LEASE AGREEMENT
BETWEEN
SUN ASSOCIATES, LLC,
LESSOR,
-AND-
SALEX HOLDING CORP.,
LESSEE.
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DATED: December 23, 1998
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Prepared by:
Stephen A. Urban, Esquire
Shanley & Fisher, P.C.
131 Madison Avenue
Morristown, New Jersey 07962
TABLE OF CONTENTS
Page
PRELIMINARY STATEMENT................................................ 1
ARTICLE 1 DEFINITIONS.............................................. 1
ARTICLE 2 DEMISE; TERM; CONDITION.................................. 4
ARTICLE 3 BASIC RENT; ADDITIONAL RENT; NET LEASE................... 5
ARTICLE 4 PAYMENT OF IMPOSITIONS; SERVICES......................... 6
ARTICLE 5 MAINTENANCE; ALTERATIONS; ADDITIONS; REMOVAL
OF TRADE FIXTURE......................................... 6
ARTICLE 6 USE OF DEMISED PREMISES.................................. 8
ARTICLE 7 INDEMNIFICATION; LIABILITY OF LESSOR..................... 9
ARTICLE 8 COMPLIANCE WITH REQUIREMENTS............................. 10
ARTICLE 9 DISCHARGE OF LIENS; PERMITTED CONTESTS................... 12
ARTICLE 10 INSURANCE................................................ 13
ARTICLE 11 ESTOPPEL CERTIFICATES.................................... 14
ARTICLE 12 ASSIGNMENT AND SUBLETTING................................ 15
ARTICLE 13 CASUALTY................................................. 20
ARTICLE 14 CONDEMNATION............................................. 21
ARTICLE 15 EVENTS OF DEFAULT........................................ 23
ARTICLE 16 CONDITIONAL LIMITATIONS; REMEDIES........................ 25
ARTICLE 17 SUBORDINATION............................................ 29
ARTICLE 18 LESSEE'S REMOVAL......................................... 30
ARTICLE 19 MISCELLANEOUS............................................ 31
ARTICLE 20 LESSEE'S ADDITIONAL RIGHTS............................... 34
EXHIBIT A - DESCRIPTION OF LAND
EXHIBIT B - BASIC RENT
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LEASE AGREEMENT
LEASE AGREEMENT (this "Lease"), made as of December _23__,
1998, between SUN ASSOCIATES, LLC (the "LESSOR"), a New York limited liability
company, having offices at 765 Hillcrest Place, North Woodmere, New York 11581,
Attention: Betty Sun, and SALEX HOLDING CORP. (the "LESSEE"), a Delaware
corporation, having an office at 50 Laser Court, Hauppauge, New York 11788-3912,
Attention: Mr. Salvatore Crimi.
PRELIMINARY STATEMENT
LESSOR is the owner of certain real property situate, lying
and being in the Town of Smithtown (Village of Hauppauge), County of Suffolk,
State of New York, described on Exhibit A annexed hereto (the "Land"), which is
improved with a building containing approximately 12,000 square feet of space
(the "Building"), a surface parking lot and related improvements (collectively
the "Improvements") (the Land and the Improvements being herein collectively
called the "Demised Premises").
LESSOR desires to lease to LESSEE, and LESSEE desires to rent
and hire from LESSOR, the Demised Premises on the terms and conditions contained
herein.
NOW, THEREFORE, LESSOR and LESSEE agree as follows:
ARTICLE 1
DEFINITIONS
1.1. As used in this Lease, the following terms have the
following respective meanings:
(a) Additional Rent: defined in Section 3.2.
(b) Basic Rent: defined in Section 3.1.
(c) Building: defined in the Preliminary Statement.
(d) Commencement Date: the date of this Lease.
(e) Demised Premises: defined in the Preliminary Statement.
(f) Environmental Laws: all statutes, regulations, codes,
orders and ordinances of any governmental entity, authority, agency and/or
department relating to (i) air emissions, (ii) water discharges, (iii) noise
emissions, (iv) air, water or ground pollution or (v) any other environmental or
health matter, including, but not limited to the Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. ss. 9601 et seq. and the
regulations promulgated thereunder.
(g) Events of Default: defined in Article 15.
(h) Full Insurable Value: 100% of the replacement cost of the
Improvements and all other improvements on the Demised Premises, excluding
improvements below grade which are not insurable, as determined from time to
time.
(i) Impositions: all taxes, assessments, water, sewer or other
rents, rates and charges, excises, levies, license fees, permit fees, inspection
fees, and other authorization fees and charges, whether general or special,
ordinary or extraordinary, foreseen or unforeseen, of every character and
description (including all penalties and interest thereon) which at any time
during or in respect of the term hereof may be assessed, levied, confirmed or
imposed on or in respect of or be a Lien upon (a) the Demised Premises or any
interest therein, or any Basic Rent or Additional Rent or other sum reserved or
payable hereunder, or this Lease, or any estate, right, or interest hereunder,
(b) LESSOR and which relate to LESSOR'S ownership of the Demised Premises, the
use or occupancy of the Demised Premises or the transactions contemplated by
this Lease, and (c) any occupancy, use or possession of the Demised Premises or
any activity conducted thereon. Nothing herein shall require LESSEE to pay any
franchise, estate, inheritance, income, excess profits or other such taxes
levied against LESSOR determined on the basis of LESSOR'S net income or revenue,
unless such tax is in lieu of or a substitute for any other tax or assessment
upon or with respect to the Demised Premises, which, if such other tax or
assessment were in effect, would be payable by LESSEE.
(j) Improvements: defined in the Preliminary Statement.
(k) Insurance Requirements: all terms of any insurance
policy maintained by LESSOR or LESSEE with respect to the Demised Premises.
(l) Land: defined in the Preliminary Statement.
(m) Legal Requirements: all statutes, regulations, codes and
ordinances of any governmental entity, authority, agency and/or department,
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which now or at any time hereafter may be applicable to the Demised Premises or
any part thereof, including, but not limited to, all Environmental Laws.
(n) LESSEE: the party defined as such in the first paragraph
of this Lease.
(o) LESSEE'S Visitors: LESSEE'S agents, servants, employees,
subtenants, contractors, invitees, licensees and all other persons invited by
LESSEE onto the Demised Premises as guests or doing lawful business with LESSEE.
(p) LESSOR: the party defined as such in the first paragraph
of this Lease, including at any time after the date hereof, the then owner of
LESSOR'S interest in the Demised Premises.
(q) Lien: any mortgage, pledge, lien, charge, encumbrance or
security interest of any kind, including any inchoate mechanic's or
materialmen's lien.
(r) Net Award: any insurance proceeds or condemnation award
payable in connection with any damage, destruction or Taking, less any expenses
incurred by LESSOR in recovering such amount.
(s) Net Rental Proceeds: in the case of a sublease, the amount
by which the aggregate of all rents, additional charges or other consideration
payable under a sublease to LESSEE by the subtenant (excluding reasonable sums
paid for the sale of LESSEE'S fixtures, leasehold improvements, equipment,
furniture or other personal property) exceeds the sum of (i) the Basic Rent plus
all amounts payable by LESSEE pursuant to the provisions hereof during the term
of the sublease in respect of the subleased space, (ii) brokerage commissions at
prevailing rates due and owing to a real estate brokerage firm, and (iii) other
customary and reasonable costs incurred by LESSEE in connection with the
subleasing; and in the case of an assignment, the amount by which all sums and
other considerations paid to LESSEE by the assignee of this Lease for or by
reason of such assignment (excluding reasonable sums paid for the sale of
LESSEE'S fixtures, leasehold improvements, equipment, furniture or other
personal property) exceeds the sum of (i) brokerage commissions at prevailing
rates due and owing to a real estate brokerage firm, and (ii) other customary
and reasonable costs incurred by LESSEE in connection with the assignment.
(t) Recapture Notice: defined in Section 12.5.
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(u) Recapture Space: defined in Section 12.5.
(v) Restoration: the restoration, replacement or rebuilding of
the Improvements (excluding any alterations, additions and improvements
installed by LESSEE and any trade fixtures and personal property owned by
LESSEE) or any portion thereof as nearly as practicable to its value, condition
and character immediately prior to any damage, destruction or Taking.
(w) Taking: a taking of all or any part of the Demised
Premises, or any interest therein or right accruing thereto, as the result of,
or in lieu of, or in anticipation of, the exercise of the right of condemnation
or eminent domain pursuant to any law, general or special, or by reason of the
temporary requisition of the use or occupancy of the Demised Premises or any
part thereof, by any governmental authority, civil or military.
(x) Term: defined in Section 2.2.
(y) Underlying Encumbrance: defined in Section 17.1.
ARTICLE 2
DEMISE; TERM; CONDITION
2.1. Demise. LESSOR, for and in consideration of the covenants
hereinafter contained and made on the part of the LESSEE, does hereby demise and
lease to LESSEE, and LESSEE does hereby hire from LESSOR, the Demised Premises,
subject to the terms and conditions of this Lease. LESSOR and LESSEE agree, that
for all purposes of this Lease, the Demised Premises shall be deemed to consist
of 12,000 square feet.
2.2. Term. The term (the "Term") of this Lease shall commence
on the Commencement Date and shall, unless earlier terminated in accordance with
the provisions of this Lease, end on December 31, 2008.
2.3. Condition. LESSEE agrees to accept possession of the
Demised Premises in its "AS IS" condition as of the date of this Lease. LESSEE
agrees further that neither LESSOR nor any agent or representative of LESSOR has
made any representations or warranties with respect to the physical condition of
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the Demised Premises, and LESSEE acknowledges that it is not relying upon any
such representation in entering into this Lease.
2.4. Delivery of Possession. LESSEE is in possession of the
Demised Premises.
