at such time more than 50% of the Capital Stock. Except as
expressly provided otherwise, references to "Subsidiary" and "Subsidiaries"
shall be deemed to mean Subsidiaries of the Borrower.
"Support Obligations" means, with respect to any Person, without
duplication, any obligations of such Person (other than endorsements in the
ordinary course of business of negotiable instruments for deposit or collection)
guaranteeing or intended to guarantee any Indebtedness of any other Person in
any manner, whether direct or indirect, and including without limitation any
obligation, whether or not contingent, (i) to purchase any such Indebtedness or
any Property constituting security therefor, (ii) to advance or provide funds or
other support for the payment or purchase of any such Indebtedness or to
maintain working capital, solvency or other balance sheet condition of such
other Person (including without limitation keep well agreements, maintenance
agreements, comfort letters or similar agreements or arrangements) for the
benefit of any holder of Indebtedness of such other Person, (iii) to lease or
purchase Property, securities or services primarily for the purpose of assuring
the holder of such Indebtedness, or (iv) to otherwise assure or hold harmless
the holder of such Indebtedness against loss in respect thereof. The amount of
any Support Obligation hereunder shall (subject to any limitations set forth
therein) be deemed to be an amount equal to the outstanding principal amount (or
maximum principal amount, if larger) of the Indebtedness in respect of which
such Support Obligation is made.
"Swingline Commitment" means, with respect to the Swingline Lender, the
commitment of the Swingline Lender to make Swingline Loans in an aggregate
principal amount at any time outstanding up to the Swingline Committed Amount
and, with respect to each Lender, the commitment of such Lender to purchase
participation interests in the Swingline Loans up to such Lender's Revolving
Commitment Percentage of the Swingline Committed Amount.
21
"Swingline Committed Amount" shall have the meaning specified in
Section 2.1(c).
"Swingline Lender" means Bank of America and its successors in such
capacity.
"Swingline Loan" shall have the meaning specified in Section 2.1(c).
"Synthetic Lease" means any synthetic lease, tax retention operating
lease, off-balance sheet loan or similar off-balance sheet financing product
where such transaction is considered borrowed money indebtedness for tax
purposes but is classified as an Operating Lease under GAAP.
"Taxes" shall have the meaning assigned to such term in Section 3.11.
"Termination Date" means August 28, 2005, or such later date as to
which all of the Lenders may in their sole discretion by written consent agree.
"UK Borrowing Base" means an amount equal to eighty percent (80%) of
the aggregate book value of all Receivables owed or owing to the UK Subsidiaries
on a consolidated basis as shown on the books and records of the UK
Subsidiaries, as set forth in the most recent UK Borrowing Base Certificate
delivered to the Administrative Agent in accordance with the terms of Section
7.1(e).
"UK Borrowing Base Certificate" shall have the meaning assigned to such
term in Section 7.1(e).
"UK Subsidiary" means any Subsidiary which is incorporated or organized
under the laws of the United Kingdom or its member states.
"Unreimbursed Amount" has the meaning specified in Section 2.7(d)(i).
"U.S. Eligible Inventory" means, as of any date of determination, the
aggregate book value based on an average cost valuation as shown on the books
and records of the Borrower and its Domestic Subsidiaries of all inventory owned
by the Borrower and its Domestic Subsidiaries on a consolidated basis after
deducting allowances or reserves relating thereto, but excluding in any event
(without duplication) (a) inventory which is (i) not subject to a perfected,
first priority Lien in favor of the Collateral Agent to secure the obligations
under the Security Agreement (including, without limitation, inventory which
constitutes Excluded Property), or (ii) subject to any other Lien that is not a
Permitted Lien, (b) inventory which is not in good condition or fails to meet
standards for sale or use imposed by governmental agencies, departments or
divisions having regulatory authority over such goods, (c) inventory which is
leased or on consignment, (d) displays and packaging supplies, (e) inventory
located outside of the United States, (f) inventory in possession of a Person
other than the Borrower or any of its Domestic Subsidiaries, (g) inventory
located at a location not owned by the Borrower or any other Credit Party with
respect to which the Administrative Agent shall not have received a landlord's,
warehousemen's, bailee's or appropriate waiver satisfactory to the
Administrative Agent, and (h) inventory which fails to meet such other
specifications and requirements as may from time to time be established by the
Administrative Agent in its reasonable discretion.
22
"U.S. Eligible Receivables" means, as of any date of determination, the
aggregate book value as shown on the books and records of the Borrower and its
Domestic Subsidiaries of all Receivables owned by or owing to the Borrower and
its Domestic Subsidiaries on a consolidated basis after deducting retainage and
allowances or reserves relating thereto, but excluding in any event (without
duplication) (a) Receivables owing by an account debtor which is not solvent or
is subject to any bankruptcy or insolvency proceeding of any kind, (b) any
Receivable which is (i) not subject to a perfected, first priority Lien in favor
of the Collateral Agent to secure the obligations under the Security Agreement,
or (ii) subject to any other Lien that is not a Permitted Lien, (c) any insured
Receivable which is more than 60 days past due or any uninsured Receivable which
is more than 90 days past invoice date (in each case net of reserves for bad
debts in connection with any such Receivables), (d) any Receivable not otherwise
excluded by clause (c) above if more than 50% of the other Receivables owing
from the applicable account debtor are excluded by clause (c) above, (e) the sum
of all credit balances carried on Receivables that are more than 90 days past
due, (f) Receivables that are more than 90 days past the original invoice date
but that have been re-aged as a result of a dispute by the account debtor, (g)
Receivables for which any Subsidiary or any Affiliate is the account debtor, (h)
any Receivable if and to the extent the amount of such Receivable, together with
all other Receivables of the applicable account debtor, exceeds an amount equal
to 25% of all Receivables owned by or owing to the members of the North American
Group, (i) Receivables owing by an account debtor located outside of the United
States or Canada (unless payment for the goods shipped is secured by an
irrevocable letter of credit in a form and from an institution acceptable to the
Administrative Agent), and (j) Receivables which fail to meet such other
specifications and requirements as may from time to time be established by the
Administrative Agent in its reasonable discretion.
"Voting Stock" means, with respect to any Person, Capital Stock issued
by such Person the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of directors (or persons
performing similar functions) of such Person, even though the right so to vote
has been suspended by the happening of such a contingency.
"Wholly Owned Subsidiary" of any Person means any Subsidiary 100% of
whose Voting Stock is at the time owned by such Person directly or indirectly
through other Wholly Owned Subsidiaries.
1.2 Computation of Time Periods.
For purposes of computation of periods of time hereunder, the word
"from" means "from and including" and the words "to" and "until" each mean "to
but excluding."
1.3 Accounting Terms.
Except as otherwise expressly provided herein, all accounting terms
used herein shall be interpreted, and all financial statements and certificates
and reports as to financial matters required to be delivered to the Lenders
hereunder shall be prepared, in accordance with GAAP applied on a consistent
basis. All calculations made for the purposes of determining compliance with
this Credit Agreement shall (except as otherwise expressly provided herein) be
made by application of GAAP applied on a basis consistent with the most recent
annual or quarterly financial statements delivered pursuant to Section 7.1 (or,
prior to the delivery of the first financial statements pursuant to Section 7.1,
consistent with the annual audited financial statements referenced in Section
6.1(i)); provided, however, if (a) the Borrower shall object to determining such
compliance on such basis at the time of delivery of such financial statements
due to any change in GAAP or the rules promulgated with respect thereto or (b)
the Administrative Agent or the Required Lenders shall so object in writing
within 60 days after delivery of such financial statements, then such
calculations shall be made on a basis consistent with the most recent financial
statements delivered by the Borrower to the Lenders as to which no such
objection shall have been made.
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Notwithstanding the above, the parties hereto acknowledge and agree
that all calculations of the financial covenants set forth in Section 7.11
(including, without limitation, for purposes of determining compliance with such
financial covenants and determining the Applicable Percentage) shall be made on
a Pro Forma Basis.
1.4 Rounding.
Any financial ratios required to be maintained by the Borrower pursuant
to this Credit Agreement shall be calculated by dividing the appropriate
component by the other component, carrying the result to one place more than the
number of places by which such ratio is expressed herein and rounding the result
up or down to the nearest number (with a rounding-up if there is no nearest
number).
1.5 Letter of Credit Amounts.
Unless otherwise specified, all references herein to the amount of a
Letter of Credit at any time shall be deemed to mean the maximum face amount of
such Letter of Credit after giving effect to all increases and reductions
thereof contemplated by such Letter of Credit or the Letter of Credit
Application therefor, whether or not such maximum face amount is in effect at
such time.
SECTION 2
CREDIT FACILITIES
2.1 Commitments.
(a) Revolving Commitment. During the Commitment Period, subject to the
terms and conditions hereof, each Lender severally agrees to make revolving
credit loans (the "Revolving Loans") to the Borrower in Dollars from time to
time in the amount of such Lender's Revolving Commitment Percentage of such
Revolving Loans for the purposes hereinafter set forth; provided that no
Lender shall be obligated to make any Revolving Loan if after giving effect to
thereto (i) with regard to the Lenders collectively, the aggregate principal
amount of Obligations outstanding would exceed the lesser of (A) the Aggregate
Revolving Committed Amount or (B) the North American Borrowing Base, and (ii)
with regard to each Lender individually, such Lender's Revolving Commitment
Percentage of Obligations outstanding would exceed the lesser of (A) such
Lender's Revolving Committed Amount or (B) an amount equal to such Lender's
Revolving Commitment Percentage of the North American Borrowing Base.
Revolving Loans may consist of Base Rate Loans or Eurodollar Loans, or a
combination thereof, as the Borrower may request, and may be repaid and
reborrowed in accordance with the provisions hereof.
(b) Letter of Credit Commitment. Subject to the terms and conditions
set forth herein (i) the Issuing Lender agrees, in reliance upon the agreements
of the Lenders set forth in Section 2.7, (A) from time to time on any Business
Day during the period from the Closing Date to the Letter of Credit Expiration
Date to issue Letters of Credit for the account of the Borrower or its
Subsidiaries and to amend or renew Letters of Credit previously issued by it in
accordance with Section 2.7 and (B) to honor drafts under the Letters of Credit;
and (ii) the Lenders severally agree to participate in Letters of Credit issued
for the account of the Borrower or its Subsidiaries; provided that the Issuing
Lender shall not be obligated to issue or renew any Letter of Credit and no
Lender shall be obligated to participate in any Letter of Credit if after giving
effect thereto, (A) the aggregate amount of LOC Obligations would exceed TWENTY
MILLION DOLLARS ($20,000,000) (as such amount may be reduced from time to time
in accordance with the provisions hereof, the "LOC Committed Amount"), (B) with
regard to the Lenders collectively, the aggregate principal amount of
Obligations outstanding would exceed the lesser of (x) the Aggregate Revolving
Committed Amount or (y) the North American Borrowing Base, and (C) with regard
to each Lender individually, such Lender's Revolving Commitment Percentage of
Obligations outstanding would exceed the lesser of (x) such Lender's Revolving
Committed Amount or (y) an amount equal to such Lender's Revolving Commitment
Percentage of the North American Borrowing Base. All Existing Letters of Credit
shall be deemed to have been issued pursuant hereto, and from and after the
Closing Date shall be subject to and governed by the terms and conditions
hereof.
24
(c) Swingline Commitment. During the Commitment Period, subject to the
terms and conditions hereof, the Swingline Lender agrees to make certain
revolving credit loans (the "Swingline Loans") to the Borrower in Dollars from
time to time for the purposes hereinafter set forth; provided that the Swingline
Lender shall not be obligated to make any Swingline Loan if after giving effect
thereto (i) the aggregate principal amount of Swingline Loans would exceed FIVE
MILLION DOLLARS ($5,000,000) (as such amount may be reduced from time to time in
accordance with the provisions hereof, the "Swingline Committed Amount"), and
(ii) with regard to the Lenders collectively, the aggregate principal amount of
Obligations outstanding would exceed the lesser of (A) the Aggregate Revolving
Committed Amount or (B) the North American Borrowing Base. Swingline Loans may
consist of Base Rate Loans or Quoted Rate Swingline Loans, or a combination
thereof, as the Borrower may request, and may be repaid and reborrowed in
accordance with the provisions hereof.
2.2 Borrowing Procedures for Loans.
(a) Notice of Borrowing. The Borrower shall request a Revolving Loan or
Swingline Loan by written notice (or telephonic notice promptly confirmed in
writing) as follows:
(i) Revolving Loans. In the case of Revolving Loans, by the
Borrower to the Administrative Agent not later than 11:00 A.M.
(Charlotte, North Carolina time) on the Business Day of the requested
borrowing in the case of Base Rate Loans, and on the third Business Day
prior to the date of the requested borrowing in the case of Eurodollar
Loans. Each such request for borrowing shall be irrevocable, shall be
in substantially the form of Schedule 2.2(a)(i) and shall specify (A)
that a Revolving Loan is requested, (B) the date of the requested
borrowing (which shall be a Business Day), (C) the aggregate principal
amount to be borrowed, and (D) whether the borrowing shall be comprised
of Base Rate Loans, Eurodollar Loans or a combination thereof, and if
Eurodollar Loans are requested, the Interest Period(s) therefor. The
Administrative Agent shall give notice to each Lender promptly upon
receipt of each Notice of Borrowing pursuant to this Section 2.2(a)(i),
the contents thereof and each Lender's share of any borrowing to be
made pursuant thereto.
(ii) Swingline Loans. In the case of Swingline Loans, by the
Borrower to the Swingline Lender with a copy to the Administrative
Agent not later than 11:00 A.M. (Charlotte, North Carolina time) on the
Business Day of the requested borrowing. Each such request for
borrowing shall be irrevocable, shall be in substantially the form of
Schedule 2.2(a)(ii) and shall specify (A) that a Swingline Loan is
requested, (B) the date of the requested borrowing (which shall be a
Business Day), (C) the aggregate principal amount to be borrowed, and
(D) the interest rate option and maturity requested therefor.
Notwithstanding the foregoing, however, in the event that an "auto
borrow" or "zero balance" or similar arrangement shall then be in place
with the Swingline Lender, the Borrower shall request Swingline Loans
pursuant to such alternative notice arrangements, if any, provided
thereunder or in connection therewith. Each Swingline Loan shall have a
maturity date as the Borrower may request and the Swingline Lender may
agree.
25
(b) Minimum Amounts. Each Revolving Loan advance shall be in a minimum
principal amount of $5,000,000, in the case of Eurodollar Loans, or $1,000,000
(or, if less, the unused amount of the Aggregate Revolving Committed Amount), in
the case of Base Rate Loans, and integral multiples of $250,000 in excess
thereof. Each Swingline Loan advance shall be in a minimum principal amount of
$500,000 and integral multiples of $100,000 in excess thereof (or, if less, the
unused amount of the Swingline Committed Amount) provided that in the event that
an "auto borrow" or "zero balance" or similar arrangement shall then be in place
with the Swingline Lender, each Swingline Loans advance shall be in such minimum
amounts, if any, provided by such agreement.
(c) Information Not Provided. If in connection with any request for a
Revolving Loan, the Borrower shall fail to specify (x) an applicable Interest
Period in the case of a Eurodollar Loan, the Borrower shall be deemed to have
requested an Interest Period of one month, or (y) the type of Loan requested in
the case of a Revolving Loan or a Swingline Loan, the Borrower shall be deemed
to have requested a Base Rate Loan.
(d) Maximum Number of Eurodollar Loans. In connection with any request
for a Revolving Loan, Revolving Loans may be comprised of no more than five (5)
Eurodollar Loans outstanding at any time. For purposes hereof, Eurodollar Loans
with separate or different Interest Periods will be considered as separate
Eurodollar Loans even if their Interest Periods expire on the same date.
2.3 Interest.
Subject to Section 3.1, the Loans hereunder shall bear interest at a
per annum rate, payable in arrears on each applicable Interest Payment Date (or
at such other times as may be specified herein), as follows:
(a) Base Rate Loans. During such periods as the Loans shall be
comprised of Base Rate Loans, the Adjusted Base Rate;
(b) Eurodollar Loans. During such periods as the Loans shall
be comprised of Eurodollar Loans, the Adjusted Eurodollar Rate; and
(c) Quoted Rate Swingline Loans. During such periods as the
Swingline Loans shall be comprised of Quoted Rate Swingline Loans, the
Quoted Rate.
2.4 Repayment.
(a) Revolving Loans. The principal amount of all Revolving Loans shall
be due and payable in full on the Termination Date.
(b) Swingline Loans. The principal amount of all Swingline Loans shall
be due and payable on the earlier of (A) the maturity date agreed to by the
Swingline Lender and the Borrower with respect to such Loan, or (B) the
Termination Date.
2.5 Notes.
The Revolving Loans and the Swingline Loans shall be evidenced by the
Revolving Notes.
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2.6 Increase in Revolving Commitments.
The Borrower may at any time upon prior written notice to the
Administrative Agent increase the Aggregate Revolving Committed Amount by up to
TEN MILLION DOLLARS ($10,000,000) with additional Revolving Commitments from any
existing Lender or new Revolving Commitments from any other Person reasonably
acceptable to the Administrative Agent; provided that:
(a) any such increase shall be in a minimum principal amount
of $5 million and integral multiples of $1 million in excess thereof;
(b) if any Eurodollar Loans are outstanding on the date of any
such increase, the Borrower shall prepay the Eurodollar Loans (together
with any amounts owing under Section 3.12 in connection therewith) on
such date in such amounts as are necessary to cause each Lender to hold
its Revolving Commitment Percentage of each Eurodollar Loan;
(c) the conditions precedent set forth in Sections 5.2(a) and
(b) shall be satisfied on the date of any such increase;
(d) no existing Lender shall be under any obligation to
increase its Revolving Commitment and any such increase shall be in
such Lender's sole and absolute discretion;
(e) any new Lender shall join this Credit Agreement by
executing such joinder agreements and/or other agreements reasonably
acceptable to the Administrative Agent; and
(f) the Borrower shall deliver to the Administrative Agent
such supporting resolutions, legal opinions, promissory notes and other
items as may be reasonably requested by the Administrative Agent and
the Lenders in connection therewith.
In connection with any such increase in the Revolving Commitments,
Schedule 2.1 shall be revised to reflect the Revolving Committed Amount
and Revolving Commitment Percentage of each Lender.
2.7 Additional Provisions relating to Letters of Credit.
(a) The Issuing Lender shall be under no obligation to issue any Letter
of Credit if:
(i) any order, judgment or decree of any Governmental
Authority or arbitrator shall by its terms purport to enjoin or
restrain the Issuing Lender from issuing such Letter of Credit, or any
Law applicable to the Issuing Lender or any request or directive
(whether or not having the force of law) from any Governmental
Authority with jurisdiction over the Issuing Lender shall prohibit, or
request that the Issuing Lender refrain from, the issuance of letters
of credit generally or such Letter of Credit in particular or shall
impose upon the Issuing Lender with respect to such Letter of Credit
any restriction, reserve or capital requirement (for which the Issuing
Lender is not otherwise compensated hereunder) not in effect on the
Closing Date, or shall impose upon the Issuing Lender any unreimbursed
loss, cost or expense which was not applicable on the Closing Date and
which the Issuing Lender in good faith deems material to it;
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(ii) subject to Section 2.06(c)(iii), the expiry date of such
requested Letter of Credit would occur more than twelve months after
the date of issuance or last renewal, unless the Required Lenders have
approved such expiry date;
(iii) the expiry date of such requested Letter of Credit would
occur after the Letter of Credit Expiration Date, unless all the
Lenders have approved such expiry date;
(iv) the issuance of such Letter of Credit would violate one
or more policies of the Issuing Lender that are applicable to borrowers
generally; or
(v) such Letter of Credit is in an initial amount less than
$500,000 or is to be denominated in a currency other than Dollars.
(b) The Issuing Lender shall be under no obligation to amend any Letter
of Credit if (i) the Issuing Lender would have no obligation at such time to
issue such Letter of Credit in its amended form under the terms hereof, or (ii)
the beneficiary of such Letter of Credit does not accept the proposed amendment
to such Letter of Credit.
(c) Procedures for Issuance and Amendment of Letters of Credit;
Auto-Renewal Letters of Credit.
(i) Each Letter of Credit shall be issued or amended, as the
case may be, upon the request of the Borrower delivered to the Issuing
Lender (with a copy to the Administrative Agent) in the form of a
Letter of Credit Application, appropriately completed and signed by an
Executive Officer of the Borrower. Such Letter of Credit Application
must be received by the Issuing Lender and the Administrative Agent not
later than 11:00 a.m. (Charlotte, North Carolina) at least two Business
Days (or such later date and time as the Issuing Lender may agree in a
particular instance in its sole discretion) prior to the proposed
issuance date or date of amendment, as the case may be. In the case of
a request for an initial issuance of a Letter of Credit, such Letter of
Credit Application shall specify in form and detail satisfactory to the
Issuing Lender: (A) the proposed issuance date of the requested Letter
of Credit (which shall be a Business Day); (B) the amount thereof; (C)
the expiry date thereof; (D) the name and address of the beneficiary
thereof; (E) the documents to be presented by such beneficiary in case
of any drawing thereunder; (F) the full text of any certificate to be
presented by such beneficiary in case of any drawing thereunder; and
(G) such other matters as the Issuing Lender may require. In the case
of a request for an amendment of any outstanding Letter of Credit, such
Letter of Credit Application shall specify in form and detail
satisfactory to the Issuing Lender (A) the Letter of Credit to be
amended; (B) the proposed date of amendment thereof (which shall be a
Business Day); (C) the nature of the proposed amendment; and (D) such
other matters as the Issuing Lender may require.
(ii) Promptly after receipt of any Letter of Credit
Application, the Issuing Lender will confirm with the Administrative
Agent (by telephone or in writing) that the Administrative Agent has
received a copy of such Letter of Credit Application from the Borrower
and, if not, the Issuing Lender will provide the Administrative Agent
with a copy thereof. Upon receipt by the Issuing Lender of confirmation
from the Administrative Agent that the requested issuance or amendment
is permitted in accordance with the terms hereof, then, subject to the
terms and conditions hereof, the Issuing Lender shall, on the requested
date, issue a Letter of Credit for the account of the Borrower or enter
into the applicable amendment, as the case may be, in each case in
accordance with the Issuing Lender's usual and customary business
practices. Immediately upon the issuance of each Letter of Credit, each
Lender shall be deemed to, and hereby irrevocably and unconditionally
agrees to, purchase from the Issuing Lender a risk participation in
such Letter of Credit in an amount equal to the product of such
Lender's Pro Rata Share times the amount of such Letter of Credit.
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(iii) If the Borrower so requests in any applicable Letter of
Credit Application, the Issuing Lender may, in its sole and absolute
discretion, agree to issue a Letter of Credit that has automatic
renewal provisions (each, an "Auto-Renewal Letter of Credit"); provided
that any such Auto-Renewal Letter of Credit must permit the Issuing
Lender to prevent any such renewal at least once in each twelve-month
period (commencing with the date of issuance of such Letter of Credit)
by giving prior notice to the beneficiary thereof not later than a day
(the "Nonrenewal Notice Date") in each such twelve-month period to be
agreed upon at the time such Letter of Credit is issued. Unless
otherwise directed by the Issuing Lender, the Borrower shall not be
required to make a specific request to the Issuing Lender for any such
renewal. Once an Auto-Renewal Letter of Credit has been issued, the
Lenders shall be deemed to have authorized (but may not require) the
Issuing Lender to permit the renewal of such Letter of Credit at any
time to an expiry date not later than the Letter of Credit Expiration
Date; provided, however, that the Issuing Lender shall not permit any
such renewal if (A) the Issuing Lender has determined that it would
have no obligation at such time to issue such Letter of Credit in its
renewed form under the terms hereof (by reason of the provisions of
Section 2.7(a) or otherwise), or (B) it has received notice (which may
be by telephone or in writing) on or before the day that is two
Business Days before the Nonrenewal Notice Date (1) from the
Administrative Agent that the Required Lenders have elected not to
permit such renewal or (2) from the Administrative Agent, any Lender or
the Borrower that one or more of the applicable conditions specified in
Section 5.2 is not then satisfied.
(iv) Promptly after its delivery of any Letter of Credit or
any amendment to a Letter of Credit to an advising bank with respect
thereto or to the beneficiary thereof, the Issuing Lender will also
deliver to the Borrower and the Administrative Agent a true and
complete copy of such Letter of Credit or amendment.
(d) Drawings and Reimbursements; Funding of Participations.
(i) Upon receipt from the beneficiary of any Letter of Credit
of any notice of a drawing under such Letter of Credit, the Issuing
Lender shall notify the Borrower and the Administrative Agent thereof.
Not later than 11:00 a.m. (Charlotte, North Carolina time) on the date
of any payment by the Issuing Lender under a Letter of Credit (each
such date, an "Honor Date"), the Borrower shall reimburse the Issuing
Lender through the Administrative Agent in an amount equal to the
amount of such drawing. If the Borrower fails to so reimburse the
Issuing Lender by such time, the Administrative Agent shall promptly
notify each Lender of the Honor Date, the amount of the unreimbursed
drawing (the "Unreimbursed Amount"), and the amount of such Lender's
Revolving Commitment Percentage thereof. In such event, the Borrower
shall be deemed to have requested a Revolving Loan bearing interest at
the Base Rate to be disbursed on the Honor Date in an amount equal to
the Unreimbursed Amount, without regard to the minimum and multiples
specified in Section 2.2 for the principal amount of Base Rate Loans,
but subject to the amount of the unutilized portion of the Aggregate
Revolving Committed Amount and the conditions set forth in Section 5.2
(other than the delivery of a Notice of Borrowing). Any notice given by
the Issuing Lender or the Administrative Agent pursuant to this Section
2.7(d)(i) may be given by telephone if immediately confirmed in
writing; provided that the lack of such an immediate confirmation shall
not affect the conclusiveness or binding effect of such notice.
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(ii) Each Lender (including the Lender acting as Issuing
Lender) shall upon any notice pursuant to Section 2.7(d)(i) make funds
available to the Administrative Agent for the account of the Issuing
Lender at the Administrative Agent's Office in an amount equal to its
Revolving Commitment Percentage of the Unreimbursed Amount not later
than 1:00 p.m. (Charlotte, North Carolina time) on the Business Day
specified in such notice by the Administrative Agent, whereupon,
subject to the provisions of Section 2.7(d)(iii), each Lender that so
makes funds available shall be deemed to have made a Revolving Loan
bearing interest at the Base Rate to the Borrower in such amount. The
Administrative Agent shall remit the funds so received to the Issuing
Lender.
(iii) With respect to any Unreimbursed Amount that is not
fully refinanced by a Revolving Loan because the conditions set forth
in Section 5.2 cannot be satisfied or for any other reason, the
Borrower shall be deemed to have incurred from the Issuing Lender an
L/C Borrowing in the amount of the Unreimbursed Amount that is not so
refinanced, which L/C Borrowing shall be due and payable on demand
(together with interest) and shall bear interest at the Default Rate.
In such event, each Lender's payment to the Administrative Agent for
the account of the Issuing Lender pursuant to Section 2.7(d)(ii) shall
be deemed payment in respect of its participation in such L/C Borrowing
and shall constitute an L/C Advance from such Lender in satisfaction of
its participation obligation under this Section 2.7.
(iv) Until each Lender funds its Committed Loan or L/C Advance
pursuant to this Section 2.7(d) to reimburse the Issuing Lender for any
amount drawn under any Letter of Credit, interest in respect of such
Lender's Revolving Commitment Percentage of such amount shall be solely
for the account of the Issuing Lender.
(v) Each Lender's obligation to make Revolving Loans or L/C
Advances to reimburse the Issuing Lender for amounts drawn under
Letters of Credit, as contemplated by this Section 2.7(d), shall be
absolute and unconditional and shall not be affected by any
circumstance, including (A) any set-off, counterclaim, recoupment,
defense or other right which such Lender may have against the Issuing
Lender, the Borrower or any other Person for any reason whatsoever; (B)
the occurrence or continuance of a Default, or (C) any other
occurrence, event or condition, whether or not similar to any of the
foregoing; provided, however, that each Lender's obligation to make
Revolving Loans pursuant to this Section 2.7(d) is subject to the
conditions set forth in Section 5.2 (other than delivery by the
Borrower of a Notice of Borrowing). No such making of an L/C Advance
shall relieve or otherwise impair the obligation of the Borrower to
reimburse the Issuing Lender for the amount of any payment made by the
Issuing Lender under any Letter of Credit, together with interest as
provided herein.
(vi) If any Lender fails to make available to the
Administrative Agent for the account of the Issuing Lender any amount
required to be paid by such Lender pursuant to the foregoing provisions
of this Section 2.7(d) by the time specified in Section 2.7(d)(ii), the
Issuing Lender shall be entitled to recover from such Lender (acting
through the Administrative Agent), on demand, such amount with interest
thereon for the period from the date such payment is required to the
date on which such payment is immediately available to the Issuing
Lender at a rate per annum equal to the Federal Funds Rate from time to
time in effect. A certificate of the Issuing Lender submitted to any
Lender (through the Administrative Agent) with respect to any amounts
owing under this clause (vi) shall be conclusive absent manifest error.
(e) Repayment of Participations.
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(i) At any time after the Issuing Lender has made a payment
under any Letter of Credit and has received from any Lender such
Lender's L/C Advance in respect of such payment in accordance with
Section 2.7(c), if the Administrative Agent receives for the account of
the Issuing Lender any payment in respect of the related Unreimbursed
Amount or interest thereon (whether directly from the Borrower or
otherwise, including proceeds of Cash Collateral applied thereto by the
Administrative Agent), the Administrative Agent will distribute to such
Lender its Revolving Commitment Percentage thereof (appropriately
adjusted, in the case of interest payments, to reflect the period of
time during which such Lender's L/C Advance was outstanding) in the
same funds as those received by the Administrative Agent.
(ii) If any payment received by the Administrative Agent for
the account of the Issuing Lender pursuant to Section 2.7(d)(i) is
subsequently invalidated, declared to be fraudulent or preferential,
set aside or required (including pursuant to any settlement entered
into by the Administrative Agent or such Lender in its discretion) to
be repaid to a trustee, receiver or any other party, in connection with
any proceeding under the Bankruptcy Code or otherwise, each Lender
shall pay to the Administrative Agent for the account of the Issuing
Lender its Revolving Commitment Percentage thereof on demand of the
Administrative Agent, plus interest thereon from the date of such
demand to the date such amount is returned by such Lender, at a rate
per annum equal to the Federal Funds Rate from time to time in effect.
(f) Obligations Absolute. The obligation of the Borrower to reimburse
the Issuing Lender for each drawing under each Letter of Credit and to repay
each L/C Borrowing shall, notwithstanding the following, be absolute,
unconditional and irrevocable, and shall be paid strictly in accordance with the
terms of this Agreement under all circumstances:
(i) any lack of validity or enforceability of such Letter of
Credit, this Agreement, or any other agreement or instrument relating
thereto;
(ii) the existence of any claim, counterclaim, set-off,
defense or other right that the Borrower may have at any time against
any beneficiary or any transferee of such Letter of Credit (or any
Person for whom any such beneficiary or any such transferee may be
acting), the Issuing Lender or any other Person, whether in connection
with this Agreement, the transactions contemplated hereby or by such
Letter of Credit or any agreement or instrument relating thereto, or
any unrelated transaction;
(iii) any draft, demand, certificate or other document
presented under such Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein being
untrue or inaccurate in any respect; or any loss or delay in the
transmission or otherwise of any document required in order to make a
drawing under such Letter of Credit;
(iv) any payment by the Issuing Lender under such Letter of
Credit against presentation of a draft or certificate that does not
strictly comply with the terms of such Letter of Credit; or any payment
made by the Issuing Lender under such Letter of Credit to any Person
purporting to be a trustee in bankruptcy, debtor-in-possession,
assignee for the benefit of creditors, liquidator, receiver or other
representative of or successor to any beneficiary or any transferee of
such Letter of Credit, including any arising in connection with any
proceeding under the Bankruptcy Code; or
31
(v) any other circumstance or happening whatsoever, whether or
not similar to any of the foregoing, including any other circumstance
that might otherwise constitute a defense available to, or a discharge
of, the Borrower.
The Borrower shall promptly examine a copy of each Letter of Credit, each
amendment thereto and the accompanying documents that are delivered to it and,
in the event of any claim of noncompliance with the Borrower's instructions or
other irregularity, the Borrower will promptly notify the Issuing Lender. The
Borrower shall be conclusively deemed to have waived any such claim against the
Issuing Lender and its correspondents unless such notice is given as aforesaid.
(g) Role of Issuing Lender. Each Lender and the Borrower agree that, in
paying any drawing under a Letter of Credit, the Issuing Lender shall not have
any responsibility to obtain any document (other than any sight draft,
certificates and documents expressly required by the Letter of Credit) or to
ascertain or inquire as to the validity or accuracy of any such document or the
authority of the Person executing or delivering any such document. None of the
Issuing Lender, any Agent-Related Person nor any of the respective
correspondents, participants or assignees of the Issuing Lender shall be liable
to any Lender for (i) any action taken or omitted in connection herewith at the
request or with the approval of the Lenders or the Required Lenders, as
applicable; (ii) any action taken or omitted in the absence of gross negligence
or willful misconduct; or (iii) the due execution, effectiveness, validity or
enforceability of any document or instrument related to any Letter of Credit or
Letter of Credit Application. The Borrower hereby assumes all risks of the acts
or omissions of any beneficiary or transferee with respect to its use of any
Letter of Credit; provided, however, that this assumption is not intended to,
and shall not, preclude the Borrower's pursuing such rights and remedies as it
may have against the beneficiary or transferee at law or under any other
agreement. None of the Issuing Lender, any Agent-Related Person, nor any of the
respective correspondents, participants or assignees of the Issuing Lender,
shall be liable or responsible for any of the matters described in clauses (i)
through (v) of Section 2.7(f); provided, however, that anything in such clauses
to the contrary notwithstanding, the Borrower may have a claim against the
Issuing Lender, and the Issuing Lender may be liable to the Borrower, to the
extent, but only to the extent, of any direct, as opposed to consequential or
exemplary, damages suffered by the Borrower which the Borrower proves were
caused by the Issuing Lender's willful misconduct or gross negligence or the
Issuing Lender's willful failure to pay under any Letter of Credit after the
presentation to it by the beneficiary of a sight draft and certificate(s)
strictly complying with the terms and conditions of a Letter of Credit. In
furtherance and not in limitation of the foregoing, the Issuing Lender may
accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary, and the Issuing Lender shall not be responsible for
the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign a Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason.
(h) Cash Collateral. Upon the request of the Administrative Agent, (i)
if the Issuing Lender has honored any full or partial drawing request under any
Letter of Credit and such drawing has resulted in an L/C Borrowing, or (ii) if,
as of the Letter of Credit Expiration Date, any Letter of Credit may for any
reason remain outstanding and partially or wholly undrawn, the Borrower shall
immediately Cash Collateralize the then outstanding amount of all LOC
Obligations (in an amount equal to such outstanding amount determined as of the
date of such L/C Borrowing or the Letter of Credit Expiration Date, as the case
may be). For purposes hereof, "Cash Collateralize" means to pledge and deposit
with or deliver to the Administrative Agent, for the benefit of the Issuing
Lender and the Lenders, as collateral for the LOC Obligations, cash or deposit
account balances pursuant to documentation in form and substance satisfactory to
the Administrative Agent and the Issuing Lender (which documents are hereby
consented to by the Lenders). Derivatives of such term have corresponding
meanings. The Borrower hereby grants to the Administrative Agent, for the
benefit of the Issuing Lender and the Lenders, a security interest in all such
cash, deposit accounts and all balances therein and all proceeds of the
foregoing. Cash collateral shall be maintained in blocked, non-interest bearing
deposit accounts at Bank of America.
32
(i) Applicability of ISP98 and UCP. Unless otherwise expressly agreed
by the Issuing Lender and the Borrower when a Letter of Credit is issued
(including any such agreement applicable to an Existing Letter of Credit), (i)
the rules of the "International Standby Practices 1998" published by the
Institute of International Banking Law & Practice (or such later version thereof
as may be in effect at the time of issuance) shall apply to each standby Letter
of Credit, and (ii) the rules of the Uniform Customs and Practice for
Documentary Credits, as most recently published by the International Chamber of
Commerce (the "ICC") at the time of issuance (including the ICC decision
published by the Commission on Banking Technique and Practice on April 6, 1998
regarding the European single currency (euro)) shall apply to each commercial
Letter of Credit.
(j) Conflict with Letter of Credit Application. In the event of any
conflict between the terms hereof and the terms of any Letter of Credit
Application, the terms hereof shall control.
2.8 Additional Provisions relating to Swingline Loans.
The Swingline Lender may, at any time, in its sole discretion, by
written notice to the Borrower and the Lenders, demand repayment of its
Swingline Loans by way of a Revolving Loan advance, in which case the Borrower
shall be deemed to have requested a Revolving Loan advance comprised solely of
Base Rate Loans in the amount of such Swingline Loans; provided, however, that
any such demand shall be deemed to have been given one Business Day prior to the
Termination Date and on the date of the occurrence of any Event of Default
described in Section 9.1 and upon acceleration of the indebtedness hereunder and
the exercise of remedies in accordance with the provisions of Section 9.2. Each
Lender hereby irrevocably agrees to make its Revolving Commitment Percentage of
each such Revolving Loan in the amount, in the manner and on the date specified
in the preceding sentence notwithstanding (I) the amount of such borrowing may
not comply with the minimum amount for advances of Revolving Loans otherwise
required hereunder, (II) whether any conditions specified in Section 5.2 are
then satisfied, (III) whether a Default or an Event of Default then exists, (IV)
failure of any such request or deemed request for Revolving Loan to be made by
the time otherwise required hereunder, (V) whether the date of such borrowing is
a date on which Revolving Loans are otherwise permitted to be made hereunder or
(VI) any termination of the Commitments relating thereto immediately prior to or
contemporaneously with such borrowing. In the event that any Revolving Loan
cannot for any reason be made on the date otherwise required above (including,
without limitation, as a result of the commencement of a proceeding under the
Bankruptcy Code with respect to the Borrower or any other Credit Party), then
each Lender hereby agrees that it shall forthwith purchase (as of the date such
borrowing would otherwise have occurred, but adjusted for any payments received
from the Borrower on or after such date and prior to such purchase) from the
Swingline Lender such Participation Interests in the outstanding Swingline Loans
as shall be necessary to cause each such Lender to share in such Swingline Loans
ratably based upon its Revolving Commitment Percentage, provided that (A) all
interest payable on the Swingline Loans shall be for the account of the
Swingline Lender until the date as of which the respective Participation
Interest is funded and (B) at the time any purchase of Participation Interests
pursuant to this sentence is actually made, the purchasing Lender shall be
required to pay to the Swingline Lender, to the extent not paid to the Swingline
Lender by the Borrower in accordance with the terms of Section 2.4(b), interest
on the principal amount of Participation Interests purchased for each day from
and including the day upon which such borrowing would otherwise have occurred to
but excluding the date of payment by such lender for such Participation
Interests, at the rate equal to the Federal Funds Rate.
33
SECTION 3
OTHER PROVISIONS RELATING TO CREDIT FACILITIES
3.1 Default Rate.
Upon the occurrence, and during the continuance, of an Event of
Default, (i) the principal of and, to the extent permitted by law, interest on
the Loans and any other amounts owing hereunder or under the other Credit
Documents shall bear interest, payable on demand, at a per annum rate 2% greater
than the rate which would otherwise be applicable (or if no rate is applicable,
whether in respect of interest, fees or other amounts, then the Adjusted Base
Rate plus 2%) and (ii) the Letter of Credit Fee shall accrue at a per annum rate
2% greater than the rate which would otherwise be applicable.
3.2 Extension and Conversion.
The Borrower shall have the option, on any Business Day, to extend
existing Loans into a subsequent permissible Interest Period or to convert Loans
into Loans of another interest rate type; provided, however, that (i) except as
provided in Section 3.8, Eurodollar Loans may be converted into Base Rate Loans
or extended as Eurodollar Loans for new Interest Periods only on the last day of
the Interest Period applicable thereto, (ii) Eurodollar Loans may be extended,
and Base Rate Loans may be converted into Eurodollar Loans, only if the
conditions precedent set forth in Section 5.2 are satisfied on the date of
continuation or conversion, (iii) Loans extended as, or converted into,
Eurodollar Loans shall be subject to the terms of the definition of "Interest
Period" and shall be in such minimum amounts as provided in Section 2.2(b) and
(iv) any request for continuation or conversion of a Eurodollar Loan which shall
fail to specify an Interest Period shall be deemed to be a request for an
Interest Period of one month. Each such continuation or conversion shall be
effected by the applicable Borrower by giving a Notice of Extension/Conversion
(or telephonic notice promptly confirmed in writing) to the office of the
Administrative Agent specified in Section 11.1, or at such other office as the
Administrative Agent may designate in writing, prior to 11:00 A.M. (Charlotte,
North Carolina time), on the Business Day of, in the case of the conversion of a
Eurodollar Loan into a Base Rate Loan, and on the third Business Day prior to,
in the case of the continuation of a Eurodollar Loan as, or conversion of a Base
Rate Loan into, a Eurodollar Loan, the date of the proposed continuation or
conversion, the Loans to be so extended or converted, the types of Loans into
which such Loans are to be converted and, if appropriate, the applicable
Interest Periods with respect thereto. Each request for continuation or
conversion shall be irrevocable and shall constitute a representation and
warranty by the applicable Borrower of the matters specified in Section 5.2. In
the event the applicable Borrower fails to request continuation or conversion of
any Eurodollar Loan in accordance with this Section, or any such conversion or
continuation is not permitted or required by this Section, then such Eurodollar
Loan shall be automatically converted into a Base Rate Loan at the end of the
Interest Period applicable thereto. The Administrative Agent shall give each
Lender notice as promptly as practicable of any such proposed continuation or
conversion affecting any Revolving Loan.
3.3 Prepayments.
(a) Voluntary Prepayments. The Loans may be repaid in whole or in part
without premium or penalty; provided that (i) Eurodollar Loans may be prepaid
only upon three (3) Business Days' prior written notice to the Administrative
Agent and must be accompanied by payment of any amounts owing under Section
3.12, and (ii) partial prepayments shall be minimum principal amounts of (A) in
the case of Revolving Loans which are Eurodollar Loans, a minimum aggregate
principal amount of $1,000,000 and integral multiples of $250,000 in excess
thereof, (B) in the case of Revolving Loans which are Base Rate Loans, a minimum
aggregate principal amount of $1,000,000 and integral multiples of $250,000 in
excess thereof, and (C) in the case of Swingline Loans, a minimum aggregate
principal amount of $1,000,000 and integral multiples of $100,000 in excess
thereof, provided that in the event that an "auto borrow" or "zero balance" or
other similar arrangement shall then be in place with the Swingline Lender,
Swingline Loans may be prepaid in such other minimum amounts, if any, provided
under such arrangement.
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(b) Mandatory Prepayments. If at any time, (i) the aggregate principal
amount of Obligations shall exceed the lesser of (A) the Aggregate Revolving
Committed Amount or (B) the North American Borrowing Base, (ii) the aggregate
principal amount of LOC Obligations shall exceed the LOC Committed Amount, or
(iii) the aggregate principal amount of Swingline Loans shall exceed the
Swingline Committed Amount, the Borrower shall immediately make payment on the
Revolving Loans, the Swingline Loans and/or to a cash collateral account in
respect of the LOC Obligations, in the amount of the difference.
(c) Application. Unless otherwise specified by the applicable Borrower,
prepayments on the Obligations shall be applied first to Swingline Loans, then
to Revolving Loans which are Base Rate Loans, then to Revolving Loans which are
Eurodollar Loans in direct order of Interest Period maturities, and then to a
cash collateral account to secure LOC Obligations.
3.4 Reduction and Termination of Commitments.
(a) Voluntary Reduction of Commitments. The Commitments may be
terminated or permanently reduced in whole or in part by the Borrower upon three
(3) Business Days' prior written notice by the Borrower to the Administrative
Agent (and the Administrative Agent shall promptly notify the Lenders), provided
that after giving effect to any voluntary reduction in the Revolving
Commitments, the aggregate principal amount of Obligations shall not exceed the
Aggregate Revolving Committed Amount, as reduced, and (ii) partial reductions
shall be in a minimum aggregate principal amount of in the case of Aggregate
Revolving Committed Amount, $5,000,000 and integral multiples of $1,000,000 in
excess thereof.
(b) Termination of Commitments. The Commitments shall terminate on the
Termination Date.
3.5 Fees.
(a) Commitment Fee. In consideration of the Revolving Commitments, the
Borrower agrees to pay to the Administrative Agent for the ratable benefit of
the Lenders a commitment fee (the "Commitment Fee") equal to the Applicable
Percentage per annum on the average daily unused amount of the Aggregate
Revolving Committed Amount for the applicable period. The Commitment Fee shall
be payable quarterly in arrears on the last Business Day of each March, June,
September and December for the immediately preceding quarter (or a portion
thereof) (and on the Termination Date). For purposes of computation of the
Commitment Fee, (A) Swingline Loans shall not be counted toward or considered
usage of the Aggregate Revolving Committed Amount and (B) LOC Obligations shall
be counted toward and considered usage of the Aggregate Revolving Committed
Amount.
(b) Letter of Credit Fees.
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(i) Letter of Credit Issuance Fee. In consideration of the
issuance of Letters of Credit, the Borrower promises to pay to the
Administrative Agent for the account of each Lender a fee (the "Letter
of Credit Fee") on such Lender's Revolving Commitment Percentage of the
average daily maximum amount available to be drawn under each such
Letter of Credit computed at a per annum rate for each day from the
date of issuance to the date of expiration equal to the Applicable
Percentage. The Letter of Credit Fee shall be payable quarterly in
arrears on the last Business Day of each March, June, September and
December for the immediately preceding quarter (or a portion thereof)
(and on the Termination Date).
(ii) Issuing Lender Fees. In addition to the Letter of Credit
Fee, the Borrower promises to pay to the Administrative Agent for the
account of the Issuing Lender without sharing by the other Lenders (i)
a letter of credit fronting fee of one-eighth of one percent (0.125%)
on the average daily maximum amount available to be drawn under each
Letter of Credit computed at a per annum rate for each day from the
date of issuance to the date of expiration and (ii) the customary
charges from time to time of the Issuing Lender with respect to the
issuance, amendment, transfer, administration, cancellation and
conversion of, and drawings under, such Letters of Credit. The fronting
fee shall be payable quarterly in arrears on the last Business Day of
each March, June, September and December for the immediately preceding
quarter (or a portion thereof) (and on the Termination Date) and the
customary charges shall be payable on demand.
(c) Administrative Fees. The Borrower agrees to pay to the
Administrative Agent, for its own account, the fees referred to in the
Administrative Agent's Fee Letter (the "Administrative Agent's Fees").
3.6 Capital Adequacy.
If any Lender has reasonably determined, after the date hereof, that
the adoption or the becoming effective of, or any change in, or any change by
any Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof in the interpretation or administration
of, any applicable law, rule or regulation regarding capital adequacy, or
compliance by such Lender with any request or directive regarding capital
adequacy (whether or not having the force of law) of any such authority, central
bank or comparable agency, has or would have the effect of reducing the rate of
return on such Lender's (including, for purposes hereof, the parent company of
such Lender) capital or assets as a consequence of its commitments or
obligations hereunder to a level below that which such Lender would have
achieved but for such adoption, effectiveness, change or compliance (taking into
consideration such Lender's policies with respect to capital adequacy), then,
upon notice from such Lender to the Borrower, the Borrower shall be obligated to
pay to such Lender such additional amount or amounts as will compensate such
Lender for such reduction. Each determination by any such Lender of amounts
owing under this Section shall, absent manifest error, be conclusive and binding
on the parties hereto. If any Lender requests compensation by the Borrower under
this Section 3.6, the Borrower may, by notice to such Lender (with a copy to the
Administrative Agent), suspend the obligation of such Lender to make or continue
Eurodollar Loans, or to convert Base Rate Loans into Eurodollar Loans, until the
event or condition giving rise to such request ceases to be in effect (in which
case the provisions of Section 3.10 shall be applicable); provided that such
suspension shall not affect the right of such Lender to receive the compensation
so requested.
3.7 Limitation on Eurodollar Loans.
If on or prior to the first day of any Interest Period for any
Eurodollar Loan:
(a) the Administrative Agent reasonably determines (which
determination shall be conclusive absent manifest error) that by reason
of circumstances affecting the relevant market, adequate and reasonable
means do not exist for ascertaining the Eurodollar Rate for such
Interest Period; or
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(b) the Required Lenders reasonably determine (which
determination shall be conclusive absent manifest error) and notify the
Administrative Agent that the Eurodollar Rate will not adequately and
fairly reflect the cost to the Lenders of funding Eurodollar Loans for
such Interest Period;
then the Administrative Agent shall give the Borrower prompt notice thereof, and
so long as such condition remains in effect, the Lenders shall be under no
obligation to make additional Eurodollar Loans, continue Eurodollar Loans, or to
convert Base Rate Loans into Eurodollar Loans with respect to the affected
currency.
3.8 Illegality.
Notwithstanding any other provision of this Credit Agreement, in the
event that it becomes unlawful for any Lender (or its Applicable Lending Office)
to make, maintain, or fund Eurodollar Loans hereunder, then such Lender shall
promptly notify the Borrower thereof and such Lender's obligation to make or
continue Eurodollar Loans and to convert Base Rate Loans into Eurodollar Loans
shall be suspended until such time as such Lender may again make, maintain, and
fund Eurodollar Loans (in which case the provisions of Section 3.10 shall be
applicable).
3.9 Requirements of Law.
If, after the date hereof, the adoption of any applicable law, rule, or
regulation, or any change in any applicable law, rule, or regulation, or any
change in the interpretation or administration thereof by any Governmental
Authority, central bank, or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or its Applicable Lending
Office) with any request or directive (whether or not having the force of law)
of any such Governmental Authority, central bank, or comparable agency:
(i) shall subject such Lender (or its Applicable Lending
Office) to any additional tax, duty, or other charge with respect to
any Eurodollar Loans, its Notes, or its obligation to make Eurodollar
Loans, or change the basis of taxation of any amounts payable to such
Lender (or its Applicable Lending Office) under this Credit Agreement
or its Notes in respect of any Eurodollar Loans (other than taxes
imposed on the overall net income of such Lender by the jurisdiction in
which such Lender has its principal office or such Applicable Lending
Office);
(ii) shall impose, modify, or deem applicable any reserve,
special deposit, assessment, or similar requirement (other than the
Eurodollar Reserve Requirement utilized in the determination of the
Adjusted Eurodollar Rate) relating to any extensions of credit or other
assets of, or any deposits with or other liabilities or commitments of,
such Lender (or its Applicable Lending Office), including the
Commitment of such Lender hereunder; or
(iii) shall impose on such Lender (or its Applicable Lending
Office) or the London interbank market any other condition affecting
this Credit Agreement or its Notes or any of such extensions of credit
or liabilities or commitments;
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and the result of any of the foregoing is to increase the cost to such Lender
(or its Applicable Lending Office) of making, converting into, continuing, or
maintaining any Eurodollar Loans or to reduce any sum received or receivable by
such Lender (or its Applicable Lending Office) under this Credit Agreement or
its Notes with respect to any Eurodollar Loans, then the Borrower shall pay to
such Lender on demand such amount or amounts as will compensate such Lender for
such increased cost or reduction. If any Lender requests compensation by the
Borrower under this Section 3.9, the Borrower may, by notice to such Lender
(with a copy to the Administrative Agent), suspend the obligation of such Lender
to make or continue Eurodollar Loans, or to convert Base Rate Loans into
Eurodollar Loans, until the event or condition giving rise to such request
ceases to be in effect (in which case the provisions of Section 3.10 shall be
applicable); provided that such suspension shall not affect the right of such
Lender to receive the compensation so requested. Each Lender shall promptly
notify the Borrower and the Administrative Agent of any event of which it has
knowledge, occurring after the date hereof, which will entitle such Lender to
compensation pursuant to this Section 3.9 and will designate a different
Applicable Lending Office if such designation will avoid the need for, or reduce
the amount of, such compensation and will not, in the judgment of such Lender,
be otherwise disadvantageous to it. Any Lender claiming compensation under this
Section 3.9 shall furnish to the Borrower and the Administrative Agent a
statement setting forth the additional amount or amounts to be paid to it
hereunder which shall be conclusive in the absence of manifest error. In
determining such amount, such Lender may use any reasonable averaging and
attribution methods.
3.10 Treatment of Affected Loans.
If the obligation of any Lender to make any Eurodollar Loan or to
continue, or to convert Base Rate Loans into, Eurodollar Loans shall be
suspended pursuant to Section 3.6, 3.8 or 3.9 hereof, such Lender's Eurodollar
Loans shall be automatically converted into Base Rate Loans on the last day(s)
of the then current Interest Period(s) for such Eurodollar Loans (or, in the
case of a conversion required by Section 3.8 hereof, on such earlier date as
such Lender may specify to the Borrower with a copy to the Administrative Agent)
and, unless and until such Lender gives notice as provided below that the
circumstances specified in Section 3.6, 3.8 or 3.9 hereof that gave rise to such
conversion no longer exist:
(a) to the extent that such Lender's Eurodollar Loans have
been so converted, all payments and prepayments of principal that would
otherwise be applied to such Lender's Eurodollar Loans shall be applied
instead to its Base Rate Loans; and
(b) all Loans that would otherwise be made or continued by
such Lender as Eurodollar Loans shall be made or continued instead as
Base Rate Loans, and all Base Rate Loans of such Lender that would
otherwise be converted into Eurodollar Loans shall remain as Base Rate
Loans.
If such Lender gives notice to the Borrower (with a copy to the Administrative
Agent) that the circumstances specified in Section 3.6, 3.8 or 3.9 hereof that
gave rise to the conversion of such Lender's Eurodollar Loans pursuant to this
Section 3.10 no longer exist (which such Lender agrees to do promptly upon such
circumstances ceasing to exist) at a time when Eurodollar Loans made by other
Lenders are outstanding, such Lender's Base Rate Loans shall be automatically
converted, on the first day(s) of the next succeeding Interest Period(s) for
such outstanding Eurodollar Loans, to the extent necessary so that, after giving
effect thereto, all Loans held by the Lenders holding Eurodollar Loans and by
such Lender are held pro rata (as to principal amounts, interest rate basis, and
Interest Periods) in accordance with their respective Commitments.
3.11 Taxes.
(a) Any and all payments by any Credit Party to or for the account of
any Lender or the Administrative Agent hereunder or under any other Credit
Document shall be made free and clear of and without deduction for any and all
present or future taxes, duties, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding, in the case
of each Lender and the Administrative Agent, taxes imposed on its income, and
franchise taxes imposed on it, by the jurisdiction under the laws of which such
Lender (or its Applicable Lending Office) or the Administrative Agent (as the
case may be) is organized or does business or any political subdivision thereof
(all such non-excluded taxes, duties, levies, imposts, deductions, charges,
withholdings, and liabilities being hereinafter referred to as "Taxes"). If any
Credit Party shall be required by law to deduct or withhold any Taxes from or in
respect of any sum payable under this Credit Agreement or any other Credit
Document to any Lender or the Administrative Agent, (i) the sum payable shall be
increased as necessary so that after making all required deductions and
withholdings (including deductions and withholdings applicable to additional
sums payable under this Section 3.11) such Lender or the Administrative Agent
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) such Credit Party shall make such deductions and
withholdings, (iii) such Credit Party shall pay the full amount deducted or
withheld to the relevant taxation authority or other authority in accordance
with applicable law, and (iv) such Credit Party shall furnish to the
Administrative Agent, at its address referred to in Section 11.1, the original
or a certified copy of a receipt evidencing payment thereof.
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(b) In addition, the Borrower agrees to pay any and all present or
future stamp or documentary taxes and any other excise or property taxes or
charges or similar levies which arise from any payment made under this Credit
Agreement or any other Credit Document or from the execution or delivery of, or
otherwise with respect to, this Credit Agreement or any other Credit Document
(hereinafter referred to as "Other Taxes").
(c) The Borrower agrees to indemnify each Lender and the Administrative
Agent for the full amount of Taxes and Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed or asserted by any jurisdiction on
amounts payable under this Section 3.11) paid by such Lender or the
Administrative Agent (as the case may be) and any liability (including
penalties, interest, and expenses) arising therefrom or with respect thereto.
(d) Each Lender that is not a United States person under Section
7701(a)(30) of the Internal Revenue Code (each a "Foreign Lender"), on or prior
to the date of its execution and delivery of this Credit Agreement in the case
of each Lender listed on the signature pages hereof and on or prior to the date
on which it becomes a Lender in the case of each other Lender, and from time to
time thereafter if requested in writing by the Borrower or the Administrative
Agent (but only so long as such Lender remains lawfully able to do so), shall
provide the Borrower and the Administrative Agent with (i) Internal Revenue
Service Form W-8 BEN or W-8 ECI, as appropriate, or any successor form
prescribed by the Internal Revenue Service, certifying that such Lender is
entitled to benefits under an income tax treaty to which the United States is a
party which reduces to zero the rate of withholding tax on payments of interest
or certifying that the income receivable pursuant to this Credit Agreement is
effectively connected with the conduct of a trade or business in the United
States, (ii) Internal Revenue Service Form W-8 or W-9, as appropriate, or any
successor form prescribed by the Internal Revenue Service, and/or (iii) any
other form or certificate required by any taxing authority (including any
certificate required by Sections 871(h) and 881(c) of the Internal Revenue
Code), certifying that such Lender is entitled to an exemption from tax on
payments pursuant to this Credit Agreement or any of the other Credit Documents.
(e) For any period with respect to which a Lender has failed to provide
the Borrower and the Administrative Agent with the appropriate form pursuant to
Section 3.11(d) (unless such failure is due to a change in treaty, law, or
regulation occurring subsequent to the date on which a form originally was
required to be provided), such Lender shall not be entitled to indemnification
under Section 3.11(a) or 3.11(b) with respect to Taxes imposed by the United
States; provided, however, that should a Lender, which is otherwise exempt from
or subject to a reduced rate of withholding tax, become subject to Taxes because
of its failure to deliver a form required hereunder, the Borrower shall take
such steps as such Lender shall reasonably request to assist such Lender to
recover such Taxes.
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(f) If any Credit Party is required to pay additional amounts to or for
the account of any Lender pursuant to this Section 3.11, then such Lender will
agree to use reasonable efforts to change the jurisdiction of its Applicable
Lending Office so as to eliminate or reduce any such additional payment which
may thereafter accrue if such change, in the judgment of such Lender, is not
otherwise disadvantageous to such Lender.
(g) Within thirty (30) days after the date of any payment of Taxes, the
applicable Credit Party shall furnish to the Administrative Agent the original
or a certified copy of a receipt evidencing such payment.
(h) Without prejudice to the survival of any other agreement of the
Credit Parties hereunder, the agreements and obligations of the Credit Parties
contained in this Section 3.11 shall survive the repayment of the Loans, LOC
Obligations and other obligations under the Credit Documents and the termination
of the Commitments hereunder.
3.12 Funding Losses.
Upon demand of any Lender (with a copy to the Administrative Agent)
from time to time, the Borrower shall promptly compensate such Lender for and
hold such Lender harmless from any loss, cost or expense incurred by it as a
result of:
(a) any continuation, conversion, payment or prepayment of any Loan
other than a Base Rate Loan on a day other than the last day of the
Interest Period for such Loan (whether voluntary, mandatory, automatic,
by reason of acceleration, or otherwise); or
(b) any failure by the Borrower (for a reason other than the failure of
such Lender to make a Loan) to prepay, borrow, continue or convert any
Loan other than a Base Rate Loan on the date or in the amount notified
by the Borrower;
including any loss or expense (but excluding any loss of anticipated profits)
arising from the liquidation or reemployment of funds obtained by it to maintain
such Loan or from fees payable to terminate the deposits from which such funds
were obtained. For purposes of calculating amounts payable by the Borrower to
the Banks under this Section 3.12, each Lender shall be deemed to have funded
each Eurodollar Loan made by it at the Interbank Offered Rate for such Loan by a
matching deposit or other borrowing in the applicable offshore Dollar interbank
market for a comparable amount and for a comparable period, whether or not such
Eurodollar Loan was in fact so funded.
3.13 Pro Rata Treatment.
Except to the extent otherwise provided herein:
(a) Obligations. Each Revolving Loan advance, each payment or
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prepayment of principal of any Revolving Loan, each payment of interest on any
Revolving Loan, each payment on or in respect of the LOC Obligations and each
payment of interest thereon, each payment of the Commitment Fee, each payment of
the Letter of Credit Fee, each reduction of aggregate Revolving Committed
Amounts, and each conversion or extension of Revolving Loan shall be allocated
pro rata among the Lenders according to the respective Revolving Commitment
Percentages of the Lenders.
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(b) Advances.
(i) The obligations of the Lenders hereunder to make Loans and
to fund participations in Letters of Credit and Swingline Loans are
several and not joint. The failure of any Lender to make any Loan or to
fund any such participation on any date required hereunder shall not
relieve any other Lender of its corresponding obligation to do so on
such date, and no Lender shall be responsible for the failure of any
other Lender to so make its Loan or purchase its participation.
(ii) Unless the Borrower or any Lender has notified the
Administrative Agent, prior to the date any payment is required to be
made by it to the Administrative Agent hereunder, that the Borrower or
such Lender, as the case may be, will not make such payment, the
Administrative Agent may assume that the Borrower or such Lender, as
the case may be, has timely made such payment and may (but shall not be
so required to), in reliance thereon, make available a corresponding
amount to the Person entitled thereto. If and to the extent that such
payment was not in fact made to the Administrative Agent in immediately
available funds, then:
(A) if the Borrower failed to make such payment, each
Lender shall forthwith on demand repay to the Administrative
Agent the portion of such assumed payment that was made
available to such Lender in immediately available funds,
together with interest thereon in respect of each day from and
including the date such amount was made available by the
Administrative Agent to such Lender to the date such amount is
repaid to the Administrative Agent in immediately available
funds at the Federal Funds Rate from time to time in effect;
and
(B) if any Lender failed to make such payment, such
Lender shall forthwith on demand pay to the Administrative
Agent the amount thereof in immediately available funds,
together with interest thereon for the period from the date
such amount was made available by the Administrative Agent to
the Borrower to the date such amount is recovered by the
Administrative Agent (the "Compensation Period") at a rate per
annum equal to the Federal Funds Rate from time to time in
effect. If such Lender does not pay such amount forthwith upon
the Administrative Agent's demand therefor, the Administrative
Agent may make a demand therefor upon the Borrower, and the
Borrower shall pay such amount to the Administrative Agent,
together with interest thereon for the Compensation Period at
a rate per annum equal to the rate of interest applicable to
the applicable borrowing.
