SUBLEASE
This Sublease is made this 1st day of October, 1992 by and between
DIFEO BMW, INC., a New Jersey corporation, having an address at c/o Dealership
Management, 585 Route 440, Jersey City, New Jersey ("Sublandlord") and DIFEO BMW
PARTNERSHIP, a New Jersey partnership, having an address at c/o EMCO Motor
Holdings, Inc., 153 East 53rd Street, New York, New York 10022 ("Subtenant").
W I T N E S S E T H
WHEREAS, Sublandlord is the tenant under that certain lease, more
particularly described on Exhibit A attached hereto and made part hereof (said
lease being hereinafter referred to as the "Overlease"), demising certain
premises as more particularly described in the Overlease (said premises being
hereinafter referred to as the "Demised Premises");
WHEREAS, Subtenant desires to sublease from Sublandlord the Demised
Premises.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto, intending to be
legally bound hereby, agree as follows:
1. Subleasing
Sublandlord, in consideration of the rents reserved in this Sublease
to be paid by Subtenant and in consideration of the covenants, agreements and
conditions herein contained to be observed and fulfilled by Subtenant, hereby
subleases to Subtenant, and Subtenant hereby hires from Sublandlord, the Demised
Premises.
2. Term
The term of this Sublease shall commence on the date hereof and
shall terminate at 5 o'clock p.m. (local time) on the day preceding the last day
of the term of the Overlease in effect on the date of this Sublease, unless
extended or earlier terminated pursuant to the provisions of this Sublease.
3. Incorporation
This Sublease is expressly subject and subordinate to the Overlease,
and all that to which the Overlease is subject and subordinate. Except as
otherwise provided herein, the terms, covenants, provisions and conditions of
the Overlease are incorporated herein by this reference with the same force and
effect as if fully set forth herein and shall be binding upon both parties
hereto. This Section shall be self-operative and no
further instrument of subordination shall be required. Whenever reference is
made in the terms, covenants, provisions and conditions of the Overlease to
"Landlord" or "Lessor" (or the like), "Tenant" or "Lessee" (or the like),
"Demised Premises" or "Premises" (or the like) and "Lease" (or the like), unless
otherwise provided for in this Sublease, the same shall be deemed to refer to
Sublandlord, Subtenant, the Demised Premises hereunder, and to this Sublease,
respectively. All of the duties, obligations and requirements owed by
Sublandlord to the Landlord under the Overlease ("Overlandlord") are during the
term hereof owed by subtenant to the Sublandlord under this Sublease and
Subtenant shall timely perform and observe the same as if expressly set forth
herein. Subtenant shall not take or suffer any action in connection with its use
and enjoyment of the Demised Premises which would constitute a default under or
be a violation of, the Overlease (nothing contained in this Sublease shall be
deemed to impose upon Subtenant any obligation which, under this Sublease, is
the responsibility of the Sublandlord). All of the rights and benefits conferred
by the Overlease upon the Overlandlord are hereby upon Sublandlord with respect
to the Demised Premises and the Subtenant and all of the obligations, duties and
requirements imposed by the Overlease upon the Sublandlord are hereby imposed
upon Subtenant with respect to the Demised Premises.
4. Services
4.1 Any provision in this Sublease to the contrary notwithstanding,
including, without limitation, the provisions of Section 3 hereof, Sublandlord
shall, except as otherwise expressly provided for in this Sublease or in the
Transaction Agreements (hereinafter defined), have no obligation during the term
of this Sublease, under this Sublease or otherwise, to render any services to
Subtenant of any nature or to expend any money for the preservation or repair of
the Demised Premises, or to perform any obligation imposed upon the Overlandlord
under the Overlease. Subtenant agrees to look solely to the Overlandlord for
furnishing of any services or the maintenance, rebuilding or repair of the
Demised Premises or equipment therein or access thereto to which Subtenant is
entitled under the provisions of the Overlease incorporated herein and for the
performance or fulfillment of any promise, obligation, covenant, warranty or
representation made by or imposed upon Overlandlord under the Overlease. If the
Overlandlord is not obligated for arranging, doing or providing for the same
then Subtenant shall arrange, provide and do the same at Subtenant's sole cost
and expense unless, under this Sublease or the Transaction Agreements,
Sublandlord (or an Affiliate of Sublandlord) is responsible for the same.
Sublandlord shall not be obligated to perform and shall not be liable for the
performance by the Overlandlord of any of the obligations imposed or assumed or
undertaken by the Overlandlord under the Overlease and Subtenant shall have no
claim against Sublandlord by reason of any default upon the part of the
Overlandlord, and Sublandlord shall not be liable to
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Subtenant nor shall Subtenant's obligations hereunder be impaired or the
performance thereof excused (including the payment of rent and additional rent)
because of any failure or delay on the Overlandlord's part in furnishing any
such service or making any such repairs or alterations or in providing equipment
or access or because of Subtenant's inability to obtain said service or for any
other reason whatsoever.
4.2 If Overlandlord shall default in any of its obligations with
respect to the Demised Premises, or there shall exist a bona fide dispute with
Overlandlord under the terms of the Overlease and Subtenant notifies Sublandlord
in writing that Subtenant shall have previously notified Overlandlord of such
dispute and that such notice shall have been disregarded or not reasonably
satisfactorily acted upon, then Sublandlord shall notify Overlandlord of such
default or dispute in its name on Subtenant's behalf. Subtenant shall be
entitled to participate with Sublandlord in the enforcement of Sublandlord's
rights against Overlandlord, but Sublandlord shall have no obligation to bring
any action or proceeding or to take any steps to enforce Sublandlord's rights
against Overlandlord. If, after written request from Subtenant, Sublandlord
shall fail or refuse to take appropriate action for the enforcement of
Sublandlord's rights against Overlandlord with respect to the Demised Premises,
Subtenant shall have the right to take such action in its own name, and for such
purpose and only to such extent, all of the rights of Sublandlord under the
Overlease are hereby conferred upon and assigned to Subtenant and Subtenant
hereby is subrogated to such rights to the extent that the same shall apply to
the Demised Premises or Subtenant may, at Subtenant's sole cost and expense,
upon not less than five (5) business days prior notice to Sublandlord (or in the
event of an emergency, without any notice) take such action in Sublandlord's
name; provided Subtenant shall, in connection with any of the foregoing,
indemnify and hold Sublandlord harmless from and against all liability, loss or
damage, including, without limiting the foregoing, reasonable attorney's fees
(as well as attorneys fees incurred to enforce this indemnity), which
Sublandlord shall suffer by reason of such action, which obligation to indemnify
shall survive the expiration or earlier termination of this Sublease. Without
limiting the foregoing, Subtenant shall reimburse Sublandlord for all reasonable
costs incurred by Sublandlord in connection with the provisions of this Section
4.2.
5. Utilities
Subtenant shall make its own arrangements with the appropriate
utility company supplying electricity, water, gas, steam, telephone and other
utilities to the Demised Premises and for garbage disposal from the Demised
Premises, and shall arrange to have all bills for such utilities or services to
be forwarded directly to Subtenant. Subtenant shall pay when due all charges for
such utilities or services accruing during the term of this
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Sublease.
6. Indemnification
6.1 Except to the extent due to negligence or willful misconduct of
Sublandlord, its agents, employees, or contractors from and after the date
hereof, Subtenant shall indemnify and save harmless Sublandlord against and from
any and all claims arising during the term hereof (even if asserted after the
end of the term hereof) (i) by or on behalf of any person for injury to persons
or damage to property occurring in, on or about the Demised Premises, or (ii)
arising from the conduct or management of or from any work or thing whatsoever
done in and on the Demised Premises, or the use and occupancy of the Demised
Premises, or (iii) arising from any condition of the Demised Premises or any
sidewalk adjoining the Demised Premises, or of any vaults, passageways or space
therein or appurtenant thereto or arising from any act of negligence of
Subtenant, or any occupant of the Demised Premises or any part thereof, or of
its or their agents, contractors, servants, employees, invitees or licensees and
from and against all judgments, costs, expenses or liabilities incurred in or
about any such claim or action or proceeding brought therein; and in case any
action or proceeding be brought against Sublandlord by reason of any such claim,
Subtenant upon notice from Sublandlord shall defend such action or proceeding by
counsel reasonably satisfactory to Sublandlord. Nothing contained herein shall
be deemed or construed to deal with environmental related matters.
6.2 Sublandlord shall indemnify and save harmless Subtenant against
and from any and all claims arising during the term hereof (even if asserted
after the end of the term hereof) to the extent due to negligence or willful
misconduct of Sublandlord, its agents, employees or contractors, from and after
the date hereof, solely with respect to and arising from any entry of any
thereof into or upon the Demised Premises, (i) by or on behalf of any person for
injury to persons or damage to property occurring in, on or about the Demised
Premises, or (ii) any act of negligence or willful misconduct of Sublandlord, or
of its agents, contractors, servants, employees, invitees or licensees, from and
after the date hereof, and from and against all judgments, costs, expenses and
liabilities incurred in or about any such claim or action or proceeding brought
therein solely with respect to an entry of any thereof into or upon the Demised
Premises; and in case any such action or proceeding be brought against Subtenant
by reason of any such claim, Sublandlord upon notice from Subtenant shall defend
such action or proceeding by counsel reasonably satisfactory to Sublandlord.
Nothing contained herein shall be deemed or construed to deal with environmental
related matters.
7. Payment of Rent
7.1 Subtenant shall make payment of all forms of rent
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(which shall be deemed to include base rent, additional rent and all other
charges required to be paid by the tenant under the Overlease, regardless of
whether to the Overlandlord) required to be paid by tenant under the Overlease
directly to the person, entity or party to whom the Overlease requires such
payment to be made. However, if the Overlandlord refuses to accept payments
directly from the Subtenant, then Subtenant shall make payment of the same to
Sublandlord who will, after receipt, promptly make payment of the same to the
Overlandlord. All such payments shall be made by Subtenant no later than the
date when the Overlease requires such payment to be made by the tenant
thereunder except that if the Overlandlord refuses to accept payments directly
from the Subtenant, then Subtenant shall make such payments to Sublandlord no
later than five (5) days prior to the date when the Overlease requires such
payment to be made by the tenant thereunder and Sublandlord shall, after
receipt, but subject to Subtenant's timely compliance with the foregoing, make
payment of the same to the Overlandlord within the time required by the
Overlease. Without limiting any of the foregoing, Subtenant shall, upon request
from Sublandlord, provide evidence to the Sublandlord that all such payments
have been made.
7.2 All sums, charges, costs, expenses and payments which this
Sublease requires the Subtenant to pay (regardless of to whom) shall be deemed
rent hereunder and Sublandlord shall have all of the rights and remedies
afforded to the Overlandlord pursuant to the Overlease in the case of the
non-payment of basic rent, all rights and remedies afforded to the Sublandlord
pursuant to this Sublease for failure to pay the same, as well as all rights and
remedies afforded to landlords under law or at equity.
7.3 With respect to sums and charges required to be paid by the
Subtenant hereunder, which sums and charges are not required by the Overlease to
be paid by the tenant thereunder, if this Sublease does not set forth a time
frame for the payment of such sums and charges, then the same shall be due and
payable within fifteen (15) days after demand.
8. Permitted Use
Subtenant shall not have the right to use the Demised Premises for
any use which (i) would cause the Demised Premises to become subject to
compliance with the remedial provisions of the New Jersey Environmental Clean Up
Responsibility Act (N.J.S.A. 13:1k-6 et seq., or the regulations promulgated
thereunder ("ECRA")), or a similar state statute requiring environmental testing
and/or remediation, in any case prior to the sale or other transfer of the
Demised Premises, upon the circumstance of an assignment of this Sublease or
sublease of the Demised Premises, upon the expiration or sooner termination of
this Sublease or any such sublease or upon the cessation of operations at the
Demised Premises or (ii) would increase in any material respect the risk of
environmental contamination of the
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Demised Premises (the increase in risk to be measured from the uses being made
of the Demised Premises during December, 1991 by Sublandlord (or an Affiliate of
Sublandlord)). If Subtenant desires to use the Demised Premises for a use not
being made thereof during December, 1991, it shall notify Sublandlord.
Sublandlord will advise Subtenant, by notice within thirty (30) days of
Subtenant's notice, if Sublandlord believes that the proposed use to which the
Subtenant desires to put the Demised Premises violates the prohibitions
contained above, which notice from Sublandlord shall specify in reasonable
detail grounds for Sublandlord's determination. Failure or refusal of
Sublandlord to respond within such thirty (30) day period shall be deemed a
determination by Sublandlord that the proposed use does not violate the above
prohibitions. If Subtenant disputes Sublandlord's determination, such dispute
shall be resolved by ADR pursuant to Section 36 hereof. Nothing contained in
this Section 8 shall be deemed or construed to prohibit Subtenant from using the
Demised Premises for the uses being made thereof by Sublandlord (or an Affiliate
of Sublandlord) during December, 1991.
9. Net Sublease
It is the purpose and intent of Sublandlord and Subtenant that
except for Sublandlord's obligations which are expressly provided for herein (or
in the Transaction Agreements), that this be an absolutely net sublease and that
Subtenant shall make all payments hereunder free of any charges, assessments,
impositions or deductions of any kind and without abatement, deduction, demand,
notice or setoff and that all costs, expenses, charges, assessments, impositions
and obligations of every kind and nature whatsoever relating to the Demised
Premises which are the tenant's obligations under the Overlease or which
otherwise relate to the Demised Premises and/or the use and occupancy thereof,
whether foreseen or unforeseen, ordinary or extraordinary, shall be the
responsibility of the Subtenant.
10. Notices from Overlandlord
Subtenant shall promptly furnish Sublandlord with copies of all
notices which Subtenant shall receive from the Overlandlord (or anyone claiming
by, through or under Overlandlord) with respect to the Overlease and/or the
Demised Premises. Sublandlord shall promptly furnish Subtenant with copies of
all notices which Sublandlord shall receive from the Overlandlord (or anyone
claiming by, through or under Overlandlord) with respect to the Overlease and/or
the Demised Premises.
11. Absence of Representations by Sublandlord
11.1 The parties hereto acknowledge and agree that, except as
otherwise provided in this Sublease, in the Master Agreement and in the other
transaction agreements, Sublandlord is
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delivering, and Subtenant is accepting, the Demised Premises in their "as is"
condition on the date hereof. Subtenant acknowledges that it has inspected,
examined and investigated to its full satisfaction the Demised Premises and the
uses thereof and any other matter of concern to Subtenant with respect to the
Demised Premises, that Subtenant accepts the Demised Premises in their present
condition without any representation or warranty whatsoever by Sublandlord,
except as herein expressly provided, as to the condition of the Demised Premises
or the value thereof or the utility thereof or usefulness for any particular
purpose or any other matter or thing relating in any way to the Demised
Premises, and that Subtenant acknowledges that Sublandlord has not made and does
not make, and Subtenant is not relying upon, any representation or warranty,
except as herein expressly provided, as to the physical condition, quality,
value or character or any other matter relating to or affecting the Demised
Premises. Nothing in this Sublease, including this Section, however, shall waive
or modify any of the obligations, rights or remedies of the parties to the
Master Agreement and the other Transaction Agreements pursuant to the Master
Agreement and the other Transaction Agreements.
11.2 Sublandlord represents and warrants to Subtenant as follows:
(a) The actual uses being made of the Demised
Premises by Sublandlord during December 1991 and the use of the Demised Premises
by Subtenant on the date hereof for the same uses were and are permitted by all
applicable zoning laws, or (if not permitted by zoning laws) are lawful
nonconforming uses, and all certificates of occupancy required for such use in
December 1991 were obtained and were in full force and effect immediately prior
to the commencement of the term hereof.
(b) To the actual knowledge of Sublandlord, Joseph
C. DiFeo and Samuel X. DiFeo, there are no material structural defects in the
Demised Premises on the date hereof, except as set forth on Exhibit B.
(c) The representations and warranties set forth in
Exhibit C are true, correct and complete as of the date hereof.
11.3 Notwithstanding anything in this Sublease to the contrary, in
the event that any representation or warranty of Sublandlord set forth in
Section 11.2 are false or incorrect when made (an "Inaccuracy") in any material
respect, then Sublandlord shall, in its sole expense (but subject to the cost
sharing provisions contained in the Master Agreement) after receipt of notice
from Subtenant of the specifics of the Inaccuracy institute steps necessary to
cure the same and proceed with reasonable dispatch to effectuate the same. If,
by reason of such Inaccuracy, Subtenant's ability to use the Demised Premises
for the December Uses is materially adversely interfered with
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then there shall be an equitable reduction of the rent until such time as the
material interference caused by the Inaccuracy has been eliminated, which
reduction shall not extend beyond six months from the date Subtenant notified
Sublandlord of such Inaccuracy. If by reason of the Inaccuracy the Subtenant's
use of the Demised Premises for the December Uses is materially adversely
interfered with for a period of six (6) consecutive months from the date of such
notice, then Subtenant shall have the right, prior to the cessation of such
material interference, as its sole remedy with respect to such Inaccuracy, to
terminate this Sublease in which event neither party hereto shall have any
further liability or obligation to the other under this Sublease except those
which are expressly stated to survive the expiration or sooner termination of
this Sublease. Any notice by Subtenant to Sublandlord advising of the Inaccuracy
must be given by six (6) months from the date of this Sublease and must
specifically identify the Inaccuracy, failing which Sublandlord shall have no
responsibility to Subtenant hereunder with respect to any Inaccuracy.
12. No Violations
12.1 Subject to the provisions of Section 29.7 hereof, Subtenant
shall not do or permit to be done anything which would constitute a violation or
breach of any of the terms, conditions or provisions of the Overlease or which
would cause the Overlease to be terminated or forfeited by virtue of any rights
of termination or forfeiture reserved or vested in Overlandlord. Nothing
contained in this Section 12.1 shall be deemed or construed to obligate
Subtenant to perform any obligation imposed upon Sublandlord hereunder. If
Subtenant shall default in the performance of any of Subtenant's obligation
under this Sublease, Sublandlord may perform same at the expense of Subtenant
(i) immediately without notice in the case of an emergency, which shall be
deemed to include, without limitation, the lapse or termination of any insurance
policy required to be obtained by Subtenant hereunder or the taking of any
action required to prevent an imminent default under the Overlease (but will
provide Subtenant with prompt notice thereafter) and (ii) in any other case if
Subtenant shall fail to remedy such default after Sublandlord shall have
notified Subtenant of such default (Sublandlord shall not be entitled to notify
Subtenant of a default which respects Subtenant's failure to perform or observe
any covenant or agreement on the part of Subtenant to be performed hereunder
which involves the observance and performance of a covenant or agreement imposed
upon the tenant under the Overlease (excepting from the foregoing, however, the
failure to make payment of rent, additional rent or any other payment required
to be made by Subtenant hereunder, and excepting from the foregoing any
obligation which is independently imposed upon the Subtenant under this
Sublease) unless Sublandlord receives notice from the Overlandlord with respect
to such failure to perform or observe) and the applicable grace period, if any,
for curing such default shall have expired, provided, however, in the
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case of a failure for which for causes beyond Subtenant's reasonable control
cannot with due diligence be cured within such applicable grace period, such
grace period shall be deemed extended if Subtenant (x) shall promptly upon the
receipt of such notice, advise Sublandlord of Subtenant's intention to institute
all steps necessary to cure such failure and (y) shall institute and thereafter
with reasonable dispatch prosecute to completion all steps necessary to cure the
same.
12.2 Sublandlord shall not do or permit to be done anything which
would constitute a violation or breach of any of the terms, conditions or
provisions of the Overlease or which would cause the Overlease to be terminated
or forfeited by virtue of any rights of termination or forfeiture reserved or
vested in Overlandlord. Nothing contained in this Section 12.2 shall be deemed
or construed to obligate Sublandlord to perform any obligation imposed upon
Subtenant hereunder. If Sublandlord shall default in the performance of any of
Sublandlord's obligations under this Sublease (if any), Subtenant may perform
same at the expense of Sublandlord (i) immediately and without notice in the
case of any emergency which shall be deemed to include the taking of any action
required to prevent an imminent default under the Overlease (but will provide
Sublandlord with prompt notice thereafter) and (ii) in any other case if such
failure continues after thirty (30) days from the date of the giving by
Subtenant to Sublandlord of notice of intention so to perform the same or, in
the case of a failure which for causes beyond Sublandlord's reasonable control
(the failure to pay money shall not be deemed beyond a party's reasonable
control) cannot with due diligence be cured within such thirty (30) day period,
such thirty (30) day period shall be deemed extended if Sublandlord (x) shall
promptly upon the receipt of such notice, advise Subtenant of Sublandlord's
intention to institute all steps necessary to cure such failure and (y) shall
institute and thereafter with reasonable dispatch prosecute to completion all
steps necessary to cure the same; provided that, at the expiration of the period
described in this clause (ii) such default continues after three (3) business
days from the date of the giving by Subtenant to Sublandlord of a further notice
of Subtenant's intention to perform the same.
12.3 All sums paid by either party affecting a cure pursuant to this
Section 12 and all necessary incidental costs and expenses paid or incurred by
such party in connection with the performance of any act by such party pursuant
to such section, together with interest thereon from the date of the making of
such expenditure by such party at the rate of two (2%) per cent above the prime
commercial lending rate from time to time announced by The Chase Manhattan Bank,
N.A. ("Prime Rate") to be in effect at its principal office in New York, New
York, or if Chase no longer announces such a rate, then a comparable rate
selected by Sublandlord and reasonably acceptable to Subtenant, shall be payable
by the other party to such curing party within thirty (30) days after demand
therefore accompanied by evidence
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reasonably establishing that the expenditure has reasonably been made. Nothing
contained herein shall be deemed or construed to permit Subtenant to make any
set-off against Subtenant's obligations hereunder.
13. Consents
Whenever the consent or approval of the Overlandlord shall be
required under the Overlease, the consent or approval of the Sublandlord shall
not be required under this Sublease. Subtenant agrees that Sublandlord shall not
have any duty or responsibility with respect to obtaining the consent or
approval of Overlandlord when the same is required other than (i) the
transmission by Sublandlord to Overlandlord of Subtenant's request for such
consent or approval; and (ii) Sublandlord's cooperation (at Subtenant's expense)
with Subtenant to obtain, and providing assistance to Subtenant in obtaining
such approval or consent. Subtenant shall be entitled to take the actions
specified in Section 4.2 of this Sublease as it respects the obtaining of the
Overlandlord's consent. Subtenant, in no event, shall be entitled to make, nor
shall Subtenant make, any setoff against rent otherwise due, nor shall Subtenant
withhold any rent otherwise due pursuant to the terms of this Sublease based
upon any claim or assertion by Subtenant that overlandlord has unreasonably
withheld, conditioned or delayed any consent or approval. Nothing contained
herein shall be deemed or construed to limit the obligation of Subtenant to
obtain Sublandlord's consent where expressly provided for in this Sublease.
14. Compliance with Laws
14.1 Notwithstanding anything in this Sublease to the contrary,
Subtenant shall not be in default hereunder if Subtenant shall fail to comply
with any Law to the extent that the Demised Premises, or their use, prior to the
date hereof, were not in compliance with such Law, except to the extent that
Subtenant is otherwise obligated to comply with such Law pursuant to the Master
Agreement or the other Transaction Agreements.
14.2 If the Demised Premises and the use thereof for the actual uses
being made of the Demised Premises by Sublandlord during December 1991 are not,
on the day preceding the date hereof, in compliance with all Laws (such
non-compliance being hereinafter referred to as "Non-Compliance"), and if
Non-Compliance is not Subtenant's responsibility to correct pursuant to the
Master Agreement and the other Transaction Agreements, or this Sublease, and if
such Non-Compliance would, under the Overlease, be the obligation of the tenant
thereunder to cure or correct, Sublandlord shall, at its sole cost and expense
(but subject to the cost sharing provisions provided for in Section 4.231 of the
Master Agreement), after receipt of notice from Subtenant of the specifics of
such Non-Compliance, institute steps necessary to cure such Non-Compliance and
proceed with reasonable dispatch to effectuate the same. Nothing contained
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herein shall be deemed or construed to obligate Sublandlord to make any changes,
alterations or repairs to the structural elements of the Demised Premises unless
the existence of the condition which caused the need to make the same
constitutes a violation of the warranty and representation contained in Section
11.2(b) hereof. The Demised Premises shall not be deemed to be in Non-Compliance
(that is, shall be deemed to be in compliance) if on the date hereof the time by
which such Law must be complied with had not expired, although such Law had been
enacted. If by reason of such Non-Compliance a governmental authority or agency
takes action or refuses to take action (any such action or refusal, including a
refusal to permit the transfer or continued effectiveness of any certificate of
occupancy or other license or permit, being herein called a "Governmental
Action"), which Governmental Action materially adversely interferes with
Subtenant's ability to use the Demised Premises for the uses for which the
Premises during December, 1991 were in fact used by Sublandlord ("December
Uses"), then there shall be an equitable reduction of the rent until such time
as the material interference caused by the Non-Compliance has been eliminated,
which reduction shall not, however, extend beyond six (6) months from the date
Subtenant notifies Sublandlord of such Non-Compliance or Governmental Action.
If, by reason of the Non-Compliance or Governmental Action, Subtenant's use of
the Demised Premises for the December Uses is materially adversely interfered
with for a period of six (6) consecutive months after the date of such notice,
then Subtenant shall have the right, prior to the cessation of such material
interference as its sole remedy with respect to such Non-Compliance, to
terminate this Sublease, in which event neither party hereto shall have any
further liability or obligation to the other under this Sublease except those
which are expressly stated to survive the expiration or sooner termination of
this Sublease. Any notice by Subtenant to Sublandlord advising of Non-Compliance
must be given by six (6) months after the date hereof and must specifically
identify the Non-Compliance, failing which Sublandlord shall have no
responsibility to Subtenant under this Section with respect to such
Non-Compliance. The provisions contained in this subsection shall not be
applicable to any environmental related matters.
15. Adjustments
Sublandlord and Subtenant shall cooperate with each other in
making usual and customary closing type adjustments and apportionment's for real
estate taxes, rents, security deposits, utility charges, water and sewer charges
and premiums on transferable insurance policies which are in fact transferred to
Subtenant except to the extent that such adjustments were taken into account
under the Transaction Agreements, it being the intention of the parties to avoid
duplication of such adjustments. Sublandlord shall pay to Subtenant or Subtenant
shall pay to Sublandlord, as the case may be, the net amount owing by one to the
other promptly after such adjustments have been agreed upon. Any dispute between
the parties hereto in
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connection with the making of such adjustment shall be resolved pursuant to the
alternative dispute resolution mechanism set forth in Section 36 hereof.
16. Brokers
Each party represents and warrants to the other that it has
dealt with no broker or finder in connection with this Sublease. Each party
agrees to indemnify and hold harmless the other from and against any claims,
liabilities, suits, actions, losses, damages or expenses (including attorney's
fees and disbursements, including those incurred to enforce this indemnity)
resulting from any breach of the foregoing representation and warranty.
17. Notices
Any notice, demand, request, approval or other communication
(a "Notice") which, under the terms of this Sublease or under any statute, must,
or may be given by the parties hereto must be in writing and shall be sent by
any of the following means: registered or certified mail, return receipt
requested; reputable overnight delivery service; or by "fax." Any Notice given
by registered or certified mail shall be deemed given when received (as
evidenced by the return receipt); any Notice given by overnight delivery notice
shall be deemed given one (1) business day after mailed; any Notice given by fax
shall be deemed given when received. Any Notice given by fax shall only be
effective if a copy thereof is sent by reputable overnight delivery service to
arrive on the day after it is dispatched by fax. All Notices shall be addressed
as follows:
If to Sublandlord:
c/o Joseph DiFeo and Samuel X. DiFeo
585 Route 440
Jersey City, New Jersey 07034
With a Copy to:
Hannoch Weisman
A Professional Corporation
4 Becker Farm Road
Roseland, New Jersey 07068-3788
Attn: Stephen P. Lichtstein
If to Subtenant:
c/o EMCO Motor Holdings, Inc.
153 East 53rd Street
Suite 5900
New York, New York 10022
Attn: Ezra P. Mager
With a Copy to:
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Akin, Gump, Haver & Feld
1700 Pacific Avenue
4100 First City Center
Dallas, Texas 75201-2800
Attn: Gary M. Lawrence, P.C.
Either party may designate by Notice in writing given in the manner
herein specified a new or other address to which a Notice shall thereafter be so
given.
18. Insurance
18.1 Subtenant agrees to name Sublandlord as an additional
insured in all insurance policies which the tenant under the Sublease is
required to carry and maintain. Subtenant shall, as it respects Sublandlord, be
entitled to solely control the adjustment of any loss under a casualty insurance
policy.
18.2 In addition to, and not in limitation of, any of the
Subtenant's obligations hereunder, Subtenant shall maintain general liability
insurance insuring against claims for personal injury (including, without
limitation, bodily injury or death), property damage liability and such other
loss or damage from such causes of loss as are embraced by insurance policies of
the type now known as "Commercial General Liability" insurance, all in such
amounts as Sublandlord may from time to time reasonably require. Sublandlord
currently requires such insurance to be in the amount of Five Million
($5,000,000) Dollars combined single limit per occurrence. Such insurance
coverage shall be issued and maintained on an "occurrence" basis. Subtenant's
obligations with respect to such insurance policy shall be governed by the
Overlease as if such insurance policy were expressly required to be maintained
by the tenant thereunder.
18.3 Subtenant shall consult with sublandlord before adjusting
or settling any loss under any insurance policy required to be maintained by the
tenant under the Overlease.
19. Subordination
This Sublease shall, to the extent provided for in the
Overlease, be subject and subordinate to any ground lease, underlying lease
and/or mortgages made or given by Overlandlord which now or hereafter affect the
Demised Premises and to all renewals, modifications, consolidations,
replacements and extensions of such ground or underlying leases and mortgages.
This Sublease is, to the extent provided for in the Overlease, made subject and
subordinate to all liens, claims, encumbrances and other title matters affecting
the Demised Premises. This paragraph shall be self-operative and no further
instrument of subordination shall be required. However, in confirmation of such
subordination, Subtenant shall promptly execute and deliver at its own cost and
expense any instrument, in recordable form if
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requested, that Overlandlord shall request be executed pursuant to the
provisions of the Overlease.
20. Entry
Subtenant shall, upon prior notice (except in the event of an
emergency which shall include, without limitation, prevention of imminent
default under the Overlease in which event no notice shall be required) permit
entry to the Demised Premises by Sublandlord and authorized representatives of
Sublandlord at reasonable times (or at any and all times in the event of an
emergency) for the purpose of inspecting the Demised Premises and making any
necessary repairs or performing any work at the Demised Premises that may be
necessary by reason of Subtenant's failure to make them or otherwise (subject to
the provisions of Section 12 hereof). Nothing contained herein shall imply any
duty on the part of Sublandlord to do any such work which under any provision of
this Sublease, Subtenant may be required to perform, and the performance by
Sublandlord shall not constitute a waiver of Subtenant's default in failing to
perform.
21. Estoppel Certificates
Either party hereto shall, at any time and from time to time,
upon not more than fifteen (15) days prior notice from the other party, execute,
acknowledge and deliver to the other party (or to such person or entity
designated by the other party) a statement in writing certifying that this
Sublease is unmodified and in full force and effect (or if there have been
modifications, that this Sublease is in full force and effect as modified and
stating the modifications), and the dates to which rent and other charges have
been paid, stating whether or not to the best knowledge of the signer of such
statement the other party is in default in keeping, observing or performing any
covenant or agreement contained in this Sublease and, if there be a default,
specifying each such default, and containing any such customary certifications
as the other party may reasonably request, it being intended that any such
statement delivered pursuant to this Section may be relied upon by the other
party (or by the person or entity designated by the other party), but reliance
on such statement may not extend to any default as to which the signor shall
have had no actual knowledge, after due inquiry.
22. Right of First Refusal
Sublandlord hereby grants to Subtenant the right of first
refusal to acquire the Sublandlord's interest in the Overlease ("Sublandlord's
Interest") on the terms and conditions contained herein. If Sublandlord, during
the term of this Sublease and provided that this Sublease is then in full force
and effect and there does not then exist an Event of Default hereunder, desires
to sell or transfer Sublandlord's Interest, then Sublandlord shall, prior
thereto, submit to the Subtenant a
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writing ("Writing") executed by the Sublandlord and the proposed acquiror of
Sublandlord's Interest (the "Acquiror"), which Writing shall set forth the
material terms and conditions of the sale by the Sublandlord to the Acquiror of
the Sublandlord's Interest. The Writing need not be a legally binding agreement.
If Subtenant desires to acquire the Sublandlord's Interest upon the terms and
conditions contained in the Writing it shall give notice ("Reply Notice") to
that effect to the Sublandlord within fifteen (15) days after it receives the
Writing, time being of the essence. Upon the giving of the Reply Notice, the
Sublandlord shall be obligated to sell and Subtenant shall be obligated to
purchase the Sublandlord's Interest upon the terms and conditions contained in
the Writing. The Sublandlord and Subtenant shall, in such circumstance, proceed
expeditiously, in good faith and with due diligence to consummate the transfer
of the Sublandlord's Interest to the Subtenant in accordance with the terms and
conditions contained in the Writing. If the Subtenant does not timely give a
Reply Notice then Sublandlord shall be permitted to sell the Sublandlord's
Interest to the Acquiror upon substantially the same terms and conditions
contained in the Writing and, upon the consummation of such sale, Subtenant's
right of first refusal shall cease to exist forever. If the Sublandlord and the
Acquiror do not consummate the transaction contemplated by the Writing or desire
to consummate the transaction contemplated by the Writing on terms and
conditions which are not substantially the same as those set forth in the
Writing, then Sublandlord shall, before selling the Sublandlord's Interest,
follow the procedure above set forth granting the Subtenant a right of first
refusal. Notwithstanding anything to the contrary contained herein the right of
first refusal provided for above shall not be applicable to (i) a transfer of
the Sublandlord's Interest to an Affiliate of Sublandlord, Joseph C. DiFeo
and/or Samuel X. DiFeo (but such Affiliate shall comply with the right of first
refusal herein granted to Subtenant in the event it desires to sell or transfer
Subtenant's Interest and shall confirm in writing its obligation to so comply at
the time of the transfer of the Sublandlord's Interest to such Affiliate); or
(ii) a transaction entered into between Sublandlord, or an Affiliate of
Sublandlord, Joseph C. Difeo and/or Samuel X. Difeo and another which is not an
Affiliate of Sublandlord, Joseph C. Difeo and/or Samuel X. Difeo which involves
other significant property or properties in addition to the transfer of the
Sublandlord's Interest ("Other Matters"). Upon the consummation of a transaction
involving Other Matters the right of first refusal granted to Subtenant
hereunder shall cease to exist forever. Any dispute between the parties hereto
regarding the application of the provisions contained herein shall be resolved
by ADR in accordance with the provisions of Section 36 hereof.
23. End of Term
Upon the expiration or other termination of the term hereof,
Subtenant shall quit and surrender the Demised
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Premises in the condition and state of repair required under the provisions of
the Overlease, free and clear of any and all lettings and rights to occupy or
use the Demised Premises or any part thereof created by Subtenant or by anyone
claiming by, through or under Subtenant and free and clear of liens or
encumbrances created by any act or omission on the part of Subtenant or anyone
claiming by, through or under Subtenant. No reference in this Section to
lettings, right to occupy or use and to liens and encumbrances shall in and of
itself be construed to authorize any of the same.
24. Termination of Lease
If for any reason whatsoever the Overlease shall terminate
prior to the expiration of the term hereof, then this Sublease shall likewise
terminate simultaneously with such termination and, except for the termination
of the Overlease because of a default of Sublandlord as tenant thereunder, or
any other act of Sublandlord causing the Overlease to terminate, Subtenant shall
acquire no right or cause of action against Sublandlord by reason of such
termination. Sublandlord hereby agrees that it will not voluntarily cancel or
terminate the Overlease or otherwise modify or amend the same. If the Overlease
grants to the tenant thereunder an express right to elect to terminate the
Overlease, then the Subtenant shall have the same right to elect to terminate
this Sublease, subject, however, to compliance with the provisions of Section 28
hereof.
25. Casualty; Condemnation
Anything in this Sublease or the provisions of the Overlease
incorporated herein by reference to the contrary notwithstanding: (a) in the
event the Demised Premises shall be damaged or destroyed as a result of any fire
or other casualty, or taken in condemnation proceedings, by deed in lieu of
condemnation and by any right of eminent domain, Subtenant shall have the same
right to terminate this Sublease as Sublandlord, as tenant under the Overlease,
has to terminate or otherwise cause the term of the Overlease to expire or be
forfeited (subject to the provisions of Section 28 hereof); and (b) Subtenant
shall have no right to an abatement of fixed rent or additional rent or any
other similar charge unless Sublandlord is entitled to a corresponding abatement
with respect to its corresponding obligation under the Overlease as it relates
to the Demised Premises (the dollar amount of such abatement shall be limited to
the amount of the abatement to which Sublandlord is entitled under the
Overlease). If, by reason of such fire or casualty or condemnation, the
Overlandlord elects to terminate the Overlease in accordance with the provisions
of the Overlease, then, upon such termination of the Overlease, this Sublease
automatically shall be terminated as if such date of termination were the
expiration date.
26. Options to Extend
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26.1 Subtenant shall have the right (but not the obligation),
at its election and as hereinafter provided, to extend the original term of this
Sublease in effect on the date of this Sublease for the same number of
additional periods as shall be permitted under the Overlease and Sublandlord
shall duly exercise the respective additional periods under the Overlease, upon
the following terms and conditions:
(a) Subtenant shall give Sublandlord written notice
of each such election not earlier than one hundred eighty (180) days, nor later
than thirty (30) days prior to the last day in the Overlease on which such
notice must be given to the Overlandlord;
(b) At the time of exercise of such election and at
the commencement of such additional period (which condition Sublandlord may
waive in its sole and absolute discretion), Subtenant shall not be in default
under this Sublease beyond any applicable grace period or notice periods and
this Sublease shall be in full force and effect;
(c) Each such additional periods shall be upon the
same terms and conditions as during the initial term hereof, except as otherwise
provided in the Overlease and except that Subtenant shall have no further right
to extend the term of this Sublease (i) beyond such additional periods, or (ii)
if Subtenant shall have failed to timely elect to extend the term for any prior
additional period; and
(d) the term of each such additional period shall be
one (1) day less than the respective additional period under the Overlease.
26.2 Sublandlord hereby agrees that, if the extension of the
initial term or any additional period under the Overlease is an automatic
extension, to occur unless notice to the contrary is given by the tenant
thereunder, Sublandlord shall timely notify the Overlandlord that Sublandlord
does not wish to extend such term or period, provided that Subtenant shall
notify Sublandlord to give notice electing against the automatic extension not
less than sixty (60) days prior to the latest date such notice must be given
under the terms of the Overlease.
26.3 If, under the Overlease, the rent to be paid during any
renewal term is not a sum certain, or is not capable of being determined by
reference to a state of facts (for example, by reference to a consumer price
index) but is to be determined by agreement of the parties to the Overlease or
another mechanism which requires input of the parties, agreement of the parties
or determination by others (for example, fair market rental, appraisal
procedures, arbitration procedures or the like) then Subtenant shall have the
right to be directly involved in and solely control such rental determination
process to the exclusion of the Sublandlord but shall, nevertheless keep
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the Sublandlord advised in connection therewith.
27. Assignment; Subletting
27.1 Subject to the provisions of Sections 27.2 and 27.3
below, and subject to the applicable provisions of the Overlease (including,
without limitation, all prohibitions contained therein and consents required
thereby), Subtenant may assign this Sublease or sublet the Demised Premises.
Nothing contained in this Section 27.1 shall be deemed or construed to permit
the Subtenant to assign, mortgage, pledge, encumber or otherwise transfer this
Sublease, or sublet the Demised Premises in contravention of the terms and
provisions of the Overlease.
27.2 Any assignment of the Sublease shall not be effective
unless and until (i) the assignee shall execute, acknowledge and deliver to
Sublandlord an agreement in form and substance reasonably satisfactory to
Sublandlord, and with respect to which Sublandlord shall be a direct
beneficiary, whereby the assignee shall (x) assume the obligations and
performance of this Sublease and agree to be personally bound by all the
covenants, agreements, terms, provisions and conditions hereof on the part of
Subtenant to be performed and observed from and after the effective date of any
such assignment and (y) agree that the provisions of this Section 27 shall,
notwithstanding such assignment or transfer, continue to be binding upon it in
the future. Subtenant covenants that, notwithstanding any assignment, sublease
or transfer, whether or not in violation of the provisions of this Sublease, and
notwithstanding the acceptance of rent by Sublandlord from any assignee,
subtenant or transferee or any other party, Subtenant shall remain fully and
primarily and jointly and severally liable for the payment of rent due and to
become due under this Sublease and for the performance and observance of all the
covenants, agreements, terms, provisions and conditions of this Sublease on the
part of Subtenant to be performed or observed. The liability of Subtenant, and
the due performance by Subtenant of the obligations on its part to be performed
under this Sublease shall not be discharged, released or impaired in any respect
by an agreement or stipulation made by Sublandlord or any assignee of
Sublandlord or any other agreement with a third party extending the term or
modifying any of the obligations contained in this Sublease, or by any waiver or
failure of Sublandlord to enforce any of the obligations on Subtenant's part to
be performed under this Sublease, and Subtenant shall continue liable hereunder.
If any such agreement or modification operates to increase the obligations of
Subtenant under this Sublease the liability of Subtenant under this Sublease or
any of its successors in interest (all such parties shall be deemed to have
expressly consented in writing to such agreement or modification) shall continue
to be no greater than if such agreement or modification had not been made. Each
sublease entered into by Subtenant shall provide that in the event of
cancellation or termination of this Sublease because of a default by Subtenant
hereunder or of the
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surrender of this Sublease whether voluntary, involuntary or by operation of
law, prior to the expiration date of the sub-sublease, including extensions and
renewals granted thereunder, at Sublandlord's option, the sub-subtenant shall
make full and complete attornment to the Sublandlord for the balance of the term
of the sub-sublease, which attornment shall be evidenced by an agreement in form
and substance reasonably satisfactory to Sublandlord, which the sub-subtenant
shall execute and deliver at any time within ten (10) days after request by
Sublandlord, its successors and assigns and that the sub-subtenant waives the
provisions of any law now or hereafter in effect which may give the
sub-subtenant any right of election to terminate the sub-sublease or surrender
possession of the demised premises in the event any proceeding is brought by the
Sublandlord to terminate this Sublease.
