New York-Hauppauge-85 Nicon Court Lease - Reckson Operating Partnership LP and American Tissue Corp.
AGREEMENT OF LEASE
AGREEMENT OF LEASE made as of the 18th day of January, 1996 between RECKSON
OPERATING PARTNERSHIP, L.P., a limited partnership having its principal office
at 225 Broadhollow Road, Suite 212 West, Melville, New York 11747 (hereinafter
referred to as Landlord"), and AMERICAN TISSUE CORPORATION, a corporation
organized under the laws of the State of New York, having its principal office
at 35 Engle Street, Hicksville, New York 11801 (hereinafter referred to as
"Tenant")
RECITAL
Landlord has agreed to demise and lease unto Tenant and Tenant has agreed
to hire and take from Landlord the real property and the building and other
improvements thereon known as and located at 85 Nicon Court, Hauppauge, New
York, as shown on Exhibit A annexed hereto (such real property, building and
improvements being hereinafter referred to as the "Premises" and such building
being hereinafter referred to as the "Building"). Now, therefore, in
consideration of the terms, conditions and covenants of this Lease, it is hereby
agreed as follows:
TERM
1. Landlord hereby leases the Premises to Tenant and Tenant hereby hires
the Premises from Landlord for a term of five (5) years which shall commence on
February 1, 1996 (the "Commencement Date") and shall end on January 31, 2001
(the "Expiration Date") unless such term shall sooner cease or expire as
hereinafter provided. If on the foregoing date specified for the Commencement
Date the Landlord's Work, as hereinafter described in Paragraph 6 hereof, is not
"Substantially Completed" (hereinafter defined), then the Term Commencement Date
shall be postponed until the sooner to occur of (a) Tenant's occupancy for the
conduct of its business, or (b) the date on which Landlord's Work shall be
Substantially Completed and the term of this Lease shall be extended so that the
expiration date shall be five (5) years after the last day of the month in which
the Commencement Date occurs. "Substantially Completed", as used herein, is
defined to mean when:
(a) The only items of Landlord's Work to be completed are those which
do not materially interfere with Tenant's use and occupancy of the Demised
Premises. If Landlord shall be delayed from achieving Substantial
Completion of Landlord's Work as a
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result of the performance or completion of any work, labor or services by
Tenant or a party employed by Tenant, then the commencement of the Term of
this lease and the payment of rent hereunder shall be accelerated by the
number of days of such delay. Tenant waives any right to rescind this Lease
under Section 223-a of the New York Real Property Law or any successor
statute of similar import then in force and further waives the right to
recover any damages which may result from Landlord's failure to deliver
possession of the Premises on the Commencement Date.
TITLE
2. The Premises are let subject to covenants, restrictions and easements of
record ("Permitted Encumbrances"), governmental laws, rules, regulations and
orders, and the reservation by Landlord of all air rights above, around and
about the Premises and all rights to increase the sizes of surrounding buildings
based on the air rights appurtenant to the Premises, as, if and when permitted
by any present or future zoning laws, ordinances, orders or regulations.
Landlord represents that the above-referenced covenants, restrictions and
easements of record shall not materially impair Tenant's permitted use of the
Premises. Tenant shall not be required to incur a financial obligation in
complying with the above Permitted Encumbrances except to the extent such
obligations are due to the acts of Tenant, it's employees, agents, invitees or
permitted licensees or permitted assigns.
RENT
3. (a) Tenant covenants to pay to Landlord at its principal office, or at
such place as Landlord shall from time to time direct in writing, the minimum
annual rent set forth below, and the additional rent required to be paid
pursuant to the terms of this Lease. Minimum annual rent and such other
additional rent and charges which Tenant shall be required to pay are
hereinafter sometimes referred to as "Rent". Minimum annual rent shall be as
follows:
During the period February 1, 1996 through January 31, 1997, the minimum
annual rent shall be $446,579.52, payable $in equal monthly installments of
$37,214.96.
During the period February 1, 1997 through January 31, 1998, the minimum
annual rent shall be $459,976.92, payable in equal monthly installments of
$38,331.41.
During the period February 1, 1998 through January 31, 1999, the minimum
annual rent shall be $473,776.20, payable in monthly installments of
$39,481.35.
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During the period February 1, 1999 through January 31, 2000, the minimum
annual rent shall be $487,989.48, payable in equal monthly installments of
$40,665.79.
During the period February 1, 2000 through January 31, 2001, the minimum
annual rent shall be $502,629.12, payable in monthly instaLlments of
$41,885.76.
(b) Tenant shall pay the minimum annual rent in equal monthly installments
in advance on the first day of each calendar month included in the term except
for the first month's rent which shall be paid on the signing of this Lease.
(c) All Rent shall be paid in lawful money of the United States which shall
be legal tender in payment of all debts and dues, public and private, at the
time of payment, at the address of Landlord set forth in this Lease or at such
other place as Landlord in writing may designate without any set-off or
deduction whatsoever except as may otherwise be specifically provided herein,
and without any prior demand therefor.
(d) Unless another time shall be herein expressly provided, any additional
rent shall be due and payable within ten (10) days of written demand or billing
therefor and Landlord shall have the same remedies for failure to pay the
additional rent as for a non-payment of minimum annual rent.
(e) For any portion of a calendar month included at the beginning or end of
the term, Tenant shall pay 1/30th of each monthly installment of Rent for each
day of such portion, payable in advance at the beginning of such portion. The
Rent for any partial month at the beginning of the term of this lease shall be
prorated on the basis of the monthly installments of Rent due for the second
calendar month of the term of this lease.
(f) In any case in which the minimum rent or additional rent is not paid
within ten (10) days of the day when same is due, Tenant shall pay a late charge
equal to 5 cents for each dollar so due; for the purpose of defraying expenses
incident to the handling of such delinquent payment. Tenant further agrees that
the late charge imposed herein is fair and reasonable, complies with all laws,
regulations and statutes, and constitutes an agreement between Landlord and
Tenant as to the estimated compensation for costs and administrative expenses
incurred by Landlord due to the late payment of rent to Landlord by Tenant.
Tenant further agrees that the late charge assessed pursuant to this Lease is
not interest, and the late charge assessed does not constitute a lender or
borrower/creditor relationship between Landlord and Tenant. Notwithstanding the
foregoing, Tenant shall not be required to pay the above late charge until and
including the second late payment in any twelve (12) month period during the
term of this Lease.
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(g) If Tenant shall be in default after the expiration of the applicable
notice period provided herein for the cure thereof in making any payment
required to be made by Tenant or in performing any obligation of Tenant under
this Lease which shall require the expenditure of money, Landlord may, but shall
not be obligated to, make such payment on behalf of Tenant or expend such sum as
may be necessary to perform or fulfill such obligation. Any sums so paid by
Landlord shall be deemed Rent and shall be due and payable to Landlord at the
time of payment of the next installment of minimum annual rent.
(h) Net Lease. The minimum annual rent hereinabove provided for shall be in
addition to all other payments to be made by Tenant as herein provided. It is
the purpose and intent of the parties hereto that the minimum annual rent shall
be absolutely net to Landlord so that, except as otherwise specifically provided
herein, this Lease shall yield, net to the Landlord, the minimum annual rent and
that all costs, expenses and obligations of every kind and nature whatsoever
relating to the Premises which may arise or become due during the term of this
Lease shall be paid by Tenant and that Landlord shall be indemnified and saved
harmless by Tenant from and against the same.
(i) Tenant will pay Landlord, as additional rent, without deduction or
offset, all amounts that this Lease requires Tenant to pay in addition to Rent
(the "additional rent"), at the place where the Rent is payable. Landlord will
have the same remedies for a default in the payment of additional rent as it has
for a default in the payment of Rent.
USE OF PREMISES
4. (a) Tenant shall use and occupy the Premises solely for warehousing,
distribution, manufacturing and offices associated therewith and related
purposes, and for no other purpose. Tenant shall not use or permit the use of
the Premises contrary to any applicable statute, ordinance or regulation or in
violation of the Certificate of Occupancy of the Building, or in a manner which
would cause structural injury to the Building.
(b) Tenant acknowledges that the value of the Premises and the reputation
of Landlord will be seriously injured if the Premises are used for any obscene
or pornographic purposes or if any obscene or pornographic material is permitted
on the Premises. Tenant further agrees that Tenant will not permit any of such
uses by Tenant or a sublessee of the Premises or an assignee of this Lease. This
Paragraph shall directly bind any successors in interest to Tenant. Tenant
agrees that if at any time Tenant violates any of the provisions of this
Paragraph, such violation shall be deemed a breach of a substantial obligation
of the terms
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of this Lease and objectionable conduct. Pornographic material is defined for
purposes of this Paragraph as any written or pictorial matter with prurient
appeal or any objects or instruments that are primarily concerned with lewd or
prurient sexual activity. Obscene material is defined here as it is in Penal Law
section 235.00.
TAXES
5. (a) The term "Real Estate Taxes" shall be deemed to mean all real estate
taxes, assessments, special or otherwise, fixed water charges or sewer rentals
(if any), or other taxes assessed upon or with respect to the ownership of or
all other taxable interests in the real property, Building and other
improvements which constitute the Premises, imposed by Federal, State or Local
governmental authority or any other taxing authority having jurisdiction over
the Premises, but shall not include income, intangible, franchise, capital
stock, estate or inheritance taxes, or taxes based upon the receipt of rentals
(unless the same shall be in lieu of "Real Estate Taxes" as herein defined by
whatever name the tax may be designated.) As to any assessment, for purposes
hereof, Landlord agrees to pay same in installments over the longest period
offered by the taxing authorities, and Real Estate Taxes for any given Lease
Year (hereafter defined) shall only include installments that are payable during
the term.
A "Lease Year" shall comprise a period of twelve (12) consecutive months.