Nothing herein shall be deemed to relieve any Lender from its
obligation to fulfill its Commitment or to prejudice any rights that
the Administrative Agent or the Borrower may have against any Lender as
a result of any default by such Lender hereunder. A notice of the
Administrative Agent to any Lender with respect to any amount owing
under this subsection (d) shall be conclusive, absent manifest error.
3.14 Sharing of Payments.
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(a) Lenders. The Lenders agree that, in the event that any Lender shall
obtain payment in respect of any Revolving Loan, LOC Obligation or any other
obligation owing to such Lender under this Credit Agreement through the exercise
of a right of setoff, banker's lien or counterclaim, or pursuant to a secured
claim under Section 506 of the Bankruptcy Code or other security or interest
arising from, or in lieu of, such secured claim, received by such Lender under
any applicable bankruptcy, insolvency or other similar law or otherwise, or by
any other means, in excess of its pro rata share of such payment as provided for
in this Credit Agreement, such Lender shall promptly purchase from the other
Lenders a participation in such Revolving Loan, LOC Obligation and other
obligations in such amounts, and make such other adjustments from time to time,
as shall be equitable to the end that all such Lenders share such payment in
accordance with the respective Revolving Commitment Percentages of such Lenders,
as provided for in this Credit Agreement. The Lenders further agree that if
payment to any such Lender obtained by such Lender through the exercise of a
right of setoff, banker's lien, counterclaim or other event as aforesaid shall
be rescinded or must otherwise be restored, each Lender which shall have shared
the benefit of such payment shall, by repurchase of a participation theretofore
sold, return its share of that benefit (together with its share of any accrued
interest payable with respect thereto) to each such Lender whose payment shall
have been rescinded or otherwise restored. The Borrower agrees that any Lender
so purchasing such a participation may, to the fullest extent permitted by law,
exercise all rights of payment, including setoff, banker's lien or counterclaim,
with respect to such participation as fully as if such Lender were a holder of
such Revolving Loan, LOC Obligation or other obligation in the amount of such
participation. If under any applicable bankruptcy, insolvency or other similar
law, any Lender receives a secured claim in lieu of a setoff to which this
Section 3.16 applies, such Lender shall, to the extent practicable, exercise its
rights in respect of such secured claim in a manner consistent with the rights
of the Lenders under this Section 3.16 to share in the benefits of any recovery
on such secured claim.
(b) Lenders and Agents. Except as otherwise expressly provided in this
Credit Agreement, if any Lender or the Administrative Agent shall fail to remit
to the Administrative Agent or any other Lender an amount payable by such Lender
or the Administrative Agent to the Administrative Agent or such other Lender
pursuant to this Credit Agreement on the date when such amount is due, such
payments shall be made together with interest thereon for each date from the
date such amount is due until the date such amount is paid to the Administrative
Agent or such other Lender at a rate per annum equal to the Federal Funds Rate.
3.15 Payments, Computations, Etc.
(a) Generally. Except as otherwise specifically provided herein, all
payments of principal, interest and fees shall be made to the Administrative
Agent in Dollars in immediately available funds, without condition or deduction
for any counterclaim, defense, recoupment or setoff, at the Administrative
Agent's office specified in Section 11.1 not later than 2:00 P.M. (Charlotte,
North Carolina time) on the date when due. Payments received after such time
shall be deemed to have been received on the next succeeding Business Day. The
Administrative Agent may (but shall not be obligated to) debit the amount of any
such payment which is not made by such time to any ordinary deposit account of
the Borrower maintained with the Administrative Agent (with notice to the
Borrower). The Borrower shall, at the time it makes any payment under this
Credit Agreement, specify to the Administrative Agent the Loans, LOC
Obligations, Fees, interest or other amounts payable by the Borrower hereunder
to which such payment is to be applied (and in the event that it fails so to
specify, or if such application would be inconsistent with the terms hereof, the
Administrative Agent shall distribute such payment to the relevant Lenders in
such manner as the Administrative Agent may determine to be appropriate in
respect of obligations owing by the Borrower hereunder, subject to the terms of
Section 3.15(a) and Section 3.17). The Administrative Agent will distribute such
payments to the applicable Lenders if any such payment is received prior to 2:00
P.M. (Charlotte, North Carolina time or London time, as appropriate) on a
Business Day in like funds as received prior to the end of such Business Day and
otherwise the Administrative Agent will distribute such payment to such Lenders
entitled thereto on the next succeeding Business Day. Whenever any payment
hereunder shall be stated to be due on a day which is not a Business Day, the
due date thereof shall be extended to the next succeeding Business Day (subject
to accrual of interest and Fees for the period of such extension). Except as
expressly provided otherwise herein, all computations of interest and fees shall
be made on the basis of the actual number of days elapsed over a year of 360
days, except with respect to computation of interest on Base Rate Loans
determined by reference to the Prime Rate which shall be calculated based on a
year of 365 or 366 days, as appropriate. Interest shall accrue from and include
the date of borrowing, but exclude the date of payment.
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(b) Allocation of Payments After Event of Default. Notwithstanding any
other provisions of this Credit Agreement to the contrary, after the occurrence
and during the continuance of an Event of Default, all amounts collected or
received on or in respect of the Obligations (or other amounts owing under the
Credit Documents in connection therewith) shall be paid over or delivered as
follows:
FIRST, to the payment of all reasonable out-of-pocket
costs and expenses (including without limitation reasonable
attorneys' fees) of the Collateral Agent actually incurred in
connection with the execution of its duties as Collateral
Agent in exercising or attempting to exercise rights and
remedies in respect of the collateral and all protective
advances made with respect thereto;
SECOND, to the payment of all reasonable
out-of-pocket costs and expenses (including without limitation
reasonable attorneys' fees) of the Administrative Agent in
connection with enforcing the rights and remedies of the
Lenders under the Credit Documents and any protective advances
made with respect thereto;
THIRD, to payment of any fees owed to the
Administrative Agent;
FOURTH, to the payment of all reasonable
out-of-pocket costs and expenses (including without
limitation, reasonable attorneys' fees) of each of the Lenders
hereunder in connection with enforcing its rights under the
Credit Documents or otherwise with respect to the Obligations
owing to such Lender;
FIFTH, to the payment of all accrued interest and
fees on or in respect of the Obligations;
SIXTH, to the payment of the outstanding principal
amount of the Obligations hereunder (including the payment or
cash collateralization of the outstanding LOC Obligations);
SEVENTH, to all other Obligations hereunder and other
obligations which shall have become due and payable under the
Credit Documents otherwise and not repaid pursuant to clauses
"FIRST" through "SIXTH" above; and
EIGHTH, to the payment of the surplus, if any, to the
Borrower and/or whoever may be lawfully entitled to receive
such surplus.
In carrying out the foregoing, (i) amounts received shall be applied in
the numerical order provided until exhausted prior to application to
the next succeeding category; and (ii) except as otherwise provided,
the Lenders shall receive amounts ratably in accordance with their
respective pro rata share (based on the proportion that the then
outstanding Obligations held by such Lenders bears to the aggregate
amount of Obligations then outstanding) of amounts available to be
applied pursuant to clauses "FOURTH", "FIFTH", "SIXTH" and "SEVENTH"
above; and (iii) to the extent that any amounts available for
distribution pursuant to clause "SIXTH" above are attributable to the
issued but undrawn amount of outstanding Letters of Credit, such
amounts shall be held by the Administrative Agent in a cash collateral
account and applied (A) first, to reimburse the Issuing Lender for any
drawings under such Letters of Credit and (B) then, following the
expiration of all Letters of Credit, to all other obligations of the
types described in clauses "FIFTH" and "SIXTH" above in the manner
provided in this Section 3.15(b).
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3.16 Certain Limitations.
The provisions of Sections 3.6, 3.8, 3.9 and 3.11 shall be subject to
the following:
(a) If any Lender demands compensation or indemnification from the
Borrower under Section 3.6, 3.9 or 3.11, then such Lender will agree to use
reasonable efforts to change the jurisdiction of its applicable lending office
so as to eliminate or reduce any such additional payment which may thereafter
accrue if such change, in the judgment of such Lender, is not otherwise
disadvantageous to such Lender.
(b) If any Lender determines that it has recovered or used as a credit
any amount withheld on its account pursuant to Section 3.6, 3.9 or Section 3.11,
it shall reimburse (without any interest) the Borrower to the extent of such
amount so determined to have been recovered (to the extent of any tax benefit
actually received) or used as a credit, provided that nothing in this clause (b)
shall require any Lender to make available its tax returns (or any other
information relating to its taxes which it deems to be confidential).
(c) If any Lender demands compensation or indemnification from the
Borrower under Section 3.6, 3.9 or 3.11, such Lender shall be entitled to
compensation or indemnification only for increased costs or other amounts (i)
incurred during the period of ninety (90) days preceding the date of such
Lender's demand therefor and (ii) which such Lender charges to similarly
situated borrowers.
(d) If any Lender notifies the Borrower that it demands compensation or
indemnification from the Borrower under Section 3.6, 3.9 or 3.11, or if that it
has become unlawful for any Lender to make, maintain, or fund Eurodollar Loans
under Section 3.8, the Borrower may, at its option, so long as no Event of
Default shall have occurred and be continuing, obtain, at the Borrower's
expense, a replacement Lender for the affected Lender. If the Borrower elects to
obtain a replacement Lender for the affected Lender, the Borrower shall within
thirty (30) after the date of such notification from such affected Lender,
notify the Administrative Agent and such affected Lender of its intention to
replace the affected Lender. If the Borrower obtains a replacement Lender (which
replacement Lender shall be acceptable to the Administrative Agent in its
reasonable discretion) within ninety (90) days following notice of its intention
to do so, the affected Lender must sell and assign its Loans and Commitments to
such replacement Lender pursuant to Section 11.6(b), for an amount equal to the
principal balance of all Revolving Loans held by the affected Lender and all
accrued interest and Fees with respect thereto through the date of such sale,
provided that the Borrower shall have paid to such affected Lender the
compensation or indemnification that it is entitled to receive under Section
3.6, 3.9 or 3.11 through the date of such sale and assignment. Notwithstanding
the foregoing, if the Borrower shall fail to give the Administrative Agent and
the affected Lender notice of its intention to replace the affected Lender or if
the Borrower timely gives notice to the Administrative Agent and an affected
Lender of its intention to replace such affected Lender and does not so replace
such affected Lender within ninety (90) days following such notice, then, in
either case, the Borrower's rights under this Section 3.16 to replace such
Lender for the particular circumstances shall terminate.
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3.17 Evidence of Debt.
(a) Each Lender shall maintain an account or accounts evidencing each
Revolving Loan made by such Lender to the Borrower from time to time, including
the amounts of principal and interest payable and paid to such Lender from time
to time under this Credit Agreement. Each Lender will make reasonable efforts to
maintain the accuracy of its account or accounts and to promptly update its
account or accounts from time to time, as necessary.
(b) The Administrative Agent shall maintain the Register pursuant to
Section 11.3(c)(i), and a subaccount for each Lender, in which Register and
subaccounts (taken together) shall be recorded (A) the amount, type and Interest
Period of each such Revolving Loan hereunder, (B) the amount of any principal or
interest due and payable or to become due and payable to each Lender hereunder
and (C) the amount of any sum received by the Administrative Agent hereunder
from or for the account of the Borrower and each Lender's share thereof. The
Administrative Agent will make reasonable efforts to maintain the accuracy of
the respective subaccounts referred to in the preceding sentences and to
promptly update such subaccounts from time to time, as necessary.
(c) The entries made in the accounts, Register and subaccounts
maintained pursuant to subsection (b) of this Section 3.17 (and, if consistent
with the entries of the Administrative Agent, subsection (a)) shall be prima
facie evidence of the existence and amounts of the obligations of the Credit
Parties therein recorded; provided, however, that the failure of any Lender or
the Administrative Agent to maintain any such account, such Register or such
subaccount, as applicable, or any error therein, shall not in any manner affect
the obligation of the Credit Parties to repay the loans and obligations owing to
such Lender.
SECTION 4
GUARANTY
4.1 The Guaranty.
(a) Each of the Guarantors hereby jointly and severally guarantees to
each Lender, to each Lender and each Affiliate of a Lender that enters into a
Hedging Agreement with a Credit Party relating to the Obligations and to the
Agents, as hereinafter provided, the prompt payment of the Guaranteed
Obligations in full when due (whether at stated maturity, as a mandatory
prepayment, by acceleration, as a mandatory cash collateralization or otherwise)
strictly in accordance with the terms thereof. The Guarantors hereby further
agree that if any of the Guaranteed Obligations are not paid in full when due
(whether at stated maturity, as a mandatory prepayment, by acceleration, as a
mandatory cash collateralization or otherwise), the Guarantors will, jointly and
severally, promptly pay the same, without any demand or notice whatsoever, and
that in the case of any extension of time of payment or renewal of any of the
Guaranteed Obligations, the same will be promptly paid in full when due (whether
at extended maturity, as a mandatory prepayment, by acceleration, as a mandatory
cash collateralization or otherwise) in accordance with the terms of such
extension or renewal.
(b) Notwithstanding any provision to the contrary contained herein or
in any other of the Credit Documents or Hedging Agreements, to the extent the
obligations of a Guarantor shall be adjudicated to be invalid or unenforceable
for any reason (including, without limitation, because of any applicable state,
provincial or federal law relating to fraudulent conveyances or transfers or the
granting of financial assistance) then the obligations of each Guarantor
hereunder shall be limited to the maximum amount that is permissible under
applicable law (whether federal, state or provincial and including, without
limitation, the Bankruptcy Code). In such case or otherwise at the request of an
Agent, each Credit Party shall take such action and shall execute and deliver
all such further documents required by such Agent to cause the obligations of
such Guarantor to be enforceable to the extent required by this Credit
Agreement.
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4.2 Obligations Unconditional.
The obligations of all of the Guarantors under Section 4.1 are joint
and several, absolute and unconditional, irrespective of the value, genuineness,
validity, regularity or enforceability of any of the Credit Documents or Hedging
Agreements, or any other agreement or instrument referred to therein, or any
substitution, release, impairment or exchange of any other guarantee of or
security for any of the Guaranteed Obligations, and, to the fullest extent
permitted by applicable law, irrespective of any other circumstance whatsoever
which might otherwise constitute a legal or equitable discharge or defense of a
surety or guarantor, it being the intent of this Section 4.2 that the
obligations of the Guarantors hereunder shall be absolute and unconditional
under any and all circumstances. Each Guarantor agrees that such Guarantor shall
have no right of subrogation, indemnity, reimbursement or contribution against
the Borrower or any other Guarantor for amounts paid under this Section 4 until
such time as the Lenders (and any Affiliates of Lenders entering into Hedging
Agreements relating to the Obligations to the extent permitted hereunder) have
been paid in full in respect of all Guaranteed Obligations, all Commitments
under this Credit Agreement have been terminated and no Person or Governmental
Authority shall have any right to request any return or reimbursement of funds
from the Lenders in connection with monies received under the Credit Documents
or Hedging Agreements between any Credit Party and any Lender, or any Affiliate
of a Lender. Without limiting the generality of the foregoing, it is agreed
that, to the fullest extent permitted by law, the occurrence of any one or more
of the following shall not alter or impair the liability of any Guarantor
hereunder which shall remain absolute and unconditional as described above:
(a) at any time or from time to time, without notice to any
Guarantor, the time for any performance of or compliance with any of
the Guaranteed Obligations shall be extended, or such performance or
compliance shall be waived;
(b) any of the acts mentioned in any of the provisions of any
of the Credit Documents, any Hedging Agreement between any Credit Party
and any Lender or any Affiliate of a Lender, or any other agreement or
instrument referred to in the Credit Documents or such Hedging
Agreements shall be done or omitted;
(c) the maturity of any of the Guaranteed Obligations shall be
accelerated, or any of the Guaranteed Obligations shall be modified,
supplemented or amended in any respect, or any right under any of the
Credit Documents, any Hedging Agreement between any Credit Party and
any Lender or any Affiliate of a Lender, or any other agreement or
instrument referred to in the Credit Documents or such Hedging
Agreements shall be waived or any other guarantee of any of the
Guaranteed Obligations or any security therefor shall be released,
impaired or exchanged in whole or in part or otherwise dealt with;
(d) any Lien granted to, or in favor of, any Agent or any
Lender or Lenders as security for any of the Guaranteed Obligations
shall fail to attach or be perfected; or
(e) any of the Guaranteed Obligations shall be determined to
be void or voidable (including, without limitation, for the benefit of
any creditor of any Guarantor) or shall be subordinated to the claims
of any Person (including, without limitation, any creditor of any
Guarantor).
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With respect to its obligations hereunder, each Guarantor hereby expressly
waives diligence, presentment, demand of payment, protest and all notices
whatsoever, and any requirement that any Agent or any Lender exhaust any right,
power or remedy or proceed against any Person under any of the Credit Documents,
any Hedging Agreement between any Credit Party and any Lender, or any Affiliate
of a Lender, or any other agreement or instrument referred to in the Credit
Documents or such Hedging Agreements, or against any other Person under any
other guarantee of, or security for, any of the Guaranteed Obligations.
4.3 Reinstatement.
The obligations of the Guarantors under this Section 4 shall be
automatically reinstated if and to the extent that for any reason any payment by
or on behalf of any Person in respect of the Guaranteed Obligations is rescinded
or must be otherwise restored by any holder of any of the Guaranteed
Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and each Guarantor agrees that it will indemnify
the Agents and each Lender on demand for all reasonable costs and expenses
(including, without limitation, reasonable fees and expenses of counsel)
incurred by the Agents or such Lender in connection with such rescission or
restoration, including any such costs and expenses incurred in defending against
any claim alleging that such payment constituted a preference, fraudulent
transfer or similar payment under any bankruptcy, insolvency or similar law.
4.4 Certain Additional Waivers.
Each Guarantor agrees that such Guarantor shall have no right of
recourse to security for the Guaranteed Obligations, except through the exercise
of rights of subrogation pursuant to Section 4.2 and through the exercise of
rights of contribution pursuant to Section 4.6.
4.5 Remedies.
The Guarantors agree that, to the fullest extent permitted by law, as
between the Guarantors, on the one hand, and the Agents and the Lenders, on the
other hand, the Guaranteed Obligations may be declared to be forthwith due and
payable as provided in Section 9.2 (and shall be deemed to have become
automatically due and payable in the circumstances provided in said Section 9.2)
for purposes of Section 4.1 notwithstanding any stay, injunction or other
prohibition preventing such declaration (or preventing the Guaranteed
Obligations from becoming automatically due and payable) as against any other
Person and that, in the event of such declaration (or the Guaranteed Obligations
being deemed to have become automatically due and payable), the Guaranteed
Obligations (whether or not due and payable by any other Person) shall forthwith
become due and payable by the Guarantors for purposes of Section 4.1. The
Guarantors acknowledge and agree that their obligations hereunder are secured in
accordance with the terms of the Collateral Documents and that the Lenders may
exercise their remedies thereunder in accordance with the terms thereof.
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4.6 Rights of Contribution.
The Guarantors hereby agree, as among themselves, that if any Guarantor
shall become an Excess Funding Guarantor (as defined below), each other
Guarantor shall, on demand of such Excess Funding Guarantor (but subject to the
succeeding provisions of this Section 4.6), pay to such Excess Funding Guarantor
an amount equal to such Guarantor's Pro Rata Share (as defined below and
determined, for this purpose, without reference to the properties, assets,
liabilities and debts of such Excess Funding Guarantor) of such Excess Payment
(as defined below). The payment obligation of any Guarantor to any Excess
Funding Guarantor under this Section 4.6 shall be subordinate and subject in
right of payment to the prior payment in full of the obligations of such
Guarantor under the other provisions of this Section 4, and such Excess Funding
Guarantor shall not exercise any right or remedy with respect to such excess
until payment and satisfaction in full of all of such obligations. For purposes
hereof, (a) "Excess Funding Guarantor" shall mean, in respect of any obligations
arising under the other provisions of this Section 4 (hereafter, the "Guarantied
Obligations"), a Guarantor that has paid an amount in excess of its Pro Rata
Share of the Guarantied Obligations; (b) "Excess Payment" shall mean, in respect
of any Guarantied Obligations, the amount paid by an Excess Funding Guarantor in
excess of its Pro Rata Share of such Guarantied Obligations; and (c) "Pro Rata
Share", for the purposes of this Section 4.6, shall mean, for any Guarantor, the
ratio (expressed as a percentage) of (i) the amount by which the aggregate
present fair saleable value of all of its assets and properties exceeds the
amount of all debts and liabilities of such Guarantor (including contingent,
subordinated, unmatured, and unliquidated liabilities, but excluding the
obligations of such Guarantor hereunder) to (ii) the amount by which the
aggregate present fair saleable value of all assets and other properties of the
Borrower and all of the Guarantors exceeds the amount of all of the debts and
liabilities (including contingent, subordinated, unmatured, and unliquidated
liabilities, but excluding the obligations of the Borrower and the Guarantors
hereunder) of the Borrower and all of the Guarantors, all as of the Closing Date
(in each case, if any Guarantor becomes a party hereto subsequent to the Closing
Date, then for the purposes of this Section 4.6 such subsequent Guarantor shall
be deemed to have been a Guarantor as of the Closing Date and the information
pertaining to, and only pertaining to, such Guarantor as of the date such
Guarantor became a Guarantor shall be deemed true as of the Closing Date).
4.7 Guarantee of Payment; Continuing Guarantee.
The guarantee in this Section 4 is a guaranty of payment and not of
collection, is a continuing guarantee, and shall apply to all Guaranteed
Obligations whenever arising.
SECTION 5
CONDITIONS
5.1 Closing Conditions.
The obligation of the Lenders to enter into this Credit Agreement and
to make the initial Extensions of Credit shall be subject to satisfaction of the
following conditions (in form and substance acceptable to the Lenders):
(a) Executed Credit Documents. Receipt by the Administrative
Agent of (i) multiple counterparts of this Credit Agreement, (ii) a
Revolving Note for each Lender, and (iii) multiple counterparts of the
Collateral Documents, in each case executed by a duly authorized
officer of each party thereto and in each case conforming to the
requirements of this Credit Agreement.
(b) Legal Opinions. Receipt by the Administrative Agent of
multiple counterparts of opinions of counsel for the Credit Parties
relating to the Credit Documents and the transactions contemplated
therein, in form and substance reasonably satisfactory to the
Administrative Agent and the Lenders, and including, among other
things, opinions regarding enforceability of the Credit Documents and
the perfection of the security interests created thereby.
(c) Financial Information. Receipt by the Lenders of such
financial information regarding the members of the Consolidated Group
as may be requested by, and in each case in form and substance
reasonably satisfactory to, the Administrative Agent and the Lenders.
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(d) Collateral. Receipt by the Administrative Agent of
satisfactory evidence that the Collateral Agent (on behalf of the
Lenders) holds a perfected, first priority lien in all of the
Collateral, subject to no other liens except for Permitted Liens,
including, without limitation, (i) Lien searches, (ii) such filings,
recordations and certificates as the Collateral Agent reasonably deems
necessary to perfect its Liens in the Collateral and (ii) landlord lien
waivers with respect to Collateral held on leased premises to the
extent reasonably required by the Administrative Agent.
(e) Evidence of Insurance. Receipt by the Administrative Agent
of insurance certificates or policies evidencing casualty insurance
(including builders' risk and all-risk permanent policies), credit
insurance and liability conforming to the requirements of this Credit
Agreement and the other Credit Documents, showing the Collateral Agent
as sole loss payee with respect to casualty insurance and credit
insurance and as additional insured with respect to liability
insurance, in each case together with evidence of payment of premiums
thereon.
(f) Absence of Legal Proceedings. There shall not exist any
action, suit, investigation or proceeding pending or threatened in any
court or before any arbitrator or Governmental Authority which would
reasonably be expected to have a Material Adverse Effect.
(g) No Material Adverse Change. There shall not have occurred
a material adverse change since October 31, 2001 in the business,
assets, liabilities (actual or contingent), operations, condition
(financial or otherwise) or prospects of the Borrower and its
Subsidiaries taken as a whole, other than (i) the Restated Financial
Statement and (ii) the lawsuits comprising the Shareholder Litigation.
(h) Corporate Documents. Receipt by the Administrative Agent
of the following (or their equivalent) for each of the Credit Parties:
(i) Charter Documents. Copies of the articles or
certificates of incorporation or other charter documents of
such Credit Party certified to be true and complete as of a
recent date by the appropriate Governmental Authority of the
state or other jurisdiction of its incorporation and certified
by a secretary or assistant secretary of such Credit Party to
be true and correct as of the Closing Date.
(ii) Bylaws. A copy of the bylaws, operating
agreement or equivalent of such Credit Party certified by a
secretary or assistant secretary of such Credit Party to be
true and correct and in force and effect as of the Closing
Date.
(iii) Resolutions. Copies of resolutions of the board
of directors of such Credit Party approving and adopting the
Credit Documents to which it is a party, the transactions
contemplated therein and authorizing execution and delivery
thereof, certified by a secretary or assistant secretary of
such Credit Party to be true and correct and in force and
effect as of the Closing Date.
(iv) Good Standing. (A) certificates of good
standing, existence or its equivalent certified as of a recent
date by the appropriate governmental authorities of the state
of incorporation and the state in which the principal place of
business is located and (B) certificates indicating payment of
all corporate franchise taxes certified as of a recent date by
the appropriate governmental taxing authorities of the state
of incorporation and the state in which the principal place of
business is located.
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(v) Officer's Certificate. An officer's certificate
for each of the Credit Parties dated as of the Closing Date
substantially in the form of Schedule 5.1 with appropriate
insertions and attachments.
(i) Closing Certificate. A certificate signed by an Executive
Officer of the Borrower certifying that the conditions specified in
Section 5.01(f), 5.01(g), 5.02(a) and 5.02(b) have been satisfied.
(j) Fees and Expenses. Payment by the Credit Parties of all
fees and expenses owed by them to the Lenders and the Administrative
Agent, including, without limitation, payment to the Administrative
Agent of the fees set forth in the Administrative Agent's Fee Letter.
5.2 Conditions to all Extensions of Credit.
The obligation of each Lender to make any Extension of Credit hereunder
(including the initial Extension of Credit to be made hereunder) is subject to
the satisfaction of the following conditions precedent on the date of making
such Extension of Credit:
(a) Representations and Warranties. The representations and
warranties made by the Credit Parties herein and in the other Credit
Documents and which are contained in any certificate furnished at any
time under or in connection herewith shall be true and correct in all
material respects on and as of the date of such Extension of Credit as
if made on and as of such date (except for those which expressly relate
to an earlier date).
(b) No Default or Event of Default. No Default or Event of
Default shall have occurred and be continuing on such date or after
giving effect to the Extension of Credit to be made on such date unless
such Default or Event of Default shall have been waived in accordance
with this Credit Agreement.
(c) Additional Conditions. The conditions set forth in Section
2 (or, in the case of an extension or conversion of a Loan, Section
3.2) shall have been satisfied.
Each request for an Extension of Credit (including continuations and
conversions) and each acceptance by the applicable Borrower of an Extension of
Credit (including continuations and conversions) shall be deemed to constitute a
representation and warranty by the applicable Borrower as of the date of such
Extension of Credit that the applicable conditions in paragraphs (a) and (b) of
this Section 5.2 have been satisfied.
SECTION 6
REPRESENTATIONS AND WARRANTIES
To induce the Lenders to enter into this Credit Agreement and to make
the Extensions of Credit hereunder, each of the Credit Parties hereby represents
and warrants to the Administrative Agent and to each Lender that:
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6.1 Financial Condition.
Each of the financial statements described below (copies of which have
heretofore been provided to the Administrative Agent for distribution to the
Lenders) have been prepared in accordance with GAAP consistently applied
throughout the periods covered thereby and, except as set forth in the Restated
Financial Statements, are complete and correct in all material respects and
present fairly the financial condition (including disclosure of all material
liabilities, contingent or otherwise) and results from operations of the
entities and for the periods specified, subject in the case of interim
company-prepared statements to normal year-end adjustments and the absence of
footnotes:
(i) the audited consolidated balance sheets of the Borrower
and its consolidated subsidiaries dated as of October 31, 1999, October
31, 2000 and October 31, 2001, together with the related audited
statements of income, stockholders' equity and cash flows for the
respective fiscal years then ended, certified by
PriceWaterhouseCoopers, LLP, certified public accountants;
(ii) the unaudited, company-prepared balance sheets of the
Borrower and its consolidated subsidiaries as at April 30, 2002 and the
related unaudited, company-prepared statements of income, stockholders'
equity and cash flows for the fiscal quarter then ended; and
(iii) after the Closing Date, the annual and quarterly
financial statements provided in accordance with Sections 7.1(a) and
(b).
6.2 No Changes or Restricted Payments.
Since October 31, 2001,
(i) except as set forth on Schedule 6.2, for the period to the
Closing Date, except as previously disclosed in writing to the
Administrative Agent and the Lenders, (A) there have been no material
sales, transfers or other dispositions of any material part of the
business or property of the members of the Consolidated Group (except
for sales of inventory in the ordinary course of business), nor have
there been any material purchases or other acquisitions of any business
or property (including the Capital Stock of any other person) by the
members of the Consolidated Group, which are not reflected in the
annual audited or company-prepared quarterly financial statements
referenced in Section 6.1(i) and (ii) hereof, and (B) no Restricted
Payments have been declared or paid by members of the Consolidated
Group; and
(ii) there has been no circumstance, development or event
relating to or affecting the members of the Consolidated Group which
has had or would reasonably be expected to have a Material Adverse
Effect other than (A) the Restated Financial Statement and (B) the
lawsuits comprising the Shareholder Litigation other than any such
lawsuit for which the court having jurisdiction thereof does not
approve the settlement agreed to prior to the Closing Date by the
Borrower and the other parties thereto.
6.3 Organization; Existence; Compliance with Law.
Each of the members of the North American Group (a) is duly organized,
validly existing in good standing under the laws of the jurisdiction of its
incorporation or organization, (b) has the corporate power and authority, and
the legal right, to own and operate its Property, to lease the Property it
operates as lessee and to conduct the business in which it is currently engaged,
(c) is duly qualified as a foreign entity and in good standing under the laws of
each jurisdiction where its ownership, lease or operation of Property or the
conduct of its business requires such qualification, other than in such
jurisdictions where the failure to be so qualified and in good standing would
not, in the aggregate, have a Material Adverse Effect, and (d) is in compliance
with all Requirements of Law, except to the extent that the failure to comply
therewith would not, in the aggregate, be reasonably expected to have a Material
Adverse Effect.
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6.4 Power; Authorization; Enforceable Obligations.
Each Credit Party has the corporate power and authority, and the legal
right, to make, deliver and perform the Credit Documents to which it is a party
and has taken all necessary corporate or other action to authorize the
execution, delivery and performance by it of the Credit Documents to which it is
a party. No consent or authorization of, filing with, notice to or other act by
or in respect of, any Governmental Authority or any other Person is required in
connection with acceptance of Extensions of Credit or the making of the
guaranties hereunder or with the execution, delivery or performance of any
Credit Documents by the Credit Parties (other than those which have been
obtained, such filings as are required by the Securities and Exchange Commission
and to fulfill other reporting requirements with Governmental Authorities) or
with the validity or enforceability of any Credit Document against the Credit
Parties (except such filings as are necessary in connection with the perfection
of the Liens created by such Credit Documents). Each Credit Document constitutes
a legal, valid and binding obligation of each Credit Party party thereto
enforceable against such Credit Party in accordance with its respective terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
6.5 No Legal Bar.
The execution, delivery and performance of the Credit Documents, the
borrowings hereunder and the use of the Extensions of Credit will not violate
any Requirement of Law or any Contractual Obligation of any member of the North
American Group (except those as to which (a) waivers or consents have been
obtained and (b) the violation of which would not be reasonably expected to have
a Material Adverse Effect), and will not result in, or require, the creation or
imposition of any Lien on any of its respective properties or revenues pursuant
to any Requirement of Law or Contractual Obligation other than the Liens arising
under or contemplated in connection with the Credit Documents.
6.6 No Material Litigation and Disputes.
(a) No claim, litigation, investigation or proceeding of or before any
arbitrator or Governmental Authority is pending or, to the knowledge of the
Credit Parties, threatened by or against, any members of the Consolidated Group
or against any of their respective properties or revenues which (i) relate to
the Credit Documents or any of the transactions contemplated hereby or thereby
or (ii) would reasonably be expected to have a Material Adverse Effect.
(b) No default exists and, to the knowledge of the Credit Parties, no
default has been asserted, under any Contractual Obligations to which any
members of the Consolidated Group are party which individually or in the
aggregate would reasonably be expected to have a Material Adverse Effect.
6.7 No Defaults.
No Default or Event of Default exists and is continuing.
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6.8 Ownership and Operation of Property.
Each of the members of the North American Group (i) has valid and
marketable title to, or a valid leasehold interest in, all its material real
property, and valid title to, or a valid leasehold interest in, all its other
material property, and none of such property is subject to any Lien, except for
Permitted Liens, and (ii) except to the extent that the failure to do so would
not be reasonably expected to have a Material Adverse Effect, has obtained all
licenses, permits, franchises or other certifications, consents, approvals and
authorizations, governmental or private, necessary to the ownership of its
Property and to the conduct of its business.
6.9 Intellectual Property.
(a) Each of the members of the North American Group owns, or has the
legal right to use, all United States trademarks, tradenames, copyrights,
patents, technology, know-how and processes, if any, necessary for each of them
to conduct its business as currently conducted (the "Intellectual Property")
except for those the failure to own or have such legal right to use would not be
reasonably expected to have a Material Adverse Effect. Set forth on Schedule 6.9
is a list of (A) all Trademarks (as defined in the Security Agreement) owned by
a Credit Party in its own name as of the Closing Date and (B) all Copyrights,
Copyright Licenses, Patents, Patent Licenses and Trademark Licenses (each as
defined in the Security Agreement) owned by a Credit Party in its own name as of
the Closing Date the loss of which would reasonably be expected to have a
Material Adverse Effect. No claim has been asserted and is pending by any Person
challenging or questioning the use of any Intellectual Property or the validity
or effectiveness of any Intellectual Property, nor does any Credit Party know of
any such claim, and the use of any Intellectual Property by the members of the
North American Group does not infringe on the rights of any Person, except for
such claims and infringements that, in the aggregate, would not be reasonably
expected to have a Material Adverse Effect.
(b) No member of the North American Group owns any Intellectual
Property the loss of which would have a Material Adverse Effect except for the
trademark "Grand Theft Auto".
(c) To the extent any member of the North American Group licenses
trademarks from third parties, either (i) such licenses permit the disposition
by such member of the North American Group, or its successors in interest, of
the inventory bearing such trademarks or (ii) the inventory bearing such
licensed trademarks is not material to the business of the members of the North
American Group.
(d) The members of the North American Group hold copyright, patent,
and/or software licenses from numerous third parties, which permit the members
of the North American Group to carry on their respective business. To the
knowledge of the Credit Parties, except with respect to publishing rights
granted under License from Sony Computer Entertainment America, Nintendo of
America, Inc. and Sega Enterprises, Inc., there are substitute sources for
equivalent intellectual property rights on equivalent financial terms for all
such licenses, and the loss of even a material number of such licenses (except
with respect to publishing rights granted under License from Sony Computer
Entertainment America, Nintendo of America, Inc. and Sega Enterprises, Inc.)
would not be reasonably expected to have a Material Adverse Effect.
6.10 Taxes.
Each of the members of the North American Group has filed or caused to
be filed all income tax returns (federal, state, local and foreign) and all
other material tax returns which are required to be filed and has paid (i) all
amounts shown therein to be due (including interest and penalties) and (ii) all
other taxes, fees, assessments and other governmental charges (including
mortgage recording taxes, documentary stamp taxes and intangibles taxes) owing,
except for such taxes which are not yet delinquent or as are being contested in
good faith by appropriate proceedings for which adequate reserves determined in
accordance with GAAP have been established unless the failure to make any such
payment could give rise to an immediate right to foreclose on a Lien securing
such amounts. No tax claim or assessment has been asserted against members of
the Consolidated which if adversely determined would reasonably be expected to
have a Material Adverse Effect.
53
6.11 ERISA
Except as would not reasonably be expected to have a Material Adverse
Effect:
(a) During the five-year period prior to the date on which this
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representation is made or deemed made: (i) no ERISA Event has occurred, and, to
the knowledge of the Credit Parties, no event or condition has occurred or
exists as a result of which any ERISA Event could reasonably be expected to
occur, with respect to any Plan; (ii) no "accumulated funding deficiency," as
such term is defined in Section 302 of ERISA and Section 412 of the Internal
Revenue Code, whether or not waived, has occurred with respect to any Plan;
(iii) each Plan has been maintained, operated, and funded in compliance with its
own terms and in material compliance with the provisions of ERISA, the Internal
Revenue Code, and any other applicable federal or state laws; and (iv) no lien
in favor of the PBGC or a Plan has arisen or is reasonably likely to arise on
account of any Plan.
(b) The actuarial present value of all "benefit liabilities" (as
defined in Section 4001(a)(16) of ERISA), whether or not vested, under each
Single Employer Plan, as of the last annual valuation date prior to the date on
which this representation is made or deemed made (determined, in each case, in
accordance with Financial Accounting Standards Board Statement 87, utilizing the
actuarial assumptions used in such Plan's most recent actuarial valuation
report), did not exceed as of such valuation date the fair market value of the
assets of such Plan.
(c) No member of the Consolidated Group nor any ERISA Affiliate has
incurred, or, to the knowledge of the Credit Parties, could be reasonably
expected to incur, any withdrawal liability under ERISA to any Multiemployer
Plan or Multiple Employer Plan. No member of the Consolidated Group nor any
ERISA Affiliate would become subject to any withdrawal liability under ERISA if
any member of the Consolidated Group or any ERISA Affiliate were to withdraw
completely from all Multiemployer Plans and Multiple Employer Plans as of the
valuation date most closely preceding the date on which this representation is
made or deemed made. No member of the Consolidated Group nor any ERISA Affiliate
has received any notification that any Multiemployer Plan is in reorganization
(within the meaning of Section 4241 of ERISA), is insolvent (within the meaning
of Section 4245 of ERISA), or has been terminated (within the meaning of Title
IV of ERISA), and no Multiemployer Plan is, to the knowledge of the Credit
Parties, reasonably expected to be in reorganization, insolvent, or terminated.
(d) No prohibited transaction (within the meaning of Section 406 of
ERISA or Section 4975 of the Internal Revenue Code) or breach of fiduciary
responsibility has occurred with respect to a Plan which has subjected or may
subject any member of the Consolidated Group or any ERISA Affiliate to any
liability under Sections 406, 409, 502(i), or 502(l) of ERISA or Section 4975 of
the Internal Revenue Code, or under any agreement or other instrument pursuant
to which any member of the Consolidated Group or any ERISA Affiliate has agreed
or is required to indemnify any person against any such liability.
54
(e) No member of the Consolidated Group nor any ERISA Affiliates has
any material liability with respect to "expected post-retirement benefit
obligations" within the meaning of the Financial Accounting Standards Board
Statement 106. Each Plan which is a welfare plan (as defined in Section 3(1) of
ERISA) to which Sections 601-609 of ERISA and Section 4980B of the Internal
Revenue Code apply has been administered in compliance in all material respects
of such sections.
(f) Neither the execution and delivery of this Credit Agreement nor the
consummation of the financing transactions contemplated thereunder will involve
any transaction which is subject to the prohibitions of Sections 404, 406 or 407
of ERISA or in connection with which a tax could be imposed pursuant to Section
4975 of the Internal Revenue Code. The representation by the Credit Parties in
the preceding sentence is made in reliance upon and subject to the accuracy of
the Lenders' representation in Section 11.15 with respect to their source of
funds and is subject, in the event that the source of the funds used by the
Lenders in connection with this transaction is an insurance company's general
asset account, to the application of Prohibited Transaction Class Exemption
95-60, 60 Fed. Reg. 35,925 (1995), compliance with the regulations issued under
Section 401(c)(1)(A) of ERISA, or the issuance of any other prohibited
transaction exemption or similar relief, to the effect that assets in an
insurance company's general asset account do not constitute assets of an
"employee benefit plan" within the meaning of Section 3(3) of ERISA of a "plan"
within the meaning of Section 4975(e)(1) of the Internal Revenue Code.
6.12 Governmental Regulations, Etc.
(a) No part of the proceeds of the Extensions of Credit hereunder will
be used, directly or indirectly, for the purpose of purchasing or carrying any
"margin stock" within the meaning of Regulation U, or for the purpose of
purchasing or carrying or trading in any other securities. If requested by any
Lender or the Administrative Agent, the Borrower will furnish to the
Administrative Agent and each Lender a statement to the foregoing effect in
conformity with the requirements of FR Form U-1 referred to in said Regulation
U. No indebtedness being reduced or retired out of the proceeds of the
Extensions of Credit hereunder was or will be incurred for the purpose of
purchasing or carrying any margin stock within the meaning of Regulation U or
any "margin security" within the meaning of Regulation T. "Margin stock" within
the meanings of Regulation U does not constitute more than 25% of the value of
the consolidated assets of the Borrower and its Subsidiaries. None of the
transactions contemplated by this Credit Agreement (including, without
limitation, the direct or indirect use of the proceeds of the Loans) will
violate or result in a violation of Regulation T, U or X.
(b) None of the members of the Consolidated Group is subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act or the Investment Company Act of 1940, each as amended. In addition,
none of the members of the Consolidated Group is (i) an "investment company"
registered or required to be registered under the Investment Company Act of
1940, as amended, and is not controlled by such a company, or (ii) a "holding
company", or a "subsidiary company" of a "holding company", or an "affiliate" of
a "holding company" or of a "subsidiary" of a "holding company", within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
6.13 Subsidiaries.
Set forth on Schedule 6.13 are all the North American Subsidiaries as
of the Closing Date, including the classes of Capital Stock (including options,
warrants, rights of subscription, conversion and exchangeability and other
similar rights), ownership and ownership percentages thereof. The Capital Stock
of the North American Subsidiaries is validly issued, fully paid and are
non-assessable and owned free of Liens other than Permitted Liens and is not
subject to any buy-sell, voting trust or other shareholder agreement.
55
6.14 Purpose of Extensions of Credit.
The Loans will be used solely to finance working capital, capital
expenditures and other lawful corporate purposes (including, but not limited to,
Permitted Acquisitions).
6.15 Environmental Matters.
Except as would not reasonably be expected to have a Material Adverse
Effect:
(a) To the knowledge of the Credit Parties, each of the facilities and
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properties owned, leased or operated by the members of the Consolidated Group
(the "Subject Properties") and all operations at the Subject Properties are in
compliance with all applicable Environmental Laws, and there is no violation of
any Environmental Law with respect to the Subject Properties or the businesses
operated by the members of the Consolidated Group (the "Businesses"), and there
are no conditions relating to the Businesses or Subject Properties that could
give rise to liability under any applicable Environmental Laws.
(b) To the knowledge of the Credit Parties, none of the Subject
Properties contains, or has previously contained, any Materials of Environmental
Concern at, on or under the Subject Properties in amounts or concentrations that
constitute or constituted a violation of, or could give rise to liability under,
Environmental Laws.
(c) None of the members of the Consolidated Group has received any
written or verbal notice of, or inquiry from any Governmental Authority
regarding, any violation, alleged violation, non-compliance, liability or
potential liability regarding environmental matters or compliance with
Environmental Laws with regard to any of the Subject Properties or the
Businesses, nor does any member of the Consolidated Group have knowledge or
reason to believe that any such notice will be received or is being threatened.
(d) To the knowledge of the Credit Parties, Materials of Environmental
Concern have not been transported or disposed of from the Subject Properties, or
generated, treated, stored or disposed of at, on or under any of the Subject
Properties or any other location, in each case by or on behalf any members of
the Consolidated Group in violation of, or in a manner that would be reasonably
likely to give rise to liability under, any applicable Environmental Law.
(e) No judicial proceeding or governmental or administrative action is
pending or, to the knowledge of any Credit Party, threatened, under any
Environmental Law to which any member of the Consolidated Group is or will be
named as a party, nor are there any consent decrees or other decrees, consent
orders, administrative orders or other orders, or other administrative or
judicial requirements outstanding under any Environmental Law with respect to
any member of the Consolidated Group, the Subject Properties or the Businesses.
(f) To the knowledge of the Credit Parties, there has been no release
or, threat of release of Materials of Environmental Concern at or from the
Subject Properties, or arising from or related to the operations (including,
without limitation, disposal) of any member of the Consolidated Group in
connection with the Subject Properties or otherwise in connection with the
Businesses, in violation of or in amounts or in a manner that could give rise to
liability under Environmental Laws.
6.16 No Material Misstatements.
56
None of the written information, reports, financial statements,
exhibits or schedules, taken as a whole, furnished by or on behalf of any member
of the Consolidated Group to the Administrative Agent or any Lender in
connection with the negotiation of the Credit Documents or included therein or
delivered pursuant thereto contained or contains any misstatement of material
fact or omitted or omits to state any material fact necessary to make the
statements therein, in light of the circumstances under which they were, are or
will be made, not materially misleading, provided that to the extent any such
information, report, financial statement, exhibit or schedule was based upon or
constitutes a forecast or projection (statistical and numerical information
furnished by third parties (or, if disclosed to the Administrative Agent and the
Lenders in writing, derived from such information) to the Administrative Agent
or any Lender on behalf of any member of the Consolidated Group shall constitute
a forecast or projection), each of the Credit Parties represents only that it
acted in good faith and utilized reasonable assumptions and due care in the
preparation of such information, report, financial statement, exhibit or
schedule.
6.17 Labor Matters.
(a) There are no strikes or lockouts against any member of the North
American Group pending or, to the knowledge of the Credit Parties, threatened.
(b) The hours worked by and payments made to employees of the members
of the North American Group have not been in violation of the Fair Labor
Standards Act or any other applicable federal, state, local or foreign law
dealing with such matters in any case where a Material Adverse Effect would
reasonably be expected to occur as a result of the violation thereof.
(c) All payments due from members of the North American Group, or for
which any claim may be made against a member of the North American Group, on
account of wages and employee health and welfare insurance and other benefits,
have been paid or accrued as a liability on the books of the respective members
of the North American Group.
(d) None of the members of the North American Group is party to a
collective bargaining agreement.
6.18 Collateral Documents.
(a) Security Agreement. The Security Agreement is effective to create
in favor of the Collateral Agent, for the ratable benefit of the holders of the
Secured Obligations identified therein, a legal valid and enforceable security
interest in the Collateral (as defined in the Security Agreement) and, when
financing statements in appropriate form are filed in the appropriate offices
for the locations specified in Schedule 2 to the Security Agreement, the
Security Agreement shall constitute a fully perfected Lien on, and security
interest in, all right, title and interest of the grantors thereunder in such
Collateral that may be perfected by filing, recording or registering a financing
statement under the Uniform Commercial Code as in effect, in each case prior and
superior in right to any other Lien on any Collateral other than Permitted
Liens.
(b) Pledge Agreements. The Pledge Agreement is effective to create in
favor of the Collateral Agent, for the ratable benefit of the holders of the
Secured Obligations identified therein, a legal valid and enforceable security
interest in the Collateral (as defined in the Pledge Agreement) and, when such
Collateral is delivered to the Collateral Agent, the Pledge Agreement shall
constitute a fully perfected first priority Lien on, and security interest in,
all right, title and interest of the pledgors thereunder in such Collateral, in
each case prior and superior in right to any other Lien.
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(c) Intellectual Property. The Security Agreement together with the
Notice of Grant of Security Interest in Trademarks and the Notice of Grant of
Security Interest in Patents filed with the United States Patent and Trademark
Office, and the Notice of Grant of Security Interest in Copyrights filed with
the United States Copyright Office will constitute a fully perfected Lien on,
and security interest in, all right, title and interest of the grantors
thereunder in all Patents and Patent Licenses, Trademarks and Trademark Licenses
and Copyrights and Copyright Licenses (each as defined in the Security
Agreement) and in which a security interest may be perfected by filing,
recording or registration of a Notice in the United States Patent and Trademark
Office and the United States Copyright Office, in each case prior and superior
in right to any other Lien other than Permitted Liens.
6.19 Collateral Matters.
Set forth on Schedule 6.19(a) is a complete and correct list of all
real property located in the United States and owned or leased by any Credit
Party as of the Closing Date with street address and state where located. Set
forth on Schedule 6.19(b) is a list of all locations where any tangible personal
property of any Credit Party is located as of the Closing Date, including street
address and state where located (other than locations set forth on Schedule
6.19(a)). Set forth on Schedule 6.19(c) is the legal name, state of formation
and chief executive office of each Credit Party as of the Closing Date.
6.20 Solvency.
Immediately after giving effect to the initial Extensions of Credit
made on the Closing Date, (i) the fair value of the assets of each Credit Party
will exceed its debts and liabilities, subordinated, contingent or otherwise;
(ii) the present fair saleable value of the property of each Credit Party will
be greater than the amount that will be required to pay the probable liability
of its debts and other liabilities, subordinated, contingent or otherwise, as
such debts and other liabilities become absolute and mature; and (iii) each
Credit Party will not have unreasonably small capital with which to conduct the
business in which it is engaged as such business is now conducted and is
proposed to be conducted following the Closing Date.
6.21 No Other Broker's Fees.
None of the members of the Consolidated Group owes to any Person other
than the Lenders and their affiliates, or otherwise has any obligation in
respect of any finder's, broker's, investment banker's or other similar fee in
connection with the transactions contemplated in the Credit Agreement and the
other Credit Documents.
SECTION 7
AFFIRMATIVE COVENANTS
Each Credit Party hereby covenants and agrees that so long as this
Credit Agreement is in effect or any amounts payable hereunder or under any
other Credit Document shall remain outstanding or any Letter of Credit is
outstanding, and until all of the Commitments hereunder shall have terminated:
7.1 Information Covenants.
The Credit Parties will furnish, or cause to be furnished, to the
Administrative Agent and each of the Lenders:
58
(a) Annual Financial Statements. As soon as available, and in
any event within 90 days (or, if the SEC grants a 15 day extension for
filing the Borrower's Form 10K for such fiscal year, 105 days) after
the close of each fiscal year of the members of the Consolidated Group,
audited consolidated and unaudited company-prepared consolidating
balance sheet and income statement of the members of the Consolidated
Group as of the end of such fiscal year, together with related audited
consolidated and unaudited company-prepared consolidating statements of
operations and retained earnings and of cash flows for such fiscal
year, in each case setting forth in comparative form consolidated and
consolidating figures for the preceding fiscal year, all such financial
information described above to be in reasonable form and detail and
audited by PriceWaterhouseCoopers LLP or other independent certified
public accountants of recognized national standing reasonably
acceptable to the Administrative Agent and the Required Lenders and
whose opinion shall be to the effect that such financial statements
have been prepared in accordance with GAAP (except for changes with
which such accountants concur) and shall not be limited as to the scope
of the audit or qualified as to the status of the members of the
Consolidated Group as a going concern or any other material
qualifications or exceptions.
(b) Quarterly Financial Statements. As soon as available, and
in any event within 45 days (or, if the SEC grants a 5 day extension
for filing the Borrower's Form 10Q for such fiscal quarter, 50 days)
after the close of each fiscal quarter of the Consolidated Group (other
than the fourth fiscal quarter, in which case together with the annual
financial statements required by Section 7.1(a)) a consolidated and
consolidating balance sheet and income statement of the Consolidated
Group as of the end of such fiscal quarter, together with related
consolidated and consolidating statements of operations and retained
earnings and of cash flows for such fiscal quarter, in each case
setting forth in comparative form consolidated and consolidating
figures for the corresponding period of the preceding fiscal year, all
such financial information described above to be in reasonable form and
detail and reasonably acceptable to the Administrative Agent, and
accompanied by a certificate of an Executive Officer of the Borrower to
the effect that such quarterly financial statements fairly present in
all material respects the financial condition, results of operations
and cash flows of the Consolidated Group and have been prepared in
accordance with GAAP, subject to changes resulting from audit and
normal year-end audit adjustments and absence of footnotes.
(b-1) Monthly Financial Statements. As soon as available, and
in any event within thirty (30) days after the end of each month, a
consolidated and consolidating balance sheet, statement of operations
and statement of cash flows indicating the financial performance of the
Consolidated Group for the month then ending and the financial position
of the Consolidated Group as of the end of such month.
(c) Officer's Certificate. At the time of delivery of the
financial statements provided for in Sections 7.1(a) and 7.1(b) above,
a certificate of an Executive Officer of the Borrower substantially in
the form of Schedule 7.1(c), (i) demonstrating compliance with the
financial covenants contained in Section 7.11 by calculation thereof as
of the end of each such fiscal period and (ii) stating that no Default
or Event of Default exists, or if any Default or Event of Default does
exist, specifying the nature and extent thereof and what action the
Credit Parties propose to take with respect thereto.
(d) North American Borrowing Base Certificate. (i) By no later
than the 15th day of each calendar month, a statement of the North
American Borrowing Base and its components as of the last day of the
immediately preceding calendar month and (ii) by no later than the last
day of each calendar month, a statement of the North American Borrowing
Base and its components as of the 15th day of such calendar month, in
each case in form and content satisfactory to the Administrative Agent
and certified by the chief financial officer of the Borrower to be true
and correct as of the date thereof (the "North American Borrowing Base
Certificate").
59
(e) UK Borrowing Base Certificate. Upon request of the
Administrative Agent, within 15 days after the end of each calendar
month, a statement of the UK Borrowing Base and its components as of
the end of such calendar month, in form and content satisfactory to the
Administrative Agent and certified by the chief financial officer of
the Borrower to be true and correct as of the date thereof (the "UK
Borrowing Base Certificate").
(f) Update of Intellectual Property. At the time of delivery
of the financial statements provided for in Sections 7.1(a) and 7.1(b)
above, a certificate of an Executive Officer of the Borrower setting
forth (i) all applications made, and all issuances of registrations on
existing applications received, for Trademarks since the date of the
prior certificate (or, in the case of the first such certificate, the
Closing Date), (ii) all applications made, and all issuances of
registrations and letters on existing applications received, for
Patents and Copyrights since the date of the prior certificate (or, in
the case of the first such certificate, the Closing Date) the loss of
which would reasonably be expected to have a Material Adverse Effect,
and (iii) all Trademark Licenses, Copyright Licenses and Patent
Licenses entered into since the date of the prior certificate (or, in
the case of the first such certificate, the Closing Date) the loss of
which would reasonably be expected to have a Material Adverse Effect.
(g) Annual Business Plan and Budgets. At least 30 days prior
to the end of each fiscal year of the Borrower, beginning with the
fiscal year ending October 31, 2000, an annual business plan and budget
of the Consolidated Group containing, among other things, pro forma
financial statements for the next fiscal year.
(h) Accountant's Certificate. Within the period for delivery
of the annual financial statements provided in Section 7.1(a), a
certificate of the accountants conducting the annual audit stating that
they have reviewed this Credit Agreement and stating further whether,
in the course of their audit, they have become aware of any Default or
Event of Default and, if any such Default or Event of Default exists,
specifying the nature and extent thereof.
(i) Auditor's Reports. Promptly upon receipt thereof, a copy
of any other report or "management letter" submitted by independent
accountants to any member of the Consolidated Group in connection with
any annual, interim or special audit of the books of such Person.
(j) Reports. Promptly upon transmission or receipt thereof,
(i) copies of any filings and registrations with, and reports to or
from, the Securities and Exchange Commission, or any successor agency,
and copies of all financial statements, proxy statements, notices and
reports as any member of the Consolidated Group shall send to its
shareholders or to a holder of any Indebtedness owed by any member of
the Consolidated Group in its capacity as such a holder and (ii) upon
the request of the Administrative Agent, all reports and written
information to and from the United States Environmental Protection
Agency, or any state or local agency responsible for environmental
matters, the United States Occupational Health and Safety
Administration, or any state or local agency responsible for health and
safety matters, or any successor agencies or authorities concerning
environmental, health or safety matters.
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(k) Notices. Upon any Executive Officer of a Credit Party
obtaining knowledge thereof, the Credit Parties will give written
notice to the Administrative Agent immediately of (i) the occurrence of
an event or condition constituting a Default or Event of Default,
specifying the nature and existence thereof and what action the Credit
Parties propose to take with respect thereto, and (ii) the occurrence
of any of the following with respect to any member of the Consolidated
Group (A) the pendency or commencement of any litigation, arbitral or
governmental proceeding against such Person which if adversely
determined would reasonably be expected to have a Material Adverse
Effect or (B) the institution of any proceedings against such Person
with respect to, or the receipt of notice by such Person of potential
liability or responsibility for violation, or alleged violation of any
federal, state or local law, rule or regulation, including but not
limited to, Environmental Laws, the violation of which would reasonably
be expected to have a Material Adverse Effect.
(l) ERISA. Upon any Executive Officer of a Credit Party
obtaining knowledge thereof, the Credit Parties will give written
notice to the Administrative Agent promptly (and in any event within
five Business Days) of: (i) any event or condition, including, but not
limited to, any Reportable Event, that constitutes, or would reasonably
be expected to lead to, an ERISA Event; (ii) with respect to any
Multiemployer Plan, the receipt of notice as prescribed in ERISA or
otherwise of any withdrawal liability assessed against the Credit
Parties or any ERISA Affiliates, or of a determination that any
Multiemployer Plan is in reorganization or insolvent (both within the
meaning of Title IV of ERISA); (iii) the failure to make full payment
on or before the due date (including extensions) thereof of all amounts
which any member of the Consolidated Group or any ERISA Affiliate is
required to contribute to each Plan pursuant to its terms and as
required to meet the minimum funding standard set forth in ERISA and
the Internal Revenue Code with respect thereto; or (iv) any change in
the funding status of any Plan that would reasonably be expected to
have a Material Adverse Effect, together with a description of any such
event or condition or a copy of any such notice and a statement by an
Executive Officer of the Borrower briefly setting forth the details
regarding such event, condition, or notice, and the action, if any,
which has been or is being taken or is proposed to be taken by the
Credit Parties with respect thereto. Promptly upon request, the Credit
Parties shall furnish the Administrative Agent and the Lenders with
such additional information concerning any Plan as may be reasonably
requested, including, but not limited to, copies of each annual
report/return (Form 5500 series), as well as all schedules and
attachments thereto required to be filed with the Department of Labor
and/or the Internal Revenue Service pursuant to ERISA and the Internal
Revenue Code, respectively, for each "plan year" (within the meaning of
Section 3(39) of ERISA).
(m) Environmental.
(i) Upon the reasonable written request of the
Administrative Agent following the occurrence of any event or
the discovery of any condition which the Administrative Agent
or the Required Lenders reasonably believe has caused (or
would be reasonably expected to cause) the representations and
warranties set forth in Section 6.16 to be untrue in any
material respect, the Credit Parties will furnish or cause to
be furnished to the Administrative Agent, at the Credit
Parties' expense, a report of an environmental assessment of
reasonable scope, form and depth, (including, where
appropriate, invasive soil or groundwater sampling) by a
consultant reasonably acceptable to the Administrative Agent
as to the nature and extent of the presence of any Materials
of Environmental Concern on any Subject Properties (as defined
in Section 6.16) and as to the compliance by any member of the
Consolidated Group with Environmental Laws at such Subject
Properties. If the Credit Parties fail to deliver such an
environmental report within seventy-five (75) days after
receipt of such written request then the Administrative Agent
may arrange for same, and the members of the Consolidated
Group hereby grant to the Administrative Agent and their
representatives access to the Subject Properties to reasonably
undertake such an assessment (including, where appropriate,
invasive soil or groundwater sampling). The reasonable cost of
any assessment arranged for by the Administrative Agent
pursuant to this provision will be payable by the Credit
Parties on demand and added to the obligations secured by the
Collateral Documents.
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(ii) The members of the Consolidated Group will
conduct and complete all investigations, studies, sampling,
and testing and all remedial, removal, and other actions
necessary to address all Materials of Environmental Concern
on, from or affecting any of the Subject Properties to the
extent necessary to be in compliance with all Environmental
Laws and with the validly issued orders and directives of all
Governmental Authorities with jurisdiction over such Subject
Properties to the extent any failure could have a Material
Adverse Effect.
(n) Other Information. With reasonable promptness upon any
such request, such other information regarding the business, properties
or financial condition of any member of the Consolidated Group as the
Administrative Agent or any Lender may reasonably request.
7.2 Preservation of Existence and Franchises.
Except as a result of or in connection with a dissolution, merger or
disposition of a Subsidiary permitted under Section 8.4 or Section 8.5, each
Credit Party will, and will cause each of its Subsidiaries to, do all things
necessary to preserve and keep in full force and effect its existence, rights,
franchises and authority.
7.3 Books and Records.
Each Credit Party will, and will cause each of its Subsidiaries to,
keep complete and accurate books and records of its transactions in accordance
with good accounting practices on the basis of GAAP (including the establishment
and maintenance of appropriate reserves).
7.4 Compliance with Law.
Each Credit Party will, and will cause each of its Subsidiaries to,
comply with all laws, rules, regulations and orders, and all applicable
restrictions imposed by all Governmental Authorities, applicable to it and its
Property if noncompliance with any such law, rule, regulation, order or
restriction could have a Material Adverse Effect.
7.5 Payment of Taxes and Other Indebtedness.
Each Credit Party will, and will cause each of its Subsidiaries to, pay
and discharge (a) all taxes, assessments and governmental charges or levies
imposed upon it, or upon its income or profits, or upon any of its properties,
before they shall become delinquent, (b) all lawful claims (including claims for
labor, materials and supplies) which, if unpaid, would give rise to a Lien upon
any of its properties, and (c) except as prohibited hereunder, all of its other
Indebtedness as it shall become due; provided, however, that no member of the
Consolidated Group shall be required to pay any such tax, assessment, charge,
levy, claim or Indebtedness which is being contested in good faith by
appropriate proceedings for which adequate reserves determined in accordance
with GAAP have been established, unless the failure to make any such payment (i)
would give rise to an immediate right to foreclose on a Lien securing such
amounts or (ii) would reasonably be expected to have a Material Adverse Effect.
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7.6 Insurance.
