C » Topics » Compliance with Laws

These excerpts taken from the C 10-K filed Feb 22, 2008.

Compliance with Laws

8.01. Each of Tenant and Landlord shall give prompt notice to the other of any notice it receives of the violation of any Legal Requirements with respect to the

 

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Premises or the use or occupancy thereof. Tenant shall be responsible for compliance with all Legal Requirements in respect of the Real Property, whether or not such compliance requires work which is structural or non-structural, ordinary or extraordinary, foreseen or unforeseen, and, subject to this Article 8, shall procure the cancellation or discharge of all notices of violation issued in respect of the Premises, whether issued before the date hereof or during the Term whether related to conditions existing before the date hereof or during the Term (except to the extent such compliance requirement was attributable to any act of Landlord or any of Landlord’s agents). Tenant shall pay all the reasonable out-of-pocket costs and all the reasonable out-of-pocket expenses, and all the fines, penalties and damages which may be imposed upon Landlord by reason of or arising out of Tenant’s failure to fully and promptly comply with and observe the provisions of this Section 8.01. However, Tenant need not comply with any such Legal Requirement so long as Tenant shall be contesting the validity thereof, or the applicability thereof to the Premises, in accordance with Section 8.02. Landlord shall pay all the reasonable out-of-pocket costs and all the reasonable out-of-pocket expenses, and all the fines, penalties and damages which may be imposed upon Tenant by reason of or arising out of Landlord’s failure to fully and promptly comply with and observe the provisions of this Section 8.01. However, Landlord need not comply with any such Legal Requirement so long as Landlord shall be contesting the validity thereof, or the applicability thereof to the Premises, in accordance with Section 8.02.

8.02. (a) Tenant, at its expense, after notice to Landlord and any Superior Mortgagee of which Tenant had prior notice, may contest, by appropriate proceedings prosecuted diligently and in good faith, the validity, or applicability to the Premises, of any Legal Requirement, provided that (a) Landlord shall not be subject to a bona fide threat of criminal penalty or to prosecution for a crime, or any other fine or charge (unless Tenant agrees in writing to indemnify, defend and hold Landlord harmless from and against such non-criminal fine or charge), nor shall the Premises or any part thereof, be subject to a bona fide threat of being condemned or vacated, nor shall the Building or Land, or any part thereof, be subjected to a bona fide threat of any lien (unless Tenant shall remove such lien by bonding or otherwise) or encumbrance nor shall the insurance coverage required to be carried by Tenant hereunder be limited or impaired in any material respect, by reason of non-compliance or otherwise by reason of such contest; (b) except as otherwise provided in this Section 8.02, before the commencement of such contest, Tenant shall furnish to Landlord a cash deposit or other security in amount, form and substance reasonably satisfactory to Landlord and shall indemnify Landlord against the reasonable cost thereof and against all liability for damages, interest, penalties and expenses (including reasonable attorneys’ fees and expenses), resulting from or incurred in connection with such contest or non-compliance (provided, however, that Tenant shall not be required to furnish any such cash deposit or other security for so long as the Guaranty is in full force and effect); and (c) Tenant shall keep Landlord advised as to the status of such proceedings. Without limiting the application of the above, Landlord shall be deemed subject to a bona fide threat of prosecution for a crime if Landlord or any officer, director, partner, shareholder or employee of any of Landlord,

 

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as an individual, is threatened to be charged (it being agreed that if applicable Legal Requirements provide that a crime cannot be charged while the same is being contested, then a person shall not be deemed threatened to be charged with such crime during such contest) or is charged with a crime of any kind or degree whatever, unless such charge is withdrawn or disposed of before Landlord or such officer, director, partner, shareholder or employee (as the case may be) is required to plead or answer thereto. In the event Tenant shall have contested any Legal Requirement in accordance with this Section 8.02(a) and if Tenant fails to comply with the applicable determination (whether such determination was made prior to, or following the expiration of the Term), Tenant shall remain responsible for the cost of complying with such Legal Requirement, including the cost of performing the work associated with such compliance (subject to Landlord’s obligation for what would have otherwise been Landlord Reimbursement Amounts) but not for the actual compliance therewith (i.e., performance of the actual work) notwithstanding the expiration or earlier termination of this lease, and shall indemnify Landlord against the reasonable cost thereof and against all liability for damages, interest, penalties and expenses (including reasonable attorneys’ fees and expenses), resulting from or incurred in connection with such contest or non-compliance. The provisions of this Section 8.02(a) shall survive the expiration or earlier termination of this lease.

