Exhibit 10.2
------------
AGREEMENT OF LEASE
BETWEEN
TOUCHSTONE APPLIED SCIENCE ASSOCIATES, INC., as Tenant
and
26 ▇▇▇▇▇▇, LLC, as Landlord
SUMMARY INFORMATION (FOR CONVENIENCE ONLY; NOT PART OF THE LEASE)
Premises Address: ▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇
Delivery Date: ▇▇▇▇▇ ▇▇, ▇▇▇▇
▇▇▇▇: Ten (10) Years
Commencement Date: On or about April 1, 2003, as same may be
modified pursuant to Paragraph 3.2 hereof.
Expiration Date: On or about March 30, 2013, as same may be
modified pursuant to Paragraph 3.2 hereof.
AGREEMENT OF LEASE
This Agreement of Lease (the "Lease") dated as of March
30, 2003, is made by and between26 ▇▇▇▇▇▇, LLC, a New York
limited liability company (the "Landlord") and TOUCHSTONE
APPLIED SCIENCE ASSOCIATES, INC., a Delaware corporation (the
"Tenant").
ARTICLE 1. BASIC PROVISIONS.
1.1. Premises. That certain real property more fully
--------
described on Exhibit A hereto (the "Land") including all
improvements located thereon or to be provided by Landlord under
the terms of this Lease (the "Improvements"), and commonly
known by the street address of 4 Hardscrabble Heights located in
the Village of ▇▇▇▇▇▇▇▇, Town of Southeast, County of ▇▇▇▇▇▇,
State of New York, containing approximately Twenty-Eight Thousand
(28,000) square feet of retail space (the "Building"). (The
Building is hereinafter collectively referred to as the
"Premises").
1.2. Term. Ten (10) years (the "Lease Term")
----
commencing April 1, 2003, as same may be modified pursuant to
Paragraph 3.2 hereof (the "Commencement Date") and ending March
30, 2013, as same may be modified pursuant to Paragraph 3.2
hereof (the "Expiration Date"). Landlord will deliver the
Premises to Tenant in the condition described herein on or before
March 30, 2003, as same may be modified pursuant to Paragraph 3.2
hereof (the "Delivery Date").
1.3. Base Rent. Annual Rent in the amount set forth
---------
below ("Base Rent")shall be due and payable in equal monthly
installments payable on the first (1st) day of each month
commencing April 1, 2003, as same may be modified pursuant to
Paragraph 3.2 hereof. The amount of the Base Rent throughout
the term of the Lease shall be as follows:
-------------------------------------------------------------------
YEAR(S) S.F. BASE RENT ANNUAL BASE MONTHLY BASE
RENT RENT
-------------------------------------------------------------------
1 $10.50 $304,500.00 $25,375.00
2 $10.82 $313,780.00 $26,148.33
3 $11.14 $323,060.00 $26,921.67
4 $11.47 $332,630.00 $27,719.16
5 $11.81 $342,490.00 $28,540.83
6 $12.16 $352,640.00 $29,386.67
7 $12.52 $363,080.00 $30,256.67
8 $12.90 $374,100.00 $31,175.00
9 $13.29 $385,410.00 $32,117.50
10 $13.69 $397,010.00 $33,084.16
1.4. Intentionally Omitted.
---------------------
1.5. Permitted Use. The Premises are to be used
-------------
by Tenant only for office and warehouse use for the development,
assessment, publication and distribution of published materials,
and similar and accessory uses, and for no other purpose without
the prior written consent of Landlord.
1.6. Parking. Tenant and its invitees and licensees
-------
shall be entitled to the exclusive use of all parking spaces on
the Land.
1.7. Real Estate Brokers. No real estate brokers
-------------------
represent any party to this transaction. Each of Landlord and
Tenant indemnify and hold harmless the other from any against any
real estate broker claiming a commission through such Landlord or
Tenant.
1.8. Exhibits And Addenda. The following Exhibits and
--------------------
Addenda are attached hereto and incorporated herein by reference:
Exhibit A -- The Land
1.9. Intentionally Omitted.
---------------------
ARTICLE 2. PREMISES.
2.1. Letting. Landlord hereby leases to Tenant, and
-------
Tenant hereby leases from Landlord, the Premises, for the Lease
Term, at the Base Rent and Additional Rent (as hereinafter
defined), and upon all of the terms, covenants and conditions,
set forth in this Lease. Unless otherwise provided herein, any
statement of square footage set forth in this Lease, or that may
have been used in calculating Base Rent, is an approximation
which Landlord and Tenant agree is reasonable, and the rental
based thereon is not subject to revision whether or not the
actual square footage is more or less.
2.2. Condition. Tenant has inspected the condition
---------
of the Premises, is satisfied with its condition, and agrees to
lease the Premises in its "as is" condition.
