THIS LEASE, made the _____ day of_______________, 2006, by and
between STNLA-SPVEF Bay Shore, LLC, a Delaware limited liability company, whose
address is 00000 Xxxxx Xxxxx, Xxxxxx Xxxx, Xxxxxxx 00000 ("Landlord"), and Air
Industries Machining, Corp., a New York Corporation, whose address is 0000 Xxxxx
Xxxxxxx Xxxxxx, Xxx Xxxxx, Xxx Xxxx 00000 ("Tenant").
W I T N E S S E T H:
Landlord and Tenant hereby covenant and agree as follows:
ARTICLE I
Demise of Premises
Section 1.01. Landlord, for and in consideration of the rents to be paid
and of the covenants and agreements herein contained to be kept and performed by
Tenant, hereby demises and leases unto Tenant, and Tenant hereby hires and
leases from Landlord, for the term and the rent and upon the covenants and
agreements herein set forth, the parcel of land consisting of approximately 4.49
acres located at 1479 & 0000 X Xxxxxxx Xxxxxx, Xxx Xxxxx Xxx Xxxx and 0000 X.
Xxxxx Xxxxxx, Xxx Xxxxx Xxx Xxxx all as shown on Exhibit A attached hereto and
made a part hereof (the "Land"), together with industrial buildings containing
approximately 75,421 gross square feet (the "Buildings") and all other
improvements now or hereafter located on the Land (the "Improvements") (the
Land, the Building and the Improvements being hereinafter collectively referred
to as the "Demised Premises")
ARTICLE II
Term of Lease
Section 2.01. The term of this Lease and the demise of the Demised
Premises shall be for Twenty (20) years beginning on the date hereof (the
"Initial Commencement Date"), plus any partial month from the Initial
Commencement Date to the first day of the following month (the "Commencement
Date"), if the Initial Commencement Date occurs on a day other than the first
day of the calendar month, and ending on the last day of the calendar month in
which the twentieth (20th) anniversary of the Commencement Date shall occur (the
"Term", which shall include any renewals hereof). Each twelve (12) month period
commencing on the Commencement Date and ending on the day before the first and
each subsequent anniversary of the Commencement Date shall be a "Lease Year" as
used in this Lease.
ARTICLE III
Basic Rent
Section 3.01. Tenant's obligation to pay rent shall commence on the
Initial Commencement Date. Tenant shall pay to Landlord during the Term, without
demand, counterclaim, deduction or setoff, basic rent ("Basic Rent") as follows:
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(a) During the first complete Lease Year, Tenant shall pay the sum of Five
Hundred Forty Thousand and 00/100 ($540,000.00) Dollars payable in twelve (12)
equal monthly installments of Forty-five Thousand and 00/100 ($45,000.00)
Dollars each; and monthly thereafter for the 1st 60 months of the Lease.
(b) Beginning on the 61st month of the Lease, the Basic Rent payable by
Tenant shall be increased by fifteen (15%) percent over the Basic Rent payable
by Tenant in the immediately preceding Lease Year; thereafter the Basic Rent
shall increase by 3% per annum for the remainder of the Term.
(c) In the event the Commencement Date is not the first day of a calendar
month, the Basic Rent for such partial month shall be pro-rated upon a daily
basis.
The Basic Rent, Additional Rent (as defined in Section 30.02 below) and
all other sums payable under this Lease shall be payable, by wire transfer, at
the office of Landlord on the first business day of each month, at the address
above set forth, or as may otherwise be directed by notice from Landlord to
Tenant. Basic Rent shall be paid monthly in advance.
Section 3.02. During the Term, Tenant shall well and truly pay, or cause
to be paid, to Landlord, the monthly installments of Basic Rent as herein
provided and all other sums that may become due and payable by Tenant under this
Lease, at the time and in the manner herein provided, without counterclaim,
offset or deduction; and all other sums due and payable by Tenant hereunder may,
at Landlord's option, be deemed to be, and treated as, Additional Rent, and
added to any Basic Rent due and payable by Tenant hereunder. In the event of
nonpayment of such other sums, Landlord shall have all the rights and remedies
herein provided for in the case of the nonpayment of Basic Rent or of a breach
of any covenant to be performed by Tenant. No payment to or receipt by Landlord
of a lesser amount than the then-amount required to be paid under this Lease
shall be deemed to be other than on account of the earliest amount of such
obligation then due. No endorsement or statement on any check or other
communication accompanying a check for payment of any amounts payable hereunder
shall be deemed an accord and satisfaction, and Landlord may accept such check
in payment without prejudice to Landlord's right to recover the balance of any
sums owed by Tenant under this Lease.
Section 3.03. The Basic Rent payable by Tenant pursuant to this Lease
shall be absolutely net to Landlord. All costs, operating expenses, and
obligations imposed upon the Demised Premises or incurred in connection with its
use, occupancy, care, maintenance, operation and control (including, but not
limited to, all costs of replacements, maintenance and repairs (capital and
ordinary, structural and non-structural, foreseen and unforeseen, ordinary and
extraordinary) of the structure, roof, parking lot, utilities, taxes, insurance
and all other payments required in connection with the Demised Premises during
the Term of this Lease) shall be paid by Tenant in addition to all items of
Basic Rent payable by Tenant under this Lease. Additionally, Tenant shall be
responsible for compliance with any and all legal requirements and shall pay any
and all current and future costs relative thereto.
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Section 3.04. All amounts payable by Tenant to or on behalf of Landlord
under this Lease, whether or not designated as "Rent", shall constitute rent for
all purposes, including without limitation, as used in this Lease, "Rent" shall
be deemed to include all Basic Rent, all Additional Rent and all other sums due
under this Lease for the purpose of Section 502(b)(6) of the Bankruptcy Code, 11
U.S.C. 502(b)(6).
Section 3.05. Except as may be expressly otherwise provided in this Lease,
there shall be no abatement, diminution or reduction of Basic Rent, Additional
Rent or any other sums due under this Lease under any circumstances including,
without limitation, due to charges or other compensation claimed by or allowed
to Tenant or any person claiming under it, nor shall there be any abatement or
diminution or reduction of the performance of the obligations of Tenant under
any circumstances.
ARTICLE IV
Condition of the Demised Premises
Section 4.01. Tenant acknowledges that it has inspected and is fully
familiar with and is leasing the Demised Premises in AS IS condition. Without
limiting the generality of the foregoing, Tenant acknowledges, agrees and
represents that Tenant has been given free access to and has inspected the
Demised Premises to its satisfaction and is relying solely on its inspection.
Neither Landlord nor any other party has made any representations or warranties
of any kind as to the condition, design, use, operation, expenses, maintenance
or repair of the Demised Premises. Landlord shall not be responsible for any
latent or other defects or changes in the condition of the Demised Premises.
Section 4.02. The Demised Premises constitutes a self-contained unit; and
nothing in this Lease shall impose upon Landlord any obligation to provide any
services for the benefit of Tenant, including but not limited to water, gas,
electricity, heat, janitorial or garbage removal.
Section 4.03. (a) In addition to any Basic Rent, Additional Rent and any
other sums due under this Lease, Tenant has placed with Landlord the sum of
$303,750 (referred to herein as the "Roof Reserve"). The Roof Reserve shall be
kept in an interest bearing account under Tenant's tax identification number and
interest earned thereon shall be taxed to the Tenant; and Landlord's right to
possession of the Demised Property for non-payment of Basic Rent, or for any
other reason, shall not in any event be affected by reason of the Landlord's
holding the Roof Reserve.
(b) Tenant shall expeditiously make those certain repairs to or
replacements of the roofs to the Buildings as set forth in that certain report
attached hereto as Exhibit B and shall utilize the Roof Reserve for such repairs
to or the replacement of the roofs to the Buildings. Tenant shall access the
Reserve and conduct any permitted repairs or replacements subject to the
requirements of and in the same manner as set forth in Section 11.03 of the
Lease except that any remaining proceeds, including interest accrued, shall be
distributed to the Tenant upon completion of the repairs.
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(c) In the event it is determined to the reasonable satisfaction of
Landlord that the amount necessary to meet the conditions of this Paragraph 4.03
is less than $303,750, the Roof Reserve shall be reduced accordingly with any
excess being distributed to the Tenant.
(d) The foregoing is in addition to, and not in lieu of, Tenant's
continuing obligation to be responsible for all structural and roof repairs and
replacement
Section 4.04. (a) In addition to any Basic Rent, Additional Rent and any
other sums due under this Lease, Tenant has placed with Landlord the sum of
$21,875 (referred to herein as the "Remediation Reserve"); The Remediation
Reserve shall be kept in an interest bearing account under Tenant's tax
identification number and interest earned thereon shall be taxed to the Tenant;
and Landlord's right to possession of the Demised Property for non-payment of
Basic Rent, or for any other reason, shall not in any event be affected by
reason of the Landlord's holding the Remediation Reserve.
(b) Tenant shall expeditiously make those certain repairs to or
replacements as required by that certain Phase 2 Environmental Report dated
October 5, 2006 (the "Phase 2 Report") as set forth in that certain report
attached hereto as Exhibit C and shall utilize the Remediation Reserve for such
repairs to or replacements. Tenant shall access the Reserve and conduct any
permitted repairs or replacements subject to the requirements of and in the same
manner as set forth in Section 11.03 of the Lease except that, provided there is
no condition of an uncured material default under the Lease by Tenant, any
remaining proceeds, including interest accrued, shall be distributed to the
Tenant upon completion of the repairs.
(c) The foregoing is in addition to, and not in lieu of, Tenant's
continuing obligation to be responsible for all structural and Remediation
repairs and replacement
ARTICLE V
Use
Section 5.01. The Demised Premises may be used solely for offices, the
assembly/manufacturing and warehousing and ancillary offices in connection
therewith and for no other purposes (the "Permitted Use"). Throughout the Term,
Tenant covenants to continuously occupy and use the Demised Premises solely for
the Permitted Use. Nothing contained herein shall be construed as a
representation on the part of Landlord that Tenant's use of the Demised Premises
is permitted under applicable zoning or other land use requirements, and, it
shall be Tenant's obligation, at Tenant's sole cost and expense, research
applicable zoning and other land use requirements and to make application for
and to obtain any and all certificates and/or permits to permit Tenant's use
from any governmental agencies having jurisdiction over the Demised Premises.
Section 5.02. Tenant shall continuously and without interruption, during
all usual business hours, and on such days as most comparable businesses of like
nature are open for business, occupy, use and operate the Demised Premises for
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the Permitted Use. Tenant shall, at all times, operate the business conducted by
it on the Demised Premises in a first class manner.
ARTICLE VI
Quiet Enjoyment
Section 6.01. Landlord covenants that if, and for so long as, Tenant pays
Basic Rent, Additional Rent and all other sums due under this Lease as herein
provided, and observes and performs the covenants and conditions of this Lease,
Landlord shall do nothing to affect Tenant's right to peacefully and quietly
have, hold and enjoy the Demised Premises for the Term, subject to the
provisions of this Lease and to any present or future ground lease, mortgage or
deed of trust to which this Lease shall be subordinate.