(b) Landlord, at its expense, after notice to Tenant, may contest, by appropriate proceedings prosecuted diligently and in good faith, the validity, or applicability to the Premises, of any Legal Requirement, in respect of the Real Property that Landlord may be responsible for after the expiration or earlier termination of this lease and which Tenant is not contesting under Section 8.02(a), provided that (i) Tenant shall not be subject to a bona fide threat of criminal penalty or to prosecution for a crime, or any other fine or charge (unless Landlord agrees in writing to indemnify, defend and hold Tenant harmless from and against such non-criminal fine or charge), nor shall the Premises or any part thereof, be subject to a bona fide threat of being condemned or vacated, nor shall the Building or Land, or any part thereof, be subjected to a bona fide threat of any lien (unless Landlord shall remove such lien by bonding or otherwise) or encumbrance, by reason of non-compliance or otherwise by reason of such contest; and (ii) Landlord shall keep Tenant advised as to the status of such proceedings, and to the extent compliance with such Legal Requirement is the obligation of Tenant hereunder, (x) Tenant shall have the right to participate in such contest, including attending all related meeting participation, (y) Landlord shall act reasonably in accepting Tenant’s recommendations in connection with any such contest, and (z) Landlord may not settle any such contest without Tenant approval, which approval shall not be unreasonably withheld. Without limiting the application of the above, Tenant shall be deemed subject to a bona fide threat of prosecution for a crime if Citigroup Tenant or any officer, director, partner, shareholder or employee of any of Citigroup Tenant, as an individual, is threatened to be charged (it being agreed that if applicable Legal Requirements provide that a crime cannot be charged while the same is being contested, then a person shall not be deemed threatened to be charged with such crime during such contest) or is charged with a crime of any kind or degree whatever, unless such charge is

 

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withdrawn or disposed of before Citigroup Tenant or such officer, director, partner, shareholder or employee (as the case may be) is required to plead or answer thereto.

8.03. Notwithstanding anything to the contrary contained herein, Tenant shall not be deemed to be in default of Tenant’s obligations under this lease if Tenant shall fail to comply with any such Legal Requirement if, and only if:

 

  (a) such Legal Requirement obligation is limited to the interior of the Premises, is not related to Hazardous Materials, is not structural in nature and the failure to comply with such Legal Requirement will not have an adverse effect on Building Systems or on the health or safety of any occupant of or visitor to the Building; and

 

  (b) the failure to comply with such Legal Requirement will not (i) subject Landlord or any Superior Mortgagee to prosecution for a crime or any criminal or civil fine or charge (unless, in the case of a civil fine, Tenant agrees in writing to indemnify, defend and hold such parties harmless from and against any such fine or charge and actually pays any such fine or charge), (ii) subject the Premises or any part thereof to being condemned or vacated, or (iii) subject the Building or Land, or any part thereof, to any lien or encumbrance which is not removed or bonded within the time period required under this lease.

 

  (c) such failure to comply shall not become Landlord’s obligation to cure upon the expiration or earlier termination of this lease.

8.04. Notwithstanding anything to the contrary contained herein, Tenant shall be responsible for compliance with all Environmental Laws in respect to (i) any Hazardous Materials that are brought onto the Real Property during the Term by Tenant or any of Tenant’s agents or permitted occupants, and (ii) pre-existing latent Hazardous Materials (a substance that is deemed a Hazardous Material as of the date of this lease under applicable Environmental Laws) on the Real Property which were brought onto the Real Property by Tenant, State Street Bank and Trust Company of Connecticut, National Association (the “Prior Owner”) or an Affiliate of either thereof during Tenant’s or Prior Owner’s ownership of the Real Property; provided however Tenant shall not be responsible for (x) any pre-existing Hazardous Materials, if any, noted in that certain Phase I Environmental Site Assessment 388 Greenwich Street NY, NY 10013, August 17, 2007. Prepared for: Citigroup, Inc. 388 Greenwich Street, 5th Floor NY, NY 10013. Hillman Project Number E3-2152.1. By Hillman Group LLC, Nationwide Engineering & Environmental Consulting, provided by Tenant to Landlord or any other environmental report obtained by Landlord with respect to the Real Property prior to the date of this

 

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lease or (y) any pre-existing Hazardous Materials discovered by Landlord or any of its employees, agents or contractors during the Term in connection with any activity by any of said parties that is outside the scope of Landlord’s rights under this lease.

