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EXHIBIT 10.12
SECOND AMENDMENT OF LEASE
AMENDMENT OF LEASE dated this 1st day of June, 1995 by and between the
ESTATE OF X. XXXXX, having an office at 00 Xxxxx Xxxxxx Xxxx, Xxx Xxxx, Xxx Xxxx
00000 ("Landlord") and F.P.G. INTERNATIONAL INC., having an office at 00-00
Xxxxx Xxxxxx Xxxx, Xxx Xxxx, Xxx Xxxx 00000 ("Tenant").
W I T N E S E T H:
WHEREAS, Landlord is the fee owner of certain premises located at 00-00
Xxxxx Xxxxxx Xxxx, Xxx Xxxx, Xxx Xxxx (the "Building"); and
WHEREAS, Landlord and 00-00 Xxxxx Xxxxxx Xxxx Associates Limited
Partnership (the "Net Lessee") entered into a ground lease for portions of the
Building dated as of October 1, 1988 as amended by an agreement dated June 1,
1989 (collectively, the "Ground Lease"); and
WHEREAS, the Net Lessee and Tenant entered into a sublease dated August
9, 1990 (the "Lease") whereby the Net Lessee leased to Tenant certain premises
in the Building, including the entire penthouse floor, the entire sixth floor
south and the entire seventh floor north; and
WHEREAS, pursuant to a Lease Surrender Agreement dated as of June 30,
1993, Landlord terminated the Ground Lease and released the Net Lessee from
further obligations thereunder and agreed to and has continued to recognize
Tenant as its direct Tenant under the Lease; and
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WHEREAS, pursuant to an Amendment of Lease dated October 17, 1994 (the
"First Amendment"), Landlord and Tenant extended the term of the Lease and added
the entire fifth floor -south of the Building (said fifth floor premises,
together with the entire penthouse floor, the entire sixth floor south and the
entire seventh floor north, is hereinafter referred to collectively as the
"Existing Premises"); and
WHEREAS, Landlord and Tenant now desire to further modify and amend the
terms of the Lease by further extending the term thereof, by adding the entire
rentable area on the fourth floor (the "New Premises") to the Existing Premises
and by making certain other adjustments and modifications to the Lease.
NOW THEREFORE, in consideration of the terms, conditions and covenants
herein set forth the parties hereto agree as follows:
1. Landlord hereby leases to Tenant and Tenant hereby accepts from
Landlord the entire New Premises for a term of approximately ten (10) years
commencing on June 1, 1995 (the "Commencement Date"). The New Premises and the
Existing Premises are sometimes hereinafter referred to, collectively, as the
"Premises". The New Premises, together with the Existing Premises, shall be the
"Demised Premises" for all purposes of the Lease. The term of the Lease shall be
extended so that same shall be for a term of approximately ten (10) years
commencing on the Commencement Date and expiring on May 31, 2005 (the
"Expiration Date"). All of the terms, covenants and conditions of the Lease
which refer to the term of the Lease (the "Term") shall be deemed to refer to an
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approximately ten (10) year term commencing on the Commencement Date hereof.
2. In addition to the Minimum Rent set forth in Article 39 B. of the
Lease, as modified by Paragraphs 2A and 2D of the First Amendment, Tenant shall
pay additional Minimum Rent for the New Premises as follows:
A. Minimum Rent:
(i) $170,000 per annum ($14,166.67 per month) during the period
commencing on the Commencement Date and ending on May 31, 1996:
(ii) $175,950 per annum ($14,662.50 per month) during the period
commencing on the June 1, 1996 and ending on may 31, 1997;
(iii) $182,108.25 per annum ($15,175.69 per month) during the period
commencing on June 1, 1997 and ending on May 31, 1998;
(iv) $188,482.04 per annum ($15,706.84 per month) during the period
commencing on June 1, 1998 and ending on May 31, 1999;
(v) $195,078.91 per annum ($16,256.58 per month) during the period
commencing on June 1, 1999 and ending on May 31, 2000;
(vi) $201,906.67 per annum ($16,825.56 per month) during the period
commencing on June 1, 2000 and ending on May 31, 2001;
(vii) $208,973.40 per annum ($17,414.45 per month) during the period
commencing on June 1, 2001 and ending on may 31, 2002;
(viii) $216,287.47 per annum ($18,023.95 per month) during the period
commencing on June 1, 2002 and ending on May 31, 2003;
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(ix) $223,857.53 per annum ($18,654.79 per month) during the period
commencing on June 1, 2003 and ending on May 31, 2004; and
(x) $231,692.54 per annum ($19,307.71 per month) during the balance of
the within Term.