2.3. Compliance With Covenants, Restrictions And
-------------------------------------------
Applicable Law. During the Lease Term, Tenant will comply,
--------------
with all applicable covenants or restrictions of record and all
Applicable Law. As used herein, "Applicable Law," means all
laws, rules, regulations, ordinances, statutes, codes,
directives, covenants, easements and restrictions of record,
permits, and the reasonable requirements of any applicable fire
insurance underwriter or rating bureau relating in any manner to
the Premises now in effect or which may hereafter come into
effect, including, without limitation, the Americans with
Disabilities Act of 1990, the Occupational Safety and Health
Administration's (OSHA's) standards for occupational exposure to
asbestos (29 CFR parts 1910 and 1926), federal emissions
regulations under the Clean Air Act (42 U.S.C. 7401, et seq.)
and similar state laws. Promptly after becoming aware of any
breach of the foregoing provision (whether by written notice from
Landlord or otherwise), Tenant shall take all necessary action to
remedy such breach at its sole expense. In addition to the
foregoing, Tenant agrees that the following costs shall be the
sole responsibility of Tenant: (i)monthly electric for site
lighting; (ii) water usage for the Premises; and (iii)
maintenance of all mechanical systems inside of the Building.
3. TERM.
3.1. Term. The scheduled Commencement Date, Expiration
----
Date and Lease Term of this Lease are specified in Section 1.2.
3.2. Sale/Lease Back. This Lease is being made in
---------------
conjunction with a sale of the Premises by Tenant, as seller, to
Landlord, as purchaser (the "Sale"). The closing date of the
Sale is scheduled for March 30, 2003. In the event that the
actual closing date for the Sale is other than March 30, 2003,
the Commencement Date and Delivery Date shall be revised to the
date immediately following the closing date for the Sale, and the
Expiration Date shall likewise be revised to the date which is
ten (10) years from the Commencement Date. Rent shall commence
on the revised Commencement Date. In the event the Sale does not
take place for any reason, this Lease shall be of no force and
effect and neither party shall have any rights as against the
other hereunder.
This lease transaction and the Sale shall not
constitute a joint venture between Landlord and Tenant. Landlord
and Tenant acknowledge that both the purchase price for the Sale
and the Rent payable hereunder are at fair market values.
4. BASE RENT.
Subject to the terms of this Lease, Base Rent and other rent
or charges payable hereunder shall be paid to Landlord in lawful
money of the United States, without offset or deduction except as
otherwise provided herein, when due under the terms of this
Lease. Base Rent and all other rent and charges for any period
during the Lease Term which is for less than 1 full calendar
month shall be prorated based upon the actual number of days of
the calendar month involved. Payment of Base Rent and other
charges shall be made to Landlord at its address stated herein or
to such other persons or at such other addresses as Landlord may
from time to time designate in writing to Tenant.
5. USE.
5.1. Use. Tenant shall use and occupy the Premises
---
for the purposes set forth in Section 1.5 and other compatible
or related uses permitted by Applicable Law. Landlord will not
unreasonably withhold or delay its consent to any written request
for a modification of the purposes for which the Premises may be
used or occupied.
5.2. Hazardous Substances.
--------------------
(a) Definition. As used in this Section, the term
----------
"Hazardous Substance" shall mean any product, substance,
chemical, material or waste whose presence, nature, quantity
and/or intensity of existence, use, manufacture, disposal,
transportation, spill, release or effect, either by itself
or in combination with other materials expected to be on the
Premises, is either: (i) potentially injurious to the
public health, safety or welfare, the environment, or the
Premises; (ii) regulated or monitored by any governmental
authority; or (iii) a basis for liability of Landlord to any
governmental agency or third party under any applicable
statute or common law theory. The term "Hazardous
Substance" shall include, but not be limited to,
asbestos-containing materials (ACM), hydrocarbons,
petroleum, gasoline, crude oil or any products, by-products
or fractions thereof.
(b) Representations And Warranties. Landlord makes
------------------------------
no representations and warranties with respect to the absence
or presence of Hazardous Substances in, on, under or about
the Premises. Tenant acknowledges that it is fully familiar
with the environmental condition of the Premises and assumes
all obligations with respect to any Hazardous Substances or
Remedial Work at the Premises. Tenant shall promptly
perform, at its sole cost and expense, any Remedial Work
necessitated by the presence of any Hazardous Substances
which existed at the Premises at the time possession of the
Premises was delivered to Tenant or which subsequently came
to be located on the Premises, except for Hazardous
Substance Conditions caused by Tenant's operations. As used
herein, "Remedial Work" means any investigation,
monitoring, clean-up, containment, remediation, removal,
response cost or restoration work and the preparation and
implementation of any closure, remedial or other required
plans, that is: (i) required under any Applicable Law; (ii)
required by any federal, state or local governmental agency
or political subdivision, whether by judicial order or
otherwise; or (iii) necessary to bring the Premises and the
Building to a standard of environmental condition which
presents no risk to safety, health or the environment. As
used herein, "Hazardous Substance Condition" means the
occurrence or discovery of a condition involving the
presence of, or a contamination by, a Hazardous Substance
in, on, under or about the Premises, as part of the
Improvements or in the indoor environment of the Building.
Tenant shall indemnify, defend and hold Landlord harmless
from and against any and all claims, judgments, damages,
penalties, fines, costs, liabilities or losses (including,
without limitation, sums paid in settlement of claims,
attorneys' fees, consultant fees and expert fees)
(collectively, "Claims") which arise on or after the date
that possession of the Premises is delivered to Tenant,
including at any time after the expiration of the Lease
Term, from or in connection with Hazardous Substance
Conditions which were caused by Tenant's operations during
the Lease Term.