ARTICLE VII
Additional Rent, Taxes, Assessments,
Water Rates, Electric, Charges
Section 7.01. The Tenant agrees during the Term of the Lease to pay, as
Additional Rent, an amount equal to all the real estate taxes assessed against
the Demised Premises together with all governmental and non-governmental water
and sewer charges pertaining to the Demised Premises (collectively, "Taxes"
which, among other charges set forth herein, are deemed a part of Additional
Rent) plus an amount equal to all of the insurance required to be paid pursuant
to Paragraphs 8(A), (B), (C), (D), (E) and (G) below (collectively, "Insurance"
which among other charges set forth herein, are deemed a part of Additional
Rent). Throughout the Term hereof, for each fiscal tax year, Taxes and Insurance
to become due shall be payable by Tenant to Landlord with the monthly Basic Rent
installment in twelve (12) equal installments as reasonably estimated by
Landlord until the actual sum of Taxes and Insurance for such fiscal year is
known, and thereafter an adjustment shall be made, with any deficiency being due
from Tenant within ten (10) days following demand, or any overage being credited
to Tenant against the monthly installment of Taxes and Insurance next following
the billing. If Landlord's lender requires tax and insurance escrows, such
lender's estimate of Taxes and Insurance shall be deemed to be a reasonable
estimate that will not be questioned by Tenant.
Section 7.02. If at any time during the Term of this Lease, under the laws
of the State of New York or any political subdivision thereof, a tax on rents is
assessed against the Landlord or the Basic Rent, as a substitution, in whole or
in part, for a real estate tax, assessment, water rent, rate or charge, sewer
rent or other governmental imposition or charge with respect to the Demised
Premises, Tenant shall pay an amount equal to same to the extent that it is in
substitution, in whole or in part, for real estate taxes. Taxes shall not
include any income tax, capital levy or transfer tax imposed on Landlord, or any
franchise taxes imposed upon any corporate owner of the fee of the Demised
Premises or income tax imposed upon the rent received by the Landlord unless
such tax is a substitute for any real estate tax, property tax or rent tax. Any
sales, value added, use and similar tax assessed or payable on account of the
acquisition, ownership, leasing operation, possession or use of the Demised
Property shall be paid by Tenant.
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Section 7.03. Tenant shall, at its sole cost, arrange for service by all
utility providers serving the Building and the Demised Premises (including,
without limitation electricity, oil, gas, sewer, water and telephone) and shall
pay for all such utility service before any interest or penalties accrue
thereon, directly to the providers thereof.
Section 7.04. Landlord shall not be liable in any way to Tenant for any
loss, damage or expense which Tenant may sustain or incur as a result of any
failure, interruption, defect or change in the quantity or character of any
utility or service and, in all events, no such interruption or cessation shall
affect or modify this Lease or give rise to any right of cancellation,
termination, offset or defense to Basic Rent, Additional Rent or any other
charge hereunder. Tenant agrees that such supply may be interrupted for
inspection, repairs and replacement and in emergencies.
ARTICLE VIII
Insurance
Section 8.01. During the Term, Tenant, at its sole cost, but for the
mutual benefit of Landlord and Tenant, shall maintain the following insurance:
(A) General Comprehensive public liability insurance protecting and
indemnifying Landlord and Tenant against all claims for damages to person
or property or for loss of life or property occurring in, upon or about
the Demised Premises and the areas adjacent thereto, in the amount of not
less than Three Million and 00/100 ($3,000,000.00) per occurrence and Five
Million and 00/100 ($5,000,000.00) annual general aggregate limit per
location, naming Landlord, its managing agent, if any, and any
mortgagee(s), as their respective interests may appear:
(B) Insurance against damage to the Buildings by all risks of direct
physical loss (at Landlord's option to include earthquake, flood and such
other risks as Landlord deems appropriate) with the policy to contain
either the agreed amount endorsement or a replacement cost endorsement, in
amounts equal to one hundred (100%) percent of full replacement cost, and
in any event in an amount sufficient to prevent Landlord from becoming a
co-insurer. Replacement Cost shall be determined from time to time by an
independent appraiser, architect or engineer designated by Landlord, at
Tenant's expense. The policy may include, at Landlord's option, a
contingent liability endorsement and/or demolition and increased cost of
construction endorsement in order for the Building to be constructed in
accordance with all requirements and regulations which may be applicable
at the time of loss or damage, of all governmental agencies having
jurisdiction over the Building and construction of the Building.
(C) "All Risk" property insurance against fire, theft, vandalism,
malicious mischief, sprinkler leakage and such additional perils as are
now, or hereafter may be, included in a standard extended coverage
endorsement from time to time in general use in the State of New York upon
property of every description and kind owned by Tenant and/or under
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Tenant's care, custody or control located in the Building or the Demised
Premises or for which Tenant is legally liable or installed by or on
behalf of Tenant, including by way of example and not by way of
limitation, furniture, fixtures, fittings, equipment, installations and
any other personal property in an amount equal to the full replacement
cost thereof.
(D) Boiler and machinery insurance coverage, if appropriate, for all
eligible objects, including pressure vessels and air conditioning
equipment, with the electrical apparatus clause, with such limits as may
be reasonably necessary to properly insure the values at risk in the
Buildings.
(E) Business interruption and rent loss insurance, against the loss
of Basic and Additional Rent for no less than one (1) year as provided
herein, as well as such amounts as will reimburse Landlord for direct or
indirect loss of earnings attributable to all perils commonly insured
against by prudent tenants or assumed by Tenant pursuant to this Lease or
attributable to prevention or denial of access to the Demised Premises or
the Buildings as a result of any such perils.
(F) Workers' Compensation Insurance (including employers' liability
insurance) covering all persons employed at the Demised Premises to the
extent required by the laws of the State of New York.
(G) Insurance for such other hazards and in such amounts as Landlord
may reasonably require and as at the time are commonly insured against
with respect to buildings similar in character, general location and use
and occupancy to the Demised Premises in relative amounts normally carried
with respect thereto. If, by reason of changed economic conditions, the
insurance amounts referred to in this Section 8.01 become inadequate, in
Landlord's reasonable determination, Tenant agrees to increase the amounts
of such insurance promptly upon Landlord's reasonable request.
Tenant represents, said representation being specifically designed to
induce Landlord to execute this Lease, that Tenant's personal property,
fixtures, goods and inventory and any other items which Tenant may bring to the
Demised Premises or which may be under Tenant's care, custody and control which
may be subject to any claim for damages or destruction shall never exceed the
amount of insurance which Tenant is required to carry pursuant to this Lease.
Tenant shall name Landlord, its managing agent, if any, and Landlord's
mortgagee[s] as an additional named insureds, as their interests may appear,
with Landlord (of its mortgagee(s)) being designated as "loss payee" in all
cases. If at any time the amount of personal property, fixtures, goods and
inventory or other items located at the Demised Premises shall exceed said
amount, Tenant covenants to so notify Landlord and at the same time increase the
amount of insurance required to be carried pursuant to Subsection 8.01(C) to an
amount sufficient to cover the aforesaid to preclude any liability on Landlord's
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part to Tenant. Should Tenant fail to do so, or fail to maintain insurance
coverage adequate to cover the aforesaid, naming Landlord, its managing agent,
if any, and Landlord's mortgagee[s] as an additional named insured, then, after
written notice and a ten (10) day opportunity to cure, Tenant shall be in
default hereunder and shall be deemed to have breached its covenants as set
forth herein.
Tenant shall not do or permit to be done any act or thing on the Demised
Premises which shall invalidate or be in conflict with, or cause additional
premium for any insurance policy insuring the Demised Premises.
All policies of insurance required pursuant to this Section 8.01 shall be
from a company rated in the A.M. Best Key Rating Guide with a policyholder's
service rating of A and a financial rating of X or such other rating as may be
required by Landlord's mortgagee. The insurance company shall be licensed to do
business in the State of New York and a certificate(s) evidencing the existence
of such policy shall be delivered to Landlord, together with evidence of the
payment of the premiums therefore upon the execution of this Lease. Each
insurance company shall agree to provide a notice of cancellation or non-renewal
to Landlord and any mortgagee at least thirty (30) days prior to said event
becoming effective. At least thirty (30) days prior to the expiration or
termination date of any policy, Tenant shall deliver a renewal or replacement
policy, or certificate(s) evidencing the existence thereof, to Landlord together
with proof of the payment of the premium therefor. No deductible on any
insurance required hereunder shall exceed One Thousand and 00/100 ($1,000.00)
Dollars. If Tenant shall fail to comply with the provisions of this Article
VIII, Landlord shall have the right, but not the obligation, to procure such
insurance and pay the premiums thereof and Landlord shall be entitled to
repayment by Tenant immediately on demand, as Additional Rent.
Section 8.02 Tenant is and shall be in exclusive control and possession of
the Demised Premises as provided herein, and Landlord shall not be liable to
Tenant for any loss suffered by Tenant under any circumstances, including, but
not limited to: (i) loss of or injury to Tenant or to Tenant's property or that
for which Tenant is legally liable from any cause whatsoever, including but not
limited to theft or burglary; or (ii) that which results from or is incidental
to the furnishing of or failure to furnish or the interruption in connection
with the furnishing of any service; or (iii) that which results from any
inspection, repair, alteration or addition or the failure thereof undertaken or
failed to be undertaken by Landlord; or (iv) any interruption to Tenant's
business, however occurring.
The aforesaid exculpatory Section is to induce Landlord, in its judgment,
to avoid or minimize covering risks which are better quantified and covered by
Tenant either through insurance, thereby avoiding the need to increase the rent
charged Tenant to compensate Landlord for the additional costs in obtaining said
coverage or reserving against such losses.
Tenant shall indemnify, defend and save Landlord harmless against and from
all and all liabilities, claims, suits, fines, penalties, damages, losses, fees,
obligations, costs and expenses (including attorneys' fees) which may be imposed
upon, incurred by or asserted against Landlord by reason of:
(A) Any work or thing done in, on or about the Demised Premises or any
part thereof;
(B) Any use, occupation, condition or operation of the Demised Premises;
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(C) Any act or omission on the part of Tenant or any of its agents,
employees, invitees, licensees or subtenants on or within the Demised
Premises or any part thereof, or any occurrence on any of the same;
(D) Any accident, injury (including death) or damage to any third party or
property owned by someone other than Tenant and not under the care,
custody or control of Tenant occurring in, on or about the Demised
Premises or any part thereof;
(E) Any failure on the part of Tenant to perform or comply with any of the
covenants, agreements, terms or conditions contained in this Lease.
The provisions of this Section 8.02 shall survive the expiration or
earlier termination of the Lease.
Section 8.03. Any policies required to be furnished by Tenant pursuant to
this Article VIII will unequivocally provide an undertaking by the insurers to
notify Landlord and the mortgagees or ground lessors of Landlord in writing not
less than thirty (30) days prior to any material change, reduction in coverage,
cancellation or other termination thereof.
Section 8.04. All policies of insurance set forth in this Article shall
expressly provide that any losses thereunder shall be adjusted with Landlord,
Tenant and Landlord's mortgagees. The Tenant will not take out separate
insurance concurrent in form or contributing in the event of loss with that
required (or which may reasonably be required) pursuant to this paragraph to be
furnished by the Tenant unless the Landlord and each of Landlord's mortgagees
are included therein as an insured, with all losses payable thereunder as
provided above. Any such additional policy shall be subject to Landlord's prior
consent and if approved, shall be delivered to Landlord.