ARTICLE 9

Compliance with Laws

8.01. Each of Tenant and Landlord shall give prompt notice to the other of any notice it receives of the violation of any Legal Requirements with respect to the Premises or the use or occupancy thereof. Tenant shall be responsible for compliance with all Legal Requirements in respect of the Real Property, whether or not such compliance requires work which is structural or non-structural, ordinary or extraordinary, foreseen or unforeseen, and, subject to this Article 8, shall procure the cancellation or discharge of all notices of violation issued in respect of the Premises, whether issued before the date hereof or during the Term whether related to conditions existing before the date hereof or during the Term (except to the extent such compliance requirement was attributable to any act of Landlord or any of Landlord’s agents). Tenant shall pay all the reasonable out-of-pocket costs and all the reasonable out-of-pocket expenses, and all the fines, penalties and damages which may be imposed upon Landlord by reason of or arising out of Tenant’s failure to fully and promptly comply with and observe the provisions of this Section 8.01. However, Tenant need not comply with any such Legal Requirement so long as Tenant shall be contesting the validity thereof, or the applicability thereof to the Premises, in accordance with Section 8.02. Landlord shall pay all the reasonable out-of-pocket costs and all the reasonable out-of-pocket expenses, and all the fines, penalties and damages which may be imposed upon Tenant by reason of or arising out of Landlord’s failure to fully and promptly comply with and observe the provisions of this Section 8.01. However, Landlord need not comply with any such Legal Requirement so long as Landlord shall be contesting the validity thereof, or the applicability thereof to the Premises, in accordance with Section 8.02.

8.02. (a) Tenant, at its expense, after notice to Landlord and any Superior Mortgagee of which Tenant had prior notice, may contest, by appropriate proceedings prosecuted diligently and in good faith, the validity, or applicability to the Premises, of any Legal Requirement, provided that (a) Landlord shall not be subject to a bona fide threat of criminal penalty or to prosecution for a crime, or any other fine or charge (unless Tenant agrees in writing to indemnify, defend and hold Landlord harmless from and against such non-criminal fine or charge), nor shall the Premises or any part thereof, be subject to a bona fide threat of being condemned or vacated, nor shall the Building or Land, or any part thereof, be subjected to a bona fide threat of any lien

 

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(unless Tenant shall remove such lien by bonding or otherwise) or encumbrance nor shall the insurance coverage required to be carried by Tenant hereunder be limited or impaired in any material respect, by reason of non-compliance or otherwise by reason of such contest; (b) except as otherwise provided in this Section 8.02, before the commencement of such contest, Tenant shall furnish to Landlord a cash deposit or other security in amount, form and substance reasonably satisfactory to Landlord and shall indemnify Landlord against the reasonable cost thereof and against all liability for damages, interest, penalties and expenses (including reasonable attorneys’ fees and expenses), resulting from or incurred in connection with such contest or non-compliance (provided, however, that Tenant shall not be required to furnish any such cash deposit or other security for so long as the Guaranty is in full force and effect); and (c) Tenant shall keep Landlord advised as to the status of such proceedings. Without limiting the application of the above, Landlord shall be deemed subject to a bona fide threat of prosecution for a crime if Landlord or any officer, director, partner, shareholder or employee of any of Landlord, as an individual, is threatened to be charged (it being agreed that if applicable Legal Requirements provide that a crime cannot be charged while the same is being contested, then a person shall not be deemed threatened to be charged with such crime during such contest) or is charged with a crime of any kind or degree whatever, unless such charge is withdrawn or disposed of before Landlord or such officer, director, partner, shareholder or employee (as the case may be) is required to plead or answer thereto. In the event Tenant shall have contested any Legal Requirement in accordance with this Section 8.02(a) and if Tenant fails to comply with the applicable determination (whether such determination was made prior to, or following the expiration of the Term), Tenant shall remain responsible for the cost of complying with such Legal Requirement, including the cost of performing the work associated with such compliance (subject to Landlord’s obligation for what would have otherwise been Landlord Reimbursement Amounts) but not for the actual compliance therewith (i.e., performance of the actual work) notwithstanding the expiration or earlier termination of this lease, and shall indemnify Landlord against the reasonable cost thereof and against all liability for damages, interest, penalties and expenses (including reasonable attorneys’ fees and expenses), resulting from or incurred in connection with such contest or non-compliance. The provisions of this Section 8.02(a) shall survive the expiration or earlier termination of this lease.

(b) Landlord, at its expense, after notice to Tenant, may contest, by appropriate proceedings prosecuted diligently and in good faith, the validity, or applicability to the Premises, of any Legal Requirement, in respect of the Real Property that Landlord may be responsible for after the expiration or earlier termination of this lease and which Tenant is not contesting under Section 8.02(a), provided that (i) Tenant shall not be subject to a bona fide threat of criminal penalty or to prosecution for a crime, or any other fine or charge (unless Landlord agrees in writing to indemnify, defend and hold Tenant harmless from and against such non-criminal fine or charge), nor shall the Premises or any part thereof, be subject to a bona fide threat of being condemned or vacated, nor shall the Building or Land, or any part thereof, be subjected to a bona fide threat of any lien (unless Landlord shall remove such lien by bonding or