Notwithstanding the foregoing, the first Lease Year shall commence upon the
Commencement Date and if the Commencement Date is not the first day of a month
shall include the additional period from the Commencement Date to the end of the
then current month. Each succeeding Lease Year shall end on the anniversary date
of the last day of the preceding Lease Year. For example, if the Commencement
Date is January 1, 1996, the first Lease Year would end on December 31, 1996 and
each succeeding Lease Year would end on December 31st. If, however, the
Commencement Date is January 2, 1996 the first Lease Year would end on January
31, 1997, the second Lease Year would commence on February 1, 1997 and each
succeeding Lease Year would end on January 31st.
(b) Commencing on the Commencement Date and continuing throughout the term
of this Lease, Tenant shall pay to Landlord any and all Real Estate Taxes levied
or assessed against the Premises to the extent applicable to the term of this
Lease, as additional rent hereunder. Any amount due to Landlord under the
provisions of this Paragraph shall be paid within ten (10) days after receipt by
Tenant from Landlord of an invoice therefor. A copy of the tax bill shall be
sufficient evidence of the amount of Real Estate Taxes imposed upon the
Premises. Tenant shall also pay when due any occupancy taxes arising under or in
connection with this Lease. Provided that Tenant pays Real Estate Taxes to
Landlord within the
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said ten (10) day period, Tenant shall not be liable for any penalties or
interest assessed as a result of any late payment of Real Estate Taxes.
(c) Landlord's failure during the term of this Lease to prepare and deliver
any of the foregoing tax statements or Landlord's failure to make a demand for
additional rent due hereunder shall not in any way waive or cause Landlord to
forfeit or surrender its rights to collect any of the foregoing items of
additional rent which may have become due during the term of this Lease.
(d) If, for any reason, any such Real Estate Taxes shall be paid by Tenant
directly to the taxing authority, Tenant agrees to deliver to Landlord, within
15 days after request by Landlord, a copy of Tenant's check and an official
receipt, if available, of the taxing authority evidencing such payment.
(e) Tenant shall pay to Landlord, within ten (10) days after demand, any
Real Estate Taxes relating to the term of this Lease which may have been prepaid
by Landlord. With respect to any period at the expiration of the term of this
Lease which shall constitute a partial tax year, Tenant shall be responsible for
the Real Estate Taxes allocable to such partial tax year and Landlord's tax
statement shall apportion the amount of the additional rental due hereunder. The
obligation of Tenant in respect of such additional rental applicable for the
last year of the term of this Lease or part thereof shall survive the expiration
of the term of this Lease.
(f) Tenant shall not, without Landlord's prior written consent, institute
or maintain any action, proceeding or application in any court or body or with
any governmental authority for the purpose of changing the Real Estate Taxes.
However, if Landlord fails to commence such a proceeding on or before the
thirtieth (30th) day prior to the final date to file challenges for the tax year
in question and Landlord has not provided a reasonable justification for not
doing so by such thirtieth (30th) day, then Tenant shall be permitted to
commence such a proceeding for the tax year in question at Tenant's sole cost
and expense and upon prior notice to Landlord. In the event Tenant commences
such a proceeding as permitted by this Article, Tenant shall furnish Landlord
with copies of all documents delivered and received by or on behalf of Tenant in
connection with said proceeding. In the event any such action initiated by
Landlord or Tenant is successful, then Landlord and Tenant shall share any tax
refund or credit obtained thereby (after reimbursement to the appropriate party
for reasonable legal fees and other customary out of pocket expenses) on the
basis of the Taxes actually paid by each such party.
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(g) Tenant shall not be responsible for increases in Real Estate Taxes
which result from improvements to the Building made by Landlord unless said
improvements are required by law or are performed by Landlord at the request of
Tenant or as required under this Lease.
LANDLORD'S WORK AND DELIVERY OF POSSESSION
6. (a) Subject to Landlord's representations in Subparagraph 8(a) being
true on the date of delivery of possession of the Premises, and further subject
to Landlord's obligation to perform the work provided below, Tenant agrees to
accept the Premises in its "as is" condition as of the date hereof and Landlord
shall have no obligation to perform any work on the Premises in order to prepare
same for occupancy by Tenant. Landlord, at its sole cost and expense shall
promptly commence and diligently complete the removal of the temporary small
non-structural platform and the racking system presently located at the Demised
Premises ("Landlord's Work"). In the event Landlord's Work is not Substantially
Completed within sixty (60) days of the date hereof, Tenant may terminate this
lease upon written notice to Landlord.
(b) Subject to the provisions of Article 35, Landlord shall deliver
possession of the Premises to Tenant on the date Landlord's Work is
Substantially Completed.
TENANT'S WORK
7. Upon the commencement of the Term as provided in Paragraph 1 hereof,
Tenant, at its sole cost and expense, may perform the following work at the
Demised Premises ("Tenant's Work"):
(a) Demolish the office area on the mezzanine.
(b) Raise loading docks.
(c) Replace existing florescent lighting with high pressure sodium
lighting fixtures.
(d) Install an exterior truck scale.
(e) Install a propane tank.
Notwithstanding the foregoing, Tenant may commence the raising of the loading
docks and the installation of exterior of the truck scale upon execution of this
lease.
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All alterations, additions, improvements, equipment and fixtures installed by
Tenant (as part of Tenant's Work or otherwise) which are appurtenant to the
Building (but not including Tenant's trade fixtures) shall be deemed the
property of Landlord (except for purposes of sales tax, if any, which shall
remain Tenant's obligation) and shall be and remain upon the Demised Premises at
the expiration of this Lease. All work performed by or on behalf of Tenant in
the Demised Premises including, without limitation, Tenant's Work, shall be
performed in accordance with Article "9" and Exhibit "B" annexed hereto and made
a part hereof. Tenant shall not be required to post a bond or pay a supervisory
fee with respect to Tenant's Work, as provided above. Landlord hereby approves
Tenant's plans for the installation of the truck scale and Bopst Machine, a copy
of which has been initialed by Landlord and Tenant.
Notwithstanding the foregoing, in the event that Tenant does not exercise its
option to renew the Term of this Lease for an additional five (5) year period,
or in the event that Tenant renews this Lease for an additional five (5) year
period and this Lease is terminated by reason of Tenant's acts or defaults or by
operation of law or otherwise, prior to the end of the extended term, at its
option, Tenant shall either (i) restore all of the offices which were demolished
as part of Tenant's Work to their condition existing on the date hereof
excepting wall coverings, floor coverings and paintings, or (ii) pay Landlord
$30,000.00 ("Restoration Fee") which Landlord and Tenant agree represents the
fair and reasonable amount Landlord may incur in restoring the offices which
were demolished as part of Tenant's Work. The Restoration Fee shall be paid on
the sooner to occur of: (i) an early termination of this Lease; or (ii) the
failure of Tenant to timely exercise its option to extend the term.
REPAIRS, MAINTENANCE, FLOOR LOADS AND PARKING RESTRICTION
8. (a) Tenant shall at all times keep and maintain the Premises in good
order, condition and repair, and shall make all nonstructural repairs to the
Premises, including, without limiting the generality of the foregoing, (i)
maintenance and repair of the electrical, plumbing, sprinkler, heating,
ventilating and air conditioning systems servicing the Premises; (ii) generally
keeping and maintaining the Premises, both interior and exterior, in good
condition and repair; (iii) maintenance and repair of all landscaping,
sidewalks, driveways and parking areas at the Premises; (iv) keeping the
Premises clean and free of debris, snow and ice; (v) the repair and maintenance
of all plate glass; and (vi) the roof. Tenant shall obtain and keep in full
force and effect for the benefit of Landlord and Tenant, with a responsible
company doing business in Nassau or Suffolk County, a service, repair and
maintenance contract with respect to the heating,
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ventilating and air-conditioning systems of the Premises. A copy of such
contract and all renewals thereof shall, upon issuance and thereafter not later
then ten (10) days prior to expiration, be furnished to Landlord together with
evidence of payment. If Tenant fails to make any repairs or replacements
required to be made by Tenant, Landlord may, after fifteen (15) days written
notice to Tenant, except in the case of emergency which shall not require
notice, without obligation, perform same for the account of Tenant at Tenant's
expense and the cost thereof shall be due and payable by Tenant to Landlord as
additional rent. In no event shall Tenant be obligated to make repairs to the
Premises necessitated by the affirmative acts or negligence of Landlord or
Landlord's agents, employees, licensees, contractors, invitees or
representatives. Landlord represents and warrants to Tenant that: (a) the
Premises are and shall be delivered to Tenant vacant, free of all rights of
occupancy, in broom clean condition, with all systems, including, without
limitation, HVAC, plumbing and electrical systems, equipment, facilities,
fixtures, installations and appurtenances in good working order, repair and
condition; (b) the roof and basement are in good condition, free of leaks; and
(c) all utility systems are operational and in good working order. Promptly upon
the execution hereof, weather permitting, Landlord and Tenant acknowledge that
Landlord will install a new roof membrane over the entire existing roof.
Landlord agrees that during the term of this Lease, Tenant shall receive the
benefit of the warranty given to Landlord covering the new roof membrane which
warranty shall be for minimum of three (3) years.
During the term hereof, Landlord shall promptly make all structural repairs to
the Building except for those structural repairs occasioned by the acts or
omissions of Tenant or Tenant's agents, employees, licensees, contractors,
invitees or representatives, which shall be made by Landlord at the sole cost
and expense of Tenant to be paid by Tenant as additional rent.
(b) When necessary by reason of accident or other casualty occurring in the
Building or at the Premises or in order to make any necessary repairs, or to
make alterations or improvements required by law, in or relating to the Building
or the Premises, Landlord reserves the right to interrupt, temporarily, and on
written notice to Tenant, the supply of utility services until said repairs or
improvements shall have been completed. Landlord shall pursue such work with
reasonable diligence and dispatch. Nothing contained in this paragraph shall
create any obligation of Landlord to maintain the Building or the Premises.