(c) Tenant's Use. Tenant shall have the right
------------
to store, use and handle Hazardous Substances on the
Premises provided: (a) that Tenant shall obtain, at its own
cost an expense, environmental insurance naming Landlord as
an additional insured and (b) that such Hazardous Substances
are used in the operation of Tenant's business or are
brought onto the Premises in the ordinary course of Tenant's
business and are stored, used, handled and disposed of in
compliance with all Applicable Law. Tenant shall be
responsible for all costs incurred in complying with all
Applicable Law relating to Hazardous Substances which Tenant
or its agents, contractors, or invitees store, use or handle
in or upon the Premises at any time during the Lease Term.
Tenant shall indemnify, defend and hold Landlord harmless
from and against any and all Claims which arise on or after
the date that possession of the Premises is delivered to
Tenant, including at any time after the expiration of the
Lease Term, as a result of any Hazardous Substance
Condition, but only to the extent such Hazardous Substance
Condition was caused by Tenant's operations during the Lease
Term; provided, however, that in no event shall Tenant be
liable for any Claims resulting from routine leakage from
vehicles parked on or traveling across the Premises or any
portion thereof, nor from the migration or leaching of
Hazardous Substances that were not released at the Premises
due to Tenant's operations, nor shall such leakage or
migration of Hazardous Substances be deemed a violation of
Tenant's obligations hereunder. Further, notwithstanding
anything to the contrary in this Lease, Tenant is not
permitted to maintain, repair, renovate, remediate or
otherwise conduct work with respect to the following
portions of the Premises owned by Landlord: (i) structural
elements of the Premises, the building systems and portions
of the Building containing insulation or fireproofing
material on or in exterior walls, columns, beams, ceilings,
pipes, ducts and the like; (ii) any portion of the Premises
more than 6 feet below ground surface; or (iii) any
equipment, structures or facilities located on the Premises
as of the Commencement Date which were previously used in
operations involving Hazardous Substances, including,
without limitation, any underground storage tanks, sumps,
septic systems or retention ponds. Tenant shall at all
times during the term of this Lease maintain a policy of
insurance with respect to the oil tank existing at the
Premise and shall name Landlord as an additional insured
under such oil tank insurance policy.
(d) Environmental Communications. Landlord and
----------------------------
Tenant shall promptly after receipt or transmittal thereof,
deliver to the other copies of all material written
communications given to or received from any governmental
agency, environmental consultant, or other person or entity
relating to Hazardous Substances in or removed from the
Premises, including, without limitation, copies of all
claims, reports, complaints, notices, warnings or asserted
violations, relating in any way to Hazardous Substances in,
on, under or about the Premises.
(e) Survival. The representations, warranties
--------
and agreements of the Parties set forth in this Article 5
shall survive the expiration of the Lease Term or the
termination of this Lease for any other reason.
5.3. Compliance With Law.
-------------------
(a) Tenant's Responsibility; Evidence Of
------------------------------------
Compliance. Except as otherwise provided in this Lease and
----------
subject to the terms of this Section 5.3, Tenant shall, at
its sole cost and expense, fully, diligently and in a timely
manner, comply with all Applicable Law relating to Tenant's
specific business operations at the Premises, provided that
Tenant has been notified by Landlord of such requirements.
Tenant shall, within 45 days after receipt of Landlord's
written request, provide Landlord with copies of all
documents and information, including, but not limited to,
permits, registrations, manifests, applications, reports and
certificates, evidencing Tenant's compliance with Applicable
Law as required herein. Without limiting the terms of
Section 5.3(c), it is understood and agreed that Tenant is
not obligated to take any action to cure any violation of
Applicable Law which results from any condition or
circumstance (including, without limitation, any Hazardous
Substance Condition) not caused by Tenant, its agents or
employees.
(b) Tenant's Right To Contest. Tenant shall have
-------------------------
the right, after written notice to Landlord and at Tenant's
sole cost and expense, to contest in good faith by
appropriate legal proceedings the validity or application of
any law, ordinance or other legal requirement and to delay
compliance therewith pending the prosecution of such
proceedings, provided that (i) no civil or criminal penalty,
violation, fine or levy would be incurred by Landlord as a
result of such contest; (ii) no lien or charge would be
imposed upon the Land or the Building by reason of such
delay; and (iii) such legal proceedings are conducted in the
manner prescribed by Applicable Law. Tenant shall indemnify
and hold Landlord harmless from and against any and all
Claims arising out of or in connection with any such contest
by Tenant. Landlord agrees that it will, at the request of
Tenant, execute or join in the execution of any instrument
or document reasonably necessary in connection with any such
contest, at no cost to Landlord, provided such instrument or
document does not in any way prejudice Landlord's interest
in the Premise.
(c) Intentionally Omitted
---------------------
5.4. Inspection; Compliance. Landlord shall have the
----------------------
right to enter the Premises at any time in the case of an
emergency upon such notice as may be reasonable under the
circumstances, (but notice shall not be required if the nature of
the emergency would make notice unreasonable), and otherwise at
reasonable times upon reasonable prior written notice for the
purpose of inspecting the condition of the Premises and for
verifying compliance by Tenant with this Lease and all Applicable
Law. Any such inspection shall not disrupt or disturb the
ongoing operation of the Premises or Tenant's quiet enjoyment of
the Premises. Landlord may employ experts or consultants in
connection therewith to advise Landlord with respect to Tenant's
activities, including but not limited to the installation,
operation, use, monitoring, maintenance or removal of any
Hazardous Substance or storage tank on or from the Premises. The
cost and expense of any such inspections shall be paid by
Landlord, unless a material Breach of this Lease, a material
violation of Applicable Law, or a material contamination caused
by Tenant is found to exist, in which case Tenant shall pay the
cost and expense of such inspections.