 

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otherwise) or encumbrance, by reason of non-compliance or otherwise by reason of such contest; and (ii) Landlord shall keep Tenant advised as to the status of such proceedings, and to the extent compliance with such Legal Requirement is the obligation of Tenant hereunder, (x) Tenant shall have the right to participate in such contest, including attending all related meeting participation, (y) Landlord shall act reasonably in accepting Tenant’s recommendations in connection with any such contest, and (z) Landlord may not settle any such contest without Tenant approval, which approval shall not be unreasonably withheld. Without limiting the application of the above, Tenant shall be deemed subject to a bona fide threat of prosecution for a crime if Citigroup Tenant or any officer, director, partner, shareholder or employee of any of Citigroup Tenant, as an individual, is threatened to be charged (it being agreed that if applicable Legal Requirements provide that a crime cannot be charged while the same is being contested, then a person shall not be deemed threatened to be charged with such crime during such contest) or is charged with a crime of any kind or degree whatever, unless such charge is withdrawn or disposed of before Citigroup Tenant or such officer, director, partner, shareholder or employee (as the case may be) is required to plead or answer thereto.

8.03. Notwithstanding anything to the contrary contained herein, Tenant shall not be deemed to be in default of Tenant’s obligations under this lease if Tenant shall fail to comply with any such Legal Requirement if, and only if:

 

  (a) such Legal Requirement obligation is limited to the interior of the Premises, is not related to Hazardous Materials, is not structural in nature and the failure to comply with such Legal Requirement will not have an adverse effect on Building Systems or on the health or safety of any occupant of or visitor to the Building; and

 

  (b) the failure to comply with such Legal Requirement will not (i) subject Landlord or any Superior Mortgagee to prosecution for a crime or any criminal or civil fine or charge (unless, in the case of a civil fine, Tenant agrees in writing to indemnify, defend and hold such parties harmless from and against any such fine or charge and actually pays any such fine or charge), (ii) subject the Premises or any part thereof to being condemned or vacated, or (iii) subject the Building or Land, or any part thereof, to any lien or encumbrance which is not removed or bonded within the time period required under this lease.

 

  (c) such failure to comply shall not become Landlord’s obligation to cure upon the expiration or earlier termination of this lease.

 

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8.04. Notwithstanding anything to the contrary contained herein, Tenant shall be responsible for compliance with all Environmental Laws in respect to (i) any Hazardous Materials that are brought onto the Real Property during the Term by Tenant or any of Tenant’s agents or permitted occupants, and (ii) pre-existing latent Hazardous Materials (a substance that is deemed a Hazardous Material as of the date of this lease under applicable Environmental Laws) on the Real Property which were brought onto the Real Property by Tenant, State Street Bank and Trust Company of Connecticut, National Association (the “Prior Owner”) or an Affiliate of either thereof during Tenant’s or Prior Owner’s ownership of the Real Property; provided however Tenant shall not be responsible for (x) any pre-existing Hazardous Materials, if any, noted in that certain Phase I Environmental Site Assessment 388 Greenwich Street NY, NY 10013, August 17, 2007. Prepared for: Citigroup, Inc. 388 Greenwich Street, 5th Floor NY, NY 10013. Hillman Project Number E3-2152.1. By Hillman Group LLC, Nationwide Engineering & Environmental Consulting, provided by Tenant to Landlord or any other environmental report obtained by Landlord with respect to the Real Property prior to the date of this lease or (y) any pre-existing Hazardous Materials discovered by Landlord or any of its employees, agents or contractors during the Term in connection with any activity by any of said parties that is outside the scope of Landlord’s rights under this lease.

ARTICLE 9

Compliance with Laws

8.01. Each of Tenant and Landlord shall give prompt notice to the other of any notice it receives of the violation of any Legal Requirements with respect to the Premises or the use or occupancy thereof. Tenant shall be responsible for compliance with all Legal Requirements in respect of the Real Property, whether or not such compliance requires work which is structural or non-structural, ordinary or extraordinary, foreseen or unforeseen; provided, however, Landlord shall be responsible for any such compliance as it relates to Landlord’s Restoration Obligations, if any, under Article 19. Tenant shall pay all the reasonable out-of-pocket costs and all the reasonable out-of-pocket expenses, and all the fines, penalties and damages which may be imposed upon Landlord by reason of or arising out of Tenant’s failure to fully and promptly comply with and observe the provisions of this Section 8.01. However, Tenant need not comply with any such Legal Requirement so long as Tenant shall be contesting the validity thereof, or the applicability thereof to the Premises, in accordance with Section 8.02. Landlord shall pay all the reasonable out-of-pocket costs and all the reasonable out-of-pocket expenses, and all the fines, penalties and damages which may be imposed upon Tenant by reason of or arising out of Landlord’s failure to fully and promptly comply with and observe the provisions of this Section 8.01. However, Landlord need not

 

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comply with any such Legal Requirement so long as Landlord shall be contesting the validity thereof, or the applicability thereof to the Premises, in accordance with Section 8.02.