(c) Tenant shall not place a load upon any floor of the Premises which
exceeds the floor load per square foot area which such floor was designed to
carry. If Tenant shall desire a floor load in excess of that for which the floor
of any portion of the Premises is designed, upon submission to Landlord of plans
showing the location of and the desired floor live load for the area in
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question, Landlord may strengthen and reinforce the same, at Tenant's sole
expense, so as to carry the live load desired. Business machines and mechanical
equipment used by Tenant which cause vibration or noise that may be transmitted
to or through the Building shall be placed and maintained by Tenant, at its
expense, in settings of cork, rubber or spring-type vibration eliminators
sufficient to eliminate such vibration or noise.
(d) Tenant shall comply with the following restrictions with respect to the
Premises:
(i) Tenant shall store all trash and refuse in appropriate sealed and
covered containers either within the Premises or in a concealed location at
the rear of the Building and shall attend to the regular disposal and
removal thereof.
(ii) Tenant shall receive all deliveries, load and unload goods,
merchandise, supplies, fixtures, equipment, furniture and rubbish only
through proper service doors and loading docks serving the Building, but in
no event through the main front entrance thereof.
(iii) Tenant shall not change the exterior colors or architectural
treatment of the Premises or make any alterations or changes to the
exterior of the Building or to the grading, planting or landscaping of the
exterior of the Building without the consent of Landlord which shall not be
unreasonably withheld or delayed.
(iv) Tenant shall not place or install or suffer to be placed or
installed any sign upon the Building or the Premises unless such sign shall
be approved by Landlord which approval shall not be unreasonably withheld
or delayed and shall be harmonious with the signs of adjoining properties.
In any event, Tenant shall not place or cause to be placed upon the
Building any awning, canopy, banner, flag, pennant, aerial, antenna or the
like without the consent of Landlord, not to be unreasonably withheld or
delayed. All signs or lettering on or about the Premises or the Building
shall be neat and reasonable size. The following are strictly prohibited:
(x) Paper signs and stickers;
(y) Moving, flickering or flashing lights;
(z) Exposed neon or fluorescent tubes or other exposed light sources.
(v) Tenant shall not permit the parking of any vehicle on the streets
and roadways adjoining or surrounding the Building and Tenant shall require
its employees, customers, invitees, licensees and visitors to park only in
the parking areas serving the Premises.
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TENANT'S ALTERATION
9. Tenant shall make no alterations, improvements or changes to the
Building or the Premises without Landlord's prior written consent, which
consent, as to non-structural alterations which do not involve heating,
ventilating, air conditioning, plumbing, electrical, mechanical, fire safety or
life safety systems, shall not be unreasonably withheld or delayed. Tenant may,
without Landlord's consent but on prior notice to Landlord, (i) repaint,
recarpet, install wall coverings or replace ceiling tiles in the Premises, and
(ii) perform alterations which do not involve the Building structure, heating,
ventilating, air-conditioning, plumbing, electrical, mechanical, fire safety or
life safety systems, the cost of which do not exceed $25,000 in the aggregate
over the Term of this Lease ("Minor Alterations"). Tenant shall be deemed to
have met its obligations under Subparagraph (i) above if it endeavors to notify
Landlord. Tenant shall not be required to bond or pay a supervisory fee for
Minor Alterations. All improvements, alterations and replacements, and all
building service equipment made or installed by or on behalf of Tenant shall
immediately upon completion or installation thereof be and become the property
of Landlord. All trade fixtures, movable partitions, furniture and furnishings
installed at the expense of Tenant shall remain the property of Tenant and
Tenant may remove the same or any part thereof during the term of this Lease, or
if the term shall end prior to the date herein specifically fixed for such
termination, then within a reasonable time thereafter, but Tenant shall, at its
expense, repair any and all damage to the Premises resulting from or caused by
such removal. Title to any property which Tenant elects not to remove or which
is abandoned by Tenant shall, at the end of the term, vest in Landlord. Tenant
hereby acknowledges that Landlord does not possess current architectural or
mechanical plans for the Premises and that Landlord is not obligated to deliver
such plans to Tenant. Tenant shall not make any structural alterations or
improvements or any non-structural alterations or improvements other than Minor
Alterations until it shall have first submitted to Landlord plans and
specifications for such work and Landlord shall approve or respond to same
within two (2) business days of submission. Landlord shall not unreasonably
withhold such approval. All such work to be performed by Tenant shall be in
accordance with the approved plans and specifications and Landlord shall have
the right at any time during the pendency of such work to inspect the Premises
and the manner of construction. In the event of any such repairs, alterations or
improvements, Landlord shall have the option to require Tenant to deliver to
Landlord at Tenant's cost and expense a bond satisfactory to Landlord in the sum
equal to the cost of the work. Any mechanic's liens filed at any time against
the Premises, for work claimed to have been performed or for materials claimed
to have been furnished to Tenant or Tenant's contractors or subcontractors,
shall be discharged by Tenant within thirty (30)
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days from Tenant's receipt of notice of lien by bonding, payment or otherwise.
Except as otherwise specifically provided herein, all work done by Tenant other
than Minor Alterations shall be subject to a ten (10%) percent supervisory fee
of Landlord.
UTILITIES
10. (a) Tenant shall provide, at its own expense, fuel, heat, water,
electricity and all other utilities required in connection with its use of the
Premises. Landlord shall be obligated to deliver the utility lines and
facilities servicing the Premises in working order at the commencement of the
term of this Lease.
(b) Tenant shall be responsible for all deposits required by the respective
utilities for service. Tenant shall comply with all requirements of the
utilities supplying said service. Landlord shall have no responsibility for the
installation of telephone service.
REQUIREMENTS OF LAW, SPRINKLERS
11. (a) Tenant shall promptly execute and comply with all statutes,
ordinances, rules, orders, regulations and requirements (including those which
require structural alterations which alterations shall be made by Landlord at
Tenant's sole cost and expense and paid by Tenant as additional rent) of the
Federal, State, County and Local Government and of any and all their Departments
and Bureaus applicable to the Premises, for the correction, prevention or
abatement of nuisances or other grievances in, upon, or connected with the
Premises during the term; and shall also promptly comply with and execute all
rules, orders and regulations of the New York Board of Fire Underwriters for the
prevention of fires at the Tenant's own cost and expense. The foregoing
obligations of Tenant shall be limited to the extent such execution and
compliance is required due to Tenant's particular manner of use of the Premises.
In addition, Tenant may contest in good faith such laws. Landlord shall comply
at its sole cost and expense, with all applicable federal, state and local laws,
orders, rules and regulations to the extent actually required by governmental
authorities with respect to the real property and the Building, other than those
which are the responsibility of Tenant in accordance with the terms of this
Lease.
(b) Tenant shall keep and maintain any sprinkler system now or hereafter
installed in the Premises in good repair and working condition, and if the New
York Board of Fire Underwriters or the New York Fire Insurance Exchange or any
Bureau, Department
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or official of any Federal, State or Local governmental or quasi-governmental
authority shall require or recommend any changes, modifications or alterations,
including, without limitation, additional sprinkler heads or other equipment, to
be made or supplied by reason of Tenant's business or the location of
partitions, trade fixtures, or other contents of the Premises, or if such
changes, modifications, alterations, additional sprinkler heads or other
equipment in the Premises are necessary to prevent the imposition of a penalty
or charge against the full allowance for a sprinkler system in the fire
insurance rate as fixed by said Exchange, or by any Fire Insurance Company with
respect to the Building, the Premises or any adjoining or nearby buildings or
improvements, Tenant shall at Tenant's sole cost and expense, promptly make and
supply such changes, modifications, alterations, additional sprinkler heads or
other equipment. Tenant shall throughout the term maintain for the benefit of
Landlord and Tenant, with a responsible company doing business in Nassau or
Suffolk County, a contract for sprinkler supervisory service and furnish
Landlord with copies thereof and all renewals, together with evidence of
payment.
(c) If by reason of Tenant's use and occupancy or abandonment of the
Premises, or if by reason of the improper or careless conduct of any business
upon or use of the Premises, the fire insurance rates for any other tenants or
occupants of any adjoining or nearby buildings or improvements (including
contents and equipment coverage) shall at any time be higher than it otherwise
would be, Tenant shall reimburse Landlord, as additional rent hereunder, for
that part of all fire insurance premiums charged to such other owners, tenants
or occupants because of the improper or careless conduct of any business upon or
use of the Premises, and shall make such reimbursement upon the first day of the
month following billing thereof by Landlord; but this covenant shall not apply
to a premium for any period beyond the expiration date of this Lease first above
specified. In any action or proceeding based upon or arising out of this
provision, a schedule or "make up" of rate of the Building or any other affected
insurance coverage purporting to have been issued by the New York Fire Insurance
Exchange, or other body making fire insurance rates, shall be prima facie
evidence of the facts therein stated.