27.3 Subtenant shall not have the right to sublet the Demised
Premises or assign this Sublease if the same would cause the Demised Premises to
become subject to compliance with the remedial provisions of the New Jersey
Environmental Clean Up Responsibility Act (N.J.S.A. 13:lk-6 et seq., or the
regulations promulgated thereunder ("ECRA")), or a similar state statute
requiring environmental testing and/or remediation, in any case prior to the
sale or other transfer of the Demised Premises, upon the circumstance of such
assignment or sublease, upon the expiration or sooner termination of this
Sublease or any such sublease or upon the cessation of operations at the Demised
Premises. If Subtenant desires to so assign or sublet, it shall notify
Sublandlord. Sublandlord will advise Subtenant, by notice within thirty (30)
days of Subtenant's notice, if Sublandlord believes that the proposed assignment
or sublet violates the prohibitions contained above, which notice from
Sublandlord shall specify in reasonable detail grounds for Sublandlord's
determination. Failure or refusal of Sublandlord to respond within such thirty
(30) day period shall be deemed a determination by Sublandlord that the proposed
assignment or sublet does not violate the above prohibitions. If Subtenant
disputes Sublandlord's determination, such dispute shall be resolved by ADR
pursuant to Section 36 hereof.
27.4 Sublandlord confirms, for the benefit of any subtenant
under any Major Sublease (such subtenant being called a "Space Subtenant"), that
upon the termination of this Sublease pursuant to Section 29.1 hereof,
Sublandlord will recognize the Space Subtenant under such sublease as a direct
tenant of Sublandlord (provided that such Space Subtenant attorns to
Sublandlord) and will, upon the request of Subtenant with respect to a Major
Sublease consented to by Sublandlord, enter into a reasonable and customary form
of recognition and attornment agreement with such Space Subtenant which would
provide for the recognition by Sublandlord of such Space Subtenant as a direct
tenant of Sublandlord and the attornment by such Space Subtenant to Sublandlord,
provided that, among other things, at the time of the termination of this
Sublease no default exists under the
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Space Subtenant's sublease which at such time would then permit the landlord
thereunder to terminate the same or to exercise any dispossess remedy provided
for therein. The term "Major Sublease" shall mean a sublease of all of the
Demised Premises for all of the term hereof (less one day), provided that the
sublease requires the sublessee to perform all of the Subtenant's obligations
hereunder, grants to the sublandlord all of Sublandlord's rights hereunder other
than pursuant to Section 29.1(c) or (d) (which shall not apply to the Major
Sublease) and that the sublessee shall not be obligated to enter into, assume or
otherwise be liable for obligations under any Tenant Cross-Guaranty.
28. Time Periods
The time limits set forth in the various provisions of the
Overlease for the giving of notices are (unless a different time frame is set
forth herein) changed for the purposes of this Sublease by lengthening or
shortening the same in each instance, as appropriate, by two (2) business days
so that notices may be given Sublandlord or Subtenant, as the case may be,
within the time limit relating thereto contained in the Overlease.
29. Defaults and Remedies
29.1 The occurrence of any one or more of the following events
shall constitute an event of default ("Event of Default") hereunder by
Subtenant:
(a) The failure by Subtenant to make any payment of
base rent required to be made by Subtenant hereunder, as and when due, when such
failure shall continue for a period of three (3) business days after written
notice thereof from Sublandlord to Subtenant;
(b) The failure of Subtenant to observe or perform
any other covenant or agreement on the part of Subtenant to be performed
hereunder which does not include the payment of rent, additional rent or any
other payment required to be made by Subtenant hereunder (with respect to which
the provisions of Subsection (a) hereof shall govern) and which does not involve
the observance or performance of a covenant or agreement imposed upon the tenant
under the Overlease and such default shall continue for a period of twenty (20)
days after notice thereof, specifying such default shall have been given to
Subtenant. However, in the case of a default which cannot with due diligence be
remedied by Subtenant within a period of twenty (20) days, if Subtenant, during
such twenty day period advises Sublandlord of Subtenant's intention to duly
institute all steps necessary to remedy such situation and proceeds as promptly
as may be reasonably possible after the service of such notice and with all due
diligence and continuity of purpose to remedy the default and thereafter
prosecutes the remedy of such default with due
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diligence, the period of time after the giving of such notice within which to
remedy the default shall be extended for such period as may be necessary to
remedy the same with all due diligence;
(c) An Event of Default, subject to the provisions
of Section 15.3 of a Group Lease, shall have occurred under any Group Lease;
provided, however, that if any Group Lease is assigned in a transaction
permitted thereunder to a person or entity which is not an Affiliate of the
Tenant thereunder, and does not thereafter become an Affiliate of the Tenant
thereunder, then this Subsection shall thereafter apply only with respect to
such Group Lease to a monetary Event of Default under such Group Lease and shall
not thereafter apply to a non-monetary Event of Default under such Group Lease;
(d) An Event of Default, subject to the provisions
of Section 29.9 of a Group Sublease, shall have occurred under any Group
Sublease; provided, however, that if any Group Sublease is assigned in a
transaction permitted thereunder, to a person or entity which is not an
Affiliate of the Subtenant thereunder, and does not thereafter become an
Affiliate of the Subtenant thereunder, then this Subsection shall thereafter
apply only with respect to such Group Sublease to a monetary Event of Default
under such Group Sublease and shall not thereafter apply to a non-monetary Event
of Default under such Group Sublease;
(e) (i) The making by Subtenant or '21'
International Holdings, Inc., while the TIHI Guaranty is in effect or any EMCO
Sub, while its EMCO pledge is in effect (said entities, during such periods of
time only, being each called a "Guarantor") of any general assignment for the
benefit of creditors; (ii) the filing by or against Subtenant or a Guarantor of
any petition to have Subtenant or a Guarantor adjudged a bankrupt or a petition
for reorganization or arrangement under any law relating to bankruptcy (unless,
in the case of a petition filed against Subtenant or a Guarantor, the same is
dismissed within sixty (60) days); (iii) the appointment of a trustee or
receiver to take possession of substantially all of Subtenant's or a Guarantor's
assets, or substantially all of Subtenant's or a Guarantor's assets, or
substantially all of Subtenant's assets located at the Demised Premises or of
Subtenant's interest in this Sublease; or (iv) the attachment, execution or the
judicial seizure of substantially all of Subtenant's or a Guarantor's assets, or
substantially all of Subtenants assets located at the Demised Premises or of
Subtenant's interest in this Sublease; or (v) the liquidation or dissolution of
Subtenant or a Guarantor; or
(f) Subject to the provisions of Section 29.7
hereof, the occurrence of any act or event or the existence of any other matter,
circumstance, state of fact or thing (as it respects Subtenant) which would
constitute a default under the Overlease, including, without limitation, the
failure of
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Subtenant to observe or perform any covenant or agreement on the part of
Subtenant to be performed hereunder which does involve the observance or
performance of a covenant or agreement imposed upon the tenant under the
Overlease (but which does not involve the payment of base rent required to be
made by Subtenant hereunder, with respect to which the provisions of Subsection
(a) hereof shall govern) if the same is not cured or remedied by the date when
the same would (taking into account applicable grace periods provided for in the
Overlease) constitute a default under the Overlease.
29.2 From and after the occurrence of an Event of Default,
Sublandlord shall also have the right, with or without terminating this Sublease
and without any further notice to Subtenant , to re-enter the Demised Premises
and remove all persons and property from the Demised Premises; such property may
be removed and stored in a public warehouse or elsewhere at the cost of an for
the account of Subtenant. No re-entry or taking possession of the Demised
Premises by Sublandlord pursuant to this Section 29.2 shall be construed as an
election to terminate this Sublease unless a written notice of such intention is
given to Subtenant. No entry or re-entry by Sublandlord, whether had or taken
under summary proceedings or otherwise, shall absolve or discharge Subtenant
from any liability hereunder. Sublandlord agrees that it will cease exercising
any right it may have under this Sublease by reason of the occurrence of an
Event of Default hereunder which relates to the Subtenant's failure to observe
or perform a covenant or agreement imposed upon the tenant under the Overlease
if subsequent to the occurrence of such Event of Default such failure to observe
or perform is remedied by the Subtenant and the Overlandlord accepts such cure
and waives any default occasioned thereby.
29.3 In the event that Sublandlord shall elect to re-enter as
provided above or shall take possession of the Demised Premises pursuant to
legal proceedings or pursuant to any notice provided by law, then if Sublandlord
does not elect to terminate this Sublease as provided above, Sublandlord may,
from time to time, without terminating this Sublease, either recover all rent
(which shall be deemed to include all base rent, additional rent and other
payments and charges required to be made by Subtenant hereunder) as it becomes
due or relet the Demised Premises or any part thereof on terms and conditions as
Sublandlord in its sole discretion may deem advisable for the whole or any part
of the remainder of the term or for a longer period, in Sublandlord's name, or
as agent of Subtenant, and in connection therewith Sublandlord may make repairs
or alterations to the Demised Premises in such a manner as Sublandlord may deem
necessary or advisable. Subtenant specifically acknowledges and agrees that
Sublandlord shall have no obligation or duty to mitigate damages hereunder.
29.4 In the event Sublandlord shall elect to so relet, the
rents received by Sublandlord from such reletting
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shall be applied: first, to the cost and expenses or retaking, repossessing,
repairing and/or altering the Demised Premises and the expense of removing all
persons and property therefrom; second, to the cost and expenses incurred in
securing any new tenant or tenants; and third, to the payment of rent due and
unpaid hereunder and the residue, if any, shall be held by Sublandlord and
applied to payment of future rent as the same may become due and payable. Should
that portion of such rents received from such reletting during any month, which
is applied to the payment of rents hereunder, be less than the rent payable
during the month by Subtenant hereunder, then Subtenant shall pay such
deficiency to Sublandlord immediately upon demand therefor by Sublandlord. Such
deficiency shall be calculated and paid monthly. Subtenant shall also pay to the
Sublandlord, as soon as ascertained, any costs and expenses incurred by
Sublandlord in reletting or in making such alternations and repairs not covered
by the rents received from such reletting. Suit or suits for the recovery of
such deficiency or damage, or for a sum equal to any installment or installments
of rent may be brought by Sublandlord from time to time at Sublandlord's
election and nothing herein contained shall be deemed to require Sublandlord to
await the date on which the Sublease or the term hereof would have expired by
limitation had there been no such default by Subtenant.
29.5 All rights, options and remedies of Sublandlord contained
in this Sublease shall be construed and held to be cumulative and no one of them
shall be exclusive of the other, and Sublandlord shall have the right to pursue
any one or all of such remedies or any other remedy or relief which may be
provided by law, whether or not stated in this Sublease. Subtenant expressly
waives service of any notice of intention to re-enter subsequent to the
occurrence of an Event of Default. Subtenant hereby expressly waives any and all
rights to recover or regain possession of the Demised Premises or to reinstate
or redeem its tenancy or this Sublease as is permitted or provided by or under
any statute, law or a decision now or thereafter in force and effect. Subtenant
also waives the provisions of any law now or hereafter in effect relating to
notice and delay in levy of execution in case of an eviction or dispossess of
Subtenant for non-payment of rent. Subtenant waives and shall waive any and all
right to a trial by jury in the event that summary proceedings shall be
instituted by Sublandlord. The term "enter", "re-enter", "entry", or "re-entry",
as used in this Sublease is not restricted to their technical legal meanings.
29.6 In addition to and not in limitation of any right or
remedy provided to Sublandlord in this Section 29, Sublandlord shall have all
rights and remedies which the Overlandlord is entitled to pursuant to the
provisions of the Overlease, at law, equity or otherwise upon the occurrence of
a default by the tenant thereunder.
29.7 Sublandlord agrees that it will not be entitled to give a
default notice to Subtenant with respect to
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Subtenant's failure to perform or observe any covenant or agreement on the part
of Subtenant to be performed hereunder which involves the observance or
performance of a covenant or agreement imposed upon the tenant under the
Overlease (excepting from the foregoing, however, the failure to make payment of
rent, additional rent or any other payment required to be made by Subtenant
hereunder, and excepting from the foregoing any obligation which is
independently imposed upon the Subtenant under this Sublease; the provisions of
the first sentence of Section 12.1 hereof shall not be deemed an obligation
which is independently imposed upon the Subtenant under this Lease) unless
Sublandlord receives notice from the Overlandlord with respect to such failure
to perform or observe. Nothing contained in this Section 29.7 shall be deemed or
construed to limit Sublandlord's right to take any action pursuant to Section
12.1 in the event of any emergency.
28.8 If Sublandlord shall give Subtenant a notice pursuant to
Section 29.1(b) of a default or an event which may, with the giving of such
notice, or the passage of time, or both, become an Event of Default, and if
Subtenant within fifteen (15) days after the giving of any such notice from
Sublandlord pursuant to Section 29.1(b) shall dispute by notice to Sublandlord
(a "Section 29.8" Notice) the existence of such default, the matter shall be
determined by ADR as provided in Article 36 and, pending such determination,
Sublandlord shall not be entitled to terminate this Sublease, nor shall a
default or Event of Default be deemed to exist hereunder on account thereof;
provided, however, that if it shall be determined by ADR that Subtenant is so in
default, the time within which Subtenant shall have to remedy the same under
Section 29.1(b) shall be computed from the date of such determination. Any such
Section 29.8 Notice to Sublandlord shall specify in reasonable detail the
grounds for such dispute.
29.9 If a monetary Event of Default occurs hereunder (other
than a monetary Event of Default which respects the payment of rent, additional
rent or any other payment required to be made by the tenant under the Overlease)
then Sublandlord shall have the right to send to Subtenant a second (2nd)
notice, referring to this Section and specifying such default and stating that
it is a "Second Notice" of such default, and, if such monetary Event of Default
shall not be cured within five (5) business days after such notice is given,
then Sublandlord shall have the right to send Subtenant a third (3rd) notice,
referring to this Section and specifying that it is a "Third Notice" of such
default, and if such monetary Event of Default shall not be cured within ten
(10) business days after such notice is given, Sublandlord may thereafter
proceed to exercise all rights and remedies which Sublandlord may exercise upon
such Event of Default and Sublandlord shall not thereafter be obligated to
accept a cure by Subtenant of such monetary Event of Default (but prior to
Sublandlord's commencing to exercise its rights and remedies, Sublandlord shall
be obligated to accept
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such a cure). The provisions of this Section shall only apply to the first two
(2) monetary Events of Default (as above noted, the provisions of this Section
shall not be applicable to a default relating to the payment of rent, additional
rent or any other payment required to be made by the tenant under the Overlease)
in any period of twelve (12) consecutive calendar months. Subtenant specifically
acknowledges that it will not argue before any court, ADR tribunal or anyone
that Sublandlord is obligated or required to accept any cure of any such Event
of Default described in this Section after the expiration of the applicable time
frame provided for after the Third Notice, Subtenant having negotiated for the
giving of the Second and Third Notices in lieu of any other benefit or right
provided to Subtenant at law, in equity or otherwise with respect to the right
to cure such Events of Default.
29.10 (a) The provisions of Section 29.1(d) shall no longer
apply to this Sublease, and Sublandlord shall cease to be entitled to consider
an Event of Default to exist or to terminate this Sublease on account of an
Event of Default under Section 29.1(d) in any of the following circumstances:
(i) If this Sublease shall be assigned (but only if Sublandlord's
consent, if required hereunder, has been obtained), in a transaction
permitted hereunder, to an assignee which is not an Affiliate of
Subtenant and provided that (i) such assignee or transferee does not
thereafter become an Affiliate or Subtenant, or (ii) Subtenant, or
an Affiliate of Subtenant, does not thereafter become the Subtenant
under this Sublease; or
(ii) if Sublandlord shall cease to be (and so long thereafter as
Sublandlord shall continue not to be) an Affiliate of Joseph C.
DiFeo or Samuel X. DiFeo.
(b) For purposes of Sections 29.1(c) and 29.1(d) a sublease
other than this Sublease, or a lease which is originally considered a Group
Sublease or a Group Lease shall cease to be a Group Sublease or Group Lease for
such purposes if the sublandlord or landlord under such sublease or lease shall
cease to be an Affiliate of Joseph C. DiFeo or Samuel X. DiFeo, but shall again
be considered a Group Sublease or Group Lease if and so long as the sublandlord
or landlord under such sublease or lease shall again be an Affiliate of Joseph
C. DiFeo or Samuel X. DiFeo.
29.11 Pursuant to the Tenant Cross-Guaranty, Subtenant has
guaranteed the performance of the tenants under the Group Leases and the
subtenants under the Group Subleases.
30. Purchase of Demised Premises
The Overlease may grant the Sublandlord an option to purchase the Demised
Premises, a right of first refusal to purchase the
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Demised Premises, the right of first offer to purchase the Demised Premises or
other rights (collectively "Rights") concerning the purchase of the Demised
Premises. Subtenant specifically acknowledges that Sublandlord has retained all
of its rights with respect to the foregoing and Subtenant does not have any
rights with respect to the foregoing. If Sublandlord, or an Affiliate of
Sublandlord, acquires title to the Demised Premises at any time during the term
of this Sublease, then this Sublease shall automatically be deemed to be a
direct lease between Sublandlord (or the Affiliate of Sublandlord), as landlord,
and Subtenant, as tenant, except that this Sublease shall automatically be
deemed modified to incorporate all of the terms and provisions of the lease in
the form of Exhibit D hereto, it being agreed, however, that the term of the
direct lease between Sublandlord (or an Affiliate of Sublandlord) and Subtenant
shall be for a term which is coterminous with the balance of the then effective
term of this Sublease and that the Subtenant shall have the options to renew
provided for in the Overlease and that the base rent, additional rent and other
charges to be paid by the Subtenant, as tenant, to Sublandlord (or an Affiliate
of Sublandlord), as landlord, shall be the same rent and additional rent which
the Subtenant was required to pay under this Sublease. If a successor
("Successor") in interest to the Sublandlord with respect to this Sublease
(other than an Affiliate of Sublandlord) or the Sublandlord's Rights acquires
title to the Demised Premises then this Sublease shall automatically be deemed
to be a direct lease between the Successor, as landlord, and Subtenant, as
tenant. Each Successor shall execute a writing so assuming the obligations
contained herein with respect to it.
31. Taxes
Subtenant shall be responsible for paying (or reimbursing Sublandlord, as
appropriate) any and all taxes, assessments and charges, levied, assessed or
imposed upon Sublandlord (other than income taxes, but including occupancy taxes
which are measured by income) measured by (x) Sublandlord's ownership of its
interest in this Sublease; (y) this Sublease; or (z) the rent or other charges
produced by this Sublease. Nothing contained in the foregoing sentence shall
require Subtenant to pay any franchise, income, corporate, estate succession,
capital levy, stamp or transfer tax of Sublandlord or other taxes imposed on
taxpayers generally as opposed to the owners or landlords of real property or on
rents in particular. Nothing contained herein shall be deemed or construed to
limit or diminish Subtenant's obligations contained elsewhere in this Sublease.
32. No Fiduciary Obligation
Sublandlord, an affiliate of Sublandlord, or persons comprising Sublandlord, may
be a stockholder, partner or the like in Subtenant or an affiliate of Subtenant,
which fact shall not impose any duty or obligation (fiduciary or otherwise) on
the
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Sublandlord in acting as sublandlord under this Sublease, it being specifically
understood and agreed that Sublandlord shall have the right to do or not to do
anything with respect to this Sublease to the same extent as if Sublandlord, an
affiliate of Sublandlord or persons comprising Sublandlord were not a
stockholder, partner or the like with or in Subtenant or an affiliate of
Subtenant.
33. Warranties and Representations
Sublandlord represents to the Subtenant that, as of the date of this Sublease:
(i) the Overlease is in full force and effect;
(ii) attached hereto as Exhibit E is a complete copy of the
Overlease, together with all amendments thereto and modifications thereof;
(iii) to the best of its knowledge, there exists no default on
its part under the Overlease
(iv) The Sublandlord is the holder of the tenants interest
under the Overlease and has not assigned the same; and
(v) There are no presently effective subleases or rights of
occupancy entered into or granted by Sublandlord with respect to the Demised
Premises.
34. Non-Recourse
There shall be absolutely no personal liability on the part of Sublandlord, its
partners, agents, employees, shareholders, officers and directors or their
successors or assigns with respect to any of the terms, covenants and conditions
of this Sublease or with respect to any act, omission or negligence of the
Sublandlord. Subtenant shall look solely to Sublandlord's estate and property in
the Demised Premises for the satisfaction of Subtenant's remedies for the
collection of any judgment or any other judicial process requiring the payment
of money by Sublandlord, and no other property or assets of Sublandlord shall be
subject to levy, execution or other enforcement procedure or for the
satisfaction of Subtenant's remedies under or with respect to this Sublease, the
relationship of Sublandlord and Subtenant or of Subtenant's use or occupancy of
the Demised Premises.
35. Certain Definitions
As used herein:
(a) "Affiliate" shall have the meaning ascribed thereto
in the Master Agreement.
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(b) "TIHI Guaranty" shall have the meaning ascribed
thereto in the Master Agreement.
(c) "EMCO Sub" shall mean the pledgor(s) under the EMCO
Pledge(s).
(d) "Transaction Agreements" means, collectively, the
Master Agreement and the Transaction Documents (as defined in the Master
Agreement).
(e) Master Agreement" shall mean the Master Agreement,
dated as of March 11, 1992, among Emco Motor Holdings, Inc., DiFeo Partnership,
Inc., '21' International Holdings, Inc., Fair Cadillac-Oldsmobile Corp., Fair
Chevrolet Corp., Fair Infiniti, Inc., Fair Imports Corp. (d/b/a Fair Acura),
Fair Hyundai Corp., Fair Motors Corp. (d/b/a Fair Mitsubishi), Danbury-Mt. Kisco
Saturn Corp. (d/b/a/ Saturn of Danbury), Hudson Toyota Inc., J & S Ford Inc.,
DiFeo Volkswagen Inc., DiFeo Hyundai Inc., J & F Oldsmobile Corp., DiFeo Subaru
Inc., DiFeo Jeep-Eagle Inc., DiFeo Imports, Inc. (d/b/a/ Jersey City
Mitsubishi), Park Pontiac-GMC Truck, Inc., DiFeo Buick Inc., DiFeo Autocenter
Inc. (d/b/a/DiFeo Mazda), DiFeo Leasing Corporation, Somerset Motors Inc.
(d/b/a/ DiFeo Lexus), Gateway Oldsmobile Inc. (d/b/a DiFeo Volkswagen of
Bridgewater), DiFeo B.M.W., Inc., County Auto Group, Inc. (d/b/a County Toyota),
Rockland Motors Corp. (d/b/a Rockland Mitsubishi), Samuel X. DiFeo and Joseph
DiFeo, as the same may have been amended.
(f) "Group Leases" means the leases to be entered into
contemporaneously herewith by Sublandlord (or Affiliates of Sublandlord) and
Subtenant (or Affiliates of Subtenant) pursuant to the Master Agreement, a list
of such Group Leases being attached hereto as Exhibit F.
(g) "Group Subleases" means this Sublease and all other
subleases to be entered into contemporaneously herewith by Sublandlord (or
Affiliates of Sublandlord) and Subtenant (or Affiliates of Subtenant) pursuant
to the Master Agreement, a list of all such Group Subleases being attached
hereto as Exhibit G.
(h) "ADR" shall have the meaning ascribed thereto in
Article 36.
(i) "EMCO pledge(s)" shall have the meaning ascribed to
"EMCO Sub-Pledge Agreements (Leases)" in the Mater Agreement.
(j) "laws" shall mean all present and future laws and
ordinances and the orders, rules, regulations and requirements of all federal,
state and municipal governments and appropriate departments, commissions, board
and officers thereof, which may be applicable to the Demised Premises and the
sidewalks, curbs and vaults adjoining the same or to the use or
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manner of use of the Demised Premises, whether or not such requirement shall be
foreseen or unforeseen, ordinary or extraordinary.
(k) "Tenant Cross-Guaranty" shall have the meaning
ascribed thereto in the Master Agreement.
36. ADR
36.1 In such cases where this Sublease provides for the
determination of any matter by arbitration or ADR, the same shall be settled and
finally determined by the means of alternative dispute resolution as provided in
the New Jersey Alternative Procedure for Dispute Resolution Act, N.J.S.A.
2A:23A-1, et seq., as in effect on the date of this Sublease, (the "Act") upon
written notice given by any party to the other (the "Dispute Notice"), and to
the umpire hereafter established. Except to the extent required by law, the
proceedings under the Act shall be confidential and shall not be disclosed or
discussed with persons not parties to this Sublease without the consent of all
parties to the dispute. In the event a party to a dispute may suffer irreparable
harm or injury, such party shall have the ability to seek provisional remedies,
including but not limited to injunctive relief and other equitable remedies, to
the fullest extent permitted by law pending completion of the process provided
under this Article 36.
36.2 (a) Within thirty (30) days after the Dispute Notice is
given the parties shall select three (3) umpires from among the persons listed
in Subparagraphs (1) through (4) below in the order of priority listed below,
i.e., if a person meeting the requirements of Subparagraph (1) is not able or
willing to serve, a person meeting the requirements of Subparagraph (2) shall be
selected, and so forth. In addition to meeting the requirements of Subparagraph
(1), (2), (3) or (4) below, the umpires must also satisfy the requirements
described in Subparagraphs (b) and (d) below. A potential umpire is:
(1) Any retired judge of a United States District
Court or a United States Circuit Court of Appeals;
(2) Any retired judge of any State Superior Appellate or
Supreme Court;
(3) Any attorney licensed to practice law for more than
fifteen (15) years or certified public accountant who has been certified for
more than fifteen (15) years; and, in either case, who has either directly or
indirectly, no conflict of interest; or
(4) Such other person upon whom the members of the
selecting group agree.
(b) In addition to the requirements described in
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Section 36.2(a) above, the umpires selected hereunder must:
(1) Be free of any potential for bias or conflict of
interest with respect to either of the parties hereto, directly or indirectly or
by virtue of any direct or indirect financial interest, family relationship or
close friendship; and
(2) Be in a position to immediately hear the dispute and
thereafter render a resolution within the time specified in Section 36.7 below.
(c) If the umpires are not selected within the period of time
specified in Section 36.2(a) above, Sublandlord, on the one hand, and Subtenant,
on the other hand, each shall promptly select an umpire which umpires shall
select a third umpire who shall be the sole umpire. If the parties fail to so
select umpires pursuant to the foregoing provisions within twenty (20) days
after the expiration of the period described in Section 36.2(a), the sole umpire
shall be selected by the Chief Judge of the United States District Court for the
District of New Jersey or, if the Chief Judge is unable or unwilling to act, by
the Chief Judge of the Southern District of New York or the President of the Bar
Association of the City of New York. Such selection shall be in accordance with
the requirements of Sections 36.2(a) and 36.2(b) above. The umpire to be
selected pursuant to this Section 36.2(c) must be designated within thirty (30)
days after the expiration of the period described in Section 36.2(a) above.
(d) Anything to the contrary herein notwithstanding, the
following persons are not eligible to be an umpire under this Article: a party
to this Sublease or any affiliate thereof; an employee or co-employee of any
party to the dispute; or any person having material or undisclosed, financial or
personal interests dependent on the success or failure of any of the parties.
(e) An umpire shall disqualify himself or herself if he or she
is unable to handle the process promptly so as to render a resolution within a
reasonable time, in no event to exceed forty-five (45) days after final
testimony and/or brief and in all __________ not to extend beyond six months
from the date the umpire is chosen, or such longer period to which the parties
to the dispute and the umpire may agree.
36.3. The alternative resolution shall be held at such place
as the umpire may determine within Essex County, New Jersey or such other
location to which the parties may agree, to commence not later than ten (10)
days after the umpire has been determined in accordance with Section 36.2.
36.4. All fees and expenses (including transcripts, room
rental and fees of the umpire) of alternative dispute resolution, shall be paid
as follows: 25% by the party
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or parties served with the Dispute Notice and 25% by the person(s) serving the
Dispute Notice, with the remaining 50% allocated 10% to the prevailing party (or
parties) and 40% to the non-prevailing party (or parties), as determined by the
umpire (if the umpire does not determine a prevailing party then pro-rata to
each of the material parties to the dispute as determined by the umpire)
provided that the umpire shall have the right to order that such fees be paid in
a different percentage if any of the parties have acted in bad faith (in which
case he may shift other's shares to the bad faith party(ies). The fees payable
to the umpire shall be his usual hourly rates for consulting or dispute
resolution services, as the same may be in effect from time to time. Each party
shall pay his own legal fees, costs and disbursements.
36.5. Each party shall be entitled to discovery by way of oral
deposition, inspection and copying of all relevant documents within the care,
custody or control of a party or a witness, and when authorized by the umpire,
by way of interrogatories. All discovery shall be complete within forty-five
(45) days of the appointment of the umpire. All documents to be relied upon by
any party to the proceeding shall be provided to the others no later than two
weeks before the hearing date for the proceedings. The time periods for
discovery may be extended by the umpire for good cause, provided that he is able
to meet the time requirement of Section 36.7.
36.6. When appropriate under applicable New Jersey substantive
and procedural law, the umpire shall have full and complete authority to award
provisional relief, on an ex parte basis or otherwise.
36.7. The umpire shall make the award and serve notice thereof
upon all parties within six (6) months of the date the umpire is designated, or
such longer period to which the parties to the dispute and the umpire may agree.
If the umpire fails to make his decision in accordance with substantive law, or
to properly apply the facts to the law, the umpire's award will be deemed to
have been procured by "undue means" and "beyond his power." Any party may apply
to court in accordance with the Act to have the umpire's decision confirmed,
reviewed, modified, affirmed or remanded to the umpire with directions.
36.8. Except as otherwise provided herein, the Act shall
govern the procedures and methods for any Alternative Dispute Resolution
undertaken pursuant to this Sublease. Except as expressly provided above, the
umpire may not modify the provisions of this Article. Except as expressly
provided to the contrary above, and to the extent otherwise not inconsistent
with this Sublease and the Act, proceedings under this Article, including
efforts to mediate the dispute, shall be governed by the "Rules for
Non-Administered Arbitration of Business Disputes" (Final Draft, June 14, 1989)
by the CPR (NY).
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37. Miscellaneous
37.1 This Sublease may not be modified or amended except by a
writing executed by both parties.
37.2 This Sublease shall be governed by and shall be construed
in accordance with the laws of the State in which the Demised Premises is
located.
37.3 The covenants and agreements herein contained shall bind
and inure to the benefit of Sublandlord and Subtenant and their respective
successors and assigns (but in the case of Subtenant only, permitted assigns).
37.4 Sublandlord and Subtenant agree that they are not
partners or joint venturers by reason of this Sublease.
37.5 The persons and entities signing this Sublease for
Sublandlord and Subtenant respectively each represents and warrants that this
Sublease has been duly authorized, executed and delivered by Sublandlord and
Subtenant, as the case may be.
37.6 Neither acceptance of the keys nor any other act or thing
done by Sublandlord or any agent or employee of Sublandlord during the term of
this Sublease shall be deemed to be an acceptance or a surrender of the Demised
Premises. Surrender of the Demised Premises can only be effected by agreement in
writing signed by Sublandlord accepting or agreeing to accept such a surrender.
37.7 Sublandlord and Subtenant hereby waive trial by jury in
any action or proceeding (including counterclaims) brought by either against the
other in any matters arising out of or relating to this Sublease which are not
required to be decided pursuant to the alternative dispute resolution mechanism
set forth herein.
37.8 This Sublease contains the entire agreement between the
parties concerning the subleasing of the Demised Premises by Sublandlord to
Subtenant. All prior descriptions and negotiations between the parties regarding
the subject matter of this Sublease are merged into and superseded by this
Sublease.
37.9 The captions herein are for convenience of reference only
and shall not be deemed to define, limit or describe the scope or intendment of
any provision of this Sublease.
IN WITNESS WHEREOF, Sublandlord and Subtenant have duly executed and
delivered this Sublease as of the day and year first above written.
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WITNESS DIFEO BMW, INC.
By:
Name:
Its:
DIFEO BMW PARTNERSHIP
By: /s/ Ezra P. Mager
Name: Ezra P. Mager
Its: CEO
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EXHIBIT A TO SUBLEASE BETWEEN DIFEO BMW, INC. AND
DIFEO BMW PARTNERSHIP
Lease dated January 6, 1992 between Michael Zullo, Sr. and
Bertha Zullo, as landlord, and DiFeo BMW, Inc., as tenant.
-34-
EXHIBIT B TO SUBLEASE BETWEEN
DIFEO BMW, INC. AND DIFEO BMW PARTNERSHIP
Report Of Site Investigation For Various Automobile Dealerships In New
Jersey, New York and Connecticut - SE # 2519, Prepared For: EMCO Motor
Holdings, Inc. by Storch Engineers - Dated June 2, 1992, as amended.
-35-
EXHIBIT C TO SUBLEASE BETWEEN
DIFEO BMW, INC. AND DIFEO BMW PARTNERSHIP
Additional Representations
And Warranties of Sublandlord
1. Existence. Sublandlord is a corporation duly organized, validly
existing and in good standing under the laws of its state of organization and
has all requisite power and authority to enter into this Sublease and the Rent
Adjustment and Takeback Agreement (collectively, the "Lease Documents") to which
it is a party and to perform its obligations hereunder and thereunder; and has
all requisite corporate power and authority to own its properties and assets and
conduct its business as it is now being conducted.
2. Authority; Consents. The execution, delivery performance by
Sublandlord of the Lease Documents to which it is a party and the consummation
of the transactions contemplated hereby and thereby have been duly authorized by
all requisite corporate, partnership or other action, and no other corporate,
partnership or other action on the part of Sublandlord is necessary for the
execution, delivery and performance by Sublandlord of any Lease Document to
which it is a party and the consummation by it of the transactions contemplated
hereby and thereby. Subject to Section 4.23 of the Master Agreement (which
exclusively governs Environmental Health and Safety Matters) and except as
disclosed on Schedule C-1 hereto, or in the Master Agreement, neither the
execution nor the delivery by Sublandlord of any Lease Document to which it is a
party, nor the consummation of any of the transactions contemplated hereby or
thereby, nor compliance with nor fulfillment by Sublandlord of the terms and
provisions hereof or thereof, will, except as disclosed on Schedule C-1 hereto,
(i) conflict with or result in a breach of the terms, conditions or provisions
of or constitute a default under (A) the Certificate or Articles of
Incorporation, Bylaws, partnership agreement, or other organizational documents
of Sublandlord, or (B) any lease, contract, instrument, mortgage, deed of trust,
trust deed or deed to secure debt evidencing or securing indebtedness for
borrowed money, any financing lease, any law, rule, regulation, judgment, order,
award, decree or other restriction of any kind to which Sublandlord is a party
or by which it is bound and the Demised Premises is subject, (ii) require
Sublandlord to obtain the consent, approval, authorization or other order or
action of, or filing with, any court, governmental authority or regulatory body,
(iii) require the consent, approval, authorization or order of any person or
entity under, and will not conflict with, or result in the breach, lapse or
termination of, or constitute a default under, or result in the acceleration of
the performance by Sublandlord
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under, any material lease, permit, license, contract, mortgage, deed of trust,
trust deed, deed to secure debt, other lease, indenture or other instrument to
which Sublandlord is a party and by which the Demised Premises is subject, (iv)
give any party with rights under any instrument, contract (including any
sale/leaseback agreement), lease, mortgage, deed of trust, trust deed, deed to
secure debt, judgment, order, award, decree or other restriction the right to
terminate, modify or otherwise change the rights or obligations of any party
under such instrument, contract, lease, mortgage, deed of trust, trust deed,
deed to secure debt, judgment, order, award, decree or other restriction or (v)
require any declaration, filing or registration with any governmental or
regulatory authority by Sublandlord. Each Lease Document has been duly executed
and delivered by Sublandlord and (assuming the due authorization, execution and
delivery hereof and thereof by the other parties hereto and thereto),
constitutes a legal, valid and binding obligation of Sublandlord, enforceable
against Sublandlord in accordance with its respective terms (except as the
enforceability thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditor's rights generally and laws
restricting the availability of equitable remedies and may be subject to general
principles of equity whether or not such enforceability is considered in a
proceeding at law or in equity).
3. No Litigation. There is no action, lawsuit, claim, counterclaim,
proceeding or investigation (or group of related actions, lawsuits, claims,
proceedings or investigations) pending or, to the knowledge of Sublandlord,
Joseph DiFeo or Samuel DiFeo, threatened against or affecting Sublandlord that
seeks to restrain or enjoin the consummation of the transactions contemplated by
any Lease Document.
4. Title to Assets. Sublandlord has the legal right to use all
of the Demised Premises.
5. Compliance. Except as otherwise disclosed in the Master
Agreement, Sublandlord is not in default under or in violation of, any
applicable franchise, permit or license, its Articles or Certificate of
Incorporation (or other charter document), Bylaws, partnership agreement or
other organizational document, any promissory note, indenture or any evidence of
indebtedness or security therefor, mortgage, lease, Contract (as hereinafter
defined) or any other instrument to which it is a party and by which it or the
Premises is or may be bound.
6. Litigation. Except as disclosed in Schedule C-1 hereto or in the
Master Agreement and except for Environmental Health and Safety Matters which
are governed exclusively by Section 4.23 of the Master Agreement, there is no
action, lawsuit, claim, counterclaim, proceeding, or investigation (or group or
related actions, lawsuits, claims, proceedings or investigations) pending or, to
the knowledge of Sublandlord,
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threatened, against or affecting Sublandlord in any court, or before any
Federal, state, provincial, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign, or
before any arbitrator of any kind, and as of the date hereof Landlord knows of
no reasonable basis for any such action, lawsuit, claim, proceeding, or
investigation (or group of related actions, lawsuits, claims, proceedings or
investigations) which seeks to restrain or enjoin the consummation of the
transactions contemplated by the Lease Documents or would materially adversely
affect Subtenant or Subtenant's use and occupancy of the Demised Premises.
Except as disclosed in Schedule C-1 or in the Master Agreement, Sublandlord is
not in default, and no condition exists that with notice or the lapse of time or
both would constitute a default, with respect to any judgment, order writ,
injunction or decree of any court or before any Federal, state, provincial,
municipal or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, affecting or relating to the business of
Sublandlord. No condemnation proceeding has commenced or, to the knowledge of
Sublandlord, is threatened to be commenced against any of the Demised Premises.
7. Contracts. Except as otherwise disclosed in the Master Agreement,
Schedule C-1 hereto lists all of the following contracts of Sublandlord relating
to the Demised Premises ("Contracts"): (i) any lease, sublease or other right of
occupancy, (ii) any contract, commitment or option to sell or lease the Demised
Premises, (iii) any mortgage, hypothecation, deed of trust, equipment lease,
conditional sales agreement or similar instrument which place a lien or
encumbrance upon the Demised Premises, (iv) any other contract relating to
rights in the Demised Premises which will, or has the reasonable likelihood to,
materially adversely interfere with Subtenant, this Sublease or the use and
occupancy of the Demised Premises by Subtenant pursuant to this Sublease, or (v)
any other contract which would be binding on Subtenant hereunder. Sublandlord
has made available to Subtenant true and complete copies of all Contracts, all
as presently in effect. This representation shall not be deemed to affect, or to
be affected, by any environmental matter or Environmental Claims, each of which
is governed exclusively by the Master Agreement.
Any dispute with respect to the foregoing representations and
warranties shall be resolved by ADR pursuant to Article 36.
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SCHEDULE C-1
The consent of the overlandlord of the Demised Premises is required.
The Sublandlord is a party to the Overlease.
Incorporated herein by reference is all that which is disclosed in the
Master Agreement.
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LEASE
This LEASE is dated as of October 1, 1992, by and between J & S
Equity Associates, a New Jersey partnership, having an office at c/o Dealership
Management, 585 Route 440, Jersey City, New Jersey ("Landlord"), and DiFeo
Buick-Pontiac-GMC Truck Partnership, a New Jersey general partnership, having an
address c/o EMCO Motor Holdings, Inc., 153 East 53rd Street, New York, New York
10022 ("Tenant").
W I T N E S S E T H:
That Landlord in consideration of the rents reserved in this Lease
to be paid by Tenant and in consideration of the covenants, agreements and
conditions herein contained to be observed and fulfilled by Tenant, hereby
demises and leases to Tenant, and Tenant hereby hires and takes from Landlord,
the real property (the "Land") situate, lying and being in Jersey City, New
Jersey, as more particular bounded and described in Exhibit A.
TOGETHER with the Buildings and the Appurtenances (as hereinafter
respectively defined; the Land, the Buildings and the Appurtenances,
collectively, the "Premises").
SUBJECT to the mortgages specified in Exhibit A and any easements,
restrictions and other matters of record against the Premises as of the date
hereof.
TO HAVE AND TO HOLD the Premises unto Tenant, its successors and
assigns, for a term commencing on the date hereof (the "Term Commencement Date")
and expiring on the last day of the calendar month in which occurs the tenth
(10th) anniversary of the Term Commencement Date, subject to extension as
provided in Article 17, unless this Lease shall sooner terminate as hereinafter
provided, upon and subject to the terms and conditions hereinafter set forth.
AND Landlord and Tenant covenant and agree as follows:
ARTICLE 1.
BASE, ESCALATION AND ADDITIONAL RENT
Section 1.1. Base Rent. Tenant shall pay to Landlord during the term
hereof in lawful money of the United States of America, by check subject to
collection, at the address of the Landlord specified above or at such place as
Landlord may from time to time designate, without notice or demand, a net annual
base rental (the "Base Rent"), in equal monthly installments in advance on the
twenty-fifth (25th) day of the calendar month preceding the month to which such
installment of Base Rent
relates, at a rate of $156,000 per annum, subject to adjustment as provided in
this Article 1 and Article 17. Notwithstanding the foregoing (and without
limitation of any other rights or remedies provided to Landlord hereunder), if
during any twelve (12) month period Tenant shall be more than five (5) days late
in the payment of two (2) monthly installments of Base Rent hereunder, then, for
the twelve (12) months following such second (2nd) instance, Base Rent hereunder
shall be payable on the fifteenth (15th) day of the calendar month preceding the
month to which such installment of Base Rent relates.