6. REPAIRS; UTILITY INSTALLATIONS; TRADE FIXTURES AND
--------------------------------------------------
ALTERATIONS.
-----------
6.1. Tenant's Obligations. Except as otherwise provided
--------------------
herein, Tenant shall, at Tenant's sole cost and expense, maintain
the Building and make repairs, restorations, and replacements to
the Building, including without limitation the heating,
ventilating, air conditioning, mechanical, electrical, sprinkler,
fire alarm and/or smoke detection systems, if any, and plumbing
systems, structural roof, walls, and foundations, and the
fixtures and appurtenances to the Building as and when needed to
preserve them in good working order and condition and regardless
of whether the repairs, restorations, and replacements are
ordinary or extraordinary, foreseeable or unforeseeable, capital
or non-capital, or the fault or not the fault of Tenant, its
agents, employees, invitees, visitors, or contractors. All
repairs, restorations, and replacements will be in quality and
class equal to the original work or installations. If Tenant
fails to make repairs, restorations, or replacements, Landlord
may make them at the expense of Tenant and the expense will be
collectible as Additional Rent to be paid by Tenant within
fifteen (15) days after delivery of a statement for the expense.
6.2. Intentionally Omitted
---------------------
6.3. Utility Installations; Trade Fixtures; Alterations.
--------------------------------------------------
(a) Definitions; Consent Required. The term
-----------------------------
"Utility Installations" is used in this Lease to refer to
all carpeting, window coverings, air lines, power panels,
electrical distribution, security, fire protection systems,
lighting fixtures, heating, ventilating, and air
conditioning equipment, plumbing and non-demising walls in,
on, under or about the Premises. The term "Trade
Fixtures" shall mean Tenant's machinery and equipment,
including, but not limited to, computer systems, computer
equipment, storage facilities, partitions and other similar
items, that can be removed without doing material damage to
the structural portions of the Premises. The term
"Alterations" shall mean any modification of the
Improvements on the Premises, other than Utility
Installations or Trade Fixtures, or nonstructural
modifications not visible from the exterior of the Premises,
whether by addition or deletion. "Tenant Owned Alterations
and/or Utility Installations" are defined as Alterations
and/or Utility Installations made by Tenant that are not yet
owned by Landlord as defined in Subsection 6.4(a). Except
as provided elsewhere in this Lease, Tenant shall not make
any Alterations or Utility Installations in, on, under or
about the Premises without Landlord's prior written consent,
which consent shall not be unreasonably withheld or delayed.
Tenant may, however, without obtaining Landlord's consent
thereto, make nonstructural Alterations or Utility
Installations to the interior of the Building, as long as
they are not visible from the outside and do not involve
puncturing, relocating or removing the roof or any existing
exterior or load bearing walls.
(b) Consent. Any Alterations or Utility
-------
Installations that Tenant shall desire to make and which
require the consent of Landlord shall be presented to
Landlord in written form with proposed plans. All consents
given by Landlord shall be deemed conditioned upon: (i)
Tenant's acquiring all applicable permits required by
governmental authorities; (ii) the furnishing to Landlord of
copies of such permits together with a copy of the plans and
specifications for the Alteration or Utility Installation
prior to commencement of the work thereof; (iii) Tenant's
obtaining a builders' all-risk policy of insurance
reasonably acceptable to Landlord naming Landlord as an
additional insured and in amounts based upon the completed
replacement value of the Premises and endorsed to provide
that occupancy by any person shall not void such coverage,
which policy shall be in addition to the insurance required
in Article 7 hereof and (iv) compliance by Tenant with all
conditions of said permits in a prompt and expeditious
manner. Any Alterations or Utility Installations made by
Tenant during the Lease Term shall be done in a good and
workmanlike manner, with good and sufficient materials, and
in compliance with all Applicable Law. Tenant shall
promptly upon completion thereof furnish Landlord with
as-built plans and specifications therefore, and a
certificate of occupancy or other certificate from the
authorizing municipality certifying that the Alterations or
Utility Installations have been completed in compliance with
Applicable Law. Landlord may (but without obligation to do
so) condition its consent to any requested Alteration or
Utility Installation that costs Fifty Thousand Dollars
($50,000) or more upon Tenant's providing Landlord with a
lien and completion bond in an amount equal to one and
one-half (1-1/2) times the estimated cost of such Alteration
or Utility Installation.
(c) Indemnification. Tenant shall pay, when
---------------
due, all claims for labor or materials furnished or alleged
to have been furnished to or for Tenant at or for use on the
Premises which claims are or may be secured by any
mechanics' or materialmen's lien against the Premises or any
interest therein. If Tenant shall, in good faith, contest
the validity of any such lien, claim or demand, then Tenant
shall, at Tenant's sole cost and expense, defend and protect
itself, Landlord and the Premises against the same and shall
pay and satisfy any such adverse judgment that may be
rendered thereon before the enforcement thereof against the
Landlord or the Premises. If, in connection with such
contest, Landlord shall so require, Tenant shall furnish to
Landlord a surety bond satisfactory to Landlord in an amount
equal to one and one-half (1-1/2) times the amount of such
contested lien, claim or demand (or, if different, the
amount required by statute), indemnifying Landlord against
liability for the same, as required by law for the holding
of the Premises free from the effect of such lien or claim.