(d) Tenant shall keep or cause the Premises to be kept free of Hazardous
Materials (hereinafter defined). Without limiting the foregoing, Tenant shall
not cause or permit the Premises to be used to generate, manufacture, refine,
transport, treat, store, handle, dispose, transfer, produce or process Hazardous
Materials, except in compliance with all applicable federal, state and local
laws or regulations, nor shall Tenant cause or permit, as a result of any
intentional or unintentional act or omission on the part of Tenant or any
subtenant, a release of Hazardous Materials onto the Premises or onto any other
property. Tenant shall comply with and ensure compliance by all
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subtenants with all applicable federal, state and local laws, ordinances, rules
and regulations, whenever and by whomever triggered, and shall obtain and comply
with, and ensure that all subtenants obtain and comply with, any and all
approvals, registrations or permits required thereunder. Tenant shall (A)
conduct and complete all investigations, studies, samplings, and testing, and
all remedial removal, and other actions necessary to clean up and remove all
Hazardous Materials, on, from, or affecting the Premises (i) in accordance with
all applicable Federal, State and Local laws, ordinances, rules, regulations,
and policies, (ii) to the satisfaction of Landlord, and (iii) in accordance with
the orders and directives of all federal, state, and local governmental
authorities, and (B) defend, indemnify, and hold harmless Landlord, its
employees, agents, officers, and directors, from and against any claims,
demands, penalties, fines, liabilities, settlements, damages, costs, or expenses
of whatever kind or nature, known or unknown, contingent or otherwise, arising
out of, or in any way related to, (i) the presence, disposal, release, or
threatened release of any Hazardous Materials which are on, from, or affecting
the soil, water, vegetation, buildings, personal property, persons, animals, or
otherwise to the extent same were; (ii) any personal injury (including wrongful
death) or property damage (real or personal) arising out of or related to such
Hazardous Materials; (iii) any lawsuit brought or threatened, settlement
reached, or government order relating to such Hazardous Materials; and/or (iv)
any violation of laws, orders, regulations, requirements, or demands of
government authorities, or any policies or requirements of Landlord which are
based upon or in any way related to such Hazardous Materials, including, without
limitation, reasonable attorney and consultant fees, investigation and
laboratory fees, court costs, and litigation expenses. In the event this Lease
is terminated, or Tenant is dispossessed, Tenant shall deliver the Premises to
Landlord free of any and all Hazardous Materials so that the conditions of the
Premises shall conform with all applicable federal, state and local laws,
ordinances, rules or regulations affecting the Premises. For purposes of this
paragraph, "Hazardous Materials" includes, without limit, any flammable
explosives, radioactive materials, hazardous materials, hazardous wastes,
hazardous or toxic substances, or related materials defined in the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended (42
U.S.C. Sections 9601, et seq.), the Hazardous Materials Transportation Act, as
amended (49 U.S.C. Sections 1801 et seq.), the Resource Conservation and
Recovery Act, as amended (42 U.S.C. Sections 9601, et seq.), and in the
regulations adopted and publications promulgated pursuant thereto, or any other
federal, state or local environmental law, ordinance, rule, or regulation.
(e) Nothing herein, or elsewhere in this Lease, shall place any liability
upon Tenant for and Landlord hereby agrees to indemnify and hold Tenant harmless
against damages, claims, expenses or costs arising out of the presence of any
Hazardous
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Materials resulting from the acts or omissions of Landlord, or prior tenants or
third parties unrelated to Tenant.
INSURANCE
12. (a) Landlord shall, during the term of this Lease, keep the Building,
together with all fixtures, building related equipment, building related
machinery and improvements therein or thereto, insured under its blanket policy
against loss by fire, with extended coverage, malicious mischief, storm and
sprinkler damage and boiler insurance (written on a broad form basis to a limit
of $300,000.00) if there is a boiler or pressure object in the Premises, all
with waiver of right in all such insurance policies to recover by way of
subrogation against Landlord or Tenant, with insurance companies of recognized
responsibility authorized and licensed to issue such policies in the State of
New York reasonably acceptable to Landlord and Landlord's first mortgagee, and
to maintain such insurance at all times during the term of this Lease in an
amount sufficient to prevent Landlord from becoming a co-insurer of any loss but
in no event in an amount less than the full replacement value (excluding
foundation costs) of the Building and improvements. Such policies shall be
obtained by Landlord and the policies shall be issued in the name of Landlord
and, at the direction of Landlord, loss to be payable to Landlord and its
mortgagee as their interests shall appear. All premiums paid by Landlord, shall
be deemed additional rent and shall be due and payable as provided in paragraph
3(d) hereof.
(b) Tenant shall, during the term of this Lease, at Tenant's sole cost and
expense, provide and keep in force for the benefit of Landlord and Tenant, as
their interests may appear, public liability insurance policy or policies in
standard form in the State of New York, with a combined single limit of
$1,000,000 and umbrella coverage of at least $3,000,000, such policy or policies
to cover the Premises, inclusive of sidewalks and parking facilities. The
policies shall be obtained by Tenant and certificates hereof delivered to
Landlord upon the commencement of the term hereof, with evidence of payment of
the premiums thereon and shall be taken in well rated insurance companies
authorized to do business in the State of New York.
(c) Landlord shall maintain during the term of this Lease rent insurance
covering minimum annual rent and additional rent for a twelve (12) month period
during the term of this Lease. Landlord agrees that such policy shall carry a
waiver of subrogation. Tenant shall, as additional rent, reimburse Landlord for
all such insurance premiums within ten (10) days after billing by Landlord.
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(d) Neither Landlord nor Tenant shall be liable to the other for any
business interruption or any loss or damage to property or injury to or death
of persons occurring at the Premises or for the condition thereof, whether or
not caused by the negligence or other fault of Landlord or Tenant or of their
respective agents, employees, subtenants, licensees, or assigns. This release
shall apply to the extent that such business interruption, loss, or damage to
property or injury to or death of persons is covered by insurance, regardless of
whether such insurance is payable to or protects Landlord or Tenant, or both.
Nothing herein shall be construed to impose any other or greater liability upon
either Landlord or Tenant than would have existed in the absence of this
provision. This release shall be in effect only so long as the applicable
insurance policies contain a clause to the effect that this release shall not
affect the right of the insured to recover under such policies. Such clauses
shall be obtained by the parties whenever possible. The release in favor of
Landlord contained herein is in addition to and not in substitution for, or in
diminution of, the hold harmless and indemnification provisions hereof.
DAMAGE OR DESTRUCTION
13. (a) If the Building or the Premises shall be damaged or destroyed
during the term by fire or other casualty covered by insurance then carried
pursuant to Article 12, to the extent permitted by the insurance proceeds
collected by Landlord (or collected by Tenant and paid over to Landlord),
Landlord shall, with due diligence, repair and/or rebuild the same to
substantially the condition it was in immediately prior to such damage or
destruction. Tenant shall receive and hold the insurance proceeds from the
insurance carried by Tenant covering any other property appurtenant to the
Premises (excepting Tenant's Trade Fixtures) in trust for the purposes of
preparing the Premises for occupancy by Tenant in the condition obtaining
immediately prior to the casualty.
(b) To the extent of payments received by Landlord with respect to Rent
insurance proceeds, Rent shall be abated proportionately during the period in
which, by reason of any such damage or destruction, there is a substantial
interference with the operation of the business of Tenant in the Premises,
having regard to the extent to which Tenant may be required to discontinue its
business in the Premises, and such abatement shall continue for the period
commencing with such destruction or damage and ending with the substantial
completion by Landlord of such work, repair or construction as Landlord is
obligated to perform.
(c) If the Building shall be damaged or destroyed to the extent of fifty
(50%) percent or more of the then replacement value
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thereof, exclusive of foundations, by any cause, or should the damage be
occasioned by a casualty for which there was no insurance, Landlord shall have
the right to terminate this Lease on written notice to Tenant served within
sixty (60) days after such damage or destruction. If, within ninety (90) days
after the occurrence of damage or destruction to the Building Landlord shall
fail to provide a certification by a licensed architect or engineer that the
Building can be restored within one (1) year, or if such certification is
obtained and Landlord fails to restore the Building within one (1) year from the
date of damage, either Landlord or Tenant may terminate this Lease.
(d) If this Lease shall not be terminated as in this Article 13 provided,
Landlord shall restore the Building and the Premises, provided adequate
insurance proceeds are available for this purpose, and subparagraphs (a) and (b)
of this Article 13 shall be applicable. Notwithstanding anything to the contrary
contained herein, if during the last year of the term, the Premises are rendered
substantially untenantable and Landlord shall fail to provide within thirty (30)
days of the casualty, a certification by a licensed architect or engineer that
the Premises can be restored within ninety (90) days, or if such certification
is obtained and Landlord fails to restore the Premises within ninety (90) days
from the date of damage, either Landlord or Tenant may terminate this Lease.
(e) Tenant hereby waives any and all rights granted by Section 227 of the
Real Property Law of the State of New York or any other law of like import now
or hereafter enacted.
SUBORDINATION
14. This Lease shall be subject and subordinate at all times to the lien of
any mortgages (i) now encumbering the Building or the Premises and to all
advances made or hereafter to be made upon the security thereof, and (ii)
hereafter made provided same are made to a lending institution. Tenant shall
execute and deliver such further reasonable instrument or instruments
subordinating this Lease to the lien of any such mortgage or mortgages as shall
be desired by any mortgagee or proposed mortgagee and Tenant hereby appoints
Landlord the attorney-in-fact of Tenant, irrevocably, to execute and deliver any
such instrument or instruments for the Tenant. As used in this Lease, the term
"lending institution" shall mean savings bank, savings and loan association,
bank or trust company, real estate investment trust, investment bank or an
affiliate thereof, insurance company, university, public or private, employee,
welfare, pension or retirement fund or system.
(b) Within thirty (30) days after demand, Tenant shall furnish to Landlord
certified balance sheets and operating
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statements for the past five (5) years and uncertified balance sheets and
operating statements for the current partial year as reasonably required by any
prospective mortgagee.
(c) Tenant shall, upon not less than ten (10) days' prior request by
Landlord, execute, acknowledge and deliver to Landlord a statement in writing
certifying (i) that this Lease is unmodified and in full force and effect (or if
there have been modifications that the same are in full force and effect as
modified and identifying the modifications), (ii) the dates to which the Rent
and other charges have been paid, and (iii) that so far as the person making the
certificate knows, Landlord is not in default under any provision of this Lease.
It is intended that any such statement may be relied upon by any person
proposing to acquire Landlord's interest in this Lease, any prospective
purchaser of the Premises, or any prospective mortgagee, or assignee of any
mortgage upon the Premises.
(d) So long as there is a first mortgage lien encumbering the Premises,
Landlord and Tenant shall not, without first obtaining the written consent of
such mortgagee, enter into any agreement, the effect of which would be to (i)
modify, cancel terminate or surrender this Lease; (ii) grant any concession in
respect thereof; (iii) reduce the Rent or require the prepayment of any rent in
advance of the due date thereof; (iv) create any offsets or claims against Rent;
(v) assign in whole or in part any of the rents therefrom or Tenant's interest
in this Lease or sublet the whole or any portion of the Premises, all of the
foregoing except as provided in this Lease.