ARTICLE IX
Repairs and Alterations; Surrender
Section 9.01. Tenant covenants that throughout the Term, Tenant shall, at
its sole cost and expense, take good care of the Demised Premises, and make all
necessary repairs and replacements thereto, interior and exterior, ordinary and
extraordinary, foreseen and unforeseen, structural and non-structural, needed to
keep the same in good order, repair and condition. As used in this Lease, the
term "repair" shall include all necessary replacements, renewals, alterations,
additions and betterments. Tenant shall keep the Demised Premises and all parts
thereof in a clean and sanitary condition and free from trash, flammable
material and other objectionable matter. Tenant shall keep the sidewalks,
parking areas, and roadways within the Demised Premises clean and free of
obstructions, snow and ice. Tenant shall re-pave and re-stripe as required all
parking areas and roadways within the Demised Premises. Tenant shall keep,
maintain and replace as required all landscaping on the Demised Premises. Tenant
shall replace, at Tenant's expense, all glass in and on the Demised Premises,
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which may become broken after the Commencement Date. Tenant shall also keep in
effect a service and maintenance contract with respect to the HVAC unit
servicing the Demised Premises and shall be responsible for all repairs and
replacements to any such unit(s). Tenant shall redecorate, paint and renovate
the Demised Premises as may be necessary to keep them in good appearance,
condition and repair. Tenant shall comply with all legal requirements as may now
or in the future exist in taking or not taking any action under this Lease.
Tenant, at its sole cost and expense, shall be responsible for the
maintenance, repair and replacement of: (a) all electric, water, sewer and other
utility lines serving the Demised Premises and the mains to the points of
connection; (b) all structural and non-structural elements of the Buildings and
other improvements, including, without limitation, the roof and all roof
structures, HVAC system, plumbing, electrical, and other building systems.
Tenant shall provide snow removal services for the Demised Premises, including
the removal of heavy accumulations of snow from the roof of the Buildings which
threaten to cause the roof to collapse, and removal of snow from all sidewalks,
driveways and parking areas.
All repairs or replacements made by Tenant shall be equal or better in
quality and class to the original work. Tenant shall quit and surrender the
Demised Premises at the end of the Term in as good condition as the reasonable
use thereof will permit and in compliance with the requirements stated herein
and in a "broom-clean" condition, and shall, by way of example and not by way of
limitation, clean and reseal all concrete floors.
Section 9.02. Landlord covenants and agrees that Landlord shall not make
any alterations or additions to the Demised premises without Tenant's consent.
Landlord shall not permit any mechanics' or other liens to stand against the
Demised Premises for work or materials furnished to landlord. Notwithstanding
the foregoing, should Tenant fail to keep the Demised Premises in good condition
and repair, Landlord, after notice to Tenant (or without notice in the case of
an emergency), may, without being obligated to do so, make the repairs, but
nothing herein shall be construed to impose a duty on Landlord to mitigate its
damages by undertaking any repair which is Tenant's obligation. Any costs
incurred by Landlord in connection with the making of such repairs shall be paid
to Landlord promptly after demand and shall be deemed Additional Rent under this
Lease.
Section 9.03. At any time and from time to time, Tenant, at Tenant's cost
and expense, may make such non-structural and structural alterations and
additions to the Demised Premises as Tenant desires, including the construction
of new building(s) on the vacant area included within the Demised Premises,
provided that any such alteration and addition shall be of such character and
condition as not to diminish the structural integrity of any improvement on the
Demised Premises and shall not violate applicable laws. Any such alteration
shall not reduce the square footage of the Buildings by more than 5% from that
as of the date hereof and shall not enlarge the square footage of the Buildings
by more than that allowed by applicable law. Any alterations to the Demised
Premises shall be made subject to compliance with all of the following
conditions: (i) Tenant shall first obtain all governmental permits and
approvals, if any, required therefor; (ii) no alteration of or involving the
structural portions, and no alteration, the cost of which would exceed $125,000,
of or involving the non-structural portions, of the Buildings shall be
undertaken until detailed plans and specifications have first been approved in
writing by the Landlord (which approval shall not be unreasonably withheld,
delayed or conditioned); (iii) all alterations when completed shall be of such a
character as shall not reduce, or otherwise adversely affect, the value, cubic
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content or structural soundness of the Demised Premises and shall immediately
become the property of the Landlord; (iv) all alterations shall be done promptly
and in a good and workmanlike manner and in compliance with all governmental
laws, ordinances, orders, rules, regulations and requirements, and in accordance
with the orders, rules and regulations of the Board of Fire Underwriters or any
other body exercising similar functions and having jurisdiction thereof; (v)
Tenant, prior to performing any work, shall provide Landlord with evidence that
Tenant and each of its contractors and subcontractors have (and will continue to
have), at their sole cost and expense, adequate insurance therefor, including
statutory worker's compensation insurance (or certificates for contractors
indicating worker's compensation insurance is in force) covering all persons
employed in connection with the work, builder's risk insurance (including
completed operations) and general liability insurance for the mutual benefit of
the Tenant, Landlord and Landlord's mortgagees with limits reasonably acceptable
to Landlord, at all times when any work is in process in connection with any
alteration; (vi) Tenant shall pay all increased taxes and insurance premiums
assessed or charged as a result of the alterations; and (vii) Tenant shall post
with Landlord a completion bond in form and substance acceptable to Landlord.
The Tenant shall not be permitted to do any work on the Demised Premises which
would void any portion of any insurance coverage for Landlord's benefit.
Section 9.04. All alterations, additions and improvements, whether
temporary or permanent in character, which may be made upon or to the Demised
Premises by Tenant (except furniture or movable trade fixtures installed at the
expense of Tenant) shall become the property of Landlord and shall remain upon
and be surrendered with the Demised Premises as a part thereof at the expiration
or sooner termination of this Lease, without compensation to Tenant.
Any furniture or movable trade fixtures remaining at the Demised Premises
on the next day after the end of the Term shall be conclusively deemed abandoned
and may be removed by Landlord and discarded or stored at Tenant's sole risk and
expense.
Section 9.05. On the Termination Date or earlier termination of this
Lease, Tenant shall, at Tenant's sole cost and expense: (1) peaceably surrender
the Demised Premises broom-clean, in good order and condition and upon
Landlord's request, restored to its original condition as of the Commencement
Date; and (2) at its expense remove from the Demised Premises the signage,
movable furniture, equipment, machinery, trade fixtures (the personalty which
belongs to Tenant and which Tenant may remove shall be referred to as "Tenant's
Property"), and any of Tenant's Property not so removed may at Landlord's
election and without limiting Landlord's right to compel removal thereof, be
deemed abandoned. Any damage to the Demised Premises caused by Tenant in the
removal of Tenant's Property shall be repaired by and at Tenant's expense, or if
not done by Tenant in a timely manner, may be performed by Landlord and all sums
expended by Landlord shall be deemed Additional Rent. Any cost or expense
incurred by Landlord in removing Tenant's Property shall be deemed Additional
Rent.
ARTICLE X
Management Fee
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Section 10.01. Intentionally omitted.
ARTICLE XI
Casualty or Condemnation
Section 11.01. Tenant shall give prompt written notice to Landlord in the
event of any damage, destruction to or condemnation of the Demised Premises.
Section 11.02. Tenant hereby irrevocably assigns to Landlord any award,
compensation or insurance payment to which Tenant may become entitled by reason
of Tenant's interest in the Demised Premises (i) if the use, occupancy or title
of the Demised Premises or any part thereof, is taken, requisitioned or sold in,
by or on account of any actual or threatened eminent domain proceeding or other
action by any person having the power of eminent domain ("Condemnation") or (ii)
if the Demised Premises or any part thereof are damaged or destroyed by fire,
flood or other casualty ("Casualty"). All awards, compensations and insurance
payments on account of any Condemnation or Casualty are herein collectively
called "Compensation." Landlord may appear in any such proceeding or action to
negotiate, prosecute and adjust any claim for any Compensation, and Landlord
shall collect any such Compensation. Tenant shall pay all of Landlord's costs
and expenses in connection with each such proceeding, action, negotiation,
prosecution and adjustment. Tenant shall be entitled to participate in any such
proceeding, action, negotiation, prosecution or adjustment. Notwithstanding
anything to the contrary contained in this Article XI, if permissible under
applicable law, any separate Compensation made to Tenant for its moving and
relocation expenses, anticipated loss of business profits, loss of goodwill or
fixtures and equipment paid for by Tenant and which are not part of the Demised
Premises, shall be paid directly to and shall be retained by Tenant (unless such
Compensation reduces amounts otherwise due to Landlord). All Compensation shall
be applied pursuant to this Section 11.02, and all such Compensation (less the
expense of collecting such Compensation) is herein called the "Net Proceeds".
Section 11.03. Substantial Condemnation. If a Condemnation shall, in
Tenant's good faith judgment, affect all or a substantial portion of the
Premises and shall render the Premises unsuitable for restoration for continued
use and occupancy in Tenant's business, then Tenant shall, not later than thirty
(30) days after such Condemnation, deliver to Landlord (i) notice of its
intention to terminate this Lease on the rental payment date immediately after
any such Condemnation occurs (the "Condemnation Termination Date"); (ii) a
certificate of an authorized officer of Tenant describing the event giving rise
to such termination and stating that Tenant has determined that such
Condemnation has rendered the Premises unsuitable for restoration for continued
use and occupancy in Tenant's business; and (iii) documentation to the effect
that termination of this Lease will not be in violation of any agreement then in
effect with which Tenant is obligated to comply pursuant to this Lease. This
Lease shall terminate on the Condemnation Termination Date, except with respect
to obligations and liabilities of Tenant hereunder, actual or contingent, which
have arisen on or prior to the Condemnation Termination Date, upon payment by
Tenant of all Basic Rent, Additional Rent and other sums due and payable
hereunder to and including the Condemnation Termination Date and the Net
Proceeds shall belong to Landlord.
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Section 11.04. Substantial Casualty during the Renewal Term. Intentionally
Omitted
Section 11.05. Less Than Substantial Condemnation or any Casualty. If,
after a Condemnation or Casualty, Tenant does not give or does not have the
right to give notice of its intention to terminate this Lease as provided in
Subsections 11.03 and 11.04, then this Lease shall continue in full force and
effect (with no abatement of Basic Rent, Additional Rent or any other sums due
under this Lease) and Tenant shall, at its expense, rebuild, replace or repair
the Demised Premises in conformity with the requirements of Section IX, and
other applicable Sections of this Lease so as to restore the Demised Premises
(in the case of Condemnation, as nearly as practicable) to the condition,
character and fair market value thereof immediately prior to such Casualty or
Condemnation. Prior to any such rebuilding, replacement or repair, Landlord and
Tenant shall agree on the maximum cost thereof (the "Restoration Cost"). The
Restoration Cost shall be paid first out of Tenant's own funds to the extent
that the Restoration Cost exceeds the Net Proceeds payable in connection with
such occurrence, after which expenditure Tenant shall be entitled to receive the
Net Proceeds, but only against (i) certificates of Tenant delivered to Landlord
from time to time as such work of rebuilding, replacement and repair progresses,
each such certificate describing the work for which Tenant is requesting payment
and the cost incurred by Tenant in connection therewith and stating that Tenant
has not theretofore received payment for such work and (ii) such additional
documentation as Landlord may reasonably require, including, but not limited to,
copies of contracts and subcontracts relating to restoration, architects'
certifications, title policy updates and lien waivers or releases. Any Net
Proceeds remaining after final payment has been made for such work and after
Tenant has been reimbursed for any portions it contributed to the Restoration
Cost shall be retained by Landlord. In the event of any temporary Condemnation,
this Lease shall remain in full effect and Tenant shall be entitled to receive
the Net Proceeds allocable to such temporary Condemnation, except that any
portion of the Net Proceeds allocable to the period after the expiration or
termination of the Term shall be paid to Landlord. If the cost of any
rebuilding, replacement or repair required to be made by Tenant pursuant to this
subsection 11.05 shall exceed the amount of such Net Proceeds, the deficiency
shall be paid by Tenant.