ARTICLE 3
BASIC RENT; ADDITIONAL RENT; NET LEASE
3.1. Basic Rent. LESSEE shall pay to LESSOR, during the Term
of this Lease, basic rent ("Basic Rent") in the amounts and at the times
provided in Exhibit B in lawful money of the United States of America. In the
event the Commencement Date shall be other than the first day of a calendar
month, the Basic Rent for said month shall be prorated. Basic Rent will be
deemed to have been paid to LESSOR when it is received by LESSOR.
3.2. Additional Rent. LESSEE will also pay and discharge when
due, as additional rent ("Additional Rent"), to the persons entitled to receive
same, all other amounts, liabilities and obligations which LESSEE herein agrees
to pay or discharge, together with all interest, penalties and costs which may
be added thereto. LESSOR shall have all the rights, powers and remedies provided
for in this Lease or at law or in equity or otherwise for failure to pay
Additional Rent as are available for nonpayment of Basic Rent. Additional Rent
shall commence on the Commencement Date.
3.3. Late Charge. If any installment of Basic Rent or any
Additional Rent is not paid within ten (10) days after the date that such
installment was due, LESSEE shall pay to LESSOR a late charge based on the
amount unpaid, at the same rate that LESSOR's lender could charge LESSOR if
LESSOR were to make a late payment under the first mortgage encumbering the
Demised Premises.
3.4. Triple Net Lease. This is a triple net lease, and except
as herein provided, LESSEE hereby covenants and agrees to pay to LESSOR during
the Term, at LESSOR'S address for notices hereunder, or such other place as
LESSOR may from time to time designate, without any offset, set-off,
counterclaim, deduction, defense, abatement, suspension, deferment or diminution
of any kind, the Basic Rent and Additional Rent. Except as otherwise expressly
provided herein, this Lease shall not terminate, nor shall LESSEE have any right
to terminate or avoid this Lease or be entitled to the abatement of any Basic
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Rent or Additional Rent, nor shall the obligations and liabilities of LESSEE
hereunder be in any way affected for any reason. The obligations of LESSEE
hereunder shall be separate and independent covenants and agreements.
ARTICLE 4
PAYMENT OF IMPOSITIONS; SERVICES
4.1. Payment of Impositions, etc. LESSEE will pay all
Impositions and all charges for utility, communications and other services at
any time rendered or used on or about the Demised Premises, before any interest
or penalty may be added thereto, and such charges shall be deemed Additional
Rent hereunder. LESSOR agrees to request the tax assessor to forward the tax
bill for the Demised Premises directly to LESSEE. If the tax assessor refuses to
forward tax bills directly to LESSEE, LESSOR shall forward the tax bills to
LESSEE upon receipt of same. LESSEE shall, promptly upon payment of Impositions,
forward to LESSOR satisfactory proof evidencing payment of same. If the holder
of any mortgage encumbering the Demised Premises requires LESSOR to pay to such
holder escrows for any Impositions or other charges (i.e. insurance), provided
that LESSEE has received prior notice of same, LESSEE shall pay the required
amount of any such escrows, including reserves, to LESSOR together at least
three (3) business days in advance of the date that LESSOR must pay same to such
mortgage holder. LESSOR shall provide LESSEE promptly with such holder's
accounting of such escrows. Any Impositions paid by LESSEE, and any escrows and
reserves paid to the holder of any mortgage, shall be pro-rated at the
expiration of this Lease.
4.2. Services. LESSEE hereby acknowledges and agrees that
LESSOR is not obligated to provide any services to LESSEE and that LESSEE shall
provide or contract in its name for all services required in connection with its
use and occupancy of the Demised Premises and the maintenance and repair of the
Demised Premises (including, without limitation, landscaping, snow removal,
garbage collection, window cleaning, extermination and janitorial services).
ARTICLE 5
MAINTENANCE; ALTERATIONS;
ADDITIONS; REMOVAL OF TRADE FIXTURES
5.1. Maintenance Obligations. LESSEE acknowledges that LESSOR
has purchased the Demised Premises from LESSEE on this date in reliance on
LESSEE'S maintenance obligations contained in this Section 5.1, and that the
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Basic Rent set forth herein is calculated assuming that LESSEE will perform its
obligations under this Section 5.1. LESSEE shall, at its sole cost and expense,
(i) keep and maintain the Demised Premises in substantially the same condition
as exists on the Commencement Date (except for ordinary wear and tear), (ii)
make all repairs, alterations, renewals and replacements, ordinary and
extraordinary, structural or non-structural, foreseen or unforeseen (including,
without limitation, roof repairs and repair of termite damage), and (iii) take
such other action as may be necessary or appropriate to keep and maintain the
Demised Premises in such condition. LESSOR shall not be obligated in any way to
maintain, alter or repair the Demised Premises. Notice is hereby given that
LESSOR will not be liable for any labor, services or materials furnished or to
be furnished to LESSEE, or to anyone holding the Demised Premises or any part
thereof through or under LESSEE, and that no mechanics' or other liens for any
such labor or materials shall attach to or affect the interest of LESSOR in and
to the Demised Premises.
5.2. Standards. All maintenance and repair, and each addition,
improvement or alteration (a) must not, individually or in the aggregate,
materially adversely affect the usefulness of the Demised Premises for its use
as of the date of this Lease, or materially adversely affect the operation of
the electrical or mechanical systems of the Building, (b) shall be completed in
a good and workmanlike manner, and in compliance with all applicable Legal and
Insurance Requirements, and (c) shall be completed free and clear of all Liens.
5.3. Interior Non-Structural Alterations and Improve-ments. If
there is no then existing Event of Default by LESSEE under this Lease beyond any
applicable cure period, LESSEE may, at its sole cost and expense, make interior
non-structural additions, improvements or alterations to the Demised Premises,
provided the same do not interfere with or disrupt any electrical, mechanical,
plumbing or other system of the Building, do not affect the outside appearance
of the Building, do not affect the roof of the Building or any structural
element of the Building, do not reduce the value of the Building, and do not
cost, in the aggregate, more than $50,000.00 per year. LESSEE may not perform
any other alterations to the Building, without LESSOR'S prior written consent,
which shall not be unreasonably withheld or delayed. In order to obtain LESSOR'S
consent, LESSEE shall first submit to LESSOR plans and specifications detailing
the scope and nature of any work, and any other information as may be reasonably
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requested by LESSOR. LESSEE shall obtain any required governmental permits and
approvals, and deliver copies of same to LESSOR, prior to performing any
alterations.
5.5. Service Contracts. LESSEE shall, at its sole cost and
expense, procure and maintain in full force, effect and good standing, a
contract for the service, maintenance and replacement of all heating,
ventilating and air conditioning equipment (HVAC) from time to time installed in
the Demised Premises, which service contract shall be between LESSEE and a HVAC
service and maintenance contracting firm of proven and established reputation.
5.6. Title to Alterations etc. (a) All additions, improvements and alterations
to the Demised Premises shall, upon installation, become the property of LESSOR
and shall be deemed part of, and shall be surrendered with, the Demised
Premises, except as follows. Only in the case alterations, additions or
improvements with respect which LESSOR'S consent is required pursuant to Section
5.3 above, LESSOR, by notice given to LESSEE at the time LESSOR approves such
additions, improvements or alterations may elect to relinquish LESSOR'S right
thereto. If LESSOR so elects to relinquish LESSOR'S right to any addition,
improvement or alteration as aforesaid, then, prior to the expiration or
termination of the Term, LESSEE shall remove said addition, improvement or
alteration, shall promptly repair any damage to the Demised Premises caused by
said removal and shall restore the Demised Premises to the condition existing
prior to the installation of said addition, improvement or alteration. LESSEE
shall have no obligation to remove any addition, improvement or alteration, or
restore the Demised Premises to the condition existing prior to the installation
of said addition, improvement or alteration, if LESSOR was not required to
approve such addition, improvement or alteration pursuant to Section 5.3 above,
and such addition, improvement or alteration was performed in a first class,
workmanlike manner.
(b) LESSEE may install or place or reinstall or replace and
remove from the Demised Premises any trade equipment, machinery and personal
property belonging to LESSEE, provided, that LESSEE shall repair all damage
caused by such removal. Such trade equipment, machinery and personal property
shall not become the property of LESSOR and shall remain the property of LESSEE.
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ARTICLE 6
USE OF DEMISED PREMISES
6.1. Permitted Uses. LESSEE shall not, except with the prior
consent of LESSOR, use or suffer or permit the use of the Demised Premises to be
used for any purpose other than general office and business use.
6.2. Limitations on Use. LESSEE shall not use, or suffer or
permit the use of, the Demised Premises or any part thereof in any manner or for
any purpose or do, bring or keep anything, or suffer or permit anything to be
done, brought or kept, therein (including, but not limited to, the installation
or operation of any electrical, electronic or other equipment) (a) which would
violate any covenant, agreement, term, provision or condition of this Lease or
would be unlawful or in contravention of the certificate of occupancy for the
Building, or in contravention of any Legal or Insurance Requirement to which the
Demised Premises is subject, or (b) which would overload the electrical or
mechanical systems of the Building, or (c) which would exceed the floor load per
square foot which the floor was designed to carry and which is allowed by law,
or (d) suffer or permit the Building or any component thereof to be used in any
manner or anything to be done therein or anything to be brought into or kept
thereon which would in any way impair or exceed the design criteria, the
structural integrity, character or appearance of the Building, or result in the
use of the Building or any component thereof in a manner or for a purpose not
intended.
6.3. Permits and Approvals. LESSEE shall obtain, at its sole
cost and expense, all permits, licenses or authorizations of any nature required
in connection with the operation of LESSEE'S business at the Demised Premises.
ARTICLE 7
INDEMNIFICATION; LIABILITY OF LESSOR
7.1. Indemnification by LESSEE. LESSEE hereby indemnifies, and
shall pay, protect and hold LESSOR harmless from and against all liabilities,
losses, claims, demands, costs, expenses (including reasonable attorneys' fees
and expenses) and judgments of any nature, arising, or alleged to arise, from or
in connection with, (a) any injury to, or the death of, any person or loss or
damage to property on or about the Demised Premises, except when arising from
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the negligence or the recklessness or willful misconduct of LESSOR, its agents,
servants, employees or contractors, (b) any violation of this Lease or of any
Legal or Insurance Requirement by LESSEE, or (c) performance of any labor or
services or the furnishing of any materials or other property in respect of the
Demised Premises or any part thereof by LESSEE or by any third party for LESSEE.