Section 1.2. Base Rent Adjustments. (a) The Base Rent shall be
adjusted as and to the extent required in Section 11 of the Rent Adjustment
and Takeback Agreement.
(b) The Base Rent shall be adjusted as of the third (3rd)
anniversary of the Term Commencement Date (the "First Adjustment"), and as of
the ninety-first (91st) calendar month anniversary of the Term Commencement Date
(the "Second Adjustment"), to an amount equal to the fair market rental value of
the Premises, determined as provided in this Section, as of said third (3rd)
anniversary (for the First Adjustment) and as of such ninety-first (91st) month
anniversary (for the Second Adjustment), which fair market rental value shall be
determined by agreement of the parties or, failing such agreement within 180
days prior to the respective date referred to above, by arbitration which shall
be conducted in the manner provided in Article 18 in which the arbitrator shall
determine the fair market rental value of the Premises (for automobile
dealership use only (or any other Vehicle-Related Use or other use for which the
Premises are in fact being used, but only to the extent that such other
Vehicle-Related Use or other use is a higher and better use of the Premises than
as an automobile dealership) and taking into consideration the obligations of
Tenant under this Lease (the arbitrator is to conclusively presume that the
Premises are in good condition and repair, are undamaged by any fire or other
casualty and are free of any environmental contamination), the character and
location of the Premises, the absence of a brokerage commission, work letter or
rent concessions, any further provisions for adjustment of Base Rent, and other
factors customarily taken into account in calculating fair market rental value
of real property, but excluding any valued added by Alterations in the nature of
new Buildings (other than where Tenant has demolished and replaced a Building
existing on the date hereof, in which event any value added by such Alternations
shall be included) or additions to Buildings existing on the date hereof and
undertaken by Tenant, but including renovations or restorations to (but not
expansions of) Buildings existing as of the date hereof, determined as of the
date the Base Rent is to be adjusted).
(c) With respect to the First Amendment, by a separate Rent
Adjustment and Takeback Agreement, the parties have agreed that the First
Adjustment under all of the Group Leases shall in
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the aggregate result in an increase in Base Rent under all Group Leases of at
least $288,000 per annum, but not more than $864,000 per annum (although under
certain circumstances these numbers may be adjusted, as provided in the Rent
Adjustment and Takeback Agreement). The First Adjustment determined pursuant to
subsection (b) of this Section shall therefore be subject to further adjustment
pursuant to the Rent Adjustment and Takeback Agreement.
(d) With respect to the Second Adjustment, by a separate Rent
Adjustment and Takeback Agreement, the parties have agreed that the Second
Adjustment under all of the Group Leases shall in the aggregate result in an
increase (together, cumulatively with the aggregate increase of the First
Adjustment) in Base Rent under all Group Leases of at least $576,000 per annum
(although under certain circumstances this number may be adjusted, as provided
in the Rent Adjustment and Takeback Agreement), but not more than a maximum
amount, in excess of the $576,000 per annum minimum (as such minimum may be so
adjusted), determined pursuant to the Rent Adjustment and Takeback Agreement.
The Second Adjustment determined pursuant to subsection (b) of this Section
shall therefor be subject to further adjustment pursuant to the Rent Adjustment
and Takeback Agreement.
(e) After the First Adjustment or the Second Adjustment, or any
other adjustment pursuant to Section 11 of the Rent Adjustment and Takeback
Agreement, has been determined, then, at either party's request, the parties
shall enter into an agreement confirming the amount of the First Adjustment or
the Second Adjustment, or such other adjustment, but failure to enter into the
same shall not affect the rights or obligations of the parties hereunder.
Section 1.3. Net Lease. This Lease shall be deemed and construed to
be an absolutely "net lease", except as herein expressly provided to the
contrary. It is the intent of Landlord and Tenant that the Base Rent shall be
absolutely net to Landlord so that this Lease shall yield to Landlord the Base
Rent, and that all costs, expenses, charges, assessments, impositions and
obligations of every kind and nature relating to the Premises which may arise or
become due during the Term, whether foreseen or unforeseen, ordinary or
extraordinary, shall be the responsibility of Tenant, except (i) as expressly
provided to the contrary in this Lease, or (ii) for obligations relating to Fee
Mortgages and liens created by Landlord, or other agreements entered into by
Landlord relating to the Premises, to the extent that the same are not expressly
assumed in writing by Tenant or that Tenant expressly agrees to comply with the
same hereunder. Tenant shall pay to Landlord the Base Rent and other payments
hereunder free of any charges, assessments, impositions or deductions of any
kind and without abatement, deduction, demand, notice, or set-off, except as
otherwise expressly provided in this Lease.
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Section 1.4. Prorations; Additional Rent; Adjustments. (a) If the
Term Commencement Date or the expiration date of the Term, or the date on which
the First Adjustment or the Second Adjustment shall become effective, shall be
other than the first and last day, respectively, of a calendar month, the
monthly installment of Base Rent for such month shall be prorated on a per diem
basis. If any period to which a payment of additional rent hereunder relates
shall not be wholly within the Term of this Lease, such payment of additional
rent shall be prorated on a per diem basis.
(b) All additional rent, sums, charges and other payments provided
for under this Lease, other than Base Rent, shall be deemed additional rent and
shall constitute rent payable hereunder with the same effect as if the same were
Base Rent reserved and provided for herein and, in the event of the non-payment
by Tenant of such additional rent when due hereunder, Landlord shall have the
same rights and remedies in respect thereof as Landlord shall or may have in
respect of non-payment of Base Rent reserved and provided for herein.
(c) Landlord and Tenant shall cooperate with each other in making
apportionments for Impositions, utility payments and premiums on transferable
insurance policies which are in fact transferred to Tenant, except to the extent
that such apportionments are taken into account under the Master Agreement, it
being the intention of the parties to avoid duplication of such adjustments.
Landlord shall pay to Tenant or Tenant shall pay to Landlord, as the case may
be, the net amount, if any, owing by one to the other promptly after such
apportionments have been agreed upon. Any dispute between the parties hereto in
connection with the making of such apportionments shall be resolved pursuant to
ADR as set forth in Article 18.
ARTICLE 2.
CERTAIN DEFINITIONS
As used herein:
(a) "ADR" shall have the meaning ascribed thereto in Article 18;
(b) "Affiliate" shall have the meaning ascribed thereto in the
Master Agreement;
(c) "Alterations" shall have the meaning set forth in Section 10.1;
(d) "Appurtenances" means all easements, licenses, privileges,
rights and appurtenances related to the Land or the Buildings;
(e) "Buildings" means any buildings, structures or improvements now
or hereafter erected or situated on the Land,
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the foundations and footings thereof, any and all fixtures, equipment, machinery
and other tangible personal property of every kind and nature whatsoever now or
hereafter affixed or attached thereto;
(f) "Condemnation Proceeds" shall have the meaning set forth in
Section 9.2;
(g) "Constructive Total Taking" shall have the meaning set forth in
Section 9.1;
(h) "Dealerships" shall have the meaning ascribed thereto in the
Master Agreement;
(i) "Depositary" shall have the meaning set forth in Section 10.1;
(j) "Deposited Sums" shall have the meaning set forth in Section
11.1;
(k) "EMCO" means EMCO Motor Holdings, Inc., a Delaware corporation;
(l) "EMCO SUB" shall mean the pledgor(s) under the EMCO Pledge(s);
(m) "EMCO Pledge(s)" shall have the meaning ascribed to "EMCO SUB
Pledge Agreements (Leases)" in the Master Agreement.
(n) "Event of Default" has the meaning set forth in Article 15;
(o) "Fee Mortgage" shall mean any mortgage or deed of trust placed
upon fee title to all or any portion of the Premises, and all renewals,
refinancings, modifications, replacements and extensions thereof, and "Fee
Mortgagee" shall mean the holder of any Fee Mortgage;
(p) "Full Insurable Value" means the actual replacement cost of the
Buildings (excluding foundation and excavation costs) and shall be determined at
the request of Landlord by an architect, appraiser, appraisal company or one of
the insurers, selected by Landlord and reasonably acceptable to and paid for by
Tenant, but such determination shall not be required to be made more frequently
than once every 36 months, unless such determination is required by an
Institutional Fee Mortgage (subject to Section 21.5);
(q) "Group Leases" means this Lease and all other leases to be
entered into contemporaneously herewith by Landlord (or Affiliates of Landlord)
and Tenant (or Affiliates of Tenant) pursuant to the Master Agreement, a list of
all such Group Leases being attached hereto as Exhibit B;
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(r) "Group Subleases" means the subleases to be entered into
contemporaneously herewith by Landlord or Affiliates of Landlord and Tenant or
Affiliates of Tenant pursuant to the Master Agreement, a list of such Group
Subleases being attached hereto as Exhibit C;
(s) "Impositions" shall have the meaning set forth in Section 3.1;
(t) "Institution" means a savings and loan association, a savings
bank, a commercial bank or trust company (whether acting individually or in any
fiduciary capacity), an insurance company, an educational institution or a
state, municipal or similar public employees' welfare, pension or retirement
fund or system, a real estate investment trust or any other corporation or
organization subject to supervision and regulation by the insurance or banking
departments of the State of New York, the State of New Jersey, the State of
Connecticut, or the United States Treasury, or any successor department or
departments hereafter exercising the same functions as said departments;
(u) "Institutional Fee Mortgage" and "Institutional Fee Mortgagee"
mean, respectively, a Fee Mortgage held by an Institution and the Institution
which is the holder of an Institutional Fee Mortgage;
(v) "Institutional Mortgage" and "Institutional Mortgagee" mean,
respectively, a Mortgage held by an Institution and the holder of an
Institutional Mortgage;
(w) "Landlord Guaranty" shall have the meaning ascribed to the
"Landlord Cross-Guaranty" in the Master Agreement.
(x) "Laws" shall have the meaning set forth in Section 7.1;
(y) "Master Agreement" shall mean the Master Agreement, dated as of
March 11, 1992, among Emco Motor Holdings, Inc., DiFeo Partnership, Inc., '21'
International Holdings, Inc., Fair Cadillac-Oldsmobile Corp., Fair Chevrolet
Corp., Fair Infiniti, Inc., Fair Imports Corp. (d/b/a Fair Acura), Fair Hyundai
Corp., Fair Motors Corp. (d/b/a Fair Mitsubishi), Danbury-Mt. Kisco Saturn Corp.
(d/b/a Saturn of Danbury), Hudson Toyota Inc., J & S Ford Inc., DiFeo Volkswagen
Inc., DiFeo Hyundai Inc., J & F Oldsmobile Corp., DiFeo Subaru Inc., DiFeo
Jeep-Eagle Inc., DiFeo Imports, Inc. (d/b/a Jersey City Mitsubishi), Park
Pontiac-GMC Truck, Inc., DiFeo Buick Inc., DiFeo Autocenter Inc. (d/b/a DiFeo
Mazda), DiFeo Leasing Corporation, Somerset Motors Inc. (d/b/a DiFeo Lexus),
Gateway Oldsmobile Inc. (d/b/a DiFeo Volkswagen of Bridgewater), DiFeo B.M.W.,
Inc., County Auto Group, Inc. (d/b/a County Toyota),
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Rockland Motors Corp. (d/b/a Rockland Mitsubishi), Samuel X. DiFeo and Joseph
DiFeo, as the same may have been amended.
(z) "Mortgage" means any mortgage or deed of trust constituting a
lien on Tenant's interest in this Lease and all renewals, refinancings,
modifications, replacements and extensions thereof;
(aa) "Prime Rate" means the prime commercial lending rate from time
to time announced by The Chase Manhattan Bank, N.A. ("Chase") to be in effect at
its principal office in New York, New York or, if Chase no longer announces such
a rate, then a comparable rate selected by Landlord and reasonably acceptable to
Tenant;
(bb) "Rent Adjustment and Takeback Agreement" shall mean the Rent
Adjustment and Takeback Agreement, dated as of the date hereof, among Fair
Imports Corp., J & S Equity Associates, Fair Motors Corp. and DiFeo BMW, Inc.
(collectively, the sublandlords), Fair Imports Partnership, DiFeo Volkswagen
Partnership, DiFeo Hyundai Partnership, Fair Motors Partnership, DiFeo BMW
Partnership, and DiFeo Autocenter Partnership (collectively, the subtenants),
Fair Realty Company, Rockland Realty Associates, Boundbrook Realty Associates, J
& S Equity Urban Renewal Corp. and J & S Equity Associates (collectively, the
landlords), Fair Hyundai Partnership, Danbury-Mt. Kisco Saturn Partnership, Fair
Cadillac-Oldsmobile-Isuzu Partnership, Rockland Motors Partnership, DiFeo
Oldsmobile Partnership, Somerset Motors Partnership, Hudson Motors Partnership,
DiFeo Jeep-Eagle Partnership, J & F Oldsmobile-Isuzu Partnership, DiFeo Subaru
Partnership, DiFeo Autocenter Partnership, DiFeo Buick-Pontiac-GMC Truck
Partnership, and DiFeo Imports Partnership (collectively, the tenants).
(cc) "Space Tenant" shall have the meaning set forth in Section
14.7;
(dd) "Tenant Guaranty" shall have the meaning ascribed to the
"Tenant Cross-Guaranty" in the Master Agreement.
(ee) "Term" means the initial term and each successive renewal term
effected pursuant to Article 17;
(ff) "TIHI Guaranty" shall have the meaning ascribed thereto in the
Master Agreement;
(gg) "Transaction Agreements" means, collectively, the Mater
Agreement and the Transaction Documents (as defined in the Master Agreement);
(hh) "Work" shall have the meaning set forth in Section 11.2.
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ARTICLE 3.
IMPOSITIONS
Section 3.1. Payment of Impositions. As additional rent, Tenant
shall pay, before any fine, penalty, interest or cost may be added thereto for
the non-payment thereof (or at such earlier and commercially reasonable time as
is required by a Institutional Fee Mortgagee or a Fee Mortgagee on the date
hereof which is not an Institution), all real estate taxes, assessments, special
assessments, water and sewer rates and charges, vault charges, occupancy taxes
measured by income, license and permit fees and other governmental levies and
charges, general and special, ordinary and extraordinary, unforeseen as well as
foreseen, of any kind and nature (collectively, "Impositions") which are
assessed, levied, confirmed, imposed or become a lien upon or are due and
payable with respect to the Premises or the sidewalks or streets in front of or
adjoining the same, or are assessed, levied, confirmed or imposed upon Landlord
as owner of the Premises and/or as the Landlord under this Lease or as the
recipient of rents or other charges produced by this Lease, and which become or
are payable, during the Term (including any interest imposed thereon by reason
of an election to pay the same in installments), and any and all other taxes,
assessments and charges levied, assessed or imposed upon the Premises or any
portion thereof or upon Landlord as an owner of the Premises and/or as the
Landlord under this Lease or in respect of the rents or other charges produced
by this Lease in lieu of or in addition to the foregoing, including in
substitution of or in addition to any other Impositions (for such purpose, the
Imposition in question shall be calculated as if the Premises were the sole
asset of Landlord); provided, that if, by law, any Imposition is payable or at
the option of the taxpayer may be paid in installments (whether or not interest
shall accrue on the unpaid balance thereof), Tenant may pay the same (and any
accrued interest on the unpaid balance) in installments (and Landlord shall
cooperate with Tenant in any application by Tenant to pay the same in
installments) and shall pay only such installments as may become due during the
Term as the same respectively become due and before any fine, penalty, interest
or cost may be added thereto for non-payment thereof (or at such earlier and
commercially reasonable time as is required by an Institutional Fee Mortgagee or
a Fee Mortgagee on the date hereof which is not an Institution); and provided,
further, that any Imposition relating to a fiscal period of a taxing authority,
a part of which period is included within the Term of this Lease and a part of
which is included in a period of time before the Term Commencement Date or after
the expiration or earlier termination of this Lease, shall (whether or not such
Imposition shall be assessed, levied, confirmed, imposed or become a lien upon
the Premises, or shall become payable, during the Term) be appropriately
pro-rated between Landlord and Tenant, subject to Section 1.4(c).
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Section 3.2. Taxes Not Included In Impositions. Nothing in this
Lease contained shall require Tenant to pay any franchise, income, corporate,
estate, inheritance, succession, capital levy, stamp or transfer tax of Landlord
or other taxes imposed on taxpayers generally as opposed to the owners of real
property or on rents in particular. In the event of a dispute between Landlord
and Tenant as to whether or to what extent a tax is an Imposition, such dispute
shall be determined by ADR in the manner provided in Article 18.
Section 3.3. Receipts for Impositions. Tenant shall, upon request of
Landlord, furnish to Landlord within fifteen (15) days after the date when any
Imposition is payable, official receipts of the appropriate taxing authority, or
other evidence satisfactory to Landlord, evidencing the payment thereof.
Section 3.4. Right to Contest Impositions. Tenant, after prior
notice to Landlord, shall have the right to contest the amount or validity, in
whole or in part, of any Imposition by appropriate proceedings, and to pay any
Imposition under protest or with reservation of rights. Notwithstanding Section
3.1, and only if payment of the Imposition in question would bar such contest,
Tenant may postpone such payment pending resolution of such contest if (i)
Tenant deposits with Landlord in cash, cash equivalents or a clean, irrevocable
letter of credit in form and with an issuer reasonably acceptable to Landlord,
as a reserve for payment thereof, the amount of such Impositions being
contested, plus all fines, interest, penalties and costs which may become due
pending the determination of such contest, in such amounts as Landlord may
reasonably request from time to time, and (ii) no part of the Premises shall be
in any danger of sale or forfeiture within the next 120 days by reason of such
nonpayment; provided, however, that Tenant may not postpone such payment if,
subject to Section 21.5, (i) postponement of such payment would violate the
terms and provisions of any Institutional Fee Mortgage (and the Institutional
Fee Mortgagee refuses to waive the same), or (ii) Tenant does not comply with
the terms and conditions of such Institutional Fee Mortgage, relating to such
postponement (but Tenant will not be obligated to deposit sums for the same
obligations with both Landlord and an Institutional Fee Mortgagee). Upon the
termination of such proceedings, or if the Premises at any time become in danger
of sale or forfeiture by reason thereof within the next 120 days, Tenant shall
pay the amount of such Imposition or part thereof, the payment of which may have
been deferred during the prosecution of such proceedings, together with any
costs, fees, interest, penalties or other liabilities in connection therewith.
Without limiting the foregoing, Tenant shall have the right to apply for a
reduction in the assessed valuation of the Premises or for an abatement of or
exemption from any Imposition, for any fiscal or tax year during any part of
which the Term of this Lease is in effect. Landlord shall, at Tenant's request,
join in any such proceedings or permitting the same to be brought in its name if
required by law. Landlord shall not be subjected to any
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liability for the payment of any costs or expenses in connection with any such
proceedings unless Landlord intervenes and takes an affirmative part therein
(but Tenant shall be entitled to control such proceedings), and Tenant shall
indemnify and save harmless Landlord from any such costs or expenses, except in
the case of such intervention. If Tenant has not commenced such a proceeding for
a particular period or Imposition within a reasonable time prior to the last
date on which such a proceeding may be commenced, and fails to commence the same
within thirty (30) days after notice from Landlord referring to this Section,
Landlord shall have the right to commence, maintain and control, at Landlord's
sole cost and expense, such a proceeding (a "Landlord Proceeding") for such
period or Imposition. Any refund or rebate of any Impositions and interest or
penalties thereon shall belong to Landlord except to the extent it is based on a
payment made by Tenant or to a payment made by Landlord to the extent Landlord
has been reimbursed therefor by Tenant, in which case it shall belong to Tenant,
notwithstanding the expiration or sooner termination of this Lease. Any refund
or rebate so belonging to either party and received by the other party shall be
deemed trust funds and as such are to be received by the recipient party in
trust and forthwith paid to the other party, in accordance with this Article.
Each party agrees, promptly upon request by the other party, to execute and
deliver any receipt which may be necessary to effectuate the provisions of this
Section. If any such refund or rebate is subject to apportionment between
Landlord and Tenant as hereinabove provided, all costs and expenses (including
experts and attorneys' fees and disbursements) incurred by Tenant, or by
Landlord in the case of a Landlord Proceeding, in connection with obtaining such
refund or rebate shall first be deducted from the amount thereof.
Section 3.5. Evidence of Impositions. The certificate, advice, bill
or receipt by an appropriate official legally authorized to make or give the
same shall be prima facie evidence that an Imposition was due and payable on the
date thereof, or has been paid, and either party shall be entitled to rely
thereon.
Section 3.6. Tenant Taxes. Tenant shall at all times be responsible
for and shall pay directly to the applicable taxing authority, before
delinquency, all taxes and assessments which shall or may during the Term be
charged, levied, assessed or imposed on Tenant with respect to Tenant's right to
occupy the Premises and any personal property of any kind owned, used or
installed by Tenant at the Premises or in connection with (a) the operation of
the Premises or (b) Tenant's business conducted on or at the Premises.
Section 3.7. Payments to Institutional Fee Mortgagee. If the
provisions of a Fee Mortgage permit an Institutional Fee Mortgagee, or a Fee
Mortgagee on the date hereof which is not an Institution, to require payment of
some or all of the Impositions by Landlord to be held in escrow by such Fee
Mortgagee to enable
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such Fee Mortgagee to pay the same, and such Fee Mortgagee so requires, then
Tenant, at the direction of Landlord, shall make such payments to such Fee
Mortgagee (or to Landlord, as directed by Landlord, in which event Landlord
agrees to pay the same to such Fee Mortgagee) in the amounts and at the times
required by such Fee Mortgagee. Payment of such amounts by Tenant shall be
deemed, to the extent thereof, to relieve Tenant of its obligations hereunder
with respect to such Impositions. If such Fee Mortgagee fails or refuses to
apply the sums so paid by Tenant in payment when due of the Impositions to which
such sums relate (unless applied by such Fee Mortgagee to cure a default under
its Fee Mortgagee, which default resulted from the failure by Tenant to perform
or observe an obligation imposed against it under this Lease, within applicable
grace periods hereunder), and if Landlord shall not pay or cause to be paid such
Impositions within thirty (30) days after demand by Tenant, Tenant may, at its
option, pay the same and offset the sums so paid against the next Base Rent due
hereunder and Landlord shall, if insufficient Base Rent shall thereafter be
payable, pay the same to Tenant; provided, however, that if within such thirty
(30) day period Landlord disputes Tenant's right to such offset by notice to
Tenant, then the matter shall be resolved by ADR as provided in Article 18,
pending resolution of which dispute by ADR, Tenant shall have no right to an
offset.
Section 3.8. Allocation. If the Premises are a part of a single tax
lot with the premises demised under one or more other Group Leases, then Tenant
shall pay its allocable share of the Impositions thereon as determined in the
Rent Adjustment and Takeback Agreement, but shall be jointly and severally
liable with the tenants under the other such Group Leases for the payment of all
Impositions assessed on the basis of such single tax lot; provided, however,
that if a transaction described in Section 15.11(a)(i) or (a)(ii) shall occur to
this Lease, then the assignee or subtenant in question shall only be liable for
its allocable share of such Impositions thereon, as so determined.
Section 3.9. Survival. The provisions of this Article 3 shall
survive the expiration or sooner termination of this Lease.
ARTICLE 4.
INSURANCE
Section 4.1. Required Insurance. At all times during the Term
of this Lease, Tenant shall, at Tenant's expense, keep, provide and maintain
in force the following insurance:
(i) Property insurance covering the Buildings against loss or
damage from such causes of loss as are embraced by insurance policies of
the type now known as "All Risks" or "Open Perils" property insurance on a
replacement cost basis with an Agreed Value Endorsement waiving
co-
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insurance, all in an amount not less than one hundred per cent (100%) of
the then Full Insurable Value, without deduction for physical depreciation
thereof. Such property insurance shall include a Demolition and Increased
Cost of Construction Endorsement as well as such other insurance as the
Landlord may from time to time reasonably require to cover other risks and
hazards affecting the Premises;
(ii) Flood insurance if required by law, in amounts
required by law;
(iii) Boiler and machinery insurance insuring against loss or
damage to the Premises and to the major components of any heating,
air-conditioning or other ventilation systems and/or such other machinery
or apparatus as may be now or hereafter installed in the Premises, in such
amounts as Landlord may from time to time reasonably require;
(iv) General liability insurance insuring against claims for
personal injury (including, without limitation, bodily injury or death),
property damage liability and such other loss or damage from such causes
of loss as are embraced by insurance policies of the type now known as
"Commercial General Liability" insurance, all in such amounts as Landlord
may from time to time reasonably require. Landlord currently requires such
insurance to be in the amount of $5,000,000 combined single limit per
occurrence. Such insurance coverage shall be issued and maintained on an
"occurrence" basis;
(v) Workmen's compensation insurance covering employees of
Tenant, in statutory limits; and
(vi) In addition to and not in limitation of the above
requirements, subject to Section 21.5, such insurance as may be reasonably
required by any Institutional Fee Mortgagee.
Subject to clause (vi) above, if applicable, if either Landlord or Tenant
believes that the insurance described above is less or different than, or is
greater or more extensive than, that which is then customarily maintained by
prudent owners of comparable properties for comparable uses, the insurance
required above shall be so adjusted if either (A) the parties agree on the
adjustment, or (B) by ADR instituted by either party under Article 18, if it is
determined that the party requesting the change in insurance is correct in its
belief as aforesaid.
Section 4.2. Insurers; Form of Policy. All insurance provided for
under this Lease shall be effected under valid enforceable policies issued by
insurers of recognized responsibility who may legally issue such insurance in
the State in which the Premises is located, and reasonably acceptable in
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form, amount and content, to Landlord and, subject to Section 21.5, reasonably
acceptable to the Institutional Fee Mortgagee. Upon the execution of this Lease,
certificates in respect of the policies procured by Tenant pursuant to Section
4.1 shall be delivered to Landlord. Within fifteen (15) days after the execution
hereof Landlord shall be furnished with the original or certified copies of each
policy required hereunder. At least twenty (20) days prior to the expiration of
any policy required hereunder Tenant shall furnish Landlord with appropriate
proofs of the issuance of a policy continuing in force the insurance covered by
the policy so expiring. To the extent reasonably obtainable, all policies
referred to in Section 4.1 shall contain agreements by the insurers that (a) any
loss shall be payable to Landlord and to the holder of any Fee Mortgage to whom
loss may be payable as hereinafter provided, notwithstanding any act or
negligence of Tenant which might otherwise result in forfeiture of said
insurance, or affect the validity or enforceability thereof, (b) such policies
shall not be cancelled or materially modified except upon at least twenty (20)
days' prior written notice to each named insured and loss payee and (c) the
coverage afforded thereby shall not be affected by the performance of any work
in or about the Premises.
Section 4.3. Payment of Proceeds. (a) The insurance policy
described in Section 4.1(iv) shall name Landlord, any Fee Mortgagee and any
Mortgagee as additional insureds.
(b) The insurance policies described in Section 4.1(i), (ii) and
(iii) shall name Landlord, Tenant, any Fee Mortgage and any Mortgagee as named
insureds as their interests may appear and shall provide that proceeds shall be
paid to Landlord or any Fee Mortgagee, as their interests may appear, and not to
Tenant or any Mortgagee, which proceeds shall be held by Landlord or by any Fee
Mortgagee (but only if such Fee Mortgagee is neither a Fee Mortgagee on the date
hereof nor an Institutional Fee Mortgagee) pursuant to the terms of this Lease,
and shall, to the extent required by an Institutional Fee Mortgagee or a Fee
Mortgagee on the date hereof which is not an Institution, contain a standard,
non-contributory mortgagee clause or Lender Loss Payable Endorsement.
(c) So long as there shall be an Institutional Fee Mortgagee, any
rental value policy or similar policy for the Premises shall name such
Institutional Fee Mortgagee as the loss payee thereunder or if there shall be no
Institutional Fee Mortgagee then Tenant shall be named as the loss payee
thereunder. Upon receipt of such proceeds by an Institutional Fee Mortgagee,
such proceeds shall be deemed payments of Base Rent and Additional Rent
hereunder and shall be deemed to have been applied by the Institutional Fee
Mortgagee as provided in the next sentence; to the extent that such proceeds
relate to Impositions or insurance premiums, and the Institutional Fee Mortgagee
fails or refuses to apply the same to such Impositions or insurance premiums,
then Tenant shall have rights comparable
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to the rights specified in Section 3.7 as to payments on account of Impositions
which an Institutional Fee Mortgagee so fails to apply; the balance of any
proceeds after Restoration of the Buildings shall be promptly paid to Tenant
(or, if not so paid, Tenant shall be entitled offset the same against the next
Base Rent or Additional Rent due hereunder).
(d) All such policies shall expressly provide that loss thereunder
shall be adjusted and paid as provided in Section 4.4 and this Section. Any loss
paid to Landlord or Tenant which, pursuant to the requirements contained in this
Lease, should have been paid to the other party, or to any Fee Mortgagee, shall
be held by the receiving party in trust and shall be promptly turned over to the
person entitled thereto under this Lease.
Section 4.4. Adjustment of Loss. Landlord and Tenant shall cooperate
reasonably and in good faith and shall use their best efforts to cause any Fee
Mortgagee or Mortgagee to cooperate reasonably and in good faith to adjust any
loss under a policy of insurance required to be maintained by Tenant under this
Lease expeditiously and favorably, recognizing Landlord's ownership of the
Buildings and Tenant's obligation to effect restoration at its expense, without
an abatement of Base Rent and Additional Rent hereunder. Subject to the rights
of an Institutional Fee Mortgagee or a Fee Mortgagee on the date hereof which is
not an Institution (subject to Section 21.5), adjustment of any such loss shall
be subject to the consent of Landlord and Tenant, which consent shall not be
unreasonably withheld.
Section 4.5. Blanket Policies. Nothing in this Article shall prevent
Tenant from taking out insurance of the kind and in the amounts and with
companies provided for under Sections 4.1, under a blanket insurance policy or
policies which can cover other properties owned, leased or operated by Tenant
(or any Affiliate of Tenant) as well as the Premises; provided, that any such
policy of insurance provided for under Section 4.1(i) shall specify therein, or
Tenant shall furnish Landlord and the holder of any Fee Mortgage with a written
statement from the insurers under such policies specifying, the amount of the
total insurance allocated to the Buildings, which amount shall comply with the
requirements of Section 4.1. Tenant shall furnish to Landlord and to the holder
of any Fee Mortgagee, within thirty (30) days after the filing thereof with any
insurance rate-making body, copies of the schedule or make-up of all property
covered by every such policy of blanker insurance. Notwithstanding the
foregoing, subject to Section 21.5, if the taking out by Tenant of any such
blanket insurance policy would require the consent or waiver of an Institutional
Fee Mortgagee, so as not to constitute a default under the terms of an
Institutional Fee Mortgage, then Tenant must obtain such consent or waiver in
order to benefit from the provisions of this Section as to the insurance in
question.
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Section 4.6. Deductibles. All insurance provided for under Section
4.1(a) may contain loss deductible clauses in such reasonable and customary
maximum amounts as Landlord shall approve, which approval shall not be
unreasonably withheld. In the event of a dispute between Landlord and Tenant as
to the amount which may be deductible under a policy, or otherwise as to the
insurance required under this Article, such dispute shall be determined by ADR
in the manner provided in Article 18.
Section 4.7. Waiver of Subrogation. Landlord hereby waives its
rights of recovery against Tenant, its subtenants and their respective
successors and assigns for any losses to the Premises covered by fire and
extended coverage insurance (or otherwise covered by insurance maintained by
either party), but only to the extent of the actual recovery. In consideration
therefor, Tenant hereby waives its rights of recovery against Landlord, its
successors and assigns, for any losses to the Premises otherwise covered by
insurance maintained by either party), but only to the extent of the actual
recovery. The above referred to waivers shall only be applicable with respect to
loss or damage occurring during such time as the waiving party's policy shall
contain a clause or endorsement to the effect that any such waiver shall not
adversely affect or impair the right of the party so waiving from recovering
thereunder. Each party shall obtain from its insurance carriers, at its expense,
and will deliver to the other party waivers of the subrogation rights and the
statement described in the preceding sentence under its respective policies as
herein provided.
Section 4.8. Other Insurance. (a) Tenant may insure its own
property at the Premises in such manner as Tenant deems advisable and shall
be entitled to all proceeds therefrom.
(b) Neither Landlord nor Tenant shall carry any insurance concurrent
in coverage or contributory in the event of loss with any insurance which is
required to be carried by Tenant hereunder if the effect of such separate
insurance would be to reduce the protection or the payment to be made under the
insurance policy required to be maintained by Tenant hereunder. Landlord shall
immediately notify Tenant of the taking out of any such insurance and the terms
thereof.
ARTICLE 5.
RIGHT TO PERFORM OTHER PARTY'S COvenanTS -
ADDITIONAL RENT
Section 5.1. Right to Perform Other Party's Covenants. (a) If Tenant
shall default in the performance of any of Tenant's obligations under this
Lease, Landlord may perform the same at the expense of Tenant (i) immediately
and without notice in the case of (x) emergency, or (y) the taking of any action
required to prevent an
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imminent lapse or termination of any insurance policy required to be obtained by
Tenant hereunder, or (ii) if the taking of any action is required to prevent an
imminent default under any Fee Mortgage, and such default continues after three
(3) business days from the date of the giving by Landlord to Tenant of a notice
of Landlord's intention to so perform; and (iii) in any other case if Tenant
shall fail to remedy such default after Landlord shall have notified Tenant of
such default and the applicable grace period for curing such default shall have
expired, and such failure continues after three (3) business days from the date
of the giving by Landlord to Tenant of a further notice of Landlord's intention
to so perform; provided, however, that, in the case of a failure which for
causes beyond Tenant's reasonable control (the failure to pay money shall not be
deemed beyond a party's reasonable control) cannot with due diligence be cured
within such grace period, such grace period shall be deemed extended if Tenant
(x) shall promptly upon the receipt of such first notice, advise Landlord of
Tenant's intention to institute all steps necessary to cure such failure and (y)
shall institute and thereafter with reasonable dispatch prosecute to completion
all steps necessary to cure the same.
(b) If Landlord shall default in the performance of any of its
obligations under this Lease, Tenant may perform the same at the expense of
Landlord (i) immediately and without notice in the case of (x) emergency, (y)
the taking of any action required to prevent an imminent lapse or termination of
any insurance policy required to be obtained by Tenant hereunder due to such
default, or (z) the taking of any action required to prevent an imminent default
under any Mortgage (but will provide Landlord with prompt notice thereafter) and
(ii) in any other case if such failure continues after thirty (30) days from the
date of the giving by Tenant to Landlord of notice of intention so to perform
the same or, in the case of a failure which for causes beyond Landlord's
reasonable control (the failure to pay money shall not be deemed beyond a
party's reasonable control) cannot with due diligence be cured within such
thirty (30) day period, such thirty (30) day period shall be deemed extended if
Landlord (x) shall promptly upon the receipt of such notice, advise Tenant of
Landlord's intention to institute all steps necessary to cure such failure and
(y) shall institute and thereafter with reasonable dispatch prosecute to
completion all steps necessary to cure the same; provided that, at the
expiration of the period described in this clause (ii), such default continues
after three (3) business days from the date of the giving by Tenant to Landlord
of a further notice of Tenant's intention to perform the same.
Section 5.2. Reimbursement of Curing Party. All sums paid by either
party effecting a cure pursuant to Section 5.1 and all necessary incidental
costs and expenses paid or incurred by such party in connection with the
performance of any act by such party pursuant to said Section, together with
interest thereon from the date of making of such expenditure by such party at a
rate two (2%) percent above the Prime Rate, shall be payable by the other party
to such curing party within thirty (30) days
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after demand therefor accompanied by evidence reasonably establishing that the
expenditure has reasonably been made. Nothing contained herein shall be deemed
or construed to permit Tenant to make any set-off against Tenant's obligations
to pay Base Rent or Additional Rent, except as may otherwise be expressly
provided in this Lease.
ARTICLE 6.
USE; CONDITION OR PREMISES; COVENANTS AGAINST WASTE
AND TO REPAIR AND MAINTAIN THE PREMISES
Section 6.1. Use. (a) Tenant shall have the right to use the
Premises for (i) a motor vehicle dealership, vehicle showroom, vehicle storage,
used vehicle sales, vehicle body shop (but only if a vehicle body shop use was a
use of the Premises during December, 1991), service and maintenance facilities,
general, executive and administrative offices in connection with such uses, any
uses ancillary or customarily exercised in connection therewith, and (ii) any
other uses for which the Premises during December, 1991 were in fact used
(collectively, "Vehicle-Related Uses").
(b) During the period ending on the third (3rd) anniversary of the
Term Commencement Date, Tenant shall not use any material portion of the
Premises for a use other than as described in subsection (a) of this Section
without Landlord's consent, which consent Landlord may withhold in Landlord's
sole discretion.
(c) From and after the third (3rd) anniversary of the Term
Commencement Date, Tenant shall be entitled to use all or any portion of the
Premises for any lawful use other than as described, or in addition to those
described, in subsection (a) of this Section, provided that Tenant shall have
received Landlord's consent to such use, which consent Landlord shall not
unreasonably withhold (without limitation, it shall not be unreasonable for
Landlord to withhold its consent to such use if such use is disreputable, would
cause the Premises to become subject to compliance with the remedial provisions
of ECRA (or a similar state statute requiring environmental testing and/or
remediation) prior to the sale or other transfer of the Premises, upon the
occurrence of any assignment of this Lease or sublease of all or part of the
Premises, or upon the expiration or sooner termination of this Lease or
cessation of operations at the Premises, or would increase in any material
respect the risk of environmental contamination of the Premises, and it shall
not be unreasonable for Landlord to take into account any material adverse
effect of such change in use on contiguous properties owned by Landlord or
Affiliates of Landlord, including those which are subject to Group Leases). The
parties acknowledge that there is no agreement under this Lease that Tenant
shall use all or any portion of the Premises for any particular use or uses
during the term of this Lease. Any dispute between the parties
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under this subsection (c) or subsection (d) shall be determined by ADR as
provided in Article 18.
(d) Tenant shall not use or occupy or permit the Premises to be used
or occupied, nor do or permit anything to be done in or on the Premises, in
whole or in part, in a manner which in any way (i) violates any certificate of
occupancy affecting the Premises; (ii) violates or breaches the provisions of
any recorded easement, restriction or the like affecting the Premises on the
date hereof or entered into after the date hereof with the prior consent of
Tenant; (iii) violates any present or future law, rule or requirement of any
governmental, public or quasi public authority having jurisdiction over the
Premises; (iv) makes void or voidable any insurance in force with respect to the
Premises; or (v) constitutes a public or private nuisance.
Section 6.2. Condition of Premises. (a) The parties hereto hereby
acknowledge and agree that, except as otherwise provided in this Lease, in the
Master Agreement and in the other Transaction Agreements, Landlord is
delivering, and Tenant is accepting, the Premises in their "as is" condition on
the date hereof. Tenant acknowledges that it has inspected, examined and
investigated to its full satisfaction the Premises and the uses thereof and any
other matter of concern to Tenant with respect to the Premises, that Tenant
accepts the Premises in their present condition without any representation or
warranty whatsoever by Landlord, except as herein expressly provided, as to the
condition of the Premises or the value thereof or the utility thereof or
usefulness for any particular purpose or any other matter or thing relating in
any way to the Premises, and that Tenant acknowledges that Landlord has not made
and does not make, and Tenant is not relying upon, any representation or
warranty, except as herein expressly provided, as to the physical condition,
quality, value or character or any other matter relating to or affecting the
Premises. Nothing in this Lease, including in this Section, however, shall waive
or modify any of the obligations, rights or remedies of the parties to the
Master Agreement and the other Transaction Agreements pursuant to the Master
Agreement and the other Transaction Agreements.
(b) Landlord represents and warrants to Tenant as follows:
(i) The mortgages specified in Exhibit A are the only Fee
Mortgages encumbering or affecting all or any part of the Premises as of
the date hereof, and true and complete copies of the Fee Mortgage
documents or documents evidencing or affecting such lien, as in effect on
the date hereof, have been delivered to Tenant, nor, except as otherwise
provided in the Master Agreement, is any portion of the Premises subject
to a security interest, equipment lease, conditional sales agreement or
similar financing arrangement, or to a ground or underlying lease.
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(ii) The easements, restrictions and other matters of record
as of the date hereof, and any unrecorded agreements of a similar nature
to which Tenant would be subject hereunder, do not materially adversely
affect, individually or in the aggregate, the use of the Premises, as the
Premises were used in December, 1991.
(iii) The actual uses being made of the Premises during
December 1991 and the use of the Premises by Tenant on the date hereof for
the same uses were and are permitted by all applicable zoning Laws, or (if
not permitted by zoning laws) are lawful nonconforming uses, and all
certificates of occupancy required for such use in December 1991 were
obtained and were in full force and effect immediately prior to the
commencement of the Term.
(iv) To the actual knowledge of Landlord, Joseph C. DiFeo and
Samuel X. DiFeo, there are no material structural defects in the Premises
on the date hereof, except as set forth on Exhibit D.
(v) Landlord is a fee owner of the Premises and all prior
tenancies and rights of occupancy at the Premises or any part thereof have
been terminated.
(vi) The representations and warranties set forth on Exhibit E
are true, correct and complete as of the date hereof.
Section 6.3. No Waste. Tenant shall not cause or permit any
waste to the Premises.
Section 6.4. Maintenance and Repair. Tenant shall keep the Premises
and the adjoining sidewalks, curbs and any vaults clean and in good condition
and repair, free of accumulations of dirt, rubbish, snow and ice, and shall make
all necessary repairs and replacements, whether structural or non-structural,
interior or exterior, ordinary as well as extraordinary, foreseen as well as
unforeseen. Notwithstanding the foregoing, unless this Lease is assigned or the
Premises is sublet to a person or entity which is not an Affiliate of Tenant,
Tenant shall only be obligated hereunder to repair or maintain the Premises in
accordance with ordinary and prudent standards of repair and maintenance for
comparable uses. In the event of any dispute between the parties as to the
standard for the repair or maintenance of the Premises, the dispute shall be
resolved by ADR as provided in Article 18.