ARTICLE XII
Reserve
Section 12.01. In addition to any Basic Rent, Additional Rent and any
other sums due under this Lease, Tenant shall pay to Landlord, concurrently with
each payment of Basic Rent, a monthly installment for Annual Replacement Reserve
Costs (as defined below and referred to herein as the "Reserve"). "Annual
Replacement Reserve Costs" is hereby defined as the estimated annual replacement
reserve for repair and replacement to the structure of the Buildings and
replacement of the roof of the Buildings. The annual Reserve shall be 12.5 cents
($0.125) per sq.ft. per annum and each monthly installment shall be one twelfth
(1/12th) of such amount. The Reserve shall be held by the Landlord, in escrow,
and the following shall apply:
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i) Tenant acknowledges and agrees that the Reserve may be pledged to
Landlord's mortgagee(s);
ii) The Reserve shall be kept in a non-interest bearing account unless
Landlord is required by law to pay interest in which event the
Reserve shall be placed in an interest bearing account under
Tenant's tax identification number and interest earned thereon shall
be taxed to the Tenant;
iii) So long as no default has occurred under this Lease and is
continuing, any amount remaining in the Reserve at the termination
of the Lease, including any permitted Renewal Term, shall be
returned to the Tenant; and
iv) Landlord's right to possession of the Demised Property for
non-payment of Basic Rent, or for any other reason, shall not in any
event be affected by reason of the Landlord's holding the Reserve.
Section 12.02. So long as there is no default has occurred under this
Lease and is continuing, Tenant shall have the option, but not the obligation,
to utilize the Reserve for structural repairs or replacements to the Buildings
and for the replacement of the roof(s) of the Building(s). Tenant shall access
the Reserve and conduct any permitted repairs or replacements subject to the
requirements of and in the same manner as set forth in Section 11.03 above
except that any remaining proceeds shall remain in the Reserve.
The foregoing is in addition to, and not in lieu of, Tenant's continuing
obligation to be responsible for all structural and roof repairs and
replacement.
ARTICLE XIII
Compliance With Laws, Etc.; Environmental Matters
Section 13.01. Tenant shall not do or permit anything to be done in the
Demised Premises which shall constitute a public nuisance or which will conflict
with the regulations of the Fire Department or with any insurance policy upon
said improvements or any part thereof or which will conflict with or violate any
governmental law, regulation, ordinance or code.
Section 13.02. Tenant shall, at its own expense, obtain all necessary
environmental and operating permits and comply with all present and future
requirements of law and with all present and future ordinances or orders, rules
and regulations of any Federal, State, Municipal or other public authority
affecting the Demised Premises and with all requirements of the Fire Insurance
Exchange or similar body, and of any liability insurance company insuring
Landlord against liability for accidents in or connected with the Demised
Premises including, but not limited to laws, ordinances, orders, rules and
regulations which apply to the interior or exterior of the Demised Premises, the
structural or nonstructural parts thereof, and to make all improvements and
repairs required by such laws, ordinances, orders, rules and regulations,
ordinary or extraordinary, foreseen or unforeseen.
Section 13.03. Tenant acknowledges and agrees to comply with all
applicable municipal, county, State, and Federal laws, rules and regulations now
or hereafter enacted or amended (collectively, "Laws") with respect to its use
of the Demised Premises. Tenant acknowledges that it has reviewed the documents
listed as exceptions 7, 8, 9 and 10 as set forth on Schedule B-II of that
14
certain Title Commitment issued by First American Title Insurance Company of New
York (Title Number 3008-147496 with an effective date of May 9, 2006) naming Net
Lease Advisor's, LLC as "Purchaser". Tenant shall comply with the requirements
of such documents and shall take any and all required actions or inactions
necessary to comply with and maintain compliance with such requirements.
Section 13.04. Environmental Compliance.
(a) For purposes of this Lease
(i) the term "Environmental Laws" shall mean and include the Resource
Conservation and Recovery Act, as amended by the Hazardous and Solid
Waste Amendments of 1984, the Comprehensive Environmental Response,
Compensation and Liability Act, the Hazardous Materials
Transportation Act, the Toxic Substances Control Act, the Federal
Insecticide, Fungicide and Rodenticide Act and all applicable
federal, state and local environmental laws, ordinances, rules,
requirements, regulations and publications, as any of the foregoing
may have been or may be from time to time amended, supplemented or
supplanted, and any and all other federal, state or local laws,
ordinances, rules, requirements, regulations and publications, now
or hereafter existing, relating to the preservation of the
environment or the regulation or control of toxic or hazardous
substances or materials; and
(ii) the term "Regulated Substance" shall mean and include any, each and
all substances or materials now or hereafter, regulated pursuant to
any Environmental Law, including but not limited to any such
substance or material now or hereafter defined as or deemed to be a
"regulated substance", "pesticide", "hazardous substance" or
"hazardous waste" under any Environmental Law, or included in any
similar or like classification or categorization, thereunder.
(b) Tenant shall
(i) not cause or permit any Regulated Substance to be placed, held,
located, released, transported or disposed of on, under, at or from
the Demised Premises or to otherwise adversely affect the Demised
Premises;
(ii) contain at or remove from the Demised Premises, or perform any other
necessary or desirable remedial action regarding, any Regulated
Substance in any way affecting the Demised Premises if, as and when
such containment, removal or other remedial action is required under
any Environmental Law and, whether or not so required, shall perform
any containment, removal or remediation of any kind involving any
Regulated Substance in any way affecting the Demised Premises in
compliance with all Laws, and shall arrange for periodic
environmental tests to be conducted at the Demised Premises by
qualified companies specializing in environmental matters and
reasonably satisfactory to Landlord in order to ascertain compliance
15
with all Laws and the requirements of this Lease, all of the
foregoing to be at Tenant's sole cost and expense. Further, Tenant
shall, upon the request of Landlord, provide Landlord with a bond or
letter of credit, in form and substance satisfactory to Landlord, in
an amount sufficient to cover the aggregate of the foregoing costs;
(iii) provide Landlord with written notice (and a copy as may be
applicable) of any of the following within five (5) days thereof:
(A) Tenant's obtaining knowledge or notice of any kind of the
presence, or any actual or threatened release, of any Regulated
Substance in any way affecting the Demised Premises; (B) Tenant's
receipt or submission, or Tenant's obtaining knowledge or notice of
any kind, of any report, citation, notice or other communication
from or to any federal, state or local governmental or
quasigovernmental authority regarding any Regulated Substance in any
way affecting the Demised Premises; or (c) Tenant's obtaining
knowledge or notice of any kind of the incurrence of any cost or
expense by any federal, state or local governmental or
quasigovernmental authority or any private party in connection with
the assessment, monitoring, containment, removal or remediation of
any kind of any Regulated Substance in any way affecting the Demised
Premises, or of the filing or recording of any lien on the Demised
Premises or any portion thereof in connection with any such action
or Regulated Substance in any way affecting the Demised Premises;
and
(iv) in addition to the requirements of this Section 13.04 hereof, defend
all actions against Landlord and its members, officers, employees,
agents and lenders (the "Indemnified Parties") and pay, protect,
indemnify and save harmless the Indemnified Parties from and against
any and all liabilities, losses, damages, costs, expenses
(including, without limitation, reasonable attorneys' fees and
expenses), causes of action, suits, claims, demands or judgments of
any nature relating, directly or indirectly, to any Environmental
Laws, Regulated Substance or other environmental matters. Tenant
shall comply with all Environmental Laws in existence now or in the
future and, if some action(s) or inaction(s) is required pursuant to
any such future Environmental Laws, Tenant shall take such action(s)
or inaction(s) and shall fully comply with such Environmental Laws
at its sole cost and expense. The indemnity and the compliance
obligation of Tenant contained in this Section 13.04 shall survive
the expiration or earlier termination of this Lease.
(v) Notwithstanding anything to the contrary in this Section 13.04,
Landlord hereby acknowledges that Tenant uses certain Regulated
Substances, and may use other Regulated Substances in the future,
and that such use of Regulated Substances in connection with the
operation of its business on the Demised Premises shall not be deem
a violation of this Lease, as long as such use complies with
applicable Environmental Laws.
16
Section 13.05. Tenant shall immediately provide the Landlord with copies
of all correspondence, reports, notices, orders, findings, declarations and
other materials pertinent to the Tenant's compliance and the requirements of the
New York Department of Environmental Protection ("DEP") with respect to any
Environmental Law as they are issued or received by the Tenant.
Section 13.06. Tenant covenants to indemnify, defend and hold Landlord and
each mortgagee of the Demised Premises harmless from and against any and all
liabilities, damages, claims, losses, judgments, causes of action, costs and
expenses (including, without limitation, the fees and expenses of counsel and
consultants and expenses incurred by Landlord as the result of the filing of a
lien against the Demised Premises by any governmental agency or authority) which
may be incurred by Landlord or any such mortgagee or threatened against Landlord
or such mortgagee, relating to or arising out of any breach by Tenant of the
undertakings set forth in this Lease, or the release of any Hazardous Substances
in, on, about, above or under the Demised Premises occurring as a result of
Tenant's activities on and occupancy of the Demised Premises.
Section 13.07. Intentionally omitted.
Section 13.08. On or before the Commencement Date, Tenant, at its sole
cost and expense, shall provide Landlord with an environmental insurance policy
issued by AIG or similar insurance carrier specializing in environmental
insurance policies, as required by Landlord, including, without limitation, a
so-called "Cost-Cap Environmental Policy" and/or a so-called "Pollution Coverage
Legal Liability Policy" (collectively, the "Environmental Insurance"). The
Environmental Insurance shall name Landlord (and its mortgagee, if so required)
as the insured and loss payee. The amounts, coverage and insurance company
issuing the Environmental Insurance must be acceptable to Landlord in all
respects. Tenant shall maintain the Environmental Insurance for the benefit of
Landlord and its mortgagee throughout the 20 Year Term in the amount of
$5,000,000.
Section 13.09. In the event of Tenant's failure to comply in full with the
provisions of this Article XIII, Landlord may at its option, but without any
obligation to do so, perform any or all of Tenant's obligations and all costs
and expenses incurred by Landlord in exercise of such rights shall be deemed to
be Additional Rent payable to Landlord upon demand.
Section 13.10. The undertakings and indemnities of this Article XIII shall
survive the termination or sooner expiration of the Lease and surrender of the
Demised Premises and shall also survive sale, or lease or assignment of the
Demised Premises by Landlord.
Section 13.11. The undertakings of Tenant contained in this Section shall
not require Tenant to remove those Hazardous Substances referred to in the
Environmental Report annexed hereto as Exhibit C unless and until (i) Tenant
shall remove the Building which lies above such material or (ii) a governing
agency shall order Tenant to do so, provided that Tenant shall not be required
to comply with such order so long as it is contesting the same in a manner which
prevents the imposition of any penalty or fine or, in such event, Tenant
provides a bond in an amount sufficient to satisfy any penalty or fine to which
landlord or the Demised Premises may be subjected.
17
Section 13.12. The Tenant shall, at least once every Lease Year, drain the
storm drain located between the buildings located on the property known as 0000
Xxxxx Xxxxx Xxxxxx and 0000 Xxxxx Xxxxxxx Xxxxxx.