(e) In the event of any act or omission by Landlord which would give Tenant
the right to terminate this Lease or to claim a partial or total eviction,
Tenant shall not exercise any such termination right until (i) it shall have
served written notice, by registered mail, of such act or omission, to Landlord
and to the holder of any mortgage whose name and address shall have been
furnished to Tenant in writing, at the last address so furnished, and (ii) a
reasonable period of time for remedying such act or omission shall have elapsed
following the serving of such notice; provided, however, that following the
serving of such notice, Landlord or said holder shall, with reasonable
diligence, have commenced and continued to remedy such act or omission or to
cause the same to be remedied.
(f) Notwithstanding the foregoing, Landlord agrees to provide a
Subordination, Attornment and Nondisturbance Agreement from its mortgagee, if
any, on such mortgagee's standard form.
(g) Any information delivered by Tenant to Landlord or its mortgagee
pursuant to Subparagraphs (b) and (e) above is to be made available internally
by Landlord or its mortgagee, as the case may be, only to such of Landlord's or
its mortgagee's employees and
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to the extent required for such employees to discharge their responsibilities on
a need-to-know basis only. In no event shall any such information, any copies
thereof or any information set forth thereon be disseminated to any person
outside Landlord's or its mortgagee's organizations unless such person is given
written notice of this confidentiality provision and agrees in writing to be
bound by same.
INDEMNIFICATION
15. Tenant shall indemnify, defend, save and hold Landlord harmless from
and against any and all liability and damages and any and all injury, loss,
claim, damage or suit of every kind and nature, including Landlord's reasonable
counsel fees, to any person, firm, association or corporation or to any
property, arising out of or based upon, related to, or in any way connected
with, the use or occupancy of the Premises or the conduct or operation of
Tenant's business unless such injury, loss, claim or damage is attributable
solely to the negligence of Landlord or its agents, servants or employees.
EMINENT DOMAIN
16. (a) If the whole of the Premises be taken under the power of eminent
domain for any public or quasi-public improvement or use, the term of this Lease
shall expire as of the date of vesting of title in the condemning authority.
(b) If 25% or more of the Building is taken under the power of eminent
domain or for any public or quasi-public purpose, Landlord shall have the option
of cancelling and terminating this Lease by written notice served within sixty
(60) days after the taking, and this Lease shall thereupon expire on the date of
vesting of title in said proceeding.
(c) If less than 25% of the Building is taken, this Lease shall remain in
full force and effect, however, the minimum annual rent shall be reduced in
proportion to the percentage of square feet of the Building so taken. If
Tenant's parking area only is taken, then (i) if 25% or less is taken, this
Lease shall not terminate but minimum annual rent only shall, unless Landlord
provides substitute parking, substantially equal in size to that which was
taken, within sixty (60) days after the taking, for Tenant within reasonable
walking distance of the Premises, be apportioned pro rata in accordance with the
size and usefulness of the portion taken; or (ii) if more than 25% is taken,
then, unless Landlord provides substitute parking, substantially equal in size
to that which was taken, and within reasonable walking distance of
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the Premises, within sixty (60) days after the taking, this Lease shall, at the
option of either Landlord or Tenant, by written notice served between the 61st
and 90th days after the taking, be canceled and terminated effective sixty (60)
days from the date of said taking and if such notice is not served, this Lease
shall not terminate but minimum annual rent only shall be apportioned pro rata
in accordance with the size and usefulness of the portion taken.
(d) If this Lease is not terminated or terminable under the provisions of
this Article 16, Landlord shall, with reasonable dispatch and at Landlord's sole
cost and expense, restore, reconstruct and rebuild the remaining portion of the
Premises and the Building and all the appurtenances, equipment, utilities,
facilities and installations to their condition prior to such taking, in such
manner that the resulting building and parking area and driveways shall be a
complete and integrated structural, architectural and functional unit similar to
and of equal material and workmanship to the Building and parking area and
driveways prior to such taking, with all the appurtenances, equipment,
utilities, facilities and installations throughout in good working order so as
to put both the parking area and driveways and the Premises in proper condition
to be used by Tenant for the same purposes as at the time of such taking, all in
accordance with plans and specifications to be prepared by Landlord, at the sole
cost and expense of Landlord.
(e) If the nature of the work to be performed as a result of the taking is
such as to prevent the operation of the business then being conducted thereon,
or to make it impractical so to do, then the Rent and other charges to be paid
by Tenant under this Lease shall abate until substantial completion of such work
by Landlord.
(f) In the event of any taking under the power of eminent domain, Landlord
shall be entitled to and shall receive the entire award provided that Tenant
shall be entitled to and shall receive any part of any award made for Tenant's
cost of moving Tenant's trade fixtures.
(g) In the event of any dispute under the provisions of this Article 16, it
shall be resolved by arbitration in Suffolk County, New York before three
disinterested and impartial arbitrators, in accordance with the rules of the
American Arbitration Association. Each arbitrator shall have a minimum of then
(10) years experience in dealing with, renting or appraising industrial real
estate. All fees and expenses of the arbitrators and the American Arbitration
Association shall be borne equally by the parties.
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RIGHT TO SUBLET OR ASSIGN
17. (a) The Tenant covenants that it shall not assign this Lease nor sublet
the Premises or any part thereof without the prior written consent of Landlord
in each instance, which consent shall not be unreasonably withheld or delayed.
The Tenant may assign this Lease or sublet the Premises with Landlord's written
consent, providing:
(i) That such assignment or sublease is for a use which is in
compliance with the then existing zoning regulations and the Certificate of
Occupancy;
(ii) That at the time of such assignment or subletting, there is no
default beyond such applicable notice and grace period provided herein for
the cure thereof under the terms of this Lease on the Tenant's part;
(iii) That in the event of an assignment, the assignee assumes in
writing the performance of all of the terms and obligations of the within
Lease;
(iv) That a duplicate original of said assignment or sublease be
delivered by registered mail to the Landlord at the address herein set
forth within ten (10) days from the said assignment or sublease and within
ninety (90) days of the date that Tenant first advises Landlord of the name
and address of the proposed subtenant or assignee as required, pursuant to
subparagraph (b) hereof;
(v) Such assignment or subletting shall not, however, release the
within Tenant from its liability for the full and faithful performance of
all of the terms and conditions of this Lease;
(vi) If this Lease be assigned, or if the Premises or any part thereof
be underlet or occupied by anybody other than Tenant, Landlord may, after
default by Tenant, collect rent from the assignee, undertenant or occupant,
and apply the net amount collected to the Rent herein reserved;
(b) Notwithstanding anything contained in this Article 17 to the contrary,
no assignment or underletting shall be made by Tenant in any event until Tenant
has offered to terminate this Lease as of the last day of any calendar month
during the term hereof and to vacate and surrender the Premises to Landlord on
the date fixed in the notice served by Tenant upon Landlord (which date shall be
prior to the date of such proposed assignment or the commencement date of such
proposed sublease). Simultaneously with said offer to terminate this Lease,
Tenant shall advise the Landlord, in writing, of the name and address of the
proposed
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assignee or subtenant, and all the terms, covenants, and conditions of the
proposed sublease or assignment.
(c) Anything herein to the contrary notwithstanding, Tenant may, without
the consent of Landlord, assign this Lease or sublease or grant a license to use
the Premises or any portion thereof to (i) an affiliate of Tenant or any person,
corporation or other entity which controls, is controlled by or under common
control with Tenant and/or (ii) any person, corporation or other entity which is
acquiring a controlling interest in Tenant by purchase of stock, merger,
consolidation or otherwise, or is acquiring all or substantially all of Tenant's
business or assets, provided that with respect to such assignment such
purchasing, consolidated, merged, affiliated or subsidiary corporation, or other
entity or person shall, in writing, assume and agree to perform all of the
obligations of Tenant under this Lease and it shall deliver such assumption with
a copy of such assignment to Landlord within ten (10) days thereafter, and
provided further that Tenant shall not be released or discharged from any
liability under this Lease by reason of such assignment.
(d) Whenever Tenant shall claim under this Article or any other part of
this Lease that Landlord has unreasonably withheld or delayed its consent to
some request of Tenant, Tenant shall have no claim for damages by reason of such
alleged withholding or delay, and Tenant's sole remedy thereof shall be a right
to obtain specific performance or injunction but in no event with recovery of
damages.
(e) Without affecting any of its other obligations under this lease, except
with respect to any permitted assignment or subletting under Paragraph 17(c),
Tenant will pay Landlord as additional rent any sums or other economic
consideration, which (i) are actually received by Tenant as a result of an
assignment or subletting whether or not referred to as rentals under the
assignment or sublease (after deducting therefrom the bona fide costs and
expenses incurred by Tenant in connection with the assignment or subletting in
question; and (ii) exceed in total the sums which Tenant is obligated to pay
Landlord under this Lease (prorated to reflect obligations allocable to that
portion of the Premises subject to such assignment or sublease), it being the
express intention of the parties that Tenant shall not in any manner whatsoever
be entitled to any profit by reason of such sublease or assignment. The failure
or inability of the assignee or subtenant to pay rent pursuant to the assignment
or sublease will not relieve Tenant from its obligations to Landlord under this
Paragraph 17(e). Tenant will not amend the assignment or sublease in such a way
as to reduce or delay payment of amounts which are provided in the assignment or
sublease approved by Landlord.