LESSEE will resist and defend any action, suit or proceeding brought against
LESSOR by reason of any such occurrence by independent counsel selected by
LESSEE and approved by LESSOR. The obligations of LESSEE under this Section 7.1
shall survive any termination of this Lease.
7.2. No Claims Against LESSOR. LESSEE agrees to make no claim
against LESSOR for any damage to or loss of any goods, fixtures, equipment,
machinery, personal property or other property installed, stored, or placed by
LESSEE or others at the Demised Premises, including any claims for business
interruption or consequential damages, it being understood that LESSEE assumes
all risk in connection therewith.
ARTICLE 8
COMPLIANCE WITH REQUIREMENTS
8.1. Compliance. LESSEE shall, during the Term, at its sole
cost and expense, (a) comply with all Legal and Insurance Requirements
applicable to the Demised Premises and LESSEE'S use thereof and (b) maintain and
comply with all permits, licenses and other authorizations required by any
governmental authority for its use of the Demised Premises and for the proper
operation, maintenance and repair of the Demised Premises or any part thereof.
LESSOR will join in the application for any permit or authorization with respect
to Legal Requirements if such joinder is necessary, and cooperate with LESSEE in
connection therewith, at no cost to LESSOR.
8.2. Negative Covenants. LESSEE shall not do, or permit to be
done, anything in or to the Demised Premises, or bring or keep anything therein
which will, in any way, invalidate or conflict with the fire insurance or public
liability insurance policies covering the Demised Premises or any personal
property kept therein, or obstruct or interfere with the rights of LESSOR, or
subject LESSOR to any liability for injury to persons or damage to property, or
violate any Legal Requirements.
8.3. Reporting. LESSEE shall deliver promptly to LESSOR a true
and complete photocopy of any correspondence, notice, report, sampling, test,
submission, order, complaint, citation or any other instrument, document,
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agreement and/or information submitted to, or received from, any governmental
entity, department or agency in connection with any Legal Requirements or
Insurance Requirements relating to or affecting LESSEE'S use and occupancy of
the Demised Premises.
8.4. No Hazardous Substances. LESSEE shall not cause or permit
any "hazardous substance", "hazardous waste" or terms of similar import, as such
terms are defined in applicable Environmental Laws, to be brought, kept or
stored on or about the Demised Premises, and LESSEE shall not engage in, or
permit any other person or entity to engage in, any activity, operation or
business on or about the Demised Premises which involves the generation,
manufacture, refining, transportation, treatment, storage, handling or disposal
of hazardous substances and/or hazardous wastes, except substances normally used
in connection with office operations which are kept in accordance with
applicable Environmental Laws.
8.5. Spills and Discharges. (a) If a spill or discharge of a
hazardous substance or a hazardous waste occurs on the Demised Premises during
the Term, LESSEE shall, promptly upon obtaining knowledge thereof, give LESSOR
immediate oral and written notice of such spill and/or discharge, setting forth
in reasonable detail all relevant facts. LESSEE shall pay all costs and expenses
relating to compliance with the applicable Environmental Law (including, without
limitation, the costs and expenses of the site investigations and of the removal
and remediation of such hazardous substance or hazardous wastes) arising out of
or in connection with any such spill or discharge, except any spill or discharge
caused by the negligence or willful misconduct of LESSOR, its agents, servants
or contractors, which such spill or discharge shall be remediated by LESSOR
after giving notice thereof to LESSEE.
(b) Without relieving LESSEE of its obligations under this
Lease and without waiving any default by LESSEE under this Lease, in the event
LESSEE fails after notice from the governmental authority having jurisdiction to
take action to respond to a spill or discharge for which LESSEE is responsible
under this Lease, LESSOR shall have the right, but not the obligation, to take
such action as LESSOR deems necessary or advisable to cleanup, remove, resolve
or minimize the impact of or otherwise deal with any spill or discharge of any
hazardous substance or hazardous waste for which LESSEE is responsible under
this Lease. In such event, LESSEE shall pay to LESSOR within thirty (30) days
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after demand, as Additional Rent, all reasonable costs and expenses incurred by
LESSOR in connection with any action taken by LESSOR.
8.6. Testing. (a) LESSOR shall have the right, but not the
obligation, upon notice to LESSEE, to enter onto the Demised Premises from time
to time during the Term for the purpose of conducting such tests and
investigations as LESSOR deems reasonably necessary to determine whether LESSEE
is complying with the provisions of this Article 8 and all applicable
Environmental Laws. LESSEE shall have the right to accompany LESSOR and to
obtain splits of any samples collected. In the event LESSOR determines that
LESSEE is not in compliance with this Article 8 or any Environmental Law, LESSOR
shall notify LESSEE of such fact, setting forth in such notice the basis for
LESSOR'S determination and shall provide to LESSEE copies of any reports, data
and/or other information relating to LESSOR'S determination. LESSEE shall
promptly perform any actions required under this Lease to comply with this
Article 8 or any Environmental Laws.
(b) In the event LESSEE is not in compliance with the
provisions of this Article 8 or any applicable Environmental Law, LESSEE shall
pay to LESSOR, as Additional Rent, within thirty (30) days after demand, an
amount equal to all reasonable costs and expenses incurred by LESSOR in
connection with the tests and investigations conducted by or on behalf of
LESSOR.
8.7. Environmental Indemnification. LESSEE hereby agrees to
defend, indemnify and hold LESSOR harmless from and against any and all claims,
losses, liability, damages and expenses (including, without limitation, site
investigation costs, removal and remediation costs and reasonable attorneys'
fees and disbursements) arising out of or in connection with (a) LESSEE'S use
and occupancy of the Demised Premises under this Lease, (b) any spill or
discharge of a hazardous substance or hazardous waste unless caused by the
negligence or willful misconduct of LESSOR, its agents, servants, employees or
contractors, and/or (c) LESSEE'S failure to comply with the provisions of this
Article 8.
8.9. Survival. The provisions of this Article 8 shall
survive the expiration or earlier termination of this Lease.
ARTICLE 9
DISCHARGE OF LIENS; PERMITTED CONTESTS
9.1. Discharge of Liens. LESSEE will discharge by bond or
otherwise, within thirty (30) days after receipt of notice thereof, any Lien on
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the Demised Premises or the Basic Rent, Additional Rent or any other sums
payable under this Lease, caused by or arising out of LESSEE'S acts or LESSEE'S
failure to perform any obligation hereunder.
9.2. Permitted Contests. LESSEE may contest by appropriate
proceedings, the amount, validity or application of any Legal Requirement which
LESSEE is obligated to comply with or any Lien which LESSEE is obligated to
discharge, provided that (a) such proceedings shall suspend or stay the
collection thereof, (b) no part of the Demised Premises or of any Basic Rent or
Additional Rent or other sum payable hereunder would be subject to loss, sale or
forfeiture during such proceedings, (c) LESSOR would not be subject to any civil
or criminal liability for failure to pay or perform, as the case may be, (d)
LESSEE shall have furnished such security as may be required in the proceedings,
(e) such proceedings shall not affect the payment of Basic Rent, Additional Rent
or any other sum payable to LESSOR hereunder or prevent LESSEE from using the
Demised Premises for its intended purposes, and (f) LESSEE shall notify LESSOR
of any such proceedings prior to the commencement thereof, and shall describe
such proceedings in reasonable detail. LESSEE will conduct all such contests in
good faith and with due diligence and will, promptly after the determination of
such contest, pay and discharge all amounts which shall be finally determined to
be payable therein.
9.3. Tax Certiorari. Subject to the provisions of any mortgage
encumbering the Demised Premises, LESSEE may bring proceedings in the
appropriate jurisdiction to reduce the amount of any Impositions, and any
reduction in the amount of such Impositions due with respect to the term of this
Lease shall inure to the benefit of LESSEE. LESSEE shall give prior notice of
any such proceedings to LESSOR.
ARTICLE 10
INSURANCE
10.1. LESSEE'S Insurance. LESSEE will maintain with insurers
authorized to do business in the State of New York and which are rated A-Plus in
Best's Key Rating Guide (LESSOR accepts LESSEE'S insurance provided on this
date, and LESSEE shall have a reasonable period of time to obtain any additional
insurance required hereunder.):
(a) comprehensive general liability insurance (including,
during any period when LESSEE is making alterations or improvements to the
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Demised Premises, coverage for any construction on or about the Demised
Premises), against claims for bodily injury, personal injury, death or property
damage occurring on, in or about the Demised Premises, or as a result of
ownership of facilities located on the Demised Premises, in a combined single
limit of not less than $5,000,000.00 for each claim with respect to any bodily
injury, personal injury or death or property damage;
(b) workers' compensation insurance coverage for the full
statutory liability of LESSEE;
(c) fire insurance and insurance with respect to risks from
time to time included under standard extended coverage endorsement, including
but not limited to water leakage, boiler, vandalism and malicious mischief, in
an amount equal to the Full Insurable Value of the Demised Premises, as
determined from time to time;
(d) rental value insurance against loss by reason of the risks
described in clause (c) above in an amount sufficient to pay all Basic Rent and
Additional Rent for a period of twelve (12) months after the occurrence of any
loss.