ARTICLE XIV
Subordination & Estoppel Certificate
Section 14.01. This Lease is and shall be automatically subject and
subordinate to all present and future ground leases and mortgages of Landlord
affecting the Demised Premises (including all modifications, extensions and
renewals thereof) without the need for further documentation or instrumentation
to effectuate such subordination, provided that as a condition of such
subordination the holder of such ground lease or mortgage provides Tenant a
Non-Disturbance Agreement in form and substance reasonably satisfactory to
Tenant and such mortgagee or ground lessor. However, if requested by Landlord
and subject to Tenant's receipt of the aforesaid Non-Disturbance Agreement,
Tenant shall execute any instrument which reasonably may be requested by
Landlord to confirm the subordination of this Lease to any such ground lease or
mortgage. Landlord may assign this Lease to any such mortgagee in connection
with any such lien, and subject to Tenant's receipt of the aforesaid
Non-Disturbance Agreement Tenant shall execute any instrument which may be
necessary or desirable by Landlord or the holder of said lien in connection with
said assignment.
Section 14.02. Tenant agrees, within ten (10) days of Landlord's written
request, to certify by written instrument duly executed and acknowledged to any
mortgagee, ground lessee or purchaser, or any proposed mortgagee, ground lessee
or purchaser, that this Lease is in full force and effect, or if not, in what
respect it is not, that this Lease has not been modified, or the extent to which
it has been modified, that there are no existing defaults hereunder to the best
of the knowledge of the party so certifying, or specifying the defaults, if any,
and any other information which Landlord shall reasonably require.
Section 14.03. Tenant shall not seek to enforce any remedy it may have
under this Lease for any default on the part of Landlord without first giving
written notice by certified mail, return receipt requested, specifying the
default in reasonable detail, to any Landlord's mortgagee whose address has been
provided to Tenant and affording Landlord's mortgagee a reasonable opportunity
to perform Landlord's obligations under this Lease.
ARTICLE XV
Defaults & Remedies
Section 15.01. The occurrence of any one or more of the following acts or
occurrences shall be referred to as a default or as an "Event of Default" under
this Lease:
18
(A) If Tenant shall fail to make any payment of Basic Rent or pay
Additional Rent or any other amount due under this Lease as and when the
same shall become due and payable; or
(B) If Tenant shall default in the performance of or compliance with any
of the other covenants, agreements, terms or conditions of this Lease to
be performed by Tenant (other than any default curable by payment of
money), and such default shall continue for a period of thirty (30) days
after written notice thereof from Landlord to Tenant; or where such
default reasonably cannot be cured within such thirty (30) days, if Tenant
shall not have commenced the curing thereof within such period of time and
shall not be proceeding with reasonable diligence to cure it, provided,
however, that such default must be cured within ninety (90) days after
commencement of the curing thereof; or
(C) If Tenant or any guarantor of this Lease shall make an assignment for
the benefit of creditors or file a voluntary petition in bankruptcy or
shall be adjudicated a bankrupt or insolvent, or shall file any petition
or answer seeking any reorganization, composition, readjustment or similar
relief under any present or future bankruptcy or other applicable law, or
shall seek or consent to or acquiesce in the appointment of any trustee,
receiver, or liquidator of Tenant or any guarantor of this Lease or of all
or any substantial part of its properties or of all or any part of the
Demised Premises; or
(D) If, within thirty (30) days after the filing of an involuntary
petition in bankruptcy against Tenant or any guarantor of this Lease, or
the commencement of any proceeding against Tenant or such guarantor
seeking any reorganization, composition, readjustment or similar relief
under any law, such proceeding shall not have been dismissed, or if,
within thirty (30) days after the appointment (with or without the consent
or acquiescence of Tenant or such guarantor), of any trustee, receiver or
liquidator of Tenant or such guarantor, or of all or any part of the
Demised Premises, such appointment shall not have been vacated or stayed
on appeal or otherwise, or if, within thirty (30) days after the
expiration of any such stay, such appointment shall have been vacated, or
if, within thirty (30) days after the taking possession, without the
consent or acquiescence of Tenant or such guarantor, of the property of
Tenant, or of such guarantor by any governmental office or agency pursuant
to statutory authority for the dissolution or liquidation of Tenant or
such guarantor, such taking shall not have been vacated or stayed on
appeal or otherwise; or
(E) If the Demised Premises shall be abandoned, unoccupied or vacated by
Tenant; or
(F) If Tenant liquidates, ceases to exist or sells all or a substantial
portion of its assets; or
(G) Intentionally omitted.
(H) If any representation or warranty made by Tenant or any guarantor of
this Lease that is set forth herein or in any contract, notice,
certificate, estoppel or request proves to be incorrect in any respect; or
19
(I) If a final judgment of more than $1,000,000 or any amount which
creates a default under any material debt of Tenant or any guarantor
occurs and is not discharged or bonded within thirty (30) days of such
occurrence.
Section 15.02. Following the occurrence of an Event of Default, Landlord,
in addition to any and all rights and remedies it may have at law and equity,
may at its option exercise any one or more of the following remedies:
(a) Landlord may give Tenant a notice (the "Eviction Notice") of its
intention to terminate this Lease specifying a date not less than five (5) days
thereafter, upon which date this Lease, the term and estate hereto granted and
all rights of Tenant hereunder shall expire and terminate. Notwithstanding the
foregoing: (i) Tenant shall remain liable for damages as hereinafter set forth,
and (ii) Landlord may institute dispossession proceedings for non-payment of
rent, or other proceedings to enforce the payment of rent without giving the
Eviction Notice. Upon any such eviction or expiration of this Lease, Tenant
shall peaceably quit and surrender the Demised Premises to Landlord, and
Landlord may without further notice enter upon. re-enter, possess and repossess
itself thereof, by summary proceedings, ejectment or otherwise and may have,
hold and enjoy the Demised Premises and the right to receive all rental and
other income of and from the same as heretofore provided. However, so long as
Tenant is not in default in the payment of Basic Rent or Additional Rent or in
the performance of any other terms, covenants and conditions of this Lease
beyond the expiration of relevant cure periods, Landlord shall not terminate
this Lease.
(b) Landlord may, at Landlord's sole option (without imposing any duty
upon Landlord to do so), and Tenant hereby authorizes and empowers Landlord to:
(i) re-enter the Demised Premises as Tenant's agent or for any occupant of the
Demised Premises under Tenant, or for its own account or otherwise, (ii) relet
the same for any term, (iii) restore the Demised Premises to the condition in
which it was required to be surrendered by Tenant under this Lease, and (iv)
receive and apply the rent so received to pay all reasonable fees and expenses
incurred by Landlord, directly or indirectly, as a result of Tenant's default,
including, without limitation, any reasonable legal fees and expenses arising
therefrom, the reasonable cost of re-entry, repair and reletting and the payment
of the rent and other charges due hereunder. No entry, re-entry or reletting by
Landlord, whether by summary proceedings, termination or otherwise, shall
discharge Tenant from any of its liability to Landlord as set forth in this
Lease, and in no event shall Tenant be entitled to or receive any benefit or
credit from any rental in excess of the rent reserved under this Lease which
results from a reletting of the Demised Premises after Tenant's default;
(c) Regardless of whether Landlord relets the Demised Premises, or enters
or re-enters the same, whether by summary proceedings, termination or otherwise,
Tenant shall pay Landlord, and be liable to Landlord for the full amount of all
Basic Rent, Additional Rent, and all other charges then due or thereafter to
become due to Landlord hereunder less any sums collected by Landlord during the
remaining term of this Lease, such amount shall be paid by Tenant to Landlord on
the days originally fixed herein for payment thereof. Landlord may apply any or
20
all sums held by Landlord as a security deposit pursuant to Article XXIII toward
all sums due by Tenant for Basic Rent, Additional Rent or any other obligations
of Tenant;
(d) If Tenant shall fail to pay any Taxes or make any other payment
required to be made under this Lease, or shall default in the performance of any
covenant, agreement, term, provision or condition herein contained, Landlord
may, without being under any obligation to do so, and without thereby waiving
such default, make such payment and/or remedy such default for the account and
at the sole expense of Tenant. Tenant shall pay to Landlord, on demand, the
amount of all sums so paid and all expenses so incurred by Landlord, together
with interest, at the rate set forth in subparagraph 15.02(e) below, on such
sums and expenses from the date incurred until payment in full;
(e) Interest on any sums due to Landlord from Tenant under this Lease
shall accrue from the date such sums became due and payable at the lesser of:
(a) the highest permitted rate by law, and (b) eighteen percent (18%) per annum.
Landlord, at its option, shall forthwith, notwithstanding any other provision of
this Lease, be entitled to recover from Tenant (in lieu of all other claims for
damages on account of such termination) as and for liquidated damages an amount
equal to the excess of all Basic Rent and Additional Rent reserved hereunder for
the unexpired portion of the Term of this Lease discounted at the rate of three
(3%) percent per annum to the then present worth, over the fair rental value of
the Demised Premises at the time of termination for such unexpired portion of
the Term (the rent received on a reletting shall be conclusively accepted as the
fair rental value). Additionally, Tenant agrees to pay, as Additional Rent, all
reasonable attorney's fees and other expenses incurred by Landlord in enforcing
any of the obligations under this Lease, including but not limited to the
payment of any rental obligations hereunder. This covenant shall survive the
expiration or sooner termination of this Lease.
(f) Nothing herein contained shall limit or prejudice the right of
Landlord, in any bankruptcy or reorganization or insolvency proceeding, to prove
for and obtain as liquidated damages by reason of such termination an amount
equal to the maximum allowed by any statute or rule of law whether such amount
shall be greater or less than the excess referred to above.
Section 15.03. All remedies of Landlord set forth herein, and all remedies
of Landlord at law and in equity, may be exercised from time to time in such
order and in such combination as Landlord elects.
Section 15.04. Tenant hereby waives all right of redemption or re-entry or
re-possession to which Tenant or any person under it may be entitled by any law
now or hereafter in force. In addition, in the event of an Event of Default
which results in the Landlord recovering possession of the Demised Premises,
Landlord shall be under no duty to mitigate Tenant's damages as provided for in
this Article XV unless such mitigation is required by applicable law. Landlord's
remedies hereunder are in addition to any remedy allowed by law.
Section 15.05. In the event of any breach or threatened breach by Tenant
of any of the agreements, terms, covenants or conditions contained in this
Lease, Landlord shall be entitled to enjoin such breach or threatened breach and
shall have the right to invoke any right or remedy allowed at law or in equity
or by statute or otherwise as though re-entry, summary dispossession
21
proceedings, and other remedies were not provided for in this Lease. During the
pendency of any proceedings brought by Landlord to recover possession by reason
of default, Tenant shall continue all money payments required to be made to
Landlord, and Landlord may accept such payments for use and occupancy of the
Demised Premises. In such event, Tenant waives its right in such proceedings to
claim as a defense that the receipt of such money payments by Landlord
constitutes a waiver by Landlord of such default.
Section 15.06. No failure by Landlord to insist upon the strict
performance of any covenant, agreement or term or condition of this Lease, or to
exercise any right or remedy upon default, and no acceptance of full or partial
Basic Rent, Additional Rent or any other sum due under this Lease during the
continuance of any such default shall constitute a waiver of such default or of
any covenant, agreement, term or condition. No covenant, agreement, term or
condition of this Lease, or any breach thereof, shall be waived, altered or
modified except by a written instrument executed by Landlord.
Section 15.07. In the event of any breach or threatened breach by Tenant
of any of the terms or conditions contained in this Lease, Landlord shall be
entitled to enjoin such breach or threatened breach and shall have the right to
invoke any right or remedy allowed at law or in equity.