8.02. (a) Tenant, at its expense, after notice to Landlord, may contest, by appropriate proceedings prosecuted diligently and in good faith, the validity, or applicability to the Premises, of any Legal Requirement, provided that (a) Landlord shall not be subject to a bona fide threat of criminal penalty or to prosecution for a crime, or any other fine or charge (unless Tenant agrees in writing to indemnify, defend and hold Landlord harmless from and against such non-criminal fine or charge), nor shall the Premises or any part thereof, be subject to a bona fide threat of being condemned or vacated, nor shall the Building or Land, or any part thereof, be subjected to a bona fide threat of any lien (unless Tenant shall remove such lien by bonding or otherwise) or encumbrance, by reason of non-compliance or otherwise by reason of such contest; (b) except as otherwise provided in this Section 8.02, before the commencement of such contest, Tenant shall furnish to Landlord a cash deposit or other security in amount, form and substance reasonably satisfactory to Landlord and shall indemnify Landlord against the reasonable cost thereof and against all liability for damages, interest, penalties and expenses (including reasonable attorneys’ fees and expenses), resulting from or incurred in connection with such contest or non-compliance (provided, however, that Tenant shall not be required to furnish any such cash deposit or other security if Tenant is a Citibank Tenant or if a non-Citibank Tenant or the guarantor of a non-Citibank Tenant shall then have a net worth, exclusive of good will, determined in accordance with GAAP of not less ten (10) times the potential cost of non-compliance, as reasonably determined by Landlord); and (c) Tenant shall keep Landlord advised as to the status of such proceedings. Without limiting the application of the above, Landlord shall be deemed subject to a bona fide threat of prosecution for a crime if Landlord or any officer, director, partner, shareholder or employee of any of Landlord, as an individual, is charged with a crime of any kind or degree whatever, unless such charge is withdrawn or disposed of before Landlord or such officer, director, partner, shareholder or employee (as the case may be) is required to plead or answer thereto.

(b) Landlord, at its expense, after notice to Tenant, may contest, by appropriate proceedings prosecuted diligently and in good faith, the validity, or applicability to the Premises, of any Legal Requirement, provided that (a) Tenant shall not be subject to a bona fide threat of criminal penalty or to prosecution for a crime, or any other fine or charge (unless Landlord agrees in writing to indemnify, defend and hold Tenant harmless from and against such non-criminal fine or charge), nor shall the Premises or any part thereof, be subject to a bona fide threat of being condemned or vacated, nor shall the Building or Land, or any part thereof, be subjected to a bona fide threat of any lien (unless Landlord shall remove such lien by bonding or otherwise) or encumbrance, by reason of non-compliance or otherwise by reason of such contest; (b) except as otherwise provided in this Section 8.02, before the commencement of such contest, Landlord shall furnish to Tenant a cash deposit or other security in amount, form

 

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and substance reasonably satisfactory to Tenant and shall indemnify Tenant against the reasonable cost thereof and against all liability for damages, interest, penalties and expenses (including reasonable attorneys’ fees and expenses), resulting from or incurred in connection with such contest or non-compliance (provided, however, that Landlord shall not be required to furnish any such cash deposit or other security if Landlord shall then have a net worth, exclusive of good will and its interest in the Real Property, determined in accordance with GAAP of not less ten (10) times the potential cost of non-compliance, as reasonably determined by Tenant); and (c) Landlord shall keep Tenant advised as to the status of such proceedings. Without limiting the application of the above, Tenant shall be deemed subject to a bona fide threat of prosecution for a crime if Citibank Tenant or any officer, director, partner, shareholder or employee of any of Citibank Tenant, as an individual, is charged with a crime of any kind or degree whatever, unless such charge is withdrawn or disposed of before Citibank Tenant or such officer, director, partner, shareholder or employee (as the case may be) is required to plead or answer thereto.