Section 6.5. Removal of Property. Tenant shall not remove or permit
the removal of any of the permanent furnishings or of any of the fixtures or
other property or equipment constituting a part of the Premises (other than
property of Tenant or other tenants or occupants of the Buildings or obsolescent
fixtures, property or equipment) unless other
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fixtures, property or equipment at least equal in value and utility shall be
promptly substituted therefor, provided this Section shall not apply if Tenant
demolishes existing Buildings and erects new Buildings on the Land, or a portion
thereof, in accordance with Article 10.
Section 6.6. Utilities and Services; Signage. (a) Landlord shall not
be responsible to furnish any utilities or services to the Premises, and shall
not be liable for any interruption or failure in the supply of any such utility
or service. The interruption or failure in the supply of any such utility or
service or the inability to obtain such utility or service shall not affect,
alter, negate or diminish Tenant's obligations hereunder.
(b) Tenant shall make its own arrangements with the appropriate
utility companies supplying electricity, water, gas, steam, telephone and other
utilities to the Premises, and for garbage disposal from the Premises, and shall
arrange to have all bills for such utilities or services to be forwarded
directly to Tenant. Tenant shall pay when due all charges for such utilities or
services accruing during the term of this Lease.
(c) Subject to Landlord's consent, which Landlord shall not
unreasonably withhold, Tenant shall have the right to enter into agreements with
public utility companies and municipal and other governmental authorities,
agencies and departments creating such easements or other similar rights in
favor thereof, or to apply for permits, licenses, certificates or other
governmental or quasi-governmental authorizations relating to Alterations or the
use and operation of the Premises ("Permits"), as may be necessary or convenient
to the use or servicing of the Premises or the making of any Alterations
required or permitted hereunder; provided, however, that Landlord shall have the
right, in its sole and absolute discretion, to withhold granting its consent to
any zoning variance which would have the effect of prohibiting any use being
made of the Premises in December, 1991. If pursuant to this Lease Landlord shall
consent (or shall be deemed hereunder to have consented or shall be required by
ADR to consent) thereto, Landlord shall, at Tenant's expense, (i) cooperate with
Tenant in obtaining any necessary consent of any mortgagee or ground or
underlying lessee to such agreements, (ii) join in any request for such consent
or Permit or permit the same to be brought in Landlord's name (if necessary to
obtain such consent or Permit or to effectuate such agreement), or (iii) join in
any such agreement. Landlord shall incur no liability for the payment of any
costs or expenses in connection with Landlord's review, execution and delivery
of the same, or involvement with respect to the same, and Tenant shall indemnify
and hold harmless Landlord and, within thirty (30) days after demand, reimburse
Landlord, from any such costs or expenses.
(d) Tenant, at its expense and subject to compliance with applicable
Laws pursuant to Article 7, and subject to the
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applicable provisions of Article 10, shall be entitled to construct and maintain
such signage at the Premises as Tenant shall elect to construct and maintain.
ARTICLE 7.
COMPLIANCE WITH LAWS
Section 7.1. Compliance with Laws. (a) Subject to the provisions of
subsections (b) and (c) hereof, Tenant shall, at its sole cost and expense,
promptly comply with all present and future laws and ordinances and the orders,
rules, regulations and requirements of all federal, state and municipal
governments and appropriate departments, commissions, boards and officers
thereof, which may be applicable to the Premises and the sidewalks, curbs and
vaults adjoining the same or to the use or manner of use of the Premises,
whether or not such requirement shall be foreseen or unforeseen, ordinary or
extraordinary (collectively, "Laws").
(b) Notwithstanding anything in this Lease to the contrary, Tenant
shall not be in default hereunder if Tenant shall fail to comply with any Law to
the extent that the Premises, or their use, prior to the Term Commencement Date,
were not in compliance with such Law, except to the extent that Tenant is
otherwise obligated to comply with such Law pursuant to the Master Agreement or
the other Transaction Agreements.
(c) If the Premises and the use thereof for the actual uses of the
Premises during December 1991 are not, on the day preceding the date hereof, in
compliance with all Laws (such non-compliance being hereinafter referred to as
"Non-Compliance"), and if Non-Compliance is not Tenant's responsibility to
correct pursuant to the Master Agreement and the other Transaction Agreements,
or this Lease, Landlord shall, at its sole cost and expense (but subject to the
cost sharing provisions provided for in Section 4.231 of the Master Agreement),
after receipt of notice from Tenant of the specifics of such Non-Compliance,
institute steps necessary to cure such Non-Compliance and proceed with
reasonable dispatch to effectuate the same. Nothing contained herein shall be
deemed or construed to obligate Landlord to make any changes, alterations or
repairs to the structural elements of the Premises unless the existence of the
condition which causes the need to make the same constitutes a violation of the
warranty and representation contained in Section 6.2(b)(iv) hereof. The Premises
shall not be deemed to be in Non-Compliance (that is, shall be deemed to be in
compliance) if on the date hereof the time by which such Law must be complied
with had not expired, although such Law had been enacted. If by reason of such
Non-Compliance a governmental authority or agency takes action or refuses to
take action (any such action or refusal, including a refusal to permit the
transfer or continued effectiveness of any certificate of occupancy or other
license or permit, being herein called a "Governmental Action"), which
Governmental Action materially adversely interferes with Tenant's
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ability to use the Premises for the uses for which the Premises during December,
1991 were in fact used ("December Uses"), then there shall be an equitable
reduction of the Base Rent and Additional Rent until such time as the material
interference caused by the Non-Compliance has been eliminated, which reduction
shall not, however, extend beyond six (6) months from the date Tenant notifies
Landlord of such Non-Compliance or Governmental Action. If, by reason of the
Non-Compliance or Governmental Action, Tenant's use of the Premises for the
December Uses is materially adversely interfered with for a period of six (6)
consecutive months after the date of such notice, then Tenant shall have the
right, prior to the cessation of such material interference as its sole remedy
with respect to such Non-Compliance, to terminate this Lease, in which event
neither party hereto shall have any further liability or obligation to the other
under this Lease except those which are expressly stated to survive the
expiration or sooner termination of this Lease. Any notice by Tenant to Landlord
advising of Non-Compliance must be given by six (6) months after the date hereof
and must specifically identify the Non-Compliance, failing which Landlord shall
have no responsibility to Tenant under this Section with respect to such
Non-Compliance. The provisions contained in this subsection shall not be
applicable to any environmental or other matters which are the subject matter of
Section 22 of this Lease and the rights and obligations of the parties with
respect to such matters shall be governed by that Section of this Lease and not
by this subsection.
(d) Notwithstanding anything in this Lease to the contrary, in the
event that any representation or warranty of Landlord set forth in Section
6.2(b)(ii), (iii) or (v) are false or incorrect when made (an "Inaccuracy") in
any material respect, then Landlord shall, in its sole expense (but subject to
the cost sharing provisions contained in the Master Agreement) after receipt of
the notice from Tenant of the specifics of the Inaccuracy institute steps
necessary to cure the same and proceed with reasonable dispatch to effectuate
the same. If, by reason of such Inaccuracy, Tenant's ability to use the Premises
for the December Uses is materially adversely interfered with then there shall
be an equitable reduction of the Base Rent and Additional Rent until such time
as the material interference caused by the Inaccuracy has been eliminated, which
reduction shall not extend beyond six months from the date Tenant notifies
Landlord of such Inaccuracy. If by reason of the Inaccuracy the Tenant's use of
the Premises for the December Uses is materially adversely interfered with for a
period of six (6) consecutive months from the date of such notice, then Tenant
shall have the right, prior to the cessation of such material interference, as
its sole remedy with respect to such Inaccuracy, to terminate this Lease in
which event neither party hereto shall have any further liability or obligation
to the other under this Lease except those which are expressly stated to survive
the expiration or sooner termination of this Lease. Any notice by Tenant to
Landlord advising of the Inaccuracy must be given by six (6)
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months from the date of this Lease and must specifically identify the
Inaccuracy, failing which Landlord shall have no responsibility to Tenant
hereunder with respect to any Inaccuracy.
Section 7.2. Right to Contest Laws. Tenant shall have the right,
after prior notice to Landlord, to contest by appropriate legal proceedings, in
the name of Tenant or Landlord (but only if legally required to so contest) or
both, without cost or expense to Landlord, the validity or application of any
Laws, and if, by the terms of any such Law, compliance therewith pending the
prosecution of any such proceeding may legally be held in abeyance without the
incurrence of a lien, charge or liability of any kind against the Premises or
Tenant's leasehold interest therein and without subjecting Tenant or Landlord to
any criminal liability or (unless Tenant shall indemnify Landlord therefor)
civil liability for failure so to comply therewith, and without adversely
affecting any insurance policy required to be obtained by Tenant hereunder,
Tenant may postpone compliance therewith until the final determination of any
proceedings, provided that all such proceedings shall be prosecuted with due
diligence and dispatch, and if any lien, charge or civil liability is incurred
by reason of non-compliance, Tenant may nevertheless make the contest and delay
compliance as aforesaid, provided that Tenant furnishes to Landlord security,
reasonably satisfactory to Landlord, against any loss or injury by reason of
such non-compliance or delay and prosecutes the contest with due diligence.
Landlord shall, at the cost and expense of Tenant, execute and deliver any
papers which may be necessary or proper to permit Tenant to contest the validity
or application of any such Law. In the event that a contest is not concluded
prior to the expiration of the Term of this Lease, if at the termination of the
contest a determination is to the effect that some or all of the work in
question should have been or must be performed, Tenant shall pay to Landlord a
sum sufficient to pay for the cost of the work required to be performed. This
provision shall survive the termination or sooner expiration of this Lease.
Notwithstanding anything to the contrary contained herein, Tenant's right to
contest the validity or applicability of any Law is subject to the applicable
provisions contained in any Institutional Fee Mortgage, subject to Section 21.5,
and shall be limited thereby and shall be subject to compliance with the
requirements thereof.
Section 7.3. Tenant's Termination Right. If Tenant is, or would be,
required to do any work or incur any expenses to comply with the requirements of
Section 7.1 during the last year of the Term which, in Tenant's reasonable
judgment will, in the aggregate cost more than one-half of the Base Rent payable
for the then remainder of such Term, Tenant may, by notice to Landlord, decline
to comply with such requirements, and upon giving of such notice, Tenant shall
not be obligated to comply with the same (but Landlord, at the cost and expense
of Landlord, may comply with same), but this Lease shall not be otherwise
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affected. Notwithstanding the foregoing, the provisions of this Section 7.3
shall not be applicable if the Law which must be complied with became effective
and required compliance to be effected prior to the last year of the Term.
Section 7.4. Arbitration as to Laws. In the event of any dispute
between the parties as to an issue covered by this Article, the matter shall be
resolved by ADR as provided in Article 18.
ARTICLE 8.
DAMAGE TO OR DESTRUCTION OF THE BUILDINGS
Section 8.1. Restoration and Repair. (a) In case of damage to or
destruction of the Buildings, in whole or in part, by fire or any other cause,
similar or dissimilar (a "Casualty"), Tenant shall, regardless of the
availability of insurance proceeds (but subject to Section 8.5), restore,
repair, replace or rebuild the Buildings as nearly as may be reasonably possible
to the condition, quality and class the same were in immediately prior to such
damage or destruction, or with such changes or alterations as Tenant shall elect
to make in conformity with Article 10. Such restoration, repairs, replacement or
rebuilding shall be commenced with reasonable promptness and prosecuted with
reasonable diligence.
(b) Provided that there does not then exist an Event of Default
hereunder, all insurance money collected by Landlord or Tenant from any policy
of insurance maintained by Tenant pursuant to Article 4 on account of such
Casualty, less the cost, if any, incurred in connection with the adjustment of
the loss and the collection thereof (herein sometimes referred to as the
"insurance proceeds"), shall be held in an interest bearing account by an
Institutional Fee Mortgagee (as provided in Section 11.1) or, if there is no
such Institutional Fee Mortgagee, by an Institution, as insurance trustee,
selected by Landlord and reasonably approved by Tenant, shall be applied to the
payment of the cost of rebuilding, and shall be paid out to or for the account
of Tenant from time to time, upon requisition by Tenant, as such work
progresses, subject to Article 10 and Article 11. However, if the insurance
proceeds for any Casualty are less than $50,000, such insurance proceeds shall
be paid to Tenant, and shall be held by Tenant in trust for the purpose of
paying the cost of such reconstruction.
(c) Upon Landlord's receipt of evidence reasonably acceptable to it
that the reconstruction has been completed and paid for in full, that there are
no liens on the Premises as a result thereof, that reconstruction has been
completed in a good and workmanlike manner, in accordance in all material
respects with applicable Laws and in substantial accordance with plans and
specifications theretofore submitted to (and if required hereunder approved by)
Landlord, and that a certificate of occupancy, if required by Law, has been
issued or is otherwise in
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effect with respect to such reconstruction, Landlord shall pay or cause to be
paid to Tenant any remaining balance of said insurance proceeds.
Section 8.2. No Abatement. No provision of this Article shall be
construed to entitle Tenant to any abatement, allowance, reduction or suspension
of Base Rent or Additional Rent, unless this Lease is terminated as herein
provided.
Section 8.3. Termination. If the Premises are damaged to such an
extent that the cost to repair and restore will exceed one-half of the Base Rent
payable for the then remainder of the Term or repair and restoration will take
longer than ninety (90) days to complete and in either case the damage occurs in
the last year of the Term, Tenant may by notice to Landlord given within thirty
(30) days after the occurrence of such damage terminate this Lease effective as
of a date specified in such notice, not earlier than thirty (30) days after the
date of such notice, and upon such effective date this Lease shall terminate as
if such date were the scheduled dated for expiration of the Term, but Tenant
shall remain liable to pay the Base Rent and Additional Rent relating to
Impositions and insurance premiums due hereunder until the originally scheduled
date for such expiration.
Section 8.4. Notice of Casualty. Tenant shall immediately
notify Landlord of the occurrence of a casualty.
Section 8.5. Issues Relating to Insurance Proceeds. (a) Tenant
acknowledges that Tenant bears the risk that the insurance coverage maintained
by Tenant shall be insufficient to provide the funds required to effect
restoration of the Buildings after a casualty (including due to the financial
inability of the insurance carrier to pay the same).
(b) If a casualty occurs, Landlord will use its best efforts (but
Landlord shall not be obligated to give up any right or to make any payment to
the Fee Mortgagee, unless Tenant shall agree to be responsible for such payment)
to cause any Fee Mortgagee to agree to apply, and thereafter to apply, the
applicable insurance proceeds to restoration on terms consistent with those
which a sophisticated Institutional Fee Mortgagee would customarily impose
("Customary Conditions"), so long as Tenant is not in default beyond applicable
grace periods in its obligations hereunder.
(c) If any of the following events shall occur:
(A) Within sixty (60) days after a casualty shall have
occurred and the insurance proceeds are made available by the insurer for
restoration, the Fee Mortgagee shall not agree to make such proceeds
available for restoration on Customary Conditions or if thereafter for a
period in excess of sixty (60) days such Fee Mortgagee shall refuse to so
apply all or any portion of the insurance proceeds (unless
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such refusal to agree is due to (x) an Event of Default by Tenant
hereunder unless Tenant is disputing the existence of such Event of
Default as hereinafter provided or (y) a failure by Tenant to comply with
the Customary Conditions); or
(B) The Fee Mortgagee shall apply any such insurance proceeds
to the payment, in whole or in part, of the indebtedness secured by the
Fee Mortgage in question (unless caused by a default by Tenant hereunder
beyond applicable grace periods); or
(C) Due to the negligence or willful misconduct of Landlord or
such Fee Mortgagee, or a default by Landlord hereunder beyond applicable
grace periods, a reasonable amount of insurance proceeds under the
circumstances cannot be obtained under the policies of insurance
maintained by Tenant within a reasonable period of time under the
circumstances; or
(D) If the insurance proceeds are within Landlord's control
and Landlord refuses to apply the same toward restoration in accordance
with Customary Conditions, unless such refusal is due to an Event of
Default then existing under this lease;
and, in addition, if within sixty (60) days thereafter (thirty (30) days
thereafter in respect of clause (D) above) Landlord does not make available the
proceeds in question to Tenant, then Tenant, by notice to Landlord, may
terminate this Lease on a date specified in such notice, and upon such date this
Lease shall terminate, as if such date were the scheduled expiration date of
this Lease, and in such event neither party shall have any further obligations
to the other party hereunder.
ARTICLE 9.
CONDEMNATION
Section 9.1. Condemnation. (a) If there shall be a total taking or a
Constructive Total Taking of the fee title to the Premises in condemnation
proceedings, by deed in lieu of condemnation or by any right of eminent domain,
this Lease shall terminate on the date of such taking and the Base Rent and
other charges payable by Tenant hereunder shall be apportioned and paid to the
date of such taking. "Constructive Total Taking" means a taking of less than all
of the Premises, but of such scope that the untaken portion of the Premises is
insufficient or has insufficient access to public streets to permit the
restoration of the existing Buildings so as to constitute an economically viable
property for the conduct of Tenant's business.
(b) If a Constructive Total Taking shall occur and this Lease is
terminated, then from and after the date of such termination for the remainder
what would have been of the then-
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current Term of this Lease absent such termination, Tenant shall pay to
Landlord, in equal monthly installments on the same dates as Base Rent would
have been payable hereunder, a sum per annum equal to the "Annual CTT Payment."
For such purposes, the Base Rent hereunder shall first be recomputed pursuant to
Section 9.5, as if the Constructive Total Taking were a partial taking subject
to Section 9.3, and the Annual CTT Payment shall be equal to fifty (50%) percent
of the annual Base Rent and Impositions for the Premises, as so recomputed.
Notwithstanding the foregoing, Tenant's obligation to pay the Annual CTT Payment
shall cease if a circumstance occurs to the remaining Premises analogous to a
circumstance described in Section 3(e)(iii)(A) or (B) of the Rent Adjustment and
Takeback Agreement. Any dispute between the parties pursuant to this Section
shall be reduced by ADR pursuant to Article 18. Tenant's failure to pay these
sums, subject to grace periods comparable to those set forth in Article 15 for a
failure by Tenant to pay Base Rent hereunder, shall be deemed an Event of
Default for purposes of Section 15.1(c) notwithstanding that this Lease may be
deemed to have been terminated.
Section 9.2. Condemnation Award. In the event of any such total
taking or Constructive Total Taking, the award or awards for said taking, less
the cost of the determination of the amount thereof (the "Condemnation
Proceeds"), shall be paid to Landlord, who shall be entitled to receive the
entire award with respect to any taking, without deduction therefrom for any
estate vested in Tenant other than with respect to Tenant's property as
described in Section 10.3 and for Tenant's moving expenses ("Tenant's Share")
and Tenant shall receive no part of such award other than Tenant's Share. Tenant
hereby assigns to Landlord all of its right, title and interest in and to such
award (other than to Tenant's Share). Tenant may, at its sole cost and expense,
make a claim with the condemning authority for Tenant's Share and, provided that
Landlord's award is not thereby reduced or otherwise adversely affected, for
other sums to which Tenant may be entitled under applicable law.
Section 9.3. Partial Condemnation. In the event of a taking which is
less than a Constructive Total Taking, this Lease shall not terminate or be
affected in any way, except as provided in Section 9.5, and the Condemnation
Proceeds shall be paid as follows:
(a) The portion of the Condemnation Proceeds with interest thereon
as shall be awarded for or shall be required for restoration of the
Buildings shall be payable (i) so long as there shall be an Institutional
Fee Mortgagee, to such Institutional Fee Mortgagee, or (ii) if there shall
be no Institutional Fee Mortgagee, in trust to Landlord for application by
Tenant to the cost of restoring, repairing, replacing or rebuilding the
Buildings. Such portion of the Condemnation Proceeds shall be held and
disbursed as Deposited Sums, in the same manner as insurance
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proceeds are treated in accordance with Article 10 and Article 11.
(b) The Remainder of the Condemnation Proceeds shall be treated
as provided in Section 9.2.
Section 9.4. Restoration and Repair. In the event of a taking less
than a Constructive Total Taking, Tenant shall, to the extent Condemnation
Proceeds are available, proceed with due diligence to restore, repair, replace
or rebuild the remaining part of the Buildings to substantially their former
condition or with such changes or alterations as Tenant may elect to make in
conformity with Article 10 so as to constitute a complete, usable building and
property. For that purpose, the provisions of Section 8.5(b) and (c) shall be
applicable, except that references to casualty and to insurance proceeds shall
be deemed references to condemnation and to Condemnation Proceeds, and the
following clause (E) shall be deemed added to Section 8.5(c): "(E) If sufficient
Condemnation Proceeds for restoration are not obtained from the condemning
authority within a reasonable period of time under the circumstances and the
cost of restoration is more than 110% of the Condemnation Proceeds obtained and
available for restoration;".
Section 9.5. Abatement of Rent. In the event of a taking of the
character referred to in Section 9.3, this Lease shall terminate as to the
portion of the Premises so taken and from and after the date of such taking a
just proportion of the Base Rent, according to the extent and nature of such
taking, shall abate for the remainder of the Term. If Landlord and Tenant cannot
agree on the amount of such abatement of rent, such dispute shall be determined
by ADR as provided in Article 18. Until the amount of the reduction of the Base
Rent shall have been determined, Tenant shall continue to pay to Landlord the
Base Rent provided for herein; when the amount of the abatement shall have been
agreed upon or determined, Landlord shall permit Tenant to credit against the
next installments of Base Rent due hereunder (to the extent thereof), or shall
refund to Tenant, the amount of the Base Rent paid from the date of the taking
which is in excess of the amount to which the Base Rent has been reduced by such
abatement, together with interest thereon at the Prime Rate for the period from
the date the Base Rent was paid until the date of reimbursement to Tenant.
Section 9.6. Temporary Taking. If the whole or any part of the
Premises, or of Tenant's leasehold estate under this Lease, shall be taken in
condemnation proceedings or by any right of eminent domain for temporary use or
occupancy (for these purposes, for a period of twelve (12) months or less), the
foregoing provisions of this Article shall not apply and Tenant shall continue
to pay, in the manner and at the times herein specified, the full amounts of the
Base Rent and all additional rent and other charges payable by Tenant hereunder,
and, except only to the extent that Tenant may be prevented from so doing
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pursuant to the terms of the order of the condemning authority, Tenant shall
perform and observe all of the other terms, covenants, conditions and
obligations hereof upon the part of Tenant to be performed and observed, as
though such taking had not occurred. Tenant shall be entitled to receive the
entire amount of the Condemnation Proceeds made for such taking, whether paid by
way of damages, rent or otherwise, unless such period of temporary use or
occupancy shall extend beyond the expiration or termination of this Lease, in
which case the Condemnation Proceeds shall be apportioned between Landlord and
Tenant upon receipt thereof as of the date of the expiration or termination of
this Lease; provided, however, that the portion of such award which represents
reimbursement for the cost of restoration (and is not required to pay Base Rent
or Additional Rent accruing hereunder during the period of temporary taking)
shall be used by Tenant to pay or to reimburse Tenant for payments of the costs
of restoration and shall be treated hereunder as provided in Section 9.4. Tenant
shall, upon the expiration of any such period of temporary use or occupancy
during the Term and to the extent Condemnation Proceeds are available for the
purpose, restore the Buildings, as nearly as may be reasonably practicable, to
the condition in which the same were immediately prior to such taking, subject
to Section 9.4. The provisions of Section 4.3(c) shall apply, with appropriate
modifications to reflect the difference between rent insurance proceeds and
Condemnation Proceeds for a temporary taking.
Section 9.7. Allocation of Award. If the order or decree in any
condemnation or similar proceeding shall fail separately to state the amount to
be awarded to Landlord and the amount to be awarded to Tenant under this
Article, or the amount of the compensation for the restoration of the Buildings
under this Article, and if Landlord and Tenant cannot agree thereon within
thirty (30) days after the final award or awards shall have been fixed and
determined, any such dispute shall be determined by ADR in the manner provided
in Article 18.
Section 9.8. Assignments of Condemnation Proceeds. Tenant shall be
entitled to assign to the holder of any Mortgage any Condemnation Proceeds to
which it shall be entitled under this Article and Landlord shall recognize such
assignment and shall consent to the payment of said Condemnation Proceeds to
said assignee as its interest may appear. Nothing in this Section 9.8 shall
grant a Mortgagee any greater rights than Tenant possesses under this Article.
Section 9.9. Participation in Condemnation Proceedings. Tenant and
the holder of any Mortgage or Fee Mortgage shall have the right to participate
in any condemnation proceeding for the purpose of protecting their rights
hereunder (consistent with the above); provided, however, that Landlord shall
have the sole right to settle such condemnation proceeding, but Tenant shall not
be bound by any determination in such proceeding as to, and shall have the right
to dispute, by ADR as
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provided in Article 18, the portion of any Condemnation Proceeds to which Tenant
is entitled under this Article.
ARTICLE 10.
CHANGES AND ALTERATIONS
Section 10.1. Alterations. Tenant shall have the right, at any time
and from time to time, to make such changes and alterations, structural or
otherwise, to the Buildings as Tenant shall deem necessary or desirable,
including the right to increase or reduce the height of the buildings, or to
demolish the Buildings, or any part thereof, provided that in the case of any
demolition Tenant shall erect in substitution thereof a new building or (in the
event of the demolition of part of a Building) a new part thereof. Such changes,
alterations, demolition or new construction (collectively, "Alterations") shall
be made in all cases subject to the following conditions:
(a) no Alterations shall be undertaken until Tenant shall have
procured and paid for, so far as the same may be required from time to
time, all municipal and other governmental permits and authorizations of
the various municipal departments and governmental subdivisions having
jurisdiction, and Landlord shall join, at Tenant's expense, in the
application for such permits or authorizations whenever such action is
necessary;
(b) any structural Alterations, or any Alterations undertaken as a
single project and involving an estimated cost aggregating more than
$75,000, shall be conducted under the supervision of an architect or
engineer (who may be an employee of Tenant) selected by Tenant, and no
such work shall be undertaken until ten (10) business days after plans and
specifications and budget estimates therefor, prepared and approved in
writing by such architect or engineer shall have been submitted to
Landlord;
(c) all Alterations shall be of such a character that, when
completed, the value of the Buildings shall be not less than the value of
the Buildings immediately before any such Alterations;
(d) all work done in connection with any Alterations shall be done
in a good and workmanlike manner, in compliance with applicable Laws, and
in substantial accordance with the plans and specifications submitted to
Landlord;
(e) workmen's compensation insurance covering all persons employed
in connection therewith and with respect to whom death or bodily injury
claims could be asserted against Landlord, Tenant or the Premises and
general liability and property damage insurance, and insurance covering
all risks generally related to construction and which would reasonably
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be required by a prudent Institutional Fee Mortgagee for similar
construction (which may be effected by endorsement, if obtainable, on the
insurance required to be carried pursuant to Section 4.1) for the mutual
benefit of Landlord, any Fee Mortgagee, and Tenant with limits of not less
than those required to be carried pursuant to Section 4.1 shall be
maintained by Tenant at all times when any work is in process in
connection with any Alterations, and evidence of the procuring of such
policies shall be submitted to Landlord before construction of any such
Alteration is commenced;
(f) any structural Alterations, including Alterations which involve
the demolition and reconstruction of any material structure on the
Premises, shall be subject to Landlord's consent, which consent shall not
be unreasonably withheld by Landlord (in the case of the demolition and
reconstruction of any material structure on the Premises, it shall not be
unreasonable for Landlord to withhold its consent if Tenant cannot
reasonably demonstrate that Tenant has obtained or can obtain the funds
required to pay the cost of such demolition or reconstruction and it shall
not be unreasonable for Landlord to take account any material adverse
effect of such Alterations on contiguous properties owned by Landlord or
Affiliates of Landlord, including those properties which are subject to
Group Leases);
(g) subject to Section 10.3, all Alterations shall immediately upon
installation become Landlord's property and shall remain on and be
surrendered with the Premises as part thereof at the termination of this
Lease;
(h) the cost of any Alteration shall be paid by Tenant so that,
subject to Article 12, the Premises shall at all times be free of liens
for labor and materials supplied or claimed to have been supplied to the
Premises in connection with such Alteration;
(i) within a reasonable time after completion of any Alteration,
Tenant shall provide Landlord with complete as-built mylar drawing
thereof, if such drawings were prepared for Tenant, and otherwise with
such final plans and specification for such Alteration as are in Tenant's
possession;
(j) any Alterations commenced by Tenant shall be prosecuted
diligently to completion by Tenant; and
(k) Subject to Section 21.5, any Alterations (i) shall be subject to
the consent of any Institutional Fee Mortgagee if and to the extent
required under the Institutional Fee Mortgage in question, and (ii) shall
be performed in compliance with the applicable requirements of the
Institutional Fee Mortgage in question.
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Any dispute under this Section shall be determined by arbitration in the manner
provided in Article 18.
Section 10.2. Applicability of Conditions. In performing any work or
repairs to, or restoration, replacement or rebuilding of, the Buildings required
to be performed by Tenant under Article 6, 7, 8 or 9, Tenant shall observe and
perform, in so far as the nature of such repairs, restoration, replacement or
rebuilding make such observance and performance appropriate, the conditions
relating to changes or alterations set forth in Section 10.1.
Section 10.3. Tenant's Property. All items of personal property, all
business and trade fixtures and equipment and any other property of Tenant at
the Premises which is not a part of any structure or building system, or
required for the operation of any building as a building, shall remain the
property of Tenant and shall be removed by Tenant at any time prior to the
expiration or sooner termination of this Lease. Tenant, at its expense, shall
repair any damage to the Building caused by any such removal. Tenant's property
shall include (a) equipment (for example, hoists) installed by Tenant and not
required for the use and operation of the Buildings as buildings and (b) any
property transferred to Tenant pursuant to the Master Agreement and the other
Transaction Agreements. Any of the foregoing enumerated property of Tenant which
shall remain in the Premises within thirty (30) days after the expiration or
sooner termination of this Lease (but the foregoing provision shall not relieve
Tenant of any obligations or liabilities hereunder on account of such holdover)
may, at the option of Landlord, subject to Section 10.4, be deemed abandoned and
may either be retained by Landlord as its property or be promptly disposed of
without accountability as Landlord sees fit and Tenant shall reimburse Landlord,
within thirty (30) days after demand, for the reasonable costs and expenses
incurred by Landlord in such disposal.
Section 10.4. Liens on Tenant's Property. (a) Except as otherwise
provided in Section 14.2(c) with respect to a Mortgage, and as provided in
subsection (b) of this Section, all property installed by Tenant in the Premises
shall be installed and maintained free and clear of any liens, encumbrances and
security interests.
(b) Notwithstanding subsection (a) of this Section, Tenant may
install and maintain items of Tenant's property in the Premises subject to
conditional sales agreements, equipment leases and similar financing, provided
that (i) the removal of such property, if not movable personal property, would
not adversely affect the value of the Buildings as real estate (as opposed to
their value for a particular use) and would not adversely affect the operation,
function, or use of the Buildings as buildings, (ii) Tenant agrees to restore
any damage to the Premises caused by the removal thereof, and (iii) the term of
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such financing does not extend beyond the then-scheduled expiration date of the
Term. The other party to such conditional sales agreement, equipment lease or
similar financing shall have the right to remove the property in question from
the Premises within thirty (30) days after the expiration or ninety (90) days
after the sooner termination of the Term, but this sentence shall not relieve
Tenant of any obligations or liabilities hereunder on account of such holdover.
ARTICLE 11.
DISBURSEMENT OF DEPOSITED MONEYS
Section 11.1. Deposited Sums. All sums (collectively, the "Deposited
Sums") paid to or deposited with an Institutional Fee Mortgagee or to an
Institution described in Section 8.1 (the "Depositary"), shall be disbursed in
the manner hereinafter provided.
Section 11.2. Disbursement. From time to time as the restoration,
repair, replacement or rebuilding of any Buildings or any portion thereof
damaged or destroyed by fire or any other cause, or not taken in a proceeding of
the character described in Section 9.3, progresses (collectively, the "Work"),
disbursement of the Deposited Sums shall be made in accordance with good and
sophisticated construction lending practices which a prudent Institutional Fee
Mortgagee would adopt in order to insure that the work shall be completed in a
good and workmanlike manner, shall be paid for in full, shall be completed free
of any lien against the Premises, and shall be completed in accordance with
applicable law and in substantial accordance with the plans and specifications
submitted to (and if required hereunder, approved by) Landlord. In the event
that a reputable independent architect or engineer selected by Landlord and
reasonably approved by Tenant shall determine or if (subject to Section 21.5)
the Institutional Fee Mortgagee or a Fee Mortgagee on the date hereof which is
not an Institution, shall determine, as provided in the applicable Fee Mortgage,
that the Deposited Sums are insufficient to pay for the cost to complete the
Work, (i) Tenant shall be responsible for paying for any such shortfall (which
obligation shall survive the expiration or sooner termination of this Lease),
and (ii) no further disbursement of the Deposited Sum shall be made until Tenant
shall have deposited with the Institution cash, cash equivalents or other
security for the shortfall, which deposit shall be made promptly after demand
therefor by Landlord, and shall be treated in the same manner as the Deposited
Sums are treated (but any unused portion thereof shall in all events be returned
to Tenant upon completion of the Restoration in question). At any time after the
completion of the work the balance of the Deposited Sums shall be disbursed to
Tenant (and Tenant may retain any insurance proceeds held by Tenant).
Section 11.3. Disbursement After Default. If this Lease shall be
terminated pursuant to Section 15.1 prior to the
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disbursement of the Deposited Sums or any part thereof, Landlord may notify the
Depositary thereof and thereupon the Depositary shall have no further right or
obligation to disburse any of the Deposited Sums to Tenant, but shall disburse
the same to or for the account of Landlord upon Landlord's direction so to do,
provided that if Tenant disputes the termination of this Lease, the Depositary
shall take no action until the issue is resolved between Landlord and Tenant by
ADR as provided in Article 18.
Section 11.4. Expenses of Depositary. The Depositary shall have
the right to deduct from the Deposited Sums its reasonable charges for acting
as Depositary hereunder.
ARTICLE 12.
MECHANICS' LIENS
Tenant shall not suffer or permit any mechanics' liens to be filed
against the Premises, nor against Tenant's leasehold estate hereunder, by reason
of work, labor, services or materials supplied or claimed to have been supplied
to Tenant or anyone holding any interest in the Premises or any part thereof
through or under Tenant. If any such mechanic's lien shall at any time be filed
against the Premises, Tenant shall, within thirty (30) days after notice of the
filing thereof, or sooner and within ten (10) days after demand from Landlord if
required in order to close a sale or financing involving the Premises (and which
notice shall refer to such ten (10) day period and this sentence), cause the
same to be discharged of record by payment, deposit, bond, order of a court of
competent jurisdiction or otherwise. If Tenant shall fail to cause such lien to
be discharged within the period aforesaid, then Landlord may (without complying
with any other provision contained in this Lease) discharge the same either by
paying the amount claimed to be due or by procuring the discharge of such lien
by deposit or by bonding proceedings, and in any such event Landlord shall be
entitled, if Landlord so elects, to compel the prosecution of an action for the
foreclosure of such lien by the lienor and to pay the amount of the judgment in
favor of the lienor with interest, costs and allowance. Nothing in this Lease
contained shall be deemed or construed in any way as constituting the consent or
request of Landlord, express or implied, by inference or otherwise, to any
contractor, subcontractor, laborer or materialman for the performance of any
labor or the furnishing of any materials for any specific improvement,
alteration to or repair of the Premises or any part thereof, nor as giving
Tenant a right, power or authority to contract for or permit the rendering of
any services or the furnishing of any materials that would give rise to the
filing or any mechanic's lien against the Premises.
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ARTICLE 13.
SURRENDER OF THE PREMISES;
INSPECTION OF THE PREMISES
Section 13.1. Surrender. Upon the expiration or sooner termination
of this Lease, Tenant shall surrender to Landlord the Premises, free of
subtenants (except as provided in Section 14.7), occupants or the like, in good
order and repair (except in the event of termination upon a Casualty, a total
taking or Constructive Total Taking in condemnation proceedings), reasonable
wear and tear and damage by casualty or condemnation (except to the extent
Tenant was theretofore obligated under this Lease to restore such casualty or
condemnation prior to the date of such expiration or sooner termination)
excepted and also except as Tenant may have been prevented from maintaining the
Premises in good order and repair by occupation thereof by any entity having the
power of eminent domain which shall have taken the temporary use thereof and
shall then be in possession thereof. If the Premises are not surrendered at the
end of the Term, Tenant shall compensate Landlord for all damages which Landlord
shall suffer by reason thereof, and Tenant shall indemnify, defend and hold
Landlord harmless from and against all claims made by any succeeding tenant
against Landlord founded upon delay by Landlord in delivering possession of the
Premises to such succeeding tenant to the extent that all or any portion of such
delay is occasioned by the failure of Tenant to surrender the Premises as and
when required by this Lease. Without limiting the provisions of Section 13.1
hereof, if Tenant shall, without the written consent of Landlord, hold over
after the expiration of the Term, Tenant's use shall be deemed a month-to-month
tenancy, which tenancy may be terminated upon demand of Landlord. During such
tenancy, Tenant agrees to pay Landlord, each month, (i) the following percentage
of the Base Rent in effect upon the expiration of the Term:
(A) 125% of such Base Rent for the first ninety (90) days after
the expiration or sooner termination of this Lease;
(B) 150% of such Base Rent for the next ninety (90) days (that is,
until the 180th day thereafter);
(C) 175% of such Base Rent for the next ninety (90) days (that is,
until the 270th day thereafter); and
(D) 200% of such Base Rent for the period from and after such
270th day after the expiration or sooner termination of this
Lease,
plus (ii) all Additional Rent payable by Tenant hereunder for such month.
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Section 13.2. Inspection. Tenant shall permit Landlord and
Landlord's authorized representatives to enter the Premises at reasonable times
during usual business hours upon reasonable prior notice (except in the case of
an emergency or to prevent an imminent default under a Fee Mortgage, which entry
may be made without notice at any time) for the purpose of inspecting the same
and of exhibiting the same to prospective purchasers or mortgagees thereof, or
others to whom Landlord shall desire to so exhibit the Premises.
ARTICLE 14.
ASSIGNMENT AND SUBLETTING
Section 14.1. Assignment and Subletting. Except as otherwise
provided in this Article 14, or as expressly provided elsewhere in this Lease,
Tenant shall not, without the prior written consent of Landlord, assign,
mortgage, pledge or encumber this Lease or sublease the Premises, or any part
thereof. The consent of Landlord to any assignment, mortgage, pledge,
encumbrance or subletting shall not relieve Tenant from obtaining Landlord's
consent to any further such transaction which requires Landlord's consent
hereunder.
Section 14.2. Permitted Transactions. Without Landlord's
consent, but upon at least fifteen (15) days' prior notice to Landlord, and
subject to Section 14.3(c), Tenant may:
(a) Assign this Lease or sublease all or any part of the
Premises to an Affiliate of Tenant;
(b) Assign this Lease or sublet all or substantially all of the
Premises for all or any portion of the Term in connection with a sale or other
transfer to the assignee or sublessee of all or substantially all of the
business conducted by Tenant at the Premises;
(c) Mortgage, pledge or encumber this Lease, except as provided
in Section 14.3(a); or
(d) Sublease the Premises, in whole or in part, other than a
sublease of all or substantially all of the Premises for all or substantially
all of the term (except as provided in subsection (b) above).
Section 14.3. Transactions Requiring Landlord's Consent.
(a) So long as Landlord is an Affiliate of Joseph C. DiFeo or Samuel
X. DiFeo, Landlord's consent shall be required to any mortgage, pledge or
encumbrance of this Lease (but not to a transaction described in Section
10.4(b)), which consent may be withheld in Landlord's sole discretion,
notwithstanding any provision of this Lease which contemplates the potential
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existence of any Mortgage, or otherwise give to Tenant the right to mortgage
this Lease and the leasehold estate created hereby.
(b) Tenant may assign this Lease, and may sublease all or any part
of the Premises, other than as provided in Section 14.2, subject to Landlord's
prior consent, which consent Landlord shall not unreasonably withhold, upon the
following terms and conditions:
(i) Tenant shall furnish Landlord with the name and business
address of the proposed assignee or subtenant and with information with
respect to the nature and character of the proposed assignee's or
subtenant's business or activities as are reasonably satisfactory to
Landlord.
(ii) Landlord shall not be entitled to take into account the
financial net worth, credit or financial responsibility of the proposed
assignee or subtenant;
(iii) Tenant shall deliver an executed assignment or
sublease to Landlord at the time Landlord's consent is requested;
(iv) The nature and character of the proposed assignee or
subtenant, and its business or activities are, in Landlord's reasonable
judgment, in keeping with the standards of the Premises (and its intended
use of the Premises is not in violation of the provisions of this Lease);
(v) Each assignment or sublease, whether or not Landlord's
consent is required thereto, shall specifically state that (i) it is
subject to all of the terms, covenants, agreements, provisions and
conditions of this Lease (except as otherwise provided herein as to
Sections 3.8, and 15.1(c), and provided, further, that no assignee or
subtenant shall be obligated to enter into, assume or otherwise be liable
for obligations under any Tenant Guaranty, and provided, further, that no
assignee or subtenant shall be obligated to enter into, assume or
otherwise be liable for obligations under any Tenant Guaranty; and (ii)
the assignee or subtenant will not have the right to further assign or
sublet all or part of the Premises except in accordance with the
provisions of this Lease.
(vi) With respect to any such assignment or sublease, whether
or not Landlord's consent is required thereto: (A) the receipt by Landlord
of any amounts from an assignee or subtenant, or other occupant of any
part of the Premises, shall not be deemed or construed as releasing Tenant
from Tenant's obligations hereunder or of the acceptance of that party as
a direct Tenant; (B) Tenant shall reimburse Landlord within thirty (30)
days after
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demand for any reasonable costs incurred by Landlord to review the
proposed assignment or sublease in connection with the requested consent,
including the cost of making investigations as to the acceptability of the
proposed assignee or subtenant and any reasonable attorney's fees incurred
by Landlord; (C) consent by Landlord thereto shall not be deemed or
construed to modify, amend or affect the terms and provisions of this
Lease, or Tenant's obligations hereunder, which shall continue to apply to
the Premises as if the assignment or sublease had not been made; and (D)
if Tenant defaults in the payment of any rent, Landlord is authorized to
collect any rents due or accruing from any assignee, subtenant or other
occupant of the Premises and to apply the net amounts collected to the
rent due hereunder.