Each Credit Party will, and will cause each of its Subsidiaries to, at
all times maintain in full force and effect insurance (including worker's
compensation insurance, liability insurance, casualty insurance and business
interruption insurance) in such amounts, covering such risks and liabilities and
with such deductibles or self-insurance retentions as are in accordance with
normal industry practice (or as otherwise required by the Collateral Documents).
The Collateral Agent shall be named as loss payee or mortgagee, as its interest
may appear, and/or additional insured with respect to any such insurance
providing coverage in respect of any Collateral, and each provider of any such
insurance shall agree, by endorsement upon the policy or policies issued by it
or by independent instruments furnished to the Agent, that it will give the
Collateral Agent thirty (30) days prior written notice before any such policy or
policies shall be altered or canceled, and that no act or default of any member
of the Consolidated Group or any other Person shall affect the rights of the
Collateral Agent or the Lenders under such policy or policies.
7.7 Maintenance of Property.
Each Credit Party will, and will cause each of its Subsidiaries to,
maintain and preserve its properties and equipment material to the conduct of
its business in good repair, working order and condition, normal wear and tear
and casualty and condemnation excepted, and will make, or cause to be made, in
such properties and equipment from time to time all repairs, renewals,
replacements, extensions, additions, betterments and improvements thereto as may
be needed or proper, to the extent and in the manner customary for companies in
similar businesses.
7.8 Performance of Obligations.
Each Credit Party will, and will cause each of its Subsidiaries to,
perform in all material respects all of its obligations under the terms of all
material agreements, indentures, mortgages, security agreements and other debt
instruments to which it is a party or by which it is bound.
7.9 Use of Proceeds.
The Borrower will use the proceeds of Extensions of Credit solely for
the purposes set forth in Section 6.14.
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7.10 Audits; Field Exams; Appraisals.
(a) Upon reasonable notice and during normal business hours, each
Credit Party will, and will cause each of its North American Subsidiaries to,
permit representatives appointed by the Administrative Agent, including, without
limitation, independent accountants, agents, attorneys, and appraisers to visit
and inspect its property, including its books and records, its accounts
receivable and inventory, its facilities and its other business assets, and to
make photocopies or photographs thereof and to write down and record any
information such representative obtains and shall permit the Administrative
Agent or its representatives to investigate and verify the accuracy of
information provided to the Lenders and to discuss all such matters with the
officers, employees and representatives of such Person.
(b) Each Credit Party shall, and shall cause its Subsidiaries to,
permit the Administrative Agent or its agents to conduct periodic field exams
(the "Field Exams") of the inventory and Receivables of the members of the North
American Group. The Field Exams shall be at the expense of the Credit Parties.
Each Credit Party shall, and shall cause its Subsidiaries to, to cooperate fully
with the Administrative Agent and its agents in the conduct of the Field Exams,
providing reasonable access to all personnel, books and records, and facilities
of the members of the North American Group necessary for the conduct of the
Field Exams. The Administrative Agent and/or its agents shall be limited to no
more than two Field Exams during any twelve month period following the Closing
Date; provided, however, after the occurrence and during the continuation of an
Event of Default, the Administrative Agent and/or its agents may make Field
Exams as often as the Administrative Agent reasonably deems necessary at the
expense of the Credit Parties.
(c) Each Credit Party shall, and shall cause its Subsidiaries to,
permit the Administrative Agent or any third party appraiser engaged by the
Administrative Agent to make periodic appraisals (the "Appraisals") of the
Collateral comprising the Borrowing Base. The Appraisals shall be at the expense
of the Credit Parties, shall be prepared on a basis satisfactory to the Agent
and shall include, without limitation, information required by applicable law.
Each Credit Party shall, and shall cause its Subsidiaries to, to cooperate fully
with the Administrative Agent and its agents in the conduct of the Appraisals,
providing reasonable access to all personnel, books and records, and facilities
of the members of the North American Group necessary for the conduct of the
Appraisals. The Administrative Agent and/or third party appraisers engaged by
the Administrative Agent shall be limited to no more than four Appraisals during
any twelve month period following the Closing Date; provided, however, after the
occurrence and during the continuation of an Event of Default, the
Administrative Agent and/or third party appraisers engaged by the Administrative
Agent may make Appraisals as often as the Administrative Agent reasonably deems
necessary at the expense of the Credit Parties.
7.11 Financial Covenants.
(a) Consolidated Net Worth. As of the end of each fiscal quarter,
Consolidated Net Worth shall be not less than the sum of $235 million, plus on
the last day of each fiscal quarter to end after the Closing Date, an amount
equal to seventy-five percent (75%) of Consolidated Net Income for the fiscal
quarter then ending (but not less than zero), such increases to be cumulative,
plus an amount equal to one hundred percent (100%) of the net proceeds received
from any Equity Transactions occurring after the Closing Date.
(b) Consolidated Leverage Ratio. As of the end of each fiscal quarter
ending during the periods set forth below, the Consolidated Leverage Ratio shall
not be greater than (a) during the period from the Closing Date through (and
including) January 31, 2003, 2.0:1.0, and (b) February 1, 2003 and thereafter,
1.75:1.0.
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(c) Consolidated Fixed Charge Coverage Ratio. As of the end of each
fiscal quarter, the Consolidated Fixed Charge Coverage Ratio shall be not less
than 2.0:1.0.
7.12 Additional Guarantors.
(a) Domestic Subsidiaries. Where Domestic Subsidiaries which are not
Guarantors (the "Non-Guarantor Domestic Subsidiaries") shall at any time (the
"Domestic Threshold Requirement"):
(i) in any instance for any such Non-Guarantor Domestic
Subsidiary, constitute more than five percent (5%) of consolidated
assets for the Consolidated Group as of the end of the immediately
preceding fiscal quarter or generate more than five percent (5%) of
consolidated revenues for the Consolidated Group for the period of four
consecutive fiscal quarters ending as of the end of the immediately
preceding fiscal quarter, or
(ii) in the aggregate for all such Non-Guarantor Domestic
Subsidiaries, constitute more than ten percent (10%) of consolidated
assets for the Consolidated Group as of the end of the immediately
preceding fiscal quarter or generate more than ten percent (10%) of
consolidated revenues for the Consolidated Group for the period of four
consecutive fiscal quarters ending as of the end of the immediately
preceding fiscal quarter,
then the Borrower shall (i) notify the Administrative Agent thereof within 10
days after a Responsible Officer has knowledge thereof, and (ii) within 45 days
thereafter, (A) cause each such Domestic Subsidiary to become a Guarantor by
execution of a Joinder Agreement such that immediately after joinder as a
Guarantor, the remaining Non-Guarantor Domestic Subsidiaries shall not in any
instance, or collectively, exceed the Domestic Threshold Requirement, (B)
deliver with the Joinder Agreement such supporting resolutions, incumbency
certificates, corporate formation and organizational documentation and opinions
of counsel as the Administrative Agent may reasonably request, and (C) deliver
stock certificates and related pledge agreements or pledge joinder agreements
evidencing the pledge of 100% of the capital stock of each Domestic Subsidiary
(whether or not it is a Guarantor) of the Borrower and 66% (or such greater
percentage which would not result in material adverse tax consequences) of the
issued and outstanding capital stock entitled to vote (within the meaning of
Treas. Reg. Section 1.956-2(c)(2)) and 100% of the issued and outstanding
Capital Stock not entitled to vote (within the meaning of Treas. Reg. Section
1.956-2(c)(2)) of each Canadian Subsidiary directly owned by each such Domestic
Subsidiary to secure the obligations of the Credit Parties under the Credit
Documents, together with undated stock transfer powers executed in blank.
(b) Foreign Subsidiaries. At any time that Foreign Subsidiaries (other
than Canadian Subsidiaries) shall in the aggregate generate more than ten
percent (10%) of consolidated revenues for the Consolidated Group for the period
of four consecutive fiscal quarters ending as of the end of the immediately
preceding fiscal quarter or more than ten percent (10%) of Consolidated EBITDA
for the period of four consecutive fiscal quarters ending as of the end of the
immediately preceding fiscal quarter, then the Borrower shall (a) notify the
Administrative Agent thereof within 10 days after a Responsible Officer has
knowledge thereof, and (b) if the Capital Stock of such Foreign Subsidiaries is
not required (or reasonably expected to be required) to be pledged to secure the
UK Subsidiary Credit Facility, cause, within 45 days thereafter, (i) delivery of
supporting resolutions, incumbency certificates, corporation formation and
organizational documentation and opinions of counsel as the Administrative Agent
may reasonably request, and (ii) delivery of stock certificates (where required
for perfection under local law) and a related pledge agreement or pledge joinder
agreement evidencing the pledge of 66% (or such greater percentage which would
not result in material adverse tax consequences) of the issued and outstanding
capital stock entitled to vote (within the meaning of Treas. Reg. Section
1.956-2(c)(2)) and 100% of the issued and outstanding Capital Stock not entitled
to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) of each
Foreign Subsidiary (other than Canadian Subsidiaries) directly owned by the
Borrower or any Domestic Subsidiary of the Borrower to secure the obligations of
the Credit Parties under the Credit Documents.
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7.13 Pledged Assets.
Each Credit Party will cause all of its owned personal property located
in the United States other than Excluded Property to be subject at all times to
first priority, perfected Liens in favor of the Administrative Agent to secure
the loans and obligations owing hereunder pursuant to the terms and conditions
of the Collateral Documents or, with respect to any such Property acquired
subsequent to the Closing Date, such other additional security documents as the
Administrative Agent shall reasonably request, subject in any case to Permitted
Liens. Without limiting the generality of the above, the Credit Parties will
cause (i) 100% of the issued and outstanding Capital Stock of each Domestic
Subsidiary and (ii) 66% (or such greater percentage which would not result in
material adverse tax consequences) of the issued and outstanding Capital Stock
entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) and
100% of the issued and outstanding Capital Stock not entitled to vote (within
the meaning of Treas. Reg. Section 1.956-2(c)(2)) of each Canadian Subsidiary
directly owned by the Borrower or any Domestic Subsidiary of the Borrower to be
subject at all times to a first priority, perfected Lien in favor of the
Administrative Agent pursuant to the terms and conditions of the Collateral
Documents or such other security documents as the Administrative Agent shall
reasonably request.
If, subsequent to the Closing Date, a Credit Party shall acquire any
Property required to be pledged to the Administrative Agent as Collateral by
this Section 7.13 or by any of the Collateral Documents, the Credit Parties
shall promptly notify the Administrative Agent of the same and each Credit Party
shall, and shall cause each of its Domestic Subsidiaries to, take such action
(including but not limited to the actions set forth in Sections 5.1(d) and (e))
at its own expense as requested by the Administrative Agent to ensure that the
Administrative Agent has a first priority, perfected Lien to secure the
obligations of the Credit Parties under the Credit Documents in all owned
personal property of the Credit Parties located in the United States other than
Excluded Property, subject in each case only to Permitted Liens. Each Credit
Party shall, and shall cause each of its Subsidiaries to, adhere to the
covenants regarding the location of personal property as set forth in the
Security Agreement.
SECTION 8
NEGATIVE COVENANTS
Each Credit Party hereby covenants and agrees that so long as this
Credit Agreement is in effect or any amounts payable hereunder or under any
other Credit Document shall remain outstanding or any Letter of Credit is
outstanding, and until all of the Commitments hereunder shall have terminated:
8.1 Indebtedness.
The Credit Parties will not permit any member of the Consolidated Group
to contract, create, incur, assume or permit to exist any Indebtedness, except:
(a) Indebtedness existing or arising under this Credit
Agreement or the other Credit Documents;
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(b) Indebtedness existing on the Closing Date and set forth on
Schedule 8.1 and any renewals, refinancings, refundings and extensions
thereof, provided that (i) the amount of such Indebtedness is not
increased at the time of such renewal, refinancing, refundings or
extension and (ii) the terms and conditions no less favorable to such
Person than such existing Indebtedness;
(c) purchase money Indebtedness (including obligations in
respect of Capital Leases or Synthetic Leases) hereafter incurred by
the Borrower or any of its Subsidiaries to finance the purchase of
fixed assets, provided that (i) the total of all such Indebtedness for
the Borrower and its Subsidiaries taken together shall not exceed an
aggregate principal amount of $3,000,000 at any one time outstanding;
(ii) such Indebtedness when incurred shall not exceed the purchase
price of the asset(s) financed; and (iii) no such Indebtedness shall be
refinanced for a principal amount in excess of the principal balance
outstanding thereon at the time of such refinancing;
(d) obligations owing under interest rate, commodities and
foreign currency exchange protection agreements entered into in the
ordinary course of business to manage existing or anticipated risks and
not for speculative purposes;
(e) unsecured intercompany Indebtedness owing to another
member of the Consolidated Group (subject, however, to the limitations
of Section 8.6 in the case of the member of the Consolidated Group
extending the loan, advance or credit);
(f) secured Funded Debt of the UK Subsidiaries (the "UK
Subsidiary Credit Facility") in an aggregate principal amount not to
exceed an amount equal to the sum of (i) the UK Borrowing Base minus
(ii) the aggregate amount of Investments (including loans and advances)
made by the members of the North American Group in the UK Subsidiaries.
(g) unsecured Funded Debt assumed by the Borrower and its
Subsidiaries in connection with Acquisitions permitted hereunder;
(h) secured Funded Debt of Jack of All Games, Inc. under the
floor planning line of credit for Nintendo inventory in an aggregate
principal amount not to exceed $5,000,000 at any time outstanding;
(i) other unsecured Funded Debt of the Borrower and its
Subsidiaries in an aggregate outstanding principal amount of up to
$2,000,000 at any time; and
(j) Support Obligations of any Credit Party with respect to
any Indebtedness permitted under this Section 8.1.
8.2 Liens.
The Credit Parties will not permit any member of the Consolidated Group
to contract, create, incur, assume or permit to exist any Lien with respect to
any of its Property, whether now owned or after acquired, except for Permitted
Liens.
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8.3 Nature of Business.
The Credit Parties will not permit any member of the Consolidated Group
to substantively alter the character or conduct of the business conducted by
such Person as of the Closing Date.
8.4 Merger and Consolidation, Dissolution and Acquisitions.
(a) No member of the North American Group will enter into any
transaction of merger or consolidation, or dissolve, liquidate or wind up its
affairs, except that:
(i) the Borrower may be party to a transaction of merger or
consolidation with another member of the Consolidated Group, provided
that the Borrower shall be the surviving entity;
(ii) a North American Subsidiary may be party to a transaction
of merger or consolidation with another Subsidiary, provided that if
(A) a Domestic Subsidiary is a party to such transaction, a Domestic
Subsidiary shall be the surviving entity and (B) if a Canadian
Subsidiary is a party to such transaction and a Domestic Subsidiary is
not a party to such transaction, a Canadian Subsidiary shall be the
surviving entity;
(iii) the Borrower may be a party to a transaction of merger
or consolidation with a Person other than a member of the Consolidated
Group, provided that (A) the Borrower shall be the surviving entity and
(B) the transaction shall otherwise constitute a Permitted Acquisition;
(iv) a North American Subsidiary may be a party to a
transaction of merger or consolidation with a Person other than a
member of the Consolidated Group, provided that (A) if a Domestic
Subsidiary is a party to such transaction, a Domestic Subsidiary shall
be the surviving entity, (B) if a Canadian Subsidiary is a party to
such transaction and a Domestic Subsidiary is not a party to such
transaction, a Canadian Subsidiary shall be the surviving entity and
(C) the transaction shall otherwise constitute a Permitted Acquisition;
(v) a North American Subsidiary may enter into a transaction
of merger or consolidation in connection with an Asset Disposition
permitted under Section 8.5; and
(vi) a North American Subsidiary that is a Wholly Owned
Subsidiary may dissolve, liquidate or wind up its affairs if no
Material Adverse Effect shall result on account thereof.
(b) No member of the North American Group shall make any Acquisition,
unless:
(i) in the case of an acquisition of Capital Stock of another
Person,
(A) if, after giving effect to such Acquisition, such
other Person would not be a Subsidiary, such Acquisition would
constitute a Permitted Investment; and
(B) if, after giving effect to such Acquisition, such
other Person would be a Subsidiary, such Acquisition would
constitute a Permitted Acquisition;
(ii) in the case of an Acquisition of all or any substantial
portion of the Property (other than Capital Stock) of another Person,
such Acquisition shall constitute a Permitted Acquisition.
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8.5 Asset Dispositions.
The Credit Parties will not permit any member of the North American
Group to make any Asset Disposition (including, without limitation, any Sale and
Leaseback Transaction), unless
(a) if the subject transaction is a Sale and Leaseback
Transaction, such transaction shall be permitted by Section 8.13;
(b) if the subject transaction involves Capital Stock of a
Subsidiary, the subject transaction is of a controlling interest in
such Subsidiary;
(c) the aggregate net book value of all assets sold, leased or
otherwise disposed of in any fiscal year of the Borrower shall not
exceed an amount equal to the lesser of (A) ten percent (10%) of
consolidated assets for the Borrower and its Domestic Subsidiaries as
of the end of the immediately preceding fiscal year or (B) assets
producing ten percent (10%) of Consolidated EBITDA;
(d) no Default or Event of Default shall exist immediately
after giving effect thereto;
(e) the Borrower shall have delivered to the Administrative
Agent a Pro Forma Compliance Certificate demonstrating that, upon
giving effect to such Asset Disposition on a Pro Forma Basis, the
Credit Parties shall be in compliance with all of the covenants set
forth in Section 7.11; and
(f) in the case of an Asset Disposition involving Property
exceeding $2 million, the Borrower shall have given written notice to
the Administrative Agent at least 30 days in advance of the prospective
disposition, and the terms thereof, in sufficient detail as to the book
value and consideration to be paid, terms of disposition, and net
proceeds expected therefrom and intended application thereof.
The Administrative Agent will promptly deliver to the Borrower upon
request, at the Borrower's expense, such release documentation (including
delivery of applicable stock certificates and UCC-3 terminations) as may be
reasonably requested to give effect to the release of subject Property from the
security interests securing the obligations hereunder in connection with Asset
Dispositions permitted hereunder.
8.6 Investments.
The Credit Parties will not permit any member of the North American
Group to make or permit to exist Investments in or to any Person, except for
Permitted Investments.
8.7 Restricted Payments.
The Credit Parties will not make, or permit any member of the North
American Group to make, any Restricted Payment, unless:
(a) the Consolidated Leverage Ratio shall be less than
1.50:1.0 on a Pro Forma Basis after giving effect to the Restricted
Payment (and any Funded Debt incurred in connection therewith);
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(b) the aggregate amount of Restricted Payments in any fiscal
year shall not exceed
$5,000,000;
(c) no Default or Event of Default shall then exist or would
exist immediately after giving effect thereto; and
(d) the Borrower shall have delivered to the Administrative
Agent a Pro Forma Compliance Certificate demonstrating that, upon
giving effect to such Restricted Payment on a Pro Forma Basis, the
Credit Parties shall be in compliance with all of the covenants set
forth in Section 7.11.
8.8 Modifications and Payments in respect of Funded Debt.
None of the members of the Consolidated Group will
(a) After the issuance thereof, amend or modify (or permit the
amendment or modification of) the terms of any Funded Debt in a manner adverse
to the interests of the Lenders (including specifically shortening any maturity
or average life to maturity or requiring any payment sooner than previously
scheduled or increasing the interest rate or fees applicable thereto);
(b) Except in connection with a refinancing or refunding permitted
hereunder, make any prepayment, redemption, defeasance or acquisition for value
of (including without limitation, by way of depositing money or securities with
the trustee with respect thereto before due for the purpose of paying when due),
or refund, refinance or exchange of, any Funded Debt (other than the
Indebtedness under the Credit Documents and intercompany Indebtedness permitted
hereunder) other than regularly scheduled payments of principal and interest on
such Funded Debt.
8.9 Transactions with Affiliates.
The Credit Parties will not permit any member of the Consolidated Group
to enter into or permit to exist any transaction or series of transactions with
any officer, director, shareholder, Subsidiary or Affiliate of such Person other
than (a) advances of working capital to any Domestic Credit Party, (b) transfers
of cash and assets to any Domestic Credit Party, (c) transactions permitted by
Section 8.1, Section 8.4, Section 8.5, Section 8.6, or Section 8.7, (d) normal
compensation and reimbursement of expenses of officers and directors and (e)
except as otherwise specifically limited in this Credit Agreement, other
transactions which are entered into in the ordinary course of such Person's
business on terms and conditions substantially as favorable to such Person as
would be obtainable by it in a comparable arms-length transaction with a Person
other than an officer, director, shareholder, Subsidiary or Affiliate.
8.10 Fiscal Year; Organizational Documents; Legal Name; State of Formation;
Form of Organization.
The Credit Parties will not permit any member of the Consolidated Group
to:
(a) change its fiscal year;
(b) amend, modify or change its articles of incorporation (or
corporate charter or other similar organizational document) or bylaws
(or other similar document) in a manner adverse to the interests of the
Lenders without the prior written consent of the Required Lenders
(which consent shall not be unreasonably withheld);
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(c) without providing ten (10) days prior written notice to
the Collateral Agent, change its name, state of formation or form of
organization.
8.11 Limitation on Restricted Actions.
The Credit Parties will not permit any member of the Consolidated Group
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to, directly or indirectly, create or otherwise cause or suffer to exist or
become effective any encumbrance or restriction on the ability of any such
Person to (a) pay dividends or make any other distributions on its Capital Stock
or with respect to any other interest or participation in, or measured by, its
profits, (b) pay any Indebtedness or other obligation, (c) make loans, advances
or capital contributions, (d) sell, lease or otherwise transfer any of its
Property, (e) provide any Support Obligation (including a guaranty of the
obligations hereunder) or (f) grant a Lien upon any its Property, in each case
except for such encumbrances or restrictions existing under or by reason of (i)
this Credit Agreement and the other Credit Documents, (ii) pursuant to the terms
of any purchase money Indebtedness permitted by Section 8.1(c) to the extent
such limitations relate only to the Property which is the subject of such
financing, (iii) pursuant to the terms of any licensing or use agreement to the
extent such agreements prohibit the assignment of, or the grant of a security
interest in, such agreement or the Property subject thereto and (iv) with
respect to the UK Subsidiaries only, the loan doocuments governing the UK
Subsidiary Credit Facility.
8.12 Ownership of Subsidiaries.
Notwithstanding any other provisions of this Credit Agreement to the
contrary, the Credit Parties will not, and will not permit any member of the
North American Group to, (i) permit any Person (other than the Borrower or any
Wholly Owned Subsidiary of the Borrower) to own any Capital Stock of any North
American Subsidiary, except (A) to qualify directors where required by
applicable law or to satisfy other requirements of applicable law with respect
to the ownership of Capital Stock of North American Subsidiaries or (B) as a
result of or in connection with a dissolution, merger, consolidation or
disposition of a North American Subsidiary permitted under Section 8.4 or
Section 8.5, (ii) permit any Subsidiary of the Borrower to issue any shares of
preferred Capital Stock or (iii) permit, create, incur, assume or suffer to
exist any Lien on any Capital Stock of any Subsidiary of the Borrower, except
for Permitted Liens.
8.13 Sale Leasebacks.
The Credit Parties will not permit any member of the North American
Group to enter into any Sale and Leaseback Transaction unless such Sale and
Leaseback Transaction constitutes purchase money Indebtedness permitted by
Section 8.1(c).
SECTION 9
EVENTS OF DEFAULT
9.1 Events of Default.
An Event of Default shall exist upon the occurrence of any of the
following specified events (each an "Event of Default"):
(a) Payment. Any Credit Party shall
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(i) default in the payment when due of any principal of any of
the Loans or of any reimbursement obligations arising from drawings
under Letters of Credit, or
(ii) default, and such default shall continue for three (3) or
more Business Days, in the payment when due of any interest on the
Loans or on any reimbursement obligations arising from drawings under
Letters of Credit, or of any Fees or other amounts owing hereunder,
under any of the other Credit Documents or in connection herewith or
therewith; or
(b) Representations. Any representation or warranty made or deemed to
be made by any Credit Party herein, in any of the other Credit Documents or in
any written statement or certificate delivered or required to be delivered
pursuant hereto or thereto shall prove untrue in any material respect on the
date as of which it was deemed to have been made; or
(c) Covenants. Any Credit Party shall
(i) default in the due performance or observance of any term,
covenant or agreement contained in Sections 7.2, 7.9, 7.11, 7.12, 7.13
or 8.1 through 8.13, inclusive;
(ii) default in the due performance or observance of any term,
covenant or agreement contained in Sections 7.1(a), (b), (c) or (d) and
such default shall continue unremedied for a period of at least 5 days
after the earlier of an Executive Officer of a Credit Party becoming
aware of such default or notice thereof by the Administrative Agent; or
(iii) default in the due performance or observance by it of
any term, covenant or agreement (other than those referred to in
subsections (a), (b), (c)(i) or (c)(ii) of this Section 9.1) contained
in this Credit Agreement or any other Credit Document and such default
shall continue unremedied for a period of at least 30 days after the
earlier of an Executive Officer of a Credit Party becoming aware of
such default or notice thereof by the Administrative Agent; or
(d) Other Credit Documents. Except as a result of or in connection with
a dissolution, merger or disposition of a Subsidiary permitted under Section 8.4
or Section 8.5, any Credit Document shall fail to be in full force and effect or
to give the Administrative Agent and/or the Lenders the Liens, rights, powers
and privileges purported to be created thereby, or any Credit Party shall so
state in writing; or
(e) Guaranties. Except as the result of or in connection with a
dissolution, merger or disposition of a Subsidiary permitted under Section 8.4
or Section 8.5, the guaranty given by any Guarantor (including any Person which
becomes a Guarantor after the Closing Date in accordance with Section 7.12) or
any provision thereof shall cease to be in full force and effect, or any
Guarantor (including any Person which becomes a Guarantor after the Closing Date
in accordance with Section 7.12) or any Person acting by or on behalf of such
Guarantor shall deny or disaffirm such Guarantor's obligations under such
guaranty, or any Guarantor shall default in the due performance or observance of
any term, covenant or agreement on its part to be performed or observed pursuant
to any guaranty; or
(f) Bankruptcy, etc. Any Bankruptcy Event shall occur with respect to
any member of the Consolidated Group; or
(g) Defaults under Other Agreements. With respect to any Funded Debt
(other than Funded Debt outstanding under this Credit Agreement) in excess of
$2,500,000 in the aggregate for the members of the Consolidated Group taken as a
whole, (i) any member of the Consolidated Group shall (A) default in any payment
(beyond the applicable grace period with respect thereto, if any) with respect
to any such Funded Debt, or (B) the occurrence and continuance of a default in
the observance or performance relating to such Funded Debt or contained in any
instrument or agreement evidencing, securing or relating thereto, or any other
event or condition shall occur or condition exist, the effect of which default
or other event or condition is to cause, or to permit, the holder or holders of
such Funded Debt (or trustee or agent on behalf of such holders) to cause
(determined without regard to whether any notice or lapse of time is required),
any such Funded Debt to become due prior to its stated maturity; or (ii) any
such Funded Debt shall be declared due and payable, or required to be prepaid
other than by a regularly scheduled required prepayment, prior to the stated
maturity thereof; or
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(h) Judgments. One or more judgments or decrees shall be entered
against one or more of the members of the Consolidated Group involving a
liability of $2,500,000 or more in the aggregate (to the extent not paid or
fully covered by insurance provided by a carrier who has acknowledged coverage
and has the ability to perform) and any such judgments or decrees shall not have
been vacated, discharged or stayed or bonded pending appeal within 45 days from
the entry thereof; or
(i) ERISA. Any of the following events or conditions, if such event or
condition could involve possible taxes, penalties, and other liabilities in an
aggregate amount which would have a Material Adverse Effect: (i) any
"accumulated funding deficiency," as such term is defined in Section 302 of
ERISA and Section 412 of the Internal Revenue Code, whether or not waived, shall
exist with respect to any Plan, or any lien shall arise on the assets of any
member of the Consolidated Group or any ERISA Affiliate in favor of the PBGC or
a Plan; (ii) an ERISA Event shall occur with respect to a Single Employer Plan,
which is, in the reasonable opinion of the Administrative Agent, likely to
result in the termination of such Plan for purposes of Title IV of ERISA; (iii)
an ERISA Event shall occur with respect to a Multiemployer Plan or Multiple
Employer Plan, which is, in the reasonable opinion of the Administrative Agent,
likely to result in (A) the termination of such Plan for purposes of Title IV of
ERISA, or (B) any member of the Consolidated Group or any ERISA Affiliate
incurring any liability in connection with a withdrawal from, reorganization of
(within the meaning of Section 4241 of ERISA), or insolvency (within the meaning
of Section 4245 of ERISA) of such Plan; or (iv) any prohibited transaction
(within the meaning of Section 406 of ERISA or Section 4975 of the Internal
Revenue Code) or breach of fiduciary responsibility shall occur which may
subject any member of the Consolidated Group or any ERISA Affiliate to any
liability under Sections 406, 409, 502(i), or 502(l) of ERISA or Section 4975 of
the Internal Revenue Code, or under any agreement or other instrument pursuant
to which any member of the Consolidated Group or any ERISA Affiliate has agreed
or is required to indemnify any person against any such liability; or
(j) Ownership. There shall occur a Change of Control.
9.2 Acceleration; Remedies.
Upon the occurrence of an Event of Default, and at any time thereafter
unless and until such Event of Default has been waived by the requisite Lenders
(pursuant to the voting requirements in Section 11.6) or cured to the
satisfaction of the requisite Lenders (pursuant to the voting requirement in
Section 11.6), the Agents shall, upon the request and direction of the Required
Lenders, by written notice to the Credit Parties take any of the following
actions:
(a) Termination of Commitments. Declare the Commitments
terminated whereupon the Commitments shall be immediately terminated.
(b) Acceleration. Declare the unpaid principal of and any
accrued interest in respect of all Loans, any reimbursement obligations
arising from drawings under Letters of Credit and any and all other
indebtedness or obligations of any and every kind owing by the Credit
Parties to the Agents and any of the Lenders hereunder to be due
whereupon the same shall be immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which
are hereby waived by the Credit Parties.
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(c) Cash Collateral. Direct the Credit Parties to pay (and the
Credit Parties agree that upon receipt of such notice, or upon the
occurrence of an Event of Default under Section 9.1(f), they will
immediately pay) to the Administrative Agent additional cash, to be
held by the Administrative Agent, for the benefit of the Lenders, in a
cash collateral account as additional security for the LOC Obligations
in respect of subsequent drawings under all then outstanding Letters of
Credit in an amount equal to the maximum aggregate amount which may be
drawn under all Letters of Credits then outstanding.
(d) Enforcement of Rights. Enforce any and all rights and
interests created and existing under the Credit Documents or applicable
law, including, without limitation, all rights and remedies existing
under the Collateral Documents, all rights and remedies against a
Guarantor and all rights of set-off.
Notwithstanding the foregoing, if an Event of Default specified in
Section 9.1(f) shall occur with respect to the Borrower, then the Commitments
shall automatically terminate and all Loans, all reimbursement obligations
arising from drawings under Letters of Credit, all accrued interest in respect
thereof, all accrued and unpaid Fees and other indebtedness or obligations owing
to the Agents and/or any of the Lenders hereunder automatically shall
immediately become due and payable without the giving of any notice or other
action by the Agents or the Lenders.
SECTION 10
AGENCY PROVISIONS
10.1 Appointment and Authorization of Agents.
(a) Each Lender hereby irrevocably appoints, designates and authorizes
each Agent to take such action on its behalf under the provisions of this Credit
Agreement and each other Credit Document and to exercise such powers and perform
such duties as are expressly delegated to it by the terms of this Credit
Agreement or any other Credit Document, together with such powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
contained elsewhere herein or in any other Credit Document, the Agents shall not
have any duties or responsibilities, except those expressly set forth herein,
nor shall the Agents have or be deemed to have any fiduciary relationship with
any Lender or participant, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Credit Agreement or any other Credit Document or otherwise exist against the
Agents. Without limiting the generality of the foregoing sentence, the use of
the term "agent" herein and in the other Credit Documents with reference to the
Agents is not intended to connote any fiduciary or other implied (or express)
obligations arising under agency doctrine of any applicable law. Instead, such
term is used merely as a matter of market custom, and is intended to create or
reflect only an administrative relationship between independent contracting
parties.
(b) The Issuing Lender shall act on behalf of the Lenders with respect
to any Letters of Credit issued by it and the documents associated therewith and
the Issuing Lender shall have all of the benefits and immunities (i) provided to
the Agents in this Section 10 with respect to any acts taken or omissions
suffered by the Issuing Lender in connection with Letters of Credit issued by it
or proposed to be issued by it and the application and agreements for letters of
credit pertaining to the Letters of Credit as fully as if the term "Agent" as
used in this Section 10 included the Issuing Lender with respect to such acts or
omissions, and (ii) as additionally provided herein with respect to the Issuing
Lender.
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10.2 Delegation of Duties.
Each Agent may execute any of its duties under this Credit Agreement or
any other Credit Document by or through agents, employees or attorneys-in-fact
and shall be entitled to advice of counsel and other consultants or experts
concerning all matters pertaining to such duties. No Agent shall be responsible
for the negligence or misconduct of any agent or attorney-in-fact that it
selects in the absence of gross negligence or willful misconduct.
10.3 Reliance by Agents.
(a) The Agents shall be entitled to rely, and shall be fully protected
in relying, upon any writing, communication, signature, resolution,
representation, notice, consent, certificate, affidavit, letter, telegram,
facsimile, telex or telephone message, electronic mail message, statement or
other document or conversation believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons, and upon advice
and statements of legal counsel (including counsel to any Credit Party),
independent accountants and other experts selected by the Agents. Each Agent
shall be fully justified in failing or refusing to take any action under any
Credit Document unless it shall first receive such advice or concurrence of the
Required Lenders as it deems appropriate and, if it so requests, it shall first
be indemnified to its satisfaction by the Lenders against any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action. The Agents shall in all cases be fully protected in
acting, or in refraining from acting, under this Credit Agreement or any other
Credit Document in accordance with a request or consent of the Required Lenders
(or such greater number of Lenders as may be expressly required hereunder in any
instance) and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Lenders and participants.
(b) For purposes of determining compliance with the conditions
specified in Section 5.1, each Lender that has signed this Credit Agreement
shall be deemed to have consented to, approved or accepted or to be satisfied
with, each document or other matter required thereunder to be consented to or
approved by or acceptable or satisfactory to a Lender unless the Administrative
Agent shall have received notice from such Lender prior to the proposed Closing
Date specifying its objection thereto.
10.4 Notice of Default.
No Agent shall be deemed to have knowledge or notice of the occurrence
of any Default or Event of Default, except with respect to defaults in the
payment of principal, interest and fees required to be paid to such Agent for
the account of the Lenders, unless such Agent shall have received written notice
from a Lender or the Borrower referring to this Credit Agreement, describing
such Default or Event of Default and stating that such notice is a "notice of
default." Each Agent will notify the Banks of its receipt of any such notice.
Each Agent shall take such action with respect to such Default or Event of
Default as may be directed by the Required Lenders in accordance with Section 9;
provided, however, that unless and until such Agent has received any such
direction, such Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable or in the best interest of the Lenders.
10.5 Agent in its Individual Capacity.
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Bank of America and its Affiliates may make loans to, issue letters of
credit for the account of, accept deposits from, acquire equity interests in and
generally engage in any kind of banking, trust, financial advisory, underwriting
or other business with each of the Credit Parties and their respective
Affiliates as though Bank of America were not the Administrative Agent,
Collateral Agent or Issuing Lender hereunder and without notice to or consent of
the Lenders. The Lenders acknowledge that, pursuant to such activities, Bank of
America or its Affiliates may receive information regarding any Credit Party or
its Affiliates (including information that may be subject to confidentiality
obligations in favor of such Credit Party or such Affiliate) and acknowledge
that Bank of America, in its capacity as Administrative Agent, Collateral Agent,
Issuing Lender or otherwise, shall be under no obligation to provide such
information to them. With respect to its Commitment and Loans, Bank of America
shall have the same rights and powers under this Credit Agreement and the other
Credit Documents as any other Lender and may exercise such rights and powers as
though it were not the Administrative Agent, Collateral Agent or Issuing Lender,
and the terms "Lender" and "Lenders" include Bank of America in its individual
capacity.
10.6 Liability of Agents.
No Agent-Related Person shall be (a) liable for any action taken or
omitted to be taken by any of them under or in connection with this Credit
Agreement or any other Credit Document or the transactions contemplated hereby
(except for its own gross negligence or willful misconduct in connection with
its duties expressly set forth herein), or (b) responsible in any manner to any
Lender or participant for any recital, statement, representation or warranty
made by any Credit Party or any officer thereof, contained herein or in any
other Credit Document, or in any certificate, report, statement or other
document referred to or provided for in, or received by any Agent under or in
connection with, this Credit Agreement or any other Credit Document, or the
validity, effectiveness, genuineness, enforceability or sufficiency of this
Credit Agreement or any other Credit Document, or for any failure of any Credit
Party or any other party to any Credit Document to perform its obligations
hereunder or thereunder. No Agent-Related Person shall be under any obligation
to any Lender or participant to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this Credit
Agreement or any other Credit Document, or to inspect the properties, books or
records of any Credit Party or any Affiliate thereof.
10.7 Indemnification of Agent.
Whether or not the transactions contemplated hereby are consummated,
the Lenders shall indemnify upon demand each Agent-Related Person (to the extent
not reimbursed by or on behalf of any Credit Party and without limiting the
obligation of any Credit Party to do so), pro rata, and hold harmless each
Agent-Related Person from and against any and all Indemnified Liabilities
incurred by it; provided, however, that no Lender shall be liable for the
payment to any Agent-Related Person of any portion of such Indemnified
Liabilities to the extent determined in a final, nonappealable judgment by a
court of competent jurisdiction to have resulted from such Agent-Related
Person's own gross negligence or willful misconduct; provided, however, that no
action taken in accordance with the directions of the Required Lenders shall be
deemed to constitute gross negligence or willful misconduct for purposes of this
Section. Without limitation of the foregoing, each Lender shall reimburse the
Agents upon demand for its ratable share of any costs or out-of-pocket expenses
(including reasonable fees and expenses of counsel) incurred by the Agents in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Credit Agreement, any other Credit Document, or any
document contemplated by or referred to herein, to the extent that the Agents
are not reimbursed for such expenses by or on behalf of the Borrower. The
undertaking in this Section shall survive termination of the Commitments, the
payment of all Obligations and the resignation of any Agent.
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10.8 Credit Decision; Disclosure of Information by Agent.
Each Lender acknowledges that no Agent-Related Person has made any
representation or warranty to it, and that no act by any Agent hereafter taken,
including any consent to and acceptance of any assignment or review of the
affairs of any Credit Party or any Affiliate thereof, shall be deemed to
constitute any representation or warranty by any Agent-Related Person to any
Lender as to any matter, including whether Agent-Related Persons have disclosed
material information in their possession. Each Lender represents to the Agent
that it has, independently and without reliance upon any Agent-Related Person
and based on such documents and information as it has deemed appropriate, made
its own appraisal of and investigation into the business, prospects, operations,
property, financial and other condition and creditworthiness of the Credit
Parties and their respective Subsidiaries and Affiliates, and all applicable
Lender or other regulatory laws relating to the transactions contemplated
hereby, and made its own decision to enter into this Credit Agreement and to
extend credit to the Borrower and the other Credit Parties hereunder. Each
Lender also represents that it will, independently and without reliance upon any
Agent-Related Person and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Credit
Agreement and the other Credit Documents, and to make such investigations as it
deems necessary to inform itself as to the business, prospects, operations,
property, financial and other condition and creditworthiness of the Credit
Parties and their respective Subsidiaries and Affiliates. Except for notices,
reports and other documents expressly required to be furnished to the Lenders by
the Agent herein, no Agent shall have any duty or responsibility to provide any
Lender with any credit or other information concerning the business, prospects,
operations, property, financial and other condition or creditworthiness of any
of the Credit Parties or any of their respective Subsidiaries and Affiliates
which may come into the possession of any Agent-Related Person.
10.9 Successor Agents.
The Administrative Agent may resign as Administrative Agent and the
Collateral Agent may at resign as Collateral Agent in each case upon thirty (30)
days' notice to the Lenders and the Borrower; provided that any resignation by
Bank of America as Administrative Agent shall also constitute its resignation as
Issuing Lender and Swingline Lender. Upon the resignation of any Agent, the
Required Lenders shall appoint a successor Agent, which successor Agent shall be
consented to by the Borrower at all times other than during the existence of an
Event of Default (which consent shall not be unreasonably withheld or delayed)).
If no successor Agent is appointed prior to the effective date of the
resignation of the resigning Agent, the resigning Agent may appoint, after
consulting with the Lenders and the Borrower, a successor Agent from among the
Lenders. Upon the acceptance of its appointment as successor Agent hereunder by
a successor, the Person acting as such successor Agent shall succeed to all the
rights, powers and duties of the resigning Agent (and, in the case of the
resignation of the Administrative Agent, shall succeed to all the rights, powers
and duties of the resigning Issuing Lender and the resigning Swingline Lender)
and the respective terms "Collateral Agent" and/or "Administrative Agent" (and,
in the case of the resignation of the Administrative Agent, "Issuing Lender" and
"Swingline Lender"), as applicable, shall mean such successor Collateral Agent
and/or Administrative Agent (and, in the case of the resignation of the
Administrative Agent, Issuing Lender and Swingline Lender), and the resigning
Agent's appointment, powers and duties shall be terminated and, if the Issuing
Lender and Swingline Lender are also resigning as provided above, the resigning
Issuing Lender's and Swingline Lender's rights, powers and duties as such shall
be terminated, without any other or further act or deed on the part of such
retiring Issuing Lender or Swingline Lender or any other Lender, other than the
obligation of the successor Issuing Lender to issue letters of credit in
substitution for the Letters of Credit, if any, outstanding at the time of such
succession or to make other arrangements satisfactory to the resigning Issuing
Lender to effectively assume the obligations of the resigning Issuing Lender
with respect to such Letters of Credit. After any resigning Agent's resignation
hereunder as Agent, the provisions of this Section 10 and Sections 11.5 and 11.9
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Agent. If no Person has accepted appointment as successor Agent by
the date which is thirty (30) days following a resigning Agent's notice of
resignation, the resigning Agent's resignation shall nevertheless thereupon
become effective and the Lenders shall perform all of the duties of the
resigning Agent hereunder until such time, if any, as the Required Lenders
appoint a successor agent as provided for above.
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10.10 Administrative Agent May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to any Credit Party, the Administrative Agent
(irrespective of whether the principal of any Loan or LOC Obligation shall then
be due and payable as herein expressed or by declaration or otherwise and
irrespective of whether the Administrative Agent shall have made any demand on
the Borrower) shall be entitled and empowered, by intervention in such
proceeding or otherwise:
(a) to file and prove a claim for the whole amount of the
principal and interest owing and unpaid in respect of the Loans, LOC
Obligations and all other Obligations that are owing and unpaid and to
file such other documents as may be necessary or advisable in order to
have the claims of the Lenders and the Agents (including any claim for
the reasonable compensation, expenses, disbursements and advances of
the Lenders and the Agents and their respective agents and counsel and
all other amounts due the Lenders and the Agents under Section 3.5 and
Section 11.5(a)) allowed in such judicial proceeding; and
(b) to collect and receive any monies or other property
payable or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to the Administrative Agent and, in the event
that the Administrative Agent shall consent to the making of such payments
directly to the Lenders, to pay to the Administrative Agent any amount due for
the reasonable compensation, expenses, disbursements and advances of the Agents
and their respective agents and counsel, and any other amounts due the Agents
under Section 3.5 and Section 11.5(a).
Nothing contained herein shall be deemed to authorize the
Administrative Agent to authorize or consent to or accept or adopt on behalf of
any Lender any plan of reorganization, arrangement, adjustment or composition
affecting the Obligations or the rights of any Lender or to authorize the
Administrative Agent to vote in respect of the claim of any Lender in any such
proceeding.
10.11 Collateral and Guaranty Matters.
(a) The Lenders irrevocably authorize the Collateral Agent, at its
option and in its discretion, to release any Lien on any Property granted to or
held by the Collateral Agent under any Credit Document (i) upon termination of
the Commitments and payment in full of all Obligations (other than contingent
indemnification obligations) and the expiration or termination of all Letters of
Credit, (ii) that is sold or to be sold as part of or in connection with any
sale permitted hereunder or under any other Credit Document, or (iii) subject to
Section 11.6, if approved, authorized or ratified in writing by the Required
Lenders;
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(b) The Lenders irrevocably authorize the Collateral Agent, at its
option and in its discretion, to subordinate any Lien on any Property granted to
or held by the Collateral Agent under any Credit Document to the holder of any
Lien on such Property that is permitted by clause (viii) of the definition of
"Permitted Liens"; and
(c) The Lenders irrevocably authorize the Administrative Agent, at its
option and in its discretion, to release any Guarantor from its obligations
under the Guaranty if such Person ceases to be a Subsidiary as a result of a
transaction permitted hereunder.
Upon request by any Agent at any time, the Required Lenders will confirm in
writing such Agent's authority, in the case of the Collateral Agent, to release
or subordinate its interest in particular types or items of property, or, in the
case of the Administrative Agent, to release any Guarantor from its obligations
under the Guaranty pursuant to this Section 10.11.
10.12 Other Agents; Managers and Arrangers.
None of the Lenders or other Persons identified on the facing page or
signature pages of this Credit Agreement as a "syndication agent,"
"documentation agent," "co-agent," "book manager," "lead manager," "arranger,"
"lead arranger" or "co-arranger" shall have any right, power, obligation,
liability, responsibility or duty under this Credit Agreement other than, in the
case of such Lenders, those applicable to all Lenders as such. Without limiting
the foregoing, none of the Lenders or other Persons so identified shall have or
be deemed to have any fiduciary relationship with any Lender. Each Lender
acknowledges that it has not relied, and will not rely, on any of the Lenders or
other Persons so identified in deciding to enter into this Credit Agreement or
in taking or not taking action hereunder.
SECTION 11
MISCELLANEOUS
11.1 Notices.
Except as otherwise expressly provided herein, all notices and other
communications shall have been duly given and shall be effective (a) when
delivered, (b) when transmitted via facsimile, (c) the Business Day following
the day on which the same has been delivered prepaid to a reputable national
overnight air courier service, or (d) the third Business Day following the day
on which the same is sent by certified or registered mail, postage prepaid, in
each case to the respective parties at the facsimile or address set forth on
Schedule 11.1, or at such other facsimile or address as such party may specify
by written notice to the other parties hereto.
11.2 Right of Set-Off; Adjustments.
Upon the occurrence and during the continuance of any Event of Default,
each Lender (and each of its domestic Affiliates) is hereby authorized at any
time and from time to time, to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other indebtedness at any time owing by such
Lender (or any of its domestic Affiliates) to or for the credit or the account
of any Credit Party against any and all of the obligations of such Person now or
hereafter existing under this Credit Agreement, under the Notes, under any other
Credit Document or otherwise, irrespective of whether such Lender shall have
made any demand under hereunder or thereunder and although such obligations may
be unmatured. Each Lender agrees promptly to notify any affected Credit Party
after any such set-off and application made by such Lender; provided, however,
that the failure to give such notice shall not affect the validity of such
set-off and application. The rights of each Lender under this Section 11.2 are
in addition to other rights and remedies (including, without limitation, other
rights of set-off) that such Lender may have.
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11.3 Successors and Assigns.
(a) The provisions of this Credit Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns permitted hereby, except that the Borrower may not assign or otherwise
transfer any of its rights or obligations hereunder without the prior written
consent of each Lender and no Lender may assign or otherwise transfer any of its
rights or obligations hereunder except (i) to an Eligible Assignee in accordance
with the provisions of subsection (b) of this Section, (ii) by way of
participation in accordance with the provisions of subsection (d) of this
Section, or (iii) by way of pledge or assignment of a security interest subject
to the restrictions of subsection (f) of this Section (and any other attempted
assignment or transfer by any party hereto shall be null and void). Nothing in
this Agreement, expressed or implied, shall be construed to confer upon any
Person (other than the parties hereto, their respective successors and assigns
permitted hereby, Participants to the extent provided in subsection (d) of this
Section and, to the extent expressly contemplated hereby, the Indemnitees) any
legal or equitable right, remedy or claim under or by reason of this Agreement.
(b) Any Lender may at any time assign to one or more Eligible Assignees
all or a portion of its rights and obligations under this Credit Agreement
(including all or a portion of its Commitment and the Loans (including for
purposes of this subsection (b), participations in LOC Obligations and in
Swingline Loans) at the time owing to it); provided that (i) except in the case
of an assignment of the entire remaining amount of the assigning Lender's
Commitment and the Loans at the time owing to it or in the case of an assignment
to a Lender or an Affiliate of a Lender or an Approved Fund (as defined in
subsection (g) of this Section) with respect to a Lender, the aggregate amount
of the Commitment (which for this purpose includes Loans outstanding thereunder)
subject to each such assignment, determined as of the date the Assignment and
Assumption with respect to such assignment is delivered to the Administrative
Agent or, if "Trade Date" is specified in the Assignment and Assumption, as of
the Trade Date, shall not be less than $5,000,000 unless each of the
Administrative Agent and, so long as no Event of Default has occurred and is
continuing, the Borrower otherwise consents (each such consent not to be
unreasonably withheld or delayed); (ii) each partial assignment shall be made as
an assignment of a proportionate part of all the assigning Lender's rights and
obligations under this Credit Agreement with respect to the Loans or the
Commitment assigned, except that this clause (ii) shall not apply to rights in
respect of Swingline Loans; (iii) any assignment of a Commitment must be
approved by the Administrative Agent, the Issuing Lender and the Swingline
Lender unless the Person that is the proposed assignee is itself a Lender
(whether or not the proposed assignee would otherwise qualify as an Eligible
Assignee); and (iv) the parties to each assignment shall execute and deliver to
the Administrative Agent an Assignment and Assumption, together with a
processing and recordation fee of $3,500. Subject to acceptance and recording
thereof by the Administrative Agent pursuant to subsection (c) of this Section,
from and after the effective date specified in each Assignment and Assumption,
the Eligible Assignee thereunder shall be a party to this Credit Agreement and,
to the extent of the interest assigned by such Assignment and Assumption, have
the rights and obligations of a Lender under this Credit Agreement, and the
assigning Lender thereunder shall, to the extent of the interest assigned by
such Assignment and Assumption, be released from its obligations under this
Credit Agreement (and, in the case of an Assignment and Assumption covering all
of the assigning Lender's rights and obligations under this Agreement, such
Lender shall cease to be a party hereto but shall continue to be entitled to the
benefits of Sections 3.6, 3.9, 3.11, 3.12, 11.4 and 11.5 with respect to facts
and circumstances occurring prior to the effective date of such assignment).
Upon request, the Borrower shall execute and deliver a Note to the assignee
Lender. Any assignment or transfer by a Lender of rights or obligations under
this Credit Agreement that does not comply with this subsection shall be treated
for purposes of this Credit Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with subsection (d)
of this Section.
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(c) The Administrative Agent, acting solely for this purpose as an
agent of the Borrower, shall maintain at the Administrative Agent's Office a
copy of each Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitments of,
and principal amounts of the Loans and LOC Obligations owing to, each Lender
pursuant to the terms hereof from time to time (the "Register"). The entries in
the Register shall be conclusive absent manifest error, and the Borrower, the
Agents and the Lenders may treat each Person whose name is recorded in the
Register pursuant to the terms hereof as a Lender hereunder for all purposes of
this Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrower and any Lender, at any reasonable time
and from time to time upon reasonable prior notice.
(d) Any Lender may at any time, without the consent of, or notice to,
the Borrower or the Administrative Agent, sell participations to any Person
(other than (i) a natural person, (ii) the Borrower, (iii) any of the Borrower's
Affiliates or Subsidiaries or (iv) without the consent of the Borrower, any
Person in the same or similar line of business as the Borrower and its
Subsidiaries) (each, a "Participant") in all or a portion of such Lender's
rights and/or obligations under this Credit Agreement (including all or a
portion of its Commitment and/or the Loans (including such Lender's
participations in LOC Obligations and/or Swingline Loans) owing to it); provided
that (i) such Lender's obligations under this Credit Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (iii) the Borrower, the
Agents and the other Lenders shall continue to deal solely and directly with
such Lender in connection with such Lender's rights and obligations under this
Credit Agreement. Any agreement or instrument pursuant to which a Lender sells
such a participation shall provide that such Lender shall retain the sole right
to enforce this Credit Agreement and to approve any amendment, modification or
waiver of any provision of this Credit Agreement; provided that such agreement
or instrument may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, waiver or other modification described in
the first proviso to Section 11.6 that directly affects such Participant.
Subject to subsection (e) of this Section, the Borrower agrees that each
Participant shall be entitled to the benefits of Sections 3.6, 3.9, 3.11 and
3.12 to the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to subsection (b) of this Section. To the extent permitted
by law, each Participant also shall be entitled to the benefits of Section 11.2
as though it were a Lender, provided such Participant agrees to be subject to
Section 3.11 as though it were a Lender.
(e) A Participant shall not be entitled to receive any greater payment
under Section 3.6, 3.9 or 3.11 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the
Borrower's prior written consent. A Participant that would be a Foreign Lender
if it were a Lender shall not be entitled to the benefits of Section 3.11 unless
the Borrower is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrower, to comply with Section 3.11
as though it were a Lender.
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(f) Any Lender may at any time pledge or assign a security interest in
all or any portion of its rights under this Credit Agreement (including under
its Note, if any) to secure obligations of such Lender, including any pledge or
assignment to secure obligations to a Federal Reserve Bank; provided that no
such pledge or assignment shall release such Lender from any of its obligations
hereunder or substitute any such pledgee or assignee for such Lender as a party
hereto.
(g) As used herein, the following terms have the following meanings:
"Eligible Assignee" means (a) a Lender; (b) an Affiliate of a
Lender; (c) an Approved Fund; and (d) any other Person (other than a
natural person) approved by (i) the Administrative Agent, the Issuing
Lender and the Swingline Lender, and (ii) unless an Event of Default
has occurred and is continuing, the Borrower (each such approval not to
be unreasonably withheld or delayed); provided that notwithstanding the
foregoing, "Eligible Assignee" shall not include the Borrower or any of
the Borrower's Affiliates or Subsidiaries.
"Fund" means any Person (other than a natural person) that is
(or will be) engaged in making, purchasing, holding or otherwise
investing in commercial loans and similar extensions of credit in the
ordinary course of its business.
"Approved Fund" means any Fund that is administered or managed
by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an
Affiliate of an entity that administers or manages a Lender.
(h) Notwithstanding anything to the contrary contained herein, if at
any time Bank of America assigns all of its Commitment and Loans pursuant to
subsection (b) above, Bank of America may, (i) upon 30 days' notice to the
Borrower and the Lenders, resign as Issuing and/or (ii) upon 30 days' notice to
the Borrower, resign as Swingline Lender. In the event of any such resignation
as Issuing Lender or Swingline Lender, the Borrower shall be entitled to appoint
from among the Lenders a successor Issuing Lender or Swingline Lender hereunder;
provided, however, that no failure by the Borrower to appoint any such successor
shall affect the resignation of Bank of America as Issuing Lender or Swingline
Lender, as the case may be. If Bank of America resigns as Issuing Lender, it
shall retain all the rights and obligations of the Issuing Lender hereunder with
respect to all Letters of Credit outstanding as of the effective date of its
resignation as Issuing Lender and all LOC Obligations with respect thereto
(including the right to require the Lenders to make Base Rate Loans or fund risk
participations pursuant to Section 2.7). If Bank of America resigns as Swingline
Lender, it shall retain all the rights of the Swingline Lender provided for
hereunder with respect to Swingline Loans made by it and outstanding as of the
effective date of such resignation, including the right to require the Lenders
to make Base Rate Loans or fund risk participations pursuant to Section 2.8.
11.4 No Waiver; Remedies Cumulative.
No failure or delay on the part of either Agent or any Lender in
exercising any right, power or privilege hereunder or under any other Credit
Document and no course of dealing between either Agent or any Lender and any of
the Credit Parties shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, power or privilege hereunder or under any other
Credit Document preclude any other or further exercise thereof or the exercise
of any other right, power or privilege hereunder or thereunder. The rights and
remedies provided herein are cumulative and not exclusive of any rights or
remedies which either Agent or any Lender would otherwise have. No notice to or
demand on any Credit Party in any case shall entitle the Credit Parties to any
other or further notice or demand in similar or other circumstances or
constitute a waiver of the rights of the Agents or the Lenders to any other or
further action in any circumstances without notice or demand.
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11.5 Expenses; Indemnification.
(a) The Borrower agrees (a) to pay or reimburse the Agents for all
costs and expenses incurred in connection with the development, preparation,
negotiation and execution of this Credit Agreement and the other Credit
Documents and any amendment, waiver, consent or other modification of the
provisions hereof and thereof (whether or not the transactions contemplated
hereby or thereby are consummated), and the consummation and administration of
the transactions (including assignments pursuant to Section 11.3) contemplated
hereby and thereby, including all reasonable fees and expenses of counsel, and
(b) to pay or reimburse the Agents and each Lender for all costs and expenses
incurred in connection with the enforcement, attempted enforcement, or
preservation of any rights or remedies under this Credit Agreement or the other
Credit Documents (including all such costs and expenses incurred during any
"workout" or restructuring in respect of the Loans and Letters of Credit and
during any legal proceeding, including any proceeding under any the Bankruptcy
Code), including all reasonable fees and expenses of counsel. The foregoing
costs and expenses shall include all search, filing, recording, title insurance
and appraisal charges and fees and taxes related thereto, and other
out-of-pocket expenses incurred by the Agents and the cost of independent public
accountants and other outside experts retained by the Agents or any Lender.
(b) Whether or not the transactions contemplated hereby are
consummated, the Borrower agrees to indemnify and hold harmless each
Agent-Related Person, each Lender and their respective Affiliates, directors,
officers, employees, counsel, agents and attorneys-in-fact (collectively the
"Indemnitees") from and against any and all liabilities, obligations, losses,
damages, penalties, claims, demands, actions, judgments, suits, costs, expenses
and disbursements (including reasonable fees and expenses of counsel) of any
kind and nature whatsoever which may at any time be imposed on, incurred by or
asserted against any Indemnitee in any way relating to or arising out of or in
connection with (i) the execution, delivery, enforcement, performance or
administration of any Loan Document or any other agreement, letter or instrument
delivered in connection with the transactions contemplated thereby or the
consummation of the transactions contemplated thereby; (ii) any Commitment, Loan
or Letter of Credit or the use or proposed use of the proceeds therefrom
(including any refusal by the Issuing Lender to honor a demand for payment under
a Letter of Credit if the documents presented in connection with such demand do
not strictly comply with the terms of such Letter of Credit), (iii) any actual
or alleged presence or release of Materials of Environmental Concern on or from
any property currently or formerly owned or operated by the Borrower or any of
its Subsidiaries, or any Environmental Liability related in any way to the
Borrower or any of its Subsidiaries, or (iv) any actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory (including any investigation
of, preparation for, or defense of any pending or threatened claim,
investigation, litigation or proceeding) and regardless of whether any
Indemnitee is a party thereto (all the foregoing, collectively, the "Indemnified
Liabilities"); provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such liabilities, obligations, losses, damages,
penalties, claims, demands, actions, judgments, suits, costs, expenses or
disbursements are determined by a court of competent jurisdiction by final and
nonappealable judgment to have resulted from the gross negligence or willful
misconduct of such Indemnitee. No Indemnitee shall be liable for any damages
arising from the use by others of any information or other materials obtained
through IntraLinks or other similar information transmission systems in
connection with this Agreement, nor shall any Indemnitee have any liability for
any indirect or consequential damages relating to this Credit Agreement or any
other Credit Document or arising out of its activities in connection herewith or
therewith (whether before or after the Closing Date).
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(b) All amounts due under this Section 11.5 shall be payable within ten
Business Days after demand therefor. The agreements in this Section 11.5 shall
survive the resignation of any Agent, the replacement of any Lender, the
termination of the Commitments and the repayment, satisfaction or discharge of
all the Obligations.
11.6 Amendments, Waivers and Consents.
Neither this Credit Agreement nor any other Credit Document nor any of
the terms hereof or thereof may be amended, changed, waived, discharged or
terminated unless such amendment, change, waiver, discharge or termination is in
writing entered into by, or approved in writing by, the Required Lenders and the
Borrower, provided, however, that:
(a) without the consent of each Lender affected thereby,
neither this Credit Agreement nor any other Credit Document may be
amended to
(i) extend the final maturity of any Loan or of any
reimbursement obligation, or any portion thereof, arising from
drawings under Letters of Credit,
(ii) reduce the rate or extend the time of payment of
interest (other than as a result of waiving the applicability
of any post-default increase in interest rates) thereon or
fees hereunder,
(iii) reduce or waive the principal amount of any
Loan or of any reimbursement obligation, or any portion
thereof, arising from drawings under Letters of Credit,
(iv) increase the Commitment of a Lender over the
amount thereof in effect (it being understood and agreed that
a waiver of any Default or Event of Default or mandatory
reduction in the Commitments shall not constitute a change in
the terms of any Commitment of any Lender),
(v) except as the result of or in connection with a
dissolution, merger or disposition of a member of the North
American Group permitted under Section 8.3, release the
Borrower or substantially all of the Guarantors from its or
their obligations under the Credit Documents,
(vi) except as the result of or in connection with an
Asset Disposition permitted under Section 8.3(b), release all
or substantially all of the Collateral,
(vii) amend, modify or waive any provision of this
Section 11.6 or Section 3.6, 3.7, 3.8, 3.9, 3.10, 3.11, 3.12,
3.13, 3.14, 3.15, 9.1(a), 11.2, 11.3, 11.5 or 11.9,
(viii) reduce any percentage specified in, or
otherwise modify, the definition of Required Lenders, or
(ix) consent to the assignment or transfer by the
Borrower or all or substantially all of the other Credit
Parties of any of its or their rights and obligations under
(or in respect of) the Credit Documents except as permitted
thereby;
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(b) without the consent of the Agents, no provision of Section
10 may be amended; and
(c) without the consent of the Issuing Lender, no provision of
Section 2.2 may be amended.
Notwithstanding the fact that the consent of all the Lenders is
required in certain circumstances as set forth above, (x) each Lender
is entitled to vote as such Lender sees fit on any bankruptcy
reorganization plan that affects the Loans, and each Lender
acknowledges that the provisions of Section 1126(c) of the Bankruptcy
Code supersedes the unanimous consent provisions set forth herein and
(y) the Required Lenders may consent to allow a Credit Party to use
cash collateral in the context of a bankruptcy or insolvency
proceeding.