ARTICLE XVI
Assignment and Subletting
Section 16.01. Unless a default shall have occurred hereunder and be
continuing, Tenant may, for its own account, assign this Lease or sublet all or
any part of the Demised Premises for the Term of this Lease subject to the
approval of Landlord which approval shall not be unreasonably withheld, delayed
or conditioned. Each such assignment or sublease shall expressly be made subject
to the provisions hereof. No such assignment or sublease shall modify or limit
any right or power of Landlord hereunder or affect or reduce any obligation of
Tenant hereunder and all such obligations shall be those of Tenant and shall
continue in full effect as obligations of a principal and not of a guarantor or
surety, as though no subletting or assignment had been made, such liability of
the Tenant named herein to continue notwithstanding any subsequent modifications
or amendments of this Lease; provided, however, that (other than with respect to
any modifications required by law or on account of bankruptcy or insolvency) if
any modification or amendment is made without the consent of the Tenant named
herein (which consent shall not be unreasonably withheld or delayed), such
modification or amendment shall be ineffective as against the Tenant named
herein to the extent, and only to the extent, that the same shall materially
increase the obligations of the Tenant, it being expressly agreed that (even if
22
any such modification or amendment shall materially increase the likelihood of a
default by Tenant under this Lease) the Tenant named herein shall remain liable
to the full extent of this Lease as if such modification had not been made.
Neither this Lease nor the Term hereby demised shall be mortgaged by Tenant, nor
shall Tenant mortgage or pledge its interest in any sublease of the Demised
Premises or the rentals payable thereunder. Any such mortgage or pledge, any
sublease made otherwise than as expressly permitted by this Section 16.01 and
any assignment of Tenant's interest hereunder made otherwise than as expressly
permitted by this Section 16.01 shall be void. Tenant shall, within twenty (20)
days after the execution of any assignment or sublease, deliver a conformed copy
thereof to Landlord.
Section 16.02 Related Parties. At any time and from time to time Tenant's
interest under this Lease may be assigned and re-assigned without Landlord's
consent to a corporation or other entity which is a parent, subsidiary or
affiliate of Tenant or to a corporation or other entity resulting from any
consolidation, reorganization, or merger with Tenant, or any ot its parent or
subsidiary entities. For purposes of this paragraph, an affiliate of Tenant
shall mean any entity which directly or indirectly controls or is controlled by
Tenant or Guarantor.
Section 16.03. Tenant agrees that it shall not be unreasonable for
Landlord to withhold its consent to a proposed sublease or assignment if:
I. The proposed assignee refuses to provide Landlord with
financial statements covering a period of at least 12 months
ending no earlier than six months and no later than three
months prior to the as of which they are provided to Landlord
or as of the effective date of the proposed assignment, the
Proposed Assignee shall have a financial standing
substantially inferior to the financial standing of Tenant as
of the Commencement Date;
II. The Proposed Assignee shall not agree in writing to assume all
of the obligations of Tenant under this Lease from and after
the date of the assignment;
III. The term of any such assignment or sublease shall be less than
five (5) years or the balance of the term of this Lease, if
less;
IV. Tenant or the Proposed Assignee shall fail to pay to Landlord
a processing fee of Two Thousand Five Hundred and 00/100
($2,500.00) Dollars in connection with the proposed sublet or
assignment of this Lease;
V. Tenant shall fail to furnish Landlord with a true and correct
copy of the sublease or assignment and assumption not less
than thirty (30) days prior to execution for Landlord's review
and approval (such approval not to be unreasonably withheld)
and a fully executed counterpart of the sublease or assignment
and assumption of this Lease, as applicable, within ten (10)
days after the date of the execution of same;
VI. Tenant shall refuse to pay to Landlord fifty (50%) percent of
any sums (including without limitation Basic Rent and
Additional Rent) received by Tenant, as and when received, in
excess of the Rent payable by Tenant to Landlord as Rent under
this Lease.
VII. The Proposed Assignee is not solvent or is generally held in
disrepute.
Section 16.04 Limits on Assignees
Notwithstanding anything to the contrary contained in this Lease, Tenant shall
not., without the prior written consent (which consent, to be effective must
expressly state the Landlord is aware that the subject assignee or subtenant, as
the case may be, is a tax-exempt entity) of Landlord in each instance (which
Landlord may grant or withhold in its sole discretion), assign all or any part
of its interest in this Lease or sublet all or any part of the Demised Premises,
or in any other manner grant any right to use, occupy or otherwise "lease"
(within the meaning of Internal Revenue Code of 1986, Section 168(h), as amended
23
("Section 168(h)")) all or any part of the Demised Premises, to any "tax-exempt
entity", as defined in Section 168(h), to the extent that the aggregate portion
of the Premises sublet, assigned, used, occupied or "leased" by all such
tax-exempt entities shall be more than thirty-five (35%) percent of the Demised
Premises. Tenant agrees that any assignment of lease or subletting made in
violation of the foregoing sentence will be deemed initially void, and Tenant
acknowledges that, notwithstanding such voiding, Landlord may incur damages as a
result of such violations and Tenant agrees to indemnify Landlord from any such
damages
Section 16.05. Transfer or Pledge by Landlord
Landlord shall be free to transfer its fee interest in the Demised Premises or
any part thereof or interest therein, subject, however, to the terms of this
Lease and the assumption of such terms by the proposed assignee. Any such
transfer shall relieve the transferor of all liability and obligation hereunder
(to the extent of the interest transferred) accruing after the date of the
transfer. Landlord shall be free to pledge or mortgage its interest in the
Demised Premises and this Lease. Tenant agrees to make such reasonable
modifications to this Lease as may be requested by Landlord's mortgagee(s), if
any, provided that such modifications do not materially increase Tenant's
obligations or increase the rent due hereunder
Section 16.06. If Tenant is an entity other than an entity that files
periodic reports with the Securities and Exchange Commission under the
Securities Exchange Act of 1934 and whose stock is publicly traded, the
provisions of this Article XVI shall apply to a transfer (however accomplished,
whether in a single transaction or in a series of related or unrelated
transactions) of stock (or any other mechanism such as, by way of example, the
issuance of additional stock, a stock voting agreement or change in class(es) of
stock) which results in a change of control of Tenant as if such transfer of
stock (or other mechanism) resulting in a change of control of Tenant were an
assignment of this Lease, and if Tenant is a limited liability company,
partnership, limited partnership, joint venture or other entity other than an
entity that files periodic reports with the Securities and Exchange Commission
under the Securities Exchange Act of 1934 and whose interests are publicly
traded, such provisions shall apply with respect to a transfer (by one or more
transfers) of an interest in the entity or distributions of profits and losses
of such partnership, limited partnership or joint venture (or other mechanism,
such as, by way of example, the creation of additional general partnership or
limited partnership interests) which results in a change of control of such an
entity, partnership or joint venture as if such transfer of an interest in the
distributions of profits and losses of such entity, partnership or joint venture
which results in a change of control of such entity, partnership or joint
venture were an assignment of this Lease.
Section 16.07. Tenant shall have no claim, and hereby waives the right to
any claim, against Landlord for money damages by reason of any refusal,
withholding or delaying by Landlord of any consent to Tenant's request for a
proposed subletting or assignment.
Section 16.08. Any assignment or subletting that is not made in compliance
with the provisions of this Article XVI shall be void, and at Landlord's option,
shall constitute an Event of Default under this Lease. The provisions of this
Article XVI do not and shall not be construed to create any rights in favor of
any third parties.
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ARTICLE XVII
Notices
Section 17.01. All notices, demands, consents, approvals, requests and
instruments or documents by this Lease required or permitted to be given to or
served upon Landlord or Tenant shall be in writing. Any such notice, demand,
consent, approval, request, instrument or document shall be sufficiently given
or served only if delivered personally or if sent by a recognized overnight
courier service or if sent by certified or registered mail, postage prepaid,
addressed at the address set forth below, or at such other address as it shall
designate by notice, as follows:
If to Landlord: STNLA-SPVEF Bay Shore, LLC
Single-Tenant Financial Corp
00000 Xxxxx Xxxxx
Xxxxxx Xxxx, XX 00000
Att: Xxxxx Xxxxxxxx
With Copy to: Xxxxxxxx X. Xxxxxxx, Esq.
000 Xxxxxxxx Xxx Xxxxx, Xxxxx 000,
Xxxxx, Xxxxxxx 00000
Xxxxxx00@xxx.xxx
If to Tenant: Air Industries Machining, Corp.
0000 Xxxxx Xxxxxxx Xxxxxx
Xxx Xxxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxx, Executive Chairman
With Copy to: Xxxxx & Xxx Xxxxxx LLP
0 Xxxx Xxxxxx, 00xx Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. XxXxxx, Esq.
Any notice so sent shall be deemed delivered one (1) business day after
delivery to the overnight courier or five (5) business days after deposit in the
U.S. mail. The addresses and names of the parties to whom notices are to be sent
may be changed by the giving of a notice as provided in this Section 17.01.
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ARTICLE XVIII
Holding Over
Section 18.01. If Tenant shall remain in the Demised Premises after the
expiration of the Term without having executed and delivered a new lease with
Landlord, such holding over shall not constitute a renewal or extension of this
Lease. Landlord may, at its option, elect to treat Tenant as one who has not
removed at the end of its Term, and thereupon be entitled to all the remedies
against Tenant provided by law and in equity in that situation, or Landlord may
elect, at its option, to construe such holding over as a tenancy from month to
month made at the sufferance of Landlord, subject to all the terms and
conditions of this Lease, except: (a) as to duration thereof; and (b) that the
Basic Rent shall be at a monthly rate equal to two hundred (200%) percent of the
Basic Rent payable in the month immediately prior to the expiration of the Term
(or renewal thereof). The time limitations described in this Article XVIII shall
not be subject to extension for Force Majeure.
ARTICLE XIX
Liens
Section 19.01. Tenant shall not do any act, or make any contract, which
may create or be the foundation for any lien or other encumbrance upon any
interest of Landlord or any ground or underlying lessor in any portion of the
Building, the Land, or the Demised Premises. If, because of any act or omission
(or alleged act or omission) of Tenant, any notice of intention, mechanic's or
other lien (collectively, a "Lien"), charge or order for the payment of money or
other encumbrance shall be filed against Landlord and/or any ground or
underlying lessor and/or any portion of the Demised Premises (whether or not
such lien, charge, order, or encumbrance is valid or enforceable as such),
Tenant shall, at its own cost and expense, cause same to be discharged of record
or bonded within fifteen (15) days after the filing thereof; and Tenant shall
indemnify, defend and save harmless Landlord and all ground and underlying
lessor(s) against and from all costs, liabilities, suits, penalties, claims, and
demands, including counsel fees, resulting therefrom. If Tenant fails to comply
with the foregoing provisions, Landlord shall have the right (but not the
obligation) to discharge or bond any such lien, charge, order, or encumbrance,
and Tenant agrees to reimburse Landlord for all costs, expenses and other sums
of money in connection therewith with interest at the maximum rate permitted by
law promptly upon demand, and all such sums shall be Additional Rent.
Section 19.02. All materialmen, contractors, artisans, mechanics,
laborers, and any other persons now or hereafter contracting with Tenant or any
contractor or subcontractor of Tenant for the furnishing of any labor services,
materials, supplies, or equipment with respect to the Building or any other
portion of the Demised Premises, at any time from the date hereof until the end
of the Lease Term, are hereby charged with notice that they must look
exclusively to Tenant and not to any mechanic's or other lien on the Demised
Premises to obtain payment for same.