(f) Landlord agrees that it shall not unreasonably withhold its consent to
a subletting or assignment in accordance
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with the terms of this Article 17. In determining reasonableness, there shall be
taken into account the character and reputation of the proposed subtenant or
assignee and the specific nature of the proposed subtenant's or assignee's
business, the financial standing of the proposed subtenant or assignee; and the
impact of all of the foregoing upon the Building. Landlord shall not be deemed
to have unreasonably withheld its consent if it refuses to consent to a
subletting or assignment to an existing tenant in any building in the Hauppauge
area which is owned by Landlord or its affiliate or to a proposed subtenant or
assignee with whom Landlord is negotiating a lease or if at the time of Tenant's
request, Tenant is in default, beyond applicable grace and notice periods
provided herein for the cure thereof, of any of the terms, covenants and
conditions of this lease to be performed by Tenant. At least thirty (30) days
prior to any proposed subletting or assignment, Tenant shall submit to Landlord
a written notice of the proposed subletting or assignment, which notice shall
contain or be accompanied by the following information:
(i) the name and address of the proposed subtenant or assignee;
(ii) the nature and character of the business of the proposed
subtenant or assignee and its proposed use of the premises to be demised;
(iii) the most recent three (3) years of balance sheets and profit and
loss statements of the proposed subtenant or assignee or other financial
information reasonably satisfactory to Landlord; and
(iv) such shall be accompanied by a copy of the proposed sublease or
assignment of lease.
RIGHT TO INSPECT; POSTING SIGNS
18. (a) Tenant shall permit Landlord or Landlord's agents to enter the
Premises at all reasonable hours upon reasonable notice, except in the case of
emergencies in which case no notice shall be required, for the purpose of (i)
inspecting the same; (ii) making repairs required by the terms of this Lease to
be made by Tenant and which Tenant neglects or refuses to make; (iii) exhibiting
the Premises to prospective purchasers and mortgagees; (iv) during the 12 months
preceding the expiration of this Lease, exhibiting the Premises to brokers and
prospective tenants; and (v) for the purpose of making any additions or
alterations to the Building; or to any surrounding building provided, in each
and every case, Landlord shall use its best efforts not to unreasonably
interfere with the conduct of Tenant's business at the Premises. If, at
reasonable hours, admission to the Premises for the aforesaid
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purposes cannot be obtained or, if at any time entry shall be deemed necessary
for the inspection or protection of the Premises or for making any repairs,
whether for the benefit of Tenant or not, Landlord or Landlord's agents may
enter the Premises with reasonable force without rendering Landlord or its
agents liable to Tenant for damages by reason thereof.
(b) During the nine (9) months preceding the end of the term, Landlord may
post and maintain, without hindrance or molestation, signs or notices indicating
that the Premises are for sale and/or for rent; however, no such sign shall be
affixed to a door or window of the Premises.
BANKRUPTCY
19. (a) If, at any time prior to the commencement of the term of this
Lease, or if at any time during the term, there shall be filed by or against
Tenant in any court, pursuant to any statute, either of the United States or of
any State, a petition in bankruptcy or insolvency or for reorganization or for
the appointment of a receiver or trustee of all or a portion of Tenant's
property, and within ninety (90) days thereof Tenant fails to secure a discharge
thereof, or if Tenant makes an assignment for the benefit of creditors or
petition for or enters into an arrangement, this Lease, at the option of
Landlord, exercised within a reasonable time after notice of the happening of
any one or more of such events, may be canceled and terminated, in which event
neither Tenant nor any person claiming through or under Tenant by virtue of any
statute or of an order of any court, shall be entitled to possession or to
remain in possession of the Premises but shall forthwith quit and surrender the
Premises, and Landlord, in addition to any other rights, may retain any rent,
security deposit or monies received by it from Tenant or others in behalf of
Tenant as partial liquidated damages.
(b) In the event of the termination of this Lease pursuant to paragraph (a)
of this Article 19, Landlord shall forthwith, notwithstanding any other
provisions of this Lease to the contrary, be entitled to recover from Tenant as
and for liquidated damages an amount equal to the difference between the Rent
reserved hereunder for the unexpired portion of the term and the then fair and
reasonable rental value of the Premises for the same period. In the computation
of such damages, the difference between any installment of Rent becoming due
hereunder after the date of termination and the fair and reasonable rental value
of the Premises for the period for which such installment was payable shall be
discounted to the date of termination at the rate of 4% per annum. If the
Premises, or any part thereof, be relet by Landlord for the unexpired term of
this Lease, the amount of rent reserved upon such reletting shall prima facie be
the fair and
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reasonable rental value for the part or the whole of the Premises so relet
during the term of the reletting. Nothing herein contained shall limit or
prejudice the right of Landlord 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, in effect at the time when, and governing the proceeding in
which, such damages are to be proved, whether or not such amount be greater,
equal to, or less than the amount of the difference referred to above.
DEFAULT
20. (a) If Tenant shall fail to pay any installment of Rent or any
additional rent or other charges as and when the same are required to be paid
hereunder, and such default shall continue for a period of ten (10) days after
notice, or if Tenant defaults in fulfilling any of the other covenants of this
Lease and such default shall continue for a period of twenty (20) days after
notice, or if Tenant shall dissolve or liquidate or commence to dissolve or
liquidate, or if the Premises become vacant or deserted, or if the said default
or omission complained of shall be of such a nature that the same cannot be
completely cured or remedied within said twenty (20) day period, and if Tenant
shall not have diligently commenced during such default within such twenty (20)
day period, and shall not thereafter with reasonable diligence and in good faith
proceed to remedy or cure such default, then, in any one or more of such events,
Landlord may serve a written three (3) day notice of cancellation of this Lease
upon Tenant, and upon the expiration of said three (3) days, this Lease and the
term thereunder shall end and expire as fully and completely as if the date of
expiration of such three (3) day period were the day herein definitely fixed for
the end and expiration of this Lease, and the term thereof, and Tenant shall
then quit and surrender the Premises to Landlord but Tenant shall remain liable
as hereinafter provided. If Tenant shall default (i) in the timely payment of
any item of Rent, and such default shall continue or be repeated for four (4)
consecutive months or for a total of four months in any period of twelve months,
or (ii) in the performance of any particular term, condition or covenant of this
Lease more than six times in any period of twelve months, then, notwithstanding
that such defaults shall have each been cured within the period after notice, if
any, as provided in this Lease, any further similar default shall be deemed to
be deliberate and Landlord thereafter may serve a written ten (10) day notice of
termination of this Lease to Tenant without affording to Tenant an opportunity
to cure such further default.
(b) If (i) the notice provided for in paragraph (a) above shall have been
given and the term shall expire as aforesaid, or (ii) if any execution or
attachment shall be issued against
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Tenant or any of Tenant's property whereupon the Premises or any part thereof
shall be taken or occupied or attempted to be taken or occupied by someone other
than Tenant, or (iii) if Tenant shall make default with respect to any other
lease between Landlord and Tenant, or (iv) if Tenant shall fail to move into or
take possession of the Premises within thirty (30) days after commencement of
the term of this Lease, then, and in any of such event, Landlord may, dispossess
Tenant (or the legal representative of Tenant or other occupant of the Premises)
by summary proceedings or otherwise and remove their effects and hold the
Premises as if this Lease had not been made. If Tenant shall be in default
hereunder past the applicable notice and grace period provided herein for the
cure thereof, if any, prior to the date fixed as the commencement of any renewal
or extension of this Lease, Landlord may cancel and terminate such renewal or
extension agreement by written notice.
REMEDIES OF LANDLORD
21. In case of any such default, re-entry, expiration and/or dispossess by
summary proceedings or otherwise, (i) Rent shall become due thereupon and be
paid up to the time of such re-entry, dispossess and/or expiration, together
with such expenses as Landlord may incur for legal expenses, attorneys' fees,
brokerage, and/or putting the Premises in good order or for preparing the same
for re-rental; (ii) Landlord may relet the Premises or any part or parts
thereof, either in the name of Landlord or otherwise, for a term or terms, which
may at Landlord's option be less than or exceed the period which would otherwise
have constituted the balance of the term of this Lease and may grant concessions
or free rent; and/or (iii) Tenant or the legal representative of Tenant shall
also pay Landlord as liquidated damages for the failure of Tenant to observe and
perform said Tenant's covenants herein contained, any deficiency between the
Rent herein reserved and/or covenanted to be paid and the net amount, if any, of
the rents collected on account of the lease or leases of the Premises for each
month of the period which would otherwise have constituted the balance of the
term of this Lease. The failure or refusal of Landlord to relet the Premises or
any part or parts thereof shall not release or affect Tenant's liability for
damages. In computing such liquidated damages, there shall be added to the said
deficiency such expenses as Landlord may incur in connection with reletting such
as reasonable attorneys' fees, and brokerage, and for keeping the Premises in
good order or preparing the same for reletting. Any such liquidated damages
shall be paid in monthly installments by Tenant on the rent day specified in
this Lease and any suit brought to collect the amount of the deficiency for any
month shall not prejudice in any way the rights of Landlord to collect the
deficiency for any subsequent month by a similar proceeding. Landlord, at
Landlord's option, may make such
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alterations, repairs, replacements and/or decorations in the Premises; and the
making of such alterations and/or decorations shall not operate or be construed
to release Tenant from liability hereunder as aforesaid. Landlord shall in no
event be liable for the failure to relet the Premises, or in the event that the
Premises are relet, for failure to collect the rent under such reletting. In the
event of a breach or threatened breach by Tenant of any of the covenants or
provisions hereof, Landlord shall have the right of injunction and the right to
invoke any remedy allowed at law or in equity as if re-entry, summary
proceedings and other remedies were not herein provided for. Mention in this
Lease of any particular remedy, shall not preclude Landlord from any other
remedy, in law or in equity. In all cases hereunder, and in any suit, action or
proceeding of any kind between the parties, it shall be presumptive evidence of
the fact of the existence of a charge being due, if Landlord shall produce a
bill, notice or certificate of any public official entitled to give such bill,
notice or certificate to the effect that such charge appears of record on the
books in his office and has not been paid.
ATTORNEY'S FEES
22. If Tenant shall at any time be in default hereunder beyond the
applicable notice and grace periods provided herein for the cure thereof, if
any, and if Landlord shall institute an action or summary proceeding against
Tenant based upon such default and Landlord shall be successful, then Tenant
shall reimburse Landlord for the reasonable expenses of attorney's fees and
disbursements incurred by Landlord. The amount of such expenses shall be deemed
to be "additional rent" hereunder and shall be due from Tenant to Landlord on
the first day of the month following the incurring of such expenses.