11.7 Counterparts.
This Credit Agreement may be executed in any number of counterparts,
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each of which when so executed and delivered shall be an original, but all of
which shall constitute one and the same instrument. It shall not be necessary in
making proof of this Credit Agreement to produce or account for more than one
such counterpart for each of the parties hereto. Delivery by facsimile by any of
the parties hereto of an executed counterpart of this Credit Agreement shall be
as effective as an original executed counterpart hereof and shall be deemed a
representation that an original executed counterpart hereof will be delivered.
11.8 Headings.
The headings of the sections and subsections hereof are provided for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Credit Agreement.
11.9 Survival.
(a) All indemnities set forth herein, including, without limitation, in
Section 2.7(h), 3.11, 3.12, 10.7 or 11.5 shall survive the execution and
delivery of this Credit Agreement, the making of the Loans, the issuance of the
Letters of Credit, the repayment of the Loans, LOC Obligations and other
obligations under the Credit Documents and the termination of the Commitments
hereunder.
(b) All representations and warranties made hereunder and in any other
Credit Document or other document delivered pursuant hereto or thereto or in
connection herewith or therewith shall survive the execution and delivery hereof
and thereof. Such representations and warranties have been or will be relied
upon by the Agents and each Lender, regardless of any investigation made by the
Agents or any Lender or on their behalf and notwithstanding that the Agents or
any Lender may have had notice or knowledge of any Default at the time of any
Extension of Credit, and shall continue in full force and effect as long as any
Loan or any other Obligation hereunder shall remain unpaid or unsatisfied or any
Letter of Credit shall remain outstanding.
11.10 Governing Law; Submission to Jurisdiction; Venue.
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(a) THIS CREDIT AGREEMENT AND, UNLESS OTHERWISE EXPRESSLY PROVIDED
THEREIN, THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. Any legal
action or proceeding with respect to this Credit Agreement or any other Credit
Document may be brought in the State or Federal courts located in New York, New
York, and, by execution and delivery of this Credit Agreement, each of the
Credit Parties hereby irrevocably accepts for itself and in respect of its
property, generally and unconditionally, the nonexclusive jurisdiction of such
courts. Each of the Credit Parties further irrevocably consents to the service
of process out of any of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof by registered or certified mail,
postage prepaid, to it at the address set out for notices pursuant to Section
11.1, such service to become effective three (3) Business Days after such
mailing. Nothing herein shall affect the right of the Administrative Agent or
any Lender to serve process in any other manner permitted by law or to commence
legal proceedings or to otherwise proceed against any Credit Party in any other
jurisdiction.
(b) Each of the Credit Parties hereby irrevocably waives any objection
which it may now or hereafter have to the laying of venue of any of the
aforesaid actions or proceedings arising out of or in connection with this
Credit Agreement or any other Credit Document brought in the courts referred to
in subsection (a) above and hereby further irrevocably waives and agrees not to
plead or claim in any such court that any such action or proceeding brought in
any such court has been brought in an inconvenient forum.
(c) EACH PARTY TO THIS CREDIT AGREEMENT HEREBY EXPRESSLY WAIVES ANY
RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING
UNDER ANY CREDIT DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL
TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO ANY CREDIT
DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING
OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND
EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY
PARTY TO THIS CREDIT AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF
THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
11.11 Severability.
If any provision of any of the Credit Documents is determined to be
illegal, invalid or unenforceable, such provision shall be fully severable and
the remaining provisions shall remain in full force and effect and shall be
construed without giving effect to the illegal, invalid or unenforceable
provisions.
11.12 Entirety.
This Credit Agreement together with the other Credit Documents
represent the entire agreement of the parties hereto and thereto, and supersede
all prior agreements and understandings, oral or written, if any, including any
commitment letters or correspondence relating to the Credit Documents or the
transactions contemplated herein and therein.
11.13 Binding Effect; Termination.
(a) This Credit Agreement shall become effective at such time on or
after the Closing Date when it shall have been executed by each Credit Party and
the Administrative Agent, and the Administrative Agent and each Lender shall
have received copies hereof (telefaxed or otherwise) which, when taken together,
bear the signatures of each Lender, and thereafter this Credit Agreement shall
be binding upon and inure to the benefit of each Credit Party, the
Administrative Agent and each Lender and their respective successors and
assigns.
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(b) The term of this Credit Agreement shall be until no Loans, LOC
Obligations or any other amounts payable hereunder or under any of the other
Credit Documents shall remain outstanding (other than contingent indemnity
obligations), no Letters of Credit shall be outstanding, all of the Credit Party
Obligations have been irrevocably satisfied in full and all of the Commitments
hereunder shall have expired or been terminated.
11.14 Confidentiality.
Each of the Agents and the Lenders agrees to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its and its Affiliates' directors, officers, employees
and agents, including accountants, legal counsel and other advisors (it being
understood that the Persons to whom such disclosure is made will be informed of
the confidential nature of such Information and instructed to keep such
Information confidential); (b) to the extent requested by any regulatory
authority; (c) to the extent required by applicable laws or regulations or by
any subpoena or similar legal process; (d) to any other party to this Credit
Agreement; (e) in connection with the exercise of any remedies hereunder or any
suit, action or proceeding relating to this Credit Agreement or the enforcement
of rights hereunder; (f) subject to an agreement containing provisions
substantially the same as those of this Section, to (i) any Eligible Assignee of
or Participant in, or any prospective Eligible Assignee of or Participant in,
any of its rights or obligations under this Credit Agreement or (ii) any direct
or indirect contractual counterparty or prospective counterparty (or such
contractual counterparty's or prospective counterparty's professional advisor)
to any credit derivative transaction relating to obligations of the Credit
Parties; (g) with the consent of the Borrower; (h) to the extent such
Information (i) becomes publicly available other than as a result of a breach of
this Section or (ii) becomes available to any Agent or any Lender on a
nonconfidential basis from a source other than the Borrower; or (i) to the
National Association of Insurance Commissioners or any other similar
organization. In addition, the Administrative Agent and the Lenders may disclose
the existence of this Credit Agreement and information about this Credit
Agreement to market data collectors, similar service providers to the lending
industry, and service providers to the Administrative Agent and the Lenders in
connection with the administration and management of this Credit Agreement, the
other Credit Documents, the Commitments, and the Extensions of Credit. For the
purposes of this Section, "Information" means all information received from any
Credit Party relating to any Credit Party or its business, other than any such
information that is available to the any Agent or any Lender on a
nonconfidential basis prior to disclosure by any Credit Party; provided that, in
the case of information received from a Credit Party after the date hereof, such
information is clearly identified in writing at the time of delivery as
confidential. Any Person required to maintain the confidentiality of Information
as provided in this Section shall be considered to have complied with its
obligation to do so if such Person has exercised the same degree of care to
maintain the confidentiality of such Information as such Person would accord to
its own confidential information.
11.15 Source of Funds.
Each of the Lenders hereby represents and warrants to the Borrower that
at least one of the following statements is an accurate representation as to the
source of funds to be used by such Lender in connection with the financing
hereunder:
(a) no part of such funds constitutes assets allocated to any
separate account maintained by such Lender in which any employee
benefit plan (or its related trust) has any interest;
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(b) to the extent that any part of such funds constitutes
assets allocated to any separate account maintained by such Lender,
such Lender has disclosed to the Borrower the name of each employee
benefit plan whose assets in such account exceed 10% of the total
assets of such account as of the date of such purchase (and, for
purposes of this subsection (b), all employee benefit plans maintained
by the same employer or employee organization are deemed to be a single
plan);
(c) to the extent that any part of such funds constitutes
assets of an insurance company's general account, such insurance
company has complied with all of the requirements of the regulations
issued under Section 401(c)(1)(A) of ERISA; or
(d) such funds constitute assets of one or more specific
benefit plans which such Lender has identified in writing to the
Borrower.
As used in this Section 11.15, the terms "employee benefit plan" and "separate
account" shall have the respective meanings assigned to such terms in Section 3
of ERISA.
11.16 Conflict.
To the extent that there is a conflict or inconsistency between any
provision hereof, on the one hand, and any provision of any Credit Document, on
the other hand, this Credit Agreement shall control.
[Signature Pages to Follow]
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IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart
of this Credit Agreement to be duly executed and delivered as of the date first
above written.
BORROWER: TAKE-TWO INTERACTIVE SOFTWARE, INC.,
a Delaware Corporation
By: /s/ Barry Rutcofsky
---------------------------------
Name: Barry Rutcofsky
Title: Executive Vice President
GUARANTORS: JACK OF ALL GAMES, INC.,
a New York corporation
POPTOP SOFTWARE, INC.,
a Missouri corporation
TALONSOFT, INC.,
a Delaware corporation
VLM ENTERTAINMENT GROUP, INC.,
a Delaware corporation
ROCKSTAR GAMES, INC.,
a Delaware corporation
T2 DEVELOPER, INC.,
a Delaware corporation
INVENTORY MANAGEMENT SYSTEMS, INC.,
a Delaware corporation
GATHERING OF DEVELOPERS, INC.,
a Texas corporation
By: /s/ Barry Rutcofsky
---------------------------------
Name: Barry Rutcofsky
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Title: Executive Vice President
[Signature Pages Continue]
ADMINISTRATIVE AGENT: BANK OF AMERICA, N.A.,
in its capacity as Administrative Agent
By: /s/ Michael Brashler
------------------------------------
Name: Michael Brashler
Title: Agency Officer
LENDERS: BANK OF AMERICA, N.A.,
in its capacity as a Lender
By: /s/ Robert M. Searson
------------------------------------
Name: Robert M. Searson
Title: Senior Vice President
COMERICA BANK
By: /s/ Paul J. Durosko
------------------------------------
Name: Paul J. Durosko
Title: Vice President
SUMMIT BUSINESS CAPITAL CORP.
By: /s/ Robert Munns
------------------------------------
Name: Robert Munns
Title: Vice President
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Exhibit 10.2
STANDARD FORM OF LOFT LEASE
The Real Estate
Board of New York, Inc.
Agreement of Lease, made as of the 1st day of July, 2002, between MOKLAM
ENTERPRISES, INC., a New York corporation with an address at c/o Yuco
Management, Inc., 475 Fifth Avenue, 19" Floor, New York, New York 10017, party
of the first part, hereinafter referred to as OWNER, and TAKE-TWO INTERACTIVE
SOFTWARE, INC., a Delaware corporation with an address at 575 Broadway, New
York, New York, 10012, party of the second part, hereinafter referred to as
TENANT,
Witnesseth:: Owner hereby leases to Tenant and Tenant hereby hires from Owner
the entire fourth, fifth and sixth floors and the roof deck (as more
specifically provided in Section 42.1 below) (the "demised premises" or
"Premises") in the building known as 622 Broadway, in the Borough of New York,
City and State of New York, (the "Building") for the term of ten (10) years and
six (6) months (or until such term shall sooner cease and expire as hereinafter
provided) to commence on July 1, 2002 and to end on December 31, 2012, both
dates inclusive, at an annual rental rate as set forth in Article 63 of the
rider annexed hereto and made a part hereof, which Tenant agrees to pay in
lawful money of the United States which shall be legal tender in payment of all
debts and dues, public and private, at the time of payment, in equal monthly
installments in advance on the first day of each month during said tern, at the
office of Owner or such other place as Owner may designate, without any set off
or deduction whatsoever (except as may be otherwise specifically set forth in
this lease), except that Tenant shall pay the first monthly installment on the
execution hereof.
In the event that, at the commencement of the term of this lease, or thereafter,
Tenant shall be in default in the payment of rent to Owner pursuant to the terms
of another lease with Owner or with Owner's predecessor in interest, Owner may
at Owner's option and without notice to Tenant add the amount of such arrears to
any monthly installment of rent payable hereunder and the same shall be payable
to Owner as additional rent.
The parties hereto, for themselves, their heirs, distributees, executors,
administrators, legal representatives, successors and assigns, hereby covenant
as follows:
Rent: 1. Tenant shall pay the rent as above and as hereinafter provided.
Occupancy: 2. Tenant shall use and occupy demised premises for general and
executive offices only ...
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and for no other purpose whatsoever.
Alterations: 3. Tenant shall make no changes in or to the demised premises of
any nature without Owner's prior written consent. Subject to the prior written
consent of Owner, and to the provisions of this article, Tenant, at Tenant's
expense, may make alterations, installations, additions or improvements which
are nonstructural and which do not affect utility services or plumbing and
electrical lines, in or to the interior of the demised premises using
contractors or mechanics first approved in each instance by Owner. Tenant shall,
at its expense, before making any alterations, additions, installations, or
improvements obtain all permits, approval and certificates required by any
governmental or quasi-governmental bodies and (upon completion) certificates of
final approval thereof and shall deliver promptly duplicates of all such
permits, approvals and certificates to Owner. Tenant agrees to carry and will
cause Tenant's contractors and sub-contractors to carry such workman's
compensation, general liability, personal and property damage insurance as Owner
may require. If any mechanic's lien is filed against the demised premises, or
the building of which the same forms a part, for work claimed to have been done
for, or materials furnished to, Tenant, whether or not done pursuant to this
article, the same shall be discharged by Tenant within thirty days thereafter,
at Tenant's expense, by payment or filing the bond required by law or otherwise.
All fixtures and all paneling, partitions, railings and like installations,
installed in the premises at any time, either by Tenant or by Owner on Tenant's
behalf, shall, upon installation, become the property of Owner and shall remain
upon and be surrendered with the demised premises [1]. Nothing in this Article
shall be construed to give Owner title to or to prevent Tenant's removal of
trade fixtures, moveable office furniture and equipment, but upon removal of any
such from the premises or upon removal of other installations as may be required
by Owner, Tenant shall immediately and at its expense, repair and restore the
premises to the condition existing prior to installation and repair any damage
to the demised premises or the building due to such removal. All property
permitted or required to be removed by Tenant at the end of the term remaining
in the premises after Tenant's removal shall be deemed abandoned and may, at the
election of Owner, either be retained as Owner's property or removed from the
premises by Owner, at Tenant's expense.
Repairs: 4. Owner shall maintain and repair the exterior of and the public
portions of the building [1a]. Tenant shall, throughout the term of this lease,
take good care of the demised premises including the bathrooms and lavatory
facilities (if the demised premises encompass the entire floor of the building)
and the windows and window frames and, the fixtures and appurtenances therein
and at Tenant's sole cost and expense promptly make all repairs thereto and to
the building, whether structural or non-structural in nature, caused by or
resulting from the carelessness, omission, neglect or improper conduct of
Tenant, Tenant's servants, employees, invitees or licensees [1b], and whether or
not arising from such Tenant conduct or omission, when required by other
provisions of this lease, including Article 6. Tenant shall also repair all
damage to the building and the demised premises cause by the moving of Tenant's
fixtures, furniture or equipment. All the aforesaid repairs shall be of quality
of class equal to the original work or construction. If Tenant fails, after ten
days notice, to proceed with due diligence to make repairs required to be made
by Tenant, the same may be made by the Owner at the expense of Tenant, and the
expenses thereof incurred by Owner shall be collectible, as additional rent,
after rendition of a bill statement therefore [1c]. If the demised premises be
or become infested with vermin, Tenant shall, at its expense, cause the same to
be exterminated. Tenant shall give Owner prompt notice of any defective
condition in any plumbing, heating system or electrical lines located in the
demised premises an following such notice. Owner shall remedy the condition with
due diligence, but at the expense of Tenant, if repairs are necessitated by
damage or injury attributable to Tenant, Tenant's servants, agents, employees,
invitees or licensees as aforesaid. Except as specifically provided in Article 9
or elsewhere in this lease, there shall be no allowance to the Tenant for a
diminution of rental value and no liability on the part of Owner by reason of
inconvenience, annoyance or injury to business arising from Owner, Tenant or
others making or failing to make any repairs, alterations, additions or
improvements in or to any portion of the building or the demised premises or in
and to the fixtures, appurtenances or equipment thereof. It is specifically
agreed that Tenant shall not be entitled to any set off or reduction of rent by
reason of any failure of Owner to comply with the covenants of this or any other
article of this lease [1d]. Tenant agrees that Tenant's sole remedy at law in
such instance will be by way of any action for damages for breach of contract.
The provisions of this Article 4 with respect to the making of repairs shall not
apply in the case of fire or other casualty with regard to which Article 9
hereof shall apply. [2]
Window
Cleaning: 5. Tenant will not clean or require, permit, suffer or allow any
window in the demised premises to be cleaned from the outside in violation of
Section 202 of the New York State Labor Law or any other applicable law or of
the Rules of the Board of Standards and Appeals, or of any other Board or body
having or asserting jurisdiction.
Requirements
of Law,
Fire Insurance: 6. Prior to the commencement of the lease term, if Tenant is
then in possession, and at all times thereafter Tenant shall, at Tenant's sole
cost and expense, promptly comply with all present and future laws, orders and
regulations of all state, federal, municipal and local governments, departments,
commissions and boards and any direction of any public officer pursuant to law,
and all orders, rules and regulations of the New York Board of Fire
Underwriters, or the Insurance Services Office, or any similar body which shall
impose any violation, order or duty upon Owner or Tenant with respect to the
demised premises, if arising out of Tenant's [2a]. Except as provided in Article
30 hereof, nothing herein shall require Tenant to make structural repairs or
alterations unless Tenant has, by its manner of use of the demised premises or
methods of operation therein, violated any such laws, ordinances, orders, rules,
regulations or requirements with respect thereto. Tenant shall not do or permit
any actor or thing to be done in or to the demised premises which is contrary to
law, or which will invalidate or be in conflict with public liability, fire or
other policies of insurance at any time carried by or for the benefit of Owner.
Tenant shall not keep anything in the demised premises except as now or
hereafter permitted by the Fire Department, Board of Fire Underwriters, Fire
Insurance Rating Organization and other authority having jurisdiction, and then
only in such manner and such quantity so as not to increase the rate for fir
insurance applicable to the building, nor use the premises in a manner which
will increase the insurance rate for the building or any property located
therein over that in effect prior to the commencement of Tenant's occupancy. If
by reason of failure to comply with the foregoing the fire insurance rate shall,
at the beginning of this lease or at any time thereafter, be higher than it
otherwise would be, then Tenant shall reimburse Owner, as additional rent
hereunder, for that portion of all fire insurance premiums thereafter paid by
Owner which shall have been charged because of such failure by Tenant. In any
action or proceeding wherein Owner and Tenant are parties, a schedule or
"make=up" or rate for the building or demised premises issued by a body making
fire insurance rates applicable to said premises shall be conclusive evidence of
the facts therein stated and of the several items and charges in the fire
insurance rates then applicable to said premises. Tenant shall not place a load
upon any floor of the demised premises exceeding the floor load per square foot
area which it was designed to carry and which is allowed by law. Owner reserves
the right to prescribe the weight and position of all safes, business machines
and mechanical equipment. Such installation shall be placed and maintained by
Tenant, at Tenant's expense, in settings sufficient, in Owner's [3] judgment, to
absorb and prevent vibration, noise and annoyance.[3a]
Subordination: 7. This lease is subject and subordinate to all ground or
underlying leases and to all mortgages which may now or hereafter affect such
leases or the real property of which demised premises are a part and to all
renewals, modifications, consolidations, replacements and extensions of any such
underlying leases and mortgages. This clause shall be self-operative and no
further instrument or subordination shall be required by any ground or
underlying lessor or by any mortgagee, affecting any lease or the real property
of which the demised premises are a part. In confirmation of such subordination,
Tenant shall from time to time execute promptly any certificate that Owner may
[3b] request.
Tenant's Liability
Insurance Property
Loss, Damage
Indemnity: 8. Owner or its agents shall not be liable for any damage to property
of Tenant or of others entrusted to employees of the building, nor for loss of
or damage to any property of Tenant by theft or otherwise, nor for any injury or
damage to persons or property resulting from any cause of whatsoever nature,
unless caused by or due to the [4] of Owner, its agents, servants [5] or
employees; Owner or its agents shall not be liable for any damage caused by
other tenants or persons in, upon or about said building or caused by operations
in connection of any private, public or quasi public work. If at any time any
windows of the demised premises are temporarily ed, darkened or bricked up (or
permanently closed, darkened or bricked up, if required by law) for any reason
whatsoever including, but not limited to Owner's own acts, Owner shall not be
liable for any damage Tenant may sustain thereby and Tenant shall not be
entitled to any compensation therefore nor abatement or diminution of rent nor
shall the same release Tenant from its obligations hereunder nor constitute an
eviction. Tenant shall indemnify and save harmless Owner against and from all
liabilities, obligations, damages, penalties, claims costs and expenses for
which Owner shall not be reimbursed by insurance, including reasonable
attorney's fees, paid, suffered or incurred as a result of any breach by Tenant,
Tenant's agents, contractors, employees, invitees, or licensees, of any covenant
or condition of this lease, or the carelessness, negligence or improper conduct
of the Tenant, Tenant's agents, contractors, employees invitees or licensees.
Tenant's liability under this lease extends to the acts and omissions of any
sub-tenant, and any agent, contractor, employee, invitee or licensee of any
sub-tenant. In case any action proceeding is brought against Owner by reason of
any such claim, Tenant, upon written notice from Owner, will, at Tenant's
expense, resist or defend such action or proceeding by counsel approved by Owner
in writing, such approval not to be unreasonably withheld.[6]
Destruction,
Fire and
Other
Casualty: 9. (a) If the demised premises or any part thereof shall be damaged by
fire or other casualty, Tenant shall give immediate notice thereof to Owner and
this lease shall continue in full force and effect except as hereinafter set
forth. (b) If the demised premises or access thereto are partially damaged or
rendered partially unusable by fire or other casualty, the damages thereto shall
be repaired by and at the expense of Owner and the rent and other items of
additional rent, until such repair shall be substantially completed, shall be
apportioned from the day following the casualty according to the part of the
premises which is usable. (c) If the demised premises or access thereto are
totally damaged or rendered wholly unusable [6a] by fire or other casualty, then
the rent and other items of additional rent as hereinafter expressly provided
shall be proportionately paid up to the time of the casualty and thenceforth
shall cease until the date when the premises shall have been repaired and
restored [6b] by Owner (or sooner reoccupied in part by Tenant then rent shall
be apportioned as provided in subsection (b) above), subject to Owner's right to
elect not to restore the same as hereinafter provided. (d) If the demised
premises are rendered wholly unusable or (whether or not the demised premises
are damaged in whole or in part) if the building shall be so damaged that Owner
shall decide to demolish it or to rebuild it, then, in any of such events, Owner
may elect to terminate this lease by written notice to Tenant, given within 90
days after such fire or casualty, or 30 days after adjustment of the insurance
claim for such fire or casualty, whichever is sooner, specifying a date for the
expiration of the lease, which date shall not be more than 60 days after the
giving of such notice, and upon the date specified in such notice the term of
this lease shall expire as fully and completely as if such date were the date
set forth above for the termination of this lease and Tenant shall forthwith
quit, surrender and vacate the premises without prejudice however, to Owner's
rights and remedies against Tenant under the lease provisions in effect prior to
such termination, and any rent owing shall be paid up to such date and any
payments of rent made by Tenant which were on account of any period subsequent
to such date shall be returned to Tenant. Unless Owner shall serve a termination
notice as provided for herein, Owner shall make the repairs and restorations
under the conditions of (b) and (c) hereof, with all reasonable expedition,
subject to delays due to adjustment of insurance claims, labor troubles and
causes beyond Owner's control. After any such casualty, Tenant shall cooperate
with Owner's restoration by removing from the premises as promptly as reasonably
possible, all of Tenant's salvageable inventory and movable equipment,
furniture, and other property. Tenant's liability for rent shall resume ___ days
after written notice from Owner that the premises are substantially ready for
Tenant's occupancy. (e) Nothing contained herein-above shall relive Tenant from
liability that ay exist as a result of damage from fire or other casualty.
Notwithstanding the foregoing, including Owner's obligation to restore under
subparagraph (b) above, each party shall look first to any insurance in its
favor before making any claim against the other party for recovery for loss or
damage resulting from fire or other casualty, and to the extent that such
insurance is in force and collectible and to the extent permitted by law, Owner
and Tenant each hereby releases and waives all right of recovery with respect to
subparagraphs (b), (d) and (e) above, against the other or any one claiming
through or under each of them by way of subrogation or otherwise. The release
and waiver herein referred to shall be deemed t include any loss or damage to
the demises premises and/or to any personal property, equipment, trade fixtures,
goods and merchandise located therein. The foregoing release and waiver shall be
in force only if both releasors' insurance policies contain a clause providing
that such a release or waiver shall not invalidate the insurance. If, and to the
extent, that such waiver can be obtained only by the payment of additional
premiums, then the party benefiting from the waiver shall pay such premium
within ten days after written demand or shall be deemed to have agreed that the
party obtaining insurance coverage shall be free of any further obligation under
the provisions hereof with respect to waiver of subrogation. Tenant acknowledges
that Owner will not carry insurance on Tenant's furniture and/or furnishings or
any fixtures or equipment, improvements, or appurtenances removable by Tenant
and agrees that Owner will not be obligated to repair any damage thereto or
replace the same. (f) Tenant hereby waives the provisions of Section 227 of the
Real Property Law and agrees that the provisions of this article shall govern
and control in lieu thereof.[8]
Eminent
Domain: 10. If the whole or any part of the demised premises shall be acquired
or condemned by Eminent Domain for any public or quasi public use or purpose,
then and in that event, the term of this lease shall cease and terminate from
the date of title vesting in such proceeding and Tenant shall have no claim for
the value of any unexpired term of said lease. Tenant shall have the right to
make an independent claim to the condemning authority for the value of Tenant's
moving expenses and personal property, trade fixtures and equipment, provided
Tenant is entitled pursuant to the terms of the lease to remove such property,
trade fixtures and equipment at the end of the term and provided further such
claim does not reduce Owner's award.
Assignment,
Mortgage,
Etc.: 11. Tenant, for itself, its heirs, distributees, executors, and
administrators, legal representatives, successors and assigns, expressly
covenants that it shall not assign, mortgage or encumber this agreement, nor
underlet, or suffer or permit the demised premises or any part thereof to be
used by others, without the prior written consent of Owner in each instance.
Transfer of the majority of the stock of a corporate Tenant or the majority
partnership interest of a partnership Tenant shall be deemed an assignment. If
this lease be assigned, or if the demised premises or any part thereof be
underlet or occupied by anybody other than Tenant, Owner may, after default by
Tenant, collect rent from the assignee, under-tenant or occupant, and apply the
net amount collected to the rent herein reserved, but no such assignment,
underletting, occupancy or collection shall be deemed a waiver of this covenant,
or the acceptance of the assignee, under-tenant or occupant as tenant, or
release of Tenant from the further performance by Tenant of covenants on the
part of Tenant herein contained. The consent by Owner to an assignment or
underletting shall not in any wise be construed to relieve Tenant from obtaining
the express consent in writing of Owner to any further assignment or
underletting.
Electric
Current: 12. Tenant covenants and agrees that at all times its use of electric
current shall not exceed the capacity of existing feeders to the building or the
risers or wiring installation and Tenant may not use any electrical equipment
which, I Owner's opinion, reasonably exercised, will overload such installations
or interfere with the use thereof by other tenants of the building. The change
at anytime of the character of electric service shall in no wise make Owner
liable or responsible to Tenant, for any loss, damages or expenses which Tenant
may sustain.
Access to
Premises: 13. Owner or Owner's agents shall have the right (but shall not be
obligated) to enter the demised premises in any emergency at any time, and, at
other reasonable times, to examine the same and to make such repairs,
replacements and improvements as Owner may deem necessary and reasonably
desirable to any portion of the building or which Owner may elect to perform in
the premises after Tenant's failure to make repairs or perform any work which
Tenant is obligated to perform under this lease, or for the purpose of complying
with laws, regulations and other directions of governmental authorities. [9]
Tenant shall permit Owner to use and maintain and replace pipes and conduits in
and through the demised premises and to erect new pipes and conduits therein
provided, wherever possible, they are within walls or otherwise concealed. Owner
may, during the progress of any work in the demised premises, take all necessary
materials and equipment into said premises without the same constituting an
eviction nor shall the Tenant be entitled to any abatement of rent while such
work is in progress nor to any damages by reason of loss or interruption of
business or otherwise. [9a] Throughout the term hereof Owner shall have the
right to enter the demised premises at reasonable hours for the purpose of
showing the same to prospective purchasers or mortgagees of the building, and
during the last six months of the term for the purpose of showing the same to
prospective tenants. If Tenant is not present to open and permit an entry into
the demised premises, Owner or Owner's agents may enter the same whenever such
entry may be necessary or permissible by master key or forcibly and provided
reasonable care is exercised to safeguard Tenant's property, such entry shall
not render Owner or its agents liable therefore, nor in any event shall the
obligations of Tenant hereunder be affected. [10] If during the last month of
the term Tenant shall have removed all or substantially all of Tenant's property
therefrom. Owner may immediately enter, alter, renovate or redecorate the
demised premises without limitation or abatement of rent, or incurring liability
to Tenant for any compensation and such act shall have no effect on this lease
or Tenant's obligation hereunder.
Vault
Vault Space,
Area: 14. No Vaults, vault space or area, whether or not enclosed or covered,
not within the property line of the building is leased hereunder anything
contained in or indicated on any sketch, blue print or plan, or anything
contained elsewhere in this lease to the contrary notwithstanding. Owner makes
no representation as to the location of the property line of the building. All
vaults and vault space and all such areas not within the property line of the
building, which Tenant may be permitted to use and/or occupy, is to be used
and/or occupied under a revocable license, and if any such license be revoked,
of if the amount of such space or area be diminished or required by any federal,
state or municipal authority or public utility, Owner shall not be subject to
any liability nor shall Tenant be entitled to any compensation or diminution or
abatement of rent, nor shall such revocation, diminution or requisition be
deemed constructive or action eviction. Any tax, fee or charge of municipal
authorities for such vault or area shall be paid by Tenant, if used by Tenant,
whether or not specifically leased hereunder.
Occupancy: 15. Tenant will not at any time use or occupy the demised premises in
violation of the certificate of occupancy issued for the building of which the
demised premises are a part. Tenant has inspected the premises and accepts them
as is, subject to the riders annexed hereto with respect to Owner's work, if
any. In any event, Owner makes no representation as to the condition of the
premises and Tenant agrees to accept the same subject to violations, whether or
not of record. If any governmental license or permit shall be required for the
proper and lawful conduct of Tenant's business, Tenant shall be responsible for
and shall procure and maintain such license or permit.[10a]
Bankruptcy: 16. (a) Anything elsewhere in this lease to be contrary
notwithstanding, this lease may be cancelled by Owner by sending of a written
notice to Tenant within a reasonable time after the happening of any one or more
of the following events: (1) the commencement of a case in bankruptcy or under
the laws of any state naming Tenant as the debtor, or (2) the making by Tenant
of an assignment or any other arrangement for the benefit of creditors under any
state statute. Neither Tenant nor any person claiming through or under Tenant,
or by reason of any statute or order of court, shall thereafter be entitled to
possession of the premises demised but shall forthwith quit and surrender the
premises. If this lease shall be assigned in accordance with its terms, the
provisions of this Article 16 shall be applicable only to the party then owning
Tenant's interest in this lease.
(b) It is stipulated and agreed that in the event of the
termination of this lease pursuant to (a) hereof, Owner shall forthwith,
notwithstanding any other provisions of this lease to the contrary, be entitled
to recover from Tenant as and for liquidated damages an amount equal to the
difference between the rental reserved hereunder for the unexpired portion of
the term demised and the fair and reasonable rental value of the demised
premises for the same period. In the computation of such damages the difference
between any installment of rent becoming due hereunder after the date of
termination and the fair and reasonable rental value of the demised premises for
the period for which such installment was payable shall be discounted to the
date of termination at the rate of four percent (4%) per annum. If such premises
or any part thereof be relet by the Owner for the unexpired term of said lease,
or any part thereof, before presentation of proof of such liquidated damages to
any court, commission or tribunal, the amount of rent reserved upon such
reletting shall be deemed to be the fair and reasonable rental value for the
part or the whole of the premises so relet during the term of the reletting.
Nothing herein contained shall limit or prejudice the right of the Owner to
prove for and obtain as liquidated damages by reason of such termination, amount
equal to the maximum allowed by any statute or rule of law in effect at the time
when, and governing the proceedings in which, such damages are to be proved,
whether or not such amount be greater, equal to, or less than the amount of the
difference referred to above.
Default: 17. (1) If Tenant defaults in fulfilling any of the covenants of this
lease other than the covenants of the payment of rent or additional rents; or if
the demised premises becomes [10b] or deserted or if this lease be rejected
under ss.235 of Title 11 of the U.S. Code (bankruptcy code);" or if any
execution or attachment shall be issued against Tenant or any of Tenant's
property whereupon the demised premises shall be taken or occupied by someone
other than Tenant; or if Tenant shall make default with respect to any other
lease between Owner and Tenant; or if Tenant shall have failed, after ten (10)
days written notice, to redeposit with Owner any portion of the security
deposited hereunder which Owner has applied to the payment of any rent and
additional rent due and payable hereunder or failed to take possession of the
premises within thirty (30) days after the commencement of the term of this
lease, of which fact Owner shall be the sole judge; then in any one or more of
such events, upon Owner serving a written fifteen (15) days notice upon Tenant
specifying the nature of said default and upon the expiration of said fifteen
(15) days, if Tenant shall have failed to comply with or remedy such default, or
if the said default or omission complained of shall be of a nature that the same
cannot be completely cured or remedied within said fifteen (15) day period, and
if Tenant shall not have diligently commenced during such default within such
fifteen (15) day period, and shall not thereafter with reasonable diligence and
in good faith, proceed to remedy or cure such default, then Owner may serve a
written five (5) days' notice of cancellation of this lease upon Tenant, and
upon the expiration of said five (5) days this lease and the term thereunder
shall end and expire as fully and completely as if the expiration of such five
(5) day period were the day herein definitely fixed for the end and expiration
of this lease and the term thereof and Tenant shall then quit and surrender the
demised premises to Owner but Tenant shall remain liable as hereinafter
provided.
(2) If the notice provided for in (1) hereof shall have been
given, and the term shall expire as aforesaid; or if Tenant shall make default
in the payment of the rent reserved herein or any item of additional rent herein
mentioned or any part of either or in making any other payment herein required;
then and in any of such events Owner may dispossess Tenant by summary
proceedings or otherwise, and the legal representative of Tenant or other
occupant of demised premises and remove their effects and hold the premises as
if this lease had not been made, and Tenant hereby waives the service of notice
of intention to re-enter or to institute legal proceedings to that end. If
Tenant shall make default hereunder prior to the date fixed as the commencement
of any renewal or extension of this lease, Owner may cancel and terminate such
renewal or extension agreement by written notice.
Remedies of
Owner and
Waiver of
Redemption: 18. In case of any such default, re-entry, expiration and/or
dispossess by summary proceedings or other wise, (a) the rent, and additional
rent, shall become due thereupon and be paid up to the time of such re-entry,
dispossess and/or expiration, (b) Owner may re-let the premises or any part or
parts thereof, either in the name of Owner or otherwise, for a term or terms,
which may at Owner's option be less that or exceed the period which would
otherwise have constituted the balance of the term of this lease and may grant
concessions or free rent or charge a higher rental than that in this lease, (c)
Tenant or the legal representatives of Tenant shall also pay Owner as liquidated
damages for the failure of Tenant to observe and perform said Tenant's covenants
herein contained, any deficiency between the rent hereby reserved and or
covenanted to be paid and the net amount, if any, of the rents collected on
account of the subsequent lease or leases of the demised premises for each month
of the period which would otherwise have constituted the balance of the term of
this lease. The failure of Owner to re-let the premises or any part or parts
thereof shall not release or affect Tenant's liability for damages. In computing
such liquidated damages there shall be added to the said deficiency such
expenses as Owner may incur in connection with re-letting, such as legal
expenses, reasonable attorneys' fees, brokerage, advertising and for keeping the
demises premises in good order or for preparing the same for re-letting. Any
such liquidated damages shall be paid in monthly installments by Tenant on the
rent day specified in this lease and any suit brought to collect the amount of
the deficiency for any month shall not prejudice in any way the rights of Owner
to collect the deficiency for any subsequent month by a similar proceeding.
Owner, in putting the demised premises in good order or preparing the same for
re-rental may, at Owner's option, make such alterations, repairs, replacements,
and/or decorations in the demised premises as Owner, in Owner's sole judgment,
considers advisable and necessary for the purpose of re-letting the demised
premises and the making of such alterations, repairs, replacements, and/or
decorations shall not operate or be construed to release Tenant from liability
hereunder as aforesaid. Owner shall in no event be liable in any way whatsoever
for failure to re-let the demised premises, or in the event that the demised
premises are re-let, for failure to collect the rent thereof under such
re-letting, and in no event shall Tenant be entitled to receive any excess, if
any, of such net rents collected over the sums payable by Tenant to Owner
hereunder. In the event of a breach or threatened breach by Tenant of any of the
covenants or provisions hereof, Owner shall have the right of injunctions and
the right to invoke any remedy allowed at law or in equity as if re-entry,
summary proceedings and other remedies were not herein provided for. Mention in
this lease of any particular remedy, shall not preclude Owner from any other
remedy, in law or in equity. Tenant hereby expressly waives any and all rights
of redemption granted by or under any present or future laws.
Fees and
Expenses: 19. If Tenant shall default in the observance or performance of any
term or covenant on Tenant's part to be observed or performed under or by virtue
of any of the terms or provisions in any article of this lease, after notice if
required and upon expiration of any applicable grace period if any, (except in
an emergency), then, unless otherwise provided elsewhere in this lease, Owner
may immediately or at any time thereafter and without notice perform the
obligation of Tenant thereunder [11]. If Owner, in connection with the foregoing
or in connection with any default by Tenant in the covenant to pay rent
hereunder, makes any expenditures or incurs any obligations for the payment of
money, including but not limited to reasonable attorney's fees, in instituting,
prosecuting or defending any action or proceedings, and prevails in any such
action or proceeding, then Tenant will reimburse Owner for such sums so paid or
obligations incurred with interest and costs. The foregoing expenses incurred
with interest and costs. The foregoing expenses incurred by reason of Tenant's
default shall be deemed to be additional rent hereunder and shall be paid by
Tenant to Owner within ten (10) days of rendition of any bill or statement to
Tenant to therefore. If Tenant's lease term shall have expired at the time of
making of such expenditures or incurring of such obligations, such sums shall be
recoverable by Owner as damages.
Building
Alterations
and
Management: 20. Owner shall have the right at any time without the same
constituting an eviction and without incurring liability to Tenant therefore to
change the arrangement and or location of public entrances, passageways, doors,
doorways, corridors, elevators, stairs, toilets or other public pars of the
building and to change the name, number or designation by which the building may
be known. [11a] There shall be no allowance to Tenant for diminution of rental
value and no liability on the part of Owner by reason of inconvenience,
annoyance or injury to business arising from Owner or other Tenant making any
repairs in the building or any such alterations, additions and improvements.
[9a] Furthermore, Tenant shall not have any claim against Owner by reason of
Owner's imposition of any controls of the manner of access to the building by
Tenant's social or business visitors as the Owner may deem necessary for the
security of the building and its occupants.
No Repre-
sentations by
Owner: 21. Neither Owner or Owner's agents have made any representations or
promises with respect to the physical condition of the building, the land upon
which it is erected or the demised premises, the rents, leases, expenses of
operation or any other matter or thing affecting or relating to the demised
premises or the building except as herein expressly set forth and no rights,
assessments or licenses are acquired by Tenant by implication or otherwise
except as expressly set forth in the provisions of this lease. Tenant has
inspected the building and the demised premises and is thoroughly acquainted
with their condition and agrees to take the same "as is" on the date possession
is tendered and acknowledges that the taking of possession of the demised
premises by Tenant shall be conclusive evidence with the said premises and the
building of which the same form a part were in good and satisfactory condition
at the time such possession was so taken, except as to latent defects. All
understandings and agreements heretofore made between the parties hereto are
merged in the contract, which alone fully and completely expresses the agreement
between Owner and Tenant and any executory agreement hereafter made shall be
ineffective to change, modify, discharge or effect an abandonment of it in whole
or in part, unless such executory agreement is in writing and signed by the
party against whom enforcement of the change, modification, discharge or
abandonment is sought.
End of
Term: 22. Upon the expiration or other termination of the term of this lease,
Tenant shall quit and surrender to order and condition, ordinary wear and
damages which Tenant is not required to repair as provided elsewhere in this
lease excepted, and Tenant shall remove all its property from the demised
premises. Tenant's obligation to observe or perform this covenant shall survive
the expiration or other termination of this lease. If the last day of the term
of this Lease or any renewal thereof, falls on Sunday, this lease shall expire
at noon on the preceding Saturday unless it be a legal holiday in which case it
shall expire at noon on the preceding business day.
Quiet
Enjoyment: 23. Owner covenants and agrees with Tenant that upon Tenant paying
the rend and additional rent and observing and performing all the terms,
covenants and conditions, on Tenant's part to be observed and performed, Tenant
may peaceably and quietly enjoy the premises hereby demised, subject,
nevertheless, to the terms and conditions of this lease including, but not
limited to Article 34 hereof and to the ground leases, underlying leases and
mortgages hereinbefore mentioned.
Failure
to Give
Possession: 24. If Owner is unable to give possession of the demised premises on
the date of the commencements of the term hereof, because of the holding-over or
retention of possession of any tenant, undertenant or occupants or if the
demised premises are located in a building being constructed, because such
building has not been sufficiently completed to make the premises ready for
occupancy or because of the fact that a certificate of occupancy has not been
procured or if the Owner has not completed any work required to be performed by
Owner, or for any other reason, Owner shall not be subject to any liability for
failure to give possession on said date and the validity of the lease shall not
be impaired under such circumstances, nor shall the same be construed in any
wise to extend the term of this lease, but the rent payable hereunder shall be
abated (provided Tenant is not responsible for Owner's inability to obtain
possession or complete any work required) until after Owner shall have given
Tenant notice that Owner is able to deliver possession in the condition required
by this lease. If permission is given to Tenant to enter into the possession of
the demised premises or to occupy premises other than the demised premises prior
to the date specified as the commencement of the term of this lease, Tenant
covenants and agrees that such possession and/or occupancy shall be deemed to be
under all the terms, covenants, conditions and provisions of this lease, except
the obligation to pay the fixed annual rent set forth in page one of this lease.
The provisions of this article are intended to constitute "an express provision
to the contrary" within the meaning of Section 223-a of the New York Real
Property Law.
No Waiver: 25. The failure of [12] to seek redress for violation of, or [13] to
insist upon the strict performance of any covenant or condition of this lease or
of any of the Rules or Regulations, set forth or hereafter adopted by Owner,
shall not prevent a subsequent act which would have originally constituted a
violation from having all the force and effect of an original violation. The
receipt by Owner of rent with knowledge of the breach of any covenant of this
lease shall not be deemed a waiver of such breach and no provision of this lease
shall be deemed to have been waived by Owner unless such waiver be in writing
signed by Owner. No payment by Tenant or receipt by Owner of a lesser amount
than the monthly rent herein stipulation shall be deemed to be other than on
account of the earliest stipulated rent, nor shall any endorsement or statement
of any check or any letter accompanying any check or payment as rent be deemed
an accord and satisfaction, and Owner may accept such check or payment without
prejudice to Owner's right to recover the balance of such rent or pursue any
other remedy in this lease provided. All checks tendered to Owner as and for the
rent of the demised premises shall be deemed payments for the account of Tenant.
Acceptance by Owner of rent from anyone other than Tenant shall not be deemed to
operate as an attornment to Owner by the payor of such rent or as a consent by
Owner to an assignment or subletting by Tenant of the demised premises to such
payor, or as a modification of the provisions of this lease. No act or thing
done by Owner or Owner's agents during the term hereby demised shall be deemed
an acceptance of a surrender of said premises and no agreement to accept such
surrender shall be valid unless in writing signed by Owner. No employee of Owner
or Owner's agents shall have any power to accept the keys of said premises prior
to the termination of the lease and the delivery of keys to any such agent or
employee shall not operate as a termination of the lease or a surrender of the
premises.
Waiver of
Trial by Jury: 26. It is mutually agreed by and between Owner and Tenant that
the respective parties hereto shall and they hereby do waive trial by jury in
any action, proceeding or counterclaim brought by either of the parties hereto
against the other (except for personal injury or property damage) on any matter
whatsoever arising out of or in any way connected with this lease, the
relationship of Owner and Tenant, Tenant's use of or occupancy of said premises,
and any emergency statutory or any other statutory remedy, is further mutually
agreed that in the event Owner commences any proceeding or action for possession
including a summary proceeding for possession of the premises, Tenant will not
interpose any counterclaim of whatever nature or description in any such
proceeding including a counterclaim under Article 4[13a].
Inability to
Perform: 27. This Lease and the obligation of Tenant to pay rent hereunder and
perform all of the other covenants and agreements hereunder on part of Tenant to
be performed shall in no wise be affected, impaired or excused because Owner is
unable to fulfill any of its obligations under this lease or to supply or is
delayed in supplying any service expressly or impliedly to be supplied or is
unable to make, or is delayed in making any repair, additions, alterations or
decorations or is unable to supply or is delayed in supplying any equipment,
fixtures or other materials if Owner is prevented or delayed from doing so by
reason of strike or labor troubles or any cause whatsoever beyond Owner's sole
control including, but not limited to, government preemption or restrictions or
by reason of any rule, order or regulation or any department or subdivision
thereof of any government agency or by reason of the condition which have been
or are affected, either directly or indirectly, by war or other emergency.
Bills and
Notices: 28. Except as otherwise in this lease provided, a bill statement,
notice or communication which Owner my desire or be required to give to Tenant,
shall be deemed sufficiently given or rendered if, in writing, delivered to
Tenant personally or sent by registered or certified mail addressed to Tenant at
the building of which the demised premises form a part or at the last known
residence address or business address of Tenant or loft at any of the aforesaid
premises addressed to Tenant, and the time of the rendition of such bill or
statement and of the giving of such notice or communication shall be deemed at
the time when the same is delivered to Tenant, mailed or left at the premises
herein provided. Any notice by Tenant to Owner must be served by registered or
certified mail addressed to Owner at the address first hereinabove given or at
such other address as Owner shall designate by written notice.
Water
Charges: 29. If Tenant requires, uses or consumes water for any purpose in
addition to ordinary lavatory purposes (of which fact Tenant constitutes Owner
to be the sole judge) Owner may install a water meter and thereby measure
Tenant's water consumption of all purposes. Tenant shall pay Owner for the cost
of the meter and the cost of the installation, thereof and throughout the
duration of Tenant's occupancy Tenant shall keep said meter and installation
equipment in good working order and repair at Tenant's own cost and expense in
default of which Owner may cause such meter and equipment to be replaced or
repaired and collect the cost thereof from Tenant, as additional rent. Tenant
agrees to pay for water consumed, as shown on said meter as and when bills are
rendered, and on default in making such payment Owner may pay such charges and
collect the same from Tenant, as additional rent. Tenant covenants and agrees to
pay, as additional rent, the sewer rent, charge or any other tax, rent, levy or
charge which now or hereafter is assessed, imposed or a lien upon the demised
premises or the realty of which they are part pursuant to law, order or
regulation made or issued in connection with the use, consumption, maintenance
or supply of water, water system or sewage or sewage connection or system.
Independently of an in addition to any of the remedies reserved to Owner
hereinabove or elsewhere in this lease, Owner may sue for and collect any monies
to be paid by Tenant or paid by Owner for any of the reasons or purposes
hereinabove set forth.
Sprinklers: 30. Anything elsewhere in this lease to the contrary
notwithstanding, if the New York Board of Fire Underwriters or the New York Fire
Insurance Exchange or any bureau, department or official of the federal, state
or city government recommend or require the installation of a sprinkler system
or that any changes, modifications, alterations or additional sprinkler heads or
other equipment be made or supplied in an existing sprinkler system by reason of
Tenant's business, or the location of partitions, trade fixtures or other
contents of the demises premises, Tenant shall, at Tenant's expense, promptly
make such sprinkler system installations, changes, modifications, alterations,
and supply additional sprinkler heads or other equipment as required whether the
work involved shall be structural or non-structural in nature.
Elevators,
Heat,
Cleaning: 31. As long as Tenant is not in default under any the covenants of
this lease beyond the applicable grace period provided in this lease for the
curing of such defaults, Owner shall: (a) provide necessary passenger elevator
facilities on business days from 8 a.m. to 6 p.m. and on Saturdays from 8 a.m.
to 1 p.m.; (b) if freight elevator service is provided, same shall be provided
only on regular business days Monday through Friday inclusive, and on those days
only between the hours of; (c) furnish heat, water and other services supplied
by Owner to the demised premises, when and as required by law, on business days
from 8 a.m. to 6 p.m. and on Saturdays from 8 a.m. to 1 p.m.; (d) clean the
public halls and public portions of the building which are used in common by all
tenants. Tenant shall, at Tenant's keep the demised premises, including the
windows, clean and in order to the reasonable satisfaction of Owner, and for
that purpose shall employ the person or persons, or corporation approved by
Owner. Owner reserves the right to stop service of the heating, elevator,
plumbing and electric systems, when necessary, by reason of accident, or
emergency, or for repairs, alterations, replacements or improvements, in the
judgment of Owner, desirable or necessary to be made, until said repairs,
alterations, replacements or improvements shall have been completed. If the
building of which the demised premises are a part supplies manually operated
elevator service, Owner may proceed diligently with alterations necessary to
substitute automatic control elevator service without in any way affecting the
obligations of Tenant hereunder. See Rider.
Security: 32. Tenant has deposited with Owner the sum of $* 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 rent and additional rent, Owner may use,
apply or retain the whole or any part of the security so deposited to the extent
required for the payment of any rent and additional rent or any other sum as to
which Tenant is in default or for any sum which Owner may expend or may be
required to expend by reason of Tenant's default in respect of any of the terms,
covenants and conditions of this lease, including, but not limited to, any
damages or deficiency in the reletting of the premises, whether such damages or
deficiency accrued before or after summary proceedings or other re-entry by
Owner. [14] In the event that Tenant shall fully and faithfully comply with all
of the terms, provisions, covenants and conditions of this lease, the security
shall be returned to Tenant after the date fixed as the end of the Lease and
after delivery of entire possession of the demised premises to Owner. In the
event of a sale of the land and building or leasing of the building, of which
the demised premises from a part, Owner shall thereupon be released by Tenant
from all liability for the return of such security; and Tenant agrees to look to
the new Owner solely for the return of said security, and it is agreed that the
provisions hereof shall apply to every transfer or assignment made of the
security to a new Owner. Tenant further covenants that it will not assign or
encumber or attempt to assign or encumber the monies deposited herein as
security and that neither Owner nor its successors or assigns shall be bound by
any such assignment, encumbrance, attempted assignment or attempted encumbrance.
* See Rider.
Captions: 33. The Captions are inserted only as a matter of convenience and for
reference and in no way define, limit or describe the scope of this lease nor
the intent of any provision thereof.
Definitions: 34. The term "Owner" as used in this lease means only the owner of
the fee or of the leasehold of the building, or the mortgagee in possession, for
the time being of the land and building (or the owner of a lease of the building
or of the land and building) of which the demised premises form a part, so that
in the event of any sale or sales of said land and building or of said lease, or
in the event of a lease of said building, or of the land and building, the said
Owner shall be and hereby is entirely freed and relieved of all covenants and
obligations of Owner hereunder, and it shall be deemed and construed without
further agreement between the parties or their successors in interest, or
between the parties and the purchaser, at any such sale, or the said lessee of
the building, or of the land and building, that the purchaser or the lessee of
the building has assumed and agreed to carry out any and all covenants and
obligations of Owner hereunder. [14a] The words "re-enter" and "re-entry" as
used in this lease are not restricted to their technical legal meaning. The term
"rent" includes the annual rental rate whether so expressed or expressed in
monthly installments, and "additional rent." "Additional rent" means all sums
which shall be due to Owner from Tenant under this lease, in addition to the
annual rental rate. The term "business day" as used in this lease shall exclude
Saturdays, Sundays and all days observed by the State or Federal Government as
legal holidays and those designated as holidays by the applicable building
service upon employees service contract or by the applicable Operating Engineers
contract with respect to HVAC service. Wherever it is expressly provided in this
lease that consent shall not be unreasonably withheld, such consent shall not be
unreasonably [15] delayed.
Adjacent
Excavation-
Shoring: 35. If an excavation shall be made upon land adjacent to the demised
premises, or shall be authorized to be made, Tenant shall afford to the person
causing or authorized to cause such excavation license to enter upon the demised
premises for the purpose of doing such work as said person shall deem necessary
to preserve the wall or the building of which demised premises form a part from
injury or damages and to support the same by proper foundations without any
claim for damages or indemnify against Owner, or diminution or abatement of
rent.
Rules and
Regulations: 36. Tenant and Tenant's servants, employees, agents, visitors and
licensees shall observe faithfully and comply strictly with the Rules and
Regulations annexed hereto and such other and further Rules and Regulations as
Owner or Owner's agents may from time to time adopt. Notice of any additional
rules or regulations shall be given in such matter as Owner may elect. In case
Tenant disputes the reasonableness of any additional Rule or Regulation
hereafter made or adopted by Owner or Owner's agents, the parties hereto agree
to submit the question of the reasonableness of such Rule or Regulation for
decision to the New York office of the American Arbitration Association, whose
determination shall be final and conclusive upon the parties hereto. The right
to dispute the reasonableness of any additional Rule or Regulation upon Tenant's
part shall be deemed waived unless the same shall be asserted by service of a
notice, in writing upon Owner within fifteen (15) days after the giving of
notice thereof. Nothing in this lease contained shall be construed to impose
upon Owner any duty or obligation to enforce the Rules and Regulations or terms,
covenants or conditions in any other lease, as against any other tenant and
Owner shall not be liable to Tenant for violation of the same by any other
tenant, its servants, employees, agents, visitors of licenses.[15a]
Glass: 37. Owner shall replace, at the expense of the Tenant, any and all plate
and other glass damaged or broken from any cause whatsoever in and about the
demised premises. [15b] Owner may insure and keep insured, at Tenant's expense,
all plate and other glass in the demised premises for and in the name of Owner.
Bills for the premiums therefore shall be rendered by Owner to Tenant at such
times as Owner may elect, and shall be due from, and payable by, Tenant when
rendered, and the amount thereof shall be deemed to be, and be paid, as
additional rent.
Estoppel
Certificate: 38. Tenant, at any time, and from time to time, upon at least 10
days' prior notice by Owner, shall execute, acknowledge and deliver to Owner,
and/or to any other person, firm or corporation specified by Owner, a statements
certifying that this Lease is unmodified in full force and effect (or, if there
have been modifications, that the same is in full force and effect as modified
and stating the modifications), stating the dates to which the rent and
additional rent have been paid, and stating whether or not there exists any
default by Owner under this Lease, and, if so, specifying each such default.
Directory
Board Listing;
Successors
and Assigns: 39. If, at the request of and as accommodation to Tenant, Owner
shall place upon the directory board in the lobby of the building, one or more
names of persons other than Tenant, such directory board listing shall not be
construed as the consent by Owner to an assignment or subletting by Tenant to
such person or persons. The covenants, conditions and agreements contained in
this lease shall be bind and inure to the benefit of Owner and Tenant and their
respective heirs, distributes, executors, administrators, successors, and except
as otherwise provided in this lease, their assigns. Tenant shall look only to
Owner's estate and interest in the land and building for the satisfaction of
Tenant's remedies for the collection of a judgment (or other judicial process)
against Owner in the event of any default by Owner hereunder, and no other
property or assets of such Owner (or any partner, member, officer or director
thereof, disclosed or undisclosed), shall be subject to levy, execution or other
enforcement procedure for the satisfaction of Tenant's remedies under or with
respect to this lease, the relationship of Owner and Tenant hereunder, or
Tenant's use and occupancy of the demised premises.
See Rider annexed hereto and made a part hereof.
In Witness Whereof, Owner and Tenant have respectively signed and sealed this
lease as of the day and year first above written.
Witness for Owner: Moklam Enterprises, Inc., Owner
/s/ Lloyd Shor By: /s/ Raymond H. Yu [L.S]
-------------------------------------------- -----------------------------------------
Raymond H. Yu, President
Witness for Tenant Take-Two Interactive Software, Inc.
--------------------------------------------
/s/ Lloyd Shor By: /s/ Don Leeds [L.S]
-------------------------------------------- -----------------------------------------
Don Leeds, Executive Vice President
|
ACKNOWLEDGEMENTS
CORPORATE TENANT INDIVIDUAL TENANT
STATE OF NEW YORK, ss.: STATE OF NEW YORK, ss.:
County of County of
On this day of , 19 , On this day of , 19 ,
before me personally came , to me before me personally came , to be
known, who being by my duly sworn, known and known t me to be the
did depose and say that he resides individual described in and who, as
in that he is the of the TENANT, executed the foregoing
corporation described in and which instrument and acknowledged to me
executed the foregoing instrument, that he executed the same.
as TENANT, that he knows the seal
of said corporation; that the seal
is affixed to said instrument is
such, corporate seal; that it was
so affixed by order of the Board of
Directors of said corporation, and
that he signed his name thereto by
like order.
|
IMPORTANT - PLEASE READ
RULES AND REGULATIONS ATTACHED TO AND
MADE A PART OF THIS LEASE IN ACCORDANCE
WITH ARTICLE 36.
1. The sidewalks, entrances, driveways, passages, courts, elevators,
vestibules, stairways, corridors or halls shall not be obstructed or encumbered
by any Tenant or used for any purpose other than for ingress or egress from the
demised premises and for delivery of merchandise and equipment in a prompt and
efficient manner using elevators and passageways designated for such delivery by
Owner. There shall not be used in any space, or in the public hall of the
building, either by any Tenant or by jobbers or others in the delivery or
receipt of merchandise, any hand trucks, except those equipped with rubber tires
and sideguards. If said premises are situated on the ground floor of the
building, Tenant thereof shall further, at Tenant's expense, keep the sidewalk
and curb in front of said premises clean and free from ice, snow, dirt and
rubbish.
2. The water and wash closets and plumbing fixtures shall not be used
for any purposes other than those for which they were designed or constructed
and no sweepings, rubbish, rags, acids or other substances shall be deposited
therein, and the expense of any breakage, stoppage, or damage resulting from the
violation of this rule shall be borne by the Tenant who, or whose clerks,
agents, employees or visitors, shall have caused it.
3. No carpet, rug or other article shall be hung or shaken out of any
window of the building; and no Tenant shall sweep or throw or permit to be swept
or thrown from the demised premises any dirt or other substances into any of the
corridors of halls, elevators or out of the doors or windows or stairways of the
building and Tenant shall not use, keep or permit to be used or kept any foul or
noxious gas or substance in the demised premises, or permit or suffer the
demised premises to be occupied or used in a manner offensive or objectionable
to Owner or other occupants of the buildings by reason of noise, odors, and or
vibrations, or interfere in any way, with other Tenants or those having business
therein, nor shall any bicycles, vehicles, animals, fish, or birds be kept in or
about the building. Smoking or carrying lighted cigars or cigarettes in the
elevators of the building is prohibited.
4. No awnings or other projections shall be attached to the outside
walls of the building without the prior written consent of Owner.
5. No sign, advertisement, notice or other lettering shall be
exhibited, inscribed, painted or affixed by any Tenant on any part of the
outside of the demised premises or the building or on the inside of the demised
premises if the same is visible from the outside of the demised premises without
the prior written consent of Owner, except that the name of Tenant may appear on
the entrance door of the premises. In the vent of the violation of the foregoing
by any Tenant, Owner may remove same without any liability and may charge the
expense incurred by such removal to Tenant or Tenants violating this rule.
Interior signs on doors and directory tablet shall be inscribed, painted or
affixed for each Tenant by Owner at the expense of such Tenant, and shall be of
a size, color and style acceptable to Owner.
6. See Rider
7. No additional locks or bolts of any kind shall be placed upon any of
the doors or windows by any Tenant, nor shall any changes be made in existing
locks or mechanism thereof.[16] Each Tenant must, upon the termination of his
Tenancy, restore to Owner all keys of stores, offices and toilet rooms, either
furnished to, or otherwise procured by, such Tenant, and in the event of the
loss of any keys, so furnished, such Tenant shall pay to Owner the cost thereof.
8. Freight, furniture, business equipment, merchandise and bulky mater
of any description shall be delivered to and removed from the premises only on
the freight elevators and through the service entrances and corridors, and only
during hours and in a manner approved by Owner. Owner reserves the right to
inspect all freight to be brought into the building and to exclude from the
building all freight which violates any of these Rules and Regulations of the
lease of which these Rules and Regulations are a part.
9. Canvassing, soliciting and peddling in the building is prohibited
and each Tenant shall cooperate to prevent the same. See Rider
10. Owner reserves the right to exclude from the building all persons
who do not present a pass to the building signed by Owner. Owner will furnish
passes to persons for whom any Tenant requests same in writing. Each Tenant
shall be responsible for all persons for whom he request such pass and shall be
liable to Owner for all acts of such persons. Tenant shall no have a claim
against Owner by reason of Owner excluding from the building any person who does
not present such pass.
11. Owner shall have the right to prohibit any advertising by any
Tenant which in Owner's opinion, tends to impair the reputation of the building
or its desirability as a loft building, and upon written notice from Owner,
Tenant shall refrain from or discontinue such advertising. See Rider
12. Tenant shall not bring or permit to be brought or kept in or on the
demised premises, any inflammable, combustible, or explosive, or hazardous
fluid, material, chemical or substance, or cause or permit any odors of cooking
or other processes, or any unusual or other objectionable odors to permeate in
or emanate from the demised premises. See Rider
13. Tenant shall not use the demised premises in a manner which
disturbs or interferes with other Tenants in the beneficial use of their
premises.
See additional rules and regulations in Rider.
Address 622 Broadway
New York, New York
Premises Entire Fourth, Fifth and Sixth Floors
|
Moklam Enterprises, Inc.
TO
Take Two Interactive
Software, Inc.
STANDARD FORM OF
LOFT
LEASE
Dated July 1, 2002
Inserts to Printed Portion of Lease
Owner: Moklam Enterprises, Inc.
Tenant: Take-Two Interactive Software, Inc.