(c) No assignment or sublease permitted under Section 14.2, Section
14.3, or otherwise permitted hereunder shall be permitted if the assignee or
sublessee, in Landlord's reasonable judgment, is not reputable, or if the
assignment or sublease, in Landlord's reasonable judgment, would cause the
Premises to become subject to compliance with the remedial provisions of ECRA
(or a similar state statute requiring environmental testing and/or remediation)
prior to the sale or other transfer of the Premises, upon such assignment of
this Lease or sublease of all or any portion of the Premises, or upon the
expiration or sooner termination of this Lease or cessation of operations at the
Premises. Landlord will advise Tenant, by notice to Tenant within thirty (30)
days of Tenant's request therefor, if Landlord judges a proposed assignee or
subtenant named in such request not to be reputable, or a proposed assignment or
sublease to cause the Premises to become subject to ECRA or such similar statute
as aforesaid, which notice from Landlord shall specify, in reasonable detail,
the grounds for Landlord's determination. Failure or refusal of Landlord to
respond within such thirty (30) days period shall be deemed a determination by
Landlord that the proposed assignee or sublessee is reputable and the proposed
assignment or sublease does not cause the Premises to so become subject to ECRA
or such other similar statute. In making such determination, the financial
condition of the proposed assignee or sublessee shall not be taken into account
by Landlord. If Tenant disputes Landlord's determination, such dispute shall be
resolved by ADR pursuant to Article 18.
(d) Notwithstanding anything to the contrary in this Lease, Tenant
shall not assign this Lease or sublease the Premises to a government or any
subdivision or agency thereof, without Landlord's consent, which consent
Landlord may withhold in its sole discretion.
Section 14.4 Takeback Right. If at any time Tenant shall request
Landlord's consent (if such consent is required hereunder) (a) to assign this
Lease, other than to an Affiliate or in connection with a sale of all or
substantially all of Tenant's business at the Premises to the assignee, or (b)
to
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sublease all or substantially all of the Premises for all or substantially all
of the Term, other than to an Affiliate or in connection with sale or all or
substantially all of Tenant's business at the Premises to the sublessee, or (c)
to change the use of all or substantially all of the Premises to a use other
than a Vehicle-Related Use, and shall have notified Landlord of such proposal,
then Landlord shall have a period of thirty (30) days following such
notification to terminate this Lease as to the entire Premises, by notice to
Tenant, in which event such termination shall occur on the forty-fifth (45th)
day after the date of such notice, as if such forty-fifth (45th) day were the
date herein specified for the expiration of the Term, and, from and after such
termination, neither party shall have any further obligation hereunder to the
other party, except for obligations which accrued prior to the date of
termination or which by their terms survive the termination of this Lease.
Nothing herein in this Section shall be deemed or construed to limit Landlord's
right to withhold consent to an assignment or sublease, in accordance with the
provisions of this Lease, if such consent is required hereunder, and the
existence of this takeback right shall not be taken into account in determining
whether Landlord is entitled to withhold consent to an assignment or sublease,
if such consent is required hereunder.
Section 14.5. Requirements as to Assignments or Subleases. (a) Any
assignment of this Lease, whether made with Landlord's consent or without
Landlord's consent, as the case may be, shall not be effective unless and until
(i) the assignee shall execute, acknowledge and deliver to Landlord an agreement
in form and substance reasonably satisfactory to Landlord, and with respect to
which Landlord shall be a direct beneficiary, whereby the assignee shall (x)
assume the obligations and performance of this Lease and agree to be personally
bound by all of the covenants, agreements, terms, provisions and conditions
hereof on the part of Tenant to be performed and observed from and after the
effective date of any such assignment; and (y) agree that the provisions of this
Article 14 shall, notwithstanding such assignment or sublease, continue to be
binding upon it in the future. Tenant covenants that, notwithstanding any
assignment or sublease, whether or not in violation of the provisions of this
Lease, and notwithstanding the acceptance of rent by Landlord from any assignee
or subtenant or any other party, Tenant shall remain fully and primarily and
jointly and severally liable for the payment of rent due and to become due under
this Lease and for the performance and observance of all the covenants,
agreements, terms, provisions and conditions of this Lease on the part of Tenant
to be performed or observed.
(b) The liability of Tenant, and the due performance by Tenant of
the obligations on its part to be performed under this Lease, shall not be
discharged, released or impaired in any respect by an agreement or stipulation
made by Landlord or any grantee or assignee of Landlord or any other agreement
with a
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third party extending the term of or modifying any of the obligations contained
in this Lease, or by any waiver or failure of Landlord to enforce any of the
obligations on Tenant's part to be performed under this Lease, and Tenant shall
continue liable hereunder. If any such agreement or modification operates to
increase the obligations of Tenant under this Lease the liability of the Tenant
under this Lease or any of its successors in interest (all such parties shall be
deemed to have expressly consented in writing to such agreement or modification)
shall continue to be no greater than if such agreement or modification had not
been made.
Section 14.6. Leasehold Mortgages.
(a) Without the prior consent of Landlord, Tenant shall have the
right to mortgage this Lease and the leasehold estate hereby created. The
execution and delivery of a Mortgage shall not be deemed to constitute an
assignment or transfer of this Lease nor shall the holder of any Mortgage, as
such, be deemed an assignee or transferee of this Lease so as to require such
holder to assume the performance of any of the covenants or agreements on the
part of Tenant to be performed hereunder. No action or agreement hereafter taken
or entered into by Tenant to cancel, surrender, modify or amend this Lease shall
be binding upon or enforceable against a Mortgage, without the prior written
consent of such Mortgagee.
(b) A Mortgagee shall only have the rights provided for herein if
there has been delivered to Landlord a true, correct and complete copy of the
Mortgage in question, together with written notice executed by Tenant setting
forth the name and address of the Mortgagee. Landlord shall not be bound to
recognize any assignment of a Mortgage unless and until Landlord shall be given
written notice of such assignment and the name and address of the assignee. A
Mortgagee shall cease to be entitled to any of the rights provided for herein if
its Mortgage is satisfied or discharged of record or if Mortgagee has given
written notice to Landlord that its Mortgage has been satisfied. Tenant shall
not grant any Mortgage unless such Mortgage shall expressly state that the
proceeds of any insurance policies and condemnation awards shall be held, used
and applied for purposes and in the manner provided in this Lease, and a
Mortgagee whose Mortgage does not so provide shall have no rights hereunder.
Section 14.7. Sublease Recognition. Landlord confirms, for the
benefit of any tenant under any Major Sublease (such tenant being called a
"Space Tenant"), that, upon the termination of this Lease pursuant to Section
15.1, Landlord will recognize the Space Tenant under such sublease as the direct
tenant of Landlord (provided that such Space Tenant attorns to Landlord) and
will, upon the request of Tenant with respect to a Major Sublease consented to
by Landlord, enter into a reasonable and customary form of recognition and
attornment agreement with such Space Tenant which will provide for the
recognition by
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Landlord of such Space Tenant as the direct tenant of Landlord and the
attornment by such Space Tenant to Landlord, provided that, among other things,
at the time of the termination of this Lease no default exists under the Space
Tenant's Sublease which at such time would then permit the landlord thereunder
to terminate the same or to exercise any dispossess remedy provided for therein
The term "Major Sublease" shall mean a sublease of all of the Premises for all
of the Term (less one day), provided that the sublease requires the sublessee to
perform all of Tenant's obligations hereunder, subject to Section 3.8, grants to
the sublandlord all of Landlord's rights hereunder other than pursuant to
Section 15.1(c) (which shall not apply to the Major Sublease) and that the
sublessee shall not be obligated to enter into, assume or otherwise be liable
for obligations under any Tenant Guaranty.
ARTICLE 15.
DEFAULT PROVISIONS; CONDITIONAL LIMITATION
Section 15.1. Events of Default. In the event that any one or
more of the following events occur, an event of default (an "Event of Default")
shall be deemed to exist under this Lease:
(a) default shall be made in the payment of the Base Rent when due
and such default shall continue for a period of ten (10) days after notice
thereof, specifying such default, shall have been given to Tenant, or default
shall be made in the payment of any item of additional rent and such latter
default shall continue for a period of thirty (30) days after notice thereof,
specifying such default, shall have been given to Tenant; or
(b) default shall be made in the performance of any other covenant
or agreement on the part of Tenant to be performed hereunder, and such default
shall continue for a period of thirty (30) days after notice thereof, specifying
such default, shall have been given to Tenant; provided, however, in the case of
a default which cannot with due diligence be remedied by Tenant within a period
of thirty (30) days, if Tenant during such thirty (30) day period advised
Landlord of Tenant's intentions to cure such default, and proceeds as promptly
as may be reasonably possible after the service of such notice and with all due
diligence, and continuity of purpose to remedy the default and thereafter to
prosecute the remedying of such default with all due diligence (including by
appropriate actions against a subtenant of all or part of the Premises to compel
performance by such subtenant or to recover possession of the Premises so as to
permit Tenant to cure such default to the extent that Tenant is unable to cure
the same without recovering possession), the period of time after the giving of
such notice within which to remedy the default shall be extended for such period
as may be necessary to remedy the same with all due diligence; or
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(c) an Event of Default, subject to Section 15.3, shall have
occurred under any Group Lease or under any Group Sublease; provided, however,
that if any Group Lease or Group Sublease, other than this Lease, is assigned,
in a transaction permitted thereunder, to a person or entity which is not an
Affiliate of the Tenant thereunder, and does not thereafter become an Affiliate
of the Tenant thereunder, then this subsection shall thereafter apply only with
respect to such Group Lease or Group Sublease to a monetary Event of Default
under such Group Lease or Group Sublease and shall not thereafter apply to a
non-monetary Event of Default under such Group Lease or Group Sublease; or
(d) whenever Tenant shall default in complying with the provisions
of Article 12 with respect to the discharging of mechanics' liens within the
time period provided therein and such default shall exist for thirty (30) days
after notice from Landlord specifying such default, or, if applicable, for ten
(10) days after notice from Landlord specifying such default if such discharge
is required in order to close a sale or refinancing involving the Premises
(which notice shall refer to such ten (10) day period and Article 12); or
(e) if any execution or attachment shall be issued against Tenant or
any of Tenant's property pursuant to which execution or attachment the Premises
or any part thereof shall be taken or occupied by someone other than Tenant,
except as permitted under this Lease; or
(f) (i) the making by Tenant or '21' International Holdings, Inc.
("TIHI"), while the TIHI Guaranty is in effect, or by any EMCO Sub, while its
EMCO Pledge is in effect (each of TIHI and Emco Sub, during such respective
period of time only, being herein called a "Guarantor") of any general
assignment for the benefit of creditors; (ii) the filing by or against Tenant or
any Guarantor of any petition to have Tenant or any Guarantor adjudged a
bankrupt or a petition for reorganization or arrangement under any law relating
to bankruptcy (unless, in the case of a petition filed against Tenant or any
Guarantor, the same is dismissed within sixty (60) days; (iii) the appointment
of a trustee or receiver to take possession of substantially all of Tenant's or
any Guarantor's assets, or substantially all of Tenant's assets located at the
Premises or of Tenant's interest in this Lease; or (iv) the attachment,
execution or the judicial seizure of substantially all of Tenant's or any
Guarantor's assets, or substantially all of Tenant's assets located at the
Premises or of Tenant's interest in this Lease; or
(g) if Tenant's right, title and interest in this Lease or the
estate of Tenant hereunder shall be transferred to or shall pass to or devolve
upon any person or entity whether by action of Tenant, by operation of law or
otherwise, in violation of the terms of this Lease, and such default shall not
be cured
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within thirty (30) days after notice from Landlord of such default; or
(h) if any Mortgagee commences an action to foreclose or otherwise
realize upon its Mortgage or Tenant's interest in this Lease, unless such action
has been dismissed or discontinued.
Section 15.2. Right to ADR. If Landlord shall give Tenant a notice,
pursuant to any of subsections (a) through (h) of Section 15.1, of a default or
an event which may, with the giving of such notice, or the passage of time, or
both, become an Event of Default, and if the default in question is other than a
failure by Tenant to pay an installment of Base Rent due hereunder, and if
Tenant within fifteen (15) days after the giving of any such notice from
Landlord pursuant to subsections (a) through (h) of this Section, shall dispute
by notice to Landlord (a "Section 15.2 Notice") the existence of such default,
the matter shall be determined by ADR as provided in Article 18 and, pending
such determination, Landlord shall not be entitled to terminate this Lease, nor
shall a default or Event of Default be deemed to exist hereunder on account
thereof; provided, however, that if it shall be determined by ADR that Tenant is
so in default, the time within which Tenant shall have to remedy the same under
subsection (a) through subsection (h) above shall be computed from the date of
such determination. Any such Section 15.2 Notice to Landlord shall specify in
reasonable detail the grounds for such dispute.
Section 15.3. Multiple Notices. If a monetary Event of Default
occurs hereunder, then Landlord shall have the right to send to Tenant a second
(2nd) notice, referring to this Section and specifying such default and stating
that it is a "Second Notice" of such default, and, if such monetary Event of
Default shall not be cured within five (5) business days after such notice is
given, then Landlord shall have the right to send Tenant a third (3rd) notice,
referring to this Section and specifying that it is a "Third Notice" of such
default, and, if such monetary Event of Default shall not be cured within ten
(10) business days after such notice is given, Landlord may thereafter proceed
to exercise all rights and remedies which Landlord may exercise upon such Event
of Default and Landlord shall not thereafter be obligated to accept a cure by
Tenant of such monetary Event of Default (but prior to Landlord's commencing to
exercise its rights and remedies, Landlord shall be obligated to accept such a
cure). The provisions of this Section shall only apply to the first two (2)
monetary Events of Default of the same type in any period of twelve (12)
consecutive calendar months. Tenant specifically acknowledges that it will not
argue before any court, ADR tribunal or anyone that Landlord is obligated or
required to accept any cure of an Event of Default described in this Section
after the expiration of the applicable time frame provided for after the Third
Notice, Tenant having negotiated for the giving of the Second and Third Notices
in lieu of any other
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benefit or right provided to Tenant at law, in equity or otherwise with respect
to the right to cure such Events of Default.
Section 15.4. Notices of Default to Mortgages.
(a) If Landlord shall give a notice to Tenant regarding the Tenant's
failure to observe or perform any obligation imposed upon Tenant under this
Lease, Landlord shall at the same time give a copy of each such notice to each
Mortgagee, and no such notice shall be deemed to have been effected unless and
until notice is so given to each Mortgagee. If a Mortgage is held by more than
one person, corporation or other entity, no provision of this Lease requiring
Landlord to give a notice to a Mortgagee shall be binding upon Landlord unless
and until all of said holders shall designate in writing one of their number to
receive all such notices and shall have given to Landlord an original executed
counterpart of such designation in form reasonably satisfactory to Landlord.
(b) Landlord shall permit a Mortgagee the right (without obligation
on the part of the Mortgagee to do so) to perform any term, covenant, condition
or agreement and to remedy any default by Tenant hereunder, within the time
periods provided to the Tenant hereunder or otherwise provided to the Mortgagee
hereunder and together with any and all rights of Tenant hereunder with respect
to remedying or contesting any such default, and Landlord shall accept such
performance by Mortgagee with the same force and effect as if furnished by
Tenant; provided, however, that Mortgagee shall not thereby or hereby be
subrogated to the rights of Landlord.
(c) If an Event of Default shall occur hereunder, then, before
Landlord shall be entitled to terminate this Lease on account of such Event of
Default, Landlord shall give to the holder of any such Mortgage a further notice
that such specified Event of Default remains unremedied, and the holder of such
Mortgage shall have the right to remedy any Event of Default arising from a
failure to pay Base Rent or Additional Rent within a period of twenty (20) days
after the service of such notice and to commence to remedy any other Event of
Default within a period of thirty (30) days after the service of such notice.
Section 15.5. Rights of Mortgagees. In case of the occurrence of an
Event of Default (other than an Event of Default of the character of a failure
to pay Base Rent or Additional Rent) if, within thirty (30) days after the
further notice referred to in Section 15.4 is given by Landlord to the holder of
a Mortgage, such holder shall:
(a) notify Landlord of its election to proceed with due diligence
promptly to acquire possession of the Premises or to foreclose the
Mortgage or otherwise to extinguish Tenant's interest in this Lease;
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(b) deliver to Landlord an instrument in writing duly executed and
acknowledged wherein the holder of the Mortgage agrees that:
(i) during the period that such holder or a receiver of rents
and profits appointed upon application of such holder shall benefit
from the provisions of this Section (until, by notice to Landlord,
such holder waives any further benefits under this Section with
respect to such Event of Default), it will pay or cause to be paid
to Landlord all sums from time to time becoming due under this Lease
for the Base Rent and Additional Rent; and
(ii) if delivery of possession of the Premises shall be made
to such holder or such receiver or, in the event such holder is an
Institution, to its nominee, whether voluntarily or pursuant to any
foreclosure or other proceedings or otherwise, such holder shall,
promptly following such delivery of possession, perform or cause
such nominee to perform, as the case may be, such of the covenants
and agreements herein contained on Tenant's part to be performed as
Tenant shall have failed to perform to the extent the same are of a
type which can reasonably be performed by a party other than the
Tenant and the defaults which cannot so reasonably be performed
shall no longer be deemed to be defaults hereunder as respects
Mortgagee or any nominee, or their successors and assigns; and
(c) If such holder is not an Institution deliver to Landlord
security sufficient in Landlord's reasonable opinion to secure the
obligations undertaken pursuant to clauses (a) and (b) above;
and provided that such default is in a nature that the same cannot practically
be cured by such Mortgagee without taking possession of the Premises, then
Landlord shall not be entitled to terminate this Lease on account of such Event
of Default and shall accept such performance, for such period or periods of time
as may be necessary for such holder, with the exercise of due diligence, to
extinguish Tenant's interest in this Lease and to perform or cause to be
performed all of the covenants and agreements to be performed by Tenant to the
extent the same are of a type which can reasonably be performed by a party other
than Tenant. Nothing herein contained shall be deemed to require the holder of a
Mortgage to continue with any foreclosure or other proceedings or, in the event
such holder or receiver shall acquire possession of the Premises, to continue
such possession, if the Event of Default in respect of which Landlord shall have
given a notice shall be remedied. If prior to any sale pursuant to any
proceeding brought to foreclose any Mortgage, or if prior to the date on which
Tenant's interest in this Lease shall
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otherwise be extinguished, the Event of Default in respect of which Landlord
shall have given a notice shall have been remedied and possession of the
Premises shall have been restored to Tenant, then the obligation of the holder
of the Mortgage pursuant to the instrument referred to in clause (b) of this
Section shall be null and void and of no further effect. Nothing herein
contained shall affect the right of Landlord, upon the subsequent occurrence of
any Event of Default, to exercise any right or remedy herein reserved to
Landlord.
Section 15.6. Remedies. (a) Upon the occurrence of an Event of
Default, subject, however to Section 15.3, in addition to any other remedies
available to Landlord at law or in equity or provided for herein, Landlord shall
have the option, upon five (5) business days' prior notice to Tenant, to
terminate this Lease and all rights of Tenant hereunder. In the event that
Landlord elects to so terminate this Lease, then Landlord may recover from
Tenant:
(i) the worth at the time of award of any unpaid rent
which had been earned at the time of such termination; plus
(ii) the worth at the time of award of the amount by which the
unpaid rent which would have been earned after termination until the time
of award exceeds the amount of rent loss that Tenant proves could have
been avoided; plus
(iii) the worth at the time of award of the amount by which
the unpaid rent for the balance of the term after the time of aware
exceeds the fair market rental value for the Premises for such period.
As used in clauses (i) and (ii) above, the "worth at the time of award" is
computed by allowing interest at the Prime Rate plus two (2%) percent. As used
in clause (iii) above, the "worth at the time of award" is computed by
discounting such award at an appropriate interest rate determined at the time.
(b) From and after the occurrence of an Event of Default, subject,
however, to Section 15.3, Landlord shall also have the right, with or without
terminating this Lease, upon notice to Tenant, to re-enter the Premises and
remove all persons and property from the Premises; such property may be removed
and stored in a public warehouse or elsewhere at the cost of and for the account
of Tenant. No re-entry or taking possession of the Premises by Landlord pursuant
to this Section 15.6(b) shall be construed as an election to terminate this
Lease unless a written notice of such intention is given to Tenant. No entry or
re-entry by Landlord, whether had or taken under summary proceeding or
otherwise, shall absolve or discharge Tenant from any liability hereunder.
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(c) In the event that Landlord shall elect to re-enter as provided
in subsection (b) above or shall take possession of the Premises pursuant to
legal proceedings or pursuant to any notice provided by law, then if Landlord
does not elect to terminate this Lease as provided above, Landlord may, from
time to time, without terminating this Lease, either recover all rent (which
shall be deemed to included all Base Rent, Additional Rent, and other payments
and charges required to be made by Tenant hereunder), as it becomes due or relet
the Premises or any part thereof on terms and conditions as Landlord in its sole
discretion may deemed advisable for the whole or any part of the remainder of
the term or for a longer period, in Landlord's name, or as agent of Tenant, and
in connection therewith, Landlord may make repairs or alterations to the
Premises in such manner as Landlord may deem necessary or advisable. If the
Premises, or any part thereof, are leased to or occupied by Landlord, Joseph C.
DiFeo, Samuel X. DiFeo or any Affiliate of any thereof, the tenant or occupant
shall be deemed to be leasing or occupying the same on arms-length terms at the
then applicable fair market rental value of the premises in question, regardless
of the actual terms of or rental with respect to such leasing or occupancy.
(d) In the event Landlord shall, pursuant to subsection (c) above,
elect to so relet, the rents received by Landlord from such reletting shall be
applied: first to the cost and expenses of re-taking, repossessing, repairing
and/or altering the Premises and the expense of removing all persons and
property therefrom; second, to the costs and expenses incurred in securing any
new tenant or tenants; and third, to the payment of rent due and unpaid
hereunder and the residue, if any, shall be held by Landlord and applied to
payment of future Base Rent and Additional Rent as the same may become due and
payable. Should that portion of such rents received from such reletting during
any month, which is applied to the payment of Base Rent and Additional Rent
hereunder, be less than the Base Rent and Additional Rent payable during the
month by Tenant hereunder, then Tenant shall pay such deficiency to Landlord
immediately upon demand therefor by Landlord. Such deficiency shall be
calculated and paid monthly. Tenant shall also pay to the Landlord, as soon as
ascertained, any reasonable costs and expenses incurred by Landlord in reletting
or in making such alterations and repairs not covered by the rents received from
such reletting. Suit or suits for the recovery of such deficiency or damage, or
for a sum equal to any installment or installments of rent, may be brought by
Landlord from time to time at Landlord's election and nothing herein contained
shall be deemed to require Landlord to await the date on which this Lease or the
term hereof would have expired by limitation had there been no such default by
Tenant; provided, however, that this subsection (d) shall cease to be applicable
on a going forward basis if Landlord makes the election described in subsection
(a) of this Section.
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(e) Landlord shall have no obligation to mitigate damages upon the
exercise of any of Landlord's rights or remedies under this Article 15.
Section 15.7. No Waivers. All rights, options and remedies of
Landlord contained in this Lease shall be construed and held to be cumulative,
and no one of them shall be exclusive of the other, and Landlord shall have the
right to pursue any one or all of such remedies or any other remedy or relief
which may be provided by law, whether or not stated in this Lease. Tenant hereby
expressly waives any and all rights to recover or regain possession of the
Premises or to reinstate or redeem its tenancy or this Lease as is permitted or
provided by or under any statue, law or a decision now of hereafter in force and
effect. Tenant also waives the provisions of any law now or hereafter in effect
relating to notice and delay in levy of execution in case of an eviction or
dispossess of Tenant for non-payment of rent. Tenant waives and shall waive any
and all rights to a trial by jury in the event that summary proceedings shall be
instituted by Landlord. The term "enter", "re-enter" "entry", or "re-entry" as
used in this Lease is not restricted to their technical legal meanings.
Section 15.8. New Leases. In case of the termination of this Lease
by reason of the happening of any Event of Default, Landlord shall give prompt
notice thereof to the holder of any Mortgage. So long as the Mortgagee has
complied with Sections 15.4 and 15.5, Landlord shall, on written request of such
holder, made at any time within 60 days after the giving of such notice by
Landlord, enter into a new Lease of the Premises with such holder, or its
designee, within thirty (30) days after receipt of such request, which new Lease
shall be effective as of the date of such termination of this Lease for the
remainder of the term of this Lease, at the same Base Rent and upon the same
terms, covenants, conditions and agreements as are herein contained; provided
that the holder of the Mortgage shall (a) contemporaneously with the delivery of
such request pay to Landlord the Base Rent and items of Additional Rent which
Landlord has specified as due in any notice to such holder, (b) pay to Landlord
at the time of the execution and delivery of said new Lease any and all sums for
the Base Rent and Additional Rent which would have been due hereunder from the
date of termination of this Lease (had this Lease not been terminated) to and
including the date of the execution and delivery of said new Lease, together
with all expenses, reasonably incurred by Landlord, in connection with the
termination of this Lease and with the execution and delivery of such new Lease,
less the net amount of all sums received by Landlord from any occupants of any
part or parts of the Premises up to the date of commencement of such new Lease,
and (c) on or prior to the execution and delivery of said new Lease, agree in
writing that promptly following the delivery of such new Lease, such holder or
its designee will perform or cause to be performed all of the other covenants
and agreements herein contained on Tenant's part to be performed to
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the extent that Tenant shall have failed to perform the same to the date of
delivery of such new Lease. Nothing herein contained shall be deemed to impose
any obligation on the part of Landlord to deliver physical possession of the
Premises to such holder of a Mortgage or its designee unless Landlord at the
time of the execution and delivery of such new Lease shall have obtained
physical possession thereof. Upon execution and delivery of such new Lease, any
subleases which may have theretofore been assigned and transferred to Landlord
shall thereupon be assigned and transferred, without recourse, by Landlord to
the new tenant. If a new lease of the premises be entered into pursuant to the
above, then the holder of the Mortgage, or any assignee or designee thereof, or
a purchaser at a foreclosure sale shall, for the remainder of the term of this
Lease, succeed to the interest of the Tenant hereunder, subject to the terms,
provisions, covenants and agreements on the part of Tenant to be performed as
provided above. If more than one Mortgagee shall request such new lease, such
new Lease shall be made with and delivered to the Mortgagee whose Mortgage is
prior in lien to those of any others, without regard to the time of request.
Landlord shall have no obligation to determine the lien priority as among
Mortgagees, but shall base its actions in dealing with a Mortgagee on
information contained in a title report issued by a title company acceptable to
Landlord. Any such new lease shall be expressly made subject to the rights, if
any, of Tenant under the terminated lease and of the rights of parties in
possession.
Section 15.9. [Intentionally deleted.]
Section 15.10. Multiple Mortgages. If at any time there shall be
more than one Mortgage, the holder of the Mortgage prior in lien shall be vested
with the rights under Sections 15.3 and 15.8 to the exclusion of the holder of
any junior Mortgage; provided, however, that if the holder of a Mortgage prior
in lien to any other Mortgage shall fail or refuse to exercise the rights set
forth in said Sections, each holder of a Mortgage in the order of the priority
of their respective liens shall have the right to exercise such rights; and
provided further, however, that with respect to the right of the holder of a
Mortgage under Section 15.8 to request a new Lease, such right may,
notwithstanding the limitation of time set forth in said Section, be exercised
by the holder of any junior Mortgage, in the event the holder of a prior
Mortgage shall not have exercised such right, more than 120 days but not more
than 140 days after the giving of notice by Landlord of the termination of this
Lease as in said Section provided.
Section 15.11. Elimination of Cross-Default and
Cross-Collateralization.
(a) The provisions of Section 15.1(c) shall no longer apply to this
Lease, and Landlord shall cease to be entitled to consider an Event of Default
to exist or to terminate this Lease
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on account of an Event of Default under Section 15.1(c), in any of the following
circumstances:
(i) If this Lease shall be assigned (but only if Landlord's
consent, if required hereunder, has been obtained), in a transaction
permitted hereunder, to an assignee which is not an Affiliate of Tenant
and provided that (i) such assignee or transferee does not thereafter
become an Affiliate of Tenant, or (ii) Tenant, or an Affiliate of Tenant,
does not thereafter become the Tenant under this Lease; or
(ii) If the holder of an Institutional Mortgage permitted
hereunder or its successors and assigns shall succeed Tenant as the Tenant
under this Lease; or
(iii) If Landlord shall cease to be (and so long thereafter as
Landlord shall continue not to be) an Affiliate of Joseph C. DiFeo or
Samuel X. DiFeo.
(b) For purposes of Section 15.1(c) a lease other than this Lease or
a Sublease which is originally considered a Group Lease or Group Sublease shall
cease to be a Group Lease or Group Sublease for such purposes if the landlord or
sublandlord under such lease or sublease shall cease to be an Affiliate of
Joseph D. DiFeo or Samuel X. DiFeo, but shall again be considered a Group Lease
or Group Sublease if and so long as the landlord or sublandlord under such lease
or sublease shall again be an Affiliate of Joseph C. DiFeo or Samuel X. DiFeo.
Section 15.12. Landlord Defaults; Landlord Guaranty. Pursuant to the
Landlord Guaranty, Landlord has guaranteed the performance by the landlords
under the Group Leases and the sublandlords under the Group Subleases. Any
successor to Landlord's interest hereunder shall be deemed to have agreed to be
bound by the terms of any such Landlord Guaranty (but shall have no liability
under such Landlord Guaranty at such time as it is not an Affiliate of Joseph C.
DiFeo or Samuel X. DiFeo, other than the obligation in the next sentence).
Landlord agrees that it will not assign or otherwise transfer the Premises or
this Lease unless the assignee or other transferee enters into a Landlord
Guaranty substantially in the same form of the Landlord Guaranty entered into by
Landlord (subject to the limitations on liability contained in the foregoing
sentence).
Section 15.13. Tenant Guaranty. Pursuant to the Tenant
Guaranty, Tenant has guaranteed the performance of the tenants under the
Group Leases and subtenants under the Group Subleases.
Section 15.14. Interest on Defaulted Sums. If either party shall
fail to pay any sums due hereunder within ten (10) days after the due date
thereof, such unpaid sums shall bear interest, payable on demand, from and after
the due date thereof
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until paid at a rate per annum equal to the Prime Rate plus two (2%) percent.
Section 15.15. Late Charge. If Tenant shall fail to pay all or part
of any installment of Base Rent on the date on which the same shall be due and
payable hereunder more than once in any twelve (12) month period, Tenant shall
pay to Landlord, within twenty (20) days after demand therefor by Landlord, a
late charge equal to the greater of (a) two (2%) percent of all or the portion
of such installment not paid when due, or (b) any late charge, interest charge
or other charge imposed upon Landlord by a Fee Mortgagee because Landlord was
unable to pay when due sums required to be paid under the Fee Mortgage because
of Tenant's failure as aforesaid. In applying this provision, it shall be
assumed that Landlord has no funds from which to pay sums required to be paid
under the Fee Mortgage in question other than the sums required to be paid by
Tenant to Landlord under this Lease.
ARTICLE 16.
INDEMNIFICATION
(a) Except to the extent due to negligence or willful misconduct of
Landlord, its agents, employees or contractors, from and after the date hereof,
Tenant shall indemnify and save harmless Landlord against and from any and all
claims arising during the Term (even if asserted after the end of the Term) (i)
by or on behalf of any person for injury to persons or damage to property
occurring in, on or about the Premises, or (ii) arising from the conduct or
management of or from any work or thing whatsoever done in or on the Premises,
or the use and occupancy of the Premises, or (iii) arising from any condition of
the Premises or any sidewalk adjoining the Premises, or of any vaults,
passageways or space therein or appurtenant thereto, or arising from any act of
negligence of Tenant, or any occupant of the Premises or any part thereof, or of
its or their agents, contractors, servants, employees, invitees or licensees and
from and against all judgments, costs, expenses and liabilities incurred in or
about any such claim or action or proceeding brought therein; and in case any
action or proceeding be brought against Landlord by reason of any such claim,
Tenant upon notice from Landlord shall defend such action or proceeding by
counsel reasonably satisfactory to Landlord. The provisions contained in this
subsection shall not be applicable to any environmental or other matters which
are the subject matter of Article 22 of this Lease, and the rights and
obligations of the parties with respect to such maters shall be governed by such
Section(s) of this Lease and not by this subsection.
(b) Landlord shall indemnify and save harmless Tenant against and
from any and all claims arising during the Term (even if asserted after the end
of the Term) to the extent due to negligence or willful misconduct of Landlord,
its agents, employees or contractors, from and after the date hereof, solely
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with respect to and arising from any entry of any thereof into or upon the
Premises, (i) by or on behalf of any person for injury to persons or damage to
property occurring in, on or about the Premises, or (ii) any act of negligence
or willful misconduct of Landlord, or of its agents, contractors, servants,
employees, invitees or licensees, from and after the date hereof, and from and
against all judgments, costs, expenses and liabilities incurred in or about any
such claim or action or proceeding brought therein, solely with respect to an
entry of any thereof into or upon the Premises; and in case any action or
proceeding be brought against Tenant by reason of any such claim, Landlord upon
notice from Tenant shall defend such action or proceeding by counsel reasonably
satisfactory to Landlord. The provisions contained in this subsection shall not
be applicable to any environmental or other matters which are the subject matter
of Article 22 of this Lease, and the rights and obligations of the parties with
respect to such matters shall be governed by such Section(s) of this Lease and
not by this subsection.
ARTICLE 17.
RENEWAL PRIVILEGES
Section 17.1. First Renewal Term. Provided that this Lease is in
full force and effect and provided that no Event of Default exists at the time
of Tenant's exercise of the renewal option, Tenant shall have the option to
renew this Lease and extend the Term, by giving notice as provided in Section
17.4, for a further period of five (5) years, to commence on the expiration of
the initial Term hereof and to expire on the fifth (5th) anniversary of such
commencement date upon all of the terms, covenants and conditions set forth in
this Lease except as otherwise provided in Section 17.3, and except that Tenant
shall only have the right to further renew this Lease in accordance with Section
17.2.
Section 17.2. Second Renewal Term. Provided that this Lease is in
full force and effect and provided that no Event of Default exists at the time
of Tenant's exercise of the renewal option, and provided that Tenant has
exercised the renewal option contained in Section 17.1, Tenant shall have the
further option to renew this Lease and extend the Term, by giving notice as
provided in Section 17.4, for a further period of five (5) years, to commence on
the expiration of the first renewal term pursuant to Section 17.1 and to expire
on the fifth (5th) anniversary of such commencement date, upon all of the terms,
covenants and conditions set forth in this Lease except as otherwise provided in
Section 17.3, and except that Tenant shall have no further right to renew this
Lease.
Section 17.3. Renewal Rent. The Base Rent shall be adjusted as of
the commencement date of each renewal term pursuant to Sections 17.1 and 17.2,
to an amount equal to the fair market rental value of the Premises, determined
as provided below, as of the first (1st) day of the renewal term in question,
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which fair market rental value shall be determined by agreement of the parties
or, failing such agreement within one (1) year prior to the first day of the
renewal term in question, by an arbitration which shall be conducted in the
manner provided in Article 18 in which the arbitrator shall determine the fair
rental value of the Premises (for automobile dealership use only (or any other
Vehicle-Related Use or other use for which the Premises is in fact being used,
but only to the extent that such other Vehicle-Related Use or other use is a
higher and better use of the Premises than as an automobile dealership), and
taking into consideration the obligations of Tenant under this Lease (the
arbitrator is to conclusively presume that the Premises are in good condition
and repair, are undamaged by any fire or other casualty and are free of any
environmental contamination), the character and location of the Premises, the
absence of a brokerage commission, work letter or rent concessions, any further
provisions for adjustment of Base Rent, and other factors customarily taken into
account in calculating fair market rental value of real property, but excluding
any value added by Alterations in the nature of new Buildings (other than where
Tenant has demolished and replaced a Building existing on the date hereof, in
which event any value added by such Alterations shall be included) or additions
to Buildings existing on the date hereof and undertaken by Tenant, but including
renovations or restorations to (but not expansions of) Buildings existing on the
date hereof, determined as of the date the Base Rent is to be adjusted). In no
event shall Base Rent for any renewal term (a) be reduced below an amount
determined pursuant to the Rent Adjustment and Takeback Agreement, or(b) be
increased to an amount greater than the amount determined pursuant to the Rent
Adjustment and Takeback Agreement.
Section 17.4. Renewal Notices. (a) Tenant shall exercise its right
to renewal terms pursuant to Sections 17.1 and 17.2 by giving Landlord notice of
its election to do not less than six (6) months prior to the commencement date
of the renewal term in question (or, if later, ten (10) business days after the
applicable Meeting (as defined in Article 18) with respect thereto) and upon the
giving of such notice, this Lease, subject to the provisions of this Article,
shall be deemed to be renewed and the Term shall be deemed extended for the
period of the relevant renewal term without the execution of any further lease
or instrument.
Section 17.5. Confirmation. After Base Rent for either renewal term
has been determined, then, at either party's request, the parties shall enter
into an agreement confirming the amount of such Base Rent, but failure to enter
into the same shall not affect the rights or obligations of the parities
hereunder.
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ARTICLE 18.
ARBITRATION AND APPRAISAL
Section 18.1. Rules. In such cases where this Lease provides for the
determination of any matter by arbitration or ADR, other than as provided in
Section 18.2, the same shall be settled and finally determined by means of
alternative dispute resolution as provided in the New Jersey Alternative
Procedure for Dispute Resolution Act, N.J.S.A. 2A:23A-1, et seq., as in effect
on the date of this Lease, (the "Act") upon written notice given by any party to
the other (the "Dispute Notice"), and to the umpire hereafter established.
Except to the extent required by law, the proceedings under the Act shall be
confidential and shall not be disclosed or discussed with persons not parties to
this Lease without the consent of all parties to the dispute. In the event a
party to a dispute may suffer irreparable harm or injury, such party shall have
the ability to seek provisional remedies, including but not limited to
injunctive relief and other equitable remedies, to the fullest extent permitted
by law pending completion of the process provided under this Article 18.
Section 18.2. Umpires. (a) Within thirty (30) days after the Dispute
Notice is given the parties shall select three (3) umpires from among the
persons listed in Subparagraphs (1) through (4) below in the order of priority
listed below, i.e., if a person meeting the requirements of Subparagraph (1) is
not able or willing to serve, a person meeting the requirements of Subparagraph
(2) shall be selected, and so forth. In addition to meeting the requirements of
Subparagraph (1), (2), (3) or (4) below, the umpires must also satisfy the
requirements described in Subparagraphs (b) and (d) below. A potential umpire
is:
(1) Any retired judge of a United States District Court or a United
States Circuit Court of Appeals;
(2) Any retired judge of any State Superior, Appellate or Supreme
Court;
(3) Any attorney licensed to practice law for more than fifteen (15)
years or certified public accountant who has been certified for more than
fifteen (15) years; and, in either case, who has either directly or indirectly,
no conflict of interest; or
(4) Such other person upon whom the members of the selection group
agree.
(b) In addition to the requirements described in Section 18.2 (a)
above, the umpires selected hereunder must:
(1) Be free of any potential for bias or conflict of interest with
respect to either of the parities hereto, directly or indirectly or by virtue of
any direct or indirect financial interest, family relationship or close
friendship; and
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(2) Be in a position to immediately hear the dispute and thereafter
render a resolution within the time specified in Section 18.7 below.
(c) If the umpires are not selected within the period of time
specified in Section 18.2(a) above, Landlord, on the one hand, and Tenant, on
the other hand, each shall promptly select an umpire which umpires shall select
a third umpire who shall be the sole umpire. If the parties fail to so select
umpires pursuant to the foregoing provisions within twenty (20) days after the
expiration of the period described in Section 18.2(a), the sole umpire shall be
selected by the Chief Judge of the United States District Court for the District
of New Jersey or, if the Chief Judge is unable or unwilling to act, by the Chief
Judge of the Southern District of New York or the President of the Bar
Association of the City of New York. Such selection shall be in accordance with
the requirements of Sections 18.2(a) and 18.2(b) above. The umpire to be
selected pursuant to this Section 18.2(c) must be designated within thirty (30)
days after the expiration of the period described in Section 18.2(a) above.
(d) Anything to the contrary herein notwithstanding, the following
persons are not eligible to be an umpire under this Article: a party to this
Lease or any affiliate thereof; an employee or co-employee or any party to the
dispute; or any person having material or undisclosed, financial or personal
interests dependent on the success or failure of any of the parties.
(e) An umpire shall disqualify himself or herself if he or she is
unable to handle the process promptly so as to render a resolution within a
reasonable time, in no event to exceed forty-five (45) days after final
testimony and/or briefs and in all events not to extend beyond six months from
the date the umpire is chosen, or such longer period to which the parties to the
dispute and the umpire may agree.
Section 18.3. Time and Place of Alternative Resolution. The
alternative resolution shall be held at such place as the umpire may determine
within Essex County, New Jersey or such other location to which the parties may
agree, to commence not later than ten (10) days after the umpire had been
determined in accordance with Section 18.2.
Section 18.4. Fees. All fees and expense (including transcripts,
room rental and fees of the umpire) of alternative dispute resolution, shall be
paid as follows: 25% by the party or parties served with the Dispute Notice and
25% by the person(s) serving the Dispute Notice, with the remaining 50%
allocated 10% to the prevailing party (or parties) and 40% to the non-prevailing
party (or parties), as determined by the umpire (if the umpire does not
determine a prevailing party then pro-rata to each of the material parties to
the dispute as determined by the umpire) provided that the umpire shall have the
right to order
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that such fees be paid in a different percentage if any of the parties has acted
in bad faith (in which case he may shift other's shares to the bad faith
party(ies)). The fees payable to the umpire shall be his usual hourly rates for
consulting or dispute resolution services, as the same may be in effect from
time to time. Each party shall pay his own legal fees, costs and disbursements.