B. Notwithstanding anything herein to the contrary, provided that Tenant
is not in default of any covenant of the Lease, Tenant shall be entitled to a
credit against the Minimum Rent due for the New Premises in the amount of
$99,166.67, to be credited in seven (7) equal monthly installments of $14,166.67
each as an offset against the first seven (7) installments of Minimum Rent due
for the New Premises under this Lease.
C. The parties hereto acknowledge that the Expiration Date for the
Existing Premises is October 31, 2004 and that Term has been extended so that
the Expiration Date shall be May 31, 2005. Therefore, the Minimum Rent set forth
in Article 39 B. of the Lease for the Existing Premises, as modified by
Paragraph 2A and 2D of the First Amendment, shall be modified to provide that
commencing November 1, 2004, Minimum Rent for the Existing Premises shall be
$876,062.53 per annum ($73,005.21 per month) during the period from November 1,
2004 through May 31, 2005.
3. Tenant acknowledges that it is accepting delivery of the New
Premises, "as is" (except as provided in Paragraph 13 hereof), and that Landlord
shall have no obligation or responsibility to perform any work, installations or
alterations necessary or desirable to make the New Premises suitable for
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Tenant's use and occupancy. All of Tenant's work to make the New Premises
suitable for Tenant's use and occupancy shall be performed in accordance with
the provisions of Articles 3 and 40 of the Lease.
4. Tenant, at Tenant's sole cost and expense, shall obtain electricity
for the New Premises directly from the utility company furnishing electricity to
the Building. The cost of such service shall be paid by Tenant directly to such
utility company. Landlord will permit its electric feeders, risers and wiring
serving the New Premises to be used by Tenant to the extent available and safely
capable of being used for such purpose. Any additional risers, feeders, meters
or other equipment or service proper or necessary to supply Tenant's electrical
requirements, upon written request of Tenant, will be installed by a contractor
approved by Landlord, at the sole cost and expense of Tenant, if in Landlord's
sole judgment, the same are necessary and will not cause or create a dangerous
or hazardous condition or entail excessive or unreasonable alterations, repairs
or expense or interfere with or disturb other tenants or occupants. Rigid
conduit only will be allowed.
5. Article 42 A. of the Lease shall be modified only with respect to the
New Premises to provide that the Base Tax shall be the fiscal period of July 1,
1995 through June 30, 1996 and "Tenant's Share" for the New Premises shall be
7.3%. In all other respects the provisions of Article 42 shall be applicable to
the New Premises, utilizing the Base Tax and Tenant's Share as set forth in this
paragraph.
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6. Solely with respect to a subleasing of all or any portion of the New
Premises and solely during the initial ten (10) year term of this Second
Amendment: (a) Landlord shall not have the option set forth in Subparagraph
B(ii) of Article 48 of the Lease or the option to require Tenant to execute a
sublease to Landlord or Landlord's designee as set forth in Paragraph C of said
Article 48, and, (b) the financial condition of the proposed subtenant of the
New Premises, as set forth in condition "(i)" of said Paragraph C, shall not be
a basis for Landlord's withholding of consent so long as (x) F.P.G.
International, Inc. is the Tenant under the Lease, (y) F.P.G. International,
Inc. occupies at least a majority of the rentable area of the entire Demised
Premises, and (z) F.P.G. International, Inc. has a net worth at least equal to
its net worth as of the date of this Agreement (copies of Tenant's financials
verifying such net worth to be submitted to Landlord upon request), (c) on line
8 of condition "(iv)" of said Paragraph C, after the word "Penthouse", add or
"Fourth Floor"; and (d) condition "(v)", of said Paragraph C shall be deleted in
its entirety.
7. Article 53 of the Lease is hereby deleted and replaced with the
following Article 53:
"53. BROKER. Tenant covenants, warrants and represents that there were
no brokers instrumental in consummating this Lease and no conversations
or negotiations were had with any broker concerning the renting or
leasing of the New Premises. Tenant agrees to indemnify, defend and hold
and save Landlord harmless against any and all liability from any claims
of any broker who claims to have dealt with the Tenant, including,
without limitation, the cost of counsel fees and
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disbursements in connection with the renting of the New Premises."
8. The New Premises shall be kept clean by Tenant, at its expense, in
accordance with the requirements of Article 29 and Paragraph G of Article 55 of
the Lease.
9. The percentage "fifteen (15%) percent," as set forth in Article 67 of
the Lease, shall be increased to "thirty (30%) percent".
10. Landlord acknowledges that Tenant shall not be required to post
any security deposit for the New Premises.