Premises: Entire Fourth, Fifth and Sixth Floors
622 Broadway
New York, New York
Date of Lease: July 1, 2002
|
1. Notwithstanding anything to the contrary in this Lease, (a) without
limitation of the provisions of Section 49.8 and 49.9 below, Owner
shall have the right, exercisable by notice given to Tenant no later
than twenty (20) days prior to the date of expiration or termination of
this lease, to require Tenant to remove any fixtures, paneling,
partitions, railings or other installations installed in the Premises
at any time, either by Tenant or by Owner on Tenant's behalf, which (i)
are not readily usable for an ordinary office tenancy or (ii) which are
required to be removed by Tenant pursuant to any specific provision of
this Lease including, without limitation, the provisions of Article 49
below. Any removal and/or restoration obligations of Tenant under or
pursuant to this Lease shall be satisfied by Tenant paying to Owner, as
Additional Rent, the actual cost of such removal and/or restoration
work as incurred by Owner (if Owner or any other party shall actually
perform any such removal and/or restoration work) or otherwise in
accordance with the provisions of Section 49.9 below.
1a. , except that Tenant shall be responsible for the repair and
maintenance of the roof deck.
1b. (except if and to the extent caused by the negligence or willful
misconduct of Owner or its agents or employees.
1c. Notwithstanding anything herein to the contrary, Tenant shall not be
required to make any repairs (whether structural or non-structural) if
and to the extent same are necessitated solely by the negligence or
willful misconduct of Owner or its agents or employees.
1d. except as may be otherwise specifically set forth in this Lease.
2. Notwithstanding anything to the contrary set forth in this Lease, if
all or at least 8,000 rentable square feet of the Premises shall become
untenantable at one time for a period exceeding ten (10) consecutive
business days due solely to (a) Owner's default under this Lease or (b)
Owner's performance of repairs, alterations, additions or improvements
to the Building other than (i) emergency repairs, (ii) work required to
restore the Building after a casualty or (iii) other work required by
applicable law or otherwise necessitated by reasons outside of Owner's
control, then provided that Tenant is not in default under any
provision of the Lease (after notice and the expiration of any
applicable cure period which are specifically provided for in this
Lease with respect to such default, if any), Tenant will be entitled to
a pro-rata abatement of Fixed Rent (as such term is hereinafter
defined) (based upon the relative rentable square footage area of the
portion of the Premises rendered untenantable) commencing on the day
after the expiration of the aforementioned ten (10) business day period
until such time as the Premises shall again become tenantable. However,
in no event will the aforementioned abatement in Fixed Rent be
applicable if any repairs, alterations, additions or improvements
performed by Owner arise out of Tenant's breach of its repair or other
obligations under this lease.
2a. (i) particular use of the demised premises (in contradiction merely to
Tenant's particular manner of use of the demised premises) and/or (ii)
default under any of the provisions of this Lease.
3. reasonable.
3a. Except as hereinafter set forth, Tenant shall be required to perform,
at Tenant's sole cost and expense, any improvements, repairs,
additions, alterations or change required to be made to the demised
premises or the building by reason of any departmental or governmental
regulation, order or law, including, but not limited to, disabilities
laws and regulations, if the same are required by reason of Tenant's
permitted use of the demised premises or if same arise out of Tenant's
negligence, willful misconduct or tortious acts or omissions or out of
Tenant's breach of any of the provisions of this lease or of applicable
laws, codes, rules or regulations. However, Tenant shall not be liable
for any increase in insurance premiums so long as Tenant properly
utilizes the demised premises in accordance with the permitted use of
the demised premises pursuant to this lease and otherwise in accordance
with all applicable laws, codes, rules and regulations.
3b. reasonably
4. negligence, willful misconduct and tortious acts or omissions
5. , contractors
6. Tenant shall not be obligated to indemnify Owner against any injury to
persons or property, or any loss or damage, arising solely from the
willful misconduct, tortious acts or omissions or negligence of Owner
or Owner's agents, contractors, or employees.
6a. or inaccessible
6b. (or access restored)
7. fifteen (15)
8. If the demised premises or the building is damaged and the demised
premises are rendered untenantable by fire or other casualty, and
Building repairs sufficient to make the Premises tenantable cannot be
(as shall be reasonably determined by Owner), or are not, substantially
completed within a period of ten (10) months after the date of such
casualty, subject to delays by reason of Tenant Delay (hereinafter
defined), or in the event that the demised premises are substantially
damaged and rendered untenantable within the last year of the term and
Building repairs sufficient to make the demised premises tenantable are
not substantially completed within a period of thirty (30) days after
the date of such casualty, subject to delays by reason of Tenant Delay
or force majeure, then and in either of such events only, Tenant shall
have the right to terminate this lease by written notice (registered or
certified mail, return receipt requested) given to Owner given no later
than fifteen (15) days after either (i) the date of Owner's
determination of the inability to make such repairs or (ii) the
expiration of the aforementioned periods of ten (10) months or thirty
(30) days, as the case may be, time being of the essence, specifying a
date not less than thirty (30) days therefrom for the expiration of the
term of this lease. In the event of such termination of this lease, all
Fixed Rent and Additional Rent (as hereinafter defined) shall be paid
up to the date of such casualty. If Tenant disputes Owner's
determination, such dispute shall be submitted to and determined by an
independent structural engineer. The fees and expenses of the engineer
shall be borne by the party against whom a determination shall be
rendered.
9. Except in the event of an emergency and except as otherwise provided in
Article 52 and Section 92.15 below, (i) Owner will provide Tenant with
reasonable notice (which may be telephonic) and (ii) Owner's access to
the demised premises shall be limited to normal business hours
accompanied by a representative of Tenant (if such a representative is
available).
9a. Except in an emergency, in connection with work performed by Owner
pursuant to Articles 4, 13 and 20, if any, Owner shall use commercially
reasonable efforts to avoid unreasonable interference with Tenant's use
and occupancy of the demised premises and its access thereto, to the
extent practicable. Owner shall perform its work with reasonable
diligence [subject to Tenant Delay (hereinafter defined) and force
majeure] and in a good, workmanlike manner. However, nothing contained
in this insert or elsewhere in this Lease shall obligate Owner to use
overtime labor or incur any other additional cost, expense or liability
to perform any work, Upon the completion of such work, the usable area
of the demised premises shall not have been reduced (except to an
immaterial extent) and. to the extent reasonably practicable, Owner
shall restore the portions of the demised premises affected by such
work to substantially the condition they were in immediately prior to
the performance of such work. Owner shall not make any additions,
alterations or improvements to the demised premises that are not
necessary but merely desirable, unless the same are desired by Owner in
order to improve the functioning or appearance of the Building and/or
any building systems or to reduce the cost of operation thereof.
10. In the event of an emergency, Owner will endeavor to call Tenant's
emergency contact (to the extent Owner has been previously notified in
writing of such contact) if a representative of Tenant is not available
to permit entry into the Premises; provided, however, that Owner's
failure to call such emergency contact shall not be deemed a breach by
Owner under this lease.
10a. Owner represents that a true copy of the certificate of occupancy for
the Building is annexed hereto.
10b. abandoned
11. if, in each instance, such default has not been cured by Tenant within
the applicable cure period, if any, specifically provided for in this
lease with regard to such default.
11a. Unless required by applicable laws, codes, ordinances, rules or
regulations or the requirements of any governmental or municipal
agency, Owner agrees that Owner's right to change the arrangement
and/or location of the foregoing shall not decrease the usable area of
the demised premises other than to an immaterial extent or unreasonably
impair Tenant's ingress to or egress from the demised premises.
12. either Owner or Tenant
13. the failure of Owner
13a. unless Tenant's failure to impose such counterclaim would result in a
waiver of Tenant's right to assert same.
14. Owner shall not apply the cash security deposit (if any), or draw down
or apply the proceeds of the letter of credit to be posted by Tenant,
to cure any default unless Tenant has failed to cure such default
within the applicable cure period which is specifically provided for in
this lease with respect to such default, if any.
14a. Owner shall not be relieved of liability for any bona fide claim
properly asserted by Tenant against Owner arising out of this Lease
before the date of such sale if the purchaser shall have no liability
to Tenant with respect to such claim, either contractually or as a
matter of law.
15. conditioned or
15a. All rules and regulations shall be enforced by Owner in a
non-discriminatory manner, and in the event of any conflict between the
rules and regulations and the substantive provisions of this lease, the
substantive provisions of this lease shall control.
15b. If Tenant shall fail to do so,
16. unless Owner is given a master key thereto.
RIDER TO LEASE DATED AS OF JULY l, 2002
BETWEEN MOKLAM ENTERPRISES, INC., OWNER,
AND TAKE-TWO INTERACTIVE SOFTWARE, INC., TENANT,
IN RESPECT OF THE ENTIRE FOURTH, FIFTH AND SIXTH FLOORS
IN THE BUILDING KNOWN AS 622 BROADWAY, NEW YORK, NEW YORK
40. Provisions of Rider
If any of the provisions of this rider conflict or are otherwise
inconsistent with any of the printed provisions of this Lease, or with any of
the rules and regulations appended to this Lease, the provisions of this rider
shall prevail and be binding. Any capitalized term contained in this rider shall
have the definition assigned to such term in this Lease, unless otherwise
indicated.
41. Binding Effect
Submission by Owner of the within Lease for execution by Tenant shall
confer no rights nor impose any obligations on either party unless and until
both Owner and Tenant shall have executed this Lease and duplicate originals
thereof shall have been delivered to the respective parties or their respective
attorneys.
42. Certain Definitions
For purposes of this Lease, unless the context otherwise requires, the
terms defined below shall have the meanings hereinafter specified, whenever such
terms are utilized in this Lease:
42.1. The term "Premises" shall refer to the demised premises. The
Premises shall also include the roof deck, as more particularly described in
Exhibit C annexed hereto and made a part hereof. Except for the roof deck, in no
event shall the Premises be deemed to include any exterior portion of the
Building (including, without limitation, the flagpole on the Broadway side of
the Building) or any interior area in the Building other than the interior
fourth, fifth and sixth floor areas of the Building.
42.2. The term "Building" shall refer to the building of which the
Premises form a part and, for the purposes of Article 74, shall include the land
("Land") on which the Building is situated.
42.3. The term "Fixed Rent" shall mean rent at the annual rental rate
provided for in Article 63 of this rider.
42.4. The term "Additional Rent" shall mean all sums of money, other
than Fixed Rent, as shall become due and payable from Tenant to Owner hereunder
or under or pursuant to any other agreement or understanding between Owner and
Tenant relating to the Premises, and Owner shall have the same remedies for the
nonpayment thereof as for the nonpayment of Fixed Rent. Unless otherwise
specified herein, Additional Rent shall be due and payable to Owner on the date
which shall be fifteen (15) days after Tenant shall have been billed therefor.
42.5. The term "Rent" or "Rents" shall mean Fixed Rent and Additional
Rent.
42.6. The term "Commencement Date" shall mean July 1, 2002.
42.7. The term "Tenant Delay", and words of like import, means any
delay which Owner may encounter in the performance of Owner's obligations
hereunder by reason of any act or o mission of any nature of Tenant, its
employees, agents or contractors, including, without limitation, delays by
Tenant in submission of information or giving authorizations or approvals and
delays by Tenant in performing Tenant's work.
42.8. The term "obligations of this Lease" and words of like import,
shall mean the covenants to pay Fixed Rent and Additional Rent under this Lease
and all of the other covenants and conditions contained in this Lease. Reference
to "performance" of Tenant's obligations under this Lease shall be construed as
"performance and observance".
42.9. Reference to Tenant being "in default hereunder", and words of
like import, shall mean that Tenant is in default in the performance of one or
more of Tenant's obligations hereunder, or that a condition of the character
described in Article 17 has occurred and is continuing. Wherever in this Lease
(i) Tenant's right to exercise any option, right or privilege or (ii) any
limitation on Owner's right to Recapture is conditioned upon Tenant's not being
in default under this Lease after notice and the expiration of any applicable
cure period which are specifically provided for in this Lease with respect to
such default, if any, then solely for purposes of such provision only, Tenant
shall not be deemed to be in default in the payment of Fixed Rent or Additional
Rent unless Owner shall have given Tenant a notice of such default and Tenant
shall not have cured such default within five (5) days after the date such
notice shall be given. However, in no event shall the provisions of the
immediately preceding sentence be applicable or effective for any other
purpose(s) under this Lease including, without limitation, (i) the provisions of
Articles 17, 18 and 51 of this Lease or any provisions of applicable law
relating to Owner's rights and remedies in the event of Tenant's failure to
timely pay any Fixed Rent or Additional Rent under this Lease and (ii) the
provisions of Section 63.4 of this Lease.
42.10. The words "include", "including" and" such as" shall each be
construed as if followed by the phrase "without being limited to".
42.11. The words "herein", "hereof', "hereby", "hereunder" and words of
similar import shall be construed to refer to this Lease as a whole and not to
any particular Article or subdivision thereof unless expressly so stated.
42.12. The word "alterations" shall refer to alterations,
installations, additions, improvements, demolition and other work as set forth
in Articles 3 and 44 and elsewhere in this Lease.
42.13. The terms "Owner" and "Landlord" may be used interchangeably in
this Lease.
42.14. Words and phrases used in the singular shall be deemed to
include the plural and vice versa and nouns and pronouns used in any particular
gender shall be deemed to include any other gender if the context so requires.
42.15. The rule of "ejusdem generis" shall not be applicable in the
construction of this Lease to limit a general statement following or referable
to an enumeration of specific matters, to matters similar to the matters
specifically mentioned.
42.16. If Tenant is comprised of more than one party, then each of the
parties constituting Tenant under this Lease shall be jointly and severally
liable for the observance and performance of all of Tenant's covenants and other
obligations under and/or pursuant to this Lease.
42.17. All references in this Lease to numbered Articles and lettered
Exhibits and Schedules are references to Articles of this Lease and Exhibits and
Schedules annexed to (and thereby made part of) this Lease, as the case may be,
unless expressly otherwise designated in the context.
43. Occupancy (Supplementing Article 2)
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43.1. Tenant shall be permitted to use and occupy the Premises solely
for general and executive offices only and for no other purpose whatsoever.
Tenant's use of the Premises shall at all times be strictly in accordance with
the terms of this Lease. The use of the Premises for the purposes specified in
Article 2 and this Article 43 shall not in any event be deemed to include, and
Tenant shall not use, or permit the use of, the Premises or any part thereof for
(a) any activity which might, in Owner's reasonable opinion, damage the Premises
or the Building or unreasonably annoy, interfere with or disrupt other tenants
or occupants of the Building; (b) the sale of any merchandise, except solely for
wholesale sales of Tenant's products to the trade only, conducted principally by
means of telephone, computer or other electronic media and not by means of
walk-ins; (c) the sale, storage, handling or furnishing of any materials which
are flammable or explosive or the storage of which would cause the rate of
insurance for the Building to be increased; (d) a shared health facility, clinic
or center, drug or other substance rehabilitation facility, clinic or center or
a commercial laboratory; (e) for any improper or immoral purposes including,
without limitation, the display or sale of any items which are or may be
regarded as obscene or pornographic and Tenant shall not bring or permit any
obscene or pornographic material on the Premises; provided, however, that with
regard solely to the original named Tenant under this Lease (i.e., Take-Two
Interactive Software, Inc.) and any of its affiliates and successors as referred
to in Section 49.2 below, the provisions of this clause (e) shall only be
applicable to items or material which shall be illegal under any current or
future federal, state or local laws, codes, ordinances, rules or regulations;
(f) the providing of massages or other types of physical therapy; (g) filming,
recording or otherwise creating any video, audio, television, cable or any other
type of commercials, programs, shows, films or recordings, whether on video,
film, tape, compact disc, DVD or any form of computer or other media, for
general public or private viewing, or any other rehearsal or studio use;
provided, however, that the restrictions set forth in this clause (g) shall not
be applicable to the original named Tenant under this Lease (i.e., Take-Two
Interactive Software, Inc.) or any of its affiliates or successors as referred
to in Section 49.2 below, but only if and so long as such party's activities
described in this clause (g) are conducted solely on the fifth and/or sixth
floors of the Premises (except that software development can be conducted by the
original named Tenant and any of its affiliates and successors as referred to in
Section 49.2, on the fourth, fifth and sixth floors) and shall not cause
annoyance or disturbance to any other tenants or occupants of the Building; (h)
any parties, recitals, benefits, shows, functions, seminars, openings or social
gatherings, except solely that, subject to the terms and conditions set forth in
Section 43.7 below, Tenant shall be permitted to conduct parties in the
Premises; (i) aerobics, skating (with roller skates, roller blades or any other
form of skating), exercise or dance classes of any kind, or any similar
activity; (j) a restaurant, bar, cabaret, nightclub, social club, fast food
establishment, delicatessen, coffee bar, coffee shop or any other type of food
and/or drink establishment (however, as an incidental permitted use of the
Premises, Tenant shall be permitted to serve its employees and clients food and
beverages in the Premises from time to time as is customary for office tenants
in the New York metropolitan area); (k) any use which shall involve the
handling, generation, storage or disposal of any quantity of medical waste or
hazardous materials of any nature; or (1) residential use or occupancy.
43.2. Owner shall have the absolute right to prohibit the continued use
by Tenant of any unethical, unfair or improper method of advertising or display
which is visible from outside of the Premises if, in Owner's reasonable opinion,
the continued use thereof would impair the reputation of the Building or is
otherwise out of harmony with the general character thereof, and, upon notice
from Owner, Tenant shall forthwith refrain from or discontinue such activities.
Furthermore, Tenant agrees not to (a) use or permit to be used the sidewalks or
other space outside of the Premises or the Building for any display, sale or
similar undertaking or storage or (b) use or permit to be used any loudspeaker,
phonograph, or other sound system which may be heard outside the Premises, (c)
perform or permit any live music of any nature whatsoever to be played or
performed within the Premises, except solely as an incidental use in connection
with Tenant's recording activities pursuant to and subject to the provisions of
Section 43.1(g), or (d) distribute or permit to be distributed handbills or
other matter to persons on either side of Broadway between Bleecker street and
Houston Street.
43.3. This Lease is subject to all of the terms, conditions and
requirements of the certificate of occupancy for the Building, a copy of which
is annexed hereto as Exhibit C-2. Tenant hereby assumes and shall perform, at
Tenant's sole cost and expense, all of the terms, conditions and requirements
under such certificate of occupancy, with respect to the Premises. Owner has
made no representation that the use to be made of the Premises, as specified
herein, is consistent with those uses permitted under such certificate of
occupancy. If such use is inconsistent with said certificate of occupancy,
Tenant shall indemnify and hold Owner harmless from and against any and all
claims, damages, losses, actions, violations, penalties, costs and expenses
(including attorneys' fees) arising out of such inconsistent use. Further, if
the Department of Buildings or other governmental or municipal agency having or
asserting jurisdiction issues a violation or order based on such inconsistent
use, then, at Owner's option, Tenant shall forthwith take such action, at
Tenant's sole cost and expense, but subject in all respects to Owner's
reasonable prior written approval, as may be necessary to secure an amended
certificate of occupancy conforming with Tenant's use of the Premises.
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43.4. Tenant shall conduct Tenant's business using special care and
precaution so as not to cause annoyance, discomfort and/or injury to the other
occupants and users of the Building and shall not do or omit to do anything
which would adversely affect the proper operation or appearance of the Building.
Tenant will not permit any garbage or refuse to accumulate within the Premises
or within any other portion of the Building or be kept in other than sealed
containers or be placed on the sidewalk in front of (the Broadway side) or at
the rear (the Crosby Street side) of the Building at any time of the day or
night. Owner shall have the right to establish additional non-discriminatory
rules and regulations concerning the storage and removal of Tenant's garbage and
refuse effective upon notice thereof to Tenant. Tenant, at its sole cost and
expense, shall comply with all present and future laws, orders and regulations
of all federal, state, municipal and local governments, departments, commissions
and boards regarding the collection, sorting, separation and recycling of waste
products, garbage, refuse and trash. Tenant, at Tenant's sole cost and expense,
shall sort and separate such waste products, garbage, refuse and trash into such
categories and cause same to be placed in separate receptacles as provided by
law. Tenant shall have all of its garbage and refuse properly collected, sorted,
bagged and separated in proper receptacles and placed next to the freight
elevator on the Crosby Street side of the Building on each floor of the Premises
or, with respect to the roof deck, the freight elevator on the Crosby Street
side of the Building on the sixth floor of the Premises (or such other
location(s) as shall hereafter be designated by Owner) by no later than 6:45
P.M. on each business day. Such garbage and refuse shall be removed from the
Premises between the hours of approximately 7:00 P.M. to 11:00 P.M. of each
business day by Building personnel at Tenant's expense (to be billed to Tenant
monthly as Additional Rent). In that regard, Tenant shall pay on a monthly
basis, as Additional Rent, an amount equal to Owner's actual cost of carting or
otherwise disposing of garbage and refuse for the Premises. However,
notwithstanding the foregoing, the removal of any garbage or refuse generated by
Tenant other than ordinary quantities of typical office refuse, such as, without
limitation, construction debris, medical or other hazardous waste, furniture or
equipment, and garbage and refuse removal other than at the times indicated
above, shall be at Tenant's sole cost and expense, at rates to be determined by
Owner. Owner shall have the right to establish revised and/or reasonable
additional rules and regulations concerning the storage, bagging, sorting and
removal of Tenant's garbage and refuse in Owner's reasonable discretion,
effective upon notice thereof to Tenant. Tenant, at Tenant's sole cost and
expense, shall, if reasonably deemed necessary by Owner, employ a permanent,
scheduled and effective exterminating service for the Premises.
43.5. Tenant, at its sole cost and expense, shall fully and timely
comply with the following (hereinafter sometimes collectively referred to as
"Legal Requirements"): (i) all laws, statutes and ordinances (including, without
limitation, building codes, zoning regulations a nd ordinances, environmental
laws and ordinances [e.g., New York City Local Law 76, as amended], disabled
persons/handicapped access laws and ordinances [e.g., Americans with
Disabilities Act, as amended, and New York City Local Law 58, as amended]) and
the orders, rules, regulations, directives and requirements of all federal,
state, county, municipal, city and borough departments, bureaus, boards,
agencies, offices, commissions and other subdivisions thereof, or of any
official thereof, or of any other governmental, public or quasi-public
authorities, whether now or hereafter in force, which may be applicable to
Tenant's particular use of the Premises or any alterations therein; and (ii) all
requirements, obligations and conditions of all instruments of record on the
date of this Lease. However, Tenant shall not be obligated to comply with any
provision of any mortgage or other document of record (other than any
subordination, non-disturbance and attornment agreement, or any similar or
related agreement, to which Tenant is or shall hereafter become a party) if it
is inconsistent with the comparable provision set forth in this Lease, if any.
43.6. During the term of this Lease, Tenant shall not: (a) conduct or
permit any fire, bankruptcy, auction or "going out of business sale" (whether
real or fictitious) in the Premises; (b) use, or permit to be used, the sidewalk
adjacent to, or any other space outside the Premises for display, sale or any
other similar undertaking; (c) use or permit to be used, any advertising medium,
and/or loud speaker, and/or sound amplifier, and/or radio or television
broadcast which may be heard outside the Premises; (d) use the plumbing
facilities for any purpose other than that for which they were constructed, or
dispose of any garbage or other foreign substance therein, whether through the
utilization of so-called "disposal" or similar units or otherwise; (e) perform
any act or carry on any practice which may damage, mar or deface the Premises or
any other part of the Building; (f) operate on the Premises or in any part of
the Building any vending machine (other than for food, beverages or candy) or
similar device (including, without limitation, pay telephones, pay lockers, pay
toilets, scales (except for postage scales) and machines for the sale or
dispensing of cigarettes); (g) install any awnings in or on the Premises which
are visible to public view outside the Premises, without Owner's prior written
approval; (h) install, operate or maintain in the Premises any electrical
equipment which will overload the electrical system therein, or otherwise
suffer, allow or permit the same to constitute a nuisance or otherwise interfere
with the safety, comfort or convenience of Owner or any of the other occupants
of the Building or their customers, agents or invitees; (i) suffer, allow or
permit the erection or display in, on or from the Premises of any exhibits,
banners, decorations, flags, bunting or any other similar kind or form of
description or display without Owner's prior written consent in each instance,
except solely that Tenant may display exhibits, banners and decorations within
the Premises that are not visible to public view from the exterior of the
Building; (j) permit any business to be operated in or from the Premises by any
concessionaire or licensee without the prior written consent of Owner in each
instance except in accordance with the applicable provisions of Article 49
below; (k) permit any bottled water or other supplies to be delivered to or
removed from the Premises by any means other than by the freight elevator; and
(1) subject any fixtures or equipment in or on the Premises which are affixed to
the realty, to any mortgages, liens, conditional sales agreements, security
interests or encumbrances.
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43.7. The following terms and conditions shall apply to each office
party permitted by clause (h) of Section 43.1 above: (a) Tenant shall furnish
Owner with not less than five (5) business days' prior notice of such party; (b)
Tenant's scheduling of the party shall not conflict with any party(s) or other
event(s) which shall have been previously scheduled by any other tenant of the
Building; (c) Tenant shall provide adequate security for such party to Owner's
reasonable satisfaction; (d) Tenant shall not be permitted to conduct more than
one (1) party during any calendar month; and (e) without limitation of the
provisions of clause (c) above, if the party shall be attended by more than
fifty (50) persons (other than Tenant's full-time employees), Tenant shall be
obligated to provide at least one (1) bonded and insured security guard for each
floor of the Premises in which such party shall be conducted. If Tenant so
requests, Owner may, at its discretion, furnish such security guard()s) at
Tenant's expense, in an amount reasonably established by Owner. In such event,
any security guard(s) provided by Owner at tenant's request shall be provided by
Owner during such time(s) and at such location(s) as Owner shall determine;
provided, however, that Owner shall have no liability whatsoever relating to the
security of the Premises or the Building, as more particularly set forth in
Article 53 below.
43.8. Tenant shall take whatever actions are necessary so that sound
generated from the Premises shall not disturb other tenants or occupants of the
Building. In the event that any lessee or occupant of the Building reasonably
objects to any sound or noise generated from the Premises, then Tenant, at its
sole cost and expense, shall immediately take whatever actions are necessary, at
Tenant's sole cost and expense, to effectively remediate such disturbing or
objectionable sound or noise, including, without limitation, performing any
necessary alterations to the Premises (subject to and in compliance with the
provisions of Articles 3 and 44 of this Lease and all other applicable
provisions of this Lease). Tenant shall defend, indemnify and hold Owner
harmless from and against any and all claims, losses, liabilities, damages,
demands, actions, causes of action, judgments, costs and expenses, including,
without limitation, reasonable attorneys' fees, disbursements and court costs,
arising from or in connection with any reasonable objection from any other
lessee or occupant of the Building to any sound or noise generated from the
Premises.
43.9. Tenant shall fully comply with the Rules and Regulations set
forth in the printed portion of this Lease as well as with the Additional Rules
and Regulations annexed as Exhibit B to this Lease and by this reference hereby
made a part hereof.
43.10. Tenant acknowledges and agrees that if Tenant shall breach any
of the provisions of this Article 43, Owner shall have no adequate remedy at
law, and consequently, among other remedies for such breach permitted by law or
the provisions of this Lease, Owner shall be entitled to enjoin Tenant from any
violation of said provisions.
44. Alterations (Supplementing Article 3)
44.1. (a) Subject to the provisions of this Article 44 set forth below,
if Tenant desires to perform any renovations, decorations, additions,
installations, improvements and/or alterations of any kind or nature in the
Premises during the term of this Lease (hereinafter called "Tenant's Work"),
Tenant shall submit to Owner final and complete dimensioned and detailed plans
and specifications therefor (hereinafter sometimes referred to as "Tenant's
Plans") for Owner's prior written approval. Without limitation of the provisions
of this Article 44 or any other provisions of this Lease, Tenant's Plans shall,
at a minimum, contain all of the information referred to in and shall otherwise
fully comply with the provisions set forth in Annex I which is annexed to this
Lease and by this reference made a part hereof. Owner shall provide Tenant with
its comments on the proposed work as set forth in Tenant's Plans submitted to
Owner within approximately ten (10) business days after Owner's receipt of
Tenant's Plans, and Tenant shall provide Owner with revised Tenant's Plans at
least three (3) business days prior to the commencement of Tenant's Work
incorporating all of Owner's comments. Tenant acknowledges and agrees that any
review or approval by Owner of Tenant's Plans shall be solely for Owner's
benefit, and that such review and approval shall be without any representation,
warranty or liability whatsoever to Tenant or any other person with respect to
the adequacy, correctness or sufficiency of Tenant's Plans, or whether Tenant's
Plans are in compliance with all applicable laws, codes, ordinances, rules and
regulations, or otherwise. Tenant shall not commence any of Tenant's Work unless
and until Tenant shall have received Owner's final written approval of Tenant's
Plans with all of Owner's reasonable comments to Tenant's Plans incorporated
therein. Tenant shall pay to Owner, as Additional Rent and within fifteen (15)
days after being billed therefor, any out-of-pocket charges or expenses Owner
may reasonably incur in reviewing Tenant's plans and/or ensuring compliance
therewith.
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(b) Owner shall not unreasonably withhold, delay or condition its
consent to any proposed items of Tenant's Work (except for Tenant's Work which
shall affect the exterior of the Building or any portion of the Building other
than the Premises), and, except as otherwise specifically provided in this
Lease, Owner's consent shall not be required for any purely cosmetic Tenant's
Work (such as painting and wallpapering) performed subsequent to the performance
of Tenant's Initial Work of which Owner has received not less than ten (10)
days' advance notice from Tenant. Floor coverings (other than rugs) shall not be
deemed to be cosmetic and shall require Owner's prior written consent as
aforesaid. Owner's consent to floor coverings may be conditioned upon Tenant's
undertaking to remove the floor covering and restore the floor to Owner's
reasonable satisfaction prior to the expiration or earlier termination of the
term of this Lease.
(c) If Owner and Tenant cannot agree on the scope, nature or
manner of Tenant's Work or any other matter relating to Tenant's Work or
Tenant's Plans, the reasonable determination of Owner shall prevail. However, if
Tenant shall nevertheless elect to dispute or challenge any such determination
by Owner as being unreasonable, Tenant's sole and exclusive remedy shall be to
elect to submit such dispute to an independent structural engineering firm to be
selected by Owner from the list set forth on Annex II which is annexed to this
Lease (the "Independent Structural Engineer"). The Independent Structural
Engineer selected by Owner shall not then be under retention by Owner. Such
election by Tenant must be made by notice given to Owner within fifteen (15)
days after the date of Owner's determination, time being; of the essence,
failing which Tenant shall have no other or further right to dispute or
challenge such determination by Owner. If Tenant shall timely and properly make
such election, then the issue as to whether Owner's determination was reasonable
or unreasonable shall be submitted to the Independent Structural Engineer, who
shall be requested to render a determination within thirty (30) days thereafter.
If the Independent Structural Engineer shall determine that Owner's
determination as to the item of Tenant's Work in issue was reasonable, then all
of the fees, costs and expenses charged by the Independent Structural Engineer
in connection with making such determination shall be borne and paid for solely
by Tenant. If the Independent Structural Engineer shall determine that Owner's
determination as to the matter in issue was unreasonable, then all of the fees,
costs and expenses charged by the Independent Structural Engineer shall be borne
and paid for solely by Owner. Any advance payment or deposit required by the
Independent Structural Engineer shall be paid in advance equally by Owner and
Tenant, subject to the foregoing. The determination of the Independent
Structural Engineer shall be conclusive and binding on both Owner and Tenant.
(d) Following compliance by Tenant with its obligations under
this Section 44.1, Tenant shall commence Tenant's Work and diligently proceed to
complete same, within a reasonable period of time, in a good and workerlike
manner, strictly in compliance with Tenant's Plans as finally approved by Owner
and using only first-class materials.
44.2. Tenant shall not commence any Tenant's Work unless and until
Tenant's Plans covering such Tenant's Work shall have been submitted to and
finally approved by Owner in writing pursuant to the provisions of Section 44.1
above. Additionally, before commencement of Tenant's Work, Tenant shall:
44.2.1 Obtain and deliver copies to Owner of all necessary
approvals, consents, authorizations, permits and licenses relating to Tenant's
Work from any and all federal, state and/or municipal agencies, departments and
authorities having or asserting jurisdiction over Tenant's Work, the Building
and/or the Premises;
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44.2.2 Furnish to Owner a certificate or certificates of Worker's
Compensation Insurance covering all persons who will perform Tenant's Work for
Tenant or for any contractor, subcontractor or other person; and
44.2.3 Furnish to Owner an original policy of comprehensive
general public liability and property damage insurance covering Owner with a
broad form contractual liability endorsement with a minimum combined single
limit of liability with respect to each occurrence and in the aggregate in an
amount of not less than five million ($5,000,000.00) dollars for injuries and/or
deaths and for property damage. Each insurance company issuing such insurance
shall be responsible, authorized to issue the relevant insurance coverage,
authorized to do business in New York and have a policyholder's rating of no
less than "A+10" in the most current edition of A.M. Best's Insurance Reports or
its successor. Such policy shall be maintained at all times during the progress
of Tenant's Work and until a date no earlier than thirty (30) days after final
completion thereof, and shall provide that no cancellation shall be effective
unless thirty (30) days' prior written notice shall have been given to Owner by
certified mail, return receipt requested.
44.3. The following provisions shall also apply to Tenant's Work and to
Tenant's
44.3.1 The cost of Tenant's Work shall be paid by Tenant so that
the Premises and the Building shall at all times be free of liens for labor and
materials supplied or claimed to have been supplied. Tenant agrees to indemnify
and save Owner harmless from and against: any and all bills for labor performed
for, and equipment, fixtures and materials furnished to, Tenant; any and all
liens, bills or claims therefor against Owner or against the Premises or the
Building; and all losses, damages, liabilities, costs, expenses (including
attorneys' fees), suits and claims whatsoever in connection with Tenant's Work.
44.3.2 Tenant's Work shall be performed strictly in accordance
with Tenant's Plans, as same shall have been approved by Owner, as well as in
accordance with all applicable laws, codes, rules, regulations and ordinances,
and the approvals, authorizations, consents, permits and licenses required to be
obtained. The contractor or other person(s) performing Tenant's Work shall look
solely to Tenant for payment and shall hold Owner and its officers, directors,
principals, shareholders, agents and employees, the holder(s) of any superior
mortgages or superior leases, the Premises and the Building free from all liens
and claims of all persons furnishing labor or materials therefor, or both.
Partial waivers of the right to file mechanic's liens shall be delivered by each
general contractor or construction manager performing Tenant's Work
simultaneously with each progress payment made to such party. Notwithstanding
anything to the contrary contained in this Article 44 or elsewhere in this
Lease, nothing herein contained shall be construed to be a consent by Owner to
any lien against the fee interest in the Premises or the Building.
44.3.3 At all times during the performance of Tenant's Work
during the term of this Lease, Tenant, at its sole cost and expense, shall
comply with all Legal Requirements as well as with all rules and regulations
promulgated or adopted by Owner.
44.3.4 If the performance of Tenant's Work shall unreasonably
interfere with the comfort and/or convenience of other tenants or occupants of
the Building or adjacent buildings, Tenant, upon Owner's demand, shall
immediately discontinue, remedy or remove the condition or conditions reasonably
complained of. Tenant shall not take any action or perform any act, or permit
the same by any other party, which will violate any of Owner's union contracts
affecting the Building, if any, or create any work stoppage, picketing, labor
disruption or dispute which will interfere with the operation of the Building.
Tenant shall comply with any reasonable work schedule, rules and regulations
proposed by Owner, its agents or employees. Tenant further covenants and agrees
to indemnify and save Owner and its officers, directors, shareholders,
principals, agents and employees harmless from and against any and all claims,
losses, damages, liabilities, penalties, costs, expenses, suits and claims
whatsoever made or asserted against Owner or its officers, directors,
shareholders, principals, agents and employees by reason of the foregoing.
44.3.5 Tenant shall indemnify, defend and save Owner and its
officers, directors, shareholders, principals, agents and employees harmless
from and against any and all losses, damages, liabilities, penalties, costs,
expenses, suits and claims whatsoever incurred by Owner and/or its officers,
directors, shareholders, principals, agents and employees or asserted or imposed
against the Premises or the Building in connection with Tenant's Work, including
bills, claims or liens for labor performed and equipment, fixtures and materials
furnished to Tenant.
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44.3.6 Intentionally Deleted.
44.3.7 Any changes as may be required by any governmental
authority or department affecting any Tenant's Work including, without
limitation, the New York City Landmarks Preservation Commission (the "Landmarks
Commission"), shall be accepted by and complied with by Tenant, at Tenant's sole
cost and expense. However, Tenant shall have the right to contest any such
governmentally required changes (except for changes required by the Landmarks
Commission) subject to the terms and conditions set forth in Article 90 below.
44.3.8 Any architect or designer acting for or on behalf of
Tenant shall be deemed an agent of Tenant duly authorized to bind and act for
Tenant in all respects with respect to Tenant's Work.
44.3.9 Owner shall not be liable for any failure, diminution or
suspension of any Building systems or services arising out of Tenant's Work,
notwithstanding Owner's consent thereto, and Tenant shall promptly correct any
faulty or improper items of Tenant's Work and repair any damage caused thereby.
Upon Tenant's failure to make such corrections and repairs promptly following
such notice as is appropriate in the circumstances (which, for purposes of this
Section, may be oral notice), or without notice in the event of an emergency or
major disruption, Owner may make such corrections and repairs and charge Tenant
for the cost thereof. Such charge shall be deemed Additional Rent and shall be
paid by Tenant within fifteen (15) days after written notice to Tenant of the
amount thereof. Owner shall have the right at all times during any period
Tenant's Work is being performed to have its representatives enter the areas of
the Premises in which Tenant's Work is being performed, for the purpose of
inspection.
44.3.10 During and/or after completion of Tenant's Work, Tenant
shall promptly complete, execute and deliver, and Tenant shall use Tenant's best
efforts to cause Tenant's contractors, subcontractors and materialmen to
promptly complete, execute and deliver, any and all documents which shall be
requested by Owner in connection with any federal, state or local tax,
governmental, municipal or administrative programs relating to the Building,
including, without limitation, the "ICIP" real estate tax benefit program
administered by the New York City Department of Finance. Upon substantial
completion of Tenant's Work, Tenant shall, at Tenant's sole cost and expense,
furnish Owner with copies of all appropriate municipal and governmental
"sign-offs" as to all aspects of Tenant's Work and cause two (2) complete sets
of "as-built" Tenant's Plans to be prepared and delivered to Owner in both "CAD"
and print formats.
44.3.11 Tenant hereby acknowledges having been notified by Owner
that the Building is situated in a district which has been designated as an
historic district by the Landmarks Commission. In accordance with Sections
25-305, 25-306, 25-309 or 25310 of the New York City Administrative Code, and
without limitation of the provisions of Article 3, this Article 44 or any other
provisions contained in this Lease, Tenant must obtain a permit from the
Landmarks Commission prior to commencing any Tenant's Work, except for ordinary
repair and maintenance as such term is defined in subdivision (r) of Section
25302 of the New York City Administrative Code. Such permit, as well as any and
all other approvals or consents as may now or hereafter be required from the
Landmarks Commission, shall be obtained by Tenant at Tenant's sole cost and
expense.
44.4. Notwithstanding anything to the contrary set forth in this Lease,
Owner shall not under any circumstances be liable to pay for any work, labor or
services rendered or materials furnished to or for the account of Tenant upon or
in connection with any Tenant's Work (including, without limitation, Tenant's
Initial Work), and no mechanic's or other liens for work, labor or services
rendered or materials furnished to or for the account of Tenant shall, under any
circumstances, attach to or affect the reversionary or other estate or interest
of Owner in or to the Premises or the Building or in and to any alterations,
repairs or improvements erected or made thereon or therein. Without limitation
of the foregoing, Tenant acknowledges and agrees that the performance of any
Tenant's Work shall be for the sole and exclusive benefit of Tenant and that any
review or supervision by Owner or Owner's representatives of Tenant's Plans or
Tenant's Work is solely for the benefit of Tenant. During the term of this
Lease, Tenant shall not suffer or permit any mechanic's or other liens affecting
the Premises or the Building for work, labor, services or materials rendered or
furnished to or for the account of Tenant upon or in connection with work
performed in or to the Premises. Without limitation of the foregoing, Tenant
shall indemnify and hold Owner harmless from and against all liens or other
charges, of whatsoever nature or description, arising from, or in consequence
of, any alterations or improvements that Tenant shall make, or cause to be made,
in or upon the Premises.
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44.5. Without limitation of the provisions of Section 44.4 above or any
other provisions contained in this Lease, if a notice of mechanic's lien shall
be filed against the Premises or the Building for labor or materials alleged to
have been furnished or to be furnished at the Premises or the Building to or for
Tenant or to or for any party claiming under Tenant, Tenant shall cause such
lien to be discharged or bonded within twenty-five (25) days after the date of
filing of such notice of lien, time being of the essence. If Tenant shall fail
to take such action as shall cause such lien to be discharged or bonded within
twenty-five (25) days after the date of filing of such notice of lien, time
being, of the essence, then without limitation of Owner's other rights and
remedies, Owner may, but shall not be obligated to, pay the amount of such lien
or discharge such lien of record by deposit or by bonding proceeding, and in the
event of such deposit or bonding proceeding, Owner may, but shall not be
required to, require the lienor to prosecute an appropriate action to enforce
the lienor's claim. In such case, Owner may pay any judgment recovered on such
claim. Any amount paid or expense incurred or sum of money paid by Owner by
reason of the failure of Tenant to comply with any provision of this Article, or
in defending any such action, shall be payable by Tenant to Owner as Additional
Rent which shall be due and payable by Tenant to Owner fifteen (15) days after
Tenant shall have been billed therefor.
44.6. Tenant acknowledges and agrees that under no circumstances may
any brick walls be painted by Tenant, nor shall Tenant drill into or otherwise
perform any work upon the brick walls, without first obtaining Owner's written
consent.
44.7. If Owner shall elect to relinquish Owner's rights to Tenant's
installations as provided for in Article 3 above, or if Tenant shall be
obligated to remove any of Tenant's installations and restore the Premises
pursuant to the provisions of Article 49 below or any other applicable
provisions of this Lease, and if in either event Tenant shall fail to remove
such installations and perform such restoration, at Tenant's sole cost and
expense, in a good, workerlike fashion prior to the expiration or earlier
termination of the term of this Lease (or any sublease, as the case may be) and
otherwise in accordance with the provisions of Article 3 and this Article, then
without limitation of Owner's other rights and remedies, Tenant shall be liable
to Owner for the cost of removal of such installations and restoration, as such
cost shall be reasonably estimated by Owner after consultation with any of the
architects referred to in Annex IV annexed hereto which shall not then be under
retention by Owner, and such cost shall be deemed to constitute Additional Rent
and may be deducted from the security deposit. Owner's right to require Tenant
to remove such installations and to restore the Premises may, at Owner's option,
be exercised with regard only to such of Tenant's installations as to which
Owner shall have the right to require Tenant to remove pursuant to the
provisions of Article 3 above, Article 49 below or any other provisions of this
Lease. After Tenant's removal of such installations, Tenant, at Tenant's sole
cost and expense, shall cause the Premises to be restored, as near as
practicable, to the condition the Premises were in prior to such installations,
reasonable wear and tear excepted. Notwithstanding the provisions of Article 3
or this Section 44.7 or anything else to the contrary set forth in this Lease,
if Owner shall fail to provide Tenant with notice of Owner's election to require
Tenant to remove any of Tenant's installations and perform the necessary
restoration by the date referred to in Article 3 above, such failure shall not
constitute a waiver of such right by Owner; provided, however, that Owner so
notifies Tenant not later than thirty (30) days after the fixed date of
expiration of the term of this Lease, in which event Tenant shall have a period
of not less than ten (10) days after such notification to complete such removal
and restoration. The provisions of this Section 44.7 shall survive the
expiration or earlier termination of the term of this Lease.
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44.8. (a) Without limitation of the other provisions of Article 6
above, this Article 44 and all other applicable provisions of this Lease, if
Local Law 5 (hereinafter defined) shall now or hereafter be applicable to the
Premises, then Tenant's Work (and any work performed by Owner at Tenant's
request and expense in and to the Premises) shall be done in a fashion such that
the Premises and the Building shall be in compliance with the requirements of
Local Law 5 of 1973 of The City of New York, as heretofore and hereafter amended
("Local Law 5"). The foregoing shall include, without limitation, (i) compliance
with the compartmentalization requirements of Local Law 5, (ii) relocation of
existing fire detection devices, alarm signals and/or communication devices
necessitated by the alteration of the Premises, and (iii) installation of such
additional fire control or detection devices as may be required by applicable
governmental or quasi-governmental rules, regulations or requirements
(including, without limitation, any requirements of the New York Board of Fire
Underwriters) as a result of Tenant's particular use of the Premises. Throughout
the term of this Lease, Tenant shall comply with the Fire Warden sign in
requirements of Local Law 5.
(b) Owner shall not be responsible for any damage to Tenant's
fire control or detection devices nor shall Owner have any responsibility for
the maintenance or replacement thereof, except for any damage caused by the
negligence or illegal conduct of Owner. Tenant shall indemnify Owner from and
against all loss, damage, cost, liability or expense (including, without
limitation, reasonable attorneys' fees and disbursements) suffered or incurred
by Owner by reason of Tenant's installation and/or operation of any such
devices.
(c) The fact that Owner shall have heretofore consented to any
items of Tenant's Work shall not relieve Tenant of its obligations pursuant to
this Section 44.8 with respect to such items of Tenant's Work.
(d) If any utility company or governmental or quasi-governmental
authority requires any work, installation or improvement to be made to the
Building in connection with any Tenant's Work performed by Tenant, the
installation or operation of equipment in the Premises or for any other reason
relating to Tenant's particular use of the Premises, Tenant shall reimburse
Owner for the cost of such work, installation or improvement, as Additional
Rent, within fifteen (15) days after demand.
45. Maintenance and Repairs (Supplementing Article 4)
45.1. Tenant, at Tenant's sole cost and expense, shall take good care
of the Premises and the fixtures, appurtenances, equipment and facilities
therein that serve the Premises or any portion thereof (regardless of whether
such fixtures, appurtenances, equipment or facilities also serve other portions
of the Building) and shall make, as and when needed, all necessary repairs and
improvements to the Premises, required to keep them in good order and condition;
such repairs and improvements to be in equal quality to the original work. In
addition, Tenant shall cause the interior and exterior surfaces of all windows
to be cleaned no less frequently than one (1) time per year. Notwithstanding
anything herein to the contrary, any and all damage or injury to the Premises or
to any other part of the Building, or to its fixtures, equipment and
appurtenances, whether requiring structural or nonstructural repairs, caused by
or resulting from Tenant's Work or the acts, carelessness, omission, neglect or
improper conduct of Tenant, Tenant's agents, employees, contractors, invitees or
licensees, shall be repaired at Tenant's sole cost and expense. Such repairs
shall be made by Tenant to the reasonable satisfaction of Owner (or, at Owner's
election, by Owner) if the required repairs are nonstructural in nature. If the
required repairs are structural in nature, such repairs shall be made by Owner
(at Tenant's sole reasonable cost and expense). In addition to any other rights
and remedies which Owner may have under the terms of this Lease, Owner shall be
entitled to a decree specifically enforcing the provisions of this Article.
45.2. Owner reserves the right to suspend the service of any utilities,
elevator or by reason of accident or repairs, alterations or improvements that
Owner is required or permitted to make in the Premises or the Building until
such repairs, alterations or improvements shall have been completed, and Owner
shall have no responsibility or liability for such suspension of service and
there shall be no allowance to Tenant for the diminution of rental value, lost
business or any other matter by reason thereof and no liability on the part of
Owner by reason of inconvenience, annoyance or injury to business arising
therefrom, or otherwise. Except in the event of an emergency, Owner shall use
commercially reasonable efforts to perform such repairs, alterations and
improvements in such manner as to avoid unreasonable interference with Tenant's
conduct of its operations at the Premises, to the extent reasonably practicable.
However, notwithstanding the foregoing or anything else to the contrary set
forth in this Lease, in no event shall Owner be obligated to incur any overtime
or other additional costs, expenses, charges or liabilities to perform any such
repairs, alterations or improvements which shall be imposed by or otherwise
payable to or incurred in favor of any contractor or other third party, or to
perform any such repairs, alterations or improvements other than during normal
business hours and days. Further, the provisions of this Article shall not be
deemed to impose upon Owner any obligation for the furnishing of any service,
maintenance or repair other than as specifically set forth in this Lease.
However, the provisions of this Section 45.2 are subject to the provisions of
note 2 to Article 4 of the printed portion of this Lease if the Premises are
rendered untenantable.
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45.3. Owner reserves the right, subject to the terms and provisions of
this Lease, to construct and maintain sidewalk bridges, scaffolding or similar
structures from time to time during the term of this Lease in connection with
any repairs, alterations or improvements to be made in or to the Building or any
portion thereof and there shall be no allowance to Tenant for the diminution of
rental value, lost business or any other matter by reason thereof and no
liability on the part of Owner by reason of inconvenience, annoyance or injury
to business arising therefrom, except as may otherwise be specifically provided
herein.
45.4. In addition to, and without limitation of, Tenant's obligations
pursuant to Section 45.1 above and notwithstanding anything to the contrary set
forth in this Lease, Tenant shall be solely responsible, at Tenant's sole cost
and expense, to repair and maintain in good working order and condition
throughout the term of this Lease all of the heating, ventilation and air
conditioning units, systems, fixtures and equipment now or hereafter servicing
the Premises, whether or not installed by Owner, and all appurtenances thereto
including, without limitation, all ductwork, diffusers, controls and related
plumbing and electrical systems and equipment, exclusive of the Building
perimeter heating system, (all of such units, systems, equipment and
appurtenances are hereinafter collectively referred to as the "HVAC Systems").
Such repair and maintenance shall be performed by a service contractor
reasonably acceptable to Owner. If any portion(s) of the HVAC Systems shall
require replacement in order that all of the HVAC Systems shall be and remain in
good working order and condition, then Tenant shall be solely responsible to
make such replacements at Tenant's sole cost and expense. However, if any major
component of the HVAC Systems (other than the supplemental HVAC equipment
installed by the previous tenant) cannot be repaired by Tenant and requires
replacement during the term of this Lease (as reasonably determined by Tenant
and reasonably approved by Owner), then Tenant shall be responsible for such
replacement at Tenant's sole cost and expense; provided, however, that if Tenant
is not in default under this Lease (after notice and the expiration of any
applicable cure period which are specifically provided for in this Lease with
respect to such default, if any), Tenant shall be entitled to a credit against
the Fixed Rent next becoming due following the calendar month in which such
major component shall be replaced and the cost thereof shall have been paid in
full by Tenant (as shall be reasonably substantiated by Tenant to Owner) in an
amount equal to the unamortized original cost of the replaced component (as
shall be substantiated by Tenant to the reasonable satisfaction of Owner) which
shall be attributable to the period subsequent to the expiration of the term of
this Lease, based upon the useful life for such component published by the
manufacturer thereof or, if no such useful life information is so published, the
useful life of such component shall be determined by an independent mechanical
engineer or engineering firm selected by Owner from the list annexed hereto as
Annex III (the "Independent Mechanical Engineer"). The Independent Mechanical
Engineer selected by Owner shall not then be under retention by Owner. If the
replacement of the major HVAC component shall be made prior to the expiration of
the initial term of the Lease (i.e., prior to December 31, 2012) and Tenant
shall exercise the Option (hereinafter defined) to extend the term of this Lease
as set forth in Article 93 below, then Tenant shall pay to Owner, as Additional
Rent, on the first (lst) day of the calendar month immediately following the
date on which the Option shall be exercised, an amount equal to the unamortized
original cost of the component attributable to the Extension Term (hereinafter
defined). All repairs, maintenance and replacements with respect to the HVAC
Systems shall be performed by Tenant in a good, workmanlike fashion to Owner's
reasonable satisfaction and otherwise in accordance with the provisions of
Articles 3, 4, 44 and 45 of this Lease and all other applicable provisions of
this Lease. Additionally, Tenant shall pay all of the operating costs and
expenses relating to the HVAC Systems, including, without limitation, the cost
of all electricity used for the operation thereof. Owner shall have no
obligations, responsibilities or liabilities of any nature whatsoever arising
out of or in connection with the operation, repair, maintenance or replacement
of the HVAC Systems or any portion(s) thereof.
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45.5. If Tenant shall reasonably establish, within thirty (30) days
from the date hereof, that the HVAC units servicing the fourth, fifth and sixth
floors do not currently have a combined cooling capacity of at least 125 tons (
hereinafter "HVAC Cooling Capacity") then Owner shall reimburse Tenant for the
reasonable cost actually incurred by Tenant to increase such combined cooling
capacity to the HVAC Cooling Capacity. However, in no event shall such cost
exceed the rate of $5,000 per ton for each ton that the HVAC Systems are less
than the HVAC Cooling Capacity. Such reimbursement shall be in the form of a
rent credit against the first Fixed Rents thereafter becoming payable after such
expenditure is made by Tenant and reasonable substantiation thereof is provided
to Owner. Any dispute with regard to this Section shall be submitted for
determination to any of the Independent Mechanical Engineers not then under
retention by Owner or Tenant.
46. Subordination (Supplementing Article 7)
46.1. The ground and underlying leases and mortgages referred to in
Article 7, to which this Lease is subject and subordinate, are hereinafter
sometimes called "superior leases" and "superior mortgages" respectively, and
the lessor of a superior lease or its successor in interest is hereinafter
sometimes called the "lessor" of such superior lease.
46.2. In the event of any act or omission of Owner which would give
Tenant the right, immediately or after a lapse of a period of time, to cancel or
terminate this Lease, or claim a partial or total eviction, Tenant shall not
exercise such right (i) until it has given written notice of such act or
omission to the holder of each superior mortgage and the lessor of each superior
lease whose name and address shall have been furnished to Tenant in writing, and
(ii) unless such act or omission shall be one which is not capable of being
remedied by Owner or such mortgage holder or lessor within a reasonable period
of time, until a reasonable period for remedying such act or omission shall have
elapsed following the giving of such notice and following the time when such
holder or lessor shall have become entitled under such superior mortgage or
superior lease, as the case may be, to remedy the same (which reasonable period
shall in no event be less than the period to which Owner would be entitled under
this Lease or otherwise, after similar notice, to effect such remedy), provided
such holder or lessor shall with due diligence give Tenant written notice of
intention to, and commence and continue to, remedy such act or omission.
46.3. If the lessor of a superior lease or the holder of a superior
mortgage shall succeed to Owner's estate in the Building or the rights of Owner
under this Lease, whether through possession or foreclosure action or delivery
of a new lease or a deed or otherwise, then, at the election of such party so
succeeding to Owner's rights (herein sometimes called "successor landlord"),
Tenant shall attorn to and recognize such successor landlord as Tenant's
landlord under this Lease, and shall promptly execute and deliver any instrument
which such successor landlord may reasonably request to evidence such
attornment. Tenant hereby irrevocably appoints such successor landlord Tenant's
attorney-in-fact to execute and deliver such instrument for and on behalf of
Tenant.
46.4. If, in connection with the financing of the Premises or the
Building, the institutional holder of any mortgage shall request reasonable
modifications to this Lease as a condition of approval thereof, Tenant shall not
withhold or delay or defer making such modifications which do not increase
Tenant's substantive obligations hereunder or decrease Tenant's substantive
rights under this Lease.
46.5. (a) Owner represents to Tenant that: (i) Owner is currently the
sole owner of fee title to the Building and the Land and there is currently no
ground or underlying lease pertaining thereto; (ii) there is currently no
leasehold mortgage affecting the Land and Building which is superior to this
Lease; and (iii) the only existing fee mortgages affecting the Land and Building
are held by Washington Mutual Bank, F.A. ("Existing Mortgagee").
(b) Owner shall exercise good faith efforts to obtain a
Subordination, Nondisturbance and Attornment Agreement ("SNDA"), substantially
in the form annexed hereto as Exhibit D, from the Existing Mortgagee within
thirty (30) days after the execution and exchange of this Lease and the
execution and delivery by Tenant to Owner of the SNDA substantially as annexed
hereto as Exhibit D. If Owner fails to furnish such SNDA from the Existing
Mortgagee within such thirty (30) day period, time being of the essence, then,
as Tenant's sole and exclusive remedy, Tenant may cancel this Lease by notice
sent to Owner within ten (10) days after the expiration of such thirty (30) day
period unless, within ten (10) days after Owner's receipt of such notice of
cancellation, Owner shall furnish to Tenant an SNDA signed by the Existing
Mortgagee. In the event of such cancellation of this Lease by Tenant, the
parties shall have no further rights or obligations hereunder and all advance
rent and security theretofore paid by Tenant to Owner and the letter of credit
delivered by Tenant to Owner shall be promptly returned to Tenant.
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(c) Notwithstanding anything in this Lease to the contrary, the
subordination of this Lease to any future mortgage or ground or underlying lease
shall be subject to and conditioned upon the mortgagee or lessor thereunder,
concurrently with the consummation of the applicable mortgage or ground lease,
delivering to Tenant an SNDA which is in such mortgagee's or lessor's then
standard form which does not serve to materially increase any of Tenant's
material substantive obligations under this Lease or to materially decrease any
of Tenant's material substantive rights; provided, however, that Tenant shall be
obligated to promptly execute and deliver any SNDA meeting such requirements.
47. Tenant's Liability Insurance (Supplementing Article 8)
47.1. Tenant shall defend, indemnify and save harmless Owner and its
agents against and from (a) any and all claims, losses, liabilities, damages,
demands, actions, causes of action, judgments, costs and expenses, including,
without limitation, attorneys' fees, disbursements and court costs, arising from
or in connection with: (i) the conduct of business in or management of the
Premises or any work or thing whatsoever done or any condition created in or
about the Premises during the term of this Lease; (ii) any act or omission of
Tenant or any of its subtenants or licensees or its or their guests, invitees,
patrons, employees, agents or contractors; (iii) any accident, injury or damage
occurring outside the Premises, where such accident, injury or damage resulted
or is claimed to have resulted from the willful misconduct or the negligent or
tortious acts or omissions of Tenant or any of its guests, invitees, patrons,
employees, visitors, agents or contractors and (iv) any default by Tenant in the
performance of any of the covenants, terms, provisions, conditions and/or
obligations on its part to be performed hereunder, and (b) all costs and
expenses (including attorneys' fees) and liabilities incurred in or in
connection with each such claim or action or proceeding brought thereon. In case
any action or proceeding be brought against Owner by reason of any such claim,
Tenant, upon notice from Owner, shall resist and defend such action or
proceeding by counsel chosen by Tenant who shall be reasonably satisfactory to
Owner. Tenant or its counsel shall keep Owner fully apprised at all times of the
status of such defense.
47.2. Without limiting Tenant's liability under the indemnity provided
for in this Article, Tenant shall provide on or before the Commencement Date,
and shall keep in force continuously throughout the term of this Lease, for the
benefit of Owner and Tenant, insurance of the kinds and in the limits
hereinafter specified against any liability whatsoever occasioned by any
occurrence in, on or about, or resulting from the use, operation and/or
maintenance of, the Premises, or the fixtures or equipment therein or the
elevators, stairways, sidewalks, passageways and other areas adjacent to the
Premises or located elsewhere in the Building, and shall cause Owner, Owner's
managing agent, and their respective officers, directors, shareholders, and
authorized agents and representatives to be named as additional insureds, and as
loss payees (as to property insurance covering Tenant's improvements and
personal property), with respect to all policies of such insurance (other than
worker's compensation insurance). Such additional insureds shall be specifically
named as follows in all such policies and certificates: "Moklam Enterprises,
Inc., as owner, and Yuco Management, Inc., as agent, 475 Fifth Avenue, 19'
Floor, New York, New York 10017, and such parties' respective officers,
directors, shareholders, and authorized agents and representatives". Additional
insured status in respect of Tenant's comprehensive general public liability
insurance shall be provided on ISO Form 2026 or its equivalent, without
modification, or such other endorsement as shall be satisfactory to Owner in
Owner's sole and absolute discretion. Such kinds and limits of insurance are as
follows:
47.2.1 worker's compensation insurance to the extent required by
law in statutory limits covering all persons employed by or on behalf of Tenant
in connection with the performance of work upon, in or about the Premises;
47.2.2 comprehensive general public liability and property damage
insurance with a broad form contractual liability endorsement with a minimum
combined single limit of liability with respect to each occurrence and in the
aggregate in an amount of not less than five million ($5,000,000.00) dollars for
injuries and/or deaths and property damage, and adequate water and fire
insurance, with extended coverage, covering Tenant's fixtures, installations and
other personal property as well as property owned by others but in the
possession of Tenant at the Premises;
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47.2.3 business interruption insurance in a sum sufficient to
cover one year's Rents;
47.2.4 plate glass coverage in such amount as Owner shall
reasonably approve; and
47.2.5 insurance against such other risks, and in such limits as
are or shall be customarily insured against in businesses and use and occupancy
similar to that operated by Tenant in the Premises; provided, however, that,
prior to requiring any additional coverage or increased limits of coverage
pursuant to this Section 47.2.5, Owner will provide notice thereof to Tenant and
will agree to limit such additional coverage or increased limits to that
customarily carried by similar office tenants in the area of the Building.
47.3. If Tenant is permitted to enter the Premises prior to the
Commencement Date, Tenant shall obtain insurance of the kinds and limits as set
forth hereinabove in Sections 47.2.1, 47.2.2 and 47.2.4 prior to the
Commencement Date, and such insurance shall be effective as of the date of which
Tenant first enters upon the Premises.
47.4. The policies of insurance provided for in Section 47.2. above
shall be issued by insurance companies reasonably satisfactory to Owner, shall
be non-cancelable except on at least thirty (30) days' prior written notice to
Owner by certified mail, return receipt requested, and, to the extent
obtainable, shall not be invalidated as against one assured by reason of any act
or omission of another assured. Such insurance companies shall be responsible,
authorized to issue the relevant insurance coverage, authorized to do business
in New York and have a policyholder's rating of no less than "A+10" in the most
current edition of Best's Insurance Reports or its successor. All insurance
policies to be provided by Tenant shall be endorsed to be primary over any
insurance covering the Building that Owner may elect to carry, in Owner's sole
and absolute discretion. Not later than the earlier to occur of the day prior to
the date Tenant first enters upon the Premises or the day prior to the
Commencement Date, Tenant shall furnish Owner with a duplicate original policy
evidencing each such insurance policy, together with satisfactory evidence of
payment of the premium therefor for a period of coverage of not less than one
year. Similar documentary evidence of renewal and payment for each renewal or
new policy for such insurance shall be furnished to Owner at least thirty (30)
days prior to each date of expiration of the then current policy. All such
policies shall contain agreements by the insurers that the coverage afforded
thereby shall not be affected by the performance of any work upon, in or about
the Premises.