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ARTICLE XX
Bankruptcy
Section 20.01. If, as a matter of law, Landlord has no right on the
bankruptcy of Tenant to terminate this Lease, then, if Tenant, as debtor, or its
trustee wishes to assume or assign this Lease, in addition to curing or
adequately assuring the cure of all defaults existing under this Lease on
Tenant's part on the date of filing of the proceeding (such assurances being
defined below), Tenant, as debtor, or the trustee or assignee, must also furnish
adequate assurances of future performance under this Lease (as defined in the
Bankruptcy Code (as hereinafter defined). In the case of an assignee, Tenant or
its trustee shall assure Landlord that the assignee is financially capable of
assuming this Lease, and that its use of the Demised Premises will not be
detrimental to Landlord. In a reorganization under Chapter 11 of 11 U.S.C. ss.
101 et seq. (the "Bankruptcy Code"), the debtor or trustee must assume this
Lease or assign it within sixty (60) days from the filing of the proceedings, or
it shall be deemed to have rejected and terminated this Lease.
Section 20.02. If this Lease is assigned to any person or entity pursuant
to the provisions of the Bankruptcy Code, any and all monies or other
consideration to be delivered in connection with the assignment shall be
delivered to Landlord, shall be and remain the exclusive property of Landlord
and shall not constitute property of Tenant or of the estate of Tenant within
the meaning of the Bankruptcy Code. Any person or entity to which this Lease is
assigned pursuant to the provisions of the Bankruptcy Code shall be deemed to
have assumed all of the obligations arising under this Lease on or after the
date of the assignment and shall on demand execute and deliver to Landlord an
instrument confirming the assumption.
ARTICLE XXI
Inspection, For Sale and For Rent Signs
Section 21.01. Landlord, or its agents, shall have the right to enter the
Demised Premises at reasonable hours and by providing Tenant with no less than
one (1) business day's notice (except that no notice shall be required in an
emergency) to examine the same, or to exhibit the Demised Premises to
prospective purchasers and lenders and to place upon the Demised Premises a
suitable "For Sale" sign. For twelve (12) months prior to the expiration of the
Term, Landlord, or its agents, may exhibit the Demised Premises to prospective
tenants and may place the usual "For Rent" signs thereon.
ARTICLE XXII
Signs
Section 22.01. Tenant shall not affix or place any sign, advertisement or
notice upon any part of the Demised Premises, except in conformity with all
applicable governmental ordinances and regulations and provided Tenant shall
apply for and receive all necessary governmental approvals required for erection
and maintenance of the sign; and no later than the last day of the Term, Tenant
shall, at Tenant's expense, remove the sign and repair all damage done by or in
connection with the installation or removal of the sign.
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ARTICLE XXIII
Advanced Rent, Security and Late Charge
Section 23.01. On or before the Commencement Date, Tenant shall deposit
with Landlord, as security for the payment of the Rent due hereunder and the
full and faithful performance by Tenant of the covenants and conditions on the
part of Tenant to be performed under this Lease, an irrevocable, unconditional,
transferable "evergreen" commercial letter of credit issued by an S&P "A" rated
commercial bank approved in advance by Landlord and otherwise acceptable in all
respects to Landlord, in its sole and absolute discretion (the "Letter of
Credit"). The initial amount of the Letter of Credit shall be the sum of One
Hundred Twenty Seven Thousand Five hundred and 00/100 ($127,500) Dollars. The
Letter of Credit shall have an initial expiration date of not less than one (1)
year from the Commencement Date and shall provide for the automatic extension of
its expiration date for successive one (1) year periods throughout the Term,
unless Landlord is given written notice to the contrary by the issuing bank not
less than sixty (60) days prior to the expiration of the Letter of Credit. Not
less than thirty (30) days prior to the expiration of the Letter of Credit, or
at any time following notice by the issuing bank that it will not renew the
Letter of Credit, Tenant shall provide a substitute letter of credit conforming
in all respects to the requirements of this Section 23.01. In the event: (i) of
any default by Tenant under this Lease; or (ii) that Tenant has failed to
provide a substitute letter of credit as required by this Section 23.01,
Landlord is hereby authorized to draw upon the Letter of Credit, and shall have
the right to retain the cash proceeds of the Letter of Credit, or so much
thereof as shall remain after curing any default. In such case, Tenant shall
immediately provide Landlord with a substitute letter of credit in the amount
equal to the aggregate of twelve (12) monthly payments of the then-current Basic
Rent.
Section 23.02. Intentionally deleted
Section 23.03. The original Letter of Credit (less any portions thereof
used, applied or retained by Landlord in accordance with this Article 23) shall
be returned to Tenant after the expiration of the Term, provided that Tenant has
fully and faithfully performed all such covenants and conditions of this Lease,
is not in arrears in Rent and has vacated the Demised Premises. In the event of
a sale, pledge, transfer or encumbrance of the Demised Premises subject to this
Lease, Landlord shall have the right to transfer the Letter of Credit to a
purchaser or lender, as applicable, and Landlord shall be considered released by
Tenant from all liability for the return of the Letter of Credit. All costs
incurred in connection with the transfer of the Letter of Credit shall be paid
by Tenant. Tenant agrees to look solely to the new owner for the return of the
Letter of Credit, and it is agreed that this shall apply to every transfer or
assignment made of the Letter of Credit to the new landlord.
Section 23.04. In the event of the insolvency of Tenant or in the event of
the entry of a judgment in bankruptcy in any court against Tenant which is not
discharged within thirty (30) days after entry, or in the event a petition is
filed by or against Tenant under any chapter of the bankruptcy or insolvency
laws of any state or the United States of America, then and in such event
Landlord may require Tenant to deposit additional security in such amount as may
be necessary to adequately assure Tenant's performance of all of its obligations
under this Lease, including all payments subsequently accruing. Failure of
Tenant to deposit the additional security required by this section within ten
(10) days after Landlord's written demand shall constitute a default by Tenant
under this Lease.
28
Section 23.05. Simultaneously with the execution of this Lease, the Tenant
has delivered to Landlord the sum of $45,000.00 as Basic Rent for the first
month of Tenant's rental obligation.
Section 23.06. Tenant shall pay a "Late Charge" of eight (8%) percent of
any installment of Basic Rent or Additional Rent received by Landlord more than
five (5) days after the due date thereof. Landlord and Tenant stipulate and
agree that this Late Charge is a reasonable amount to be charged to Tenant for
the purpose of offsetting Landlord's costs and other charges incurred by
Landlord as a result of Tenant's failure (including, but not limited to,
Landlord's cost of collection efforts) which are incapable of precise definition
at this time. The assessment and/or collection of any of the foregoing charges
shall not in any way be construed or deemed to be a waiver or a continuing
waiver of any of the terms, provisions, covenants, and conditions of this Lease
or any of Landlord's rights hereunder or under applicable law nor shall it be
construed as a cure for any non-payment under this Lease. Tenant shall pay any
such Late Charge on demand.
ARTICLE XXIV
Financial Statements
Section 24.01. Lessee shall deliver to Lessor within thirty (30) days
(except as set forth below) of filing, sending, delivering to lenders or
otherwise making available, copies of all financial statements and copies of all
documents filed with the Securities and Exchange Commission ("SEC"), (including
without limitation all 8-K, 10-K and 10-Q reports, and notices and proxy
statements sent by Lessee to its stockholders); provided, however, that if such
statements and reports do not include the following information, Lessee will
deliver to Lessor the following:
(i) within seven (7) days after filing with the SEC but in no
event more than one hundred twenty (120) days after the end of
each fiscal year of Lessee, (1) a balance sheet of Lessee and
its consolidated subsidiaries as of the end of such year, (2)
a statement of profits and losses of Lessee and its
consolidated subsidiaries for such year, and (3) a statement
of cash flows of Lessee and its consolidated subsidiaries for
such year, setting forth in each of (1), (2), and (3) above,
in comparative form, the corresponding figures for the
preceding fiscal year in reasonable detail and scope and
certified by independent certified public accountants of
recognized national standing selected by Lessee, and within
sixty (60) days after the end of each fiscal quarter of Lessee
a balance sheet of Lessee and its consolidated subsidiaries as
of the end of such quarter and statements of profits and
losses of Lessee and its consolidated subsidiaries for such
quarter setting forth in each case, in comparative form, the
29
corresponding figures for the similar quarter of the preceding
year, in reasonable detail and scope, and complying with the
requirements for Form 10-Q quarterly reports pursuant to the
Securities Exchange Act of 1934, and certified by the chief
financial officer of Lessee; all of the foregoing financial
statements being prepared in accordance with generally
accepted accounting principles, consistently applied; and
(ii) Within ninety (90) days after the end of Tenant's fiscal year
or at any time upon the request of Landlord or Landlord's
lender(s), such financial statements and information
(including, without limitation, copies of public reports filed
by Lessee or financial statements and information delivered by
Lessee to its shareholders or lenders, and if Lessee is part
of a consolidated group, its financial statement consolidating
entries in reasonable detail) regarding the business affairs
and financial condition of Lessee as Lessor may request.
ARTICLE XXV
Intentionally deleted
ARTICLE XXVI
Memorandum of Lease for Recording
Section 26.01. Intentionally omitted.
ARTICLE XXVII
Waiver of Jury Trial/Non-Mandatory Counterclaims
Section 27.01. LANDLORD AND TENANT WAIVE TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER THE LANDLORD OR THE TENANT AGAINST
THE OTHER IN ANY MATTERS WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH
THIS LEASE, THE TENANT'S USE OR OCCUPANCY OF THE DEMISED PREMISES, AND/OR ANY
CLAIM OF INJURY OR DAMAGE.
ARTICLE XXVIII
Landlord's Lien
Section 28.01. Landlord shall have a lien and security interest, in
addition to statutory liens of Landlord now or hereafter in effect, on all
personal property and equipment of Tenant; provided, however, the Landlord
agrees that the lien and security granted herein shall be subordinate to any and
all liens on such personal property and equipment held by Tenant's institutional
lender, whether existing prior to the Initial Commencement Date and/or
hereinafter created or granted by Tenant, and shall be further limited to two
(2) times the Basic Rent.
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ARTICLE XXIX
Limitation of Liability; Definition of "Landlord"
Section 29.01. Notwithstanding anything to the contrary provided in this
Lease, each and every term, covenant, condition and provision of this Lease, is
hereby made specifically subject to the provisions of this Article XXIX. The
term "Landlord" as used in this Lease means only the owner or lessor for the
time being of the Demised Premises so that in the event of any conveyance of
such interest (and the transfer to the transferee of any funds then being held
under this Lease by such owner), the assigning Landlord shall be and hereby is
entirely freed and relieved of any and all obligations of Landlord hereunder
thereafter accruing, and it shall be deemed without further agreement between
the parties and such grantee(s) that the grantee has assumed and agreed to
observe and perform all future obligations of Landlord hereunder. It is
specifically understood and agreed that notwithstanding anything to the contrary
herein provided or otherwise provided at law or in equity, there shall be
absolutely no personal liability to the Landlord in excess of its interest in
the Demised Premises (whether the same be an individual, joint venture, limited
liability company, tenancy in common, firm or partnership, general, limited or
otherwise) or on the part of the members of any firm, limited liability company,
partnership or joint venture or other unincorporated Landlord with respect to
any of the terms, covenants and/or conditions of this Lease. In the event of a
breach or default by Landlord or any of its obligations under this Lease, Tenant
shall look solely to the interest in the Demised Premises of the then Landlord
for the satisfaction of each and every remedy of Tenant, such exculpation of
personal and additional liability which is in excess of such interest in the
Demised Premises to be absolute and without any exception whatsoever.