WAIVER OF REDEMPTION, COUNTERCLAIM, TRIAL BY JURY
23. Tenant hereby expressly (i) waives any and all rights of redemption
granted by or under any present or future laws in the event of Tenant being
evicted or dispossessed for any cause, or in the event of Landlord obtaining
possession of the Premises by reason of the violation by Tenant of any of the
covenants and conditions of this Lease or otherwise; (ii) agrees that it shall
not interpose any counterclaim in any summary proceeding or any action based on
non-payment of Rent or any other payments or charges required to be made by
Tenant to Landlord except compulsory counterclaims. Landlord and Tenant hereby
waive trial by jury in any action, proceeding or counterclaim brought by either
of them against the other with respect to any matters arising out of or
connected with this Lease, the relationship of Landlord and Tenant,
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Tenant's use or occupancy of the Premises, and/or any claim of injury or damage
and any emergency statutory or any other statutory remedy.
NO WAIVER
24. No act or thing done by Landlord or Landlord's agents during the term
hereby demised shall be deemed an acceptance of a surrender of the Premises, and
no agreement to accept such surrender shall be valid unless in writing signed by
Landlord. No employee of Landlord or of Landlord's agents shall have any power
to accept the keys of the Premises prior to the termination of this Lease. The
delivery of keys to any employee of Landlord or of Landlord's agents shall not
operate as a termination of this Lease or a surrender of the Premises. The
failure of Landlord to seek redress for violation of, or to insist upon the
strict performance of, any covenant or condition of this Lease shall not prevent
a subsequent act, which would have originally constituted a violation, from
having all the force and effect of an original violation. The receipt by
Landlord of Rent with knowledge of the breach of any covenant of this Lease
shall not be deemed a waiver of such breach. No provision of this Lease shall be
deemed to have been waived by Landlord unless such waiver be in writing signed
by Landlord. The words "re-enter" and "re-entry" as used herein are not
restricted to their technical legal meaning.
END OF TERM
25. (a) On the last day of the term hereof or on the earlier termination
thereof, Tenant shall peaceably and quietly leave, surrender and deliver the
Premises up to Landlord, broom clean, together with any and all alterations,
changes, additions, and improvements which may have been made upon the Premises
(except movable furniture or movable trade fixtures installed at the expense of
Tenant) in good repair and good order and safe condition, except for reasonable
wear and tear and damage by fire, other insured casualty or the elements
excepted, and Tenant shall remove all of its personal property from the Premises
and any property not so removed shall be deemed to have been abandoned and may
be appropriated, sold, stored, destroyed or otherwise disposed of by Landlord
without notice to Tenant and without obligations to account therefor. Tenant's
obligation under this Article 25 shall survive the expiration or other
termination of this Lease.
(b) In the event of any holding over by Tenant after the expiration or
termination of this Lease without the consent of Landlord, Tenant shall;
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(i) pay as holdover rental for each month of the holdover tenancy an
amount equal to the greater of (a) the fair market rental value of the
Premises for such month (as reasonably determined by Landlord) or (b) one
hundred fifty (150%) percent of the Rent payable by Tenant for the month
prior no the Expiration Date of the term of this Lease, and otherwise
observe, fulfill and perform all of its obligations under this lease,
including but not limited to, those pertaining to additional rent, in
accordance with its terms;
(ii) be liable to Landlord for any payment or rent concession which
Landlord may be required to make to any tenant in order to induce such
tenant not to terminate an executed lease covering all or any portion of
the Premises by reason of the holdover over by Tenant; and
(iii) be liable to Landlord for any damages suffered by Landlord as
the result of Tenant's failure to surrender the Premises.
No holding over by Tenant after the Term shall operate to extend the Term.
The holdover, with respect to all or any part of the Premises, of a person
deriving an interest in the Premises from or through Tenant, including, but not
limited to, an assignee or subtenant, shall be deemed a holdover by Tenant.
Notwithstanding anything in this Article contained to the contrary, the
acceptance of any Rent paid by Tenant pursuant to this Paragraph 25 (b), shall
not preclude Landlord from commencing and prosecuting a holdover or eviction
action or proceeding or any action or proceeding in the nature thereof. The
preceding sentence shall be deemed to be an "agreement expressly providing
otherwise" within the meaning of Section 232-c of the Real Property Law of the
State of New York and any successor law of like import.
BROKER
26. Landlord and Tenant each represent to the other that this Lease was not
brought about by any broker and all negotiations with respect to this Lease were
conducted exclusively between Landlord and Tenant. Each party agrees that if any
claim is made for commissions by any broker, by, through or on account of any
acts of a party, that party will hold the other party free and harmless from any
and all liabilities and expenses in connection therewith, including reasonable
attorney's fees.
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QUIET ENJOYMENT
27. Landlord covenants that if and so long as Tenant pays the minimum
annual rent and additional rent and other charges reserved by this Lease, and
performs all the terms, covenants and conditions of this Lease on the part of
Tenant to be performed, Tenant shall quietly enjoy the premises subject,
however, to the terms of this Lease and of any mortgage or mortgages to which
this Lease by its terms is subject.
NONLIABILITY OF LANDLORD
28. (a) Landlord and Landlord's agents and employees shall not be liable
for, and Tenant waives all claims for, loss or damage to Tenant's business or
damage to person or property sustained by Tenant resulting from any accident or
occurrence (unless caused by or resulting from the negligence of Landlord, its
agents, servants or employees or Landlord's failure to comply with its specific
and affirmative obligations under this Lease in or upon the Premises or the
Building, including, but not limited to, claims for damage resulting from: (i)
any equipment or appurtenances becoming out of repair; (ii) injury done or
occasioned by wind; (iii) any defect in or failure of plumbing, heating or air
conditioning equipment, electric wiring or installation thereof, gas, water, or
steam pipes, stairs, porches, railings or walks; (iv) broken glass; (v) the
backing up of any sewer pipe or downspout; (vi) the bursting, leaking or running
of any tank, tub, washstand, water closet, waste pipe, drain or other pipe or
tank in, upon or about the Building or the Premises; (vii) the escape of steam
or hot water; (viii) water, snow or ice being upon or coming through the roof,
skylight, trapdoor, stairs, doorways, windows, walks or any other place upon or
near the Building or the Premises or otherwise; (ix) the falling of any fixture,
plaster, tile or stucco; and (x) any act, omission or negligence of occupants of
adjoining or contiguous buildings or of owners of adjacent or contiguous
property.
(b) If Landlord or a successor in interest is an individual (which term as
used herein includes aggregates of individuals such as joint ventures, general
or limited partnerships, or associations), such individual shall be under no
personal liability with respect to its obligations under this Lease, Tenant
shall look solely to the equity of such individual in the land and building
constituting the Premises for the satisfaction of Tenant's remedies, and in no
event shall Tenant attempt to secure any personal judgment against any such
individual or any principal, partner, employee or agent of Landlord by reason of
such default by Landlord.
(c) The word "Landlord" as used herein means only the owner in fee for the
time being of the Premises, and in the event
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of any sale of the Premises, Landlord shall be and hereby is entirely freed and
relieved of all covenants and obligations of Landlord hereunder and it shall be
deemed and construed without further agreement between the parties or between
the parties and the purchaser of the Premises, that such purchaser has assumed
and agreed to carry out any and all covenants and obligations of Landlord
hereunder.
NO ABATEMENT
29. No diminution or abatement of Rent or other compensation shall be
claimed or allowed for inconvenience or discomfort arising from the Landlord's
making of repairs or the making of additions or improvements required by law, to
the Building or to its equipment and fixtures, except as specifically provided
in this Article or elsewhere in this Lease.
APPLICABLE LAW AND CONSTRUCTION
30. The laws of the State of New York shall govern the validity,
performance and enforcement of this Lease. The invalidity or unenforceability of
any provision of this Lease shall not affect or impair any other provision. The
submission of this document to Tenant for examination does not constitute an
offer to lease, or a reservation of or option to lease, and becomes effective
only upon execution and delivery thereof by Landlord and Tenant. All
negotiations, considerations, representations and understandings between the
parties are incorporated in this Lease. Landlord or Landlord's agents have made
no representations or promises with respect to the Building or the Premises
except as herein expressly set forth. The headings of the several articles and
sections contained herein are for convenience only and do not define, limit or
construe the contents of such articles or sections. Whenever herein the singular
number is used, the same shall include the plural, and the neuter gender shall
include the masculine and feminine genders. Neither this Lease nor any provision
hereof may be changed, waived, discharged or terminated orally, but only by an
instrument in writing signed by the party against whom enforcement of the
change, waiver, discharge or termination is sought.
CONSTRUCTION ON ADJACENT PREMISES OR BUILDINGS
31. If any construction is in progress at, on or about the Building or any
excavation or other building operation shall be about to be made or shall be
made on any premises adjoining or
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above or below the Premises or on any portion of the Building, Tenant shall
permit Landlord or the adjoining owner or tenant and their respective agents,
employees, licensees and contractors, to enter the Premises and to shore the
foundations and/or walls thereof, and to erect scaffolding and/or protective
barricades around and about the Premises (but not so as to preclude entry
thereto) and to do any act or thing necessary for the safety or preservation of
the Premises. Tenant's obligations under this Lease shall not be affected by any
such construction or excavation work, shoring-up, scaffolding or barricading
except in cases where the Premises are rendered untenantable, in which event the
provisions of Article 29 shall apply. Landlord shall not be liable in any such
case for any inconvenience, disturbance, loss of business or any other annoyance
arising from such construction, excavation, shoring-up, scaffolding or
barricades, but Landlord shall use its best efforts so that such work will cause
as little inconvenience, annoyance or disturbance to Tenant as possible
consistent with accepted construction practice in the vicinity and so that such
work shall be expeditiously completed.
UTILITY EASEMENT
32. This Lease is subject and subordinate to any utility, gas, water,
electric, or telephone line easements, now or hereafter granted, affecting the
Premises, the Building or the land upon which they are located, provided that
the same do not materially interfere with the Building nor materially interfere
with the use or enjoyment of the Premises by Tenant.