47.5. Anything herein to the contrary notwithstanding, Tenant shall
reimburse Owner within ten (10) days after demand and presentation of an invoice
or other reasonable supporting documentation with respect thereto, for any
increase in the rate of insurance over the insurance rates generally charged for
office use in buildings in the vicinity of the Building which Owner may be
required to pay because of the manner in which the Premises are used or occupied
by Tenant.
47.6. Tenant shall pay to Owner an amount equal to any increase in fire
insurance premiums due to Tenant's particular use of the Premises, including
extended coverage, vandalism, malicious mischief and surcharges, if any, above
the premiums determined by the base fire insurance rate applicable to the
Building.
47.7. Tenant shall pay all premiums and charges for all policies of
insurance required to be secured and provided by Tenant pursuant to this Lease
and shall pay for any increases in premiums thereon as required by this Article,
or elsewhere in this Lease. If Tenant shall fail to make any such payment when
due or provide any such coverage, Owner may, but shall not be obligated to, make
such payment or secure such policy, and the amount paid by Owner, shall be
repaid to Owner by Tenant within ten (10) days after demand and presentation of
an invoice or other reasonable supporting documentation with respect thereto,
and all such amounts so repayable shall be considered as Additional Rent for the
collection of which Owner shall have all of the remedies provided for hereunder
or by law. Payment by Owner of any such premium, increase in premium, other
charge or the securing by Owner of any such policy shall not be deemed to waive
or release the default of Tenant with respect thereto.
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48. Eminent Domain (Supplementing Article 10)
48.1. If the whole of the Premises shall betaken under the power of
eminent domain of any public or private authority, then this Lease shall be
deemed terminated as of the date of such taking and unearned rent or other
charges, if any, paid in advance, shall be refunded to Tenant.
48.2. If only a portion of the Premises shall be taken under the power
of eminent domain by any public or private authority, then this Lease shall
continue in full force and effect, at Owner's option, provided, however, that if
Owner shall elect to continue this Lease, then Owner shall, at its own expense,
restore that portion of the Premises which remains to substantially the same
condition as prior to the condemnation. There shall be a pro rata abatement of
the Fixed Rent to the extent that the amount of floor space so taken compares to
the amount of space prior to such condemnation, to compensate Tenant for its
loss of use of such portion of the Premises. If Owner shall not elect to
continue this Lease in the event of a partial taking as aforesaid, then this
Lease shall be deemed terminated as of the date of such taking and unearned rent
or other charges, if any, paid in advance, shall be refunded to Tenant.
48.3. Tenant shall not be entitled to any award for the loss or, damage
in any such condemnation proceeding and in no event shall the condemnation award
be apportioned. Notwithstanding anything herein contained to the contrary,
Tenant may assert a separate claim with the condemning authority limited solely
to the then value of Tenant's leasehold improvements paid for directly by
Tenant, and moving expenses, provided and on condition that such claim by Tenant
shall not affect or reduce any award to Owner in the condemnation proceeding.
49. Assignment/Subletting/Occupancy (Supplementing Article 11)
49.1. For purposes of this Lease, subject to the provisions of Section
49.2 below, the transfer or other disposition of in excess of forty-nine (49%)
percent of the issued and outstanding capital stock of a corporate Tenant or any
corporate subtenant, or the transfer of in excess of forty-nine (49%) percent of
the total ownership interest in any other entity (partnership, limited liability
company or otherwise) which is Tenant or a subtenant, however accomplished,
whether in a single transaction or in a series of related or unrelated
transactions, shall be deemed to constitute an assignment of this Lease or such
sublease, as the case may be. Additionally, subject to the provisions of Section
49.2 below, (i) any increase in the amount of issued and/or outstanding capital
stock of any corporate Tenant, or any increase of the issued and outstanding
membership interests in any Tenant which is a limited liability company and/or
the creation of one or more additional classes of capital stock of any corporate
Tenant, whether in a single transaction or a series of related or unrelated
transactions, resulting in a change in the legal or beneficial ownership of such
Tenant so that the shareholders or members of such Tenant existing immediately
prior to such transaction or series of transactions shall no longer own a
majority of the issued and outstanding capital stock or membership interests of
such Tenant, if the primary purpose of such transaction is not a bona fide
business purpose or is designed or intended to avoid the limitations and
restrictions on subletting or assignment set forth in Article 49 shall be deemed
to constitute an assignment of this Lease, (ii) an agreement by any other person
or entity, directly or indirectly, to assume all or any significant portion of
Tenant's obligations under this Lease shall be deemed to constitute an
assignment of this Lease, (iii) any person or legal representative of Tenant, to
whom Tenant's interest under this Lease passes by operation of law, or
otherwise, shall be bound by the provisions of Article 11 and this Article 49,
(iv) a modification, amendment or extension of a sublease shall be deemed to
constitute a sublease, and (v) the change or conversion of Tenant to a limited
liability company, a limited liability partnership or any other entity which
possesses the characteristics of limited liability shall be deemed to constitute
an assignment of this Lease. Tenant agrees to furnish to Owner, upon demand at
any time, such information and assurances as Owner may reasonably request that
neither Tenant, nor any previously permitted subtenant, has violated the
provisions of Article 11 and this Article 49.
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49.2. Subject to the terms and conditions hereinafter set forth in this
Section 49.2, Owner's consent shall not be required with regard to, and the
provisions set forth in Section 49.7 below shall not apply to: (i) transactions
by Tenant with a corporation or other entity into or with which Tenant is merged
or consolidated or with an entity to which all or substantially all of Tenant's
stock or assets are transferred, provided and on condition that such merger,
consolidation or transfer of assets is for a good and proper business purpose
and not principally for the purpose of transferring the leasehold estate created
by this Lease, and further provided and on condition that the assignee or
surviving entity, as the case may be, has a net worth at least equal to or in
excess of the net worth of Tenant as of the date immediately prior to such
merger, consolidation or transfer, as evidenced by audited financial statements
dated within twelve (12) months prior to the date of the transaction and
prepared in accordance with generally accepted accounting principles,
consistently applied, by Tenant's independent certified public accountant; (ii)
assignment or subletting to an entity that, at the time of the transaction,
controls or is controlled by Tenant or is under common control with Tenant; or
(iii) the underwritten public offering of the capital stock of Tenant on any
national stock market or exchange (such as the NYSE, Nasdaq or Amex) or the
subsequent public trading of such stock on such national markets or exchanges.
Tenant shall notify Owner not more than five (5) days after any such transaction
or public offering is consummated. As used in this Lease, the term "control" (i)
in the case of a corporation, shall mean ownership of more than fifty (50%)
percent of the outstanding capital stock of that corporation, (ii) in the case
of a general or limited liability partnership, shall mean ownership of more than
fifty (50%) percent of the partnership interests of the partnership, (iii) in
the case of a limited partnership, shall mean ownership of more than fifty (50%)
percent of the general partnership interests and limited partnership interests
of such limited partnership, and (iv) in the case of a limited liability
company, shall mean ownership of more than fifty (50%) percent of the membership
interests of such limited liability company. Notwithstanding the foregoing, the
provisions of this Section 49.2 shall be subject to and conditioned upon all of
the following additional conditions: (a) Tenant shall not be in default in the
performance of any of its obligations under this Lease (after notice and the
expiration of any applicable cure period which are specifically provided for in
the Lease with respect to such default, if any); (b) prior to any such
subletting or assignment by Tenant to a related entity, Tenant shall furnish
Owner with the name of any such related entity, together with a certification of
Tenant and such other proof as Owner may reasonably request, that such subtenant
or assignee is a related entity of Tenant; (c) if the related entity is the
assignee of this Lease, Tenant shall deliver to Owner an instrument of
assumption, reasonably satisfactory to Owner, pursuant to which the related
entity assumes all of the obligations of Tenant under this Lease, after which
assumption Tenant and the related entity shall be jointly and severally liable
with Tenant for all such obligations; (d) such transaction is for a good, bona
fide business purpose and not principally for the purpose of transferring the
leasehold estate created hereby; (e) in connection with the information to be
provided to Owner pursuant to this Section 49.2, Owner shall have the right, at
any reasonable time and from time to time, to examine such books and records of
Tenant and such related entity as may be necessary to establish that such
related entity remains a related entity of Tenant; and (f) the provisions of
Sections 49.3.3, 49.3.5, 49.3.8, 49.3.11, 49.3.12, 49.3.14, 49.4 and 49.9 shall
be complied with and/or be applicable, as the case may be.
49.3. If Owner shall not exercise its rights under Section 49.7 below,
Owner shall not unreasonably withhold, delay or condition its consent to an
assignment of this Lease or to a subletting of all or a portion of the Premises,
provided and on condition that:
49.3.1 Tenant is not in default in the performance of any of the
terms and conditions of this Lease (after notice and the expiration of any
applicable cure period which are specifically provided for in the Lease with
respect to such default, if any) both on the date Tenant's request for consent
to such assignment or subletting is submitted to Owner and on the date that such
assignment or subletting is to become effective;
49.3.2 Tenant shall deliver to Owner a written notice by
certified mail, return receipt requested, at least thirty (30) days prior to the
effective date of such assignment or subletting, accompanied by the following
information and documentation:
(a) The name and business address of the proposed
subtenant or assignee, an unexecuted counterpart or draft of the proposed
assignment or subletting agreement (if available), reasonably satisfactory
information with respect to the nature and character of the business of the
proposed assignee, and current financial information and references reasonably
satisfactory to Owner including, without limitation, the completion and
submission to Owner of Owner's then current form application to lease and, based
on such information, Owner shall be reasonably satisfied with the suitability of
the proposed subtenant or assignee and its ability to fully and timely perform
all of its obligations under the sublease or this Lease, as the case may be; and
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(b) A written statement by Tenant and the proposed
assignee or subtenant (or an officer, shareholder or director thereof, if a
corporation) certifying to Owner that such assignee or subtenant have never
within the immediately preceding forty-two (42) month period (i) filed a
voluntary petition in bankruptcy or insolvency, (ii) been adjudicated as
bankrupt or insolvent, (iii) filed a petition seeking relief under Federal,
state or similar bankruptcy laws or (iv) been the subject of an involuntary
bankruptcy proceeding that was not discharged.
49.3.3 The proposed subtenant or assignee shall use the Premises
solely for the use permitted under this Lease;
49.3.4 If, at the time Tenant gives notice to Owner of a proposed
sublease or assignment, Owner has or within three (3) months thereafter
reasonably expects to have comparable space for a comparable term available in
the Building, the proposed subtenant or assignee shall not be (x) a party with
whom Owner is then negotiating or discussing the leasing of space in the
Building; or (y) a tenant in or occupant of the Building or any party that,
directly or indirectly, is controlled by, controls or is under common control
with any such tenant or occupant;
49.3.5 The proposed use of the Premises by the proposed subtenant
or assignee shall be in full and complete accordance with the provisions of
Article 2 and Article 43 hereof and shall not violate the terms of this Lease or
any applicable law;
49.3.6 Intentionally Deleted.
49.3.7 The proposed assignee or subtenant shall neither be
entitled directly or indirectly to diplomatic or sovereign immunity nor be a
not-for-profit organization nor an entity or agency of any government;
49.3.8 Not more than three (3) subtenants per floor or nine (9)
subtenants in the Premises shall be permitted at any time during the term of
this Lease, subject, however, to the provisions of Section 49.9 below;
49.3.9 In the case of a proposed subletting, the listing or
advertising for subletting of the Premises shall not have included a proposed
rental rate; provided, however, that Tenant may quote in writing or orally
directly to prospective subtenants the proposed rental rate.
49.3.10 Intentionally Deleted.
49.3.11 Any subletting shall be expressly subject to all of the
terms, covenants, conditions and obligations on Tenant's part to be observed and
performed under this Lease, and any assignment or subletting shall be subject to
the further condition and restriction that this Lease or the sublease shall not
be further assigned, encumbered or otherwise transferred or the subleased
premises further sublet by the subtenant in whole or in part, or any part
thereof suffered or permitted by the assignee or subtenant to be used or
occupied by others, without the prior written consent of Owner in each instance
given pursuant to the provisions of this Lease;
49.3.12 At no time shall there be more than three (3) occupants,
including Tenant, in any floor of the Premises;
49.3.13 Tenant shall reimburse Owner within fifteen (15) days
after demand, as Additional Rent, for any reasonable costs and expenses that may
be incurred by Owner in connection with said assignment or sublease, including,
without limitation, any reasonable processing fees, attorneys' fees and
disbursements, architect's fees (if required) and the costs of making
investigations as to the acceptability of the proposed assignee or subtenant;
49.3.14 The nature of the occupancy and the particular use of the
Premises by the proposed subtenant or assignee shall, not impose on Owner any
requirements of applicable federal, state or local laws, rules, codes, or
regulations (including, without limitation, the Americans with Disabilities Act)
in excess of those requirements imposed on Owner by reason of Tenant's use and
occupancy, whether under this Lease or otherwise, unless such proposed subtenant
or assignee shall have agreed in writing to comply with each of such excess
requirements and, at Owner's option, shall have furnished Owner with such
security as Owner may require to assure that such subtenant or assignee shall so
comply; and
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49.3.15 The subletting or assignment is effected pursuant to a
written instrument in form and substance reasonably satisfactory to Owner and
its counsel and is in strict compliance with the information and documentation
submitted to Owner pursuant to Section 49.3.2 above, and, if an assignment
agreement, contains an agreement by the assignee to assume and perform all of
the terms, covenants and conditions of this Lease on Tenant's part to be
observed and performed from and after the effective date of the assignment, and
that a duplicate original of any such subletting or assignment agreement be
delivered to Owner within five (5) days following the date of its execution or
not less than five (5) days prior to its effective date, whichever shall be
sooner.
49.4. Notwithstanding any subletting or assignment and/or acceptance of
Fixed Rent or Additional Rent by Owner directly from any subtenant or assignee,
Tenant shall and will remain fully liable for the payment of Rents due and to
become due hereunder and for the performance of all the covenants, agreements,
terms, provisions and conditions contained in this Lease on the part of Tenant
to be performed. The liability of Tenant hereunder shall be unaffected by any
changes, modifications, extensions, renewals or amendments of this Lease or by
any extensions of time or other concessions which Owner may grant to any
assignee for the payment of Rents or other charges due hereunder that extend the
term of this Lease or materially increase the lessee's substantive obligations
above, or materially diminish its substantive rights below the substantive
obligations, rights or term set forth in this Lease, as same may have been
amended and/or extended as of the time of its assignment by Tenant, unless
agreed to by Tenant. However, Tenant shall in all events remain liable to Owner
with regard to all of Tenant's obligations as contained in this Lease, as same
may have been amended and/or extended as of the time of its assignment by
Tenant.
49.5. Tenant hereby waives any claim against Owner for money damages
which it may have based upon any assertion that Owner shall have unreasonably
withheld, delayed and/or conditioned any consent to a subletting or assignment
pursuant to the terms of this Article. Tenant's sole remedy shall be an action
or proceeding to enforce such provision or for specific performance, injunction
or declaratory judgment, or to enforce such provision pursuant to an arbitration
proceeding instituted in accordance with the provisions of Article 89 below. In
the event any such arbitration proceeding is commenced, the arbitrator's
determination shall be limited solely to the issue of whether Owner shall have
unreasonably withheld, delayed or conditioned any consent to a subletting or
assignment pursuant to the terms of this Article and whether such subletting or
assignment shall be permitted. In no event shall the arbitrators have the power
to award monetary damages.
49.6. (a) If Tenant shall sublet the Premises or any portion thereof
(other than in accordance with Section 49.2 above), then all sums in excess of
the Rent due under this Lease or, in the case of a sublease of a portion of the
Premises, all sums in excess of the Rent allocable to that portion of the
Premises being sublet, which are paid, directly or indirectly, to Tenant or
Tenant's shareholders or principals by such subtenant in consideration of or in
connection with said subletting including, without limitation, all sums payable
as additional rent or for the rental (but not the bona-fide sale) of Tenant's
fixtures, leasehold improvements, equipment, furniture, business or other
personal or real property interest of any nature whatsoever (such excess sums
are hereinafter referred to as the "Excess Subletting Rents") shall be disclosed
to Owner. Tenant shall pay to Owner, on a monthly basis on the first day of each
calendar month during the term of the subletting, as Additional Rent, fifty
(50%) percent of the excess of (i) all of the Excess Subletting Rents paid to
Tenant during the immediately preceding calendar month less (ii) the monthly
amortized amount (as amortized on a straight-line basis over the total number of
months of the term of the sublease) of the reasonable amount of out-of-pocket
costs of brokerage commissions, legal fees, any reasonable construction work
allowance granted to the subtenant actually paid by Tenant in connection with
the execution and delivery of the sublease and the reasonable cost of any
improvements to the subleased premises actually made by Tenant as shall be
required pursuant to the sublease agreement. The amount of such brokerage
commissions, legal fees. construction work allowance (if any) and improvement
costs (if any) shall be properly documented by Tenant to Owner's reasonable
satisfaction. The obligation to make such payment to Owner shall be binding upon
Tenant as well as each subtenant, jointly and severally, and such obligation
shall survive the expiration or earlier termination of the term of this Lease.
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(b) If this Lease shall be assigned, or shall be deemed to be
assigned, at any time(s) during the term of this Lease (other than in accordance
with Section 49.2 above), then the aggregate amount of all sums which are paid,
directly or indirectly, to Tenant or Tenant's shareholders or principals by or
on behalf of the assignee in consideration of or in connection with said
assignment and/or for Tenant's leasehold improvements (including, without
limitation, all sums paid for the sale or rental of Tenant's 'fixtures,
equipment, furniture, business or other personal or real property interest of
any nature whatsoever in excess of the then fair market value of such items),
shall be disclosed to Owner and Tenant shall pay to Owner, as Additional Rent,
an amount equal to fifty (50%) percent of the difference between (i) the total
amount of such consideration (hereinafter, "Tenant's Assignment Consideration")
less (ii) the reasonable amount of out-of-pocket costs of brokerage commissions,
legal fees and reasonable costs of improvements to the Premises actually made by
Tenant as shall be required pursuant to the assignment agreement actually paid
by Tenant in connection with the execution and delivery of the assignment. The
amount of such brokerage commissions, legal fees and improvement costs shall be
properly documented by Tenant to Owner's reasonable satisfaction. No later than
two (2) business days prior to the effective date of the assignment, time being.
of the essence, Tenant shall furnish Owner with definitive documentary evidence
of the amount of Tenant's Assignment Consideration which shall be reasonably
satisfactory to Owner including, without limitation, (i) true copies of all
agreements and other documentation between Tenant and Tenant's assignee relating
to the assignment and (ii) affidavits from executive officers of both Tenant and
Tenant's assignee (as well as from such parties' respective independent
certified public accounts) attesting, under penalties of perjury, as to the
amount of Tenant's Assignment Consideration. The obligation to make such payment
of Tenant's Assignment Consideration to Owner shall be binding upon Tenant and
the assignee, jointly and severally, and shall survive the expiration or earlier
termination of the term of this Lease.
(c) Owner may, by notice to Tenant, elect to waive the benefits
of this Section 49.6, in whole or in part, prospectively or retroactively. Any
retroactive waiver shall be accompanied by a return to Tenant of all sums
theretofore paid to and retroactively waived by Owner.
49.7. (a) Anything herein contained to the contrary notwithstanding,
should Tenant desire to assign this Lease or sublet the Premises or any portion
thereof, then Tenant shall send to Owner a written notice (hereinafter, a
"Sublease or Assignment Notice") by registered mail, return receipt requested,
at least thirty (30) days prior to the date that Tenant intends such assignment
or subletting to commence, setting forth the proposed commencement date of such
assignment or subletting and in the case of subletting, the terms of such
subletting, as well as the name and business address of the proposed subtenant
or assignee, an unexecuted counterpart or draft of the proposed assignment or
subletting agreement (if available), reasonably satisfactory information with
respect to the nature and character of the business of the proposed assignee,
and current financial information and references reasonably satisfactory to
Owner including, without limitation, the completion and submission to Owner of
Owner's then current form application to lease. In the case of a subletting of a
portion of the Premises, such notice shall be accompanied by a reasonably
accurate floor plan of that portion of the Premises to be sublet. The portion of
the Premises to which such proposed assignment or sublease is to be applicable
is hereinafter referred to in this Section 49.7 as the "Space" (which term shall
be deemed to mean the entire Premises if Tenant's proposed transaction is a
sublease of the entire Premises or an assignment of this Lease). Notwithstanding
the foregoing, if Tenant wishes to assign this Lease or enter into a sublease
and Tenant has not yet located the assignee or subtenant and/or negotiated the
terms of the transaction, Tenant shall send to Owner a notice (an "Abbreviated
Notice") specifying only Tenant's intention to so assign or sublease, the
desired effective date and term of the proposed transaction and the relevant
Space. If Tenant gives a Sublease or Assignment Notice or an Abbreviated Notice
as above set forth, the applicable Sublease or Assignment Notice or Abbreviated
Notice shall constitute an irrevocable offer to Owner, for the thirty (30) or
sixty (60) day period set forth below, as applicable; to exercise Owner's right
to Recapture (as hereinafter defined).
(b) A Sublease or Assignment Notice or an Abbreviated Notice
(collectively hereinafter sometimes referred to as a "Tenant's Notice"), if
given, shall be deemed an irrevocable offer (coupled with an interest) by Tenant
to Owner, exercisable within thirty (30) days after Owner's receipt of a
Sublease or Assignment Notice or sixty (60) days after receipt of an Abbreviated
Notice, as the case may be, by notice to Tenant ("Owner's Notice"), to terminate
this Lease with respect to the Space for the period specified in the Sublease or
Assignment Notice or the Abbreviated Notice on the terms set forth in
subparagraph (c) below (such action being called a "Recapture"). If Owner fails
to exercise such Recapture option within the applicable period, then Owner shall
not unreasonably withhold, delay or condition its consent to the proposed
assignment or sublease in accordance with and subject to the provisions of this
Article 49 (but only, in the case of an Abbreviated Notice, after Tenant has
timely delivered a Sublease or Assignment Notice with respect thereto). If
Tenant initially gives an Abbreviated Notice in accordance with the provisions
hereof and Owner fails to Recapture the Space, then Tenant shall provide a
Sublease or Assignment Notice with respect thereto once the proposed transaction
is consummated, and Owner shall not unreasonably withhold, delay or condition
its consent thereto in accordance with and subject to the provisions of this
Article 49 (but Owner shall not have the right of Recapture with respect to any
such Sublease or Assignment Notice) provided that such transaction is on
substantially no less favorable terms to Tenant than those described in the
Abbreviated Notice and is consummated within one hundred fifty (150) days after
Owner's receipt of the Abbreviated Notice. Notwithstanding the foregoing or
anything to the contrary set forth in this Article 49, (x) Tenant shall not be
permitted to give Owner an Abbreviated Notice if Tenant shall be in default
under this Lease (after notice and the expiration of any applicable cure period
which are specifically provided for in this Lease with regard to such default,
if any.
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(c) If Owner requires that this Lease be terminated as to the
Space pursuant to subparagraph (b) above, then (i) if the Space encompasses any
partial floor(s) in the Premises, Tenant, at its sole expense shall (w) erect
all partitions required to separate the Space from the remainder of the space on
such partial floor(s), (x) to the extent reasonably required by Owner, install
all doors required for independent access from the Space to the elevators,
lavatories and stairwells on the floor and install all equipment and facilities
(including, without limitation, men's and women's toilets) required to comply
with all applicable Legal Requirements and to enable Owner to maintain and
service the Space and permit the Space to be used as an independent unit, (y)
Owner and Tenant shall execute and deliver a supplementary agreement modifying
this Lease by eliminating the Space from the Premises for the term specified in
Tenant's Notice commencing, at Owner's option, on the later of (1) the
commencement date set forth in Tenant's Notice, or (2) a date designated by
Owner which shall not be more than thirty (30) days after the date of Owner's
Notice, and, for such period, reducing the Fixed Rent and Additional Rent
payable under this Lease on a pro rata basis and (z) at the expiration of the
period for which this Lease shall be terminated with respect to the Space, the
Space shall be returned to Tenant subject to all alterations, decorations,
additions or improvements made by Owner, with no obligation on Owner's part to
restore same or (ii) if the proposed transaction is an assignment of this Lease
or a subletting of all or substantially all of the Premises for all or
substantially all of the remaining term of this Lease, then the Lease shall be
deemed terminated as of the date which shall be, at Owner's option on the later
of (x) the effective date of the assignment or subletting transaction set forth
in Tenant's Notice or (y) a date designated by Owner which shall not be more
than thirty (30) days after the date of Owner's Notice, and Tenant shall pay all
Fixed Rent and Additional Rent due under or pursuant to this Lease through such
date of termination and this Lease shall terminate as of such date as if such
date were the fixed date of expiration of the term of this Lease.
(d) Notwithstanding anything to the contrary contained in this
Section 49.7, provided and on condition that Tenant shall not be in default
under this Lease (after notice and the expiration of any applicable cure period
which are specifically provided for in this Lease with respect to such default,
if any), Owner shall not have the right to Recapture with regard to any proposed
subletting or assignment transaction which is being made in connection with, and
as an integral and necessary component of, the bona fide sale, transfer or spin
off by Tenant of the stock or assets of or attributed to any division of Tenant,
or any portion of Tenant's business which is not a separate division, which in
any case represents not less than forty (40%) percent of the total asset value
of Tenant at the time of such proposed transaction. Tenant shall furnish Owner,
together with the Sublease or Assignment Notice in respect of such proposed
transaction, substantiation of the foregoing which shall be reasonably
satisfactory to Owner. Owner's consent to such proposed subletting or assignment
shall not be unreasonably withheld or delayed in accordance with the provisions
of this Article 49.
(e) The failure by Owner to exercise any of its options under
this Section 49.7 with respect to any proposed subletting or assignment shall
not be deemed a waiver of any of such options with respect to any amendment or
extension of such subletting or assignment or any subsequent subletting or
assignment.
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49.8. If Owner shall terminate this Lease pursuant to the provisions of
this Lease or if Owner shall otherwise recover or come into possession of the
Premises before the date herein fixed for the expiration of the term of this
Lease, Owner shall have the right, at Owner's sole and exclusive option, to take
over any and all subleases or sublettings of the Premises or any part thereof
made by Tenant (other than subleases or sublettings to affiliates of Tenant) and
to succeed to a ll of the rights of said subleases and sublettings or such of
them as Owner may elect to take over. Tenant hereby expressly assigns and
transfers to Owner such of the subleases and sublettings as Owner may elect to
take over at the time of such recovery of possession, such assignment and
transfer not to be effective until the termination of this Lease or reentry by
Owner hereunder or if Owner shall otherwise succeed to Tenant's estate in the
Premises, at which time Tenant shall, upon request of Owner, execute,
acknowledge and deliver to Owner such further assignments and transfers as may
be necessary to vest in Owner the then existing subleases and sublettings. Every
subletting hereunder is subject to the condition and by its acceptance of and
entry into a sublease, each subtenant thereunder shall be deemed conclusively to
have thereby agreed from and after the termination of this Lease or re-entry by
Owner hereunder or if Owner shall otherwise succeed to Tenant's estate in the
Premises, that such subtenant shall waive any right to surrender possession or
to terminate the sublease and, at Owner's election, such subtenant shall be
bound to Owner for the balance of the term of such sublease and shall attorn to
and recognize Owner, as its Owner, under all of the then executory terms of such
sublease, except that Owner shall not (i) be liable for any previous act,
omission or negligence of Tenant under such sublease, (ii) be subject to any
counterclaim or offset not expressly provided for in such sublease, which
theretofore accrued to such subtenant against Tenant, (iii) be bound by any
previous modification or amendment of such sublease which shall not have been
consented to by Owner or by any previous prepayment of more than one month's
rent and additional rent which shall be payable as provided in the sublease,
(iv) be obligated to repair, alter or improve the subleased space, the Premises,
the Building or any part thereof or (v) be obligated to perform any work in the
subleased space, the Premises, or the Building or to prepare them for occupancy
beyond Owner's obligations under this Lease, and the subtenant shall execute and
deliver to Owner any instruments Owner may reasonably request to evidence and
confirm such attornment.
49.9. As a condition to Owner's granting its consent to any sublease of
less than one (1) full floor of the Premises or to any sublease which otherwise
involves the subdivision of any floor of the Premises, and as an independent
affirmative covenant of Tenant separate and apart from the provisions of Article
3 above, (which condition and covenant shall be effective as to any proposed
alteration and/or reconfiguration of the Premises to accommodate a partial floor
sublease, whether or not Owner's consent thereto shall be required pursuant to
the provisions of this Lease), Tenant shall deposit with Owner, not later than
ten (10) days prior to the effective date of such subletting or the commencement
of such proposed alteration and/or reconfiguration, as the case may be, such sum
(hereinafter, the "Sublease Restoration Deposit") as Owner shall reasonably
determine shall be necessary to pay for the cost of removal at the end of the
term of the proposed sublease of all fixtures, partitions and other
installations proposed or reasonably contemplated to be made by or on behalf of
Tenant and/or its subtenant in order to separately demise the portion of the
Premises to be sublet and otherwise to prepare such space for the subtenant's
proposed use and occupancy, as well as for the cost to restore the floor of the
Premises in which such space is situated to its original full floor
configuration and condition (reasonable wear and tear excepted). Such
restoration shall be deemed to include, without limitation, the removal of all
demising walls, doors and other installations made by Tenant and the relocation
of all equipment, fixtures, conduits and other installations to their original
configuration and the repair of any damage to the Premises arising as a result
of the original alteration and/or reconfiguration. The amount of any Sublease
Restoration Deposit shall be subject to adjustment, if necessary, at such time
as Tenant shall submit Tenant's Plans for the alteration and/or reconfiguration
of the floor(s) on which the subleased space shall be situated. The amount of
any such adjustment shall be reasonably determined by Owner, However, in no
event shall the Sublease Restoration Deposit be in an amount equal to less than
four ($4.00) dollars per rentable square foot of the space proposed to be
sublet, as such area shall be reasonably determined by Owner. The Sublease
Restoration Deposit shall be held by Owner in the same manner as a cash security
deposit under the provisions of Article 57 below, and any unapplied portion
thereof shall be refunded to Tenant within forty-five (45) days after the
completion of the removal and restoration work described above by Owner or by a
subsequent lessee, but in no event more than one (1) year after the expiration
or earlier termination of the term of this Lease. Owner shall have the right to
apply all or any portion of the Sublease Restoration Deposit to pay for the cost
incurred by Owner or any such subsequent lessee to perform such removal and
restoration work, either directly or indirectly by means of a rent credit, rent
abatement, work allowance or otherwise. Upon such application, Owner shall be
relieved of any obligation to refund to Tenant the amount of the Sublease
Restoration Deposit so applied. Notwithstanding the provisions of the
immediately preceding sentence, if with respect to the first new lease for all
or any portion of any floor of the Premises entered into by Owner subsequent to
the expiration or earlier termination of the term of this Lease, Owner rents
such partial floor space without any reconfiguration thereof by either Owner or
the new lessee, then Owner shall not be entitled to apply such portion of the
Sublease Restoration Deposit as shall equal the cost of reconfiguring such
subdivided floor to a full floor (as such cost shall be reasonably determined by
Owner). Notwithstanding anything to the contrary herein, Tenant shall be liable
for all reasonable costs of removal and restoration which shall be in excess of
the amount of the Sublease Restoration Deposit (if any). The provisions of this
Section 49.9 shall survive the expiration or earlier termination of the term of
this Lease.
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49.10. Owner shall have no liability for brokerage commissions incurred
with respect to any assignment of this Lease or any subletting of all or any
part of the Premises by or on behalf of Tenant. Tenant shall pay, and shall
indemnify and hold Owner harmless from and against, any and all costs, expenses
(including reasonable attorneys' fees and disbursements) and liability in
connection with any compensation, commissions or charges claimed by any broker
or agent with respect to any such assignment or subletting.
49.11. Except as otherwise specifically set forth above in this Article
49, Tenant shall not (a) assign or otherwise transfer this Lease or the term or
estate hereby granted, whether by operation of law, transfers of ownership
interest in Tenant, or otherwise, (b) sublet the Premises or any part thereof or
allow the same to be used, occupied, managed or operated by others or (c)
mortgage or encumber Tenant's interest in this Lease, in whole or in part,
without, in each instance, obtaining the prior written consent of Owner, which
such consent may be withheld for any reason (whether reasonable, unreasonable or
arbitrary) or for no reason.
50. 50. Bankruptcy (Supplementing Article 16)
(a) If at or before the date fixed as the Commencement Date of the term
of this Lease or if at any time during the term of this Lease:
(i) Tenant shall file a petition commencing a voluntary case under
the Federal Bankruptcy Code (Title 11 of the United States Code), now or
hereafter in effect, or under any similar law, or file a petition in bankruptcy
or for reorganization or for an arrangement pursuant to any state bankruptcy law
or any similar law; or
(ii) an involuntary case against Tenant as debtor is commenced by a
petition under the Federal Bankruptcy Code (Title 11 of the United States Code),
as now or hereafter in effect, or under similar law, or a petition or answer
proposing the adjudication of Tenant a bankrupt or its reorganization pursuant
to any state bankruptcy law or any similar state law shall be filed in any court
and Tenant shall consent to or acquiesce in the filing thereof; or in such case,
the petition or answer shall not be dismissed, discharged or denied within sixty
(60) days after the filing thereof; or
(iii) a custodian, receiver, United States Trustee, trustee or
liquidator of Tenant or of all or substantially all of Tenant's property or of
the Premises shall be appointed in any proceedings brought by Tenant; or if such
custodian, receiver, United States Trustee, trustee or liquidator shall be
appointed in any proceedings brought against Tenant and shall not be discharged
within sixty (60) days after such appointment; or if Tenant shall consent to or
acquiesce in such appointment; or
(iv) Tenant shall generally not pay Tenant's debts as such debts
become due, or shall make an assignment for the benefit of creditors, or shall
admit in writing its inability to pay its debts generally as they become due,
then, at the sole and absolute option of Owner, after notice of the happening of
any one or more of the aforementioned events, this Lease may be cancelled and
terminated by written notice to such effect given by Owner to Tenant or Tenant's
custodian, receiver, United States Trustee, trustee or liquidator, as the case
may be.
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(b) If an order for relief is entered, or if any stay or other act
becomes effective in favor of Tenant or Tenant's interest in this Lease in any
proceeding which is commenced by or against Tenant under the Federal Bankruptcy
Code (Title 11 of the United States Code), as now or hereafter in effect, or
under any similar law, Owner shall be entitled to invoke any and all rights and
remedies available to it under such bankruptcy code, statute, law or this Lease,
including, without limitation, such rights and remedies as may be necessary to
adequately protect Owner's right, title and interest in and to the Premises or
any part thereof and adequately assure the complete and continuous future
performance of Tenant's obligations under this Lease. Adequate protection of
Owner's right, title and interest in and to the Premises, and adequate assurance
of the complete and continuous future performance of Tenant's obligations under
this Lease shall include, without limitation, the following requirements: (i)
that Tenant comply with all of its obligations under this Lease; (ii) that
Tenant pay to Owner, on the first day of each month occurring subsequent to the
entry of such order, or the effective date of such stay, a sum equal to the
aggregate amount of Rents payable for such monthly period; (iii) that any use of
the Premises shall be in accordance with the provisions of this Lease; (iv) that
Tenant pay to Owner within thirty (30) days after entry of such order or the
effective date of such stay, as adequate assurance of the complete and
continuous future performance of Tenant's obligations under this Lease, an
additional security deposit in an amount reasonably acceptable to Owner; and (v)
that Tenant has and will continue to have unencumbered assets after the payment
of all secured obligations and administrative expenses to assure Owner that
sufficient funds will be available to fulfill the obligations of Tenant under
this Lease.
51. Default and Remedies (Supplementing Articles 17 and 18)
51.1. In the event of any dispossess by summary proceedings or
otherwise, or such other termination of this Lease under the provisions hereof
or under any summary dispossess or other proceeding or action or any provision
of law, Owner shall be entitled to retain all monies, if any, paid by or on
behalf of Tenant to Owner, whether as advance Rents, security deposit or
otherwise (including, without limitation, Owner's right to draw down the full
amount of any letter of credit delivered to Owner as set forth in Article 57
below and to retain the full proceeds of such letter of credit). Such monies
shall be credited by Owner against any Fixed Rent, Additional Rent or any other
charges due from Tenant at the time of such termination or re-entry or, at
Owner's option, against any damages payable by Tenant under Article 18 above or
under Sections 51.2 and 51.4 below, or as otherwise permitted by applicable law,
and any excess amounts shall be restored to the security deposit or (if this
Lease has been terminated) be promptly refunded to Tenant.
51.2. Modifying the provisions of clause (c) of the first sentence of
Article 18 of this Lease, in the event of any default and/or dispossess by
summary proceedings or otherwise, or such other termination of this Lease under
the provisions hereof or under any summary dispossess or other proceeding or
action or any provision of law, Tenant will pay to Owner, as damages, at the
election of Owner, either:
51.2.1 a sum which at the time of such termination of this Lease
or at the time of any such re-entry by Owner, as the case may be, represents the
sum of (i) the then value of the excess, if any, of (1) the aggregate of the
installments of Fixed Rent and Additional Rent which would have been payable
under this Lease by Tenant, had this Lease not so terminated, for the period
commencing on the effective date of such earlier termination of this Lease or
the date of any such re-entry, as the case may be, and ending with the date set
forth herein as the fixed date of expiration of the term of this Lease
(hereinafter, the "Expiration Date") over (2) the aggregate fair market rental
value of the Premises for the same period, each of (1) and (2) being first
discounted to present value at the rate of four (4%) percent per annum or the
rate then being paid on newly issued ten year U.S. Treasury Bonds, whichever
shall be less, plus (ii) an amount equal to the expenses incurred or paid by
Owner in terminating this Lease and of re-entering the Premises and of securing
possession thereof, including without limitation, reasonable attorneys' fees and
costs of removal and storage of Tenant's property, as well as the reasonable
expenses of reletting, including repairing and restoring the Premises for new
tenants, brokers' commissions, advertising costs, construction allowances or
"free rent", reasonable attorneys' fees, and all other similar or dissimilar
reasonable expenses incurred in connection with such re-letting, it being
understood that such re-letting may be for a period equal to or shorter or
longer than the remaining term of this Lease. For the purpose(s) of this Section
51.2.1, the amount of Additional Rent which would have been payable by Tenant
pursuant to this Lease for each year ending after such termination of this Lease
or such re-entry, shall be deemed to be an amount equal to the amount of such
Additional Rent payable by Tenant for the calendar year ended immediately
preceding the calendar year in which such termination of this Lease or such
re-entry shall have occurred. If, before presentation of proof of such damages
to any court, commission or tribunal, the Premises, or any part thereof, are
relet by Owner for the period which otherwise would have constituted the
unexpired portion of the term of this Lease, or any part thereof, the amount of
rent reserved upon such reletting shall be deemed, prima facie, to be the fair
market rental value for the part or the whole of the Premises so relet during
the term of the reletting; or
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51.2.2 sums equal to the aggregate of the installments of Fixed
Rent and Additional Rent which would have been payable by Tenant had this Lease
not so terminated, payable upon the due dates therefor specified in this Lease
following such termination or such re-entry through and including the Expiration
Date; provided, however, that if Owner shall relet the Premises during said
period, Owner shall credit Tenant with the net rents received by Owner from such
reletting, such net rents to be determined by first deducting from the gross
rents as and when received by Owner from such reletting the reasonable expenses
incurred or paid by Owner in terminating this Lease or of re-entering the
Premises and of securing possession thereof, including without limitation,
reasonable attorneys' fees and costs of removal and storage of Tenant's
property, as well as the reasonable expenses of reletting, including repairing
and restoring the Premises for new tenants, brokers' commissions, advertising
costs, attorneys' fees, and all other similar or dissimilar reasonable expenses
incurred in connection with such re-letting, it being understood that such
re-letting may be for a period equal to or shorter or longer than the remaining
term of this Lease.
In no event shall Tenant be entitled to receive any excess of such net
rents over the sums payable by Tenant to Owner hereunder. Further, (a) in no
event shall Tenant be entitled in any suit for the collection of damages
pursuant to this Section 51.2 to a credit in respect of any net rents received
from a reletting, except, with respect to Section 51.2.2 above only, to the
extent that such net rents are actually received by Owner with respect to the
period for which a judgment is obtained by Owner in such suit, and (b) if only a
portion of the Premises shall be relet, or if the Premises or any portion
thereof should be relet in combination with other space in the Building, then a
proper apportionment on a square foot area basis shall be made of the rent
received from such reletting and of the expenses of reletting, or if such
reletting shall be for a period longer than the remaining term of this Lease,
the expenses of reletting shall be apportioned based on the respective terms.
51.3. Suitor suits for the recovery of such damages, or any
installments thereof, may be brought by Owner from time to time at Owner's
election, and nothing contained herein shall be deemed to require Owner to
postpone suit until the date when the term of this Lease would have expired if
it had not been terminated under the provisions of Article 17, or under any
provision of law, or had Owner not re-entered the Premises.
51.4. Nothing herein contained shall be construed as limiting or
precluding the recovery by Owner against Tenant of any sums or damages to which,
in addition to the damages particularly provided above, Owner may lawfully be
entitled by reason of any default hereunder on the part of Tenant. The failure
or refusal of Owner to re-let the Premises or any part or parts thereof, or the
failure of Owner to collect the rent thereof under such re-letting, shall not
release or affect Tenant's liability for damages.
51.5. Tenant, for Tenant, and on behalf of any and all persons, firms,
corporations and associations claiming through or under Tenant, including
creditors of all kinds, does hereby waive and surrender all right and privilege
which they or any of them might have under or by reason of any present or future
law to redeem the Premises or to have a continuance of this Lease for the term
hereby demised after Tenant is dispossessed or rejected therefrom by process of
law or under the terms of this Lease or after the expiration or termination of
this Lease as herein provided or pursuant to law. If Owner commences any summary
proceeding for non-payment of Rents, or for. holding over after the expiration
or earlier termination of this Lease, Tenant will not interpose any counterclaim
of whatever nature or description in any such proceeding.
51.6. Tenant expressly recognizes that Tenant's due and punctual
performance of each of its monetary and non-monetary obligations under this
Lease throughout the term hereof is of paramount importance to Owner.
Accordingly, without limiting the provisions of Article 17, Article 18 or this
Article 51, if Tenant shall default in the timely performance of any obligation
of Tenant under this Lease, and in each and every instance that any such default
shall occur at least three (3) times in any twelve (12) month period, then
notwithstanding that such failure or other default shall have been cured within
the applicable period provided in said Article 17 (if any): (i) if Owner shall
give notice to Tenant that Owner intends to invoke the provisions of this
Section 51.6 upon the occurrence of the next default by Tenant then, upon the
occurrence of the next default by Tenant, Tenant shall be obligated to
immediately tender and deliver to Owner by certified or official bank check, an
amount equal to two (2) months of the then current Fixed Rent, to be held and
applied as an additional cash security deposit pursuant and subject to the
provisions of Article 57 below; and (ii) such next default shall be deemed to be
deliberate and Owner may thereafter give Tenant a notice of such default, and if
such default shall not be cured by Tenant within ten (10) days after the giving
of such notice to Tenant, time being of the essence, Owner may proceed to serve
a notice of intention to terminate this Lease at the expiration of the next
succeeding month and upon such date this Lease shall be terminated and of no
further force and effect except with respect to those provisions which are
stated to or which by implication survive the termination of this Lease.
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52. Access to Premises (Supplementing Article 13)
52.1. Owner's right of access provided for in Article 13 shall be
deemed to include: (i) access to equipment areas with respect to electric meter,
telephone, internet service and any other rooms and/or cabinets on each floor of
the Building; (ii) access to the meter room(s) and boiler room in the cellar
portion of the Building and any other equipment or fixtures in or accessible
through the Premises which are used in the general service of the Building or
for the maintenance or repair of which Owner may be responsible on a twenty-four
hour per day, seven day per week basis; (iii) access to the Building service
elevator and stairway, if any, to the Building service passage on the ground
floor of the Premises; (iv) egress and ingress through the Premises for the
purposes of (1) removing waste, refuse, debris and garbage resulting from the
operation of the Building and (2) access to the elevator machinery on the roof
of the Building and other areas of the roof of the Building; (v) access through
the Premises to any Building stairway, the roof, passenger elevator shaftways
and cabs; and (vi) access to the Premises during business hours to inspect the
Premises. Tenant shall not cause or permit any materials to be stored in such a
manner as to delay access to meter rooms, telephone/internet service equipment
areas, service and passenger elevator(s), service passages and stairways by
anyone having a right to such access.
52.2. Tenant shall not obstruct the sidewalks or curbs abutting the
Building or the driveways or other entrances to the Building or any loading dock
areas.
53. No Representations by Owner/Building Security (Supplementing
Article 21)
53.1. Tenant acknowledges that it has inspected the Premises and agrees
to accept possession thereof in its "as-is" physical condition on the date of
this Lease, it being understood and agreed that Owner shall not be obligated to
perform any alterations or improvements to the Premises. Tenant agrees that
neither Owner, nor any broker, agent, employee or representative of Owner nor
any other party has made, and Tenant does not rely on, any representations,
warranties, or promises with respect to the Building, the Premises or this
Lease, except as may be herein expressly set forth, and no rights, easements or
licenses are acquired by Tenant by implication or otherwise except as may be
expressly set forth in this Lease. Further, without limitation of the foregoing,
Owner makes no representations, warranties or promises of any nature as to the
design, construction, development or use of the Building, the manner of
construction thereof, the contents, presence or absence of asbestos or other
toxic or hazardous materials therein, or otherwise, except as may be expressly
set forth in this Lease. Without limiting the foregoing provisions of this
Section 53.1, and notwithstanding anything to the contrary set forth in this
Lease, Tenant acknowledges and agrees that Owner shall not be obligated to
provide any security to the Premises and Tenant hereby assumes all risk and
liability for loss or damage occasioned by theft or otherwise.
53.2. Owner shall have no liability for lost, stolen or damaged
property or for injuries to Tenant, its employees, contractors, customers,
invitees or guests, except if and to the extent caused solely by Owner's
negligence, tortious acts or willful misconduct. Except as specifically set
forth in Section 53.3 below, Owner shall have no obligation to provide locks,
fences, guards or other security devices or measures for the Building or the
Premises. Tenant may use any existing locks located at the Premises at Tenant's
sole risk; however, Owner makes no representations or warranties as to the
condition or adequacy of any such existing locks and Owner shall have no
obligations to maintain, service or repair same. Notwithstanding the provisions
of Section 53.3 below or any other provisions of this Lease, Owner shall have no
liability whatsoever relating to the security of the Building, except as may be
provided by law.
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53.3. Owner has installed a closed-circuit television system in various
areas throughout the Building (but not within the interior of the Premises).
Owner shall have no liability whatsoever to Tenant or any other party if the
Building lobby shall not be attended or any such closed-circuit television
system shall not be in operation during any period(s) during the term of this
Lease. Further, Tenant acknowledges that neither the lobby attendant nor any
closed-circuit television system which Owner has installed or may hereafter
elect to install shall, or shall be intended to, provide any security to Tenant
or any other tenants or occupants of the Building and Owner shall not have any
liability arising out of any acts or omissions of such lobby attendant or
relating to the operation of the Building lobby or any closed-circuit television
system. Tenant agrees that Tenant and all persons under Tenant's control shall
not make any claims relating to invasion of privacy with regard to such
closed-circuit television system and Tenant shall indemnify and hold Owner and
Owner's managing agent harmless from and against any and all such claims
asserted by persons under Tenant's control or by persons who at any time were
under Tenant's control.
53.4. The Premises are being leased to and accepted by Tenant together
with all furniture, telephone equipment and built-ins currently located within
the fifth (5`n) and sixth (6t") floors of the Premises, in their current "as-is,
where-is" condition, (collectively, the "Fifth and Sixth Floor Furniture")
subject to all liens, claims, and encumbrances and adverse interests. Owner has
not made, and does not make, any representations or warranties of any nature
whatsoever relating to such furniture, telephone equipment and built-ins, which
Owner has advised Tenant were abandoned by the prior tenant of the Premises.
However, if any claim(s) shall hereafter be made by a third party with regard to
any ownership rights or security interest in any of the Fifth and Sixth Floor
Furniture, then (i) such claim(s) shall be defended by Owner and (ii) Tenant
shall be responsible to pay to Owner, as Additional Rent, an amount equal to (i)
fifty (50%) percent of any liability arising out of such claim(s), as well as
(ii) fifty (50%) percent of all reasonable attorneys' fees, disbursements and
court costs incurred by Owner in connection with the defense and/or settlement
of such claim(s). Owner shall not be permitted to settle any such claim without
the prior written consent of Tenant, which consent shall not be unreasonably
withheld, delayed or conditioned. The furniture and telephone equipment
currently located within the fourth (4") floor of the Premises, which are
subject to a claim asserted by a prior subtenant of the Premises, are not
included in the leasing of the Premises and such furniture will be removed by
Owner prior to the Commencement Date.
53.5. Tenant shall be obligated to cause all of its employees, agents,
vendors, contractors and invitees to strictly adhere to all Building rules,
regulations and policies now or hereafter adopted by Owner or its managing agent
relating to Building security and ingress and egress to and from the Building
and the Premises, including, without limitation, sign-in, sign-out procedures,
delivery and pick-up by messengers and other personnel, identification and
after-business hours ingress and egress.
54. Quiet Enjoyment (Supplementing Article 23)
Tenant shall not interfere with the quiet enjoyment of the other
tenants of the Building. Tenant shall indemnify and save Owner harmless from and
against any and all claims made, and liabilities, losses and damages sustained
(including all costs, expenses, penalties and attorneys' fees), which Owner may
sustain arising out of Tenant's breach or default of the terms of this Article.
In addition to any other rights and remedies which Owner may have under the
terms of this Lease, Owner shall be entitled to a decree specifically enforcing
the provisions of this Article and enjoining Tenant from the breach or default
of the terms hereof.
55. Bills and Notices (Supplementing Article 28)
55.1. Any notice or other communication which either party may desire
or be required to give to the other under this Lease shall be in writing and
shall be delivered by a nationally recognized overnight courier service with
guaranteed next day delivery which provides proof of delivery (such as Federal
Express), by certified mail, return receipt requested, or by personal delivery,
as follows: In the case of notice to Tenant, one copy shall be mailed to Tenant
at the Building and a copy of any notice of default only shall be given to
Tenant c/o Blank Rome Tenzer Greenblatt, LLP, 405 Lexington Avenue, New York,
New York, 10174, Attention: Lloyd Shor, Esq.. In the case of notice to Owner,
one copy shall be given to Owner at the address first hereinabove set forth and
a copy shall be given to Owner c/o Kaufman Friedman Plotnicki & Grun, LLP, 300
East 42nd Street, New York, New York 10017, Attention: Gary S. Friedman, Esq.
Notices shall be deemed given on the date personal delivery or delivery by
overnight courier is effected or three (3) business days after mailing by
certified mail, return receipt requested, as the case may be. Either party shall
have the right to substitute an address for such notices upon prior written
notice to the other party given in the manner hereinabove set forth. A notice or
other communication given by a party's attorneys shall be deemed given by such
party.
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55.2. Whenever either party shall consist of more than one person or
entity, any bill, notice, statement, demand or other communication required or
permitted to be given, rendered or made to or by, and any payment to be made to
such party, shall be deemed duly given, rendered, made or paid if addressed to
or by (or in the case of payment by check, to the direct order of) one of such
persons or entities who shall be designated from time to time by all persons or
entities then comprising such party. Such party shall promptly notify the other
of the identity of such person or entity who is to act on behalf of all persons
and entities then comprising such party and of all changes in such identity.
55.3. Notwithstanding anything to the contrary contained herein, all
bills for Rent and/or Additional Rent may be sent by regular mail to Tenant only
and copies of bills need not be sent to Tenant's attorney or any other party.
56. Cleaning of Premises
56.1. Tenant shall clean the Premises on each business day to Owner's
reasonable satisfaction, at Tenant's sole cost and expense. Tenant shall use a
reputable cleaning contractor of Tenant's choice, subject to Owner's reasonable
written pre-approval. Tenant shall not permit Tenant's cleaning contractor to
utilize the passenger elevators of the Building or to damage the windows, floors
or any other portion(s) of the Premises or the Building. Tenant's contractors
shall complete all cleaning activities and vacate the Building on a daily basis
by no later than 11:30 P.M. each day. Tenant shall cause Tenant's cleaning
contractor to provide liability insurance with coverage limits of not less than
$1,000,000.00 per occurrence, with a minimum aggregate limit of $2,000,000.00,
as well as a fidelity bond in an amount not less than $1,000,000.00. The
policies of insurance and fidelity bond provided for in this Section shall be
issued by insurance companies reasonably satisfactory to Owner, shall be
non-cancelable except on at least thirty (30) days' prior written notice to
Owner by certified mail, return receipt requested, and, to the extent
obtainable, shall not be invalidated as against one assured by reason of any act
or omission of another assured. Such insurance companies shall be responsible,
authorized to issue the relevant insurance coverage and fidelity bond,
authorized to do business in New York and have a policyholder's rating of no
less than "A+10" in the most current edition of A.M. Best's Insurance Reports or
its successor. Not later than the earlier to occur of the day prior to the date
Tenant first enters upon the Premises or the day prior to the Commencement Date,
Tenant shall cause Tenant's cleaning contractor to furnish Owner with a
duplicate original policy evidencing each such insurance policy and an original
fidelity bond, together with satisfactory evidence of payment of the premiums
therefor for a period of coverage of not less than one year. Similar documentary
evidence of renewal and payment for each renewal or new policy for such
insurance and fidelity bond shall be furnished to Owner at least thirty (30)
days prior .to each date of expiration of the then current policy or bond. All
such insurance policies shall contain agreements by the insurers that the
coverage afforded thereby shall not be affected by the performance of any work
upon, in or about the Premises. Such policy(ies) and fidelity bond shall name
Owner, Owner's managing agent and their respective officers, directors,
shareholders, and authorized agents and representatives as additional insureds.
Such additional insureds shall be specifically named as follows in all such
policies, bonds and certificates: "Moklam Enterprises, Inc., as owner, and Yuco
Management, Inc., as agent, 475 Fifth Avenue, 19' Floor, New York, New York
10017, and such parties' respective officers, directors, shareholders, and
authorized agents and representatives". Additional insured status in respect of
such contractor's comprehensive general public liability insurance shall be
provided on ISO Form 2026 or its equivalent, without modification, or such other
endorsement as shall be satisfactory to Owner in Owner's sole and absolute
discretion.
56.2. Notwithstanding the provisions of Section 56.1 above or anything
else to the contrary set forth in this Lease, Owner shall have the option,
effective upon thirty (30) days' notice to Tenant given at any time(s) during
the term of this Lease, to designate and require Tenant to utilize the
contractor or contractors specified by Owner (which contractor(s) may be
affiliated with Owner or have a contractual relationship with Owner or an
affiliate of Owner) to perform all cleaning services on business days with
regard to the Premises, including window cleaning. The charges of the cleaning
contractor(s) so designated by Owner shall be at competitive market rates and
shall be timely paid by Tenant. The current charge for the cleaning contractor
currently designated by Owner is $2,100.00 (plus applicable tax) per month, per
floor (i.e. $6,300.00 plus tax per month for the Premises), exclusive of window
cleaning. Tenant hereby acknowledges and confirms that such charge is a
competitive market rate and that Owner has elected (and Tenant has agreed) to
require Tenant to use Owner's designated cleaning contractor effective as of the
Commencement Date. Such charges for cleaning services may be billed directly by
Owner to Tenant as Additional Rent and, in such event, such charges shall be
payable by Tenant as Additional Rent. As long as Tenant is utilizing Landlord
designated contractor, the provisions of Section 56.1 shall be inapplicable.
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57. Security
57.1. Tenant shall deliver to Owner, upon Tenant's execution and
delivery of this Lease, and Tenant shall hereafter continuously maintain in full
force and effect, a letter of credit in favor of Owner, in the form annexed
hereto as Exhibit A (the provisions of which Exhibit are hereby incorporated
herein by reference and made a part hereof) and otherwise satisfactory to Owner
in all respects, in the sum of one million five hundred sixty thousand and
00/100 ($1,560,000.00) dollars, as security for the faithful performance by
Tenant of all of the terms, conditions, covenants and agreements of this Lease,
including, but not limited to, the payment of Rents. Owner may use, apply or
retain the whole or any part of the letter of credit, to the extent required for
the payment of Fixed Rent and/or Additional Rent or any other sum as to which
Tenant is in default (after notice and the expiration of any applicable cure
period which are specifically provided for in this Lease with respect to such
default, if any), or for the payment or reimbursement of any sum which Owner may
expend or may be required to expend or for any damages Owner may suffer by
reason of Tenant's default (after notice and the expiration of any applicable
cure period which are specifically provided for in this Lease with respect to
such default, if any) in respect of any of the terms, conditions, covenants and
agreements set forth in this Lease including, without limitation, reasonable
attorneys' fees, court costs and other expenses paid by Owner. Tenant covenants
and agrees that it will not assign or encumber the letter of credit provided for
herein and that neither Owner nor its successors or assigns shall be bound by
any assignment, encumbrance, attempted assignment or attempted encumbrance.
Without limitation to the foregoing or any other provisions set forth in this
Article 57, the letter of credit delivered to Owner shall: (i) be clean,
irrevocable and non-negotiable, except by Owner to mortgagees and future
transferees of the Building without charge to the beneficiary; (ii) be issued by
Bank of America or by any other domestic banking institution then ranked in the
top ten as to total assets among domestic banking institutions, for an initial
term expiring on December 6, 2002, and automatically renewable for successive
one (1) year periods as provided below; (iii) provide that it shall be deemed
automatically renewed, without amendment, for consecutive periods of one (1)
year after the initial term and after each subsequent one (1) year renewal term
during the term of this Lease; and (iv) provide for payment on sight of the
amount of the letter of credit to Owner upon receipt by the bank of a sight
draft signed by Owner or a representative of Owner. However, in the event of any
conflict or inconsistency between the provisions of this Section 57.1 and the
form of letter of credit annexed hereto as Exhibit A, the annexed form of letter
of credit shall control. If Tenant hereafter terminates its banking relationship
with Bank of America and desires to tender a replacement letter of credit from
another domestic banking institution meeting the requirements set forth herein,
then Tenant shall use commercially reasonable efforts to obtain such replacement
letter of credit in the form annexed hereto as Exhibit A or in the form of the
letter of credit actually issued by Bank of America in connection with Tenant's
execution and delivery of this Lease which shall have been accepted by Owner. If
Tenant is unable to obtain a letter of credit in either such form, then subject
to Owner's prior written approval (which shall not be unreasonably withheld,
delayed or conditioned), Tenant may obtain a replacement letter of credit in
substantially the same form and containing the same material provisions and
conditions as either the form letter of credit annexed hereto as Exhibit A or
the letter of credit actually issued by Bank of America in connection with
Tenant's execution and delivery of this Lease which shall have been accepted by
Owner. In the event that Owner applies or retains any portion of the proceeds of
the letter of credit, Tenant shall restore the amount so applied or retained
within ten (10) days after Owner's demand, time being of the essence, so that,
at all times, the amount of the letter of credit shall be the amount of security
required to be maintained pursuant to the provisions of this Article 57. Owner,
in Owner's sole and absolute discretion, shall have the option, exercisable by
notice to Tenant, of requiring Tenant to restore the amount so applied by means
of a cash deposit (which shall be held by Owner pursuant to the provisions of
Section 57.3 below) or by means of an amended or supplemental letter of credit
complying in all respects with the provisions of this Section 57.1.
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57.2. (a) Subject to the conditions and limitations hereinafter set
forth in this Section 57.2, the amount of the security deposit shall be subject
to reduction commencing with the fifty-fifth (55") Lease Month (as such term is
hereinafter defined) in accordance with the following schedule:
Amount of Reduction
Lease Month of Security Deposit
----------- -------------------
55 $200,000.00
67 $200,000.00
79 $200,000.00
91 $200,000.00
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(b) The reduction in the amount of the security deposit in each
Lease Month as set forth in subsection (a) above is subject to and conditioned
upon the following: (i) Tenant shall not be in default under any of the
provisions of this Lease (after the expiration of any applicable notice and cure
period which is specifically provided for in this Lease with regard to such
default, if any); and (ii) Tenant's consolidated tangible net worth, exclusive
of goodwill, software development and other capitalized costs and intangibles
(as determined in accordance with generally accepted accounting principles,
consistently applied and either publicly disclosed pursuant to Tenant's periodic
reporting requirements under the Securities Exchange Act of 1934 or certified to
Owner by an independent certified public accountant) as of the end of the fiscal
quarter immediately preceding such Lease Month, shall not be less than one
hundred seventy five million ($175,000,000.00) dollars.
(c) In no event shall the amount of the security deposit be
reduced to less than seven hundred sixty thousand and 00/100 ($760,000.00)
dollars.
(d) As used in this Article 57, the term "Lease Month" shall mean
the calendar month during the term of this Lease as numbered consecutively from
the calendar month in which the Commencement Date falls (i.e., July 2002 is
Lease Month 1).
57.3. If any cash security shall be deposited hereunder by Tenant
pursuant to the provisions of this Article 57, such cash security shall be
placed in an interest-bearing account or accounts at one or more savings banks,
savings and loan associations or commercial banks duly authorized to do business
in the State of New York to be selected by Owner with all accrued interest to be
added to the principal amount of such security deposit. Notwithstanding the
provisions of the immediately preceding sentence, Owner shall be entitled to
payment from said account on a periodic basis of an administrative fee of one
percent (1%) per annum of the principal amount of the security deposit required
to be maintained by Tenant pursuant to this Lease. Owner shall have no liability
or obligation to Tenant for any loss suffered by Tenant by reason of the
investment of the security deposit as aforesaid. Notwithstanding the foregoing,
Owner shall have no obligation to deposit the security deposit into an
interest-bearing account and no interest shall be payable hereunder to Tenant
unless Tenant's federal employer identification number is furnished herein in
writing to Owner. Tenant represents that Tenant's present federal tax
identification number is 51-0350842.