11. Article 86 of the Lease is hereby modified to provide that the
certificate of occupancy for the New Premises (4th floor) is as shown on the
annexed certified certificate of occupancy for the Building.
12. Paragraph 14 of the First Amendment is hereby deleted in its
entirety.
13. Landlord shall, at its sole cost and expense, comply with the
provisions of the Americans with Disabilities Act insofar as it, relates solely
to the bathrooms of the New Premises. Such work shall be performed by Landlord
within a reasonable time following the Commencement Date.
14. A. Solely with respect to Tenant's occupancy of the New Premises and
subject to the provisions of Paragraph E hereof, Tenant shall have the right to
extend the term of this Second Amendment for two (2) additional terms of five
(5) years each, the first additional term (the "First Extension Term")
commencing on June 1, 2005 (hereinafter called the "Commencement
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Date of the First Extension Term") and the second additional term (the "Second
Extension Term") commencing on June 1, 2010 (hereinafter called the
"Commencement Date of the Second Extension Term") provided that:
1. Tenant shall give Landlord notice (hereinafter called the
"Extension Notice") of its election to extend the term of this lease at least
twelve (12) months, but not more than twenty-four (24) months, prior to the
expiration of the (a) initial term of this Second Amendment with respect to the
First Extension Term and (b) First Extension Term with respect to the Second
Extension Term, and
2. Tenant is not in default under the Lease and/or this Second
Amendment, as the case may be, as of the time of the giving of the Extension
Notice and the Commencement Date of the First Extension Term and the
Commencement Date of the Second Extension Term, as the case may be, and
3. With respect to the Second Extension Term, Tenant shall have
exercised its option with respect to the First Extension Term.
B. The Minimum Rent payable by Tenant to Landlord during the First
Extension Term and the Second Extension Term solely with respect to the New
Premises shall be a sum equal to ninety (90%) percent of the fair market rent
for the New Premises as determined as of the date occurring six (6) months prior
to the Commencement Date of the First Extension Term and the Commencement Date
of the Second Extension Term, as the case may be, (each such date is hereinafter
called a "Determination Date") and which
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determination shall be made within a reasonable period of time after the
occurrence of the Determination Date pursuant to the provisions of Paragraph C
hereof, but such Minimum Rent shall in no event be less than the Minimum Rent in
effect under Paragraph 2A of this Second Amendment for the last month of the
immediately preceding term hereof (without giving effect to any temporary
abatement of Minimum Rent under the provisions of Article 9 or any other Article
of the Lease or this Second Amendment). In determining the fair market rent, the
provisions of Article 42 of the Lease (as modified by Paragraph 5 of this
Agreement) shall remain in effect during the First Extension Term and the Second
Extension Term with the same base period as set forth therein, and such base
period shall be recognized in making such determination of fair market value.
C. 1. Landlord and Tenant shall endeavor to agree as to the amount of
the fair market rent for the New Premises pursuant to the provisions of
Paragraph B hereof, during the thirty (30) day period following the
Determination Date. In the event that Landlord and Tenant cannot agree as to the
amount of the fair market rent within such thirty (30) day period following the
Determination Date, then Landlord or Tenant may initiate the arbitration process
provided for herein by giving notice to that effect to the other party, and the
party so initiating the arbitration process (such party hereinafter called the
"Initiating Party") shall specify in such notice the name and address of the
person designated to act as an arbitrator on its behalf. Within thirty (30) days
after the designation of such arbitrator, the
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other party (hereinafter called the "Other Party") shall give notice to the
Initiating Party specifying the name and address of the person designated to act
as an arbitrator on its behalf. If the other Party fails to notify the
Initiating Party of the appointment of its arbitrator within the time above
specified, then the appointment of the second arbitrator shall be made in the
same manner as hereinafter provided for the appointment of a third arbitrator in
the case where the two arbitrators appointed hereunder and the parties are
unable to agree upon such appointment. The two arbitrators so chosen, shall meet
within ten (10) days after the second arbitrator is appointed and if, within
sixty (60) days after the second arbitrator is appointed, the two arbitrators
shall not agree, they shall together appoint a third arbitrator. In the event of
their being unable to agree upon such appointment within eighty (80) days after
the appointment of the second arbitrator, the third arbitrator shall be selected
by the parties themselves if they can agree thereon within a further period of
fifteen (15) days. If the parties do not so agree, then either party, on behalf
of both and on notice to the other, may request such appointment by the American
Arbitration Association (or organization successor thereto) in New York City in
accordance with its rules then prevailing.