6.4. Ownership; Surrender.
-------------------
(a) Ownership. All Alterations and Utility
---------
Installations made to the Building by Tenant shall be the
property of and owned by Landlord, and considered a part of
the Building, unless Landlord specifically designates such
items as Tenant Owned Alterations and Utility Installations.
All Tenant Owned Alterations and Utility Installations
shall, at the expiration or earlier termination of this
Lease, remain the property of and may be removed by Tenant.
Tenant's Trade Fixtures shall remain the property of Tenant
at all times and may be removed by Tenant at the expiration
of the Lease Term. Tenant shall repair any damage resulting
from the removal of Tenant Owned Alterations and Utility
Installations and Tenant's Trade Fixtures. Notwithstanding
anything to the contrary herein, if any Tenant Owned
Alterations, Utility Installations or Trade Fixtures are not
removed within 30 days after expiration of the Lease Term,
then they shall nevertheless become the property of Landlord
and no longer be subject to removal by Tenant.
(b) Surrender. Tenant shall surrender the
---------
Building by the end of the last day of the Lease Term or any
earlier termination date, with all of the Improvements and
parts and surfaces thereof shall be clean and free of debris
and in good operating order, condition and state of repair,
ordinary wear and tear excepted.
7. INSURANCE; INDEMNITY.
7.1. Liability Insurance Carried By Tenant.
-------------------------------------
(a) "All-Risk" Coverage. Tenant will, at its
-------------------
sole expense, obtain and keep in force, during the term of
this lease, "all-risk" coverage insurance (including
earthquake and flood insurance and coverage for loss of
rents or business interruption) naming Landlord and Tenant
as their interests may appear and other parties that
Landlord or Tenant may designate as additional insureds in
the customary form in the County of ▇▇▇▇▇▇ for buildings and
improvements of similar character, on all buildings and
improvements now or after this date located on the Premises.
The amount of the insurance will be designated by Landlord
no more frequently than once every twelve (12) months, will
be set forth on an "agreed amount endorsement" to the policy
of insurance, and will not be less than the appraised value
of the Building and Improvements. Tenant agrees to maintain
such insurance as may be required by Landlord's lender.
Further, in the event that Landlord's lender requires
Landlord to obtain policies of insurance, the premiums for
such policy shall be paid by Landlord and shall be
reimbursed to Landlord by Tenant as Additional Rent
hereunder.
(b) General Liability. Tenant will, at its sole
-----------------
expense, obtain and keep in force during the term of this
lease commercial general liability insurance with a combined
single limit of not less than five million dollars
($5,000,000.00) for injury to or death of any one person,
for injury to or death of any number of persons in one
occurrence, and for damage to property, insuring against any
and all liability of landlord and tenant, including without
limitation coverage for contractual liability, broad form
property damage, and non-owned automobile liability, with
respect to the premises or arising out of the maintenance,
use, or occupancy of the premises. The insurance will
insure the performance by Tenant of the indemnity agreement
set forth in Section 7.1(f) herein. The insurance will be
noncontributing with any insurance that may be carried by
landlord and will contain a provision that landlord,
although named as an insured, will nevertheless be entitled
to recover under the policy for any loss, injury, or damage
to landlord, its agents, and employees, or the property of
such persons. The limits and coverage of all the insurance
will be adjusted by agreement of Landlord and Tenant during
every third lease year during the term of this lease in
conformity with the then prevailing custom of insuring
liability in the County of ▇▇▇▇▇▇ for buildings and
improvements of similar size, nature and use.
(c) Other Matters. All insurance required in this
-------------
paragraph and all renewals of it will be issued by companies
authorized to transact business in the State of New York, and
rated at least A+ Class X by Best's Insurance Reports (property
liability) or approved by landlord. All insurance policies will
be subject to approval by landlord and any lender as to form and
substance; will expressly provide that the policies will not be
canceled or altered without thirty (30) days' prior written
notice to Landlord and any lender, in the case of "all-risk"
coverage insurance, and to Landlord, in the case of general
liability insurance; and will, to the extent obtainable, provide
that no act or omission of Tenant which would otherwise result in
forfeiture or reduction of the insurance will affect or limit the
obligation of the insurance company to pay the amount of any loss
sustained. Tenant may satisfy its obligation under this paragraph
by appropriate endorsements of its blanket insurance policies.
In addition, Tenant shall obtain any other form of insurance
coverage or any different amounts of existing coverage as may be
reasonably required by Landlord or Landlord's lender. If
Landlord's lender requires, as a condition to granting a loan
secured by a mortgage on the Premises, that insurance premiums be
escrowed monthly, Tenant shall pay to Landlord such monthly
insurance escrow as calculated by Landlord's lender at the same
time as Tenant makes payment of its Base Rent.