ARTICLE XXX
Definitions
Section 30.01. Force Majeure. A "Force Majeure" shall mean and include
those situations beyond either party's control, including by way of example and
not by way of limitation, acts of God; accidents; repairs; strikes; shortages of
labor, supplies or materials; inclement weather; or, where applicable, the
passage of time while waiting for an adjustment of insurance proceeds. Any time
limits required to be met by either party hereunder, whether specifically made
subject to Force Majeure or not, except those related to the payment of Basic
Rent or Additional Rent and except as to the time periods set forth in Article
XVIII, shall, unless specifically stated to the contrary elsewhere in this
Lease, be automatically extended by the number of days by which any performance
called for is delayed due to Force Majeure.
31
Section 30.02. Additional Rent. As used in this Lease, "Additional Rent"
shall mean all sums in addition to Basic Rent payable by Tenant to Landlord
pursuant to the provisions of this Lease.
ARTICLE XXXI
Miscellaneous
Section 31.01. Partial Validity. If any term or provision of this Lease or
the application thereof to any party or circumstances shall to any extent be
invalid or unenforceable, the remainder of this Lease or the application of such
term or provision to parties or circumstances other than those to which it is
held invalid or unenforceable, shall not be affected thereby, and each term and
provision of this Lease shall be valid and enforced to the fullest extent
permitted by law.
Section 31.02. Waivers. One or more waivers by either party of the
obligation of the other to perform any covenant or condition shall not be
construed as a waiver of a subsequent breach of the same or any other covenant
or condition. The receipt of Basic Rent and/or Additional Rent by Landlord, with
knowledge of any breach of this Lease by Tenant or of any default on the part of
Tenant in the observance or performance of any of the conditions or covenants of
this Lease, shall not be deemed to be a waiver of any provision of this Lease.
Neither acceptance of the keys nor any other act or thing done by Landlord or
any agent or employee during the Term herein demised shall be deemed to be an
acceptance of a surrender of the Demised Premises, excepting only an agreement
in writing signed by Landlord accepting or agreeing to accept such a surrender.
Section 31.03. Number, Gender. Wherever herein the singular number is
used, the same shall include the plural, and the masculine gender shall include
the feminine and neuter genders.
Section 31.04. Successors, Assigns. The terms, covenants and conditions
herein contained shall be binding upon and inure to the benefit of the
respective parties and their successors and assigns.
Section 31.05. Headings. The Article and marginal headings herein are
intended for convenience in finding the subject matters, are not to be taken as
part of this Lease and are not to be used in determining the intent of the
parties to this Lease.
Section 31.06. Entire Agreement. This document recites the entire and only
agreement between the parties relating to the leasing of the Demised Premises;
and no unwritten statements or representations or prior written matter not
contained in this document shall have any force or effect. This Lease shall not
be modified in any way or terminated except by a writing executed by both
parties.
Section 31.07. Landlord. The "Landlord" means only the holder, for the
time being, of Landlord's interest under this Lease so that in the event of any
transfer of title to the Demised Premises Landlord shall be and hereby is
entirely freed and relieved of all obligations of Landlord hereunder accruing
32
after such transfer, and it shall be deemed without further agreement between
the parties that such grantee, transferee or assignee has assumed and agreed to
observe and perform all obligations of Landlord hereunder arising during the
period it is the holder of Landlord's interest hereunder.
Section 31.08. Words of Duty. Whenever in this Lease any words of
obligation or duty are used, such words or expressions shall have the same force
and effect as though made in the form of covenants.
Section 31.09. Cumulative Remedies. The specified remedies to which
Landlord or Tenant may resort under the terms of this Lease are cumulative and
are not intended to be exclusive of any other remedies or means of redress to
which Landlord or Tenant may lawfully be entitled in case of any breach or
threatened breach of any provision of this Lease.
Section 31.10. No Option. The submission of this Lease to Tenant for
examination and/or execution does not constitute a reservation of, or option
for, the Demised Premises; and this Lease becomes effective as a Lease only upon
execution and delivery thereof by Landlord and Tenant.
Section 31.11. Accord and Satisfaction. No payment by Tenant or receipt by
Landlord of a lesser amount than the Basic Rent and Additional Rent payable
hereunder shall be deemed to be other than a payment on account of the earliest
stipulated monthly Basic Rent and Additional Rent, nor shall any endorsement or
statement on any check or any letter accompanying any check or payment for Basic
Rent or Additional Rent be deemed an accord and satisfaction, and Landlord may
accept such check or payment without prejudice to Landlord's right to recover
the balance of such Basic Rent and Additional Rent or pursue any other remedy
provided herein or by law.
Section 31.12. Corporate Authority. If Tenant is a corporation, Tenant
represents and warrants that this Lease and the Tenant's execution of this Lease
has been duly authorized and approved by the Tenant's Board of Directors. The
undersigned officers and representatives of the corporation executing this Lease
on behalf of Tenant represent and warrant that they are officers of the
corporation with authority to execute this Lease on behalf of the corporation.
Section 31.13. Lease Commencement. Notwithstanding anything contained
herein to the contrary, if Landlord, for any reason whatsoever including Force
Majeure and Landlord's negligence, cannot deliver possession of the Demised
Premises to Tenant at the commencement of the agreed Term as set forth in
Section 2.01, this Lease shall not be void or voidable, nor shall Landlord be
liable to Tenant for any loss or damage resulting therefrom, but in that event,
the Term shall be for the full Term as specified in Section 2.01 to commence
from and after the date Landlord shall have delivered possession of the Demised
Premises to Tenant, and, if requested by Landlord or Tenant, Landlord and Tenant
shall, by a writing signed by the parties, ratify and confirm the Lease
Commencement and Termination Dates.
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Section 31.14. Applicable Law. This Lease shall be interpreted and
construed in accordance with the laws of the State of New York and by the state
courts of New York.
Section 31.15. Survival of Tenant's Obligations. All obligations of Tenant
which by their nature involve performance, in any particular, after the end of
the Term, or which cannot be ascertained to have been fully performed until
after the end of the term, shall survive the expiration or sooner termination of
this Lease.
Section 31.16. Parking Area. Under no circumstances shall Tenant be
permitted to use any portion of the parking area for on-site storage.
Section 31.17. Assumption. It shall be a condition precedent to the merger
of Lessee into any Person, to the consolidation of Lessee with one or more
Persons and to the sale or other disposition of all or substantially all of the
assets of Lessee to one or more Persons that the surviving entity or transferee
of assets, as the case may be, shall deliver to Lessor, and any assignee of any
interest of Lessor, an acknowledged instrument assuming all obligations,
covenants and responsibilities of Lessee hereunder
Section 31.18. No Merger. There shall be no merger of this Lease or of the
leasehold estate hereby created with the fee estate in the Premises by reason of
the fact that the same person acquires or holds, directly or indirectly, this
Lease or the leasehold estate hereby created or any interest herein or in such
leasehold estate as well as the fee estate in the Premises or any interest in
such fee estate
Section 31.19. Surrender. Upon the expiration or termination of this
Lease, Lessee shall surrender the Premises to Lessor in good repair and
condition. The provisions of this Section and Article IX shall survive the
expiration or other termination of this Lease
Section 31.20. Counterparts. This Lease may be executed in two or more
counterparts and shall be deemed to have become effective when and only when one
or more of such counterparts shall have been executed by or on behalf of each of
the parties hereto (although it shall not be necessary that any single
counterpart be executed by or on behalf of each of the parties hereto, and all
such counterparts shall be deemed to constitute but one and the same
instrument), and shall have been delivered by each of the parties to the other.
ARTICLE XXXII
Renewal Option
Section 32.01. Tenant is hereby granted one (1) option to renew (the
"Renewal Option") this Lease upon the following terms and conditions:
(A) At the time of the exercise of the Renewal Option and at the
commencement of the renewal term (the "Renewal Term"), the Tenant shall
not be in default of any of the terms and provisions of this Lease, and
shall be in possession of the Demised Premises pursuant to this Lease.
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(B) Notice of the exercise of the Renewal Option shall be sent to the
Landlord in writing at least twenty-four (24) months before the expiration
of the current Term of this Lease, TIME HEREBY BEING MADE OF THE ESSENCE.
(C) The Renewal Term shall be for a period of five (5) years, commencing
at the expiration of the twentieth (20th) Lease Year. All of the terms and
conditions of this Lease, other than the Basic Rent, shall apply during
the Renewal Term.
(D) Should Tenant exercise the Renewal Option in accordance with the
provisions of this Article, within forty-five (45) days after receipt of
Tenant's notice of intent to exercise the Renewal Option, Landlord shall
provide to Tenant, in writing a statement indicating Landlord's
calculation of the fair market value of the annual Basic Rent for the
first Lease Year of the Renewal Term (the "FMV Rent"). In calculating the
FMV Rent for the first Lease Year of the Renewal Term, Landlord shall look
to arms-length transactions between an unrelated landlord and tenant in
other comparable buildings, in the geographical area in which the Demised
Premises are located, taking into account all generally applicable terms
of tenancy for comparable leases of comparable premises in the Suffolk
County, New York marketplace at the time of calculation. Tenant shall have
twenty (20) days from receipt of Landlord's calculation of the FMV Rent
for the first Lease Year of the Renewal Term in which to accept or reject
such calculation. Tenant's failure to object within such twenty (20) day
period shall be deemed Tenant's acceptance of such calculation. In the
event that Tenant disputes Landlord's calculation, the parties shall seek
to reach a mutually acceptable amount of the FMV Rent during the first
Lease Year of the Renewal Term. In the event that the parties are unable
to reach such mutual agreement within fifteen (15) days of receipt by
Landlord of Tenant's objection, the parties shall engage the services of a
mutually acceptable independent MAI appraiser experienced with properties
located within the geographical area in which the Demised Premises are
located. The cost of the third party appraiser shall be paid by Tenant.
The determination of such appraiser shall be binding upon both parties.
Notwithstanding the foregoing, the Basic Rent for the first Lease Year of
the Renewal Terms shall not be less than the Basic Rent for the
immediately preceding Lease Year.
(E) During each subsequent Lease Year of the Renewal Term, the Basic Rent
payable by Tenant shall be equal to the greater of: (i) the then-current
FMV Rent for the Demised Premises, calculated in accordance with the
provisions set forth in Section 32.01(D) above; or (ii) the Base Rent
payable by Tenant for the immediately preceding Lease Year.
(F) Tenant shall have no further renewal options unless expressly granted
in writing by Landlord.
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ARTICLE XXXIII
Guaranty
Section 33.01. Tenant's payment and performance obligations under this
Lease shall be unconditionally guaranteed, jointly and severally by Xxxxx
Industries Incorporated, a Delaware corporation ("Guarantor") pursuant to a
Guaranty in the form attached to this Lease as Exhibit D attached hereto and
made a part hereof (the "Guaranty"). The Guarantor shall deliver the original
signed Guaranty simultaneously with the execution and delivery of this Lease.
[This page is intentionally left blank. Signature page follows]
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IN WITNESS WHEREOF, the parties hereto have hereunto set their hands and seals
the month, day and year first above written.
LANDLORD:
STNLA-SPVEF BAY SHORE, LLC,
a Delaware limited liability company
By: Single-Tenant Net Lease Advisors, LLC,
a Florida limited liability company,
its Manager
By: Single-Tenant Financial Corp.,
a Florida corporation,
its Managing Member
By:
------------------------------------
Xxxxx X. Xxxxxxxx, President
TENANT:
AIR INDUSTRIES MACHINING, CORP.,
A New York Corporation
By:
--------------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Executive Chairman
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EXHIBIT A
Demised Premises
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EXHIBIT B
Roof Repairs
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EXHIBIT C
Phase 2 Report Repairs
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EXHIBIT D
Form of Lease Guaranty
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