10.2. Policy Provisions. The policies of insurance required to
be maintained by LESSEE pursuant to clauses (c) and (d) of Section 10.1 shall
name LESSOR and any mortgagee designated by LESSOR as the insured parties, and
the policies of insurance required to be maintained by LESSEE pursuant to clause
(a) of Section 10.1 shall name LESSOR, LESSEE and any mortgagee designated by
LESSOR as the insured parties; all such policies shall be on standard forms. In
addition, (i) the policies of insurance required to be maintained by LESSEE
pursuant to clauses (a), (c) and (d) of Section 10.1 shall provide that at least
thirty (30) days' prior written notice of suspension, cancellation, termination,
modification, non-renewal or lapse or material change of coverage shall be given
and that such insurance shall not be invalidated by any change in the title or
ownership of the Demised Premises, and (ii) the policy of insurance required to
be maintained by LESSEE pursuant to clause (a) of Section 10.1 shall also
include a contractual liability endorsement evidencing coverage of LESSEE'S
obligation to indemnify LESSOR pursuant to Section 7.1 hereof.
10.3. Evidence of Insurance. On the Commencement Date, LESSEE
shall deliver to LESSOR original certificates of the insurers evidencing all the
insurance which is required to be maintained hereunder by LESSEE, and, at least
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ten (10) days prior to the expiration of any such insurance, other original
certificates evidencing the renewal of such insurance.
10.4. Waivers. LESSOR hereby waives and releases LESSEE, and
LESSEE hereby waives and releases LESSOR, from any and all liabilities, claims
and losses for which the released party is or may be held liable, to the extent
of any insurance proceeds received by said party. Each party agrees to have
included in each casualty and liability insurance policy maintained in
connection with the Demised Premises or any property belonging to it or others
in the Demised Premises a waiver of the insurer's right of subrogation against
the other.
ARTICLE 11
ESTOPPEL CERTIFICATES
11.1. Estoppel Certificates. At any time and from time to
time, upon not less than fifteen (15) days' prior notice, each party shall
execute, acknowledge and deliver to the other a statement, certifying the
following: (a) the Commencement Date, (b) the termination date, (c) the date(s)
of any amendment(s) and/or modification(s) to this Lease, (d) that this Lease
was properly executed and that this Lease is in full force and effect without
amendment or modification, or, alternatively, that this Lease and all amendments
and/or modifications thereto have been properly executed and are in full force
and effect, (e) the current annual Basic Rent and the current monthly
installments of Basic Rent, (f) the date to which Basic Rent and Additional Rent
have been paid, (g) that, to the best of such party's knowledge, neither party
to this Lease is in default in the keeping, observance or performance of any
covenant, agreement, provision or condition contained in this Lease and no event
has occurred which, with the giving of notice or the passage of time, or both,
would result in a default by either party, except as specifically provided in
this Lease or in the estoppel certificate, (h) that, in the case of LESSEE,
LESSEE has no existing defenses, offsets, liens, claims or credits against the
Basic Rent or Additional Rent or against enforcement of this Lease by LESSOR,
except as specifically provided in this Lease or in the estoppel certificate,
(i) that LESSEE has not been granted any options or rights of first refusal to
extend the Term or to terminate this Lease before the expiration date or to
purchase the Demised Premises, except as specifically provided in this Lease or
the estoppel certificate, (j) that, in the case of LESSEE, LESSEE has not
received any notice of violation of Legal Requirements or Insurance Requirements
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relating to the Demised Premises, except as specifically provided in the
estoppel certificate, (k) that, in the case of LESSEE, LESSEE has not assigned
this Lease or sublet all or any portion of the Demised Premises, except as
specifically provided in the estoppel certificate, (l) that, in the case of
LESSEE, no "hazardous substances" or "hazardous wastes" have been generated,
manufactured, refined, transported, treated, stored, handled, disposed or
spilled on or about the Demised Premises, except as specifically provided in the
estoppel certificate, and (m) such other reasonable matters as the person or
entity requesting the certificate may request. LESSEE hereby acknowledges and
agrees that such statement may be relied upon by any mortgagee, or any
prospective purchaser, mortgagee or assignee of any mortgage, of the Demised
Premises or any part thereof.
ARTICLE 12
ASSIGNMENT AND SUBLETTING
12.1. Consent Required. LESSEE shall not sell, assign,
transfer, hypothecate, mortgage, encumber, grant concessions or licenses,
sublet, or otherwise dispose of any interest in this Lease or the Demised
Premises, by operation of law or otherwise, without the prior written consent of
LESSOR, which such consent LESSOR agrees not to unreasonably withhold or delay.
Any consent granted by LESSOR in any instance shall not be construed to
constitute a consent with respect to any other instance or request. No
assignment or sublease shall be permitted if, at the effective date of such
assignment or sublease, LESSEE is then in default under this Lease beyond any
applicable notice and cure period.
12.2. Required Submissions. If LESSEE shall desire to sublet
the Demised Premises or to assign this Lease, it shall first submit to LESSOR a
written notice ("LESSEE'S Notice") setting forth in reasonable detail:
(a) the name and address of the proposed sublessee or
assignee;
(b) the terms and conditions of the proposed subletting or
assignment (including the proposed commencement date of the sublease or the
effective date of the assignment, which shall be at least ten (10) days after
LESSEE'S Notice is given);
(c) the nature and character of the business of the proposed
sublessee or assignee;
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(d) banking, financial, and other credit information relating
to the proposed sublessee or assignee, in reasonably sufficient detail, to
enable LESSOR to determine the proposed sublessee's or assignee's financial
responsibility; and
(e) in the case of a subletting, complete plans and
specifications for any and all work to be done in the Demised Premises to be
sublet.
12.3. LESSOR'S Consent. Within ten (10) days after LESSOR'S
receipt of LESSEE'S Notice, LESSOR agrees that it shall notify LESSEE whether
LESSOR (i) consents to the proposed sublet or assignment, (ii) does not consent
to the proposed sublet or assignment, or (iii) elects to exercise its recapture
right, as described in Section 12.4.
12.4. Right of Recapture. (a) LESSOR shall have the right, to
be exercised by giving written notice (the "Recapture Notice") to LESSEE within
ten (10) days after receipt of LESSEE'S Notice, to recapture the space described
in LESSEE'S Notice (the "Recapture Space"). The Recapture Notice shall cancel
and terminate this Lease with respect to the Recapture Space as of the date
stated in LESSEE'S Notice for the commencement of the proposed assignment or
sublease as fully and completely as if that date had been herein definitively
fixed as the Termination Date, and LESSEE shall surrender possession of the
Recapture Space as of such date. Thereafter, the Basic Rent and Additional Rent
(including Impositions) shall be equitably adjusted based upon the square
footage of the Demised Premises then remaining, after deducting the square
footage attributable to the Recapture Space. LESSOR shall not, in any event, be
entitled to exercise its right of recapture hereunder in connection with any
assignment to the successor of LESSEE by way of merger, consolidation, sale of
all or substantially all of LESSEE'S assets or business, or a sale of all or a
controlling interest in LESSEE.
(b) In the event LESSOR elects to exercise its
recapture right and the Recaptured Space is less than the entire
Demised Premises, then LESSOR, at its sole expense, shall have the right to make
any alterations to the Demised Premises required, in LESSOR'S reasonable
judgment, to make such Recaptured Space a self-contained rental unit. LESSOR
agrees to perform all such work, if any, with as little inconvenience to or
disturbance of LESSEE'S business as is reasonably possible; provided, however,
LESSOR shall not be required to perform such work after LESSEE'S business hours
or on weekends; and provided further, LESSOR shall not be deemed guilty of an
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eviction, partial eviction, constructive eviction or disturbance of LESSEE'S use
or possession of the Demised Premises, and shall not be liable to LESSEE for
same, provided that LESSOR uses reasonable efforts to minimize any such
inconvenience or disturbance.
12.5. Assumption of Lease. It is a further condition to the
effectiveness of any assignment otherwise complying with this Article 12 that
the assignee execute, acknowledge, and deliver to LESSOR an agreement in form
and substance reasonably satisfactory to LESSOR whereby the assignee assumes all
of the obligations of LESSEE under this Lease and agrees that the provisions of
this Article 12 shall continue to be binding upon it with respect to all future
assignments and deemed assignments of this Lease.
12.6. Sublease Requirements. In addition to the foregoing
requirements, any sublease must contain the following provisions:
(a) the sublease shall be subject and subordinate to all of
the terms and conditions of this Lease;
(b) at LESSOR'S option, in the event of cancellation or
termination of this Lease for any reason or the surrender of this Lease, whether
voluntarily, involuntarily, or by operation of law, prior to the expiration of
such sublease, including extensions and renewals of such sublease, the subtenant
shall make full and complete attornment to LESSOR for the balance of the term of
the sublease. The attornment shall be evidenced by an agreement in form and
substance satisfactory to LESSOR which the subtenant shall execute and deliver
at any time within five (5) days after request by LESSOR or its successors and
assigns;
(c) the term of the sublease shall not extend beyond a date
which is one day prior to the expiration of the Term;
(d) no subtenant shall be permitted to further sublet all or
any portion of the subleased space or to assign its sublease without LESSOR'S
prior written consent; and
(e) the subtenant shall waive the provisions of any law now or
subsequently in effect which may give the subtenant any right of election to
terminate the sublease or to surrender possession of the space subleased in the
event that any proceeding is brought by LESSOR to terminate this Lease.
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12.7. Nature of Assignment. Each of the following events shall
be deemed to constitute an assignment of this Lease and each shall require the
prior written consent of LESSOR:
(a) any assignment or transfer of this Lease by operation of
law; or
(b) any hypothecation, pledge, or collateral assignment of
this Lease; or
(c) any involuntary assignment or transfer of this Lease in
connection with bankruptcy, insolvency, receivership, or similar proceeding; or
(d) any assignment, transfer, disposition, sale or acquisition
of a controlling interest in LESSEE to or by any person, entity, or group of
related persons or affiliated entities, whether in a single transaction or in a
series of related or unrelated transactions; or
(e) any issuance of an interest or interests in LESSEE
(whether stock, partnership interests, or otherwise) to any person, entity, or
group of related persons or affiliated entities, whether in a single transaction
or in a series of related or unrelated transactions, which results in such
person, entity, or group holding a controlling interest in LESSEE. For purposes
of the immediately foregoing, a "controlling interest" of LESSEE shall mean 50%
or more of the aggregate issued and outstanding equitable interests (whether
stock, partnership interests, or otherwise) of LESSEE.