(d) Additional Insureds. All policies of
-------------------
liability insurance that Tenant is obligated to maintain
according to this Lease (other than any policy of workmen's
compensation insurance) will name Landlord and such other persons
or firms as Landlord specifies from time to time as additional
insureds. Original or copies of original policies (together with
copies of the endorsements naming Landlord, and any others
specified by Landlord, as additional insureds) and evidence of
the payment of all premiums of such policies will be delivered to
Landlord prior to Tenant's occupancy of the Premises and from
time to time at least thirty (30) days prior to the expiration of
the term of each policy. All public liability, property damage
liability, and casualty policies maintained by tenant will be
written as primary policies, not contributing with and not in
excess of coverage that Landlord may carry. No insurance
required to be maintained by Tenant by this paragraph will be
subject to any deductible without Landlord's prior written
consent.
(e) Waiver. Landlord and Tenant waive all rights to
------
recover against each other or against any other Tenant or
occupant of the building, or against the officers, directors,
shareholders, partners, joint venturers, employees, agents,
customers, invitees, or business visitors of each of theirs or of
any other Tenant or occupant of the Building, for any loss or
damage arising from any cause covered by any insurance required
to be carried by each of them pursuant to this Article 7 or any
other insurance actually carried by each of them. Landlord and
Tenant will cause their respective insurers to issue appropriate
waiver of subrogation rights endorsements to all policies of
insurance carried in connection with the Building or the Premises
or the contents of either of them. Tenant will cause all other
occupants of the premises claiming by, under, or through Tenant
to execute and deliver to Landlord a waiver of claims similar to
the waiver in this paragraph and to obtain such waiver of
subrogation rights endorsements.
(f) Indemnity By Tenant. Except for Landlord's
-------------------
intentional misconduct, grossly negligent acts or omissions
and/or breach of express warranties and the provisions of this
Lease and any matter for which Landlord is to provide
indemnification pursuant to Section 5.2(b), Tenant shall
indemnify, protect, defend and hold harmless the Premises,
Landlord, and Landlord's agents from any and all claims,
judgments, damages, penalties, fines, costs, liabilities or
losses (including, without limitation, sums paid in settlement of
claims, attorneys' fees, consultant fees and expert fees for
personal injury and/or property damage, and all Claims (as
defined in Section 5.2(b)) arising out of or involving the
occupancy of the Premises by Tenant, the conduct of Tenant's
business in or from the Premises, any act, omission or neglect of
Tenant, Tenant's agents, contractors, employees or invitees, or
out of any Breach by Tenant in the performance in a timely
manner of any obligation on Tenant's part to be performed under
this Lease. In case any action or proceeding be brought against
Landlord by reason of any of the foregoing matters, Tenant, upon
notice from Landlord, shall defend the same at Tenant's expense
by counsel reasonably satisfactory to Landlord, and Landlord
shall cooperate with Tenant in such defense.
8. DAMAGE OR DESTRUCTION.
8.1. (a) General. If the Premises are damaged or
-------
destroyed by reason of fire or any other cause or casualty,
Tenant will immediately notify Landlord and will promptly repair
or rebuild the Building at Tenant's expense, so as to make the
Building at least equal in value to the Building existing
immediately prior to the casualty and as nearly similar to it in
character as is practicable and reasonable. Landlord will apply
and make available to Tenant, pursuant to the terms of this
paragraph, the net proceeds of any fire or other casualty
insurance paid to Landlord, after deduction of any costs of
collection, including attorneys' fees, for repairing or
rebuilding as that work progresses. Progress payments will be
made by Landlord against properly certified vouchers of a
competent architect in charge of the work and approved by
Landlord. In the event the net insurance proceeds are less than
the anticipated cost to repair or rebuild, Tenant shall
contribute the difference in such cost. Landlord will contribute
out of the insurance proceeds, towards each payment to be made by
or on behalf of Tenant for the repairing or rebuilding of the
Building, under a schedule of payments to be made by Tenant and
approved by Landlord, an amount in the proportion that the total
net amount received by Landlord from insurers bears to the total
estimated cost of the rebuilding or repairing. Landlord,
however, may withhold from each amount so to be paid by Landlord
ten percent (10%) of the amount of each payment as retainage
until the work of repairing or rebuilding is completed and proof
has been furnished to Landlord that no lien or liability has
attached or will attach to the Premises or to Landlord in
connection with the repairing or rebuilding. Upon the completion
of rebuilding and the furnishing of that proof, the balance of
the net proceeds of the insurance will be paid to Tenant. If the
proceeds of insurance are paid to the holder of any mortgage on
Landlord's interest in the Premises, Landlord will make available
net proceeds of the insurance in accordance with the provisions
of this paragraph, except as may be modified by the terms of the
mortgage which mortgage shall be the controlling document with
respect to this matter. Before beginning repairs or rebuilding,
or letting any contracts in connection with repairs or
rebuilding, Tenant will submit for Landlord's approval, which
approval landlord will not unreasonably withhold or delay,
complete and detailed plans and specifications for the repairs or
rebuilding. Promptly after receiving Landlord's approval of those
plans and specifications, Tenant will begin the repairs or
rebuilding and will prosecute the repairs or rebuilding to
completion with diligence, subject, however, to strikes,
lockouts, acts of God, embargoes, governmental restrictions, and
other causes beyond tenant's reasonable control. Tenant will
obtain and deliver to Landlord a temporary or final certificate
of occupancy before the Building and/or Premises are reoccupied
for any purpose. The repairs or rebuilding will be completed free
and clear of mechanics' or other liens, and in accordance with
the building codes and all applicable laws, ordinances,
regulations, or orders of any state, municipal, or other public
authority affecting the repairs or rebuilding, and also in
accordance with all requirements of the insurance rating
organization, or similar body, and of any liability insurance
company insuring Landlord against liability for accidents related
to the premises. Any remaining proceeds of insurance after the
restoration will be Tenant's property. Notwithstanding the
foregoing, Tenant shall not be responsible for rebuilding or
repairing the Premises if the proceeds of insurance are not made
available to Tenant by either Landlord or Landlord's lender.
