SECOND MODIFICATION OF MASTER LEASE DATED FEBRUARY 15, 1965
Improvement Net Rent
Subdivision 2 of Section 2.01 of Article 2 of the Lease beginning on the bottom of page 8 thereof is modified in its entirety to provide for a change of the improvement net rent as follows:
“(2) In the event the Lessor shall increase Lessor’s investment in the Demised Premises in accordance with the provisions, conditions and requirements of Section 9.02 of this Lease, Lessee covenants and agrees to pay to Lessor as improvement net rent (so-called for convenience), in legal tender as aforesaid, Two Hundred Fifty Thousand Five Hundred Sixty Dollars ($250,560.00), per annum or, if Lessor shall increase its investment by a figure less than $3,250,000.00, an amount which shall bear the same relationship to $250,560.00 as the amount actually disbursed by Lessor in accordance with Section 9.02 bears to $3,250,000.00. Such improvement net rent shall be paid in equal monthly installments in advance on the 5th
day of each and every month beginning with the date of Lessor’s disbursement to the Lessee and continuing throughout the balance of the initial term of this Lease to and including the 5th day of the calendar month next preceding the last calendar month thereof. Lessee further covenants and agrees that as the said monthly improvement net rent becomes due and payable the same shall be combined with the net basic rent and paid in one aggregate sum as net rent in advance during the balance of the initial term of this Lease.”
Program of Capital Improvements
Section 9.02 of Article 9 of the Lease beginning on the bottom of page 29 thereof is modified in its entirety to provide for a change in Lessor’s additional investment as follows :
“SECTION 9.02. Lessee having undertaken a program of capital improvements in or about the Building, title to all of which shall be in Lessor, and Lessor having approved of such program, if Lessee shall have satisfied the conditions hereinafter set forth, then Lessor will disburse to Lessee, as an increase in its investment in the Demised Premises, the lesser of Three Million Two Hundred Fifty Thousand Dollars ($3,250,000.00) or sixty-five per centum (65%) of the actual cost of the fully completed work of the program. The disbursement, if any, to be made by Lessor to Lessee pursuant to this Section shall be made only on the 5th day of the calendar month (except that if such 5th day falls on a Saturday, Sunday or other legal holiday, then the disbursement shall be made on the next business day, but as of such preceding 5th day) and the amount so disbursed shall be the basis of the agreed net rental increase payable monthly in advance for the balance of the initial term of this Lease beginning with the day upon which such disbursement is made to Lessee in accordance with Lessee’s agreement so to pay and the method for the determination of amount thereof set forth in subdivision (2) of Section 2.01 of this Lease.
“No disbursement shall be made by Lessor unless each of the following requirements and conditions have been satisfied and complied with:
“1. The conversion of the passenger elevators to self-service operation and all other work of the capital improvements program which is to qualify as a basis for Lessor’s disbursement must he fully completed no later than December 4, 1965, time of performance being of the essence.
“2. The work of the capital improvements program shall be done in strict accordance with the plans and specifications heretofore submitted to and approved by Lessor. The program of capital improvements may be amended from time to time upon approval of Lessor in its sole discretion. Proposed amendments shall be submitted to Lessor in the form of detailed plans, specifications and cost estimates prepared by the licensed architect (or architects) or licensed professional engineer (or engineers) heretofore selected and paid for by Lessee and approved by Lessor. Lessor’s failure, however, to notify Lessee of Lessor’s decision within twenty (20) days (exclusive of Saturdays, Sundays and holidays) after receipt of such submission shall be deemed to be an acknowledgment by Lessor that all of the submitted amendments to the program have been approved by Lessor.
“3. All work of capital improvements shall be conducted under the supervision of the licensed architect or the licensed professional engineer approved by Lessor as aforesaid.
“4. No such capital improvement shall be undertaken until Lessee shall have procured and paid for, so far as the same may be required from time to time, all permits and authorizations of any federal, state or municipal government or departments or subdivisions of any of them, having jurisdiction. Lessor shall join in the application for such permits or authorizations whenever such action is necessary. And no such capital improvements shall be undertaken unless Lessee shall have first complied with the requirements of subdivision (h) of Section 9.01 in a manner and to the extent acceptable to Lessor.