12.8. Payment of Net Proceeds to LESSOR. If LESSEE assigns
this Lease or subleases the Demised Premises to any entity other than an
affiliate of LESSEE or an entity acquiring, by merger, sale of assets or sale of
stock, a majority interest in LESSEE, then LESSEE agrees to pay to LESSOR,
immediately upon receipt thereof, 50% of all Net Rental Proceeds, of whatever
nature, payable by the prospective assignee or sublessee to LESSEE pursuant to
such assignment or sublease.
12.9. No Release. No assignment of this Lease nor any sublease
of all or any portion of the Demised Premises shall release or discharge LESSEE
from any liability, whether past, present, or future, under this Lease and
LESSEE shall continue to remain primarily liable under this Lease.
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12.10. Permits and Approvals. LESSEE shall be responsible for
obtaining all permits and approvals required by any governmental or
quasi-governmental agency in connection with any assignment of this Lease or any
subletting of the Demised Premises.
12.11. Bankruptcy Provisions. (a) Notwithstanding anything to
the contrary contained in this Lease, in the event that this Lease is assigned
to any person or entity pursuant to the provisions of the Bankruptcy Code, any
and all monies or other consideration payable or otherwise to be delivered in
connection with such assignment shall be paid or delivered to LESSOR, shall be
and remain the exclusive property of LESSOR and shall not constitute property of
LESSEE or of the estate of LESSEE within the meaning of the Bankruptcy Code. Any
and all monies or other consideration constituting LESSOR'S property under the
preceding sentence not paid or delivered to LESSOR shall be held in trust for
the benefit of LESSOR and be promptly paid to or turned over to LESSOR.
(b) If LESSEE proposes to assign this Lease pursuant to the
provisions of the Bankruptcy Code to any person or entity who shall have made a
bona fide offer to accept an assignment of this Lease on terms acceptable to
LESSEE, then notice of such proposed assignment setting forth (i) the name and
address of such person or entity, (ii) all of the terms and conditions of such
offer, and (iii) the adequate assurance to be provided by LESSEE to assure such
person's or entity's future performance under this Lease, including, without
limitation, the assurance referred to in Section 365(b)(3) of the Bankruptcy
Code, or any such successor or substitute legislation or rule thereto, shall be
given to LESSOR by LESSEE no later than twenty (20) days after receipt by
LESSEE, but in any event no later than ten (10) days prior to the date that
LESSEE shall make application to a court of competent jurisdiction for authority
and approval to enter into such assignment and assumption. LESSOR shall
thereupon have the prior right and option, to be exercised by notice to LESSEE
given at any time prior to the effective date of such proposed assignment, to
accept an assignment of this Lease upon the same terms and conditions and for
the same consideration, if any, as the bona fide offer made by such person for
the assignment of this Lease. Any person or entity to which this Lease is
assigned pursuant to the provisions of the Bankruptcy Code shall be deemed
without further act or deed to have assumed all of the obligations arising under
this Lease on or after the date of such assignment. Any such assignee shall,
upon demand, execute and deliver to LESSOR an instrument confirming such
assumption.
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ARTICLE 13
CASUALTY
13.1. Notice of Casualty. If there is any damage to or
destruction of the Demised Premises, LESSEE shall, upon obtaining knowledge
thereof, promptly give notice thereof to LESSOR, describing the nature and
extent thereof. Within thirty (30) days after receipt of such notice, LESSOR
shall advise LESSEE whether the Demised Premises has been so substantially
damaged such that Restoration cannot be completed within three hundred
sixty-five (365) days of the date of the damage or destruction (the "Restoration
Period"), which determination shall be made by a reputable architect selected by
LESSOR.
13.2. Partial Damage Not Affecting Occupancy. If the Demised
Premises are damaged or partially destroyed but the area damaged is not thereby
rendered untenantable, LESSOR shall, at its own expense, cause Restoration to be
completed as soon as reasonably practicable, and the Basic Rent and Additional
Rent shall not abate.
13.3. Damage Affecting Occupancy. If the Demised Premises are
damaged or destroyed and rendered partially or wholly untenantable, and this
Lease is not terminated pursuant to Sections 13.4 and 13.5 hereof, LESSOR shall,
at its own expense, subject to the conditions stated in Sections 13.4 and 13.5,
cause Restoration to be completed as soon as reasonably practicable and the
Basic Rent and Additional Rent shall be equitably abated during Restoration.
13.4. Termination Rights of LESSOR. If the Demised Premises
are damaged or destroyed and such damage shall amount to 40% or more of the Full
Insurable Value of the Demised Premises, or if the period required for
Restoration is estimated to exceed the Restoration Period, LESSOR, in lieu of
Restoration, may elect to terminate this Lease, provided that notice of such
termination shall be sent to LESSEE within sixty (60) days after LESSOR'S
receipt of notice of the occurrence. Upon such termination, this Lease shall
cease, terminate and expire upon the giving of such termination notice, and all
Basic Rent and Additional Rent shall be adjusted as of the date of such damage
or destruction.
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13.5. Limitation on Restoration Obligation. LESSOR shall not
be required to expend for Restoration an amount in excess of the Net Award
received by it. In the event the Net Award is not adequate, or the holder of the
first mortgage lien elects to retain the Net Award, then, in either case, LESSOR
shall have the right to terminate this Lease within thirty (30) days after the
amount of such Award is ascertained, or after said holder has notified LESSOR of
its election to retain the Net Award, whichever the case may be. If LESSOR
exercises its right to terminate this Lease pursuant to this Section, then this
Lease shall cease, terminate and expire upon the giving of such termination
notice, and all Basic Rent and Additional Rent shall be adjusted as of the date
of such damage or destruction.
13.6. Termination Rights of LESSEE. In the event the period
estimated for Restoration is greater than the Restoration Period, then LESSEE
may elect, upon notice to LESSOR given within fifteen (15) days of receipt of
the notice from LESSOR given as required by Section 13.1 advising of the
estimated Restoration Period, to terminate this Lease, unless the damage or
destruction was caused by the gross negligence or willful misconduct of LESSEE
or LESSEE'S Visitors. Upon such termination, this Lease shall cease, terminate
and expire upon the giving of such termination notice, and all Basic Rent and
Additional Rent shall be adjusted as of the date of such damage or destruction.
ARTICLE 14
CONDEMNATION
14.1. Assignment of Award. LESSEE hereby irrevocably assigns
to LESSOR any award or payment to which LESSEE becomes entitled by reason of any
Taking of all or any part of the Demised Premises, whether the same shall be
paid or payable in respect of LESSEE'S leasehold interest hereunder or
otherwise, except that LESSEE shall be entitled to any award or payment for the
Taking of LESSEE'S trade fixtures or personal property or any separate award for
loss of business or moving expenses provided the amount of the Net Award payable
with respect to the fee interest is not diminished thereby. All amounts payable
pursuant to any agreement with any condemning authority which have been made in
settlement of or under threat of any condemnation or other eminent domain
proceeding shall be deemed to be an award made in such proceeding. LESSEE agrees
that this Lease shall control the rights of LESSOR and LESSEE in any such award
and any contrary provision of any present or future law is hereby waived.
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14.2. Total Taking. In the event of a Taking of the whole of
the Demised Premises, then the term of this Lease shall cease and terminate as
of the date when possession is taken by the condemning authority and all Basic
Rent and Additional Rent shall be paid up to that date.
14.3. Partial Taking. In the event of a Taking of twenty (20%)
percent or more of the Land or Building, then, if LESSEE shall determine in good
faith and certify to LESSOR that because of such Taking, continuance of its
business on the Demised Premises would be uneconomical, LESSEE may at any time
either prior to or within a period of sixty (60) days after the date when
possession of such premises shall be acquired by the condemning authority, elect
to terminate this Lease. In the event that LESSEE shall fail to so elect to
terminate this Lease, or in the event of a Taking of the Demised Premises under
circumstances under which LESSEE will have no such option, then, and in either
of such events, LESSOR, subject to the provisions of Section 14.4., shall cause
Restoration to be completed as soon as reasonably practicable, and the Basic
Rent and Additional Rent payable during the Term shall be equitably prorated
based upon the square foot area of the Demised Premises actually taken.
14.4. Limitation on Restoration. (a) In the event (i) of a
Taking of twenty percent (20%) or more of the Demised Premises or Building, or
(ii) the Net Award is inadequate to complete Restoration of the Demised
Premises, then LESSOR may elect either to complete such Restoration or terminate
this Lease by giving notice to LESSEE within thirty (30) days after the amount
of the Net Award is ascertained. If LESSOR elects to complete Restoration, then
the Basic Rent and Additional Rent payable during the Term shall be equitably
prorated based upon the square foot area of the Demised Premises actually taken;
and if LESSOR elects to terminate this Lease pursuant to this Section, then this
Lease shall cease, terminate and expire upon the giving of such termination
notice, and all Basic Rent and Additional Rent shall be adjusted as of the
earlier to occur of the termination of this Lease or the date of such Taking.
(b) In the event the Net Award is insufficient to complete the
Restoration, or the holder of a mortgage elects to retain the Net Award, then
LESSOR shall have the right to terminate this Lease by giving notice to LESSEE
within thirty (30) days after said determination or such holder has notified
LESSOR of its election to retain the Net Award. If LESSOR exercises its right to
terminate this Lease pursuant to this Section, then this Lease shall cease,
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terminate and expire upon the giving of such termination notice, and all Basic
Rent and Additional Rent shall be adjusted as of the earlier to occur of the
termination of this Lease or the date of such Taking.