Section 18.5. Discovery. Each party shall be entitled to discovery
by way of oral deposition, inspection and copying of all relevant documents
within the care, custody or control of a party or a witness, and when authorized
by the umpire, by way of interrogatories. All discovery shall be complete within
forty-five (45) days of the appointment of the umpire. All documents to be
relied upon by any party to the proceeding shall be provided to the others no
later than two weeks before the hearing date for the proceedings. The time
periods for discovery may be extended by the umpire for good cause, provided
that he is able to meet the time requirement of Section 18.7.
Section 18.6. Provisional Remedies. When appropriate under
applicable New Jersey Substantive and procedural law, the umpire shall have full
and complete authority to award provisional relief, on an ex parte basis or
otherwise.
Section 18.7. Time and Method for Resolution. The umpire shall make
the award and serve notice thereof upon all parties within six (6) months of the
date the umpire is designated, or such longer period to which the parties to the
dispute and the umpire may agree. If the umpire fails to make his decision in
accordance with substantive law, or to properly apply the facts to the law, the
umpire's award will be deemed to have been procured by "undue means" and "beyond
his power". Any party may apply to court in accordance with the Act to have the
umpire's decision confirmed, reviewed, modified, affirmed or remanded to the
umpire with directions.
Section 18.8. Act and Agreement Govern. Except as otherwise provided
herein, the Act shall govern the procedures and methods for any Alternative
Dispute Resolution undertaken pursuant to this Lease. Except as expressly
provided above, the umpire may not modify the provisions of this Article. Except
as expressly provided to the contrary above, and to the extent otherwise not
inconsistent with this Lease and the Act, proceedings under this Article,
including efforts to mediate the dispute shall be governed by the "Rules for
Non-Administered Arbitration of Business Disputes" (Final Draft, June 14, 1989)
by the CPR (NY).
Section 18.9. Procedure for Determining Fair Market Rental Value.
(a) In each instance under this Lease where it shall become necessary to
determine the fair market rental value of the Premises, the fair market rental
value shall be determined in accordance with the provisions of this Section. If
by the
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date which is two hundred seventy (270) days before the date on which the First
Adjustment, or the Second Adjustment, is to become effective, or by the date
which is one year before the commencement date of any renewal term hereunder,
the parties have been unable to agree on the fair market rental value, then
Landlord shall send Tenant a notice (the "Meeting Notice") specifying in
Landlord's order of preference those alternative dates (on business days) and
times (between 9:00 a.m. and 5:00 p.m. local time) for Landlord and Tenant to
meet at the office of the Landlord or such other locations in the northern New
Jersey, New York Metropolitan area to exchange notices ("Valuation Notice")
specifying Landlord's and Tenant's respective determinations of the fair market
rental value for the Premises. Within thirty (30) days after the giving of the
Meeting Notice, Tenant shall give Landlord a notice (the "Meeting Designation
Notice") designating which of the alternative days and times specified in the
Meeting Notice shall be acceptable to Tenant (such date and time for the meeting
between Landlord and Tenant at the location specified by Landlord being herein
call the "Meeting"). At the Meeting Landlord and Tenant shall exchange their
Valuation Notices and both Landlord and Tenant shall initial a copy thereof for
both Landlord's and Tenant's records. If Landlord's determination of the fair
market rental value for the Premises as set forth in Landlord's Valuation Notice
is less than Tenant's determination as set forth in Tenant's Valuation Notice,
the fair market rental value for the Premises shall be the average of the
Landlord's and Tenant's determinations. If Landlord's determination is greater
than Tenant's determination and within ten (10) business days after the Meeting
the parties shall fail to agree upon the fair market rental value for the
Premises, the same shall then be determined as herein provided. If either party
shall fail to appear at the Meeting, for other than force majeure reasons (in
the event of a force majeure reason the parties shall endeavor in good faith to
have the Meeting within one week thereafter in which event all references herein
to the Meeting shall be to such delayed Meeting or, failing that, the Meeting
shall take place on the tenth (10th) business day following the original
specified Meeting Date at 10:00 o'clock a.m. at the place designated in the
Meeting Notice), then the first sentence of subsection (b) of this Section shall
apply. If the Landlord shall fail to give the Meeting Notice by the date which
is two hundred forty (240) days (in the case of the First Adjustment or Second
Adjustment) or eleven (11) months before the commencement of the renewal term in
question (in the case of an adjustment to be made in connection with a renewal
term) Tenant shall have the right to so notify Landlord in writing and Landlord
shall be obligated to deliver the Meeting Notice, within ten (10) business days
after its receipt of Tenant's notification of such failure on its part. If
Landlord again fails to deliver the Meeting Notice, Tenant shall have the right
to deliver the Meeting Notice, prior to delivery by Landlord of such Meeting
Notice. If Tenant so elects to deliver any Meeting Notice, the above provisions
shall apply thereto as if Landlord were Tenant and Tenant were Landlord as
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appropriate give the sense and circumstance. In each Valuation Notice the
parties shall also designate the name of an appraiser. The parties shall cause
the appraiser designated by them in each Valuation Notice to meet towards the
end of agreeing on a single appraiser (the "Deciding Appraiser") to determine
the fair market rental value of the Premises. If, within thirty (30) days after
the Meeting, the appraisers selected by the parties are unable to agree on a
Deciding Appraiser then either Landlord or Tenant, on behalf of both, may
request such appointment by the presiding justice of the highest court in the
county in which the premises are located for the appointment of a Deciding
Appraiser and neither party shall raise any questions as to the court's full
power and jurisdiction to entertain the application and make the appointment.
The appraiser designated by the parties in their Valuation Notices, the
appraiser selected by such two appraisers (to the extent that they can agree)
and the appraiser designated by the presiding justice (if the need therefor
arises) shall all be members of the American Institute of Real Estate Appraisers
(or a successor organization), shall be impartial, shall have M.A.I.
credentials, and shall be doing business as such in the county in which the
Premises are located for a period of at least ten (10) years before the date of
his appointment. In determining fair market rental value for the Premises the
Deciding Appraiser shall choose which of Landlord's or Tenant's determination of
fair market rental value as set forth in their Valuation Notices is closest to
the Deciding Arbitrator's determination of fair market rental value and such
determination for all purposes shall be deemed to be the fair market rental
value. It is the intention of the parties that Valuation Notices be exchanged
with respect to all Premises subject to Group Leases at the Meeting. It is also
the intention of the parties that the Deciding Appraiser be the same person for
all Premises with respect to Group Leases which are in the same county; that is,
the same person shall determine fair market rental value for all Premises in the
same county in which the application of these provisions contemplate that such
determination will be made by the Deciding Appraiser. The decision of the
Deciding Appraiser shall be final and conclusive on the parties. The Deciding
Appraiser shall offer the parties a reasonable opportunity to present their
cases as to fair market rental value, including the testimony of other
appraisers and the introduction of appraisal reports. Each party shall bear the
costs of its appraiser, and the fees and expenses of the Deciding Appraiser
shall be shared equally by both parties.
(b) If, on the date on which Base Rent hereunder is to be adjusted,
the new Base Rent has not been finally determined pursuant to this Section,
Tenant shall pay, until the new Base Rent is finally determined, as new Base
Rent an amount equal to one-half of the difference between Landlord's proposal
and Tenant's proposal (notwithstanding the foregoing, if either party shall fail
to appear at the Meeting, if such party is Tenant, Tenant shall pay, until the
new Base Rent is finally determined, as new Base Rent an amount equal to
Landlord's proposal, and if
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such party is Landlord, Tenant shall pay, until the new Base Rent is finally
determined, as new Base Rent an amount equal to Tenant's proposal.) When the new
Base Rent is finally determined, appropriate adjustments shall be made as
follows: (i) any underpayment by Tenant shall be paid by Tenant within thirty
(30) days after the new Base Rent is finally determined, and (ii) any
overpayment by Tenant shall be credited against the next installments of Base
Rent due hereunder.
ARTICLE 19.
REMEDIES
Section 19.1. Remedies Not Exclusive. The specified remedies to
which either party may resort under the terms of this Lease are cumulative and
are not intended to be exclusive of any other remedies or means of redress to
which such party may be lawfully entitled in case of any breach or threatened
breach by the other party hereto of any provision of this Lease. The failure of
either party to insist in any one or more cases upon the strict performance of
any of the covenants of this Lease or to exercise any option herein contained
shall not be construed as a waiver or a relinquishment for the future of such
covenant or option (except as otherwise expressly provided herein). A receipt by
Landlord of the Base Rent or Additional Rent with knowledge of the breach of any
covenant hereof shall not be deemed a waiver of such breach, and no waiver by
either party of any provision of this Lease shall be deemed to have been made
unless expressed in writing and signed by such party. In addition to the other
remedies in this Lease provided, both parties shall be entitled to the restraint
by injunction of the violation, or attempted or threatened violation, of any of
the covenants, conditions or provisions of this Lease by the other party hereto.
In the event of any litigation between the parties, the party which does not
prevail shall reimburse the other party, within ten (10) days after demand
therefor, for the reasonable legal fees and disbursements incurred by the
prevailing party in such litigation.
ARTICLE 20.
CERTIFICATES OF LANDLORD AND TENANT
Either party hereto shall, at any time and from time to time, upon
not less than fifteen (15) days' prior notice from the other party, execute,
acknowledge and deliver to the other party (or to such person or entity
designated by the other party) a statement in writing certifying that this Lease
is unmodified and in full force and effect (or if there have been modifications,
that this Lease is in full force and effect as modified and stating the
modifications), and the dates to which the Base Rent and other charges have been
paid, stating whether or not to the best knowledge of the signer of such
statement the other party is in default in keeping, observing or performing any
covenant or agreement contained in this Lease and, if there be a default,
specifying each such default, and containing such other customary
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certifications as the other party may reasonably request, it being intended that
any such statement delivered pursuant to this Article may be relied upon by the
other party (or by the person or entity designated by the other party), but
reliance on such statement may not extend to any default as to which the signer
shall have had no actual knowledge, after due inquiry.
ARTICLE 21.
SUBORDINATION
Section 21.1. Subordination. This Lease shall be subject and
subordinate to each Fee Mortgage which may now or subsequently affect Landlord's
interest in the Premises; provided, that this Lease shall not be so subject or
subordinate unless and until the holder of each Fee Mortgage shall execute and
deliver to Tenant a non-disturbance agreement, in form reasonably acceptable to
Tenant, providing in substance that, so long as this Lease shall be in full
force and effect, this Lease shall not be terminated, nor shall Tenant's use,
possession or enjoyment of the Premises or exercise of its rights under this
Lease be terminated, nor shall Tenant's use, possession or enjoyment of the
Premises or exercise of its rights under this Lease be interfered with, nor
shall the leasehold estate granted by this Lease be affected in any other
manner, by any foreclosure of or other action to enforce any Fee Mortgage.
Section 21.2. Attornment. In the event of the enforcement by the
holder of any Fee Mortgage to which this Lease is subject and subordinate, as
provided in Section 21.1, of the remedies provided for by law or by such Fee
Mortgage, then Tenant shall automatically become the tenant of such holder, or
any person succeeding to the interest of such holder, without change in the
terms or provisions of this Lease; provided, that neither such holder nor
successor in interest (unless such holder or successor is an Affiliate of
Landlord) shall be bound by (a) any payment of Base Rent for more than one month
in advance except prepayments in the nature of security for the performance by
Tenant of its obligations under this Lease or (b) any surrender, termination
(other than in accordance with the terms of this Lease), cancellation, amendment
or modification of this Lease made subsequent to the making of the Fee Mortgage
in question and the notification of Tenant as to the name and address of such
holder, without the consent of such holder or successor in interest, and (c)
neither such holder nor successor in interest shall be liable for any act or
omission of Landlord (but shall be obligated to perform all continuing
obligations of Landlord hereunder after such holder or successor in interest
shall succeed to Landlord's rights in the Premises). Upon request by such holder
or successor in interest, Tenant shall execute and deliver an instrument or
instruments, reasonably requested by such holder or successor in interest,
confirming the subordination and attornment provided for herein.
Section 21.3. Current Fee Mortgage.
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(a) It shall be a condition precedent to any of Tenant's obligations
hereunder that Landlord has obtained, for the benefit of Tenant, from the holder
of any Fee Mortgage described in Section 6.2(b)(i), a non-disturbance agreement
satisfying the requirements of Section 21.1 and, in addition, pursuant to which
such Fee Mortgagee:
(i) agrees (A) not to require Tenant to pay Impositions earlier than
the date, or in some manner other than as, required under Section 3.1, not
to require Tenant to pay some or all of the Impositions in escrow to such
Fee Mortgagee as contemplated under Section 3.7, not to require insurance
in addition to that required in Section 4.1(a)(i) through (v), not to
prohibit or limit Tenant's rights under Section 4.5, and not to prohibit
or limit Tenant's rights under Article 10 or Article 14, and (B) to waive
any right of such Fee Mortgagee in the Fee Mortgage to approve or consent
to, or to declare a default under the Fee Mortgage on account of, Tenant's
exercise of any of the foregoing rights; and
(ii) agrees to apply or permit application of insurance proceeds and
Condemnation Proceeds in accordance with the provisions of Articles 8, 9,
10 and 11.
Section 21.4. Performance of Obligations. Landlord agrees to perform
all of Landlord's obligations under any Fee Mortgage encumbering all or any part
of the Premises, except to the extent that, under this Lease, such obligations
are the responsibility of Tenant to perform.
Section 21.5. Special Fee Mortgage Provisions. (a) Whenever in this
Lease a right of Tenant to do or not to do something is conditioned upon the
consent or approval of a Fee Mortgagee (including an Institutional Fee
Mortgagee) or upon such doing or not doing of the thing in question being
consistent with the provisions of the Fee Mortgage in question, or wherever a
Fee Mortgagee is granted a right hereunder, the following provisions shall apply
as respects the rights of Tenant being limited thereby:
(a) Neither Landlord nor any Affiliate of Landlord, or of
Joseph C. DiFeo or Samuel X. DiFeo shall be deemed to be a Fee
Mortgagee for such purposes, or shall any mortgage held thereby be
deemed a Fee Mortgage (including a purchase money mortgage held by
any thereof upon a sale of the Premises) for such purposes.
(b) If a consent, approval or waiver is obtained or is not
required from the holder of a first Fee Mortgage, no consent,
approval or waiver for the matter in question is required from any
subordinate Fee Mortgagee.
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(c) If Landlord is obligated to or does grant a consent or
approval, or is not required to grant a consent or approval
hereunder, to any action or failure to act by Tenant, or any other
matter relating to this Lease, but this Lease requires a consent,
approval or waiver from a Fee Mortgagee, then Landlord agrees, at
its sole cost and expense, to use its best efforts to obtain such
consent, approval or waiver (but Landlord shall not be obligated to
give up any right or to make any payment to the Fee Mortgagee,
unless Tenant shall agree to be responsible for such payment, in
order to grant such consent, approval or waiver), and agrees that if
Landlord shall fail or refuse to use its best efforts to obtain such
consent or approval, then Tenant shall have the right to request the
same separately (but upon prior notice to Landlord) in the name of
Tenant or, if required, in the name of Landlord, from the Fee
Mortgagee.
(d) If and so long as the reason for the Fee Mortgagee's
failure or refusal to grant such consent, approval or waiver is due
to a default by Landlord under the Fee Mortgage in question (other
than a default caused by a default by Tenant under this Lease), then
any requirement of this Lease that Tenant needs to obtain such
consent, approval or waiver shall not apply to Tenant.
(e) Notwithstanding any provisions of this Lease to the
contrary, this Lease is not intended to, and shall not, grant rights
to any Fee Mortgagee greater than the rights, if any, possessed by a
Fee Mortgagee under any Fee Mortgage on the date hereof (as such
rights may have been modified by an agreement described in Section
21.3 or any other agreement in favor of Tenant entered into by such
Fee Mortgagee on or before the date hereof), but, subject to
subsection (f) of this Section, if, after the date hereof, a Fee
Mortgage is entered into by Landlord securing an amount equal to or
less than the Refinanced Amounts (as hereinafter defined), then the
Fee Mortgagee holding such Fee Mortgage shall be entitled to the
benefit of the rights granted hereunder to a Fee Mortgagee to the
extent possessed by any Fee Mortgagee on the date hereof (as such
rights may have been modified by an agreement described in the
parenthetical in the first sentence of this subsection).
Notwithstanding any provision of this Lease granting any rights to a
Fee Mortgagee, qualifying any of Tenant's rights if the same would
constitute a default under a Fee Mortgage, requiring Tenant to
obtain a consent, approval or waiver of a Fee Mortgagee in order to
exercise any of its rights hereunder, or requiring Tenant to pay any
sums to a Fee Mortgagee, such provisions shall only apply to the
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extent that, as of the date hereof, under the existing terms of a
Fee Mortgage, such rights are required to be granted to the Fee
Mortgagee, such rights of Tenant would constitute such a default,
such consent, approval or waiver is required, or such payments are
required to be made. In no event shall Tenant be restricted by any
rights of any Fee Mortgagee which such a Fee Mortgagee on the
Premises does not so possess on the date hereof.
(f) If, after the date hereof, a Fee Mortgage is entered into
by Landlord securing an amount greater than the amounts (the
"Refinanced Amounts") required to refinance the sums secured by the
prior Fee Mortgage, plus customary costs incurred in the refinancing
transaction (for example, without limitation, commitment fees,
attorneys' fees, mortgage title insurance premiums, and recording
charges or taxes), or if and so long as the Fee Mortgagee is an
Affiliate of Landlord, Joseph C. DiFeo, Samuel X. DiFeo or the then
Landlord, then, for purposes of subsection (e) of this Section,
there shall be deemed to have been no Fee Mortgage in effect on the
date hereof (that is, no provision of this Lease which limits
Tenant's rights subject to the provisions of Section 21.5 shall
apply which requires the consent, approval or waiver of a Fee
Mortgagee for Tenant to exercise its rights hereunder, or requires
Tenant to conform to the provisions of a Fee Mortgage). If, to
circumvent the foregoing sentence, a refinancing shall be split into
more than one (1) Fee Mortgage with the same Fee Mortgagee or with
more than one (1) Fee Mortgagee which are Affiliates of each other,
and the Fee Mortgages in the aggregate would secure an amount
greater than the Refinanced Amounts, then to all such Fee Mortgages
there shall be deemed to have been no Fee Mortgage as the date
hereof.
ARTICLE 22.
HAZARDOUS MATERIALS
Section 22.1. (a) Discharges. If Tenant receives any actual notice
of the happening of any event on or after the date of this Lease involving an
emission, spill, release or discharge (including any "Release" as defined in the
Master Agreement) into or upon (i) the air, (ii) soils or (iii) surface water or
ground water, of any toxic or hazardous substances or wastes (intended hereby
and hereafter to include any and all such material listed in any federal, state
or local law, code or ordinance and all rules and regulations promulgated
thereunder (including all "Environmental Law" as defined in the Master
Agreement), as hazardous (including all "Hazardous Substances" as defined in the
Master Agreement) (any of which is hereafter referred to as a "Hazardous
Discharge"), or any complaint, order, directive, claim, citation or notice by
any governmental authority
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(including any "Notice" as defined in the Master Agreement) or any other person
or entity (including any "Environmental Agency" as defined in the Master
Agreement) with respect to the following events or matters occurring on or after
the date of this Lease (a) air emissions, (b) spills, releases or discharges to
soils or any improvements located thereon, surface water, ground water or the
sewer, septic system or waste treatment, storage or disposal systems servicing
the Premises, (c) noise emissions, (d) solid or liquid waste disposal, (e) the
use, generation, storage, transportation or disposal of toxic or hazardous
substances or wastes or (f) other Environmental, Health and Safety Matters (as
defined in the Master Agreement) affecting Tenant, the Premises, any
improvements located thereon, or the business therein conducted (any of which is
hereafter referred to as an "Environmental Complaint"), then Tenant at its sole
expense shall give immediate notice to Landlord. Subject to Landlord's rights
and obligations hereinafter provided and the Dealership's rights and obligations
under Section 4.231 of the Master Agreement and subject to cost allocation
pursuant to Subparagraph 22.7 below and Section 4.231 of the Master Agreement,
Tenant shall initiate and complete all steps and actions necessary or advisable
to cleanup, remove, restore, resolve and minimize the impacts of the Hazardous
Discharge or Environmental Complaint. Tenant shall not be in breach of its
duties under this Section 22.1 by reason of Dealership's exercise of its right
to act as manager of environmental issues under Section 4.231 of the Master
Agreement.
(b) Without limitation of the foregoing, Landlord shall have the
option, but shall not be obligated, to exercise any of its rights as provided in
this Lease, and may enter onto the Premises and/or take any actions as it deems
necessary or advisable upon notice to Tenant (except no notice shall be required
in emergent situations) to cleanup, remove, resolve or minimize the impact of,
or otherwise deal with, any Hazardous Discharge or Environmental Complaint upon
and after Landlord's receipt of any notice from any person or entity asserting
the happening of a Hazardous Discharge or an Environmental Complaint on or
pertaining to the Premises. All costs and expenses incurred by Landlord in the
exercise of any such rights shall be deemed to be additional rent hereunder,
subject however to allocation of costs pursuant to Subparagraph 22.7 below.
Section 22.2. Lien. If any federal, state or local agency imposes a
lien in a liquidated amount upon the Premises or any portion thereof by reason
of the occurrence of a Hazardous Discharge or Environmental Complaint as a
result of Tenant's operations at the Premises or Tenant's failure to perform as
required under this Lease then Tenant shall within thirty (30) days thereafter
either (i) eliminate or satisfy such lien or (ii) post security or financial
assurances in form and amount reasonably satisfactory to Landlord to secure
against enforcement of the lien. As to liens in unliquidated amounts, Tenant
shall act promptly and in good faith to obtain the removal or satisfaction of
such lien.
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Section 22.3. Reports. (a) Tenant shall promptly provide to Landlord
true, accurate and complete copies of any and all documents, including reports,
submissions, notices, orders, directives, findings and correspondence made by
Tenant to New Jersey's Department of Environmental Protection and Energy
("NJDEPE"), the United States Environmental Protection Agency ("EPA"), the
United States Occupation Safety and Health Administration ("OSHA") or any other
federal, state or local authority pursuant to any federal, state or local law,
code or ordinance and all rules and regulations promulgated thereunder which
require or involve information and submissions concerning Environmental Health
and Safety Matters (as defined in the Master Agreement) (including any
"Environmental Law" as defined in the Master Agreement).
(b) Without limitation of the foregoing, unless otherwise furnished
by the Dealerships, Landlord and Tenant shall promptly furnish to the other:
(i) true and complete copies of all documents, submissions, and
correspondence provided to or received from any environmental agencies;
(ii) true and complete copies of any Notice;
(iii) true and complete copies of all sampling and test results
obtained from samples and tests taken in and around the Premises; and
(iv) notice of the date and time of all meetings with any
Environmental Agency.
Section 22.4. Rights. Upon reasonable notice to Tenant, Tenant shall
give any representatives of Landlord access during normal business hours to, and
permit any of them to examine, audit, copy or make extracts from, any and all
books, records and documents in possession of Tenant, its agents or any
independent contractor relating to Tenant's or the Premise's environmental,
health or safety affairs and to inspect the Premises.
Section 22.5. Compliance. (a) Tenant shall, at Tenant's initial
expense, but subject to the cost allocations in Subparagraph 22.7 below,
promptly comply with all laws and regulations governing sales, transfer or
cessation of operations at a place of business including he Environmental
Cleanup Responsibility Act N.J.S.A. 13: 1K-6 et seq. and the Connecticut
Transfer Act, Connecticut General Statute Section 22a-134 et seq. and any
other law, rule or regulation or legal requirement applicable to the Premises
by reason of which law there is a requirement for sampling, investigation,
remediation and/or filings concerning the environmental condition of the
Premises, as to all events happening after the date of this Lease
(collectively "ECRA").
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(b) At no expenses to Landlord, Tenant shall promptly provide all
information requested by Landlord to determine ECRA applicability to the Tenant
(or any subtenant or assignee of Tenant) and shall promptly sign affidavits
evidencing any and all facts relevant to that determination when requested by
Landlord.
(c) Tenant and Landlord shall immediately furnish to the other party
true and complete copies of all documents, reports, submissions, notices,
orders, directives, findings and correspondence and other materials pertinent to
compliance with ECRA as such are issued or received by such party. Tenant and
Landlord shall also promptly furnish to the other party true and complete copies
of all sampling and test results obtained from all environmental and/or health
samples and tests taken at and around the Premises.
Section 22.6. Partnerships. (a) Notwithstanding any provision of
this Article 22 to the contrary, it is agreed that the Partnership (as defined
in the Master Agreement) as Tenant shall not bear responsibility for
Environmental Claims (as defined in Sections 4.23 and 4.231 of the Master
Agreement) (i) which preexist the date of this Lease and (ii) which are
unrelated to Vehicle Related Uses and are unrelated to the use, ownership or
operation of the Premises by the applicable Dealerships (the "Landlord
Environmental Claims") provided, however, that, in consideration of the Landlord
entering into this Lease, the parties hereto until the termination of this Lease
(or until the later expiration of the then current term of this Lease) if
terminated by reason of a Tenant default, shall deem all Landlord Environmental
Claims to be Class I Environmental Claims governed by Section 4.231(a)(1) (to
the extent relating to the Bound Brook, New Jersey Premises problem which is the
subject of that Section) and otherwise Class II Environmental Claims governed by
Section 4.231(a)(2) of the Master Agreement in all respects (except that the
amounts set forth in such paragraph shall be allocated with the aggregate of all
amounts paid by Landlords and Dealerships on the one hand and Partnerships
(under the Master Agreement and/or as Tenant) on the other in counting to
satisfy the limits of the levels of cost sharing set forth in Section 4.231).
The parties hereto acknowledge and agree that there shall be a presumption that
an Environmental Claim is not a Landlord Environmental Claim. Tenant's liability
for Landlord Environmental Claims will terminate with this Lease.
(b) Subject to the foregoing, Landlord agrees to indemnify, defend
and hold Tenant harmless from and against all claims, lawsuits, liabilities,
losses, damages and expenses (including without limitation cleanup costs and
reasonable attorneys fees arising by reason of any of the aforesaid or an action
against the Landlord under this indemnity) arising by reason of a Landlord
Environmental Claim.
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(c) In further consideration of the Landlord entering into this
Lease, the parties hereto agree that, to the extent that the Landlord is
obligated to indemnify the Tenant pursuant to Subparagraph 22.6(b) above in
respect of a claim other than a Landlord Environmental Claim, then the
Landlord's liability shall be subject to the same aggregate limitations on
indemnification contained in Section 8.5 of the Master Agreement as if Landlord
was a Dealership.
Section 22.7. Indemnification. Tenant hereby agrees to defend,
indemnify and hold Landlord harmless from and against any and all claims, law
suits, liabilities, losses, damages and expenses (including without limitation
cleanup costs and reasonable attorney's fees arising by reason of any of the
aforesaid or an action against the Tenant under this indemnity) arising directly
or indirectly from, out of or by reason of any breach of this Article 22
occurring during the term of this Lease. The sole exclusion to Tenant's
obligation under this Subparagraph 22.7 shall be for Landlord Environmental
Claims, provided further however, that Tenant shall be obligated to indemnify
Landlord for Tenant's share of such claims under Subparagraph 22.6(a) above and
Section 4.231 of the Master Agreement, integrated with the relative obligations
of the parties therein, as if it was a signatory partnership to the Master
Agreement and Landlord was an indemnified Dealership.
Section 22.8. (a) Environmental Manager. Tenant hereby appoints the
Landlord, which may be delegated by Landlord to a manager acting under the
Master Agreement, as the manager of all environmental issues and Landlord
Environmental Claims which are the subject of any obligation of the Landlord to
indemnify Tenant under this Article. The Landlord's rights under these
provisions are notwithstanding the provisions of any other agreement to the
contrary, and are intended to give the Landlord the unfettered discretion to act
practically and in a cost-efficient manner to deal with such issues effectively,
over such period as they deem appropriate, choosing from the available
alternatives as they deem appropriate, without interference or hindrance from
any of the other parties as long as the Landlord's actions satisfy the
requirements of any Environmental Agency. Without limitation of the foregoing,
but by way of explication, the Landlord shall have the following rights:
(i) License. To the extent necessary or advisable
in the Landlord's opinion to permit the Landlord to exercise rights under this
Article, the Tenant shall permit the Landlord full and non-exclusive use,
occupancy, possession and enjoyment of the Premises, for purposes including the
installation and operation of permanent improvements, and the sampling, removal
and remediation of soils, groundwater and improvements, at reasonable times and
in a reasonable manner, using reasonable efforts to minimize the intrusion upon
and inconvenience to the Tenant and its ongoing operations, without charge or
liability of any kind (whether by reason of a breach of
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the obligation to be reasonable or otherwise) for the interference with the
business of the Tenant resulting from the exercise of such rights.
(ii) Control. The Landlord shall have the right
to: (a) control the investigation and remediation of any Landlord Environmental
Claim, decide among available alternatives for remediation or correction
(including the right to choose inaction, or alternatives which result in higher
operational expenses as opposed to capital expenses); (b) initiate, assume and
control the prosecution or defense of any action, proceeding, litigation or suit
involving a Landlord Environmental Claim; (c) settle or compromise any Landlord
Environmental Claim; (d) exercise its rights under this Article, to bind the
Tenant and any indemnified party after consultation with Tenant; and (e) hire
lawyers, consultants, advisors and contractors acceptable to the Landlord. The
Landlord may cause Tenant to incur expenses by acting in its name, or it may
incur expenses itself, all of which are subject to reimbursement in accordance
with Subparagraph 22.7 (and accordingly with the escrow and indemnity provisions
of Section 4.231 of the Master Agreement).
(iii) Cooperation. Tenant shall cooperate in all
respects with the exercise by Landlord of its rights hereunder and shall not
interfere with the implementation of decisions made by Landlord hereunder or
under Section 4.231 of the Master Agreement. Tenant and its Affiliates shall not
initiate contact directly or indirectly with any Environmental Agency in a
manner intended or likely to result in the initiation of an enforcement action
or in interference with decisions of Landlord unless such contact is required by
law and failure to initiate contact will subject the Tenant or its Affiliates to
civil or criminal penalties. EMCO and any EMCO Sub may retain and consult with
their own experts and lawyers concerning the performance by the Landlord of
their rights and obligations, provided that the costs of such experts and
lawyers shall be borne solely by EMCO and such EMCO Sub.
(iv) Bound Brook. Without limitation of the
foregoing, the Landlord may arrange to cause the move of any automobile
franchise operated by any Tenant from the present Bound Brook Premises to
another location mutually acceptable to the parties hereto in order to permit
more efficient investigation and or remediation of the Bound Brook site.
(v) Assumption of Control. Tenant or its Affiliates
may cause the termination of the Landlord rights hereunder by notifying the
Landlord that it assumes the obligation to indemnify for all amounts otherwise
to be borne by the Landlord, without limitation or exclusion.
(vi) Certain Environmental Claims. The Tenant shall
have sole control of all dealings with regulators for, and shall have the sole
obligations to accomplish at the
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Premises: (a) ongoing compliance with Environmental Laws unrelated to an
Environmental Claim which is the subject of an indemnity obligation of the
Dealerships under Section 4.231 of the Master Agreement or of the Landlord under
this Section of the Lease (e.g. obtaining permits and complying with
Environmental Laws for new underground tanks or tanks presently in compliance
with laws); and (b) resolution of events or conditions which are not
Environmental Claims or as to which the Dealerships under Section 4.231 of the
Master Agreement or Landlord under this Section of the Lease have no obligation
to indemnify (because, for example, they occur or arise after the date of this
Lease [e.g. a new Release]).
(b) Exclusive Remedy. Notwithstanding any other provision of
this Lease or any of the other agreements among the parties hereto, and
notwithstanding any other provision of Environmental Law or other law to the
contrary, and excluding only the intentional actual fraud of the Landlord: (i)
it is intended that the sole remedy among the parties hereto for the correction
of any Environmental Claim or condition now existing at the Premises or by
reason of the operations of the Dealerships, Partnerships (as defined in the
Master Agreement) or their successors in interest shall be as provided in this
Section and the Master Agreement, and that all contrary provisions of any other
agreement are superseded and amended to be consistent with this Lease and the
Master Agreement; (ii) without limitation of the foregoing, the environmental
indemnity provision in this Lease and in Section 4.231 of the Master Agreement
is in lieu of any rights otherwise available to the Partnerships, Tenant, the
Dealerships, EMCO and any EMCO Sub under this and all other agreements; and
(iii) the Landlord's obligations, as well as those of any other seller or owner
or operator affiliated with the Landlord, and its and their respective equity
owners, officers, agents, servants, employees, with regard to Environmental
Claims, now known or unknown, presently existing or hereafter arising, shall be
solely as provided in this Section of the Lease and Section 4.231 of the Master
Agreement and any and all other claims, rights and remedies under Environmental
Law (as for example, without limitation, may arise under CERCLA, the Spill Act,
RCRA, ECRA, Clean Water Act), or under those other agreements among the parties
hereto, are hereby waived and released.
(c) Disclaimer. The transactions covered by this Agreement and
all other agreements between or among any or all parties hereto involve
properties and operations that are conveyed "AS IS, WHERE IS" except only as
expressly provided in this Lease to the contrary. No representations, warranties
or covenants are or have been made outside of this Lease and the Master
Agreement with regard to the environmental condition, liabilities or compliance
of the Premises, or the Dealerships or the accuracy, completeness of any
environmental information (except that the Landlord has not intentionally
altered any of the test results assembled as part of any environmental studies).
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Tenant is aware that the Premises and the Dealerships have had instances of
environmental contamination or noncompliance and Tenant, EMCO and the EMCO
Sub(s) have been given authority acceptable to them to conduct investigations
and due diligence independent of this Lease to determine the nature and extent
of such conditions and have determined to proceed with the transactions
contemplated hereunder subject to the provisions of this Lease. In no event
shall there be any liability of the Dealerships or the Landlord for lost profits
or other consequential damages by reason of any Environmental Claim or by reason
of the Landlord's or Dealership's actions or omissions under or by reason of an
Environmental Claim or this Lease.
Section 22.9. Survival. Tenant's obligations under this Article
shall survive the expiration or sooner termination of this Lease.
ARTICLE 23.
NOTICES; CONSENTS
Section 23.1. Notices. Any notice, demand, request, approval or
other communication (a "notice") which, under the terms of this Lease or under
any statute, must or may be given by the parties hereto, must be in writing, and
must be given by mailing the same by registered or certified mail, return
receipt requested, postage prepaid, addressed to the respective parties as
follows:
If to Landlord:
c/o Joseph DiFeo and Samuel X. DiFeo
585 Route 440
Jersey City, New Jersey 07034
with a Copy to:
Hannoch Weisman
A Professional Corporation
4 Becker Farm Road
Roseland, New Jersey 07068-3788
Attn: Stephen P. Lichtstein
If to Tenant:
c/o EMCO Motor Holdings, Inc.
153 East 53rd Street
Suite 5900
New York, New York 10022
Attn: Ezra P. Mager
with a Copy to:
Akin, Gump, Hauer & Feld
1700 Pacific Avenue
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4100 First City Center
Dallas, Texas 75201-2800
Attn: Gary M. Lawrence, P.C.
Either party, and the holder of any Mortgage or Fee Mortgage who shall have made
the request referred to in the last sentence of this Section 23.1, may designate
by notice in writing given in the manner herein specified a new or other address
to which a notice shall thereafter be so given. All notices shall be deemed
given when received. If requested in writing by the holder of any Mortgage or
Fee Mortgage (which request shall be made in the manner provided in this Section
23.1 and shall specify an address to which notices shall be given) any such
notice shall also be given contemporaneously to such holder in the manner herein
specified.
Section 23.2. Landlord's Consent. (a) No consent, approval or other
exercise of discretion (a "Consent") by Landlord shall, unless this Lease
specifies that such Consent is within Landlord's sole discretion, be
unreasonably withheld or refused. If Landlord shall fail to respond to any
request by Tenant for any Consent, within twenty (20) days after the date of
such request, and within ten (10) days after a further notice from Tenant,
stating that it is a "Second Notice" and referring to this Section, such request
shall be conclusively deemed to have been approved by Landlord. In any refusal
to grant Consent, Landlord shall specify in reasonable detail the reasons for
its refusal. Any dispute between the parties as to whether Landlord should have
granted a Consent shall be resolved by ADR in the manner described in Article
18.
(b) With respect to any provision of this Lease which provides, in
effect, that Landlord shall not unreasonably withhold, delay or refuse its
consent, Tenant, in no event shall be entitled to make, nor shall Tenant make,
any offset against rent otherwise due nor shall Tenant withhold any rent
otherwise due pursuant to the terms of this Lease based upon any claim or
assertion by Tenant that Landlord has unreasonably withheld, refused or delayed
any consent or approval; but, unless Landlord's unreasonable withholding,
refusal or delay is arbitrary, capricious or in bad faith (in which event
Tenant's rights and remedies against Landlord shall not be so limited), Tenant's
sole remedy shall be an action or proceeding to enforce any such provision, or
for specific performance, injunction or declaratory judgment.
ARTICLE 24.
QUIET ENJOYMENT
Subject to the terms of this Lease, Tenant, upon paying the Base
Rent, additional rent and all other charges herein provided for and upon
observing and keeping all of the covenants, agreements and provisions of this
Lease on its part to be observed and kept, shall lawfully and quietly hold,
occupy and
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enjoy the Premises during the Term without hindrance or molestation.
ARTICLE 25.
INVALIDITY OF PARTICULAR PROVISIONS
If any provision of this Lease or the application thereof to any
person or circumstance shall to any extent be invalid or unenforceable, the
remainder of this Lease, or the application of such provision to persons or
circumstances other than those as to which it is invalid or unenforceable, shall
not be affected thereby, and each provision of this Lease shall be valid and be
enforced to the fullest extent permitted by law.
ARTICLE 26.
BROKERAGE
Section 26.1. Brokerage. Each party represents and warrants to the
other that it has dealt with no broker or finder in connection with this Lease.
Each party agrees to indemnify and hold harmless the other party from and
against any claims, liabilities, suits, actions, loss, damage or expense
(including attorneys' fees and disbursements) resulting from any breach of the
foregoing representation and warranty.
ARTICLE 27.
MEMORANDUM OF LEASE
Section 27.1. Memorandum of Lease. Each party shall execute and
deliver, and Tenant may at any time record in the appropriate land records, a
notice or memorandum of this Lease in recordable form reasonably acceptable to
both parties. From time to time, promptly at the request of either party, each
party shall execute and deliver, and the requesting party may thereafter record
in the appropriate land records, an amendment or modification to such notice or
memorandum of lease in recordable form reasonably acceptable to both parties.
This Lease shall not be recorded. Upon any termination of this Lease, Tenant
shall, within ten (10) days after demand, execute and deliver to Landlord a
document sufficient to discharge of record any such notice or memorandum.
ARTICLE 28.
MISCELLANEOUS
Section 28.1. No Oral Modifications. This Lease may not be
modified or amended except by a writing executed by both parties.
Section 28.2. Governing Law. This Lease shall be governed by
and shall be construed in accordance with the laws of the State in which the
Premises is located.
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Section 28.3. Unavoidable Delays. If, during the term of this Lease,
either party shall be prevented or delayed from punctually performing any
obligations or satisfying any conditions of this Lease by any strike, lockout,
labor dispute, inability to obtain labor or materials, Act of God, legal
requirements, governmental restriction, regulation or control, enemy or hostile
action, civil commotion or other condition beyond the reasonable control of such
party, then the time to perform such obligation or satisfy such condition shall
be extended by the delay caused by such event. If either party shall, as a
result of any such event, be unable to exercise any right or option contained in
this Lease within any time period provided for in this Lease, such time period
shall be deemed extended for a period equal to the duration of the delay caused
by such event. Nothing herein contained shall apply to either party's
obligations to pay monies to the other party (including, as to Tenant, a failure
by Tenant to pay any Base Rent or Additional Rent due under this Lease).
Section 28.4. Successors and Assigns. The covenants and agreements
herein contained shall bind and inure to the benefit of Landlord and Tenant and
their respective successors and assigns (but, in the case of Tenant, only
permitted assigns).
Section 28.5. Construction. The terms "include", "including" and
similar terms, as used herein, shall be construed as if followed by the phrase
"without limitation". All references in this Lease to Articles, Sections,
subsections or Exhibits shall be deemed references to Articles, Sections or
subsections of or Exhibits to and incorporated into this Lease, unless expressly
provided to the contrary.
Section 28.6. No Joint Venture. Landlord and Tenant agree that
they are not partners or joint venturers by reason of this Lease.
Section 28.7. Authorization. The person and entity signing this
Lease for Landlord and Tenant, respectively, each represents and warrants that
this Lease has been duly authorized, executed and delivered by Landlord and
Tenant, as the case may be.
Section 28.8. Relationship of Landlord to Tenant. Landlord, an
Affiliate of Landlord, or persons comprising Landlord, may be a stockholder,
partner or the like in Tenant or an Affiliate of Tenant, which fact shall not
impose any duty or obligation (fiduciary or otherwise) on the Landlord in acting
as landlord under this Lease, it being specifically understood and agreed that
Landlord shall have the right to do or not to do anything with respect to this
Lease to the same extent as if Landlord, an Affiliate of Landlord or persons
comprising Landlord were not a stockholder, partner or the like with or in
Tenant or any Affiliate of Tenant.
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Section 28.9. No Services. Landlord will furnish no services of
any kind in or to the Premises. All required services shall be procured by
Tenant at its cost and expense.
Section 28.10. No Abatement Unless Specified. Except as may be
otherwise expressly provided in this Lease there shall be no abatement or
reduction of rents or other charges payable by Tenant under this Lease because
of inconvenience, interruption, cessation or loss of business or otherwise,
caused directly or indirectly by any present or future laws, rules,
requirements, orders, directions or regulations or any governmental authority
whatever or by priorities, rationing or curtailment of labor or materials or by
war or any manner or thing resulting therefrom, or by any other cause or causes,
nor shall this Lease be affected by any such causes.