8.03. Notwithstanding anything to the contrary contained herein, Tenant shall not be deemed to be in default of Tenant’s obligations under this lease if Tenant shall fail to comply with any such Legal Requirement if, and only if:

 

  (a) such Legal Requirement obligation is limited to the interior of the Premises, is not related to Hazardous Materials, is not structural in nature and the failure to comply with such Legal Requirement will not have an adverse effect on Building Systems or on the health or safety of any occupant of or visitor to the Building; and

 

  (b) the failure to comply with such Legal Requirement will not (i) subject Landlord or any Superior Mortgagee to prosecution for a crime or any other fine or charge (unless Tenant agrees in writing to indemnify, defend and hold such parties harmless from and against any such fine or charge and actually pays any such fine or charge), (ii) subject the Premises or any part thereof to being condemned or vacated, or (iii) subject the Building or Land, or any part thereof, to any lien or encumbrance which is not removed or bonded within the time period required under this lease.

 

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ARTICLE 9

Compliance with Laws

8.01. Each of Landlord and Tenant shall give prompt notice to the other of any notice it receives of the violation of any Legal Requirements with respect to the Premises or the use or occupation thereof. Tenant shall, at Tenant’s expense, comply with all Legal Requirements in respect of the Premises or the use and occupation thereof; provided, however, that Tenant shall not be obligated to make structural repairs or alterations in or to the Premises nor to the vertical portions of Building systems nor facilities serving the Premises or to any portions of Building systems or facilities that pass through the Premises but do not exclusively serve the Premises (but Tenant shall be obligated to make repairs to such Building systems or facilities that exclusively serve the Premises, such as supplemental HVAC) in order to comply with Legal Requirements unless the need for same arises out of Tenant’s manner of use of the Premises as opposed to mere executive or general office use or retail purposes or any of the causes set forth in clauses (b) through (d) of the next succeeding sentence. Except as expressly provided to the contrary herein, Tenant shall also be responsible for the cost of compliance with all Legal Requirements in respect of the Real Property arising from (a) Tenant’s manner of use of the Premises (other than arising out of the mere use of the Premises as executive and general offices or for retail purposes), (b) the manner of conduct of Tenant’s business or operation of its installations, equipment or other property therein, (c) any cause or condition created by or at the instance of Tenant (other than the mere use of the Premises as executive and general offices or for retail purposes), or (d) the breach of any of Tenant’s obligations hereunder, whether or not such compliance requires work which is structural or non-structural, ordinary or extraordinary, foreseen or unforeseen; provided, however, Landlord shall be responsible for any such compliance as it relates to Landlord’s Restoration Obligation, if any, under Article 19 and any of Landlord’s restoration obligations under Article 20. Subject to the rights of other tenants in the Building, Tenant shall have such access to the Real Property as may be required by Tenant in connection with Tenant’s performance of its obligations pursuant to this Section 8.01; provided, that, any work which could have an adverse effect on the proper functioning of the Building systems shall be performed by Landlord and the reasonable third party out-of-pocket costs incurred by Landlord in connection therewith shall be reimbursed by Tenant within thirty (30) days following a invoice therefor (which invoice shall included documentation reasonably satisfactory to Tenant in support of such charges). Tenant shall pay all the reasonable out-of-pocket costs and all the reasonable out-of-pocket expenses, and all the fines, penalties and damages which may be imposed upon Landlord by reason of or arising out of Tenant’s failure to fully and promptly comply with and observe the provisions of this Section 8.01. However, Tenant need not comply with any such Legal Requirement so long as Tenant shall be contesting the validity thereof, or the applicability thereof to the Premises, in accordance with

 

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Section 8.02. Except to the extent that Tenant is required by this lease to comply therewith, Landlord, at its expense, shall comply with all Legal Requirements in respect of the Real Property as shall affect the Premises and Tenant’s use and enjoyment thereof, but may similarly defer compliance so long as Landlord shall be contesting the validity or applicability thereof, provided that deferring such compliance does not adversely affect Tenant’s ability to use and occupy the Premises in accordance with all of the terms and conditions of this lease including, without limitation, Tenant’s ability to obtain permits and licenses to perform Alterations permitted hereunder. Landlord shall pay all the reasonable out-of-pocket costs and all the reasonable out-of-pocket expenses, and all the fines, penalties and damages which may be imposed upon Tenant by reason of or arising out of Landlord’s failure to fully and promptly comply with and observe the provisions of this Section 8.01.