2. Each party shall pay the fees and expenses of the one of the
two original arbitrators appointed by or for such party, and the fees and
expenses of the third arbitrator and all other expenses (not including the
attorneys fees, witness fees and similar expenses of the parties which shall be
borne separately by
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each of the parties) of the arbitration shall be borne by the parties equally.
3. The majority of the arbitrators shall determine the fair
market rent of the New Premises and render a written certified report of their
determination to both Landlord and Tenant within sixty (60) days of the
appointment of the first two arbitrators or sixty (60) days from the appointment
of the third arbitrator is such third arbitrator is appointed pursuant to this
Paragraph; and the fair market rent, so determined, shall be applied to
determine the Minimum Rent pursuant to Paragraph B hereof.
4. Each of the arbitrators selected as herein provided shall have
at least ten (10) years experience in the leasing and renting of office space in
office buildings in the Borough of Manhattan, City of New York.
5. If Landlord notifies Tenant that the Minimum Rent for the New
Premises during the First Extension Term or the Second Extension Term, as the
case may be, shall be equal to the Minimum Rent for the immediately preceding
term, then the provisions of Subsection 1 of this Paragraph C shall be
inapplicable and have no force or effect.
6. In the event Landlord or Tenant initiates the arbitration
process and as of the Commencement Date of the First Extension Term or
Commencement Date of the Second Extension Term, as the case may be, the amount
of the fair market rent has not been determined, Tenant shall continue to pay
the Minimum Rent in effect under this Second Amendment for the last month of the
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immediately preceding term and when such determination has been made, an
appropriate retroactive adjustment shall be made as of the Commencement Date of
the First Extension Term or Commencement Date of the Second Extension Term, as
the case may be.
7. The arbitration provisions of this Paragraph shall, solely
with respect to this Paragraph 14, supersede Article 60 of the Lease.
D. Except as provided in Paragraphs A and B hereof, Tenant's occupancy
of the New Premises during the First Extension Term and Second Extension Term,
as the case may be, shall be on the same terms and conditions as are in effect
immediately prior to the expiration of the immediately preceding term of this
Second Amendment, provided, however, (i) Tenant shall have no further right to
extend the term of this lease pursuant to this Paragraph 14, and (ii)
Subparagraph B of Xxxxxxxxx 0, Xxxxxxxxx 6 and Paragraph 13 of this Agreement
shall all be deleted in their entirety.
E. If Tenant does not send an Extension Notice pursuant to the
provisions of Paragraph A hereof, this Paragraph 14 shall have no force or
effect and shall be deemed deleted from this Second Amendment.
F. If this Second Amendment is renewed in accordance with the provisions
of this Article, then Landlord or Tenant can request the other party hereto to
execute an amendment to the Lease setting forth the exercise of Tenant's right
to extend the terms of this Second Amendment, the Minimum Rent and the last
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day of the relevant Extension Term (or a new lease on the form then in use for
the Building).
G. If Tenant exercises its right to extend the term of this
Second Amendment for an Extension Term pursuant to this Paragraph 14, the
phrases "the term of this Second Amendment" or "the term hereof" as used in this
Second Amendment shall be construed to include, when practicable, the relevant
Extension Term.
H. Notwithstanding anything to the contrary contained in this
Paragraph 14, Tenant shall not have the right to extend the term of the Lease
with respect to its occupancy of any portion of the Demised Premises other than
the New Premises.
15. Except as otherwise modified or amended herein, all of the terms,
covenants and conditions of the Lease are deemed to be ratified and approved as
if set forth at length herein.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the
day and year first above written.
LANDLORD:
ESTATE OF X. XXXXX
By: /s/ XXXXXXX XXXXXXXX
------------------------------------------
Xxxxxxx Xxxxxxxx, Administrator
TENANT:
F.P.G. INTERNATIONAL, INC.
By: /s/ XXXXXXX XXXXXXX
------------------------------------------
Name:
Title: President
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STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On this 30 day of May, 1995, before me personally came XXXXXXX XXXXXXX, to
me known, who, being by me duly sworn, did depose and say that (s)he resides at
000 Xxxx 00xx Xxxxxx, Xxx Xxxx, XX 00000, that (s)he is the President of F.P.G.
INTERNATIONAL, INC., the corporation described in and which executed the
foregoing instrument, as Tenant; and that (s)he signed his/her name thereto by
order of the board of directors of said corporation.
XXXXXX X.X. XXXXX
---------------------------
Notary Public
XXXXXX X.X. XXXXX
Notary Public, State of New York
No. 00-0000000
Qualified in Queens County
Commission Expires September 21, 1995
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CERTIFICATE OF OCCUPANCY
[Copy Illegible]