ARTICLE 15
EVENTS OF DEFAULT
15.1. Events of Default. Any of the following occurrences,
conditions or acts shall constitute an "Event of Default" under this Lease:
(a) If LESSEE shall default in making payment when due of any
Basic Rent, Additional Rent or other amount payable by LESSEE hereunder and such
default shall continue for a period of ten (10) days after receipt of notice of
such default; or
(b) if LESSEE shall abandon the Demised Premises for a period
in excess of thirty (30) consecutive days; or
(c) if LESSEE shall file a petition in bankruptcy pursuant to
the Bankruptcy Code or under any similar federal or state law, or shall be
adjudicated a bankrupt or is declared insolvent under applicable state
insolvency laws, or shall commit any act of bankruptcy as defined in any such
law, or shall take any action in furtherance of any of the foregoing; or
(d) if a petition or answer shall be filed proposing the
adjudication of LESSEE as a bankrupt pursuant to the Bankruptcy Code or any
similar federal or state law, and (i) LESSEE shall consent to the filing
thereof, or (ii) such petition or answer shall not be discharged or denied
within sixty (60) days after the filing thereof; or
(e) if a receiver, trustee or liquidator (or other similar
official) of LESSEE or of all or substantially all of its business or assets or
of the estate or interest of LESSEE in the Demised Premises shall be appointed
and shall not be discharged within sixty (60) days thereafter or if LESSEE shall
consent to or acquiesce in such appointment; or
(f) if the estate or interest of LESSEE in the Demised
Premises shall be levied upon or attached in any proceeding and such process
shall not be vacated or discharged within sixty (60) days after such levy or
attachment; or
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(g) if LESSEE shall use or suffer or permit the use of the
Demised Premises or any part thereof for any purpose other than expressly
specified in Section 6.1 and such default shall continue for a period of five
(5) days after receipt of notice; or
(h) if LESSEE fails to discharge any Lien within the time
period set forth in Article 9; or
(i) if LESSEE fails to maintain the insurance required
pursuant to Article 10, or LESSEE fails to deliver to LESSOR the insurance
certificates required by Article 10 within the time periods set forth in Section
10.3; or
(j) if LESSEE fails to deliver to LESSOR the estoppel
certificate required by Article 11 within ten (10) days after receipt of notice
that such estoppel certificate was not delivered within the time period set
forth therein; or
(k) if LESSEE fails to deliver to LESSOR the subordination
agreement required by Section 17.l within ten (10) days after receipt of notice
that such subordination agreement was not delivered within the time period set
forth therein; or
(l) if LESSEE fails to comply with any Legal Requirement, and
such failure continues for a period of ten (10) days after receipt of notice
specifying such default and demanding that the same be cured; or
(m) if LESSEE shall default in the observance or performance
of any provision of this Lease, other than those specified in subsections (a)
through (l) above, and such default shall continue for thirty (30) days after
LESSOR shall have given notice to LESSEE specifying such default and demanding
that the same be cured (unless such default cannot be cured by the payment of
money and cannot with due diligence be wholly cured within such period of thirty
(30) days, in which case LESSEE shall have such longer period as shall be
necessary to cure the default, so long as LESSEE promptly commences to cure the
same within such thirty (30) day period, prosecutes the cure to completion with
due diligence and promptly advises LESSOR from time to time, upon LESSOR'S
request, of the actions which LESSEE is taking and the progress being made).
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ARTICLE 16
CONDITIONAL LIMITATIONS; REMEDIES
16.1. Conditional Limitations; Remedies. Upon the occurrence
of any Event of Default hereunder, LESSOR may, in addition to all other rights
and remedies provided herein or at Law or in equity, exercise any or all of the
following remedies:
(a) LESSOR may give a written notice of termination upon LESSEE
setting forth a date, no fewer than ten (10) days from the date of the giving of
such notice, terminating this Lease and/or LESSEE's right to use and occupy the
Demised Premises. Upon the expiration of such period, this Lease and the term
hereof, or the right of LESSEE or any sublessee to use and occupy the Demised
Premises, as the case may be, shall terminate and expire as fully and completely
as if the day on which said notice of cancellation is to be effective were the
expiration of the Term, and LESSEE shall then peaceably quit and surrender the
Demised Premises to LESSOR, but LESSEE shall remain liable as herein provided.
LESSOR may also, without further notice, re-enter the Demised Premises and
repossess same by summary proceedings or ejectment or otherwise and/or may
dispossess the LESSEE and remove the LESSEE and all other persons and property
from the Demised Premises and may have, hold, use and enjoy the Demised Premises
and the right to receive all rental income therefrom.
(b) LESSOR may (i) declare all Basic Rent, Additional Rent and
all other sums due and payable hereunder immediately due and payable;
(ii) re-let or sublet the Demised Premises or any part or parts thereof, in the
name of LESSEE, LESSOR or otherwise, for a term or terms, which may at LESSOR's
option be less than, equal to, or exceed the period which would otherwise have
constituted the balance of the term of this Lease, and LESSOR may grant
concessions or free rent, or charge such higher or lower rental as may be
reasonable under the circumstances; or (iii) collect rental payments directly
from any sublessee, upon written notice to such sublessee directing it to make
such payment to LESSOR.
(c) LESSOR may require LESSEE immediately to pay to LESSOR the
aggregate Basic Rent and Additional Rent payable hereunder which would have
become payable by LESSEE hereunder through the day previously set as the
expiration of the Term. Such accelerated rent shall be held by LESSOR and
applied by LESSOR on a monthly basis to any deficiency between the rent or any
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other monies hereby reserved and/or covenanted to be paid by LESSEE and the net
amount, if any, of the rents collected on account of any re-letting or
sub-letting of the Demised Premises for each month of the period which would
otherwise have constituted the balance of the Term of this Lease. Any excess
accelerated rent held by LESSOR at the expiration of the Term of this Lease
shall be refunded promptly to LESSEE. LESSOR shall use good faith efforts to
mitigate LESSEE'S damages hereunder, but, provided that LESSOR has used such
good faith efforts, the failure of LESSOR to re-let or sublet the Demised
Premises or any part or parts thereof shall not release or affect LESSEE's
obligations or liability hereunder. In computing any such deficiencies, there
shall be added thereto such expenses as LESSOR may reasonably incur in
connection with re-letting or subletting or attempting to relet or sublet the
Demised Premises, including but not limited to, legal expenses, attorney's fees,
brokerage fees, advertising expenses and expenses incurred in connection with
the marketing, showing, fix-up, cleaning, repair or maintenance of the Demised
Premises including those for preparation of the Demised Premises for re-letting
or subletting and the removal of LESSEE's property, fixtures or other
improvements therefrom. LESSOR shall in no event be liable in any way whatsoever
for failure to re-let or sublet the Demised Premises, or in the event that the
Demised Premises are re-let or sublet, for failure to collect the rent under
such re-letting or subletting, and in no event shall LESSEE be entitled to
receive any excess, if any, of such net rents collected over the sums payable by
LESSEE to LESSOR hereunder.
16.2. Remedies Upon Termination. In the event of any
termination of this Lease as in this Article 16 provided or as required or
permitted by law, LESSEE shall forthwith quit and surrender the Demised Premises
to LESSOR, and LESSOR may, without further notice, enter upon, re-enter, possess
and repossess the same by summary proceedings, and again have, repossess and
enjoy the same as if this Lease had not been made, and in any such event LESSEE
and no person claiming through or under LESSEE by virtue of any law or an order
of any court shall be entitled to possession or to remain in possession of the
Demised Premises but shall forthwith quit and surrender the Demised Premises,
and LESSOR at its option shall forthwith, notwithstanding any other provision of
this Lease, be entitled to recover from LESSEE, as and for liquidated damages,
the sum of:
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(a) all Basic Rent, Additional Rent and other amounts payable
by LESSEE hereunder then due or accrued and unpaid, and
(b) for loss of the bargain, an amount equal to the aggregate
of all unpaid Basic Rent and Additional Rent which would have been payable if
this Lease had not been terminated prior to the end of the Term then in effect,
discounted to its then present value in accordance with accepted financial
practice; and
(c) all other damages and expenses (including attorneys' fees
and expenses), if any, which LESSOR shall have sustained by reason of the breach
of any provision of this Lease;
less (i) the net proceeds of any reletting actually received by LESSOR.
16.3. No Limitation on Remedies in Bankruptcy. Nothing herein
contained shall limit or prejudice the right of LESSOR, in any bankruptcy or
insolvency proceeding, to prove for and obtain as liquidated damages by reason
of such termination an amount equal to the maximum allowed by any bankruptcy or
insolvency proceedings, or to prove for and obtain as liquidated damages by
reason of such termination, an amount equal to the maximum allowed by any
statute or rule of law whether such amount shall be greater or less than the
excess referred to above.
16.4. Additional Remedies on Abandonment. In the event that
LESSEE should abandon the Demised Premises for a period in excess of thirty (30)
days, LESSOR may, at its option and for so long as LESSOR does not terminate
LESSEE'S right to possession of the Demised Premises, enforce all of its rights
and remedies under this Lease, including the right to recover all Basic Rent,
Additional Rent and other payments as they become due hereunder. Additionally,
LESSOR shall be entitled to recover from LESSEE all reasonable and necessary
costs of maintenance and preservation of the Demised Premises, and all costs,
including reasonable attorneys' and receiver's fees, incurred in connection with
the appointment of or performance by a receiver to protect the Demised Premises
and LESSOR'S interest under this Lease.
16.5. No Waiver of Indemnification. Nothing in this
Article 16 shall be deemed to affect the right of LESSOR to indemnification
pursuant to this Lease.
16.6. Surrender. If LESSOR terminates this Lease upon the
occurrence of an Event of Default, LESSEE will quit and surrender the Demised
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Premises to LESSOR or its agents, and LESSOR may without further notice enter
upon, re-enter and repossess the Demised Premises by summary proceedings,
ejectment or otherwise. The words "enter", "re-enter", and "re-entry" are not
restricted to their technical legal meanings.