“5. Whenever the work of any such capital improvement shall have been commenced, the same shall be prosecuted promptly with due diligence to completion (unavoidable delays excepted) and in a good and
workmanlike manner and in compliance with all applicable permits and authorizations and building and zoning laws and with all other laws, ordinances, orders, rules, regulations and requirements of all federal, state and municipal governments, departments, commissions, boards and officers, any national or local Board of Fire Underwriters, or any other body hereafter exercising functions similar to those of any of the foregoing.
“6. The cost of any such capital improvement shall be paid in cash so that the Demised Premises shall at all times be free of liens for labor and materials supplied or claimed to have been supplied to the Demised Premises and free from any encumbrances, security agreements, chattel mortgages, or conditional bills of sale, and Lessee, upon completion, shall, at Lessee’s sole cost and expense, furnish to Lessor municipal departmental searches and title evidence from a title company doing business in the City of New York, New York, and acceptable to Lessor, showing that the Demised Premises are free of violations and free of any such liens, encumbrances, security agreements, chattel mortgages or conditional bills of sale; and Lessee shall exhibit to Lessor receipted bills showing the actual cost of the completed capital improvements and shall deliver to Lessor photostats of all of such bills.
“7. This Lease must be in full force and effect and there shall not be existing at the time any Event of Default or any other default which is not in the process of being cured with due diligence and in good faith and all net rent for the then current month shall have been paid and all Impositions shall also have been paid to the extent that the same shall have been due and payable.
“8. A capital improvement shall be ‘fully completed’, and said words shall be deemed to mean and to have occurred when: (a) said supervising architect or engineer shall have delivered to Lessor his written report after regular periodic inspections that the improvement has been completed in accordance with the plans and specifications theretofor approved of by Lessor, and (b) whenever issuable based upon the nature of the work of such capital improvement, Lessee shall have delivered to Lessor all necessary certificates of clearance from any federal, state or municipal governments, departments or subdivisions of any of them, having jurisdiction and a certificate from the New York Board of Fire Underwriters, or any other body hereafter exercising functions similar to those of any of the foregoing.
“9. A written declaration in recordable form shall have been executed by Lessor and Lessee fixing in dollars and cents the agreed net rental increase to be paid by Lessee, as a consideration for Lessor’s additional investment in the Demised Premises, in monthly instalments in advance during the initial term of this Lease pursuant to the method for the determination thereof as set forth in subdivision (2) of Section 2.01 of this Lease and any such declaration shall be recorded and the Lessee shall be obligated to pay the recording fees.
“The above conditions and requirements having been satisfied and complied with, Lessor agrees to increase Lessor’s investment in the Demised Premises in accordance with the provisions and in the amount above set forth. But any such disbursement shall be made only on the 5th day of the calendar month (except that if such 5th day falls on a Saturday, Sunday or other legal holiday, then the disbursement shall be made on the next business day, but as of such preceding 5th day) next succeeding the date of any such qualification, and in no event after December 6, 1965. However, if Lessee does not qualify therefor, Lessor shall not make any disbursement and Lessor shall not have any obligation whatsoever with respect to this Section 9.02, and all work done by Lessee shall be at Lessee’s sole cost and expense and shall be subject to the conditions and requirements of Section 9.01, having to do generally with changes and alterations, and all the other terms, covenants, agreements, provisions, conditions and limitations of this Lease.
“Lessor’s agreement to make such disbursement pursuant to this Section 9.02 is subject to the trust fund provisions of Section 13 of the Lien Law of the State of New York. Lessee covenants that it will receive the proceeds of such disbursement, if and when made by Lessor, and will hold the right to receive such disbursement as a trust fund to be applied first for the purpose of paying the cost of the improvement and that it will apply the same first to the payment of the cost of the improvement before using any part of the total of the same for any other purpose.”