(b) Landlord's Inspection. During the progress
---------------------
of repairs or rebuilding, Landlord and its architects and
engineers may, from time to time, inspect the building and will
be furnished, if required by them, with copies of all plans, shop
drawings, and specifications relating to the repairs or
rebuilding. Tenant will keep all plans, shop drawings, and
specifications at the Building, and Landlord and its architects
and engineers may examine them at all reasonable times. If,
during repairs or rebuilding, Landlord and its architects and
engineers determine that the repairs or rebuilding are not being
done in accordance with the approved plans and specifications,
Landlord will give prompt notice in writing to tenant, specifying
in detail the particular deficiency, omission, or other respect
in which Landlord claims the repairs or rebuilding do not accord
with the approved plans and specifications. Upon the receipt of
that notice, Tenant will cause corrections to be made to any
deficiencies, omissions, or such other respect. Tenant's
obligations to supply insurance according to Article 7 will be
applicable to any repairs or building under this paragraph, and
Tenant shall also be obligated to furnish a builders' all-risk
policy for such repairs.
(c) Landlord's Costs. The charges of any
----------------
architect or engineer of Landlord employed to pass upon any plans
and specifications and to supervise and approve any construction,
or for any services rendered by the architect or engineer to
Landlord as contemplated by any of the provisions of this Lease,
will be paid by Tenant as a cost of the repair or rebuilding.
The fees of such architect or engineer will be those customarily
paid for comparable services.
(d) No Rent Abatement. Monthly rent and
-----------------
additional rent will not ▇▇▇▇▇ pending the repairs or rebuilding
except to the extent to which Landlord receives a net sum as
proceeds of any rent insurance.
(e) Damage During Last Three Years. If at any
------------------------------
time during the last three years of the term the Building is so
damaged by fire or otherwise that the cost of restoration exceeds
fifty percent (50%) of the replacement value of the Building
(exclusive of foundations) immediately prior to the damage,
either Landlord or Tenant may, within thirty (30) days after such
damage, give notice of its election to terminate this Lease and,
subject to the further provisions of this paragraph, this lease
will cease on the tenth (10th) day after the delivery of that
notice. Monthly rent will be apportioned and paid to the time of
termination. If this lease is so terminated, Tenant will have no
obligation to repair or rebuild, and the entire insurance
proceeds will belong to Landlord.
(f) Waive Statutes. Landlord and Tenant agree
--------------
that the terms of this Lease shall govern the effect of any
damage to or destruction of the Premises with respect to the
termination of this Lease and hereby waive the provisions of any
present or future Applicable Law to the extent inconsistent
herewith.
9. REAL PROPERTY TAXES.
9.1 Definitions: Any sum payable by Tenant to
-----------
Landlord under this Section 9 shall be considered Additional
Rent. For the purposes of this Section 9, the following terms
shall have the meanings set forth below:
(a) "Taxes" shall mean the aggregate amount of
real estate taxes and any general or special assessments
(exclusive of penalties and interest thereon) imposed upon the
Premises (including, without limitation; (i) assessments made
upon or with respect to any "air" and "development" rights
now or hereafter appurtenant to or affecting the Real Property,
(ii) any fee, tax or charge imposed by any Governmental authority
for any vaults, vault space or other space within or outside the
boundaries of the Real Property, and (iii) any taxes or
assessments levied after the date of this Lease in whole or in
part for public benefits to the Premise, the Land or the
Building) without taking into account any discount that Landlord
may receive by virtue of any early payment of Taxes; provided,
that if because of any change in the taxation of real estate, any
other tax or assessment, however denominated (including, without
limitation, any franchise, income profit, sales, use, occupancy,
gross receipts or rental tax) is imposed upon Landlord or the
owner of the Premises, the Land or the Building, or the
occupancy, rents or income therefrom, in substitution of or in
addition to any of the foregoing Taxes, such other tax or
assessment shall be deemed part of Taxes computed as if
Landlord's sole asset were the Premises. All expenses, including
attorneys' fees and disbursements, experts' and other witnesses'
fees, incurred in contesting the validity or amount or any Taxes
or in obtaining a refund of Taxes shall be considered as part of
the Taxes for such Tax Year. Anything contained here into the
contrary notwithstanding, Taxes shall not be deemed to include
(w) any taxes on Landlord's income, (x) franchise taxes, (y)
estate or inheritance taxes, or (z) any similar taxes imposed on
Landlord, unless such taxes are levied, assessed or imposed in
lieu of or as a substitute for or in addition to the whole or any
part of the taxes, assessments, levies, impositions which now
constitute Taxes.
(b.) "Tax Year" shall mean the period July 1
through June 30 (or such other period as hereinafter may be duly
adopted by the governmental Authority then imposing taxes as its
fiscal year for real estate tax purposes), any portion of which
occurs during the Term.