16.7. Costs and Expenses. If either party shall be in default
in the observance or performance of any provision of this Lease, and an action
shall be brought for the enforcement thereof in which it shall be determined
that such party was in default, the party in default shall pay to the other all
fees, costs and other expenses which may become payable as a result thereof or
in connection therewith, including attorneys' fees and expenses.
16.8. Additional Rights. If LESSEE shall default in the
keeping, observance or performance of any covenant, agreement, term, provision
or condition herein contained, LESSOR, without thereby waiving such default, may
perform the same for the account and at the expense of LESSEE (a) immediately or
at any time thereafter and without notice in the case of emergency or in case
such default will result in a violation of any Legal or Insurance Requirement,
or in the imposition of any Lien against all or any portion of the Demised
Premises, and (b) in any other case if such default continues after thirty (30)
days from the date of the giving by LESSOR to LESSEE of notice of LESSOR'S
intention so to perform the same. All reasonable costs and expenses incurred by
LESSOR in connection with any such performance by it for the account of LESSEE
and also all reasonable costs and expenses, including attorneys' fees and
disbursements incurred by LESSOR in any action or proceeding (including any
summary dispossess proceeding) brought by LESSOR to enforce any obligation of
LESSEE under this Lease and/or right of LESSOR in or to the Demised Premises,
shall be paid by LESSEE to LESSOR upon demand.
16.9. Non-Exclusive Remedies of LESSOR. Except as otherwise
provided in this Article 16, no right or remedy herein conferred upon or
reserved to LESSOR is intended to be exclusive of any other right or remedy, and
every right and remedy shall be cumulative and in addition to any other legal or
equitable right or remedy given hereunder, or now or hereafter existing. No
waiver of any provision of this Lease shall be deemed to have been made unless
expressly so made in writing. LESSOR shall be entitled, to the extent permitted
by law, to seek injunctive relief in case of the violation, or attempted or
threatened violation, of any provision of this Lease, or to seek a decree
compelling observance or performance of any provision of this Lease, or to seek
any other legal or equitable remedy.
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ARTICLE 17
SUBORDINATION
17.1. Subordination. Subject to the provisions of the final
sentence of this Section 17.1, this Lease and the term and estate hereby granted
are and shall be subject and subordinate to the lien of each mortgage which may
now or at any time hereafter affect all or any portion of the Demised Premises
or LESSOR'S interest therein and to all ground leases which may now or at any
time hereafter affect all or any portion of the Demised Premises (any such
mortgage or ground lease being herein called an "Underlying Encumbrance"). The
foregoing provisions for the subordination of this Lease and the term and estate
hereby granted to an Underlying Encumbrance shall be self-operative and no
further instrument shall be required to effect any such subordination; provided,
however, at any time and from time to time, upon not less than ten (10) days'
prior notice by LESSOR, LESSEE shall execute, acknowledge and deliver to LESSOR
any and all reasonable instruments that may be necessary or proper to effect
such subordination or to confirm or evidence the same. In connection with any
such subordination, LESSOR agrees to use reasonable efforts to obtain from the
holder of such Underlying Encumbrance a non-disturbance agreement in favor of
LESSEE, on terms mutually agreeable to the parties.
17.2. Effect of Transfers. If all or any portion of LESSOR'S
estate in the Demised Premises shall be sold or conveyed to any person, firm or
corporation upon the exercise of any remedy provided for in any mortgage or by
law or equity, such person, firm or corporation and each person, firm or
corporation thereafter succeeding to its interest in the Demised Premises (a)
shall not be liable for any act or omission of LESSOR under this Lease occurring
prior to such sale or conveyance, except for continuing defaults, (b) shall not
be subject to any offset, defense or counterclaim accruing prior to such sale or
conveyance, except to the extent that any successor shall seek to enforce an
obligation to pay rent which accrued prior to such sale or conveyance, (c) shall
not be bound by any payment prior to such sale or conveyance of Basic Rent,
Additional Rent or other payments for more than one month in advance (except to
the extent actually received and except prepayments in the nature of security
for the performance by LESSEE of its obligations hereunder), and (d) shall be
liable for the keeping, observance and performance of the other covenants,
agreements, terms, provisions and conditions to be kept, observed and performed
by LESSOR under this Lease only during the period such person, firm or
corporation shall hold such interest.
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ARTICLE 18
LESSEE'S REMOVAL
18.1. Removal. Upon the expiration or earlier termination of
this Lease, LESSEE shall surrender the Demised Premises to LESSOR in the
condition same is required to be maintained under Article 5 of this Lease and
broom clean. Any personal property which shall remain in any part of the Demised
Premises after the expiration or earlier termination of this Lease shall be
deemed to have been abandoned, and either may be retained by LESSOR as its
property or may be disposed of in such manner as LESSOR may see fit; provided,
however, that, notwithstanding the foregoing, LESSEE will, upon request of
LESSOR made not later than ten (10) days after the expiration or earlier
termination of this Lease, promptly remove from the Demised Premises any such
personal property.
18.2. Entry by LESSOR. If, at any time during the last three
(3) months of the Term, LESSEE shall advise LESSOR that LESSEE will not occupy
the Demised Premises in connection with the conduct of its business, LESSOR may
elect, at its option, to enter the Demised Premises to alter and/or redecorate
such part of the Demised Premises.
18.3. Holding Over. If LESSEE holds over possession of the
Demised Premises beyond the expiration or earlier termination of this Lease,
such holding over shall not be deemed to extend the Term or renew this Lease but
such holding over shall be a tenancy at sufferance upon the terms, covenants and
conditions of this Lease except that LESSEE agrees that the charge for use and
occupancy of the Demised Premises for each calendar month or portion thereof
that LESSEE holds over (even if such part shall be one day) shall be a
liquidated sum equal to one-twelfth (1/12th) of (a)(i) one hundred fifty percent
(150%) of Basic Rent during the first six (6) months of any holdover, and (ii)
two hundred percent (200%) of the Basic Rent thereafter and (b) one hundred
percent (100%) of the Additional Rent required to be paid by LESSEE during the
calendar year preceding the termination date. The parties recognize and agree
that the damage to LESSOR resulting from any failure by LESSEE to timely
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surrender possession of the Demised Premises will be extremely substantial, will
exceed the amount of the monthly Basic Rent and Additional Rent payable
hereunder and will be impossible to accurately measure. Nothing contained in
this Lease shall be construed as a consent by LESSOR to the occupancy or
possession by LESSEE of the Demised Premises beyond the termination date, and
LESSOR, upon said termination date, shall be entitled to the benefit of all
legal remedies that now may be in force or may be hereafter enacted relating to
the immediate repossession of the Demised Premises. The provisions of this
Article 18 shall survive the expiration or sooner termination of this Lease.
ARTICLE 19
MISCELLANEOUS
19.1. Broker. Each party represents to the other that it has
not dealt with any real estate broker or sales representative in connection with
this transaction. Each party agrees to indemnify and hold harmless the other
from and against any threatened or asserted claims, liabilities, losses or
judgments (including reasonable attorneys' fees and disbursements) by any broker
or sales representative claiming to have dealt with it in connection with this
transaction. The provisions of this Section 19.1 shall survive the expiration or
sooner termination of this Lease.
19.2. Notices. All notices, demands, requests, consents,
approvals, offers, statements and other instruments or communications required
or permitted to be given hereunder shall be in writing and shall be deemed to
have been given when delivered, one (1) business day after being deposited with
a reputable overnight delivery service, or five (5) days after being mailed by
first class registered or certified mail, postage prepaid, addressed to the
address for such party set forth above, or to such other address as either party
shall designate to the other in writing. Notwithstanding the foregoing, any
notice changing the address of a party shall not be deemed given until received
by the party to whom it was addressed.
19.3. Nature of LESSOR'S Obligations. Anything in the Lease to
the contrary notwithstanding, no recourse or relief shall be had under any rule
of law, statute or constitution or by any enforcement of any assessments or
penalties, or otherwise or based on or in respect of this Lease (whether by
breach of any obligation, monetary or non-monetary), against any member,
partner, joint venturer, shareholder or other person or entity having an
ownership interest in LESSOR, it being expressly understood that all obligations
of LESSOR under or relating to this Lease are solely obligations payable out of
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the Demised Premises and are compensable solely therefrom. It is expressly
understood that all such liability is and is being expressly waived and released
as a condition of and as a condition for the execution of this Lease, and LESSEE
expressly waives and releases all such liability as a condition of, and as a
consideration for, the execution of this Lease by LESSOR. LESSEE shall look
solely to LESSOR's equity in the Demised Premises to satisfy any liability of
LESSOR hereunder.
19.4. Right of Entry. LESSEE shall permit LESSOR, its agents,
servants, employees and contractors, any prospective purchaser, and any present
or prospective mortgagee and their representatives, upon reasonable advance
notice, to enter the Demised Premises from time to time upon reasonable advance
notice to LESSEE, and during the last eighteen (18) months of the Term shall
permit LESSOR to show the Demised Premises to prospective tenants.
19.5. Accord and Satisfaction. The receipt by LESSOR of any
installment of Basic Rent or of any Additional Rent with knowledge of a default
by LESSEE under the terms and conditions of this Lease shall not be deemed a
waiver of such default. No payment by LESSEE or receipt by LESSOR of a lesser
amount than the rent herein stipulated shall be deemed to be other than on
account of the earliest stipulated rent, nor shall any endorsement or statement
on any check or any letter accompanying any check or payment of rent be deemed
an accord and satisfaction, and LESSOR may accept such check or payment without
prejudice to LESSOR'S right to recover the balance of such rent or pursue any
other remedy in this Lease provided.
19.6. Expenses of LESSOR. If LESSEE seeks any consent or
waiver with respect to this Lease, then, whether or not LESSOR grants such
consent or waiver, LESSEE shall pay to LESSOR, within ten (10) days after
demand, LESSOR'S reasonable costs and expenses, including attorneys' fees,
incurred in connection therewith.