57.4. If, during the term of this Lease, Owner shall sell, exchange,
lease or otherwise convey the Building, Owner shall have the right to, pay,
transfer or assign said deposit to such grantee, transferee or lessee and, in
such event, Owner shall be released from all responsibility and liability in
connection therewith, and Tenant will look solely to said grantee, transferee or
lessee for its return, provided such grantee, transferee or lessee shall assume,
or shall be deemed to have assumed, Owner's obligations under this Lease with
respect to such security deposit.
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57.5. Within forty-five (45) days after the expiration or earlier
termination of the term of this Lease, provided and on condition that Tenant
shall have vacated the Premises and surrendered possession thereof to Owner
vacant and free and clear of all rights and claims of tenants, subtenants and
other occupants, in the condition required pursuant to the provisions of this
Lease, Owner shall return to Tenant the unapplied portion of the cash security
deposit, if any, or the letter of credit serving as security, as the case may
be. However, nothing set forth in the immediately preceding sentence or
elsewhere in this Lease shall be deemed to waive, impair or otherwise affect
Owner's right whether prior to or subsequent to the date of expiration of
earlier termination of this Lease, to apply all or any portion of the cash
security deposit, or to draw down the letter of credit in whole or in part, and
to apply the proceeds thereof in accordance with the provisions of this Lease.
58. Glass
Tenant shall promptly replace, at its sole cost and expense, all glass
damaged or broken in or about the Premises by reason of the negligent or
wrongful acts or omissions of Tenant or Tenant's employees, agents, contractors
or invitees.
59. Certificates
59.1. Tenant shall, without charge, at any time and from time to time,
at the request of Owner for a bona fide business reason, upon not less than
seven (7) business days' notice, execute and deliver to Owner an estoppel
certificate in such form as shall be reasonably required by Owner, certifying
(i) that this Lease is unmodified and in full force and effect (or if there have
been modification, that the same is in full force and effect as modified and
stating the modifications), (ii) the commencement date and the expiration date
of this Lease, (iii) the dates to which the Fixed Rent and Additional Rent have
been paid, (iv) whether or not, to the best of Tenant's knowledge, there are
then existing any setoffs or defenses against the enforcement of any of the
agreements, terms, covenants or conditions hereof upon the part of Tenant to be
performed or complied with under this Lease and, if so, specifying same, (v)
whether or not, to the best of Tenant's knowledge, Owner is in default in
performance of any of its obligations under this Lease, and, if so, specifying
each such default (including the specific provision(s) of the Lease with respect
to which Owner is claimed to be in default), (vi) whether or not any item of
Fixed Rent or Additional Rent has been paid more than one (1) month prior to its
due date, (vii) the amount of the security deposit (if any) deposited by Tenant
under this Lease, (viii) whether any actions, whether voluntary or otherwise,
are pending against Tenant under the bankruptcy laws of the United States or any
state thereof, (ix) whether Tenant has any option to renew or expand the term of
this Lease and (x) whether Tenant has any right of first refusal to purchase (or
lease) the Premises or any portion thereof or the Building or any portion
thereof. Any such estoppel certificate delivered pursuant hereto shall be
binding upon Tenant and may be relied upon by Owner as well as by others with
whom Owner may be dealing.
59.2. Owner shall, without charge, at any time and from time to time,
at the request of Tenant for a bona fide business reason, upon not less than
seven (7) business days' notice, execute and deliver to Tenant an estoppel
certificate in such form as shall be reasonably required by Tenant, certifying
(i) that this Lease is unmodified and in full force and effect (or if there have
been modifications, that the same is in full force and effect as modified and
stating the modifications), (ii) the commencement date and the expiration date
of this Lease, (iii) the dates to which the Fixed Rent and Additional Rent have
been paid, (iv) whether or not, to the best of Owner's knowledge, there are then
existing any setoffs or defenses against the enforcement of any of the
agreements, terms, covenants or conditions hereof upon the part of Tenant to be
performed or complied with under this Lease and, if so, specifying same, (v)
whether or not, to the best of Owner's knowledge, Tenant is in default in
performance of any of its obligations under this Lease, and, if so, specifying
each such default (including the specific provision(s) of the Lease with respect
to which Tenant is claimed to be in default), (vi) whether or not any item of
Fixed Rent or Additional Rent has been paid more than one (1) month prior to its
due date, (vii) the amount of the security deposit (if any) deposited by Tenant
under this Lease, (viii) whether any actions, whether voluntary or otherwise,
are pending against Owner under the bankruptcy laws of the United States or any
state thereof, (ix) whether Tenant has any option to renew or expand the term of
this Lease and (x) whether Tenant has any right of first refusal to purchase (or
lease) the Premises or any portion thereof or the Building or any portion
thereof. Any such estoppel certificate delivered pursuant hereto shall be
binding upon Owner and may be relied upon by Tenant as well as by others with
whom Tenant may be dealing.
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59.3. Within a reasonable period of time after the request of Tenant,
Owner and Tenant shall execute a memorandum of lease which specifies only the
names and addresses of the parties, the term of the lease, the space leased,
that Tenant has a right to extend the Lease for a five year period, that Tenant
has a right of first offer covering the second and third floors in the Building
and that Tenant is entitled to an SNDA as provided in this Lease. Tenant shall
also prepare and execute a termination of such memorandum in recordable form
which shall be delivered to Owner upon Owner's and Tenant's execution of such
memorandum and which may be recorded after the expiration or earlier termination
of this Lease. Such memorandum and termination of memorandum shall be subject to
Owner's approval, which shall not be unreasonably withheld or delayed. Tenant
shall prepare all necessary real property transfer tax returns for recordation.
60. Waiver of Subrogation
60.1. Tenant shall cause to be included in each of its insurance
policies insuring Tenant's property and business interest in the Premises
against loss, damage or destruction by fire or other casualty (i) a waiver of
the insurer's right of subrogation, against Owner, and (ii) an express agreement
that such policy shall not be invalidated if, prior to the occurrence of a
casualty, the insured waives the right of recovery against any party responsible
for a casualty covered by the policy. If such waiver or permission shall not be,
or shall cease to be, obtainable without additional charge or at all, Tenant
shall so notify Owner promptly after learning thereof. In such case, if Owner
shall so elect and shall pay the insurer's additional charge therefor, such
waiver shall be included in the policy. Each such policy shall name Owner as an
additional insured and shall contain, if obtainable, agreements by the insurer
that the policy will not be canceled without at least thirty days' prior notice
to both assureds and that the act or omission of Tenant will not invalidate the
policy as to Owner. Tenant hereby releases Owner with respect to any claim
(including a claim for negligence) which it might otherwise have against Owner
for loss, damage or destruction with respect and to the extent to which it is
required to be insured under a policy or policies containing a waiver of
subrogation or naming Owner as an additional insured, as provided in this Lease,
whether or not the Tenant is actually so insured and whether or not the loss,
damage or destruction is due to the carelessness or negligence of Owner, its
servants, agents or employees.
60.2. Owner shall cause to be included in each of its insurance
policies insuring the Premises and the Building against loss, damage or
destruction by fire or other casualty (i) a waiver of the insurer's right of
subrogation against Tenant, and (ii) an express agreement that such policy shall
not be invalidated if, prior to the occurrence of a casualty, the insured waives
the right of recovery against any party responsible for a casualty covered by
the policy. If such waiver or permission shall not be, or shall cease to be,
obtainable without additional charge or at all, Owner shall so notify Tenant
promptly after learning thereof. In such case, if Tenant shall so elect and
shall pay the insurer's additional charge therefor, such waiver shall be
included in the policy. Each such policy shall contain agreements by the insurer
that the policy will not be canceled without at least thirty days' prior notice
to both insureds by certified mail, return receipt requested, and that the act
or omission of Owner will not invalidate the policy as to Tenant. Owner hereby
releases Tenant with respect to any claim (including a claim for negligence)
which it might otherwise have against Tenant for loss, damage or destruction
with respect and to the extent to which it is required to be insured under a
policy or policies containing a waiver of subrogation or naming Tenant as an
additional assured, as provided in this Article, whether or not the Owner is
actually so insured and whether or not the loss, damage or destruction is due to
the carelessness or negligence of Tenant, its servants, agents or employees.
61. Limitation of Liability
61.1. The liability of Owner under this Lease and all matters
pertaining to or arising out of the tenancy and the use and occupancy of the
Premises, shall be limited to Owner's interest in the Land and Building and in
no event shall Tenant make any claim against or seek to impose any personal
liability upon Owner or Owner's managing agent or any officer, director,
stockholder, partner, principal, employee, contractor or agent of Owner or of
Owner's managing agent or any other person affiliated with or constituting
Owner, or any principal of any firm or corporation that may hereafter be or
become the Owner or the Owner's managing agent. Without limitation of the
foregoing, Tenant shall look solely to the estate and property of Owner in the
Land and Building for the satisfaction of Tenant's remedies for the collection
of any judgment (or other judicial process) requiring the payment of money by
Owner in the event of any default or breach by Owner with respect to any of the
terms, covenants and conditions of the Lease to be observed and/or performed by
Owner, and no other property or assets of Owner, or of Owner's managing agent
(or any officer, director, stockholder, partner, principal, employee, contractor
or agent of Owner or of Owner's managing agent) shall be subject to levy,
execution or other enforcement procedures for the satisfaction of Tenant's
remedies under or with respect to this Lease, the relationship of Owner and
tenant hereunder, or Tenant's use and occupancy of the Premises.
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61.2. If Owner shall at any time covenant that its consent to or
approval of any matter relating to this Lease shall not be unreasonably
withheld, delayed and/or conditioned, Tenant waives any claim against Owner for
money damages which it may have, based upon its assertion that Owner has
unreasonably withheld, delayed and/or conditioned its consent to or approval of
Tenant's proposed action or work. Tenant's sole remedy shall be an action or
proceeding to specifically enforce such provisions of this Lease or, in certain
cases relating to assignment and subletting as are specifically provided for in
Article 49 of this Lease, to institute arbitration pursuant to the provisions of
Article 89 below. In the event of any such action, proceeding or arbitration,
Tenant's remedy shall be limited to specific performance.
62. Brokers
Tenant and Owner each warrants and represents that there were no
brokers, finders or like agents instrumental in consummating this Lease except
for Insignia/ESG, Inc., and Newmark & Company Real Estate, Inc. (the "Brokers")
and that no conversations or prior negotiations were had by the representing
party with any brokers, finders or like agents other than the Brokers concerning
the renting of the Premises by Tenant or this Lease. Each party shall indemnify
and hold the other party harmless from and against any claims for brokerage
commissions arising out of any conversations or negotiations had by the
indemnifying party with any brokers other than the Brokers concerning the
renting of the Premises or this Lease. The provisions of this Article shall
survive the expiration or earlier termination of this Lease. Owner shall pay a
leasing brokerage commission to the Brokers pursuant to a separate written
agreement.
63. Payment of Rents
63.1. The Fixed Rent payable by Tenant hereunder during the period
commencing on the Commencement Date through and including the expiration or
earlier termination of the term of this Lease shall be at the following rates:
63.1.1 One million four hundred eighty-eight thousand and 00/100
($1,488,000.00) dollars per annum ($124,000.00 per month) during the one (1)
year and six (6) month period commencing on July l, 2002 through and including
December 31, 2003;
63.1.2 One million two hundred sixty-nine thousand seven hundred
sixty and 00/100 ($1,269,760.00) dollars per annum ($105,813.33 per month)
during the one (1) year period commencing on January 1, 2004 through and
including December 31, 2004;
63.1.3 One million three hundred thousand one hundred fifteen and
20/100 ($1,300,115.20) dollars per annum ($108,342.93 per month) during the one
(1) year period commencing on January 1, 2005 through and including December 31,
2005;
63.1.4 One million five hundred seventy-nine thousand
seventy-seven and 50/100 ($1,579,077.50) dollars per annum ($131,589.79 per
month) during the one (1) year period commencing on January 1, 2006 through and
including December 31, 2006;
63.1.5 One million six hundred ten thousand six hundred
fifty-nine and 05/100 ($1,610,659.05) dollars per annum ($134,221.59 per month)
during the one (1) year period commencing on January 1, 2007 through and
including December 31, 2007;
63.1.6 One million seven hundred eighty-nine thousand seven
hundred fifty-two and 24/100 ($1,789,752.24) dollars per annum ($149,146.02 per
month) during the one (1) year period commencing on January 1, 2008 through and
including December 31, 2008;
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63.1.7 One million eight hundred twenty-five thousand five
hundred forty-seven and 28/100 ($1,825,547.28) dollars per annum ($152,128.94
per month) during the one (1) year period commencing on January 1, 2009 through
and including December 31, 2009;
63.1.8 One million eight hundred sixty-two thousand fifty-eight
and 23/100 ($1,862,058.23) dollars per annum ($155,171.52 per month) during the
one (1) year period commencing on January 1, 2010 through and including December
31, 2010;
63.1.9 One million eight hundred ninety-nine thousand two hundred
ninety-nine and 39/100 ($1,899,299.39) dollars per annum ($158,274.95 per month)
during the one (1) year period commencing on January 1, 2011 through and
including December 31, 2011; and
63.1.10 One million nine hundred thirty-seven thousand two
hundred eighty-five and 38/100 ($1,937,285.38) dollars per annum ($161,440.45
per month) during the one (1) year period commencing on January 1, 2012 through
and including December 31, 2012.
63.2. Fixed Rent shall be payable in advance in equal, consecutive,
monthly installments on the first day of each and every calendar month during
the term hereof without any credits, off-sets or reduction whatsoever, except as
shall be otherwise specifically provided for in this Lease. However, upon
Tenant's execution and delivery of this Lease, Tenant shall pay the Fixed Rent
in advance for the one (1) month period of September 2002, in the amount of
$124,000.00. Tenant's liability to pay the Rents due under this Lease shall
survive the expiration or earlier termination of this Lease.
63.3. Provided and on condition that Tenant shall not default under any
provision of this Lease (after the expiration of any applicable cure period
which is specifically provided for in this Lease with regard to such default, if
any), the Fixed Rent shall be abated for each of the first two (2) months of the
term of this Lease (i.e., the months of July 2002 and August 2002). Accordingly,
the maximum amount of Fixed Rent which can be abated pursuant to this Section
63.3 is $248,000.00. However, if this Lease shall be terminated by reason of
Tenant's default or if Tenant shall abandon the Premises at any time during the
term of this Lease, then the total amount of Fixed Rent which shall have been
abated pursuant to this Section 63.3. multiplied by a fraction, the numerator of
which is the number of full calendar months falling within the period commencing
on the date of termination of this Lease or abandonment of the Premises, as the
case may be, through the fixed date of expiration hereof and the denominator of
which is the number of months constituting the term of this Lease (i.e., 126),
shall become immediately due and payable by Tenant to Owner as Additional Rent
without notice or demand.
63.4. If any installment or installments of Fixed Rent or Additional
Rent shall not be received by Owner within five (5) days of the date due, a late
payment fee equal to six percent (6%) of each late payment shall become
immediately due to Owner for the purpose of defraying the expenses incident to
handling such delinquent payment. Such fee shall be payable on the first
business day of the following month as Additional Rent hereunder. If any
installment(s) of Fixed Rent or Additional Rent shall not be received by Owner
within thirty (30) days of the date due, such payment, in addition to the
aforesaid late payment fee, shall bear interest from the date it is payable
until it shall have been paid, at a rate equal to the lesser of (a) eighteen
(18%) percent per annum or (b) the maximum rate of interest allowed by law.
Notwithstanding the foregoing, nothing herein contained shall at any time
whatsoever be construed as a consent on the part of Owner to any delay or
postponement of such payments.
63.5. Tenant's failure to timely pay any Rents under this Lease shall
be deemed a breach by Tenant of the terms of this Lease and owner shall have the
same rights and remedies with respect to such breach as it has with respect to
any other breach by Tenant of any covenant hereunder and Owner shall not be
limited to the commencement of a nonpayment summary proceeding with respect
thereto.
64. Electricity
64.1. Tenant shall contract directly with the public utility company
furnishing electric current to be used in the Premises. Owner, at Tenant's sole
cost and expense, shall furnish and install separate meter(s) servicing the
Premises and all other equipment necessary to measure Tenant's consumption of
electricity at the Premises if and to the extent such meters and equipment are
not already installed, and Tenant shall pay Owner for the cost of such
installation, on demand, as Additional Rent. Tenant shall pay directly to the
utility company supplying electricity to the Premises the amounts due for
electric current consumed in the Premises from and after the Commencement Date
through the term of this Lease, as indicated by meters measuring the use thereof
or as otherwise reasonably estimated by Owner.
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64.2. Tenant's use of electric current in the Premises shall not at any
time exceed the capacity of any of the electrical conduits and equipment in or
otherwise serving the Premises. Tenant shall not make or perform or permit the
making or performing of, any alterations to wiring, installations or other
electrical facilities in or serving the Premises and the Building without the
prior written consent of Owner in each instance. Should Owner grant any such
consent, all additional risers or other equipment required therefor shall be
installed by Owner and the cost therefor shall be paid by Tenant upon Owner's
demand accompanied by reasonably sufficient supporting documentation (such as
invoices).
64.3. Owner shall not be liable in anyway to Tenant for any failure or
defect in the supply or character of electric energy furnished to the Premises
by reason of any requirement, act or omission of the public utility providing
the Building with electricity or for any other reason whatsoever. Owner shall
reasonably cooperate with Tenant to eliminate any such failure or defect,
provided that Owner shall not be obligated to incur any costs or expenses or
incur any liability in connection therewith. Owner shall not voluntarily take
any affirmative action to reduce the existing amount of electric capacity
servicing the Premises unless Owner shall be required to do so by applicable
laws, codes, ordinance, rules or regulations or pursuant to direction of any
municipal, governmental or quasi-governmental department or organization or any
utility providing electric service to the Building. Tenant shall have the right
to reallocate existing electrical service to the Premises among the three floors
thereof and the roof deck, as Tenant's Work pursuant to Article 44 above,
subject to Owner's consent, not to be unreasonably withheld, delayed or
conditioned subject to the provisions of Article 44 above; provided that Tenant
reimburse Owner for the reasonable cost to restore the original allocation of
electric energy. The provisions of this Section 64.3 shall survive the
expiration or earlier termination of this Lease.
65. Utility and Other Charges
Tenant shall pay all charges imposed by reason of (a) the use of (i)
hot water and steam and (ii) electric current and gas for light or power or any
other purpose for the use of the Premises and (b) the operation of fans and
other devices in the HVAC Systems and any other systems or equipment which shall
service the Premises and the cost of installation and maintenance of any systems
required to be installed or maintained in connection therewith. Tenant
acknowledges that the heating of the Premises shall be provided at the existing
capacity of the Building's existing heating plant, as same shall be supplemented
by the HVAC Systems. Owner shall be responsible for the repair and maintenance
of the Building's existing central boiler/heating plant. Charges for all
services supplied to the Premises by the City of New York or any public service
companies shall be billed directly to Tenant and shall be timely paid by Tenant
to the City of New York or any public service company, as the case may be.
Tenant acknowledges that no utilities or other services, except as may be
specifically provided herein, have been included in Rents and that, without
limitation, Owner has no obligation to furnish or supply electricity, gas,
water, air conditioning or any other utility or service to or for the Premises.
66. Tenant's Compliance with Notices
Tenant shall comply, at its own expense, with all notes, notices of
violation of law or municipal ordinances, orders and requirements which may be
issued by the departments having jurisdiction over the Premises, arising out of
(i) Tenant's particular use of the Premises and/or (ii) Tenant's default under
any of the provisions of this Lease. However, Tenant shall not be responsible to
cure violations affecting the Premises which are issued prior to the
Commencement Date. Owner shall be responsible for the cure of any violation
resulting from the condition of the Premises as of the Commencement Date which
shall have a material adverse effect upon Tenant's use and occupancy of the
Premises or which shall prevent Tenant from obtaining a building permit.
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67. Permits
67.1. Tenant, at its sole cost and expense, shall (i) obtain all
necessary permits, licenses, franchises or other authorizations as may be
required by law, to carry on Tenant's particular use of the Premises as set
forth in Article 2 and Article 43 above and for the installation by Tenant of
any equipment, appliances and other services to and upon the Premises, (ii)
promptly after obtaining same, submit copies of all such permits, licenses,
franchises or other authorizations to Owner for Owner's inspection and (iii) not
less than thirty (30) days prior to expiration, submit to Owner copies of all
such new or renewal permits, licenses, franchises or other authorizations
expiring during the term of this Lease. Tenant, at Tenant's sole cost and
expense, shall furnish and install in the Premises all fire fighting equipment
and all appurtenances thereto required by the governmental authorities having
jurisdiction of the Premises by reason of Tenant's particular use of the
Premises.
67.2. Tenant shall not, nor shall Tenant permit any of its agents,
servants and/or employees to, do or perform any act or acts or fail to act which
will cause or result in the suspension or revocation of any of the permits,
licenses, franchises or authorizations issued for the Premises or the placement
of a violation against such licenses, permits, franchise or authorizations, the
Premises or the Building. If Tenant shall receive notice of any such violation
or notice of proposed suspension or revocation of said permits, licenses,
franchises or authorizations, Tenant shall forthwith notify Owner and shall
immediately cease or cause its agents, servants and/or employees to immediately
cease to do or perform the act which gave rise to the notice. Tenant, at
Tenant's sole cost and expense, shall promptly, take whatever actions are
necessary to defend and have removed the violation, suspension or revocation. If
Tenant fails to cause any such violation, suspension or revocation to be
promptly removed, Owner shall, in Owner's sole and absolute discretion, have the
right (but not the obligation), after ten (10) days' prior notice to Tenant, to
take whatever actions are necessary in order to defend and have removed the
violation, suspension or revocation of said permit, license, franchise or
authorization for the Premises, and Tenant shall, immediately upon demand from
Owner, either pay directly said costs and expenses (including, without
limitation, all penalties, fines, and attorneys' fees, costs and expenses) or
reimburse Owner for the same as Additional Rent, and Tenant hereby agrees to
indemnify and hold Owner harmless from and against any liability or expense
incurred by Owner as a result thereof.
68. Signs
68.1. Tenant shall not display or erect any exterior decorations,
lettering, signs, advertisements, notices, posters, displays, projections,
curtains, blinds, shades, screens or awnings on the outside of the Premises or
the Building or any interior signs which are visible from the exterior of the
Premises (collectively, "Signs") without obtaining Owner's prior written
approval thereto, which approval shall not be unreasonably withheld. Without
limitation of the foregoing, Tenant shall also be responsible for obtaining, at
Tenant's sole cost and expense, any required consent or approval of the
Landmarks Commission with regard to all Signs. Additionally, subject to all of
the provisions of this Article 68, Tenant shall be permitted to install its
corporate and brand(s) Signs within the Premises and on the exterior of the
Building adjacent to the entrance on Broadway; provided, however that any
proposed Sign identifying Tenant as a tenant of the Building to be affixed by
Tenant on the exterior of the Building adjacent to the Building entrance on
Broadway shall not be larger than ten inches wide by four inches high and shall
be placed in a location designated by Owner which shall be reasonably acceptable
to Tenant. All Signs located in public corridors and hallways, including Signs
for the exterior door(s) of the Premises, shall be furnished by Owner at the
expense of Tenant. All Signs shall comply with all of the laws, orders, rules
and regulations of the governmental authorities having jurisdiction thereof,
including zoning laws, building codes and as required by insurance underwriters.
Tenant shall obtain and pay for all permits required therefor. No Signs shall be
installed until all approvals and permits are first obtained and copies thereof
delivered to Owner with evidence of payment for any fees pertaining thereto.
Tenant shall pay all annual renewal fees pertaining to its Signs. Tenant
acknowledges that Owner's approval of the dimensions, material, content,
location and/or design of any Signs shall not be deemed a representation that
such Signs or the installation thereof comply with applicable laws or building
codes or are otherwise safely and properly manufactured and installed. Tenant
shall be solely liable for all loss, damage and/or injury to persons and/or
property arising out of or in connection with the installation and maintenance
of all Signs in or about the Premises.
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68.2. If Owner shall deem it necessary to remove any Signs in order to
paint or to make any other repairs, alterations or improvements in or upon the
Premises or the Building or any part thereof, Tenant, upon demand, shall remove
same at Tenant's expense and, upon completion of said repairs, alterations or
improvements, shall have same replaced at Tenant's expense.
69. Intentionally Deleted.
70. Rent Control
If at the commencement of, or at any time or times during the term of
this Lease, the Rents reserved in this Lease shall not be fully collectible by
reason of any Federal, State, County or City law, proclamation, order or
regulation, or direction of a public officer or body pursuant to law, Tenant
shall enter into such agreements and take such other steps (at Owner's cost and
expense) as Owner may reasonably request and maybe legally permissible to permit
Owner to collect the maximum Rents which may from time to time during the
continuance of such legal rent restriction be legally permissible (and not in
excess of the amounts reserved therefor under this Lease). Upon the termination
of such legal rent restriction prior to the expiration of the term of this
Lease, (i) the Rents shall become and thereafter be payable hereunder in
accordance with the amounts reserved in this Lease for the Owner and, if legally
permissible, an amount equal to (a) the Rents which would have been paid
pursuant to this Lease but for such legal rent restriction less (b) the Rents
paid by Tenant to Owner during the period or periods such legal rent restriction
was in effect, shall be forthwith paid to Owner by Tenant as Additional Rent.
71. Tenant Holdover
71.1. Should Tenant hold over in possession after the expiration or
sooner termination of the term or of any extended term of this Lease, such
holding over shall not be deemed to extend the term or renew the Lease, but such
holding over thereafter shall continue upon the covenants and conditions herein
set forth except that, in addition to any other rights or remedies Owner may
have under this Lease, at law or in equity, and without in any manner limiting
Owner's right to demonstrate or collect any damages suffered by Owner and
arising from Tenant's failure to timely surrender possession of the Premises
upon the expiration or sooner termination of the term of this Lease, the charge
for use and occupancy of such holding over for each month or part thereof (even
if such part shall be a small fraction of a month) shall be the product of (a)
one-twelfth of the annual Rents payable for the twelve-month period immediately
preceding such holding over multiplied by (b) 2.5, which amount Tenant shall pay
to Owner promptly upon demand, in full without set-off.
71.2. Tenant expressly waives, for itself and for any person claiming
through or under Tenant, any rights which Tenant or any each such person may
have under the provisions of Section 2201 of the New York Civil Practice Law and
Rules and of any similar or successor law of same import then in force, in
connection with any holdover proceedings which Owner may institute to enforce
the provisions of this Lease.
71.3. The provisions of this Article shall survive the expiration or
sooner termination of this Lease and shall not be deemed to limit Owner's rights
or remedies under this Lease, at law and/or in equity.
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72. Hazardous Materials/Odor
72.1. Tenant shall not permit any unusual or obnoxious odors to emanate
from the Premises. Tenant shall not cause or permit any Hazardous Materials (as
hereinafter defined) to be used, stored, transported, released, handled,
produced or installed in, on or from the Premises, except solely for reasonable
and safe quantities of such materials as are customarily and ordinarily used by
office tenants, provided that same are used, handled, stored and disposed of in
accordance with all applicable laws, ordinances, rules and regulations. The term
"Hazardous Materials", as used herein, shall mean any flammables, explosives,
radioactive materials, hazardous wastes, hazardous and toxic substances or
related materials, asbestos or any material containing asbestos, or any other
substance or material defined as hazardous by any Federal, state or local law,
ordinance, rule or regulation, including, without limitation, the Comprehensive
Environmental Response Compensation and Liability Act of 1980, as amended, the
Resource Conservation and Recovery Act, as amended, and in the regulations
adopted and publications promulgated pursuant to each of the foregoing. Owner
shall have the right to enter the Premises at any time upon reasonable notice
(except in an emergency, in which event no notice shall be necessary) to inspect
same and ascertain whether the Premises are clean and free of unusual or
obnoxious odors or Hazardous Materials (including, without limitation, the
elimination and removal of same) at or affecting the Premises. The provisions of
this Section 72.1 shall survive the expiration or sooner termination of this
Lease.
72.2. Tenant hereby indemnifies and holds harmless Owner and Owner's
officers, directors, shareholders, principals, agents and employees from and
against any and all claims, losses, liabilities, damages, demands, actions,
causes of action, judgments, costs and expenses, including, without limitation,
reasonable attorneys' fees, disbursements and Court costs, arising out of
Tenant's breach of any provision of this Article 72. The provisions of this
Section 72.2 shall survive the expiration or earlier termination of this Lease.
72.3. Notwithstanding the foregoing, Owner shall be responsible to
remove or remediate any asbestos existing in the Premises as of the date prior
to the Commencement Date (if any) as may be required by law.
72.4. Owner has provided Tenant with an ACP-5 covering the fourth,
fifth and sixth floors of the Building and the roof deck in the form annexed
hereto as Exhibit C-1.
73. Partnership Tenant
If Tenant is a partnership (or is comprised of two (2) or more persons,
individually or as co-partners of a partnership) or if Tenant's interest in this
Lease shall be assigned to a partnership (or to two (2) or more persons,
individually or as co-partners of a partnership) (any such partnership and such
persons are referred to in this Article 73 as the "Partnership Tenant"), the
following provisions shall apply to such Partnership Tenant: (a) the liability
of each of the parties comprising the Partnership Tenant shall be joint and
several; (b) each of the parties comprising the Partnership Tenant hereby
consents in advance to, and agrees to be bound by (x) any written instrument
which may hereafter be executed by the Tenant nr any successor partnership,
changing, modifying, extending or discharging this Lease, in whole or in part,
or surrendering all or any part of the Premises to Owner, and (y) any notices,
demands, requests or other communications which may hereafter be given by the
Partnership Tenant; (c) any bills statements, notices, demands requests or other
communications given or rendered to the Partnership Tenant or to any of such
parties shall be binding upon the Partnership Tenant and all such parties; (d)
if the Partnership Tenant shall admit new partners, all of such new partners
shall, by their admission to the Partnership Tenant, be deemed to have assumed
joint and several personal liability for the performance of all of the terms,
covenants and conditions of this Lease on Tenant's part to be observed and
performed; and (e) the Partnership Tenant shall give prompt notice to Owner of
the admission of any new partners, and upon demand of Owner, shall cause each
such new partner to execute and deliver to Owner an agreement in form
satisfactory to Owner, wherein each such new partner shall assume joint and
several personal liability for the performance of all the terms, covenants and
conditions of this Lease on Tenant's part to be observed and performed (but
neither Owner's failure to request any such agreement nor the failure of any
such new partner to execute or deliver any such agreement to Owner shall vitiate
the provisions of clause (d) of this Article 73). The provisions of this Article
73 shall also apply to all general partners of a tenant which is a limited
partnership.
74. Increase in Taxes
74.1. Tenant shall pay to Owner, as Additional Rent, for each fiscal
tax year subsequent to the Base Tax Year (hereinafter defined) falling in whole
or in part within the term of this Lease, fifty (50%) percent ("Tenant's
Proportionate Share") of any and all increases in Real Estate Taxes (as such
term is hereinafter defined) above those for the 2002/2003 fiscal tax year
(hereinafter referred to as the "Base Tax Year") imposed on the Building and/or
the land on which the Building is situated (the Building and such land are
hereinafter jointly referred to as the "Real Property") during the term of this
Lease, whether any such increase results from a higher effective tax rate,
and/or an increase in the assessed valuation of such the property, and/or the
reduction or elimination of any exemption or abatement, and/or for any other
reason(s). The term "Real Estate Taxes" shall mean the aggregate amount of real
estate taxes and any general or special assessments imposed upon the Real
Property (including, without limitation, (i) assessments made upon or with
respect to any "air" and "development" rights now or hereafter appurtenant to or
affecting the Real Property, (ii) any fee, tax or charge imposed for any vaults,
vault space or other space within or outside the boundaries of the Real
Property, and (iii) any assessments levied after the date of this Lease for
public benefits to the Real Property or the Building); provided that if, because
of any change in the taxation of real estate, any other tax or assessment,
however denominated (including, without limitation, any franchise, income,
profit, sales, use, occupancy, gross receipts or rental tax) is imposed upon
Owner or the owner of the Real Property or the Building, or the occupancy, rents
or income therefrom, in substitution for or in addition to any of the foregoing
taxes or for an increase in any of the foregoing taxes, such other or additional
tax or assessment shall be deemed part of Real Estate Taxes computed as if
Owner's sole asset were the Real Property. With respect to any fiscal tax year
subsequent to the Base Tax Year, all expenses, including attorneys' fees and
disbursements and experts' and other witnesses' fees, incurred in contesting the
validity or amount of any Real Estate Taxes or in obtaining a refund of Real
Estate Taxes shall be considered as part of the Real Estate Taxes for such
fiscal tax year. Anything contained herein to the contrary notwithstanding, Real
Estate Taxes shall not be deemed to include (1) any taxes on Owner's income, (2)
franchise taxes, (3) estate or inheritance taxes, or (4) any similar taxes
imposed on Owner, unless such taxes are levied, assessed or imposed as a
substitute for the whole or any part of, or as a substitute for an increase in,
the taxes, assessments, levies, fees, charges and impositions that now
constitute Real Estate Taxes. Real Estate Taxes shall also not include any
interest or penalties imposed upon Owner by the Department of Finance of the
City of New York which are solely attributable to Owner's late payments of real
estate taxes which do not arise out of Tenant's late payment of Additional Rent
pursuant to this Article. A copy of the tax bill of the City of New York or any
other documentation available from the Department of Finance of the City of New
York or any other governmental agency shall be sufficient evidence of the amount
of Real Estate Taxes for any period(s).
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74.2. Owner shall give Tenant written notice of each change in Real
Estate Taxes which will be effective to create or change Tenant's obligation to
pay Additional Rent pursuant to the provisions of this Article. Such notice
shall include a copy of the tax bill(s) or other documentation on which it is
based and shall contain Owner's calculation of the annual rate of Additional
Rent payable resulting from such increase in Real Estate Taxes. However, Owner
shall have no obligation to furnish more than one such copy of the real estate
tax bill or other documentation for any fiscal tax year and in no event shall
Owner's failure to furnish a copy of any such tax bill(s) or other documentation
affect Tenant's obligations as to the amount or due date of the Additional Rent
payable by Tenant pursuant to the provisions of this Article. Every notice given
by Owner pursuant to this Section shall be conclusive and binding upon Tenant in
the absence of manifest computational error unless Tenant shall give notice to
Owner (hereinafter, "Tenant's Objection Notice"), within six (6) months after
Owner's notice shall have been given to Tenant, time being of the essence,
stating that Tenant disputes the calculation of Additional Rent set forth in
Owner's notice and specifying in reasonable detail all of Tenant's bona fide
objections to the accuracy of Owner's notice. Notwithstanding the giving of
Tenant's Objection Notice, Tenant shall nevertheless timely pay the full amount
of Additional Rent specified in Owner's notice until such dispute is finally
resolved by a final, unappealed judgment of a court of competent jurisdiction.
74.3. Only Owner shall be eligible to institute tax reduction or other
proceedings to reduce the assessed valuation of the Real Property. Should Owner
be successful in any such reduction proceeding and obtain a rebate for periods
during which Tenant has paid its share of increases, Owner shall, after
deducting its expenses including, without limitation, attorneys' fees and
disbursements in connection therewith, return to Tenant its pro rata share of
such rebate, except that Tenant may not obtain any portion of the benefits which
may accrue to Owner from any reduction in Real Estate Taxes, for any year, below
those imposed in the Base Tax Year. Should Owner be successful in reducing the
Real Estate Taxes for the Base Tax Year, the amount of such taxes, as finally
determined, shall be used in computing (or re-computing, as the case may be) the
Additional Rent payable by Tenant pursuant to this Article.
74.4. The amounts due under this Article 74 shall be collectible
without set-off or deduction, and shall be paid in full by Tenant no later than
the date which is fifteen (15) days after the rendering of a bill therefor by
Owner.
74.5. Owner's failure during the Term to prepare and deliver any of the
foregoing tax bills, statements or bills, or Owner's failure to make a demand,
shall not in any way cause Owner to forfeit or surrender its rights to collect
the sums due to Owner pursuant to this Article and such rights shall survive the
expiration or other termination of the term of this Lease. Further, Owner shall
have the right to render a corrected or revised notice, statement or bill at any
time(s).
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74.6. Notwithstanding the expiration of this Lease or earlier
termination of the term of this Lease, Tenant's obligation to pay Additional
Rent under this Article shall continue and shall cover all periods up to and
including the date of expiration or earlier termination of the term of this
Lease, and shall survive the expiration or any termination of the term of this
Lease.
74.7. If the date of expiration or termination of the term of this
Lease (hereinafter, the "Expiration Date") shall occur on a date other than June
30, respectively, any payment under this Article 74 for the fiscal tax year in
which such expiration or termination date occurs shall be apportioned in that
percentage which the number of days in the period from July 1 to the Expiration
Date, both inclusive, bears to the total number of days in such fiscal tax year.
75. Owner's Renovation Work
Subject to the provisions of footnote 2 to the printed portion of this
Lease, Owner shall have the absolute and unrestricted right, but no the
obligation, to perform such renovations, alterations, improvements and other
installations to the Building (including within the Premises), both structural
and non-structural in nature, as Owner may elect to perform, in Owner's sole and
absolute discretion, from time to time during the term of this Lease (such work
is hereinafter referred to as "Owner's Renovation Work"). Tenant shall fully
cooperate with Owner and Owner's agents, employees, contractors, subcontractors,
engineers, architects and other persons involved in the performance of Owner's
Renovation Work, with regard to the performance of Owner's Renovation Work. In
that regard, Tenant shall schedule and coordinate with Owner the performance of
any Tenant's Work which may be performed by Tenant concurrently with any Owner's
Renovation Work so as to minimize, to the maximum extent possible, any
interference or delay in the performance of Owner's Renovation Work arising out
of the performance of Tenant's Work. Further, neither Tenant nor any of Tenant's
employees, agents, contractors, subcontractors, engineers, architects or other
persons under Tenant's control shall take or omit to take any actions which
shall hinder, delay or impair the performance of Owner's Renovation Work.
Without limitation of the foregoing, Tenant shall provide Owner and Owner's
employees, contractors, subcontractors, engineers, architects and other persons
involved in the performance of Owner's Renovation Work with reasonable access to
all portions of the Premises at all times during the performance of Owner's
Renovation Work. Further, if Owner shall at any time perform Owner's Renovation
Work consisting of the renovation of any Building lobby or entrance, Owner shall
have the right to close such lobby or entrance during the performance of such
renovations, so long as Tenant is provided with access to the Premises, and
Tenant shall not be entitled to any abatement of Rents nor shall Owner have any
liability by reason of inconvenience, annoyance or injury to business. In
addition to Owner's other rights and remedies under this Lease, at law and/or in
equity in the event of any breach by Tenant of the provisions of this Article
75, Tenant shall be obligated to reimburse Owner, as Additional Rent, for any
and all costs and expenses Owner may incur by reason of or in connection with
any breach by Tenant of the provisions of this Section 75.
76. Tenant's Initial Work
76.1. Tenant has advised Owner that Tenant intends to perform Tenant's
Work consisting of alterations and improvements to the Premises to build-out and
prepare the Premises for Tenant's initial use and occupancy thereof in
accordance with this Lease (such alterations and improvements are hereinafter
referred to as "Tenant's Initial Work"). Tenant's contractor for the performance
of Tenant's Initial Work shall be a reputable third party contractor reasonably
satisfactory to Owner. Tenant's Initial Work shall be subject to Owner's
approval of Tenant's Plans covering all aspects of Tenant's Initial Work
(hereinafter, "Tenant's Initial Plans") pursuant to the provisions of Articles 3
and 44 above as well as all other applicable provisions of this Lease. Tenant
shall cause to be timely filed with the New York City Department of Buildings a
so-called "type 2" building permit application covering Tenant's Initial Work.
Tenant's Initial Work shall be performed with reasonable diligence in a good,
workmanlike manner and otherwise subject to and strictly in accordance with the
provisions of Articles 3 and 44 above as well as all other applicable provisions
of this Lease. Owner shall have no obligations, responsibilities or liabilities
of any nature whatsoever with regard to the performance of Tenant's Initial
Work. Without limitation of the foregoing, in no event shall Tenant assert any
claims against Owner, or seek to assert any offset, set-off or counterclaim
against or with respect to any Rents due or to become due, arising out of any
matter or thing relating to Tenant's Initial Work or the performance thereof by
Tenant, and no such claim, offset, set-off or counterclaim shall be valid or
have any force or effect whatsoever.
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76.2. Subject to and conditioned upon Tenant's compliance with the
provisions of Articles 3 and 44 above and this Article 76 including, without
limitation, the submission and approval by Owner of Tenant's Plans relating
thereto, Owner shall not unreasonably withhold Owner's consent to the following
items of Tenant's Work to be performed by Tenant as part of Tenant's Initial
Work:
76.2.1 installation of an internal staircase between the fifth
and sixth floors of the Premises at a location to be reasonably determined by
Owner; it being understood that notwithstanding anything to the contrary in this
Article 76 or elsewhere in this Lease, Owner's reasonable determinations as to
the structural aspects of such internal staircases and the installation thereof
shall be conclusive and binding upon Tenant;
76.2.2 connection of Tenant's telecommunications equipment in the
Premises to a satellite dish to be installed by Tenant on the roof deck of the
Building; and
76.2.3 if needed, installation of conduits (not to exceed three
(3) inches in diameter) from the basement of the Building to the Premises for
Tenant's reasonable electrical and telecommunications needs; provided, however,
that Tenant shall use reasonable efforts to minimize its need for such conduits.
77. Security Agreements
77.1. No security agreement, whether by way of conditional bill
of sale, chattel mortgage or instrument of similar import, shall be placed upon
any improvements made by Tenant which is affixed to the Premises.
77.2. If any of the machinery, fixtures, furniture and equipment
installed by Tenant in the Premises are purchased or acquired by Tenant subject
to a chattel mortgage, conditional sale agreement or other title retention or
security agreement, Tenant undertakes and agrees (i) that no such chattel
mortgage, conditional sale agreement or other title retention or security
agreement shall be permitted to be filed as a lien against the Building and (ii)
to cause to be inserted in any of the above described title retention, chattel
mortgage or security agreements the following provision: "Notwithstanding
anything to the contrary herein, this chattel mortgage, conditional sale
agreement, title retention agreement or security agreement shall not create or
be filed as a lien against the land, building or improvements comprising the
real property in which goods, machinery, equipment, appliances or other personal
property covered hereby are to be located or installed."
77.3. If any such lien or UCC filing statement, is filed against
the Building, Tenant shall, upon obtaining actual knowledge of same, immediately
cause such lien or statement to be removed and discharged of record at Tenant's
cost and expense.
78. Fees and Expenses
Without limitation of any other provisions of this Lease, Tenant shall
pay to Owner all reasonable attorneys' fees and disbursements (and all other
court costs or expenses of legal proceedings), all architectural, engineering
and other professional fees and disbursements, and all other fees and costs,
which Owner may incur or pay out by reason of, or in connection with: (a) any
action or proceeding by Owner to terminate this Lease in which Owner shall be
the prevailing party; (b) any other action or proceeding by Owner against Tenant
in which Owner shall be the prevailing party; (c) any default by Tenant in the
observance or performance of any obligation under this Lease (including, but not
limited to, matters involving: payment of Fixed Rent and Additional Rent;
alterations or other Tenant's Work; and subletting or assignment) whether or not
Owner commences any action or proceeding against Tenant; (d) any action or
proceeding brought by Tenant against Owner (or any officer, partner, agent,
attorney or employee of Owner) in which Owner shall be the prevailing party; (e)
any other appearance by Owner (or any officer, partner, agent, attorney or
employee of Owner) in connection with any action or proceeding whatsoever
involving or affecting Owner, Tenant or this Lease, whether pursuant to court
order, subpoena or otherwise); (f) any bankruptcy proceeding involving Tenant or
any guarantor(s) of this Lease; and (g) any amendment, modification or extension
of this Lease (and any negotiations with respect thereto).
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79. Entire Agreement
This Lease represents the entire agreement between the parties with
respect to the subject matter hereof and all prior negotiations, understandings,
commitments and agreements relating thereto are superseded hereby.
80. Severability
If any provision of this Lease is found to be void or unenforcaable by
a court of competent jurisdiction, the remaining provisions of this Lease shall
nevertheless be binding upon Owner and Tenant with the same effect as though the
void or unenforceable part had been severed and deleted.
81. Joint Tenants
If Tenant shall consist of more than one individual or entity, then
each of the parties constituting Tenant shall be jointly and severally liable
and responsible for the observance and performance of all of the terms,
covenants and provisions of this Lease to be observed and/or performed by Tenant
including, without limitation, the timely payment of Rent and Additional Rent.
82. Occupancy Tax
Tenant shall timely pay the occupancy taxes and/or rent taxes now in
effect or hereafter enacted that are required by law to be paid by tenants,
directly to the taxing authority responsible for the collection of same.
83. Floors and Sidewalk
83.1. Tenant shall keep the floors of the Premises clean and in good
condition and free of dirt, debris and other foreign matter.
83.2. Tenant shall not permit any vehicle or materials under its
control to block any sidewalk adjacent to the Building and shall reimburse Owner
for any sums required to be paid by Owner because of any breach thereof.
84. Deliveries/Rubbish Removal
It is expressly agreed that no individuals wearing, holding or using
skates, "rollerblades", bicycles, skateboards or similar apparatus shall be
permitted to enter or leave the Building; provided, however, that skates,
"rollerblades", skateboards or similar equipment may be held by individuals
entering or leaving the Building if and for so long as such equipment shall be
securely covered in a bag or carrying case which is sufficient to prevent any
scratches, dents or other damage to any portion of the Building. Further, all
deliveries to and from the Premises and refuse and rubbish removal from the
Premises shall be made only through the service entrance to the Building and the
service elevator therein, and all construction personnel, delivery persons,
cleaning contractors, movers and all similar persons, or any other persons with
hand trucks, dollies, suitcases or tool boxes, shall use only the service
entrance to the Building and the service elevator therein, unless Owner notifies
Tenant in writing of another entrance and/or elevator to be used for such
purposes. If Tenant causes or permits any delivery, movement of any furniture,
equipment or supplies, and/or refuse and rubbish removal to be made through the
front lobby of the Building or by means of the passenger elevators in the
Building, or if Tenant otherwise breaches or permits a breach of this Article
84, and such breach shall occur more than two (2) times during any calendar year
during the term of this Lease, then Tenant shall pay to Owner, immediately upon
demand therefor, as Additional Rent hereunder, an amount equal to One Thousand
and 00/100 ($1,000.00) Dollars per occurrence for the sole purpose of defraying
the costs to Owner for inspecting the lobby and elevators for damage and/or
cleaning the same following such delivery or refuse and rubbish removal (and not
as a penalty). Notwithstanding any such payment, permitting individuals using
the aforementioned apparatus to enter the Building or the use of the front lobby
and passenger elevators for deliveries, movement of any furniture, equipment or
supplies, and/or refuse and rubbish removal shall be and be deemed to be a
default pursuant to the terms of this Lease and Owner, following any such
default, may exercise any and all rights and remedies herein set forth, or
otherwise permissible at law or in equity, including, without limitation, the
payment to Owner of the cost of any damage to the Premises or the Building
arising therefrom.
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85. Building Doors/Floors
All doors which lead into or out of the Building, whether such doors
lead into or out of any elevator lobby or staircase lobby or hallway or
otherwise, (hereinafter, the "Doors") must be kept in the closed position at all
times. Propping such Doors in the open position by Tenant or the unlocking of
such Doors during unauthorized hours is strictly prohibited and shall constitute
a nuisance and a dangerous condition. In the event of any violation of this
provision by Tenant, without limitation of Owner's other rights and remedies,
Tenant shall be responsible for all loss and damage caused by or relating to
such violation, including, without limitation, loss due to theft or vandalism
and damage to any Doors caused by the elements or otherwise. Owner may inspect
the Premises for violation of this provision and may repair damage caused
thereby and may charge the expense incurred thereby to Tenant as Additional Rent
payable on demand, which expense shall include the cost to Owner of inspecting
the Premises.
86. BID Assessment
If an assessment is imposed on the land and/or Building in connection
with or relating to any Business Improvement District (BID), then Tenant shall
pay to Owner, as Additional Rent, an amount equal to fifty (50%) percent of the
aggregate amount of all BID assessments imposed during the term of this Lease.
87. No Smoking/Loitering
87.1. Smoking is strictly prohibited in the Premises and Building
(except solely on the roof deck of the Building as provided in Section 87.2
below). Loitering is strictly prohibited in all lobbies, staircases and hallways
in the Building.
87.2. Notwithstanding the provisions of Section 87.1 above, cigarette
smoking by a limited number of Tenant's employees shall be permitted on the roof
deck of the Building only; subject, however, to the following conditions: (i)
not more than a reasonable number of Tenant's employees shall be permitted to
smoke cigarettes on the roof deck at any time; (ii) prior to permitting any
person to smoke cigarettes on the roof deck, Tenant shall perform the following
items of Tenant's Work in accordance with the provisions of Articles 3 and 44
and all other applicable provisions of this Lease: (a) install a fireproof
barrier under the entire surface of the existing wood roof deck of a type
reasonably satisfactory to Owner, (b) resurface the wood roof deck with a fire
retardant material of a type reasonably satisfactory to Owner, (c) install on
the roof deck at least three (3) proper receptacles for cigarette butts, ashes
and other debris and (d) install and maintain a fire extinguisher in the
stairwell leading from the sixth floor to the roof of the Building; (iii) Tenant
shall keep the wood roof deck and all other portions of the roof of the Building
free and clear at all times of cigarette butts, ashes and other debris to
Owner's reasonable satisfaction and to empty the receptacles, failing which
Owner may elect to do so and to bill Tenant a reasonable charge therefor as
shall be determined by Owner, which shall be payable by Tenant as Additional
Rent; (iv) such smoking shall not be in violation of (a) any current or future
federal, state or local laws, codes, ordinances, rules or regulations or (b) the
requirements of any insurance carrier or organization or any insurance policies
currently or hereafter maintained by Owner or Tenant covering the Building or
the Premises; and (v) such smoking shall not disturb or annoy any other tenants
or occupants of the Building or of any neighboring properties.
88. Sprinkler and Fire Alarm Maintenance Costs and Fuel Costs
88.1. Tenant shall pay fifty (50%) percent of Owner's costs for
maintaining, servicing, repairing, inspecting and monitoring the Building
sprinkler, standpipe and fire alarm systems during the term of this Lease. Such
payment shall be made periodically by Tenant within fifteen (15) days after each
demand by Owner, as Additional Rent. If the Commencement Date or the date of
expiration or earlier termination of the term of this Lease shall not begin or
end at the start or end of a calendar year, then Tenant shall pay Owner's
prorated estimate of such costs for each such calendar year in which the term of
this Lease shall commence, expire or be terminated, as the case may be. The
provisions of this Article shall survive the expiration or earlier termination
of the term of this Lease.
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88.2. For purposes of this Article, the following definition shall
apply: the term "Fuel Costs" shall mean all annual costs and expenses incurred
or borne by Owner with respect to all fuel purchased by Owner for the Building.
88.3. Tenant shall pay to Owner, as Additional Rent, which shall be
collectible as such under the terms of this Lease, an amount equal to the
increase in Fuel Costs, if any, for the Building for each calendar year or
portion thereof falling within the term of this Lease, over the Fuel Costs for
calendar year 2002. At or after the end of each calendar year, Owner shall
calculate such increased cost and bill Tenant for its share together with
reasonable substantiation of the Fuel Costs, which bill shall be due and payable
within fifteen (15) days after Tenant shall be billed therefor. This obligation
will survive the expiration or termination of this Lease except that should
Tenant's term expire other than at the end of a calendar year, Tenant shall only
be obligated pro-rata for the number of months in such year which formed a part
of its term.
88.4. Every bill given by Owner pursuant to Section 8 8.3. above shall
be conclusive and binding upon Tenant in the absence of manifest computational
error unless Tenant shall give a Tenant's Objection Notice to Owner within six
(6) months after Owner's notice shall have been given to Tenant, time being of
the essence, stating that Tenant disputes the calculation of Additional Rent set
forth in Owner's notice and specifying in reasonable detail all of Tenant's bona
fide objections to the accuracy of Owner's notice. Notwithstanding the giving of
Tenant's Objection Notice, Tenant shall nevertheless timely pay the full amount
of Additional Rent specified in Owner's notice until such dispute is finally
resolved by a final, unappealed judgment of a court of competent jurisdiction.
88.5. Owner's failure during the Lease term to prepare and deliver any
of the foregoing bills, or Owner's failure to make a demand, shall not in any
way waive or cause Owner to forfeit or surrender its rights to collect the sums
due to Owner pursuant to this Article or to thereafter render such bills or make
such demand nor constitute a waiver of, nor in any way impair the continuing
obligation of Tenant to pay Additional Rent as required by this Article.
Further, Owner shall have the right to render a corrected or revised notice,
statement or bill at any time(s).
88.6. Notwithstanding any expiration of this Lease or the earlier
termination of the term of this Lease, Tenant's obligation to pay Additional
Rent under this Article shall continue and shall cover all periods up to and
including the Lease expiration date, and shall survive the expiration or
termination of this Lease.
89. Arbitration
Whenever any provision of this Lease specifically provides that a
matter shall be determined by arbitration in accordance with this Article 89 and
either party notifies the other that such matter be so determined, then such
arbitration shall be determined in New York County, and shall be governed by the
expedited rules applicable to expedited arbitration of the American Arbitration
Association (or any successor thereto) and the judgment on the award rendered
may be entered in any. court having jurisdiction, subject to appeal as provided
in this Lease. Reasonable fees and expenses of the arbitration shall be paid by
the party against whom a determination shall have been rendered.
90. Tenant's Right to Contest Legal Requirements.
Tenant, at Tenant's sole risk, cost and expense and after not less than
thirty (30) days prior notice to Owner, may contest, by appropriate proceedings
prosecuted diligently and in good faith, the legality or applicability of any
Legal Requirements affecting the Premises, provided and on condition that: (i)
neither Owner nor any of Owner's principals, officers, directors, employees,
agents or contractors shall be subject to criminal penalties, nor shall the
Building or any part thereof be subject to being condemned or vacated, nor shall
the certificate of occupancy for the Building be suspended or threatened to be
suspended, by reason of non-compliance or by reason of such contest; (ii) before
the commencement of such contest, if Owner or any of Owner's principals,
officers, directors, employees, agents or contractors may be subject to any
civil fines or penalties or if Owner may be liable to any independent third
party as a result of such non-compliance, then Tenant shall furnish to Owner
either (a) a bond of a surety company satisfactory to Owner, in form and
substance reasonably satisfactory to Owner, and in an amount at least equal to
two hundred (200%) percent of Owner's estimate of the sum of (x) the cost of
such compliance, (y) the penalties or fines that may accrue by reason of such
non-compliance (as estimated by Owner) and (z) the amount of such liability to
independent third parties, and shall indemnify Owner against the cost of such
compliance and liability resulting from or incurred in connection with such
contest or non-compliance; or (b) other security satisfactory in all respects to
Owner; (iv) such non-compliance or contest shall not constitute or result in a
violation (either with the giving of notice or the passage of time or both) of
the terms of any Superior Mortgage or Superior Lease, or if such Superior Lease
or Superior Mortgage conditions such noncompliance or contest upon the taking of
action or furnishing of security by Owner, such action shall be taken or such
security shall be furnished at the expense of Tenant; (v) Tenant shall keep
Owner regularly advised as to the status of such proceedings; and (c) Tenant is
not in default under this Lease after notice and the expiration of any
applicable cure period which are specifically provided for in this Lease with
regard to such default, if any.
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91. Controlled_ Access Elevator System
91.1. As an accommodation to the tenants of the Building, but without
having incurred or hereafter incurring any obligations, responsibilities or
liabilities in connection therewith, Owner has installed in the Building a
system (hereinafter, the "Controlled Access Elevator System") which is designed
to electronically control access to the second through sixth floors of the
Building from the two passenger elevators servicing the Building. Tenant shall
pay to Owner, as Additional Rent, a monthly fee (hereinafter, the "Monthly
Elevator Fee") of two hundred fifty and 00/100 ($250.00) dollars per month plus
sixty (60%) percent of Owner's monthly cost to maintain the telephone line
servicing the Controlled Access Elevator System. The Monthly Elevator Fee is
subject to increase from time to time as shall be reasonably determined by Owner
based upon any increases in the cost of maintenance and management services
currently being provided by Owner or Owner's managing agent and/or by any third
party service providers, in such amount(s) as shall be reasonably determined
and/or established by Owner or Owner's managing agent.
91.2. Owner shall have no liabilities, responsibilities or obligations
whatsoever to Tenant for any service problems, downtime, failure or defect in,
or any other matter or thing related to, the Controlled Access Elevator System.
Further, Owner shall have no liabilities, responsibilities or obligations of any
nature with regard to any repair, maintenance, service or replacement costs or
expenses relating to the operation, maintenance, servicing or replacement of the
Controlled Access Elevator System including, but not limited to, those relating
to theft, fire, water damage, programming or the supply of cards or key fobs
required by Tenant. All of the costs and other obligations referred to in this
Section 91.2 shall be borne and paid collectively by Tenant and the other office
tenants of the Building, in such proportions as they shall mutually agree or in
such proportions as Owner shall determine. In the event of any conflict between
the mutual agreement of the tenants of the Building and Owner's determination
(if any), Owner's determination shall control and be binding.
91.3. Owner has no obligation to maintain the Controlled Access
Elevator System in operation and Owner shall have the absolute right to disable,
disconnect, suspend the operation of or remove the Controlled Access Elevator
System at any time(s) during the term of this Lease.
91.4. Tenant acknowledges that the third party maintenance and security
management services relating to the Controlled Access Elevator System are
currently being performed by Controlled Access LLC, currently with an address at
122 Kings Highway, Suite 501, Maple Shade, New Jersey and that Owner has the
absolute right to replace such third party service provider with another service
provider(s) at any time(s) upon not less than thirty (30) days' notice to Tenant
(except in an emergency, in which event no notice shall be required). Tenant
hereby agrees to indemnify and hold Owner and Owner's managing agent harmless
from and against any claims, losses, liabilities, damages, costs and expenses,
whether asserted by any third party service provider or otherwise, arising out
of the acts or omissions of Tenant or Tenant's employees, guests or contractors,
relating to the Controlled Access Elevator System.
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92. Additional Provisions
92.1. Owner will not perform any work in connection with the furnishing
or installation of any ductwork from the air conditioning units installed by
Owner to service the Premises. The furnishing and installation of all ductwork
shall be the sole responsibility of the Tenant, to be performed by Tenant at
Tenant's sole cost and expense.
92.2. Tenant shall be solely responsible, at Tenant's sole cost and
expense, for installing all fire protection equipment and devices within the
Premises (including, without limitation, all fire extinguishers, strobe lights,
signage and intercom systems) and for the connection of such equipment and
devices to the Building fire alarm system. Notwithstanding anything contained in
this Lease to the contrary, Tenant may only use the fire alarm contractor used
by Owner for the installation of the Building fire alarm system for any fire
alarm work performed by Tenant within the Premises. Furthermore, any fire alarm
equipment installed by Tenant is subject to Owner's approval and must be from
the same manufacturer and/or supplier as the Building fire alarm equipment.
Tenant must also purchase and install its fire alarm equipment in accordance
with the approved plans and specifications for the Building fire alarm system
and as otherwise directed by Owner, Owner's architect and/or any consultant
retained by Owner or Owner's architect.
92.3. Tenant shall be solely responsible, at Tenant's sole cost and
expense, for the cleaning, repair and maintenance of the bathrooms in the
Premises and all fixtures, structures, appliances and equipment therein
contained (including, without limitation, the electric heating units which
create hot water) throughout the term of this Lease and for the supply of all
bathroom paper, soap and other products, fixtures and equipment such as paper
towels, toilet and soap dispensers and hand dryers and mirrors.
93. Option to Extend
93.1. Provided and on condition that Tenant shall not be in default in
the performance of any of the terms and conditions of this Lease as more
specifically provided in Section 93.3 below, Tenant shall have one (1) option
(the "Option") to extend the term of this Lease for one (1) additional term of
five (5) years commencing on January 1, 2013 and expiring on December 31, 2017
(the "Extension Term"). Except for the rates at which the Fixed Rent shall be
payable during the Extension Term, as set forth in Sections 93.4 and 93.5 below,
all of the terms, conditions and provisions of this Lease shall continue
unmodified and in full force and effect during the Extension Term.
93.2. The Option may only be exercised by Tenant giving written notice
to Owner of Tenant's exercise of the Option (the "Option Exercise Notice") by
certified mail, return receipt requested, by no earlier than the date which is
twenty-four (24) months prior to the fixed expiration date of the term of this
Lease (i.e., by no earlier than December 31, 2010) and by no later than the date
which is twelve (12) months prior to the fixed expiration date of the term of
this Lease (i.e., by not later than December 31, 2011), time being. of the
essence. Upon Tenant's proper and timely giving of the Option Exercise Notice,
the term of this Lease shall be automatically extended for the Extension Term
upon the terms and conditions specified in this Article, without the execution
of an extension agreement or other instrument. If Tenant shall not give Owner
the Option Exercise Notice at the time and in the manner set forth above, time
being of the essence, the Option shall thereupon terminate and be of no further
force and effect.
93.3. Notwithstanding the foregoing provisions of this Article, if on
the date that Tenant exercises the Option, or if on any subsequent date up to
and including the date upon which the Extension Term commences, Tenant is in
default (after notice and the expiration of the applicable cure period which are
specifically provided for in this Lease with respect to such default, if any) in
the payment of Fixed Rent or Additional Rent hereunder, or in the performance of
any of the other terms, conditions or provisions of this Lease, then and in any
such event, Tenant's exercise of the Option and the Extension Term shall, at the
option of Owner exercised by written notice to Tenant, be rendered null and void
and of no force or effect and Tenant shall have no other or additional right to
exercise the Option, and the Option shall thereupon be deemed irrevocably waived
by Tenant.