8.02. Tenant, at its expense, after notice to Landlord and any Superior Mortgagee of which Tenant had prior notice, may contest, by appropriate proceedings prosecuted diligently and in good faith, the validity, or applicability to the Premises, of any Legal Requirement, provided that (i) Landlord shall not be subject to a threat of criminal penalty or to prosecution for a crime (it being agreed that if applicable Legal Requirements provide that a crime cannot be charged while the same is being contested, then a person shall not be deemed threatened to be charged with such crime during such contest), or any other fine or charge (unless Tenant agrees in writing to indemnify, defend and hold Landlord harmless from and against such non-criminal fine or charge), nor shall the Premises or any part thereof, be subject to a bona fide threat of being condemned or vacated, nor shall the Building or Land, or any part thereof, be subjected to a bona fide threat of any lien (unless Tenant shall remove such lien by bonding or otherwise) or encumbrance nor shall the insurance coverage required to be carried by Tenant hereunder be limited or impaired in any material respect, by reason of non-compliance or otherwise by reason of such contest, nor shall Landlord’s ability to use and occupy the Real Property, including Landlord’s ability to obtain permits and licenses to perform work at the Real Property be materially adversely affected; (b) except as otherwise provided in this Section 8.02, before the commencement of such contest, Tenant shall furnish to Landlord a cash deposit or other security in amount, form and substance reasonably satisfactory to Landlord and shall indemnify Landlord against the reasonable cost thereof and against all liability for damages, interest, penalties and expenses (including reasonable attorneys’ fees and expenses), resulting from or incurred in connection with such contest or non-compliance (provided, however, that Tenant shall not be required to furnish any such cash deposit or other security for so long as the Guaranty is in full force and effect; and (c) Tenant shall keep Landlord advised as to the status of such proceedings.

8.03. Notwithstanding anything to the contrary contained herein, Tenant shall not be deemed to be in default of Tenant’s obligations under this lease if Tenant shall fail to comply with any such Legal Requirement if, and only if:

 

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  (a) such Legal Requirement obligation is limited to the interior of the Premises, is not related to Hazardous Materials, is not structural in nature and the failure to comply with such Legal Requirement will not have an adverse effect on Building Systems or on the health or safety of any occupant of or visitor to the Building; and

 

  (b) the failure to comply with such Legal Requirement will not (i) subject Landlord or any Superior Mortgagee to prosecution for a crime or any criminal or civil fine or charge (unless, in the case of a civil fine, Tenant agrees in writing to indemnify, defend and hold such parties harmless from and against any such fine or charge and actually pays any such fine or charge), (ii) subject the Premises or any part thereof to being condemned or vacated, or (iii) subject the Building or Land, or any part thereof, to any lien or encumbrance which is not removed or bonded within the time period required under this lease.

8.04. (a) Notwithstanding anything to the contrary contained herein, Tenant shall be responsible for compliance with all Environmental Laws in respect to any Hazardous Materials that are brought onto the Premises during the Term by Tenant or any of Tenant’s agents or permitted occupants.

(b) If all or a portion of the Premises shall be rendered untenantable and Tenant ceases to occupy such portion of the Premises as the result of the presence of Hazardous Materials in any portion of the Real Property, including in Base Elements serving the Premises, which presence is not caused by Tenant or anyone claiming by, through or under Tenant (and is not otherwise the responsibility of Tenant under Section 8.04(a), then (i) the Rent payable with respect to such untenantable and unused portion of the Premises shall abate until Landlord shall have taken such steps as are necessary to render the applicable portion of the Premises tenantable, (ii) Landlord will repair any damages resulting from any required remediation and (iii) Landlord shall indemnify Tenant from and against any and all costs and expenses incurred by Tenant in connection with actual damages to the Premises and/or Tenant’s property therein to the extent arising from or in connection with any such remediation.

8.05. The provisions of this Article 8 shall survive the expiration or other termination of this lease.

ARTICLE 9

Compliance with Laws

8.01. Each of Landlord and Tenant shall give prompt notice to the other of any notice it receives of the violation of any Legal Requirements with respect to the Premises or the use or occupation thereof. Tenant shall, at Tenant’s expense, comply with all Legal Requirements in respect of the Premises or the use and occupation thereof; provided, however, that Tenant shall not be obligated to make structural repairs or alterations in or to the Premises or to the vertical portions of Building systems or facilities serving the Premises or to any portions of Building systems or facilities that pass through the Premises but do not serve the Premises (but Tenant shall be obligated to make repairs to horizontal extensions of or Alterations to such Building systems or facilities that do serve the Premises, such as electrical or HVAC distribution within the Premises) in order to comply with Legal Requirements unless the need for same arises out of Tenant’s manner of use of the Premises as opposed to mere executive or general office use or retail purposes or any of the causes set forth in clauses (b) through (d) of the next succeeding sentence. Except as expressly provided to the contrary herein, Tenant shall also be responsible for the cost of compliance with all Legal Requirements in respect of the Real Property arising from (a) Tenant’s manner of use of the Premises (other than arising out of the mere use of the Premises as executive and general offices or for retail purposes), (b) the manner of conduct of Tenant’s business or operation of its installations, equipment or other property therein, (c) any cause or condition created by or at the instance of Tenant (other than the mere use of the Premises as executive and general offices or for retail purposes), or (d) the breach of any of Tenant’s obligations hereunder, whether or not such compliance requires work which is structural or non-structural, ordinary or extraordinary, foreseen or unforeseen; provided, however, Landlord shall be responsible for any such compliance as it relates to Landlord’s Restoration Obligation, if any, under Article 19 and any of Landlord’s restoration obligations under Article 20. Tenant shall have such access to the Real Property as may be required by Tenant in connection with Tenant’s performance of its obligations pursuant to this Section 8.01. Tenant shall pay all the reasonable out-of-pocket costs and all the reasonable out-of-pocket expenses, and all the fines, penalties and damages which may be imposed upon Landlord by reason of or arising out of Tenant’s failure to fully and promptly comply with and observe the provisions of this Section 8.01. However, Tenant need not comply with any such Legal Requirement so long as Tenant shall be contesting the validity thereof, or the applicability thereof to the Premises, in accordance