19.7. Modifications; Amendments; Waivers. This Lease may not
be amended, modified or terminated, nor may any obligation hereunder be waived
orally, and no such amendment, modification, termination or waiver, shall be
effective unless in writing and signed by the party against whom enforcement
thereof is sought. No waiver by either party of any obligations hereunder shall
be deemed to constitute a waiver of the future performance of such obligation.
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19.8. Security Deposit. (a) Concurrently with the execution of
this Lease, LESSEE shall deposit with LESSOR the sum of $42,000.00, the same to
be held by LESSOR as security for the full and faithful performance by LESSEE of
the terms and conditions by it to be observed and performed hereunder. The
security deposit shall be deposited by LESSOR in an interest-bearing account
segregated from LESSOR'S other accounts. At the end of each calendar year,
interest on the security deposit shall be credited against any amounts required
to be paid by LESSEE pursuant to subsection (b) below, and any excess shall be
paid to LESSEE promptly, provided, however, that LESSOR shall be entitled to
retain for its own account an administrative fee equal to one percent (1%) of
the security deposit per annum. If any Basic Rent, Additional Rent or other sum
payable by LESSEE to LESSOR becomes overdue and remains unpaid, or should LESSOR
make any payments on behalf of LESSEE, or should LESSEE fail to perform any of
the terms and conditions of this Lease, then LESSOR, at its option, upon notice
to LESSEE, and without prejudice to any other remedy which LESSOR may have on
account thereof, shall appropriate and apply said deposit, or so much thereof as
may be required to compensate or reimburse LESSOR, as the case may be, toward
the payment of Basic Rent, Additional Rent or other such sum payable hereunder,
or loss or damage sustained by LESSOR due to the breach or failure to perform on
the part of LESSEE, and upon demand, LESSEE shall restore such security to the
original sum deposited. The Deposit shall not be considered as an advance
against Basic Rent or any other payments due under this Lease.
(b) LESSEE hereby agrees that the security deposit shall equal
three (3) months' Basic Rent at all times during the Term, and LESSEE
agrees to deposit with LESSOR such additional sum as may be required to satisfy
such requirement within thirty (30) days after any increase in the Basic Rent.
19.9. Severability. If any provision of this Lease or any
application thereof shall be invalid or unenforceable, the remainder of this
Lease and any other application of such provision shall not be affected thereby.
19.10. Successors and Assigns. This Lease shall be binding
upon and inure to the benefit of and be enforceable by the respective successors
and assigns of the parties hereto, except as provided in Article 12.
19.11. Quiet Enjoyment. Upon due performance of the covenants
and agreements to be performed by LESSEE under this Lease, LESSOR covenants that
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LESSEE shall and may at all times peaceably and quietly have, hold and enjoy the
Demised Premises during the Term.
19.12. Interpretation. The table of contents and the article
headings are for convenience of reference only and shall not limit or otherwise
affect the meaning hereof. Exhibits A and B are incorporated into this Lease.
19.13. Counterparts. This Lease may be simultaneously executed
in several counterparts, each of which when so executed and delivered, shall
constitute an original, fully enforceable counterpart for all purposes.
19.14. Governing Law. This Lease shall be governed by and
construed in accordance with the laws of the State of New York.
19.15. No Acceptance of Surrender. No act or thing done by
LESSOR or LESSOR'S agents during the Term shall be deemed an acceptance of a
surrender of the Demised Premises. No agreement to accept such surrender shall
be valid unless in writing and signed by LESSOR. No employee of LESSOR or
LESSOR'S agents shall have any authority to accept the keys to the Demised
Premises prior to the termination date and the delivery of keys to any employee
of LESSOR or LESSOR'S agents shall not operate as an acceptance of a termination
of this Lease or an acceptance of a surrender of the Demised Premises.
19.16. No Offer. The submission of this Lease to LESSEE for
examination does not constitute an offer to lease the Demised Premises on the
terms set forth herein, and this Lease shall become effective as a lease
agreement only upon the execution and delivery of the Lease by LESSOR and
LESSEE.
ARTICLE 20
LESSEE'S ADDITIONAL RIGHTS
20.1. Repurchase Option. Provided that there is no then
existing Event of Default under this Lease beyond any applicable notice and cure
period, and provided that LESSEE has not subleased all or any portion of the
Demised Premises or assigned this Lease, except as permitted below, then from
the Commencement Date through and including the date which is six (6) months
from and after the Commencement Date, LESSEE shall have the right to purchase
the Demised Premises (the "Repurchase Option"), on the following terms and
conditions:
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(a) LESSEE may exercise the Repurchase Option by providing
written notice of such exercise (the "Exercise Notice") to LESSOR.
(b) The closing of title shall take place on the date that is
specified in the Exercise Notice, which date shall be no earlier than thirty
(30) days after the date that the Exercise Notice is delivered to LESSOR, and no
later than the last day of the six (6) month period set forth above in this
Section 20.1, provided, however, that such date shall not be a Saturday, Sunday
or legal holiday, in which event, the closing of title shall occur on the next
succeeding business day.
(c) LESSEE shall pay the amount of $1,155,000.00 (the
"Repurchase Price") to LESSOR for the purchase of the Demised Premises.
(d) Title to the Demised Premises shall be the same quality of
title subject to which LESSOR took title to the Demised Premises on the date
hereof.
(e) LESSEE shall pay to LESSOR all recording fees, transfer
taxes, reasonable legal fees, reasonable fees paid in connection with obtaining
and termination of LESSOR'S mortgage excluding prepayment penalties or premiums,
and other reasonable costs and expenses, incurred by LESSOR in connection with
the purchase of the Demised Premises from LESSEE, and the repurchase of the
Demised Premises by LESSEE, so that LESSOR receives a total net profit from both
transactions equal to $55,000.00.
This Repurchase Option is not assignable in connection with the assignment of
this Lease or otherwise, except that LESSEE may assign this Repurchase Option to
the successor of LESSEE by way of merger, consolidation, sale of all or
substantially all of LESSEE'S assets or business, or a sale of all or a
controlling interest in LESSEE.
20.2 Profit Sharing. (a) Provided that there is no then
existing Event of Default under this Lease beyond any applicable notice and cure
period, and provided that LESSEE has not subleased all or any portion of the
Demised Premises or assigned this Lease, except as is permitted herein, if
LESSOR sells the Demised Premises to a third party unaffiliated with Lessor
prior to the First Anniversary of the Commencement Date, then LESSOR shall pay
to LESSEE an amount equal to one-half (1/2) of the profit realized by LESSOR in
connection with such sale, which profit shall be calculated to be the proceeds
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of such sale, net of (i) the purchase price paid by LESSOR for the Demised
Premises, (ii) all costs and expenses, including, without limitation, legal
fees, title charges, survey costs and due diligence costs, incurred by LESSOR in
connection with the purchase of the Demised Premises, (iii) all costs and
expenses, including without limitation, legal fees, recording charges, and
brokerage commissions, incurred by LESSOR in connection with the sale of the
Demised Premises to such third party, and (iv) all costs and expenses incurred
by LESSOR in improving the Demised Premises after the date hereof. This right is
not assignable by LESSEE in accordance with an assignment of this Lease or
otherwise, except that LESSEE may assign this right to the successor of LESSEE
by way of merger, consolidation, sale of all or substantially all of LESSEE'S
assets or business, or a sale of all or a controlling interest in LESSEE.
(a) If LESSEE exercises its Repurchase Option, and subsequently
sells the Demised Premises to a third party unaffiliated with LESSEE prior to
the First Anniversary of the closing date of such purchase, then LESSEE shall
pay to LESSOR an amount equal to one-half (1/2) of the profit realized by LESSOR
in connection with such sale, which profit shall be calculated to be the
proceeds of such sale, net of (i) the repurchase price paid by LESSEE for the
Demised Premises, (ii) all costs and expenses, including, without limitation,
legal fees, title charges, survey costs and due diligence costs, incurred by
LESSEE in connection with the repurchase of the Demised Premises, (iii) all
costs and expenses, including without limitation, legal fees, recording charges,
and brokerage commissions, incurred by LESSEE in connection with the sale of the
Demised Premises to such third party, and (iv) all costs and expenses incurred
by LESSEE in improving the Demised Premises after the closing date of such
repurchase. This right is not assignable by LESSOR in accordance with the sale
of the Demised Premises or otherwise, except that LESSOR may assign this right
to the successor of LESSOR by way of merger, consolidation, sale of all or
substantially all of LESSOR'S assets or business, or a sale of all or a
controlling interest in LESSOR. This right shall survive the termination of this
Lease, and shall be evidenced by the deed or another recorded document at the
closing of title with respect to the Repurchase Option.
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IN WITNESS WHEREOF, the parties have executed this Lease as of
the date first above written.
LESSOR:
SUN ASSOCIATES, LLC
By: /S/ Betty Sun
----------------------------
Name: Betty Sun
Title: Member
LESSEE:
SALEX HOLDING CORP.
By: /S/ Salvatore Crimi, CEO
----------------------------
Name: Salvatore Crimi
Title: CEO
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EXHIBIT A
DESCRIPTION OF LAND
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EXHIBIT B
BASIC RENT
The Basic Rent payable by LESSEE to LESSOR during the term shall be as
follows:
(a) During the period from the Commencement Date to December 31, 1999,
inclusive, annual Basic Rent shall be $168,000.00, payable in equal monthly
installments of $14,000.00, on the first day of each consecutive month, except
that the first such installment shall be due and payable on the Commencement
Date and shall be prorated based upon the number of days remaining in the month
in which the Commencement Date occurs.
(b) On January 1, 2000, and on January 1 of each year thereafter
through January 1, 2003, Basic Rent shall be increased by the annual amount of
$6,000.00. Basic Rent shall be payable in equal monthly installments on the
first day of each consecutive month.
(c) On January 1 2004, and on January 1 of each year thereafter during
the term, Basic Rent shall be increased by the annual amount of four percent of
the annual Basic Rent for the previous year. Basic Rent shall be payable in
equal monthly installments on the first day of each consecutive month.
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