93.4. During the Extension Term, Fixed Rent shall be payable at the
following rates:
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93.4.1 Annual Initial Extension Term Fixed Rent (as such term is
defined below) during the one (1) year period commencing January 1, 2013 through
and including December 31, 2013;
93.4.2 Annual Initial Extension Term Fixed Rent multiplied by one
hundred two (102%) percent during the one (1) year period commencing January 1,
2014 through and including December 31, 2014;
93.4.3 An amount equal to the Fixed Rent payable for the one (1)
year period referred to in Section 93.4.2 above (i.e., January 1, 2014 through
December 31, 2014) multiplied by one hundred two (102%) percent during the one
(1) year period commencing January 1, 2015 through and including December 31,
2015;
93.4.4 An amount equal to the Fixed Rent payable for the one (1)
year period referred to in Section 93.4.3 above (i.e., January 1, 2015 through
December 31, 2015) multiplied by one hundred two (102%) percent during the one
(1) year period commencing January 1, 2016 through and including December 31,
2016; and
93.4.5 An amount equal to the Fixed Rent payable for the one (1)
year period referred to in Section 93.4.4 above (i.e., January 1, 2016 through
December 31, 2016) multiplied by one hundred two (102%) percent during the one
(1) year period commencing January 1, 2017 through and including December 31,
2017.
93.5. For purposes of this Article 93, Annual Initial Extension
Term Fixed Rent shall be determined as follows:
93.5.1 Not earlier than six (6) months nor later than three (3)
months prior to the commencement of the Extension Term, Owner shall send Tenant
a notice ("Market Rent Notice") stating the amount which, in Owner's opinion,
shall constitute the fair market annual Fixed Rent (exclusive of all items of
Additional Rent and all subsequent increases in Fixed Rent provided for in this
Lease) for the Premises as of the first day of the Extension Term assuming a
five year lease of the Premises on an "as-is" basis to a new tenant. The amount
set forth in the Market Rent Notice shall constitute the Annual Initial
Extension Term Fixed Rent All of the provisions of this Lease relating to the
payment of Additional Rent shall be unaffected by the determination of the
Annual Initial Extension Term Fixed Rent and shall continue in full force and
effect.
93.5.2 Within thirty (30) days after Tenant's receipt of the
Market Rent Notice, time being of the essence, Tenant may dispute the Annual
Initial Extension Term Fixed Rent as set forth in the Market Rent Notice by
giving notice to Owner that Tenant is initiating the appraisal process provided
for herein and specifying in such notice the name and address of the arbitrator
designated by Tenant to act on its behalf. If Tenant does not timely dispute the
Annual Initial Extension Term Fixed Rent set forth in the Market Rent Notice
within the time and in the manner set forth above, time being; of the essence,
the Annual Initial Extension Term Fixed Rent as determined by Owner shall be
conclusive and binding on Owner and Tenant. Within thirty (30) days after the
designation of Tenant's arbitrator, Owner shall give notice to Tenant specifying
the name and address of Owner's arbitrator. The two arbitrators so chosen shall
meet within ten (10) days after the second arbitrator is appointed and shall
endeavor to mutually agree upon the determination of the Annual Initial
Extension Term Fixed Rent of the Premises and to render a decision as to their
mutual determination within twenty (20) days after the second arbitrator is
appointed. If, within twenty (20) days after the second arbitrator is appointed,
the two arbitrators shall not mutually agree upon the determination of the
Annual Initial Extension Term Fixed Rent in accordance with the provisions of
this Section 93.5, then they shall together appoint a third arbitrator. If said
two arbitrators cannot agree upon the appointment of a third arbitrator within
ten (10) days after the expiration of such twenty (20) day period, then either
party, on behalf of both, and on notice to the other, may request such
appointment by the American Arbitration Association (or any successor
organization) in accordance with its then prevailing rules. If the American
Arbitration association shall fail to appoint said third. arbitrator within ten
(10) days after such request is made, then either party may apply, on notice to
the other, to the Supreme Court in the county in which the Premises are located
(or any other court having jurisdiction and exercising functions similar to
those now exercised by the foregoing court) for the appointment of such third
arbitrator.
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93.5.3 Each of the arbitrators selected as herein provided shall
have at least fifteen (15) years experience in the leasing of commercial space
in New York City and properties similar in character to the Building. Each party
shall pay the fees and expenses of the arbitrator selected by it. The fees and
expenses of the third arbitrator and all other expenses (not including the
attorneys' fees, witness fees and similar expenses of the parties which shall be
borne separately by each of the parties) of the arbitration shall be borne
entirely by the party against whom a determination pursuant to this Article 93
shall have been rendered.
93.5.4 If the third arbitrator shall be appointed, then each of
the first two arbitrators shall promptly submit their respective determinations
of the Annual Initial Extension Term Fixed Rent in writing to the third
arbitrator, who must select one or the other of such determinations of the
Annual Initial Extension Term Fixed Rent and so notify both Owner and Tenant of
such selection within thirty (30) days after the appointment of the third
arbitrator or as soon thereafter as is practicable.
93.5.5 In determining the Initial Annual Extension Term Fixed
Rent, the arbitrators shall not modify the provisions of this Lease and shall
take into consideration market rents then being charged for comparable space in
other similar buildings in the area of the Building and all of the following
assumptions: (i) the Annual Initial Extension Term Fixed Rent shall be
determined on the basis of the use of the Premises as offices; (ii) Owner has
had a reasonable period of time to locate a tenant who rents with the knowledge
of the uses to which the Premises can be adapted and will not be obligated to
incur any costs of rent concession or work allowance which would otherwise be
dictated by the then prevailing market conditions for a five (5) year lease;
(iii) the Premises are free and clear of all leases and tenancies and available
for immediate occupancy and possession as of the commencement date of the
Extension Term; (iv) neither Owner nor Tenant is under any compulsion to rent;
(v) the Premises are fit for immediate occupancy and use "as is" and require no
additional work by Owner and that no work has been carried out thereon by the
Tenant, its subtenant, or their predecessors in interest during the term of this
Lease which has diminished the rental value of the Premises; (vi) in the event
the Premises have been destroyed or damaged by fire or other casualty, they have
been fully restored and (vii) the escalation provisions and base periods
therefor provided in this Lease shall remain unchanged (and such provisions and
periods shall, in fact, remain unchanged during the Extension Term). The
decision and award of the arbitrators shall be in writing and shall be final and
conclusive on both parties and counterpart copies thereof shall be delivered to
each of said parties.
93.5.6 Until such time as the final determination of the Annual
Initial Extension Term Fixed Rent shall be made by the arbitrators in accordance
with the provisions of this Section 93.5, Tenant shall pay, as Annual Initial
Extension Term Fixed Rent , the amount of the Annual Initial Extension Term
Fixed Rent determined by Owner as set forth in the Market Rent Notice (subject
to further increases as otherwise provided in this Lease), until the final
determination is made. If based upon the final determination hereunder of the
Annual Initial Extension Term Fixed Rent, the payments made by Tenant on account
of the Fixed Rent were less than the Annual Initial Extension Term Fixed Rent
payable as determined by this Section 93.5, Tenant shall pay to Owner the amount
of the underpayment on demand, and if the payments made by Tenant on account of
Fixed Rent were greater than the Annual Initial Extension Term Fixed Rent
payable as determined by this Section 93.5, Owner shall credit to Tenant the
amount of any excess against Fixed Rent due or to become due.
93.5.7 Except solely for the provisions concerning Annual Initial
Extension Term Fixed Rent set forth above in this Section 93.5, all of the
provisions of this Lease relating to the payment of increases in Fixed Rent and
the payment of Additional Rent including, without limitation, the provisions of
Article 74 above ("Increase in Taxes"), shall remain unmodified and in full
force and effect.
93.5.8 Notwithstanding the provisions of Sections 93.4.1 through
93.4.5 above, if either Owner or the arbitrators shall determine that, as of the
commencement date of the Extension Term, the annual fair market base rent
percentage increase factor (in lieu of any operating expense escalation or any
similar escalation) for comparable five year leases shall be more or less than
two (2%) percent, then the fixed annual percentage increase in the Initial
Annual Extension Term Fixed Rent of two (2%) percent referred to in Sections
93.4.1 through 93.4.5 above shall be increased or decreased, as the case may be,
to such annual fair market base rent percentage increase factor as shall be
determined by Owner or the arbitrators, as the case may be.
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94. Right of First Offer
94.1. As used in this Article:
94.1.1 the term "available" means, as to any space, that such
space is vacant and free of any present or future possessory right in favor of
either of the Existing Tenants (hereinafter defined) which is contained in the
existing lease with such Existing Tenant;
94.1.2 the term "Offer Space" means either of (i) the entire
second floor of the Building (the "Second Floor Premises"), currently leased to
Advanstancom, Inc. ("Advanstar"), and (ii) the entire third floor of the
Building (the "Third Floor Premises") currently leased to Novell, Inc./Cambridge
Technology Partners (Massachusetts), Inc. (collectively "Cambridge"). Advanstar
and Cambridge, together with their respective successors, assigns and
affiliates, are each herein referred to as an "Existing Tenant" and collectively
as the "Existing Tenants"); and
94.1.3 the term "Inclusion Date" means, as to either Offer Space,
the later of (i) the date Tenant gives an Offer Acceptance Notice (as such term
is hereinafter defined) with respect to such Offer Space and (ii) the date that
such Offer Space is first available and vacant possession of such space has been
delivered to Tenant, in either case with the Premises being in its then existing
"as-is" condition.
94.2. If at any time during the term of this Lease, either Offer Space
(i.e., either the Second Floor Premises or the Third Floor Premises) first
becomes available upon the expiration or termination of the lease currently in
effect for such Offer Space by reason of bankruptcy or bona fide dispossess,
then within a reasonable period of time thereafter (or at any time within
eighteen (18) months prior thereto), Owner shall give Tenant notice thereof (an
"Offer Notice"), specifying (i) the designation of such Offer Space, (ii) the
date or approximate date that such Offer Space has become available or is
anticipated to become available, (iii) Owner's determination of the fair market
rental value of such Offer Space as of the applicable Inclusion Date, (iv) the
Tenant's Proportionate Share and Base Tax Year (and any other base year(s))
attributable to the Offer Space with respect to Article 74 and any other rental
escalation provisions set forth in this Lease, (v) the amount of the security
deposit reasonably required by Owner for the leasing of the Offer Space (the
parties hereby acknowledging that, without limitation, a security deposit equal
to the same per square foot security deposit then maintained by Tenant under
this Lease shall be deemed reasonable) and (vi) any other terms and conditions
determined by Owner, in Owner's discretion, which are or would be applicable to
the proposed leasing of the Offer Space by Owner to a third party as of the
applicable Inclusion Date. Provided and on condition that on the date that Owner
gives Tenant an Offer Notice through and including the applicable Inclusion Date
(a) this Lease is in full force and effect, (b) Tenant is not in default under
this Lease (after notice and the expiration of any applicable cure period which
are specifically provided for in this Lease with respect to such default, if
any) and (c) Tenant or any assignee or successor of Tenant (as referred to in
Section 49.2 above) occupies the entire Premises under and pursuant to this
Lease and there has been no assignment of the Lease by Tenant, then and in such
events only, Tenant shall have the option (herein, the "Offer Space Option"),
exercisable by notice (the "Offer Acceptance Notice") given to Owner on or
before the date that is fifteen (15) days after the giving of the Offer Notice
by Owner to Tenant, time being of the essence, to include such Offer Space in
the Premises for the balance of the term of this Lease.
94.3. If Tenant properly and timely exercises the Offer Space Option
with respect to either Offer Space, such Offer Space shall become part of the
Premises effective as of the Inclusion Date and thereafter for the greater of
(i) five (5) years or (ii) the entire then remaining balance of the term of this
Lease, without any further act by Owner or Tenant and upon all of the terms and
conditions set forth in this Lease (including this Article) and the Offer
Notice, except that:
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94.3.1 such Offer Space shall be delivered to Tenant in its then
existing condition, on an "as-is" basis on the Inclusion Date for such Offer
Space;
94.3.2 the Fixed Rent for such Offer Space as of the applicable
Inclusion Date shall be the fair market rental value of such Offer Space as of
the applicable Inclusion Date as shall be determined by Owner, in Owner's sole
and absolute discretion, as set forth in the Offer Notice; provided, however,
that subsequent to the applicable Inclusion Date, Fixed Rent for the Offer Space
shall be increased on each date that Fixed Rent for the Premises (exclusive of
the Offer Space) shall be increased pursuant to the provisions of Article 63 of
this Lease in such amount(s) as Owner shall determine, in Owner's reasonable
discretion, to be the fair market escalation percentage factor(s) for the
balance of the term of this Lease as of the applicable Inclusion Date, assuming
that the Option shall have been exercised;
94.3.3 payment of Fixed Rent and all items of Additional Rent
applicable to the Offer Space shall commence on the applicable Inclusion Date;
and
94.3.4 if any of the terms and conditions set forth in the Offer
Notice are different or inconsistent with the terms and conditions set forth in
this Lease, the terms and conditions set forth in the Offer Notice shall control
and this Lease shall automatically be deemed amended accordingly with respect
solely to the Offer Space.
94.4. Promptly after the occurrence of any Inclusion Date, Owner and
Tenant shall confirm the occurrence thereof, the inclusion of the applicable
Offer Space in the Premises and the terms of this Lease applicable to such Offer
Space by executing and delivering an instrument reasonably satisfactory to
Owner; provided, however, that the failure by Owner or Tenant to execute such
instrument shall not affect the inclusion of such Offer Space in the Premises in
accordance with this Article.
94.5. (a) If Tenant does not timely deliver an Offer Acceptance Notice
with respect to any Offer Space, time being of the essence, and if either (i)
within nine (9) months after the date on which Tenant declined (or was deemed to
decline by failing to timely accept) the Offer Notice, Owner is prepared to
lease the Offer Space at a net effective rental (taking into account any work
allowances and rent concessions, and discounted to present value using a
discount rate equal to the then-current "prime rate" or "base rate" of Citibank,
N.A. or any comparable bank) of less than ninety (90%) percent of the net
effective rental offered to Tenant in the rejected Offer Notice, or (ii) after
nine (9) or more months after the date on which Tenant declined (or was deemed
to decline by failing timely to accept) the Offer Notice, Owner is prepared to
lease the Offer Space for any rent whatsoever, whether higher or lower than the
net effective rental set forth in the previous Offer Notice, then in each case
the terms of Sections 94.1 through 94.5 above shall once again apply and Owner
shall thereafter deliver to Tenant an Offer Notice as described in Section 94.2
above incorporating the rental terms that Owner is prepared to accept from a
third party with regard to such Offer Space.
(b) If Tenant does not timely deliver an Offer Acceptance
Notice with respect to any Offer Space, time being of the essence, and neither
of clauses (i) or (ii) set forth in subparagraph (a) above shall apply, then the
Offer Space Option with respect to such Offer Space shall be deemed irrevocably
waived by Tenant and Owner shall have the right to enter into a lease or leases
covering such Offer Space or any portion(s) thereof with any third party(ies) on
such terms and conditions as Owner shall determine, in Owner's sole and absolute
discretion.
94.6. Notwithstanding anything to the contrary set forth in this
Article 94 or elsewhere in this Lease, if at the time Tenant shall give Owner an
Offer Acceptance Notice pursuant to the provisions of Section 94.2 above, there
shall be less than five (5) years then remaining in the term of this Lease, and
if Tenant shall not theretofore have exercised the Option pursuant to the
provisions of Article 93 above, then as a further condition to Tenant's exercise
of the Offer Space Option, Tenant must exercise the Option pursuant to Article
93 above by giving an Option Exercise Notice to Owner simultaneously with
Tenant's delivery of the Offer Acceptance Notice to Owner. In such event,
notwithstanding the time limitations set forth in Section 93.2 above, Tenant
shall be permitted to exercise the Option even though the date on which Tenant
shall give Owner the Option Exercise Notice shall be more than twenty-four (24)
months prior to the original fixed date of expiration of the term of this Lease.
94.7. Notwithstanding anything to the contrary set forth in this
Article 94, the Offer Space Option is limited solely to the original Tenant
under this Lease (i.e., Take-Two Interactive Software, Inc.) and any successor
or assignee as referred to in Section 49.2 above.
-49-
95. Miscellaneous
95.1. Tenant shall have access to the Premises on a twenty-four hour
per day, seven day per week basis, subject to such restrictions and limitations
as may be imposed pursuant to Legal Requirements and to circumstances beyond
Owner's reasonable control.
95.2. Tenant shall not record or attempt to record this Lease or any
memorandum
95.3. Irrespective of the place of execution or performance of this
Lease, this Lease shall be governed by and construed and interpreted in
accordance with the internal laws of the State of New York. If any provision of
this Lease is found to be void or unenforceable by a court of competent
jurisdiction, the remaining provisions of this Lease shall nevertheless be
binding upon Owner and Tenant with the same force and effect as though the void
or unenforceable part had been severed and deleted.
95.4. This Lease shall be construed and interpreted without regard to
any presumption or other rule requiring construction or interpretation against
the party causing this Lease to be drafted. If any words in this Lease or any
draft thereof shall have been stricken out or otherwise eliminated, whether or
not any other words have been added in their place, this Lease shall be
construed as if the words so stricken out or otherwise eliminated were never
included in this Lease and no implication or inference shall be drawn from the
fact that said words were so stricken out or otherwise eliminated.
95.5. All terms and words used in this Lease, regardless of the number
or gender in which they are used, shall be deemed to include any other number
and any other gender as the context may require.
95.6. The obligations of Owner under this Lease shall not be binding
upon Owner named herein after the sale, conveyance, assignment or transfer by
such Owner (or upon any subsequent landlord after the sale, conveyance,
assignment or transfer by such subsequent landlord) of its interest in the Land
and Building and in the event of any such sale, conveyance, assignment or
transfer, Owner shall be and hereby is entirely freed and relieved of all
covenants and obligations of Owner hereunder. Neither the partners comprising
Owner, nor the shareholders, partners, principals, agents, directors or officers
of any of such partners shall be liable for the performance of Owner's
obligations under this Lease. Tenant shall look solely to Owner to enforce
Owner's obligations hereunder. Prior to any such sale, conveyance, assignment or
transfer, the liability of Owner for Owner's obligations under this Lease shall
be limited to Owner's interest in the Land and Building and Tenant shall not
look to any other property or assets of Owner or the property or assets of Owner
or any of its partners in seeking either to enforce Owner's obligations under
this Lease or to satisfy a judgment for Owner's failure to perform such
obligations. After any such sale, conveyance, assignment or transfer, to the
extent that the transferee shall have not assumed Owner's obligations under this
Lease, the liability of Owner for such obligations shall be limited to the
proceeds of such transfer received by it.
95.7. Notwithstanding anything contained in this Lease to the contrary,
all amounts payable by Tenant to or on behalf of Owner under this Lease, whether
or not expressly denominated Fixed Rent, Additional Rent or other charges, shall
constitute rent for the purposes of Section 502(b)(7) of the Bankruptcy Code.
95.8. If and for so long as Tenant is in default under this Lease
(after notice and the expiration of any applicable cure period which are
specifically provided for in this Lease with respect to such default, if any)
Tenant hereby irrevocably waives Tenant's right, if any, to designate the items
against which any payments made by Tenant are to be credited, and Owner may
apply any payments made by Tenant to any items Owner sees fit, irrespective of
and notwithstanding any designation or request by Tenant as to the items against
which any such payments shall be credited.
95.9. Except as may be otherwise specifically set forth in this Lease,
whenever Owner's consent or approval is required or requested, same may be
withheld for any reason or for no reason, in Owner's sole and absolute
discretion.
95.10. Whenever in this Lease it shall be provided that Owner shall not
unreasonably withhold, delay and/or unreasonably condition Owner's consent or
approval to Tenant's proposed action or work, Tenant hereby waives any claim
against Owner for money damages which Tenant may have based upon any assertion
that Owner has unreasonably withheld or unreasonably delayed any such consent or
approval to Tenant's proposed action or work. Tenant's sole remedy shall be an
action or proceeding (or, in certain instances specifically set forth in this
Lease, an arbitration) to enforce such provisions of this Lease or for specific
performance. In addition, without limitation of the foregoing and
notwithstanding anything to the contrary set forth in this Lease, Owner may
condition its granting of consent or approval as to any proposed action or work
on any other matter upon Owner's or Tenant's receiving the consent or approval
to such action, work or other matter from the Landmarks Commission and/or any
other governmental or municipal agency or commission having or asserting
jurisdiction and/or Owner's mortgagee(s).
-50-
95.11. Tenant and all persons within Tenant's control shall strictly
comply with the Rules and Regulations contained in the printed portion of this
Lease as well as with the Additional Rules and Regulations annexed as Exhibit C
to this Lease. Nothing contained in this Lease shall be construed to impose upon
Owner any duty or obligation to enforce the Rules and Regulations or the
Additional Rules and Regulations or the terms, covenants or conditions in any
other lease against any other tenant, and Owner shall not be liable to Tenant
for violation of the same by any other tenant, its employees, agents, visitors
or licensees. In case of any conflict or inconsistency between the provisions of
this Lease and of any of the Rules and Regulations or the Additional Rules and
Regulations as originally or as hereinafter adopted or revised, the provisions
of this Lease shall control.
95.12. All checks tendered to Owner in payment of Fixed Rent or
Additional Rent shall be deemed payment for the account of Tenant. Acceptance by
Owner of Fixed Rent or Additional Rent from a party other than Tenant shall not
be deemed to operate as an attornment to Owner by such party or as a consent by
Owner to an assignment or subletting by Tenant or as a modification of the
provisions of this Lease.
95.13. Intentionally Deleted.
95.14. Without incurring any liability to Tenant, Owner may permit
access to the Premises and open the same, whether or not Tenant shall be
present, upon demand of any receiver, trustee, assignee for the benefit of
creditors, sheriff, marshal or court officer entitled to, or reasonably
purporting to be entitled to, such access for the purpose of taking possession
of, or removing, Tenant's property or for any other lawful purpose (but this
provision and any action by Owner hereunder shall not be deemed a recognition by
Owner that the person or official making such demand has any right or interest
in this Lease, or in or to the Premises), or upon demand of any representative
of the fire, police, building, sanitation or other department of the city, state
or federal governments.
95.15. No receipt of monies by Owner from Tenant, after any reentry or
after the cancellation or termination of this Lease in any lawful manner, shall
reinstate this Lease, and after the service of notice to terminate this Lease,
or after the commencement of any action, proceeding or other remedy, Owner may
demand, receive and collect any monies due, and apply them on account of
Tenant's obligations under this Lease but without in any respect affecting such
notice, action, proceeding or remedy.
95.16. No payment by Tenant nor receipt by Owner of a lesser amount
than may be required to be paid hereunder shall be deemed to be other than on
account of any such payment, nor shall any endorsement or statement on any check
or any letter accompanying any check tendered as payment be deemed an accord and
satisfaction and Owner may accept such check or payment without prejudice to
Owner's right to recover the balance of such payment due and/or to pursue any
other remedy(ies) provided for in this Lease, at law and/or in equity.
95.17. Tenant acknowledges that Tenant has no rights with regard to any
development rights, "air rights" or comparable rights appurtenant to the
Property and hereby irrevocably waives any such rights in connection with any
zoning lot merger or transfer of development rights with respect to the Property
including, without limitation, any rights it may have to be a party to, to
contest, or to execute, any Declaration of Restrictions (as such term is defined
in Section 12-10 of the Zoning Resolution of the City of New York effective
December 15, 1961, as amended) with respect to the Property, which would cause
the Property to be merged with or unmerged from any other zoning lot pursuant to
such Zoning Resolution or pursuant to any document of a similar nature and
purpose, and Tenant agrees that this Lease shall be subject and subordinate to
any Declaration of Restrictions or any other document of similar nature and
purpose now or hereafter affecting the Property. In confirmation of such
subordination and waiver, Tenant shall execute and promptly deliver to Owner any
certificate or instrument that Owner reasonably may request and, in connection
therewith, Tenant hereby irrevocably constitutes and appoints Owner as Tenant's
attorney-in-fact, coupled with an interest, to execute any such certificate or
instrument for and on behalf of Tenant. The provisions of this Section shall be
deemed to be and shall be construed as an express waiver by Tenant of any
interest Tenant may have, or be deemed to have, as a "party in interest" (as
such quoted term is defined in Section 12-10 of the aforementioned Zoning
Resolution) in the Building or the land upon which the Building is situated. The
provisions of this Section 95.17 shall not be deemed to prevent Tenant's use of
the roof deck subject to and in accordance with the applicable provisions of
this Lease.
-51-
95.18. Intentionally Deleted.
95.19. Owner shall not be deemed to be in default of any of its
covenants or obligations under or pursuant to this Lease, unless and until (i)
Tenant shall have given Owner notice specifying the nature of such alleged
default in accordance with the notice provisions of this Lease and (ii) Owner
shall have failed to cure or remedy such alleged default within thirty (30) days
after Owner's receipt of such notice, or if such alleged default shall be of a
nature that the same cannot reasonably be cured or remedied within a thirty (30)
day period, then for such additional period of time as shall be reasonably
required for Owner to cure or remedy such alleged default. No action on the part
of Owner to address, cure or remedy any matter alleged by Tenant to be a default
by Owner under this Lease shall be deemed to constitute an admission by Owner
that the matter alleged to be a default by Owner constitutes a default by Owner
under this Lease.
95.20. In the event any governmental entity promulgates or revises any
law, or issues controls or regulations, relating to the use or conservation of
energy, water, gas or electricity, or the provision of any other utility or
service furnished by Owner in the Building, Owner may freely comply with such
provision of law, controls or regulations without liability to or recourse by
Tenant. Without limitation of the foregoing, neither Owner's actions nor its
failure to act in order to comply with the same shall entitle Tenant to any
damages, abate or suspend Tenant's obligation to pay Fixed Rent and Additional
Rent or constitute or be construed as a constructive or other eviction of
Tenant.
95.21. Owner and Tenant, any subtenant, and any guarantor of Tenant's
obligations under this Lease, hereby irrevocably consent to the jurisdiction of
the Civil court of the City of New York and the Supreme Court of the State of
New York with respect to any action or proceeding between Owner and Tenant or
such party with respect to this Lease or any rights or obligations of either
party pursuant to this Lease, and each of such subtenant, guarantor, Owner and
Tenant agrees that venue shall lie in New York County. Tenant and any subtenant
further waive any and all rights to commence any such action or proceeding
against Owner before any other court.
95.22. The submission of this Lease to Tenant shall not be construed as
an offer, nor shall Tenant have any rights with respect thereto unless and until
both Owner and Tenant shall execute and deliver an original of this Lease. Until
such execution and delivery, any action taken or expense incurred by Tenant
shall be at its sole risk, cost and expense.
95.23. Any apportionments or prorations of Rents to be made under the
Lease shall be computed on the basis of a 360 day year, with 12 months of 30
days each.
95.24. Tenant shall be entitled to the non-exclusive use of the service
elevator (subject to availability), on a reserved basis, at no charge, during
normal service elevator hours of operation as set forth elsewhere in this Lease;
solely in connection with Tenant's move-in at
-52-
the commencement of the term of this Lease, Tenant's move-out at the expiration
of the term of this Lease and for the performance of Tenant's Initial Work.
Moklam Enterprises, Inc., Owner
By: /s/ Raymond H. Yu
--------------------------------
Raymond H. Yu, President
|
Take Two Interactive Software, Inc., Tenant
By: /s/ Don Leeds
--------------------------------
Don Leeds, Executive Vice President
|
-53-
State of New York )
) ss.:
County of New York )
On the 2nd day of July in the year 2002, before me, the undersigned, a
Notary Public in and for said State, personally appeared Raymond H. Yu,
personally known to me or proved to me on the basis of satisfactory evidence to
be the individual whose name is subscribed to the within instrument and
acknowledged to me that he executed the same in his capacity, and that by his
signature on the instrument, the individual, or the person upon behalf of which
the individual acted, executed the instrument.
/s/ Gary S. Friedman
--------------------------------
Signature and Office of individual
taking acknowledgment
|
State of New York )
) ss.:
County of New York )
On the 2nd day of July in the year 2002, before me, the undersigned, a
Notary Public in and for said State, personally appeared Don Leeds, personally
known to me or proved to me on the basis of satisfactory evidence to be the
individual whose name is subscribed to the within instrument and acknowledged to
me that he executed the same in his capacity, and that by his signature on the
instrument, the individual, or the person upon behalf of which the individual
acted, executed the instrument.
/s/ Gary S. Friedman
--------------------------------
Signature and Office of individual
taking acknowledgment
|
ANNEX I
The below noted information must appear in complete form in Tenant's
Plans for Tenant's Initial Work and any other items of Tenant's Work.
1. ARCHITECTURAL INFORMATION
(a) Locate and identify all types of partitions.
(b) Clearly indicate all dimensions from items of base building
construction or in relation to other fixed elements.
(c) Indicate the locations and specifications for doors, door
frames and hardware; provide a keying schedule.
(d) Indicate the locations and specifications for any non-building
standard paints and any wall coverings or other wall finish.
It is Tenant's responsibility that all finishes comply with
the fire code of the City and State of New York.
(e) Indicate the location of millwork, carpentry, etc., on the
plan and provide elevations, sections and details sufficient
to clearly describe all requirements.
(f) Indicate any modifications to the acoustical ceiling required
for mounted projection screens, overhead security grills, etc.
(g) Provide locations and complete specifications for any floor
coverings, including the combined height of carpet and
padding. It is Tenant's responsibility that all non-building
standard finishes comply with fire code of the City and State
of New York.
(h) Provide support framing details for special walls and any
ceiling-mounted equipment.
(i) Provide a finish schedule and finish legend clearly indicating
the room number, wall finishes and colors, floor finishes and
colors and ceiling finish.
(j) Locate and identify all built-in furniture and cabinetry.
2. ELECTRICAL AND TELEPHONE INFORMATION
(a) Indicate the dimensions of wall electrical outlets and
switches and telephone outlets.
(b) Indicate dimensions and manufacturer for all electrical floor
outlets and telephone floor outlets. These dimensions must be
coordinated with the base Building structural system.
(c) Provide the specification and location of special receptacles
and separate circuits for special equipment such as
appliances, copiers, computer equipment, etc.
(d) Provide details of the space requirements, room finish and
electrical and mechanical requirements for the telephone
equipment within the Premises. Approval of the telephone plan
by Tenant's telephone vendor is also required.
(e) Indicate the location of the emergency disconnect switch for
any data processing equipment.
(f) Indicate the location of all computer wiring.
3. LIGHTING INFORMATION
(a) Locate and identify all fixtures used, and provide
specifications.
(b) Provide the specifications and location of all switches,
dimmers and other lighting control devices.
Annex I-1
(c) Provide the specifications and location of all exit lighting
and any special emergency lighting.
(d) All fixtures shall be U.L. listed.
4. MECHANICAL AND PLANNING INFORMATION
Provide complete plans, details and specifications prepared by a
licensed mechanical engineer reasonably approved by Owner describing
all HVAC, electrical and plumbing work to be performed.
5. STRUCTURAL INFORMATION
Provide complete plans, details and specifications prepared by a
licensed structural engineer reasonably approved by Owner of any
structural modifications required to perform Tenant's Initial Work or
any other item of Tenant's Work.
6. FIRE SAFETY SPECIFICATION
(a) Provide complete plans, details and specifications prepared by
a licensed engineer reasonably approved by Owner describing
all fire safety installations and equipment to be installed in
the Premises by Tenant.
(b) Locate and identify all equipment to be installed.
(c) Locate and identify the main control panel including any
shut-off and/or reset switches.
(d) Provide instruction manuals for system and equipment controls.
(e) Indicate any modifications to existing sprinkler system.
Annex I-2
ANNEX II
List of Independent Structural Engineering Firms
GILSANZ MURRAY STEFICEK, LLP
95 University Place
New York, New York 10003
(212) 254-0030
ROBERT SILMAN ASSOCIATES 88
University Place
New York, New York 10003
(212) 620-7970
CANTOR SEINUK GROUP, PC
600 Madison Avenue
New York, New York 10022
(212) 755-4242
Annex II-1
ANNEX III
List of Independent Mechanical Engineering Firms
SAC ENGINEERING, PC
37 West 39" Street
New York, New York 10018
(212) 852-9855
LASZLO BODAK ENGINEERS
45 West 36' Street
New York, New York 10018
(212) 643-1444
I.M. ROBBINS PC
15 West 44th Street
New York, New York 10036
(212) 944-5566
Annex III-1
ANNEX IV
List of Independent Architectural Firms
FOX & FOWLE ARCHITECTS
22 West 19th Street
New York, New York 10011
(212) 627-1700
GERTLER WENTE KERBEYKIAN ARCHITECTS LLP
145 West 30th Street
New York, New York 10001
(212) 273-9888
BEYER BLINDER BELLE ARCHITECTS
41 East 11th Street
New York, New York 10003
(212) 777-7800
Annex IV-1
Bank of America
EXHIBIT A
DRAFT
FOR DISCUSSION
PURPOSES ONLY
PAGE: 1
DATE: JUNE 28, 2002
IRREVOCABLE STANDBY LETTER OF CREDIT NUMBER: 3049576
BENEFICIARY APPLICANT
MOKLAM ENTERPRISES, ,INC. TAKE TWO INTERACTIVE SOFTWARE INC.
c/o YUCO MANAGEMENT, INC. 575 BROADWAY
475 FIFTH AVENUE, 19th FLOOR 3rd FLOOR
NEW YORK, N.Y. 10017' NEW YORK, NEW YORK 10012
AMOUNT
WORDING IS ACCEPTABLE NOT EXCEEDING USD 1,560,000.00
NOT EXCEEDING
ONE MILLION FIVE HUNDRED SIXTY THOUSAND AND
00/100'S US DOLLARS
EXPIRATION
DECEMBER 6, 2002 AT OUR COUNTERS
|
WE HEREBY ESTABLISH THIS CLEAN, IRREVOCABLE AND UNCONDITIONAL STANDBY LETTER OF
CREDIT NO. 3049876 (THE "LETTER OF CREDIT") IN FAVOR OF MOKLAM ENTERPRISES, INC.
OR ITS TRANSFEREES AS HEREINAFTER PROVIDED, AS BENEFICIARY, FOR THE ACCOUNT OF
TAKE TWO INTERACTIVE SOFTWARE, INC., AS ACCOUNT PARTY, IN AN AMOUNT UP TO U.S.
ONE MILLION FIVE HUNDRED SIXTY THOUSAND AND 00/100 ($1,560,000.00) DOLLARS
AVAILABLE BY DRAFT(S) OF BENEFICIARY DRAWN ON US PAYABLE AT SIGHT.
WE AGREE TO PAY BENEFICIARY'S DRAWING UNDER THIS LETTER OF CREDIT WITH OUR OWN
FUNDS. WE WILL NOT BE SUBROGATED TO ANY OF BENEFICIARY'S RIGHTS AS A RESULT OF
ANY PAYMENT WE MAKE TO BENEFICIARY UNDER THIS LETTER OF CREDIT. THE REQUEST FOR
PAYMENT UNDER THIS LETTER OF CREDIT SHALL BE FINAL AND CONCLUSIVE FOR ALL
PURPOSES WITHOUT VERIFICATION BY US AND SHALL NOT BE SUBJECT TO REFUTATION,
DENIAL OR CONSENT.
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THE ISP (AS DEFINED BELOW)
OR OTHERWISE, BENEFICIARY-S DRAWING UNDER THIS LETTER OF CREDIT WILL BE PAID, BY
WIRE TRANSFER IN FEDERAL FUNDS TO THE ACCOUNT DESIGNATED IN BENEFICIARY-S
INSTRUCTIONS ACCOMPANYING THE DRAFT, BY NO LATER =AN (I) 4:00 P.M. EASTERN TIME
ON THE SAME BUSINESS DAY ON WHICH SUCH DRAFT AND INSTRUCTIONS ARE RECEIVED BY US
IN CONFORMITY WITH tHE TERMS HEREOF, IF RECEIVED BY US AT OR BEFORE 11:00 A.M.
EASTERN TIME OR (II) 4:00 P.M. EASTERN TIME OF THE NEXT BUSINESS DAY FOLLOWING
THE BUSINESS DAY ON WHICH SUCH DRAFT AND INSTRUCTIONS ARE RECEIVED BY US IN
CONFORMITY WITH THE TERMS HEREOF, IF RECEIVED BY US AFTER 11:00 A.M. EASTERN
TIME.
WE HEREBY AGREE THAT ALL DRAFTS DRAWN BY BENEFICIARY UNDER AND IN COMPLIANCE
WITH THE TERMS OF THIS LETTER OF CREDIT WILL BE DULY HONORED AND PAID AS
;PROVIDED ABOVE, UPON PRESENTATION AND DELIVERY OF THE ORIGINAL OF THIS LETTER
OF CREDIT TOGETHER WITH THE DRAFT AS SPECIFIED HEREIN, IF PRESENTED TO OUR
OFFICE LOCATED AT BANK OF AMERICA, N.A., MAIL :CODE: ca9-703-19-23, 333 SOUTH
BEAUDRY AVENUE, 19TH FLOOR, LOS ANGELES, CA 90017-1466, ON OR BEFORE THE THEN
CURRENT EXPIRATION DATE (AS DEFINED BELOW) ON WHICH DATE THIS LETTER OF CREDIT
EXPIRES
THIS IS AN INTEGRAL PART OF LETTER OF CREDIT NUMBER : 3049876
PARTIAL DRAWINGS ARE PERMITTED.
IF DEMAND FOR PAYMENT MADE BY BENEFICIARY HEREUNDER DOES NOT, IN ANY INSTANCE,
CONFORM TO THE TERMS AND CONDITIONS OF THIS LETTER OF CREDIT, WE SHALL GIVE
BENEFICIARY IMMEDIATE WRITTEN NOTICE BY FACSIMILE TRANSMISSION AT (212) 725-4704
THAT ITS PURPORTED DRAWING UNDER THIS LETTER OF CREDIT WAS NOT EFFECTED IN
ACCORDANCE WITH THE TERMS AND CONDITIONS OF THIS LETTER OF CREDIT, STATING THE
REASONS
Bank of America
PAGE: 2
DRAFT
FOR DISCUSSION
PURPOSES ONLY
THIS IS AN INTEGRAL PART OF LETTER OF CREDIT NUMBER: 3049876
THEREFORE AND THAT WE ARE HOLDING ANY DOCUMENTS AT BENEFICIARY'S DISPOSAL OR
RETURNING THE SAME TO BENEFICIARY. SUCH NOTICE MUST BE GIVEN TO BENEFICIARY
WITHIN TWO (2) BUSINESS DAYS OF OUR RECEIPT-OF BENEFICIARY'S DRAFT.
THIS LETTER OF CREDIT IS TRANSFERABLE, AT BENEFICIARY'S OPTION, AT NO COST TO
BENEFICIARY. TRANSFER OF THIS LETTER OF CREDIT SHALL BE EFFECTED BY PRESENTATION
TO US OF THIS LETTER OF CREDIT M ALL AMENDMENTS ACCOMPANIED BY A TRANSFER FORM
IN FORM OF EXHIBIT A HERETO ATTACHED WITH THE BLANKS THEREIN COMPLETED. UPON
SUCH PRESENTATION, WE SHALL FORTHWITH ENDORSE THIS LETTER OF CREDIT TO THE
TRANSFEREE AND FORWARD SAME TO Tim TRANSFEREE WITH OUR ADVICE OF TRANSFER.
THIS LETTER OF CREDIT EXPIRES ON DECEMBER 6, 2002 (THE "EXPIRATION DATE"). IT IS
A CONDITION OF THIS LETTER OF CREDIT THAT IT SHALL BE DEEMED AUTOMATICALLY
EXTENDED WITHOUT AMENDMENT FOR AN ADDITIONAL ONE (1) YEAR FROM THE EXPIRATION
DATE, AND FOR AN ADDITIONAL ONE (1) YEAR PERIOD FROM EACH FUTURE EXPIRATION DATE
THROUGH AND INCLUDING THE FINAL EXPIRATION DATE OF FEBRUARY 28, 2018, UNLESS AT
LEAST FORTY-FIVE (45) DAYS PRIOR TO THE EXPIRATION DATE OR ANY FUTURE EXPIRATION
DATE, WE NOTIFY BENEFICIARY BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, OR BY
OVERNIGHT COURIER SERVICE WHICH PROVIDES PROOF OF DELIVERY (SUCH AS FEDERAL
EXPRESS), THAT WE ELECT NOT TO CONSIDER THIS LETTER OF CREDIT RENEWED FOR ANY
SUCH ADDITIONAL PERIOD. IF BENEFICIARY RECEIVES OUR N PORTION OF THIS LETTER OF
CREDIT SHALL PRESENTATION, WITHIN THE THEN CURRENT EXPIRATION DATE, OF
BENEFICIARY'S SIGHT DRAFT.
THIS LETTER OF CREDIT SETS FORTH IN FULL THE TERMS OF OUR UNDERTAKING AND SUCH
UNDERTAKING SHALL NOT IN ANY WAY BE MODIFIED OR AMENDED BY REFERENCE TO ANY
AGREEMENT, DOCUMENT OR INSTRUMENT AND SHALL NOT BE DEEMED TO INCORPORATE ANY
other AGREEMENT, DOCUMENT OR INSTRUMENT BY REFERENCE.
THIS LETTER OF CREDIT IS SUBJECT TO THE INTERNATIONAL STANDBY PRACTICES (ISP98),
INTERNATIONAL CHAMBER OF COMMERCE, PUBLICATION NO. 590 ("ISP") AND AS TO ANY
MATTERS NOT SPECIFICALLY COVERED BY THE ISP, THIS LETTER OF CREDIT SHALL BE
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK.
IF YOU REQUIRE ANY ASSISTANCE OR HAVE ANY QUESTIONS REGARDING THIS TRANSACTION,
PLEASE :CALL 213-345-0098.
DRAFT DRAFT
FOR DISCUSSION FOR DISCUSSION
PURPOSES ONLY PURPOSES ONLY
------------------------------ ----------------------------
AUTHORIZED SIGNATURE AUTHORIZED SIGNATURE
|
THIS DOCUMENT CONSISTS OF 2 PAGES
-2-
EXHIBIT 1
INSTRUCTIONS TO TRANSFER LETTER OF CREDIT
Dated: June __, 2002
Irrevocable Standby Letter of Credit No.___
[Name and Address of Issuer]
Ladies and Gentlemen:
For value received, the undersigned beneficiary hereby irrevocably transfers to:
(Name of Transferee)
(Address)
all rights of the undersigned beneficiary to draw under the above Letter of
Credit (the "Letter of Credit"). Such transfer is in accordance with and
permitted by the Lease Agreement (as defined in Exhibit A to the Letter of
Credit).
By this transfer, all rights of the undersigned beneficiary in the Letter of
Credit are transferred to the transferee and the transferee shall hereafter have
the sole rights as beneficiary thereof, provided, however that no rights shall
be transferred to a transferee unless such transfer complies with the
requirements of the Letter of Credit pertaining to transfers.
The Letter of Credit and all amendments are returned herewith, and in accordance
therewith, we ask you to endorse the Letter of Credit in favor of the transferee
and forward same to the transferee with your advice of transfer. Exhibit A
thereto will thereupon be deemed modified to reflect the change of the
beneficiary to the transferee.
Very truly yours,
By:
[Name and Title]
EXHIBIT B
ADDITIONAL RULES AND REGULATIONS
1. No tenant shall invite to the tenant's premises, or permit the visit
of persons in such numbers or under such conditions as to interfere with the use
and enjoyment of any of the entrances, corridors, escalators, elevators and
other facilities of the Building by other tenants. Fire exits and stairways are
for emergency use only, and they shall not be used for any other purpose by the
tenants, their employees, licensees or invitees. Owner reserves the right to
control and operate the public portions of the Building and the public
facilities, as well as facilities furnished for the common use of the tenants,
in such manner as Owner deems best for the benefit of the tenants generally and
is not inconsistent with Owner's obligations under this Lease.
2. Owner may refuse admission to the Building outside of ordinary
business hours to any person not known to the watchman in charge or not having a
pass issued by Tenant, Owner or Owner's managing agent or not properly
identified, and may require all persons admitted to or leaving the Building
outside of ordinary business hours to register. Subject to the foregoing,
Tenant's employees, agents and visitors shall be permitted to enter and leave
the Building at all times. Each tenant shall be responsible for all persons for
whom such tenant requests such permission and shall be liable to Owner for all
acts of such persons. Any person whose presence in the Building at any time
shall, in the reasonable judgment of Owner or Owner's managing agent, be
prejudicial to the safety, character, reputation and interests of the Building
or its tenants may be denied access to the Building or may be ejected therefrom.
In case of invasion, riot, public excitement or other commotion, Owner may
prevent all access to the Building during the continuance of the same, by
closing the doors or otherwise, for the safety of the tenants and protection of
property in the Building. Owner may require any person leaving the Building with
any package or other object to exhibit a pass from the tenant from whose
premises the package or object is being removed, but the establishment and
enforcement of such requirement shall not impose any responsibility on Owner for
the protection of any tenant against the removal of property from the premises
of the tenant. The Owner shall in no way be liable to any tenant for damages or
loss arising from the admission, exclusion or ejection of any person to or from
the tenant's premises or the Building under or despite the provisions of this
rule or any other rule or regulation.
3. No tenant shall obtain or accept for use in its premises floor
polishing, lighting maintenance, cleaning, or other similar services from any
persons not authorized by Owner in writing to furnish such services, provided
always that the charges for such services by persons authorized by Owner are
competitive. Such services shall be furnished only at such hours, in such places
within the tenant's premises and under such regulations as may be fixed by
Owner.
4. All entrance doors in each tenant's premises shall be left locked
when the tenant's premises are not in use. Entrance doors shall not be left open
at any time.
5. Nothing shall be done or permitted in any tenant's premises, and
nothing shall be brought into or kept in any tenant's premises, which would
unreasonably or materially impair or interfere with any of the Building services
or the proper and economic heating, cleaning or other servicing of the Building
or the premises, or the use or enjoyment by any other tenant of any other
premises, nor shall there be installed by any tenant any ventilating, air
conditioning, electrical or other equipment of any kind which, in the reasonable
judgment of Owner, might cause any such impairment or interference.
6. Except for ancillary personal use of a microwave oven by Tenant's
employees, Tenant shall not permit any cooking within the Premises (unless
specifically consented to in writing by Owner or specifically permitted pursuant
to this Lease), and shall not permit any food odors emanating within the
tenant's premises to seep into other portions of the Building. If Owner shall
consent in writing to any cooking or installation of kitchen equipment in the
tenant's premises, the tenant shall operate its dining room and kitchen
equipment, if any, in a manner that will prevent odors and smoke from escaping
into areas of the Building outside the tenant's premises, and shall, at its
expense, (i) install and maintain appropriate filters and grease traps to
prevent accumulation of grease in any duct, stack or flue used to exhaust fumes
and vapors resulting from such food preparation and to prevent stopping up of
the sewerage ejecting system of the Building if any of same are necessary or are
required by any governmental authority, (ii) keep all range hoods and ducts
therefrom, if any, clean and free of grease at all times so as to avoid fire
hazard, and (iii) clean out the vertical exhaust flue and duct, if any, at least
once per month, or more frequently as conditions require. The discharge of any
fumes, vapors and odors which, by law must be discharged into a separate stack
or flue, will not be permitted unless Tenant, at its expense, shall provide for
such discharge in a proper manner.
7. No acids, vapors or other materials shall be discharged or permitted
to be discharged into the waste lines, vents or flues of the Building which may
damage them.
8. No tenant or occupant shall engage or pay any employees in the
Building, except those actually working for such tenant or occupant in the
Building, nor advertise for laborers giving an address at the Building. No
premises shall be used, or permitted to be used, at any time, as a store for the
sale or display of goods, wares or merchandise of any kind, or as a restaurant,
shop, booth, bootblack or other stand, or for the conduct of any business or
occupation which predominantly involves direct patronage of the general public
in the premises demised to such tenant, or for manufacturing or for other
similar purposes.
9. The requirements of tenants will be attended to only upon
application at the office of the Building or of Owner's managing agent.
Employees of Owner or Owner's agents shall not perform any work or do anything
outside of their regular duties, unless under special instructions from the
office of Owner or Owner's managing agent.
10. The tenant's employees shall not loiter around the hallways,
stairways, elevators, front, roof or any other part of the Building (other than
the Premises) used in common by the occupants thereof.
11. Business machines and mechanical equipment of tenant which cause
noise, vibration or any other nuisance that may be transmitted to the structure
or other portions of the Building or to the Premises, to such a degree as to be
reasonably objectionable to Owner or which interfere with the use or enjoyment
by other tenants of their premises or the public portions of the Building, shall
be placed and maintained by Tenant at Tenant's sole cost and expense, in
settings of cork, rubber or spring type vibration eliminators or otherwise
installed in a manner sufficient to eliminate noise or vibration to the
satisfaction of Owner.
12. Owner, at the request of Tenant, shall maintain not more than 9
listings on the Building directory of the name of Tenant and of Tenant's
personnel and permitted subtenants. Tenant shall pay to Owner, as Additional
Rent, an amount (in no event less than one hundred ($100) dollars) equal to
Owner's actual cost for each such change, plus forty (40%) percent of such cost
as an administrative fee to Owner. The listing of any name other than that of
Tenant, whether on the doors of the Premises, on the Building directory, or, or
otherwise, shall not operate to vest any right or interest in this Lease or in
the Premises, it being expressly understood that any such listing is a privilege
extended by Owner revocable at will by written notice to Tenant.
13. (a) The service elevator is in operation only during business days
during the hours of 9:00 a.m. to 11:00 a.m. and 2:00 p.m. to 4:00 p.m. Tenant
shall provide Owner or Owner's agent with written notice not less than two (2)
business days prior to the date on which Tenant desires to use the service
elevator. Such notice must include a description of the materials to be moved
and the approximate time(s) during which the movement is scheduled by Tenant.
Tenant shall comply with all reasonable instructions from Owner or Owner's agent
with regard to the time, method and procedures to be used with regard to such
movement of materials and use of the service elevator. Tenant shall assume all
risk of damage to articles moved and injury to the Building or other property or
persons resulting from such movement of materials and/or use of the service
elevator, and Owner shall not have any liability whatsoever with regard thereto.
All movers used by Tenant shall be appropriately licensed and shall maintain
adequate workers compensation, general liability and such other insurance as
shall be required by Owner. Proof of such licensure and insurance coverage
acceptable to Owner must be submitted to Owner at least twenty-four (24) hours
prior to any move.
(b) Any heavy equipment or bulky matter to be moved in or out of
the Building requires special handling and Tenant agrees to employ only persons
holding a Master Rigger's License to do said work. All such work shall be done
in full compliance with the Administrative Code of the City of New York and
other municipal requirements. All such movements shall be made during hours
which will least interfere with the normal operations of the Building as shall
be determined by Owner, and all damage caused by such movement shall be promptly
repaired by Tenant at Tenant's expense.
-2-
(c) If, in Owner's reasonable determination, the materials to be
moved by Tenant by means of the service elevator require the service elevator
cab to be padded and/or otherwise protected, Tenant shall not use the service
elevator unless and until such padding and/or other protection has been
installed by Owner. Such installation shall be at Tenant's expense. If Owner
shall elect to permit Tenant to use the service elevator after regular hours, or
in such a manner that requires the supervision of Owner's employees (of which
fact Owner shall be the sole judge), Tenant shall pay to Owner the cost of
furnishing such after-hour service and/or supervision as shall be determined by
Owner, with a three (3) hour minimum charge. The rate currently being charged by
Owner for after-hours or supervised service elevator service is (i) $75.00 per
hour, for service on business days during the hours of 8:00 a.m. to 6:00 p.m.
and (ii) $150.00 per hour for service at any other time(s). Such rates are
subject to change by Owner effective upon notice to Tenant.
14. Tenant shall be solely responsible for locking-out and
reestablishing elevator access to the Premises or any portion(s) thereof at such
times as shall be determined by Tenant, and Owner and Owner's agents shall have
no obligations, responsibilities or liabilities whatsoever with regard thereto.
-3-
EXHIBIT C
DESCRIPTION OF ROOF DECK
No warranty or representation is made or is to be implied as to the accuracy of
the information reflected in this Exhibit. The information reflected in this
Exhibit is subject to errors, omissions or changes without notice. The plans in
this Exhibit are not drawn to scale. Any and all plans and/or drawings provided
are not to be relied upon for exact measurements and/or configurations. The
location and dimensions of walls, partitions, columns, stairs and openings are
approximate and subject to revisions due to mechanical work, job conditions and
requirements of governmental departments and authorities, and no resulting
deviation shall affect the rent or Tenant's obligations under this Lease.
Roof Plan
622 Broadway Manhattan, New York City
[GRAPHIC OMITTED]
EXHIBIT C1
ACP -5
NYC DEPARTMENT OF ENVIRONMENTAL PROTECTION
Asbestos Control Program
59-17 Junction Boulevard, 8th Floor, Corona, NY 11388-5107
NOT AN ASBESTOS PROJECT
[FORM ACP5 OMITTED]
EXHIBIT C-2
CERTIFICATE OF OCCUPANCY
THE CITY OF NEW YORK
DEPARTMENT OF BUILDINGS
CERTIFICATE OF OCCUPANCY
[CERTIFICATE OMITTED]
EXHIBIT D
Loan No.:_____________________
TAKE-TWO INTERACTIVE SOFTWARE, INC.
Tenant,
and
WASHINGTON MUTUAL BANK, F.A., SUCCESSOR BY MERGER TO
THE DIME SAVINGS BANK OF NEW YORK, FSB,
Lender.
SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
Dated as of July 1, 2002
This instrument affects real and personal property situated in the State of New
York, in Section 2, Block 522, Lot 5 on the Tax Map of New York County, known by
the street address of 622626 Broadway, New York, New York 10012.
RECORD AND RETURN TO:
Washington Mutual Bank, F.A.,
successor by merger to
The Dime Savings Bank of New York, FSB
Commercial Lending - 13th Floor
EAB Plaza
Uniondale, New York 11556-0123
Att'n: Mr. James Regan
Title Company and No.: Chicago Title Insurance Company of New York Title Number:
SUBORDINATION. NONDISTURBANCE AND ATTORNMENT AGREEMENT
THIS SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT (this
"Agreement"), made as of the 1 s" day of July, 2002, by and among Take-Two
Interactive Software, Inc., a corporation organized and existing under the laws
of the State of New York, having an address at 575 Broadway, New York, New York
10012 ("Tenant"), WASHINGTON MUTUAL BANK, F.A., SUCCESSOR BY MERGER TO THE DIME
SAVINGS BANK OF NEW YORK, FSB, a banking corporation chartered under the laws of
the United States, having an address at EAB Plaza, Thirteenth Floor, Uniondale,
New York 11556-0123 ("Lender"), and Moklam Enterprises, Inc., a corporation
organized and existing under the laws of the State of New York, having an
address at c/o Yuco Management, Inc., 475 Fifth Avenue, 19`h Floor, New York,
New York 10017 ("Landlord"), WITNESSETH THAT:
WHEREAS Tenant has entered into a certain lease dated as of July 1,
2002 between Landlord, as lessor, and Tenant, as lessee, as amended by a
supplemental agreement dated even date therewith (collectively the "Lease"),
which Lease covers a portion of the improvements now or hereafter erected on the
premises described in Schedule A annexed hereto and made part hereof known as
622-626 Broadway, New York, New York (the "Premises"); and
WHEREAS Lender is the holder of a certain Modified Promissory Note
dated December 28, 1999 made by Landlord in favor of Lender, which is secured by
a mortgage consolidation, modification and security agreement of even date
therewith encumbering the Premises, as may hereafter be amended from time to
time (the "First Mortgage Agreement"); and
WHEREAS Lender is also the holder of a certain Promissory Note dated
March 31, 2000 made by landlord in favor of Lender, which is secured by a
mortgage of even date therewith encumbering the Premises, as same may hereafter
be amended from time to time (the "Second Mortgage Agreement"; the First
Mortgage Agreement and the Second Mortgage Agreement, as consolidated, are
hereinafter jointly referred to as the "Mortgage Agreement"); and
WHEREAS Tenant has requested that Lender agree not to disturb Tenant's
possessory rights with respect to the Demised Space (as hereinafter defined) in
the event that Lender should foreclose the Mortgage (as hereinafter defined),
provided Tenant is not in default under the Lease beyond applicable periods of
notice and grace and provided further that Tenant attorns to Lender; and
WHEREAS Lender is willing so to agree on the terms and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the premises, the mutual covenants
contained herein, and other. good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereby respectively
covenant, represent, warrant, consent and agree as follows:
1. The Lease and all of Tenant's right, title and interest thereunder
are, and at all times shall be, subject and subordinate in all respects to the
lien of the Mortgage Agreement, to all of the terms, conditions and provisions
thereof and to all renewals, modifications, extensions, replacements and
consolidations thereof, and substitutions therefor, and to each and every
advance under any of the foregoing (collectively, the "Mortgage"), all without
regard to the order of execution and delivery or to the order of recordation of
the Mortgage and the Lease or any memorandum thereof.
2. Tenant, with full knowledge that Lender, in entering into this
Agreement, is relying upon the truth, accuracy and completeness of the
statements made by Tenant herein, represents and warrants to Lender that:
(a) The Lease is in full force and effect, has not been modified
or amended, and is binding upon, and enforceable against, Tenant in accordance
with its terms, subject to the provisions of Section 46.5 thereof. The Lease
constitutes the entire agreement between Landlord and Tenant with respect to the
space demised under the Lease (the "Demised Space") and Tenant has no interest
in the Demised Space or the Premises except pursuant to the Lease.
(b) The commencement date of the Lease will occur upon the
satisfaction of the conditions set forth in the supplemental agreement amending
the Lease, at which time Tenant shall accept possession of the Demised Space.
All alterations, improvements and work to be performed by Landlord pursuant to
the Lease, if any, have been completed in a manner fully satisfactory to Tenant.
(c) Tenant has paid base rent under the Lease in advance for the
month of October 2002. Tenant is entitled to an abatement of Fixed Rent for the
first two (2) months of the term of the Lease. No prepayment of any Rent for
more than one month has been made to date or hereafter will be made.
-2-
(d) Neither Tenant nor Landlord is in breach of, or in default
under, the Lease, and Tenant knows of no event or condition which, with the
passage of time or the giving of notice or both, would constitute such a breach
or default.
(e) Neither Tenant nor Landlord has commenced any action or
received any notice with respect to the termination of the Lease.
(f) Rent has been and shall be paid by Tenant free and clear of
any and all defenses, offsets, claims, counterclaims, credits or deductions of
any kind, except as otherwise specifically provided for in the supplemental
agreement amending the Lease, in footnote 2 to the printed portion of the Lease,
in Articles 9 and 10 of the Lease and pursuant to applicable law relating to
constructive eviction.
(g) Tenant has not transferred, encumbered, mortgaged, assigned,
conveyed or otherwise disposed of Tenant's interest in the Lease.
Tenant agrees at any time and from time to time upon not less than ten
(10) days' prior notice by Lender to execute, acknowledge and deliver to Lender
a statement in writing certifying that the Lease is unmodified and in full force
and effect (or, if there have been modifications, that the Lease, as modified,
is in full force and effect and stating the modifications) and the date to which
Rent has been paid, and stating whether or not (a) there is a continuing default
by Landlord in complying with any obligation imposed upon Landlord in the Lease
or (b) there shall have occurred any event which, with the giving of notice or
passage of time or both, would become such a default, and, if so, specifying
each such default or occurrence.
3. Lender covenants and agrees with Tenant that, provided the Lease is
in full force and effect and no default by Tenant exists thereunder after notice
and the expiration of any cure period which are specifically provided for in the
Lease with respect to such default, if any, (a) Tenant shall not be named or
joined as a party defendant in any action or proceeding to foreclose the
Mortgage (provided, however, that Tenant may be named or joined as a party
defendant in any suit, action or proceeding for the appointment of a receiver,
to quiet title to the Premises or to prevent impairment of Lender's security
under the Mortgage and in any other suit, action or proceeding the purpose or
intent of which shall be to enforce Lender's rights and remedies under the Loan
Documents (as defined in the Mortgage Agreement), so long as same does not
extinguish or interfere with the rights of Tenant under the Lease); and (b)
neither a default by Landlord under the Mortgage nor a suit, action or
proceeding to foreclose the Mortgage shall result in a cancellation or
termination of the Lease or of the rights of Tenant thereunder. Nothing set
forth in this paragraph is intended to impair or shall impair the right of
Landlord to enforce any obligation of Tenant under the Lease or to take such
action as is available to Landlord thereunder or under applicable law by reason
of any default under the Lease beyond applicable periods of notice and grace.
-3-
4. If Successor Landlord (as hereinafter defined) acquires fee title to
the Premises, then, subject to the provisions of the following sentence, (a)
Successor Landlord shall thereby succeed to the position of the lessor under the
Lease, (b) Successor Landlord shall not disturb the possession of Tenant except
in accordance with the terms of the Lease or this Agreement, and the Lease shall
continue in full force and effect as a direct lease between Tenant and Successor
Landlord upon all of the then executory terms, covenants, conditions and
agreements set forth therein, and (c) tenant shall attorn to and recognize
Successor Landlord as the lessor under the Lease and be bound to comply with all
of the obligations imposed upon Tenant in the Lease (Tenant hereby
-4-
STATE OF )
) ss.:
COUNTY OF )
On the ____ day of ____________, in the year 2002, before me, the
|
undersigned personally appeared________________________, personally known to me
or proved to me on the basis of satisfactory evidence to be the individual(s)
whose name(s) is (are) subscribed to the within instrument and acknowledged to
me that he/she/they executed the same in his/her/their capacity(ies), and that
by his/her/their signature(s) on the instrument, the individual(s), or the
person upon behalf of which the individual(s) acted, executed the instrument.
Signature and Office of individual
taking acknowledgment
STATE OF NEW YORK )
) ss.:
COUNTY OF YORK )
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On the___ day of __________, in the year 2002, before me, the
undersigned personally appeared _________________, personally known to me or
proved to me on the basis of satisfactory evidence to be the individual(s) whose
name(s) is (are) subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their capacity(ies), and that by
his/her/their signature(s) on the instrument, the individual(s), or the person
upon behalf of which the individual(s) acted, executed the instrument.
Signature and Office of individual
taking acknowledgment
STATE OF NEW YORK )
) ss.:
COUNTY OF YORK )
|
On the ____ day of _____________, in the year 2002, before me, the
undersigned personally appeared Raymond Yu, personally known to me or proved to
me on the basis of satisfactory evidence to be the individual(s) whose name(s)
is (are) subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their capacity(ies), and that by
his/her/their signature(s) on the instrument, the individual(s), or the person
upon behalf of which the individual(s) acted, executed the instrument.
Signature and Office of individual
taking acknowledgment
SCHEDULE A
DESCRIPTION OF PREMISES