 

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with Section 8.02. Except to the extent that Tenant is required by this lease to comply therewith, Landlord, at its expense, shall comply with all Legal Requirements in respect of the Real Property as shall affect the Premises and Tenant’s use and enjoyment thereof, but may similarly defer compliance so long as Landlord shall be contesting the validity or applicability thereof, provided that deferring such compliance does not adversely affect Tenant’s ability to use and occupy the Premises in accordance with all of the terms and conditions of this lease including, without limitation, Tenant’s ability to obtain permits and licenses to perform Alterations. Landlord shall pay all the reasonable out-of-pocket costs and all the reasonable out-of-pocket expenses, and all the fines, penalties and damages which may be imposed upon Tenant by reason of or arising out of Landlord’s failure to fully and promptly comply with and observe the provisions of this Section 8.01.

8.02. Tenant, at its expense, after notice to Landlord, may contest, by appropriate proceedings prosecuted diligently and in good faith, the validity, or applicability to the Premises, of any Legal Requirement, provided that (a) Landlord shall not be subject to a bona fide threat of criminal penalty or to prosecution for a crime, or any other fine or charge (unless Tenant agrees in writing to indemnify, defend and hold Landlord harmless from and against such non-criminal fine or charge), nor shall the Premises or any part thereof, be subject to a bona fide threat of being condemned or vacated, nor shall the Building or Land, or any part thereof, be subjected to a bona fide threat of any lien (unless Tenant shall remove such lien by bonding or otherwise) or encumbrance, by reason of non-compliance or otherwise by reason of such contest; (b) except as otherwise provided in this Section 8.02, before the commencement of such contest, Tenant shall furnish to Landlord a cash deposit or other security in amount, form and substance reasonably satisfactory to Landlord and shall indemnify Landlord against the reasonable cost thereof and against all liability for damages, interest, penalties and expenses (including reasonable attorneys’ fees and expenses), resulting from or incurred in connection with such contest or non-compliance (provided, however, that Tenant shall not be required to furnish any such cash deposit or other security if Tenant is a Citibank Tenant or if a non-Citibank Tenant or the guarantor of a non-Citibank Tenant shall then have a net worth, exclusive of good will, determined in accordance with GAAP of not less ten (10) times the potential cost of non-compliance, as reasonably determined by Landlord); and (c) Tenant shall keep Landlord advised as to the status of such proceedings. Without limiting the application of the above, Landlord shall be deemed subject to a bona fide threat of prosecution for a crime if Landlord or any officer, director, partner, shareholder or employee of any of Landlord, as an individual, is charged with a crime of any kind or degree whatever, unless such charge is withdrawn or disposed of before Landlord or such officer, director, partner, shareholder or employee (as the case may be) is required to plead or answer thereto.

8.03. Notwithstanding anything to the contrary contained herein, Tenant shall not be deemed to be in default of Tenant’s obligations under this lease if Tenant shall fail to comply with any such Legal Requirement if, and only if:

 

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  (a) such Legal Requirement obligation is limited to the interior of the Premises, is not related to Hazardous Materials, is not structural in nature and the failure to comply with such Legal Requirement will not have an adverse effect on Building Systems or on the health or safety of any occupant of or visitor to the Building; and

 

  (b) the failure to comply with such Legal Requirement will not (i) subject Landlord or any Superior Mortgagee to prosecution for a crime or any other fine or charge (unless Tenant agrees in writing to indemnify, defend and hold such parties harmless from and against any such fine or charge and actually pays any such fine or charge), (ii) subject the Premises or any part thereof to being condemned or vacated, or (iii) subject the Building or Land, or any part thereof, to any lien or encumbrance which is not removed or bonded within the time period required under this lease.

ARTICLE 9

EXCERPTS ON THIS PAGE:

10-K (5 sections)
Feb 22, 2008
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