Section 28.11. Captions. The captions herein are for
convenience of reference only and shall not be deemed to define, limit or
describe the scope or intendment of any provision of this Lease.
Section 28.12. Surrender. Neither acceptance of the keys nor any
other act or thing done by Landlord or any agent or employee of Landlord during
the term of this Lease shall be deemed to be an acceptance of a surrender of the
Premises. Surrender of the Premises can only be affected by agreement in writing
signed by Landlord accepting or agreeing to accept such a surrender.
Section 28.13. Landlord for Time Being. The term "Landlord" means
the owner, at the applicable time, of the Premises. If the named Landlord or any
successor landlord shall convey the Premises or transfer its interest therein
and the assignee shall assume Landlord's obligations hereunder, the assigning
Landlord shall thereupon cease to be liable for any subsequently accruing
obligations under this Lease.
Section 28.14. Non-Recourse. There shall be absolutely no personal
liability on the part of the Landlord, its partners, agents and employees or
their successors or assigns with respect to any of the terms, covenants and
conditions of this Lease or with respect to any act, omission or negligence of
the Landlord. Tenant shall look solely to Landlord's estate and property in the
Premises and net proceeds therefrom for the satisfaction of Tenant's remedies
for the collection of any judgment or any other judicial process requiring the
payment of money by Landlord, and no other property or assets of Landlord 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 Landlord and Tenant or Tenant's use of occupancy of the
Premises.
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IN WITNESS WHEREOF, Landlord and Tenant have duly executed and
delivered this Lease as of the day and year first above written.
LANDLORD:
J & S EQUITY ASSOCIATES
By:________________________________
Name:______________________________
Title:_____________________________
TENANT:
DIFEO BUICK-PONTIAC-GMC TRUCK
PARTNERSHIP
By:________________________________
Name:______________________________
Title:_____________________________
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EXHIBIT A
LEGAL DESCRIPTION AND MORTGAGES
Block 1745, Lots 11, 12, 13, 14, 15, 16, 17 & 18 919 Communipaw
Avenue, Jersey City, New Jersey.
1. Mortgage made by J & S Equity Associates to The Trust Company of New
Jersey, dated May 4, 1990 and recorded May 8, 1990 in the Hudson County
Register's Office in Mortgage Book 4562, Page 122.
2. Mortgage made by J & S Equity Associates to The Trust Company of New
Jersey, dated May 4, 1990 and recorded May 8, 1990 in the Hudson County
Register's Office in Mortgage Book 4562, Page 222.
3. Mortgage made by J & S Equity Associates to The Trust Company of New
Jersey, dated December 1, 1978 and recorded December 13, 1978 in the
Hudson County Register's Office in Mortgage Book 3041, Page 965.
4. Mortgage made by Samuel C. DiFeo and Julia DiFeo, his wife, to The Trust
Company of New Jersey, dated October 29, 1976 and recorded November 3,
1976 in the Hudson County Register's Office in Mortgage Book 2982, Page
876.
5. Mortgage made by Sam-Jul Realty Corp., et al. to The Trust Company of New
Jersey, dated October 29, 1976 and recorded November 3, 1976 in the Hudson
County Register's Office in Mortgage Book 2982, Page 872.
6. Mortgage made by Samuel C. DiFeo and Julia DiFeo to The Trust Company of
New Jersey, dated July 28, 1969 and recorded July 29, 1969 in the Hudson
County Register's Office in Mortgage Book 2822, Page 707.
7. Mortgage made by Joseph DiFeo and Samuel X. DiFeo to The Trust Company of
New Jersey, dated June 30, 1983 and recorded July 20, 1983 in the Hudson
County Register's Office in Mortgage Book 3168, Page 715.
8. Mortgage made by Joseph C. DiFeo and Samuel X. DiFeo t/a J & S Equity
Associates to The Trust Company of New Jersey, dated December 13, 1978 and
recorded December 13, 1978 in the Hudson County Register's Office in
Mortgage Book 3041, Page 1002.
9. Mortgage made by Joseph C. DiFeo and Samuel X. DiFeo t/a J & S Equity
Associates to The Trust Company of New Jersey, dated August 27, 1986 and
recorded September 26, 1986 in the Hudson County Register's Office in
Mortgage Book 3515, Page 20.
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10. Mortgage made by J & S Equity Associates to The Trust Company of New
Jersey, dated October 25, 1985 and recorded November 8, 1985 in the Hudson
County Register's Office in Mortgage Book 3302, Page 1.
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EXHIBIT B
GROUND LEASES
All leases set forth below are dated as of October 1, 1992 unless
otherwise stated.
1. Lease between Fair Realty Company, as landlord and Fair Hyundai
Partnership T/A Fair Suzuki, as tenant.
2. Lease between Fair Realty Company, as landlord and Danbury-Mt. Kisco
Saturn Partnership T/A Saturn of Danbury, as tenant.
3. Lease between Fair Realty Company, as landlord and Fair
Cadillac-Oldsmobile-Isuzu Partnership, as tenant.
4. Lease between Rockland Realty Associates, as landlord and Rockland Motors
Partnership T/A Rockland Mitsubishi, as tenant.
5. Lease between Boundbrook Realty Associates, as landlord and DiFeo
Oldsmobile Partnership, as tenant.
6. Lease between Boundbrook Realty Associates, as landlord and Somerset
Motors Partnership T/A DiFeo Lexus, as tenant.
7. Lease between J & S Equity Urban Renewal Corp., as landlord and Hudson
Motors Partnership T/A Hudson Toyota, as tenant.
8. Lease between J & S Equity Associates, as landlord and DiFeo Jeep-Eagle
Partnership, as tenant.
9. Lease between J & S Equity Associates, as landlord and J & F
Oldsmobile-Isuzu Partnership, as tenant.
10. Lease between J & S Equity Associates, as landlord and DiFeo Subaru
Partnership, as tenant.
11. Lease between J & S Equity Associates, as landlords and DiFeo
Buick-Pontiac-GMC Truck Partnership, as tenant (Premises: Block 1745, Lots
34-40; Block 1746, Lots 19A, 21A and 22A; Block 1747, Lots 81-84, Jersey
City, New Jersey).
12. Lease between J & S Equity Associates, as landlord and DiFeo Autocenter
Partnership, as tenant.
13. Lease between J & S Equity Associates, as landlord and DiFeo
Buick-Pontiac-GMC Truck Partnership, as tenant (Premises: 919 Communipaw
Avenue, Jersey City, New Jersey.
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14. Lease between J & S Equity Associates, as landlord and DiFeo Imports
Partnership T/A Jersey City Mitsubishi, as tenant.
15. Lease between J & S Equity Associates, as landlord and DiFeo
Buick-Pontiac-GMC Truck Partnership, as tenant (Premises: 315 Clendenny
Avenue, Jersey City, New Jersey).
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EXHIBIT C
GROUP SUBLEASES
All leases set forth below are dated as of October 1, 1992 unless
otherwise stated.
1. Sublease between Fair Imports Corp., as sublandlord and Fair
Imports Partnership t/a Fair Acura, as subtenant.
2. Sublease between J & S Equity Associates, as sublandlord and
DiFeo Volkswagen Partnership, as subtenant.
3. Sublease between J & S Equity Associates, as sublandlord and
DiFeo Hyundai Partnership, as subtenant.
4. Sublease between Fair Motors Corp., as sublandlord and Fair
Motors Partnership t/a Fair Mitsubishi, as subtenant.
5. Sublease between DiFeo BMW, Inc., as sublandlord and DiFeo BMW
Partnership, as subtenant.
6. Sublease between J & S Equity Associates, as sublandlord and
DiFeo Autocenter, as subtenant.
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EXHIBIT D
STRUCTURAL DEFECTS
All such structural defects as set forth in that certain Report of
Site Investigation for Various Automobile Dealerships in New Jersey, New York
and Connecticut, SE #2519, dated June 2, 1992, as amended, prepared by Storch
Engineers.
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EXHIBIT E
Additional Representations
And Warranties of Landlord
1. Existence. Landlord is a partnership organized validly
existing and in good standing under the laws of its state of organization and
has all requisite power and authority to enter into this Lease, the Lease
Takeback and Rent Adjustment Agreement and the Landlord Guaranty (collectively,
the "Lease Documents") to which it is a party and to perform its obligations
hereunder and thereunder; and has all requisite corporate power and authority to
own its properties and assets and conduct its business as it is now being
conducted.
2. Authority; Consents. The execution, delivery performance by
Landlord of the Lease Documents to which it is a party and the consummation of
the transactions contemplated hereby and thereby have been duly authorized by
all requisite corporate, partnership or other action, and no other corporate,
partnership or other action on the part of Landlord is necessary for the
execution, delivery and performance by Landlord of any Lease Document to which
it is a party and the consummation by it of the transactions contemplated hereby
and thereby. Subject to Article 22, which Article exclusively governs
Environmental Health and Safety Matters and except as disclosed on Schedule E-1
hereto, neither the execution nor the delivery by Landlord of any Lease Document
to which it is a party, nor the consummation by any of the transactions
contemplated hereby or thereby, nor compliance with nor fulfillment by Landlord
of the terms and provisions hereof or thereof, will, except as disclosed on
Schedule E-2 hereto, (i) conflict with or result in a breach of the terms,
conditions or provisions of or constitute a default under (A) the Certificate or
Articles of Incorporation, Bylaws, partnership agreement, or other
organizational documents of Landlord, or (B) any lease contract, instrument,
mortgage, deed of trust, trust deed or deed to secure debt evidencing or
securing indebtedness for borrowed money, any financing lease, any law, rule,
regulation, judgment, order, award, decree or other restriction of any kind to
which Landlord is a party or by which it is bound, or the Premises is subject,
(ii) require Landlord to obtain the consent, approval, authorization or other
order or action of, or filing with, any court, governmental authority or
regulatory body, (iii) require the consent, approval, authorization or order of
any person or entity under, and will not conflict with, or result in the breach,
lapse or termination of, or constitute a default under, or result in the
acceleration of the performance by Landlord under, any material lease, permit,
license, contract, mortgage, deed of trust, trust deed, deed to secure debt,
other lease, indenture or other instrument to which Landlord is a party or by
which the Premises is subject, (iv) give any party with rights under any
instrument, contract (including any sale/leaseback agreement), lease,
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mortgage, deed or trust, trust deed, deed to secure debt, judgment, order,
award, decree or other restriction the right to terminate, modify or otherwise
change the rights or obligations of any party under such instrument, contract,
lease, mortgage, deed of trust, trust deed, deed to secure debt, judgment,
order, award, decree or other restriction or (v) require any declaration, filing
or registration with any governmental or regulatory authority by Landlord. Each
Lease Document has been duly executed and delivered by Landlord and (assuming
the due authorization, execution and delivery hereof and thereof by the other
parties hereto and thereto), constitutes a legal, valid and binding obligation
of Landlord, enforceable against Landlord in accordance with its respective
terms (except as the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditor's
rights generally and laws restricting the availability of equitable remedies and
may be subject to general principles of equity whether or not such
enforceability is considered in a proceeding at law or in equity).
3. No Litigation. There is no action, lawsuit, claim
counterclaim, proceeding or investigation (or group of related actions,
lawsuits, claims, proceedings or investigations) pending or, to the knowledge of
Landlord, Joseph DiFeo or Samuel DiFeo, threatened against or affecting Landlord
that seeks to restrain or enjoin the consummation of the transactions
contemplated by any Lease Document.
4. Title to Assets. Landlord owns, and has the legal
right to use, all of the Premises. None of the personal property or fixtures
on the Premises by the prior tenant have reverted to Landlord as a result of
the termination of the prior lease of the Premises.
5. Compliance. Landlord is not in default under or in
violation of, any applicable franchise, permit or license, its Articles or
Certificate of Incorporation (or other charter document), Bylaws, partnership
agreement or other organizational document, any promissory note, indenture or
any evidence of indebtedness or security therefor, mortgage, lease, Contract (as
hereinafter defined) or any other instrument to which it is a party or by which
it or the Premises is or may be bound.
6. Litigation. Except as disclosed in Schedule E-4 hereto and
except for Environmental Health and Safety Matters which are governed
exclusively by Article 22, there is no action, lawsuit, claim, counterclaim,
proceeding or investigation (or group or related actions, lawsuits, claims,
proceedings or investigations) pending or, to the knowledge of Landlord
threatened, against or affecting Landlord in any court, or before and Federal,
state, provincial, municipal or other governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, or before any
arbitrator of any kind, and as of the date hereof Landlord knows of no
reasonable basis for any
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such action, lawsuit, claim, proceeding, or investigation (or group of related
actions, lawsuits, claims, proceedings or investigations) which seeks to
restrain or enjoin the consummation of the transactions contemplated by the
Lease Documents or would materially adversely affect Tenant or Tenant's use and
occupancy of the Premises. Landlord is not in default, and no condition exists
that with notice or the lapse of time or both would constitute a default, with
respect to any judgment, order writ, injunction or decree of any court or before
any Federal, state, provincial, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign,
affecting or relating to the business of Landlord. No condemnation proceeding
has commenced or, to the knowledge of Landlord, is threatened to be commenced
against any of the Premises.
7. Contracts. Schedule E-5 hereto lists all of the following
contracts of Landlord relating to the Premises ("Contracts"): (i) any lease,
sublease or other right of occupancy, (ii) any contract, commitment or option to
sell or lease the Premises, (iii) any mortgage, hypothecation, deed of trust,
equipment lease, conditional sales agreement or similar instrument which place a
lien or encumbrance upon the Premises, (iv) any other contract relating to
rights in the Premises which will, or has the reasonable likelihood to,
materially adversely interfere with Tenant, this Lease or the use and occupancy
of the Premises by Tenant pursuant to this Lease, or (v) any other contract
which would be binding on Tenant hereunder. Landlord had made available to
Tenant true and complete complies of all Contracts, all as presently in effect.
This representation shall not be deemed to affect, or to be affected, by any
environmental matter or Environmental Claims, each of which is governed
exclusively by Article 22.
8. Insurance. Except as disclosed in writing to Tenant
on or before April 29, 1992, the insurance maintained by the occupant of the
Premises as of March 11, 1992 is sufficient to comply with the provisions of
the Lease.
Any dispute with respect to the foregoing representations and
warranties shall be resolved by ADR pursuant to Article 18.
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EXHIBIT E
TO SUBLEASE BETWEEN
DIFEO BMW, INC. AND DIFEO BMW PARTNERSHIP
LEASE
Lease dated January 6, 1992, between Michael Zullo, Sr. and Bertha
Zullo, with an address at 40 Knoll Road, Tenafly, New Jersey 07670 ("Landlord")
and DIFEO BMW, INC., with an address of 820 River Road, Edgewater, New Jersey
("Tenant").
Landlord hereby leases to Tenant and Tenant hereby rents from
Landlord the Demised Premises described hereinbelow for the Term and at the rent
provided for hereinbelow subject to the conditions set forth in the General
Conditions of Lease attached hereto and made a part hereof. Intending to be
legally bound hereunder and in consideration of $1.00 and other good and
valuable consideration, Landlord and Tenant hereby agree with each other as
follows: DEFINITIONS AND SPECIFIC TERMS OF LEASE
(a) Demised Premises: Demised Premises means the property described
in Exhibit A which Exhibit has been initialed by the parties and attached hereto
and made a part hereof, together with the building and other improvements
located thereon. The Demised Premises includes any alterations, additions or
repairs made thereto and all lifts and fixtures attached hereto or used in
connection with the business operated on the Demised Premises.
(b) Building: Means the Building located on the Demised Premises,
commonly known as 301 County Road, Tenafly, New Jersey.
(c) Commencement Date: Means January 6, 1992.
(e) Renewals: Tenant shall have the option to renew this Lease for
two additional five (5) year period, each five year period being referred to
respectively as the First Renewal Period and Second Renewal Period.
(d) Term: Means the term of ten (10) years unless sooner terminated
in accordance herewith.
(f) Rent: The "triple net" rent herein reserved to Landlord during
the Term of this lease shall be as set forth below and shall be payable by
Tenant in equal monthly installments, on or before the first day of each month
in advance to Landlord at the office of Landlord as designated below, or to such
other recipient or place as shall be designated by Landlord, without any prior
demand therefor and without any deduction or set-off whatsoever. Notwithstanding
the foregoing, the "triple net" rent from the Commencement Date until January
31, 1992 shall be $9,000.00.
TERM ANNUAL RENT
---- -----------
Lease Year 1 264,000.00
Lease Year 2 264,000.00
Lease Year 3 288,000.00
Lease Year 4 288,000.00
Lease Year 5 288,000.00
Lease Year 6 372,000.00
Lease Year 7 372,000.00
Lease Year 8 372,000.00
Lease Year 9 372,000.00
Lease Year 10 372,000.00
First Renewal Period 480,000.00
Second Renewal Period 600,000.00
(g) Security Deposit: $22,000 payable $5,500 per month for the first
four (4) months of the Term.
(h) Use: The Demised Premises are to be used for a car dealership or
any other lawful purpose. Tenant at its own cost and expense shall obtain any
and all licenses and permits necessary for such use.
(i) Notice Addresses:
(1) Landlord's Notice Address:
Michael Zullo, Sr.
301 County Road
Tenafly, New Jersey
(2) Landlord's Notice Copy Address:
Hannoch Weisman, A Professional Corporation
4 Becker Farm Road
Roseland, New Jersey 07068
Attn: Ira B. Marcus, Esq.
(3) Tenant's Notice Address:
DiFeo BMW, Inc.
820 River Road
Edgewater, New Jersey 07020
Attn: Robert Cohen
(4) Tenant's Notice Copy Address:
Lawrence Iannacone, Esq.
Dealer Management Associates
DiFeo Automotive Group
585 Route 440
Jersey City, New Jersey 07304
Joseph A. Vena, Esq.
Mandelbaum Salsburg Gold Lazris
Discensza & Steinberg
155 Prospect Avenue
West Orange, New Jersey 07052
(j) Liability Insurance Limits:
(1) Combined Single Limit
Death or Injury Limit: $500,000
(2) Combined Single Limit
Property Damage Limit: $500,000
(3) Umbrella Liability Coverage: $5,000,000
(k) Interest: Any payment required to be made by Tenant under
the provisions of this Lease or as set forth in the General Conditions of Lease
not made by Tenant when and as due shall thereupon be deemed to be due and
payable on demand with interest thereon at the lesser of twelve percent (12%)
per year or at the highest legal rate computed from the date when the particular
amount became due to the date of payment thereof to Landlord.
(l) Late Charge: In order to cover the extra expense involved in
handling delinquent payments, Tenant, at Landlord's option, shall pay a "late
charge" of four percent (4%) of any payment of Rent when such payment of Rent is
paid more than ten (10) days after the due date thereof. It is understood and
agreed that this charge is for additional expense incurred by Landlord and shall
not be considered interest.
(m) Option to Purchase:
(1) Provided the Tenant is not in Default (as defined in the
General Conditions of Lease), the Tenant shall be given the right and privilege
to purchase the Demised Premises upon the terms set forth in the Purchase
Agreement attached hereto as Exhibit C.
(2) The right, option, and privilege of the Tenant to purchase
the Demised Premises as hereinabove set forth is expressly conditioned upon the
Tenant delivering to the Landlord, in writing by certified mail, return receipt
requested, at any time upon three (3) months' prior notice of its intention to
purchase, which notice shall be given to the Landlord by the Tenant no later
than six (6) months prior to the date fixed for termination of the Term
hereinbefore provided. The notice shall only be effective if accompanied by the
Purchase Agreement executed by the Tenant.
Time is hereby made of the essence.
(n) Tenant shall have the option to terminate the Lease at the
expiration of Lease Year 3 upon payment to Landlord the sum of $275,000.00
payable in monthly installments of $20,000.00. Tenant shall have a second option
to terminate the Lease at the expiration of Lease Year 4 upon payment to
Landlord the sum of $250,000.00 payable in monthly installment of $20,000.00.
Tenant shall have a third option to terminate the Lease at the expiration of
Lease Year 5 upon payment to Landlord the sum of $250,000.00 payable in monthly
installments of $20,000.00. The exercise of the foregoing options shall be
exercised by Tenant by written notice to Landlord not less than ninety (90) days
prior to the expiration of the respective lease year. In the event that Tenant
has exercised any of the foregoing options and Landlord subsequently sells the
Demised Premises, upon such closing all obligations of Tenant pursuant to the
exercised termination option shall lease.
IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be
executed as of the day and year first above written.
Landlord:
WITNESS:
/s/ /s/Michael Zullo
-------------------- ---------------------
Michael Zullo, Sr.
/s/Bertha Zullo
---------------------
Bertha Zullo
Initial (Landlord): /s/ BZ
------------
Initial (Tenant): /s/ JD
------------
ATTEST or WITNESS: DIFEO BMW INC.
/s/ By: /s/ Joseph C. DiFeo
- ------------------------- -------------------------
(Signature)
Joseph C. DiFeo
-----------------------------
President
-----------------------------
Title
Initial (Landlord): /s/ BZ
------------
Initial (Tenant): /s/ JD
------------
EXHIBIT F TO SUBLEASE BETWEEN
DIFEO BMW, INC. AND DIFEO BMW PARTNERSHIP
1. Lease between Fair Realty Company, as landlord, and Fair Hyundai
Partnership, as tenant.
2. Lease between Fair Realty Company, as landlord, and Danbury-Mt. Kisco
Saturn Partnership, as tenant.
3. Lease between Fair Realty Company, as landlord, and Fair
Cadillac-Oldsmobile-Isuzu Partnership, as tenant.
4. Lease between Rockland Realty Associates, as landlord, and Rockland Motors
Partnership, as tenant.
5. Lease between Boundbrook Realty Associates, as landlord, and DiFeo
Oldsmobile Partnership, as tenant.
6. Lease between Boundbrook Realty Associates, as landlord, and Somerset
Motors Partnership, as tenant.
7. Lease between J & S Equity Urban Renewal Corp., as landlord, and Hudson
Motors Partnership, as tenant.
8. Lease between J & S Equity Associates, as landlord, and DiFeo Subaru
Partnership, as tenant.
9. Lease between J & S Equity Associates, as landlord, and J & F
Oldsmobile-Isuzu Partnership, as tenant.
10. Lease between J & S Equity Associates, as landlord, and DiFeo Jeep-Eagle
Partnership, as tenant.
11. Lease between J & S Equity Associates, as landlord, and DiFeo
Buick-Pontiac-GMC Truck Partnership, as tenant (for 315 Clendenny Avenue,
Jersey City, New Jersey).
12. Lease between J & S Equity Associates, as landlord, and DiFeo Autocenter
Partnership, as tenant.
13. Lease between J & S Equity Associates, as landlord, and DiFeo
Buick-Pontiac-GMC Truck Partnership, as tenant (for premises designated as
Block 1745, Lots 34-40, Block 1746, Lots 19A, 21A and 22A; Block 1747,
Lots 81-84, Jersey City, New Jersey).
14. Lease between J & S Equity Associates, as landlord, and DiFeo Imports
Partnership, as tenant.
15. Lease between J & S Equity Associates, as landlord, and DiFeo
Buick-Pontiac-GMC Truck Partnership, as tenant (for 919 Commnipaw Avenue,
Jersey City, New Jersey).
EXHIBIT G TO SUBLEASE BETWEEN
DIFEO BMW, INC. AND DIFEO BMW PARTNERSHIP
1. Sublease between Fair Imports Corp., as sublandlord, and Fair Imports
Partnership t/a Fair Acura, as subtenant.
2. Sublease between J & S Equity Associates, as sublandlord, and DiFeo
Volkswagen Partnership, as subtenant.
3. Sublease between J & S Equity Associates, as sublandlord, and DiFeo
Hyundai Partnership, as subtenant.
4. Sublease between Fair Motors Corp., as sublandlord, and Fair Motors
Partnership t/a Fair Mitsubishi, as subtenant.
5. Sublease between DiFeo BMW, Inc., as sublandlord, and DiFeo BMW
Partnership, as subtenant (for premises commonly known as 301 County Road,
Tenafly, New Jersey).
6. Sublease between J & S Equity Associates, as sublandlord, and DiFeo
Autocenter Partnership, as subtenant.
LANDLORD'S
ESTOPPEL CERTIFICATE
Landlord: Michael Zullo, Sr. and Bertha Zullo
Tenant: DiFeo BMW, Inc.
Subtenant: DiFeo BMW Partnership
Leased Property: 301 County Road, Tenafly, New Jersey
Overlease: Dated January 6, 1992
The undersigned Landlord, being the landlord pursuant to the
Overlease, certifies to Subtenant as follows:
1. The Overlease, together with all modifications or amendments
thereof, is attached hereto as Schedule A; the Overlease has not been amended,
modified or superseded since its original execution and no other agreements or
understandings exist with respect to the property demised under the Overlease
except as set forth in Schedule A; and the Overlease is in full force and
effect.
2. To Landlord's best knowledge, there are no uncured defaults on
the part of Tenant under the Overlease and there are no events that have
occurred which, with the giving of notice or passage of time or both, would
constitute a default by Tenant thereunder, and at the present time, to the best
of Landlord's knowledge, Landlord has no claims or disputes against Tenant under
the Overlease. Any improvements required by the terms of the Overlease to be
made by Tenant have been completed to the satisfaction of Landlord, and Tenant's
current use and operation complies with any use covenants or operating
requirements contained in the Overlease.
3. The current fixed rent required under the Lease is $22,000 per
month, payable on the first day of each calendar month, not including taxes,
assessments or expenses that Tenant is obligated to pay. Fixed rent has been
fully and currently paid by Tenant in advance through Sept., 1992. All other
monetary obligations due under the Overlease to date have been fully and
currently paid.
4. The term of the Overlease commenced on the 6th day of January,
1992, and expires on the 5th day of January, 2002, and there are no provisions
for, and Lessee has no rights with respect to, renewal or extension of the term,
terminating the term, or leasing additional space, except as expressly set forth
in the Lease.
5. No controversy presently exists between Landlord and Tenant,
including any litigation or arbitration, over the Lease or the performance of
the terms thereof.
IN WITNESS WHEREOF, Landlord has duly executed this Estoppel
Certificate this 23 day of Sept., 1992.
/s/
--------------------------------
Michael Zullo, Sr.
/s/
--------------------------------
Bertha Zullo
LANDLORD'S CONSENT
Michael Zullo, Sr. and Bertha Zullo (collectively the
"Landlord"), the landlord under a certain lease agreement ("Lease") dated
January 6, 1992 (as the same may have been amended) entered into between the
Landlord and DiFeo BMW, Inc. ("Tenant"), hereby consents to the Tenant's
subleasing of the premises demised under the Lease to DiFeo BMW Partnership.
Landlord hereby certifies that it is the holder of the landlord's
interest under the Lease and that it has not assigned, transferred or otherwise
disposed of the landlord's interest under the Lease.
IN WITNESS WHEREOF, the Landlord has executed this Landlord's
consent on this 23 day of Sept., 1992.
/s/
--------------------------------
Michael Zullo, Sr.
/s/
--------------------------------
Bertha Zullo
GENERAL CONDITIONS OF LEASE
FOR SPACE AT
301 County Road, Tenafly, New Jersey
GENERAL CONDITIONS OF LEASE
The Lease to which this document is attached and made a part is
subject to the following general conditions:
ARTICLE I. DEFINITIONS. As used herein, the following words and
phrases have the following meanings:
Section 1.01. Expiration Date: Means the last day of the Term. If
the Lease is cancelled or terminated prior to the originally fixed Expiration
Date, then the Expiration Date shall be the date on which the Lease is so
cancelled or terminated. But if the Lease is cancelled or terminated prior to
the originally fixed Expiration Date by reason of Tenant's Default (as
hereinafter defined), Tenant's liability under the provisions of the Lease shall
continue until the date the Term would have expired and such cancellation or
termination not occurred.
Section 1.02. Force Majeure: Means any of the following events: Acts
of God; strikes, lock-outs, or labor difficulty; explosion, sabotage, accident,
riot or civil commotion; act of war; fire or other casualty; legal requirements;
delays caused by the other party; any causes beyond the reasonable control of a
party.
Section 1.03. Insurance Requirements: Means the applicable
provisions of the insurance policies carried by Landlord and/or Tenant covering
the demised Premises; all requirements of the issuer of any such policy; and all
orders, rules, regulations and other requirements of any insurance service
office which serves the community in which the Demised Premises is situated.
Section 1.04. Mortgage: Means any mortgage, deed to secure debt,
trust indenture, or deed of trust which may now or hereafter affect, encumber or
be a lien upon the Demised Premises, or Landlord's interest therein.
Section 1.05. Mortgagee: Means the holder of any Mortgage, at
any time.
Section 1.06. Parking Area: Means all portions of the Demised
Premises other than the Building.
Section 1.07. Person: Means an individual, fiduciary, estate,
trust, partnership, firm, association, corporation, or other organization, or
a government or governmental authority.
Section 1.08. Repair: Includes the words "replacement and
restoration", "replacement or restoration", "replace and restore", "replace
or restore", as the case may be, unless specifically indicated to the
contrary herein.
Section 1.09. Tenant's Agents: Includes Tenant's employees,
servants, licensees, tenants, subtenants, assignees, contractors, heirs,
successors, legatees and devisees.
Section 1.10. Tenant's Guarantor: Means Samuel X. DiFeo,
individually.
ARTICLE II. CONDITION OF DEMISED PREMISES.
Section 2.01. Certificate of Occupancy: If a Certificate of
Occupancy or similar instrument from any governmental authority is required in
connection with the use of the Demised Premises by Tenant, Landlord agrees to
procure same at its sole cost and expense. Tenant agrees to cooperate fully with
the procurement of such certificate.
Section 2.02. Condition of Demised Premises: Landlord has made no
representations, covenants or warranties with respect to the condition of the
Demised Premises. Tenant is accepting the Demised Premises without
representations, covenants or warranties as to the value, condition or
suitability of the Demised Premises.
ARTICLE III. TERM.
Section 3.01. Term: The Term of the Lease shall be for the
period indicated in the Lease exclusive of any renewal periods.
Section 3.02. Renewals. Any option to renew this Lease for the
periods set forth in the Lease must be exercised by giving Landlord written
notice of Tenant's intention to renew at least ninety (90) days prior to the
expiration of the Term of First Renewal Period, as applicable.
ARTICLE IV. RENT, TAXES, UTILITY CHARGES, ETC.
Section 4.01. Rent: Tenant shall pay Rent to Landlord Rent
shall be payable at the rates set forth in the Lease. Rent shall be payable in
equal monthly installments. Each monthly installment shall be due in advance.
The first monthly installment shall be due on the execution of the Lease. Each
subsequent installment shall be due on the first day of each month during the
Term. If the Commencement Date is a day other than the first day of the month,
the first installment shall be one thirtieth of a normal monthly installment for
each day during the period commencing with the Commencement Date up to and
including the last day of that month. If the Expiration Date of the Term or any
Renewal Period occurs on a day other than the last day of any month, Rent for
the last month during the Term shall be pro-rated in the same manner.
Section 4.02. Taxes, Assessments:
(a) The Tenant shall promptly pay as additional rent, all real
estate taxes, assessments and water meter charges (including any expenses
incident to the installing, repairing or replacing of any water meter) and all
such other charges or payments of any kind and nature whatsoever, and whether or
not now within the contemplation of the parties, imposed by any governmental or
public authority as shall, during the Term and Renewal Periods, be imposed, or
become a lien, upon the Demised Premises or any part thereof or which may become
due and payable with respect thereto, and any and all assessments and other
similar charges imposed upon the Demised Premises in lieu of or in addition to
the foregoing, under or by virtue of any present or future laws or regulations
of any governmental or lawful authority whatsoever.
(b) For any period during the Tenant's occupancy of the Demised
Premises which constitutes less than the full period for which any one or more
of the foregoing charges are assessed, each such charge shall be pro-rated on a
daily basis and adjusted between the Landlord and the Tenant.
Section 4.03. Payment of Rent:
(a) Rent shall be paid automatically without written or oral notice,
demand, counterclaim, offset, deduction, defense, or abatement.
-2-
(b) All Rent payable under the Lease shall be payable at Landlord's
address as set forth in the Lease or at such other address as Landlord shall
designate by giving notice to Tenant.
(c) If Tenant shall fail to pay any taxes, assessments or any other
charges payable hereunder, Landlord shall have all remedies provided for in the
Lease or at law in the case of nonpayment of Rent. Tenant's obligations,
accruing during the Term, shall survive the Expiration Date of the Lease.
Section 4.04. Security Deposit:
(a) Tenant has deposited with or to be deposited with Landlord the
sum designated as Security Deposit in the Lease, as security for the full and
faithful performance by Tenant of all obligations of Tenant under the Lease or
in connection with the Lease. If Tenant is in Default under the Lease, Landlord
may use, apply or retain the whole or any part of the Security Deposit for the
payment of (i) any Rent or any other sums of money which Tenant may not have
paid or which may become due after the occurrence of a Default, (ii) any sum
expended by Landlord on Tenant's behalf in accordance with the provisions of the
Lease, or (iii) any sum which the Landlord may expend or be required to expend
by reason of such Default, including any ages or deficiency in the reletting of
the Demised Premises in connection with Article XV hereof. The use, application
retention of the Security Deposit or portion thereof by Landlord shall not
prevent Landlord from exercising any other right remedy provided for hereunder
or at law and shall not operate a limitation on any recovery to which Landlord
may otherwise be entitled.
(b) The Security Deposit shall bear no interest and Landlord shall
be entitled to commingle the Security Deposit with Landlord's other funds.
(c) If Tenant shall fully and faithfully comply with all of the
provisions of the Lease, the Security Deposit and any balance thereof shall be
returned to Tenant after the Expiration Date or upon any later date after which
Tenant has vacated the Demised Premises.
(d) Anything in this Section 4.04 to the contrary notwithstanding,
in the event any Mortgagee shall become mortgagee-in-possession or take title by
foreclosure or deed in lieu of foreclosure, then, in either of such events, such
Mortgagee obligation to return the Security Deposit under this Section 4.04
shall be limited to the amount of the Security Deposit which is actually
transferred from Landlord to such Mortgagee.
ARTICLE V. SIGNS.
Section 5.01. Signs: The location, design and conter of any signs
shall comply with all laws, regulations and ordinances. The cost to prepare,
manufacture and install any sign shall be borne by Tenant. Tenant shall be
responsible for the cost of all repairs, replacement or maintenance of signs at
the Demised Premises or any other part of the Property. Landlord agrees to,
prior to commencement of the Term and upon fifteen (15) days notice, remove at
its own cost any signs requested by Tenant.
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ARTICLE VI. REPAIRS, ALTERATIONS,
COMPLIANCE WITH LAWS, SURRENDER.
Section 6.01. No Repairs by Landlord: Landlord shall not be
required to make or cause to be made any repairs, including without limitation,
any structural repairs to the roof, foundation, exterior walls and load-bearing
interior walls of the Demised Premises.
Section 6.02. Repairs and Maintenance by Tenant: Tenant shall make
all repairs to the Demised Premises necessary or desirable to keep the Demised
Premises in good order and repair and in a safe, dry and tenantable condition.
Without limiting the generality of the foregoing, Tenant shall be specifically
required to replace or repair (a) all pipes, lines, ducts, wires, or conduits
that service Tenant and are contained within the Demised Premises or which
service the Demised Premises and are located outside of the Demised Premises;
(b) the roof, foundation, exterior walls and interior walls; (c) windows, plate
glass, doors (including overhead doors), and any fixtures or appurtenances
composed of glass; (d) leaders and gutters; (e) Tenant's sign, (f) any heating
or air conditioning equipment installed in or servicing the Demised Premises;
(g) parking areas, sidewalks, and driveways; and (h) the Building or any part of
the Demised Premises when repairs to the same are necessitated by any act,
omission or negligence of Tenant or Tenant's Agents or invitees, or the failure
of Tenant to perform its obligations under the Lease. Tenant shall keep the
Demised Premises in a clean and sanitary condition, free from vermin and
escaping offensive odors.
Section 6.03. Approval by Landlord of Repairs and Alterations:
(a) Tenant may not make any major or structural alterations to
the Demised Premises, without the prior written consent of Landlord which shall
not be unreasonably withheld. If Landlord grants consent, any such alterations
shall be performed in a good and workmanlike manner in accordance with all
applicable legal and Insurance Requirements. Landlord hereby specifically
consents to any and all alterations and improvements which are required by
either BMW or the municipality.
(b) Tenant shall give Landlord prompt written notice of any major or
structural repair or alteration required or permitted to be performed by Tenant
under any provision of the Lease. Any alterations, additions and changes that
Tenant desires to make to the Demised Premises shall be at its own cost and
expense, but, before making same, Tenant shall submit to the Landlord the plans
and specifications therefor for Landlord's consent and approval, and all such
alterations, additions and changes (except Tenant's machinery or trade fixtures)
which are attached in such manner that their separation from the Demised
Premises will result in injury to the Demised Premises, are immediately to merge
and become a permanent part of the realty, and all interest of Tenant therein
shall become immediately vested in Landlord. Landlord, at its option, however,
may require that at the expiration or other termination of the Term or any
renewal thereof, the Tenant at its own cost and expense remove said alterations,
additions or changes except as to those
-4-
alterations and additions which were required by BMW or which were consented to
pursuant to the terms of this Lease or by a writing signed by Landlord provided
that such changes relate to the operation of a car dealership, and restore the
portion of the Demised Premises affected by such removal to their condition
prior to the making of such alterations, additions or changes. The Tenant agrees
to accept the alterations, additions and changes that were made previously and
at the termination of the Term, Tenant will restore the Building to its original
condition at the option of Landlord.
Section 6.04. Compliance with Laws and Regulations: Except as
otherwise provided in this Agreement, the Tenant covenants and agrees that upon
and after the Commencement Date, it shall promptly execute and comply with all
statutes, ordinances, rules, orders, regulations and requirements of the
Federal, State and Municipal Government and of any and all their departments and
bureaus hereinafter referred to as "Governmental Regulations" for the
corrections, prevention and abatement of nuisances, violations or other
grievances, in, upon or connected with said Demised Premises during said Term
and arising from the operations of the Tenant therein at the Tenant's cost and
expense; subject to the right of the Tenant to contest the decision by any such
department or bureau. In the event the Tenant contests any such governmental
decision, it shall indemnify, defend and save the Landlord harmless from any
fine, penalty, costs and liability imposed upon the Landlord as a result of
Tenant's failure so to comply, or as a result of said contest by Tenant. The
Tenant covenants and agrees, at its own cost and expense, to (i) comply with
such regulations or requests expressly caused by and in connection with the use
and occupancy of the Demised Premises by the Tenant and the conduct of its
business, as may be required by the fire or liability insurance carriers
providing insurance for the demised premises, or promulgated by the Board of
Fire Underwriters or their equivalent ("Insurance Regulations"); (ii) pay for
the costs of interior, exterior or structural changes in the Building, fixtures
or equipment, if the same are required by Governmental Regulations or Insurance
Regulations, as the same may be applicable as a matter of general application to
the Building; or (iii) pay for any changes in the Building, fixtures or
equipment that may be required by Governmental Regulations or Insurance
Regulations.
Section 6.05. Environmental Cleanup Responsibility Act:
(a) Landlord represents that it is not an Industrial
Establishment as that term is defined in the Environmental Cleanup
Responsibility Act, N.J.S.A. 13:1K-6 et seq., as same may be amended from time
to time (the "Act"), and that Landlord's primary Standard Industrial Code is
5511.
(b) In the event that Tenant now is or hereafter becomes an
Industrial Establishment, Tenant shall comply with all conditions as set forth
below.
(c) Tenant agrees that it shall, at its sole cost and expense,
fulfill, observe and comply with all of the terms and provisions of the Act and
all rules, regulations, ordinances, options, orders and directives issued or
promulgated pursuant to
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or in connection with said Act by the Department of Environmental Protection
("DEP"), or any subdivision or bureau thereof or any other governmental or
quasi-governmental agency, authority or body having jurisdiction thereof. (The
Act and all said rules, regulations, ordinances, opinions, orders and directives
are hereinafter collectively referred to as "ECRA").
(d) Without limiting the foregoing, upon Landlord's request
therefor, and in all events no later than sixty (60) days prior to "closing,
terminating or transferring operations" (as said terms are defined in ECRA) out
of the Demised Premises, Tenant at its sole cost and expense, shall provide the
Landlord with a true copy of:
(i) an opinion letter from DEP (or such other agency or body
which shall then have jurisdiction over ECRA matters) in form satisfactory to
Landlord's counsel, stating that ECRA does not apply to Tenant, Tenant's use and
occupancy of the Demised Premises and to the closing, terminating or
transferring of operations of the Demised Premises; or
(ii) a Negative Declaration (as said term is defined in ECRA)
duly approved by DEP or such other agency or body then having jurisdiction over
ECRA matters; or
(iii) a Cleanup Plan (as said term is defined in ECRA) duly
approved by DEP (or such other agency or body which shall then have jurisdiction
over ECRA matters).
(e) Nothing in this Section shall be construed as limiting Tenant's
obligation to otherwise comply with ECRA.
(f) In the event Tenant complies with paragraph (d) (iii) of this
Section by obtaining an approved Cleanup Plan, Tenant agrees that it shall, at
its sole cost and expense:
(i) post any financial guarantee or other bond required
to secure implementation and completion of such Cleanup Plan; and
(ii) promptly implement and diligently prosecute to completion
said Cleanup Plan, in accordance with the schedules contained therein or as may
otherwise be ordered or directed by DEP or such other agency or body which shall
then have jurisdiction over such Cleanup Plan. Tenant expressly understands,
acknowledges and agrees that Tenant's compliance with the provisions of this
paragraph (e) may require Tenant to expend funds or do acts after the expiration
or termination of the Term and Tenant shall not be excused therefrom.