NOTICES
33. All notices to be given hereunder shall be in writing and given by hand
delivery or by certified or registered mail or by recognized overnight courier
addressed to either of the parties at the address hereinabove given or at any
other subsequent mailing address they may indicate by written notice. Any notice
given hereunder by mail shall be deemed delivered two (2) business days after
the date when deposited in a United States general or branch post office,
addressed as above provided, the date when delivered, if delivered by hand, and
one (1) day after delivery to such overnight courier. Tenant hereby authorizes
and designates the receptionist at 35 Engle Street, Hicksville, New York 11801
as a person authorized to accept and receive service of process.
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BINDING EFFECT OF LEASE
34. The covenants, agreements and obligations contained in this Lease
shall, except as herein otherwise provided, extend to, bind and inure to the
benefit of the parties hereto and their respective personal representatives,
heirs, successors and permitted assigns. Each covenant, agreement, obligation or
other provision herein contained shall be deemed and construed as a separate and
independent covenant of the party bound by, undertaking or making the same, not
dependent on any other provision of this Lease unless otherwise expressly
provided.
UNAVOIDABLE DELAYS
35. Whenever Landlord shall be required by the terms of this Lease or
otherwise to make any improvements or repairs, to furnish any service, to
perform any construction or reconstruction, or to fulfill any other obligation
hereunder, and Landlord shall be delayed in, or prevented from, so doing,
Landlord shall not be deemed to be in default and this Lease and the obligation
of Tenant to pay Rent hereunder and to perform all of the other covenants and
agreements hereunder on the part of Tenant to be performed shall not be
affected, impaired or excused, and any time limit herein fixed for Landlord's
performance thereof shall be extended if and so long as Landlord's
non-performance, delay or default shall be caused by reason of strike or labor
troubles, accidents, any rule, order or regulation of any governmental agency,
or any department or subdivision thereof, governmental pre-emption in connection
with any national emergency or war, the conditions of supply and demand which
have been or are affected by war or other emergency, or any other cause beyond
Landlord's reasonable control.
SEWER
36. Tenant shall only permit sanitary discharge into the sewer servicing
the Premises. Tenant shall comply with all requirements of the County of
Suffolk, Department of Public Works, as they relate to use of the sewer,
including the payment of any excess volume charges as determined by the County
of Suffolk.
TERMINATION OPTION
37. (a) Tenant shall have the right to terminate this Lease effective as of
December 31, 1998 upon the following conditions:
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(i) Tenant shall give Landlord notice, not later than December 31,
1997, of its election to terminate this Lease effective December 31, 1998.
(ii) Tenant shall pay to Landlord on December 31, 1997, together with
the notice required in (a) (i) above, a termination fee equal to
$41,736.40.
(iii) In the event Tenant fails to provide notice to Landlord as
required under (a) (i) above or fails to pay the termination fee as
required under (a) (ii) above, Tenant shall be deemed to have waived this
termination option.
(b) In the event Tenant does not exercise the termination option set forth
in (a) above, Tenant shall have the right to terminate this Lease on December
31, 1999 upon the following conditions:
(i) Tenant shall give Landlord notice, not later than December 31,
1998, of its election to terminate this Lease effective December 31, 1999.
(ii) Tenant shall pay to Landlord on December 31, 1998, together with
the notice required in (b) (i) above, a termination fee equal to
$20,868.20.
(iii) In the event Tenant fails to provide notice to Landlord or fails
to pay the termination fee, Tenant shall be deemed to have waived this
termination option.
(c) In the event Tenant exercises this termination option, the minimum
annual rent payable during the last month of the term of this Lease shall be
reduced by $37,214.96 to account for the advance rent paid by Tenant hereunder.
RENEWAL OPTION
38. The Tenant shall have the right to be exercised as hereinafter
provided, to extend the term of this Lease for one period of five (5) years (the
"Renewal Term") upon the following terms and conditions:
(A) That at the time of the exercise of such right and at the
commencement of the Renewal Term, Tenant shall not be in default beyond
applicable notice and cure periods provided herein for the cure thereof in
the performance of any of the terms, covenants or conditions which Tenant
is required to perform under this Lease.
(B) That Tenant shall notify Landlord in writing that Tenant intends
to exercise this option at least nine (9) months prior to
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the termination of the initial term set forth in Article 1 of this Lease.
(C) That the Renewal Term shall be upon the same terms, covenants and
conditions as in this Lease provided, except that (a) there shall be no
further option to extend this Lease beyond the one (1) Renewal Term
referred to above; (b) the Premises shall be delivered in its then "as is"
condition; and (c) the Rent to be paid by Tenant during the Renewal Term
shall be as follows:
During the first Lease Year of the Renewal Term, the Rent shall be $552,892.08,
payable in monthly installments of $46,074.34.
During the second Lease Year of the Renewal Term, the Rent shall be $569,478.84,
payable in monthly installments of $47,456.57.
During the third Lease Year of the Renewal Term, the Rent shall be $586,563.24,
payable in monthly installments of $48,880.27.
During the fourth Lease Year of the Renewal Term, the Rent shall be $604,160.04,
payable in monthly installments of $50,346.67.
During the fifth Lease Year of the Renewal Term, the Rent shall be $622,284.84,
payable in monthly installments of $51,857.07.
This Renewal Option is personal to American Tissue Corporation and is
non-transferable by operation of law or otherwise, except to a permitted
transferee under paragraph 17(c) hereof.
SECURITY DEPOSIT
39. On the date hereof, Tenant shall deliver to Landlord an unconditional,
irrevocable, documentary letter of credit in the amount of Thirty-Seven Thousand
Seven Hundred Fourteen and 96/100 ($37,714.96) Dollars issued to Landlord for a
one-year term renewable annually during the Term of the Lease to secure the
performance by Tenant of all of the terms, conditions, covenants and agreements
of this Lease, as more particularly set forth herein. If Tenant defaults, after
the expiration of applicable notice and grace periods provided herein for the
cure thereof, in its payment of Rent or performance of its other obligations
under this Lease, Landlord may draw upon the letter of credit. The letter of
credit shall provide that Landlord will receive no less than thirty (30) days
prior written notice from the issuing bank of said bank's intention not to renew
the letter of credit. Upon receipt of said notice, Landlord will notify Tenant
that it must replace said letter of credit with a new letter of credit on the
terms set forth herein at least five (5) business days prior to the termination
of the original letter of credit. Failure by Tenant to
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replace the original letter of credit as required herein shall entitle Landlord
to immediately draw upon the original letter of credit up to the full amount
thereon. In the event Landlord draws upon the letter of credit as permitted by
the preceding sentence, the amount of said withdrawal shall be held by Landlord
as security for the faithful performance and observance by Tenant of the terms,
conditions, covenants and agreements of this Lease. In the event Tenant
defaults, after the expiration of applicable notice and grace periods provided
herein for the cure thereof, in respect of any of the terms, conditions,
covenants and agreements of this Lease, including, but not limited to the
payment of Rent and additional Rent, Landlord may use, apply or retain the whole
or any part of the security to the extent required for the payment of any Rent
and additional Rent or any other sum as to which Tenant is in default or for any
sum which Landlord may expend or may be required to expend by reason of Tenant's
default in respect of any of the terms, conditions, covenants and agreements of
this Lease. In the event that Tenant shall fully and faithfully comply with all
of the terms, conditions, covenants and agreements of this Lease, the security
shall be returned to Tenant within fifteen (15) business days of Tenant's
request, given after the date fixed as the end of this Lease and after delivery
of entire possession of the Premises to Landlord. In the event of a sale of the
land and Building or Lease of the Building of which the Premises form a part,
Landlord shall have the right to transfer the security to the vendee or lessee
and Landlord shall thereupon be released by Tenant from all liability for the
return of such security; and Tenant agrees to look solely to the new landlord
for the return of said security, and the provisions hereof shall apply to every
transfer or assignment made of the security to a new landlord. Tenant further
covenants that it will not assign or encumber or attempt to assign or encumber
the security and that neither Landlord nor its successors or assigns shall be
bound by any such assignment, encumbrance, attempted assignment or attempted
encumbrance. The letter of credit shall be issued by LaSalle National Bank,
Chicago, Illinois or, at the option of Tenant, any "Money Center Bank"
authorized to do business in New York and with respect to such Money Center Bank
shall indicate an address in New York City or Long Island where it can be drawn
and the hours of operation of that location and any other relevant limitations
on its use. The letter of credit must be payable "on sight" and must not contain
as a condition to a draw the requirement of Landlord's certification of the
existence of Tenant's default or other justification for the draw. Landlord will
not be responsible for bank error. The letter of credit shall not be a
limitation on Landlord's damages or other rights under this Lease, or a payment
of liquidated damages or an advance payment of Rent.
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IN WITNESS WHEREOF, the parties have executed this agreement as of the day
and year first above written.
RECKSON OPERATING PARTNERSHIP, L.P.,
By: RECKSON ASSOCIATES REALTY CORP.
By: /s/ ILLEGIBLE
----------------------------------
AMERICAN TISSUE CORPORATION
By: /s/ ILLEGIBLE
----------------------------------
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STATE OF NEW YORK )
) ss.:
COUNTY OF )
On this 18th day of January, 1996 before me personally came [ILLEGIBLE] to
me known, who being by me duly sworn, did depose and say that he resides at
[ILLEGIBLE] that he is the Vice President of American Tissue Corporation, the
corporation described in and which executed the foregoing instrument; that he
knows the seal of the said corporation; that the seal affixed to the said
instrument is such corporate seal; that it was so affixed by order of the Board
of Directors of the said corporation; and that he signed thereto by like order.
/s/ MURIEL KLOPSIS
------------------------------
Notary Public
MURIEL KLOPSIS
NOTARY PUBLIC, State of New York
No - 4860544
Qualified In Suffolk County
Commission Expires June 30, 1997
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