(g) Within ten (10) days after a written request by the Landlord or
any Mortgagee, Tenant shall deliver to Landlord and Mortgagee, if any, a duly
executed and acknowledged affidavit of Tenant's chief executive officer,
certifying:
(i) the proper four digit Standard Industrial Classification
number relating to Tenant's then current use of the Demised Premises (Standard
Industrial Classification Number to be obtained by reference to the then current
Standard Industrial Classification Manual prepared and published by the
Executive Office of the President, Office of Management and Budget or the
successor to such publication); and
(ii) (A) that Tenant's then current use of the Demised
Premises does not involve the generation, manufacture, refining, transportation,
treatment, storage, handling of
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disposal of hazardous substances or waste (as hazardous substances and hazardous
waste are defined in ECRA) on site, above ground or below ground (all of the
foregoing are hereinafter collectively referred to as the Presence of Hazardous
Substances), or, (B) that Tenant's then current use does involve the Presence of
Hazardous Substances, in which event, said affidavit shall describe in complete
detail that portion of Tenant's operations which involves the Presence of
Hazardous Substances. Such description shall, inter alia, identify each
hazardous substance and describe the manner in which Tenant generated, handled,
manufactured, refined, transported, treated, stored and/or disposed of same.
Tenant shall supply Landlord and Landlord's mortgagee, if any, with such
additional information relating to the Presence of Hazardous Substances as
Landlord or Landlord's mortgagee requests. This provision shall not be construed
to prohibit the lawful use of any Hazardous Substances by Tenant.
(h) Without limiting the foregoing, Tenant agrees:
(i) at its sole cost and expense, to promptly discharge
and remove any lien or encumbrance against the Demised Premises, the Building,
or the Complex imposed due to Tenant's failure to comply with ECRA, and
(ii) to defend, indemnify and hold Landlord harmless from and
against any and all liability, penalty, loss, expenses, damages, costs, claims,
causes of action, judgments and/or the like, of whatever nature, including but
not limited to attorney's fees and other costs of litigation or preparation
therefor, to the extent such costs arise from or in connection with Tenant's
failure or inability, for any reasons whatsoever, to observe or comply with ECRA
and/or provisions of this Section 6.05.
(i) Tenant agrees that each and every provision of this Section 6.05
shall survive the expiration or early termination of the Term. The parties
hereto expressly acknowledge and agree that the Landlord would not enter into
the Lease but for the provisions of this Section 6.05 and the aforesaid survival
thereof.
Section 6.06. Underground Storage Tanks: Tenant agrees that it
shall, at its sole cost and expense, promptly comply with all Government
Regulations relating to underground storage tanks, including, but not limited
to, the Hazardous and Solid Waste Amendments of 1984, 42 U.S.C. ss.6991 et seq.
or New Jersey's underground storage tank law, P.L. 1986 c.102, N.J.S.A.
58:10A-21 et seq. Landlord acknowledges that prior to commencement of this Lease
all underground storage tanks and gasoline pumps were removed and that this
provision shall only apply to tanks installed by or for Tenant.
Section 6.07. Spill Act:
(a) Landlord, to its knowledge, has not violated any provisions
of the Spill Act (as hereinafter defined).
(b) Tenant agrees that it shall, at its sole cost and expense,
observe, comply and fulfill all of the terms and provisions of the Spill
Compensation and Control Act, N.J.S.A. 58:10-23.11 et. seq., as the same may be
amended from time to time (the "Act") and all rules, regulations, ordinances,
opinions, orders and directives issued or promulgated pursuant to or in
connection with said Act by DEP, any subdivision or bureau thereof or
governmental or quasi-governmental agency or body having jurisdiction thereof.
(Said Act and all said rules, regulations, ordinances,
-7-
opinions, orders and directives are hereinafter in this Section 6.07
collectively referred to as "Spill Act".)
(c) Without limiting the foregoing, the Tenant agrees:
(i) that it shall not do, omit to do or suffer the
commission or omission of any act which is prohibited by or may result in any
liability under the Spill Act including without limitation the discharge of
petroleum products or other hazardous substances (as said terms are defined in
the Spill Act); and
(ii) whenever the Spill Act requires the "owner or operator"
to do any act, Tenant shall do such act and fulfill all such obligations at its
sole cost and expense, it being the intention of the parties hereto that
Landlord shall be free of all expense and obligations arising from or in
connection with compliance with the Spill Act.
(d) Without limiting the foregoing, Tenant agrees:
(i) at its sole cost and expense, to promptly discharge
and remove any lien or any encumbrance against the Demised Premises, the
Building or the Complex imposed by Tenant's failure to comply with the Spill
Act; and
(ii) to defend, indemnify and hold Landlord harmless from and
against any and all liability, penalty, loss, expenses, damages, costs, claims,
causes of action, judgments and/or the like, of whatever nature, including but
not limited to attorneys' fees and other expenses of litigation or preparation
therefor, to the extent such costs arise from or in connection with Tenant's
failure or inability, for any reason whatsoever, to observe or comply with the
Spill Act and/or the provisions of this Section 6.07.
(e) Tenant agrees that each and every provision of this Section 6.07
shall survive the expiration or earlier termination of the Term of the Lease.
The parties hereto expressly agree and acknowledge that the Landlord would not
enter into this Lease but for the provisions of this Section 6.07 and the
aforesaid survival thereof.
(f) Tenant agrees that it shall, at its sole cost and expense,
promptly comply with all federal, state and local laws, ordinances, rules,
regulations and requirements relating to air, ground and water pollution and
protection and/or preservation of the environment.
Section 6.08. Electrical Lines: If the Tenant installs any
electrical equipment that overloads the lines in the Demised Premises, Tenant
shall make whatever changes to such lines as may be necessary to render the
lines in good order and repair and in compliance with all Insurance Requirements
and applicable legal requirements. All electrical work to the Demised Premises
shall be performed by a licensed electrician. In the event that the electrical
work to be performed by Tenant shall require the alteration, modification or
repair of electrical equipment or lines servicing the Building, then, in such
event, Tenant shall cause such electrical work to be
-8-
performed by a licensed electrical contractor acceptable to Landlord.
Section 6.09. Repairs or Alterations:
(a) If, in an emergency, it shall become necessary to make promptly
any repairs or replacements required to be made by Tenant, Landlord may re-enter
the Demised Premises and proceed to have such repairs or replacements made and
pay the cost of such repairs or replacements. Within seven (7) days after
Landlord renders a bill for such repairs or replacements, Tenant shall reimburse
Landlord for the reasonable cost of making such repairs.
(b) Any alterations, modifications, additions or repairs to be made
by Tenant to the Demised Premises shall be performed by a licensed Contractor or
a reputable contractor regularly engaged in the trade to which such work
relates. All alterations, modifications, additions or repairs to the Demised
Premises must be done in a workmanlike manner and must comply with existing
municipal and state construction codes. Tenant shall be responsible for securing
any and all permits in connection with such work.
Section 6.10. Surrender of Premises: On the Expiration Date, Tenant
shall quit and surrender the Demised Premises broom clean, and in good condition
and repair, together with all alterations, fixtures, installations, additions
and improvements which may have been made in or attached on or to the Demised
Premises, including but not limited to an aggregate of at least nine (9) lifts,
electric or hydraulic but exclusive of any furniture and equipment, other than
lifts, which replaced damaged or obsolete items (except if such items were
damaged due to the gross negligence or intentional acts of Tenant.) Landlord, at
its option, may require Tenant to restore the Demised Premises to the condition
the Demised Premises was in on the Commencement Date in accordance with Section
6.03(b). Any personal property of Tenant which shall remain in or on the Demised
Premises after the termination of the Lease and the removal of Tenant from the
Demised Premises, may, at the option of Landlord and without notice, be deemed
to have been abandoned by Tenant and may either be retained by Landlord as its
property or be disposed of, without accountability, in such manner as Landlord
may see fit, or if Landlord shall give written notice to Tenant to such effect,
such property shall be removed by Tenant, at Tenant's cost and expense; and
Landlord shall not be responsible for any loss or damage occurring to any such
property owned by Tenant. Tenant's obligation under this Section shall survive
the Expiration Date.
Section 6.11. Mechanics' Liens: If any mechanic's or materialman's
lien is filed against the Demised Premises as a result of any additions,
alterations, repairs, installations or improvements made by Tenant, or any other
work or act of Tenant, Tenant shall discharge or bond same within twenty (20)
days from the filing of the lien. If Tenant shall fail to discharge or bond the
lien, Landlord may bond or pay the lien or claim for the account of Tenant
without inquiring into the validity of the lien or claim.
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Section 6.12. Insurance Covering Repairs, Etc.: Tenant shall not
make any major or structural alterations, repairs or installations or any other
work to or on the Demised Premises unless prior to the commencement of such work
Tenant shall obtain or provide proof of (and during the performance of such work
keep in force) public liability and workmen's compensation insurance coverage.
Such policies shall be non-cancellable without ten (10) days prior written
notice to Landlord. The policies shall be in amounts and shall be issued by
companies reasonably satisfactory to Landlord. Prior to the commencement of such
work, Tenant shall deliver duplicate originals of certificates of such insurance
policies to Landlord.
ARTICLE VII. SERVICES AND UTILITIES.
Section 7.01. Electricity: Tenant shall make its own arrangements
with the utility company supplying electricity for that service and arrange to
have bills forwarded directly to Tenant. Tenant shall pay for all electrical
service and charges relating to the Demised Premises and Tenant's sign.
Section 7.02. Gas Service: Tenant shall make its arrangements with
the utility company supplying gas for service and arrange to have all bills
forwarded directly to Tenant. Tenant shall pay for all gas service and charges
relating to the Demised Premises.
Section 7.03. Water: Tenant agrees to promptly pay any sewer or
water rent, charge, tax or levy imposed against the Demised Premises.
Section 7.04. Heat, Hot Water, Air-Conditioning:
(a) Landlord shall not be required to supply heat, hot water or
air-conditioning to the Demised Premises. Tenant shall supply its own
requirements of heat, hot water and air-conditioning. If the Demised Premises
includes a main heating boiler and/or air-conditioning Unit(s), such equipment
must be maintained in serviceable condition by Tenant.
(b) Tenant agrees to maintain heat at the Demised Premises at all
times at a level reasonably estimated by Landlord to keep waterpipes and
sprinklers, if any, in the Demised Premises from freezing and to otherwise
prevent damage to the Demised Premises, but under no circumstances less than 40
degrees Fahrenheit.
Section 7.05. Disruption of Utility Services: Landlord shall not be
liable for any interruption or failure in the supply of gas, electricity, water
or any other service to the Demised Premises.
Section 7.06. Garbage Disposal: Tenant agrees to make its own
arrangements with a garbage hauler for the disposal of its garbage. Tenant shall
pay for all garbage disposal charges relating to the Demised Premises.
ARTICLE VIII. USE AND OPERATION.
Section 8.01. Use: Tenant shall use the Demised Premises for the
purposes set forth in the Lease.
Section 8.02. Demised Premises Operations:
(a) Tenant shall keep the Demised Premises, including exterior and
interior portions of all windows, doors and all other glass, in neat and clean
condition. Tenant shall also, at
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its own cost and expense, maintain and care for such portions of the Demised
Premises as have been seeded to grass.
(b) Tenant shall remove snow and ice from the Demised Premises, and
spread sand or other abrasive substances thereon as conditions require.
(c) Tenant agrees not to permit the accumulation (unless in
concealed metal containers) or burning of any rubbish or garbage in, on or about
any part of the Demised Premises. All rubbish and garbage must be stored in
covered containers so as not to permit the wind from blowing the rubbish and
garbage around the Demised Premises, and shall keep the driveways and area on
the Demised Premises free and clear of any and all obstructions and equipment.
Tenant shall keep the sidewalk(s) and curbs adjacent to the Demised Premises
free of debris.
ARTICLE IX. TRANSFER OF INTEREST, PRIORITY OF LIEN.
Section 9.01. Assignment, Subletting, etc.: Tenant may sublet
the Demised Premises or any part thereof, or assign, this Lease or any interest
therein (except that the option contained in Article X may only be exercised by
an entity owned or controlled by Joseph DiFeo and/or Samuel DiFeo or by Joseph
DiFeo or Samuel DiFeo, individually), without the prior written consent of
Landlord. Tenant shall notify Landlord immediately of any such assignment or
sublet. No assignment or sublet shall relieve Tenant of any obligations herein.
Section 9.02. Subordination: The Lease and Tenant's rights under the
Lease are subject and subordinate to the lien of any present or future mortgage,
indenture or other first lien encumbrance, together with any renewals,
extensions, modifications, consolidations and replacements of such first lien,
encumbrance, now or after the Commencement Date, affecting, placed or enforced
against the Demised Premises, or any interest of Landlord in the Demised
Premises, or Landlord's interest in the Lease and the leasehold estate created
by the Lease (except to the extent any such instrument will expressly provide
that the Lease is superior to such instrument). This provision will be
self-operative and no further instrument of subordination will be required in
order to effect it. Nevertheless, Tenant will execute, acknowledge and deliver
to Landlord, at any time and from time to time, upon demand by Landlord, such
documents as may be requested by Landlord, or any mortgagee to confirm or effect
any such subordination. If Tenant fails or refuses to execute, acknowledge and
deliver any such document within twenty(20) days after written demand, Landlord,
its successors and assigns will be entitled to execute, acknowledge and deliver
any and all such documents for and on behalf of Tenant as attorney-in-fact for
Tenant. Tenant does hereby constitute and irrevocably appoint Landlord, its
successors and assigns as Tenant's attorney-in-fact to execute, acknowledge and
deliver any and all documents described in this Section 9.02 for and on behalf
of Tenant, as provided in this Section 9.02.
Section 9.03. Attornment: If the Demised Premises is encumbered by a
Mortgage and such Mortgage is foreclosed, or if the Demised Premises is sold
pursuant to such foreclosure or by reason of a default under said Mortgage, then
notwithstanding such foreclosure, such sale, or such default (i) Tenant shall
not
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disaffirm the Lease or any of its obligations thereunder, and (ii) at the
request of the applicable Mortgagee or purchaser at such foreclosure or sale,
Tenant shall attorn to such Mortgagee or purchaser and execute a new lease for
the Demised Premises setting forth all of the provisions of the Lease except
that the term of such new lease shall be for the balance of the Term.
Section 9.04. Transfer of Landlord's Interest: The term
"Landlord" as used in this Lease means the owner or the Mortgagee in
possession.
Section 9.05. Mortgagee's Rights: If Landlord shall notify Tenant
that the Demised Premises is encumbered by a Mortgage and in such notice set
forth the name and address of the Mortgagee thereof; then, notwithstanding
anything to the contrary, no notice intended for Landlord shall be deemed
properly given unless a copy thereof is simultaneously sent to such Mortgagee by
certified or registered mail, return receipt requested. If any Mortgagee shall
perform any obligation that Landlord is required to perform hereunder, such
performance by Mortgagee, insofar as Tenant is concerned, shall be deemed
performance on behalf of Landlord and shall be accepted by Tenant as if
performed by Landlord.
ARTICLE X. OPTION.
Section 10.01. Option. (a) Provided the Tenant is not in Default,
the current principals of DiFeo BMW, Inc. being Samuel DiFeo and/or Joseph
DiFeo, individually or any entity owned or controlled by them shall have the
right to purchase the Demised Premises during the first through tenth year of
Term but not during any Renewal Period upon the terms and conditions set forth
in the Purchase Agreement attached hereto as Exhibit C.
(b) In the event that the Tenant exercises its option to purchase
the Demised Premises upon the terms set forth in the attached Purchase
Agreement, the purchase price shall be Two Million Six Hundred Thousand
($2,600,000) Dollars.
ARTICLE XI. DESTRUCTION AND FIRE INSURANCE.
Section 11.01. Insurance.
(a) During the term of this Lease, the Tenant shall procure, or
do and maintain, as appropriate, the following types of insurance in the amounts
specified, naming the Landlord as additional insured:
(i) Keep insured the Building on the Demised Premises and
building equipment against loss or damage by fire (and against such other risks
as would be covered by "ALL-RISK" insurance to the extent that such insurance is
reasonably available), in an amount not less than 100% of the then full
insurable value of said building and building equipment. The term "full
insurable value" shall mean the actual replacement value (excluding foundation
and excavation costs) and said "full insurable value" shall be reasonable
determined by Landlord's engineers, or if Landlord also desires by one of the
insurers acceptable to Landlord, at three (3) year intervals or at such other
times as Landlord may reasonably request.
(ii) Maintain flood insurance, as may be required by
Landlord's mortgagee.
(iii) Maintain such other insurance as Landlord reasonably
deems necessary.
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(b) All losses shall be adjusted with the insurance companies
jointly by Landlord and Tenant and shall be paid to Landlord and Tenant as their
interests appear.
(c) Tenant agrees, at its sole cost and expense, to promptly comply
with all of the rules and regulations of the Fire Insurance Rating Organization
having jurisdiction, or any similar body. If, at any time, as a result of or in
connection with any failure by Tenant to comply with the foregoing provision, or
as a result of any act of omission or commission by Tenant, its employees,
agents, contractors, invitees, licensees or subtenants, any insurance rate
applicable to the building and/or to the contents thereof, shall be higher than
that which would be applicable for the least hazardous types of occupancy
legally permitted therein, then and in any of such events, Landlord shall have
the right to terminate this lease upon written notice delivered to the Tenant,
or to require Tenant to pay such additional premiums for all insurance policies
in force with respect to the building. Tenant shall not use or install any
electrical equipment that overloads the lines in the Building and Tenant, at its
sole cost and expense, shall promptly make whatever changes are necessary to
prevent or remedy such condition and to comply with all requirements of
Landlord, the Board of Fire Insurance Underwriters or any similar body and any
governmental authority having jurisdiction thereof. For the purposes of this
paragraph, any finding or schedule of the Fire Insurance Rating Organization or
any similar organization having jurisdiction shall be deemed to be conclusively
binding on the parties hereto.
(d) (i) If at any time during the Term of this Lease or any Renewal
Period, the Demised Premises shall be damaged in whole or in part or wholly or
partially destroyed from fire or other casualty (including any casualty for
which insurance coverage was not obtained) of any kind or nature, regardless of
whether said damage or destruction resulted from an act of God, the fault of the
Tenant, the Landlord or from any cause whatsoever, then the Tenant shall
promptly replace, repair and rebuild the damaged or destroyed improvements and
buildings, at least to the extent of the value of the improvements and
buildings, and as nearly as practicable to the character of the buildings or
improvements, existing immediately prior to such occurrence. Such rebuilding
shall be made in accordance with plans and specifications therefor which shall
first be submitted to and approved in writing by the Landlord, which approval
shall not be unreasonably withheld.
(ii) All insurance money collected by the Landlord from any
policy of insurance on account of such destruction or damages, less the cost, if
any, incurred in connection with the adjustment of the loss and the collection
thereof (herein sometimes referred to as the "insurance proceeds"), shall be
applied to the payment of the cost of the rebuilding, and shall be paid out to
or for the account of the Tenant from time to time as such work progresses. All
sums so paid to the Tenant and any other insurance proceeds received or
collected by or for the account of the Tenant (other than by way of
reimbursement to the Tenant for sums theretofore paid by the
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Tenant) shall be held by the Tenant in trust for the purpose of paying the cost
of such reconstruction.
(iii) Upon the Landlord's receipt of evidence reasonably
satisfactory to it that the reconstruction has been completed and paid for in
full and that there are no liens on the Demised Premises as a result thereof,
the Landlord shall pay to the Tenant any remaining balance of said insurance
proceeds.
(iv) Under no circumstances shall the Landlord be obligated to
make any payment, disbursement or contribution towards the cost of the work
except to the extent of the insurance proceeds actually received by the
Landlord.
(v) In the last year of the Term of the Lease, in the event of
any such casualty damage to the Demised Premises, Tenant shall have the option
to terminate the Lease and Landlord shall be entitled to all insurance proceeds.
(e) No provision of this Article shall be construed to entitle the
Tenant to any abatement, allowance, reduction or suspension of Rent unless this
Lease is terminated by the Landlord.
ARTICLE XII. CONDEMNATION.
Section 12.01. Definitions:
Within the meaning of Article XII, the following words have the
following meaning:
(a) Taking: means the taking of or damage to the Demised Premises or
any portion thereof, as the case may be, as the result of the exercise of any
power of eminent domain, condemnation, or purchase under threat thereof in lieu
thereof.
(b) Award: means the award for or proceeds of any Taking, less
all expenses in connection therewith, including reasonable attorney's fees.
(c) Taking Date: means, with respect to any Taking, the date on
which the condemning authority shall have the right to possession of the
Demised Premises or any portion thereof, as the case may be.
Section 12.02. Total or Substantial Partial Taking of Demised
Premises: In the event of a Taking of the whole of the Demised Premises, other
than a Taking for temporary use, the Lease shall automatically terminate as of
the Taking Date. In the event of a Taking of any substantial portion of the
Demised Premises, either party may, at its option, terminate the Lease by giving
notice to the other within six (6) months of the date of such Taking.
Section 12.03. Restoration: In the event of a Taking of a portion of
the Demised Premises other than a Taking for temporary use and the Lease shall
not terminate or be terminated under the provisions of Section 12.02 hereof,
Rent shall be reduced in the proportion that the area so Taken bears to the
entire area contained within the Demised Premises. If a part of the Demised
Premises are taken, Landlord may restore or cause to be restored the remainder
to the extent practical. However, Landlord may refuse to restore the remainder.
If Landlord refuses to restore the remainder and gives notice of its refusal to
Tenant, either party may cancel the Lease by giving notice to the other within
ninety (90) days after Landlord shall have given notice of its determination not
to repair the damage.
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Section 12.04. Taking for Temporary Use: If there is a Taking of the
Demised Premises for temporary use, the Lease shall continue in full force and
effect, and Tenant shall continue to comply with all of the provisions thereof,
except as such compliance shall be rendered impossible or impracticable by
reason of such Taking and Rent shall be abate during the course of such Taking.
Section 12.05. Disposition of Awards: All awards arising from a
total or partial Taking of the Demised Premises, the Building, or of Tenant's
leasehold interest, shall belong to Landlord without any participation by Tenant
except if such Taking occurs during the period of time after Tenant has given
notice to Landlord of its intention to exercise its option under Article X, in
which case Tenant shall participate to the extent of the improvements made to
the portion of the Premises subject to the Taking. Tenant hereby assigns to
Landlord any share of such Award which may be awarded to Tenant.
ARTICLE XIII. INDEMNITY AND LIABILITY.
Section 13.01. Indemnity.
(a) Within the meaning of Article XIII, "Claims" means any
claims, suits, proceedings, actions, causes of action, responsibility,
liability, demands, judgments, and executions.
(b) Tenant hereby indemnifies and agrees to save harmless Landlord
and Mortgagee from and against any and all Claims, which either (i) arise from
or are in connection with the possession, use, occupation, management, repair,
maintenance or control of the Demised Premises, or any portion thereof; (ii)
arise from or are in connection with any act or omission of Tenant, or Tenant's
Agents'; (iii) result from any Default, breach, violation or non-performance of
the Lease or any of the conditions set forth herein; or (iv) result in injury to
person or property or loss of life sustained in or about the Demised Premises.
Tenant shall defend any actions, suits and proceedings which may be brought
against Landlord or Mortgagee with respect to the foregoing or in which they may
be impleaded. Tenant shall pay, satisfy and discharge any judgments, orders and
decrees which may be recovered against Landlord or Mortgagee in connection with
the foregoing.
Section 13.02. Liability Insurance:
Tenant shall provide on or before it enters the Demised Premise for
any reason and shall keep in force during the Term for the benefit of Landlord
and Tenant, liability insurance naming Landlord and any designee of Landlord
with an insurable interest as additional insureds. The policy shall protect
Landlord, Tenant and any designee of Landlord against any liability occasioned
by any occurrence on or about the Demised Premises or any appurtenance thereto,
or arising from any of the items indicated in Section 13.01 against which Tenant
is required to indemnify Landlord. Such policy is to be written (i) by a good
and solvent insurance company satisfactory to Landlord, and (ii) in a combined
single limit of at least the amount set forth in the Lease for injury or death
to one or more than one person arising from any one occurrence and in the amount
set forth in the Lease with respect to property damages.
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Section 13.03. General Provisions with Respect to Insurance:
(a) Upon the execution of the Lease and before any insurance
policy shall expire, Tenant shall deliver to Landlord such policy or a renewal
thereof, as the case may be, together with evidence of payment of applicable
premiums. Any insurance required to be carried hereunder may be carried under a
blanket policy covering the Demised Premises and other locations of Tenant; and,
if Tenant includes the Demised Premises in such blanket coverage, Tenant may
deliver to Landlord a duplicate original of such policy or a certificate of
insurance with a copy of the policy to be delivered as soon as practical.
(b) All insurance policies required to be carried hereunder by or on
behalf of Tenant shall provide (and any certificate evidencing the existence of
any insurance policies, shall certify that): unless Landlord shall have been
given ten (10) days' written notice of any cancellation, failure to renew, or
material change as the case may be, (i) the insurance shall not be cancelled and
shall continue in full force and effect, (ii) the insurance carrier shall not
fail to renew the insurance policies for any reason, and (iii) no material
change may be made in the insurance policy.
(c) Each insurance policy shall be issued by an insurer of
recognized responsibility reasonably satisfactory to Landlord; shall be
satisfactory to Landlord in form and substance; and shall be carried in favor of
Landlord, Tenant and all Mortgagees as their respective interests may appear.
Within the meaning hereof, the term "insurance policy" shall include any
extensions or renewals of such insurance policy.
Section 13.04. Environmental Indemnification
(a) Tenant shall indemnify and hold Landlord free and harmless
from any and all liabilities, damages, claims, penalties, fines, settlements,
causes of action, costs or expenses, including reasonable attorneys' fees,
environmental consultant and laboratory fees and the cost and expenses of
investigating and defending any claims or proceedings resulting from any of the
following: (i) the presence, disposal, release or threatened release of any
hazardous substances as defined by N.J.A.C. 7:1E ("Hazardous Substances") that
is on, from or affecting the Demised Premises including the soil, water,
vegetation, buildings, personal property, persons, animals or otherwise; (ii)
any personal injury (including wrongful death) or property damage (real or
personal) arising out of or relating to the Hazardous Substance; (c) any
lawsuits or administrative order relating to the Hazardous Substance; or any
violation of any laws applicable to the Hazardous Substance, and resulting from
the acts, errors, omissions, negligence, gross negligence or willful misconduct
of the Tenant.
(b) Landlord shall indemnify and hold tenant harmless for any and
all liabilities, damages, claims, penalties, fines, settlements causes of
action, costs or expenses, including reasonable attorney fees, environmental
consultant fees and laboratory fees resulting from (i), (ii) or (iii) as listed
above, resulting from Hazardous Substances or conditions which
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existed on the Demised Premises prior to the Commencement date of this Lease.
(c) There is a presumption that any contamination not detected
during the environmental site investigations performed by Langan Environmental
Services, Inc. resulted from the operations of the Tenant unless Tenant can
prove by clear evidence that the contamination did not result from the Tenant's
actions, errors, omissions, negligence, gross negligence or willful misconduct.
ARTICLE XIV. COVENANT OF QUIET ENJOYMENT.
Section 14.01. Quiet Enjoyment:
Landlord covenants that if Tenant pays the Rent and all other
charges provided for in the Lease and herein, performs all of its obligations
provided for under the Lease and hereunder, and observes all of the other
conditions hereof, Tenant shall at all times during the Term peaceably and
quietly have, hold and enjoy the Demised Premises, without any interruption or
disturbance from Landlord, subject to the terms of the Lease and the conditions
set forth herein.
ARTICLE XV. FAILURE TO PERFORM, DEFAULTS, REMEDIES.
Section 15.01. Defaults, Conditional Limitation:
(a) Each of the following events shall constitute a Default:
(i) If Tenant, or any Tenant's Guarantor, shall (x) make an
assignment for the benefit of creditors, (y) file or acquiesce to a petition in
any court (whether or not pursuant to any statute of the United States or of any
state) in any bankruptcy, reorganization, composition, extension, arrangement or
insolvency proceedings, (z) make an application in any such proceedings for or
acquiesce to the appointment of a trustee or receiver for it or all of any
portion of its property.
(ii) If any petition shall be filed against Tenant, or any
Tenant's Guarantor, to which neither of them acquiesce in any court (whether or
not pursuant to any statute of the United States or any state) in any
bankruptcy, reorganization, composition, extension, arrangement or insolvency
proceedings, and (x) Tenant or any Tenant's Guarantor shall thereafter be
adjudicated a bankrupt, or (y) such petition shall be approved by any such
court, or (z) such proceedings shall not be dismissed, discontinued or vacated
within thirty (30) days.
(iii) If, in any proceeding, pursuant to the application of
any person other than Tenant, or any Tenant's Guarantor to which neither of them
acquiesce, a receiver or trustee shall be appointed for Tenant, or any Tenant's
Guarantor or for all or any portion of the property of either and such
receivership or trusteeship shall not be set aside within thirty (30) days after
such appointment.
(iv) If Tenant shall refuse to take possession of the Demised
Premises upon Delivery of Possession or shall vacate the Demised Premises and
permit the same to remain unoccupied and unattended.
(v) If Tenant shall fail to pay any Rent within ten (10) days
of when due, or any other charge required to be paid by Tenant hereunder within
ten (10) days after notice of failure to pay when due.
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(vi) If Tenant shall fail to perform or observe any term,
provision or requirement of the Lease or any condition or requirement set forth
herein, and such failure shall continue for sixty (60) days after notice of
nonperformance.
(b) The Lease is subject to the following limitation: If at any
time, a Default shall occur, then upon the happening of any one or more of the
aforementioned Defaults, Landlord may give to Tenant a notice of intention to
end the Term of the Lease at the expiration of five (5) days from the date of
service of such notice of termination. At the expiration of such five days the
Lease and the Term as well as all of the right, title and interest of the Tenant
thereunder shall wholly cease and expire, and Tenant shall then quit and
surrender the Demised Premises to the Landlord. Notwithstanding such
termination, surrender, and the expiration of Tenant's right, title, and
interest, Tenant's liability under all of the provisions of the Lease shall
continue.
Section 15.02. Landlord's Re-Entry: If the Lease shall be terminated
as herein provided, Landlord, or its agents or employees, may re-enter the
Demised Premises at any time and remove therefrom Tenant, Tenant's Agents, and
subtenants, and any licensees or invitees, together with any of its or their
property, either by summary dispossess proceedings or by any suitable action or
proceeding at law or by force or otherwise. In the event of such termination,
Landlord may repossess and enjoy the Demised Premises. Landlord shall be
entitled to the benefits of all provisions of law respecting any proceedings in
forcible entry and detainer or all provisions of law respecting the recovery of
the Demised Premises held over by Tenant. Tenant waives any rights to the
service of any notice of Landlord's intention to re-enter provided for by any
present or future law. Landlord shall not be liable in any way in connection
with any action it takes pursuant to the foregoing. Notwithstanding any such
re-entry, repossession, dispossession or removal, Tenant's liability under all
of the provisions hereof and of the Lease shall continue.
Section 15.03. Deficiency:
(a) In case of re-entry, repossession or termination of the Lease,
whether the same is the result of the institution of summary or other
proceedings or not, Tenant shall remain liable (in addition to accrued
liabilities) to the extent legally permissible for (i) the (x) Rent, and all
other charges provided for herein until the date the Lease would have expired
had such termination, re-entry or repossession not occurred, and (y) expenses to
which Landlord may be put in re-entering the Demised Premises repossessing the
same; making good any Default of Tenant; painting, altering or dividing the
Demised Premises; combining or placing the same in proper repair; protecting and
preserving the same by placing therein watchmen and caretakers; reletting the
same (including attorney's fees and disbursements, marshall's fees, brokerage
fees, in so doing); and any expenses which Landlord may incur during the
occupancy of any new tenant; minus (ii) the net proceeds of any reletting. Under
no circumstances, however, shall Landlord be under any obligation whatsoever to
make any payments to Tenant on account of any
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increase in the Rent received by Landlord by virtue of such reletting. Tenant
agrees to pay to Landlord the difference between items (i) and (ii) hereinabove
with respect to each month, at the end of such month. Such payment shall be made
to Landlord at Landlord's notice address or such other address as Landlord may
designate by giving notice to Tenant. Any suit brought by Landlord to enforce
collection of such difference for any one month shall not prejudice Landlord's
right to enforce the collection of any difference for any subsequent month. In
addition to the foregoing, Tenant shall pay to Landlord such sums as the court
which has jurisdiction thereover may adjudge reasonable as attorney's fees with
respect to any successful lawsuit or action instituted by Landlord to enforce
the provisions hereof.
(b) Landlord shall use best efforts to relet the whole or any part
of said Demised Premises for the whole of unexpired period of the Lease, or
longer, or from time to time for shorter period, for any rental then obtainable,
giving such concessions of rent and making such special repairs, alterations,
decorations and paintings for any new tenant as it may in its sole and absolute
discretion deem advisable. Tenant's liability as aforesaid shall survive the
institution of summary proceedings and the issuance of any warrant thereunder.
Section 15.04. Landlord's Right to Perform for Account of Tenant: If
Tenant shall be in Default hereunder, Landlord may, at any time thereafter, cure
said Default for the account and at the expense of Tenant. Tenant shall pay,
with interest at the lesser of twelve percent (12%) or the maximum legal rate,
on demand, to Landlord, the amount so paid, expended, or incurred by the
Landlord and any expense of Landlord including attorney's reasonable fees
incurred in connection with such Default; and all of the same shall be deemed to
be Additional Rent.
Section 15.05. Additional Remedies, Waivers, Etc.: With respect to
the rights and remedies of and waivers by Landlord: (a) the rights and remedies
of Landlord set forth herein shall be in addition to any other right and remedy
now and hereafter provided by law. All such remedies shall be cumulative and not
exclusive of each other. Landlord may exercise such rights and remedies at such
times, in such order, to such extent, and as often as Landlord deems advisable
without regard to whether the exercise of one right or remedy precedes, concurs
with or succeeds the exercise of another; (b) A single or partial exercise of a
right or remedy shall not preclude (i) a further exercise of a right or remedy
shall not preclude (i) a further exercise thereof, or (ii) the exercise of
another right or remedy, from time to time; (c) No delay or omission by Landlord
in exercising a right or remedy shall exhaust or impair the same or constitute a
waiver of, or acquiescence to a Default; (d) No waiver of a Default shall extend
to or affect any other Default or impair any right or remedy with respect
thereto; (e) No action or inaction by Landlord shall constitute a waiver of a
Default; (f) No waiver of a Default shall be effective, unless it is in writing.
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ARTICLE XVI. TENANT'S CERTIFICATE.
Section 16.01. Certificate:
At any time within ten (10) days after request by Landlord, by
written instrument, duly executed and acknowledged, Tenant shall certify to
Landlord, any Mortgagee, assignee of a Mortgagee, any purchaser, or any other
person, specified by Landlord, to the effect (a) whether or not Tenant is in
possession of the Demised Premises; (b) whether or not the Lease is unmodified
and in full force and effect (or if there has been modification, that the same
is in full force and effect as modified and setting forth such modification);
(c) whether or not there are then existing set-offs or defenses against the
enforcement of any right or remedy of Landlord, or any duty or obligation of
Tenant (and if so, specifying the same); and (d) the dates, if any, to which any
Rent or other charges have been paid in advance.
ARTICLE XVII. RIGHT OF ACCESS.
Section 17.01. Entry: During any reasonable time during normal
business hours before and after the Commencement Date, upon notice Landlord may
enter upon the Demised Premises, any portion thereof and any appurtenances
thereto (with men and materials, if required) for the purpose of: (a) inspecting
same; and (b) showing the Demised Premises to prospective purchasers or lessees
during the last three (3) months of the Term. Landlord reserves the right to
place a "For Sale" (or a "For Let") sign on the Demised Premises at any time
during the last three (3) months of the Term. Landlord shall use its best
efforts not to disrupt the operation of the Tenant during any such entry.
ARTICLE XVIII. INTERPRETATION, NOTICE, MISCELLANEOUS.
Section 18.01. Interpretation:
(a) Every term, condition, agreement or provision contained in
this Lease which imposes an obligation on Tenant, shall be deemed to be also a
covenant by Tenant.
(b) Any reference herein to subtenants or licensees shall not be
deemed to imply that any subtenants or licensees are permitted hereunder. Any
references herein to any extensions or renewals of the Term or any period during
which Tenant may be in possession after the Expiration Date shall not be deemed
to imply that any extension or renewal of the Term is contemplated hereby or
that Tenant shall be permitted to remain in possession after the expiration of
the Term.
(c) If any provision of the Lease, or any provision set forth
herein, or the application thereof to any person or circumstance shall to any
extent be invalid or unenforceable, the remainder of the Lease or these General
Conditions of Lease, or the application of such provision to persons or
circumstances other than those to which it is invalid or unenforceable, shall
not be affected thereby, and each provision of the Lease or these General
Conditions of Lease shall be valid and be enforced to the fullest extent
permitted by law.
(d) The captions and headings used throughout the Lease and these
General Conditions of Lease are for convenience of reference only and shall not
affect the interpretation of the Lease or these General Conditions of Lease.
(e) Anything herein to the contrary notwithstanding:
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(i) Any provision which permits or requires a party to
take any particular action shall also be deemed to permit or require a party
to cause such action to be taken; and
(ii) Any provision which requires any party not to take any
particular action shall be deemed to require the party not to permit such action
to be taken by any person or by operation of law.
(f) The Lease may be executed in several counterparts; but the
counterparts shall constitute but one and the same instrument.
(g) Wherever a requirement is imposed on any party hereto, it shall
be deemed that such party shall be required to perform such requirement at its
own expense unless it is specifically otherwise provided herein.
(h) The singular includes the plural and the plural includes the
singular.
(i) The Lease and these General Conditions of Lease shall be
construed and enforced in accordance with the laws of the State of New Jersey.
(j) The obligations and liabilities of Tenant pursuant to the Lease
and these General Conditions of Lease shall be joint and several if Tenant
consists of more than one (1) entity.
Section 18.02. Construing Various Words and Phrases:
(a) Wherever it is provided herein that a party may perform an
act or do anything, it shall be construed that that party may, but shall not be
obligated to, so perform or so do.
(b) The words "reenter" and "reentry" as used herein are not
restricted to their technical legal meaning.
(c) The following words and phrases shall be construed as
follows:
(i) "At any time" shall be construed as, "at any time or
from time to time".
(ii) "Any" shall be construed as "any and all".
(iii) "Including" shall be construed as "Including but not
limited to".
Section 18.03. No Oral Changes: The Lease may not be changed or
terminated orally.
Section 18.04. Notices: No notice, request, consent, approval,
waiver or other communication under the Lease or under these General Conditions
of Lease shall be effective unless the same is in writing and is mailed by
registered or certified mail, return receipt requested, postage prepaid,
addressed:
(a) If to Landlord, to the address designated as Landlord's Notice
Address in the Lease or such other address as Landlord designates by giving
notice thereof to Tenant, with a copy thereof to the address designated as
Landlord's Notice Copy Address in the Lease or to such other person or party as
Landlord shall designate by notice to Tenant, and
(b) If to Tenant, to the address designated as Tenant's Notice
Address in the Lease or such other address as Tenant shall designate by giving
notice thereof to Landlord, with a copy of the address designated as Tenant's
Notice Copy Address in the Lease or to such other person or party as Tenant
shall designate by giving notice thereof to Landlord.
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Section 18.05. Method of Payment: Except as herein otherwise
expressly provided, all amounts under the Lease shall be payable in currency
or by check.
Section 18.06. Successors and Assigns: Subject to the provisions
hereof, the Lease shall bind and inure to the benefit of the parties and their
respective successors, representatives, heirs and assigns.
Section 18.07. Responsibility of Tenant: Any restriction on or
requirement imposed upon Tenant hereunder shall be deemed to extend to Tenant's
Guarantor, Tenant's subtenants, concessionaires and licensees and it shall be
Tenant's obligation to cause the foregoing persons to comply with such
restriction of requirement.
Section 18.08. Hold Over: If Tenant shall hold-over after the end of
the Term or any Renewal Periods, such holding over shall be construed as a
tenancy from month-to-month, subject to all of the provisions, conditions and
obligations of the Lease and these General Conditions of Lease and Rent shall be
the Rent then in effect during the last month of the Term or any Renewal Period,
as applicable.
Section 18.09. Liability of Landlord. Landlord shall be personally
liable with respect to all provisions of this Lease except for any environmental
obligations or liabilities arising out of or by virtue of the Act, the Spill
Act, Governmental Regulations or otherwise ("Environmental Liabilities"). For
Environmental Liabilities, Tenant shall look only to the equity of the then
owner of the Demised Premises in the Demised Premises. If the owner of the
Demised Premises obtains mortgage financing secured by the Demised Premises, the
Tenant may recover from such owner the amount of any mortgage proceeds received
thereby.
Section 18.10. Execution: The Lease shall be of no force and
effect unless and until it is executed by both Landlord and Tenant.
Section 18.11. Short Form Lease: Landlord and Tenant shall, each on
request of the other, execute a short form lease or Memorandum of Lease, in
proper form for recording, setting forth the Commencement Date and any provision
thereof other than Rent, Taxes and Security Deposit. The cost and expense for
the preparation of such form lease shall be paid by the party requesting same.
The Lease itself shall not be recorded.
THE PARTIES ACKNOWLEDGE THAT THEY HAVE READ, UNDERSTAND AND AGREE
TO BE BOUND BY THE GENERAL CONDITIONS OF LEASE.
Landlord Tenant
DIFEO BMW, INC.
/s/ By: /s/
- -------------------------------- -------------------------------
Michael Zullo, Sr.
/s/
- --------------------------------
Bertha Zullo
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(Acknowledgment for Corporate Tenant)
STATE OF )
) ss.:
COUNTY OF )
On this ____ day of __________, 19__, before me personally appeared
_______________ to me known, who, being by me duly sworn, did depose and say
that he/she is the _________________ of ________________________________, the
corporation described in and which executed the foregoing Lease; that he/she
knows the seal of said corporation, that the seal 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/she signed his/her name thereto by like order.
In witness whereof I hereunto set my hand and official seal.
----------------------------
Notary Public
(Notarial Seal)
Exhibit A
Property Description
All that certain property situate, lying and being in block 168 lot
005 in the City of Tenafly, County of Bergen, State of New Jersey being more
commonly known as 301 County Road, Tenafly, New Jersey.