9.2 Payment of Taxes. Promptly upon receipt thereof,
----------------
Landlord shall deliver all Tax bills received from taxing
authorities (the "Tax Statement") to Tenant. Tenant shall pay
directly to the taxing authority, the full amount of Taxes due on
the date which is no later than ten (10) days prior to the date
upon which the Taxes become a due (the "Tax Payment") as shown
on the Tax Statement with respect to such Tax Year. Tenant shall
forward to Landlord within three (3) days of such payment a copy
of the receipted Tax Statement and a copy of the check evidencing
payment. Tenant hereby waives any rights that Tenant may have to
be exempt from the payment of Taxes or the Tax Payment by virtue
of diplomatic status or otherwise.
If Landlord's lender requires, as a condition to granting a
loan secured by a mortgage on the Premises, that Taxes be
escrowed monthly, Tenant shall pay to Landlord such monthly Tax
escrow as calculated by Landlord's lender at the same time as
Tenant makes payment of its Base Rent.
9.3. Intentionally Omitted.
---------------------
9.4. Right to Contest. Landlord and Tenant shall
----------------
each be eligible to institute tax reduction or other similar
proceedings. In the event that after a Tax Statement has been
sent to Tenant, a refund of Taxes with respect to a Tax Year
during the Lease Term is actually received by or on behalf of
Landlord, then, promptly after receipt of such refund, Landlord
shall send Tenant a statement and setting forth Tenant's share of
such refund after deducting therefrom Landlord's reasonable costs
and expenses, including attorneys and appraisal fees, of
obtaining such refund.
10. UTILITIES.
Tenant shall pay for all water, gas, heat, light, power,
telephone, cable, and all other utilities and services supplied
to the Premises. Tenant shall be responsible at its own cost and
expense to arrange for trash disposal at the Premises, and shall
maintain all dumpsters and trash disposal containers in a
discreet location not visible from the entrance to the Building.
11. ASSIGNMENT AND SUBLETTING.
11.1 Tenant's Right To Assign Or Sublet. Subject to
----------------------------------
the provisions of Section 1.5 as to the permitted use of the
Premises, Tenant may assign this Lease or sublet the Premises in
whole or in part, provided that Tenant has obtained the prior
written consent of Landlord, which consent shall not be
unreasonably withheld or delayed and in any event may only be
withheld if Landlord determines in good faith that (i) a Breach
by Tenant under this Lease has occurred and remains uncured; (ii)
the proposed assignee's use is not permitted under this Lease;
(iii) the proposed assignee's use will violate Applicable Law; or
(iv) the proposed assignee does not have the financial resources
to perform under this Lease. Notwithstanding the foregoing,
Tenant may, without Landlord's consent, assign or sublet the
Premises in whole or in part to any affiliate of Tenant. For
purposes of this Lease, "affiliate" means any person, firm or
corporation directly or indirectly controlling, controlled by or
under common control with Tenant including without limitation,
(a) any officer or director thereof; (b) any shareholder owning
more than 10% of the outstanding stock thereof; (c) any parent,
subsidiary or related or affiliated corporation thereof; (d) any
entity created by merger with, reorganization of, or re-
capitalization of Tenant; and (e) any entity which acquires
Tenant or substantially all the assets of Tenant. Tenant may
also, without Landlord's consent being required, permit the use
or occupancy of the Premises or any part thereof by Tenant's
affiliates. Such permissive use or occupancy will not constitute
a sublease or assignment under the terms of this Lease so long as
(i) the use of the Premises remains consistent with the uses
permitted under the terms of this Lease and (ii) not more than
25% of the rentable area of the Premises (in the aggregate at any
one time) is so occupied or used. Tenant shall remain fully
liable under this Lease notwithstanding any use of a portion of
the Premises by others as permitted herein.
11.2. Tenant's Continuing Obligations. No
-------------------------------
assignment, transfer, mortgage, sublease or other encumbrance,
whether or not approved, and no indulgence granted by Landlord to
any assignee or subtenant, shall in any way impair the continuing
primary liability (which after an assignment shall be joint and
several with the assignee) of Tenant hereunder, and no consent in
a particular instance shall be deemed to be a waiver of the
obligation to obtain Landlord's consent in any other case.
12. BREACH; REMEDIES.
12.1. Breach. As used in this Lease, a "Breach" is
------
defined as a failure by Tenant to observe, comply with or perform
any of the terms, covenants, conditions or rules applicable to
Tenant under this Lease following written notice and opportunity
to cure as set forth below. Where a grace period for cure after
notice is specified herein, the failure by Tenant to cure such
Breach prior to the expiration of the applicable grace period
shall entitle Landlord to pursue the remedies set forth in
Section 12.2 or 12.3, or both:
(a) Except as expressly otherwise provided in this
Lease, the failure by Tenant to make any payment of Base Rent,
Additional Rent or any other monetary payment required to be made
by Tenant hereunder as and when due, where any such failure
continues for a period of five (5) business days following
written notice thereof by or on behalf of Landlord to Tenant.
(b) The failure by Tenant to comply with the
terms, covenants, conditions or provisions of this Lease that are
to be observed, complied with or performed by Tenant, other than
those described in Subsection 12.1 (a) above, where such Breach
continues for a period of 30 days after written notice thereof by
or on behalf of Landlord to Tenant provided, however, that if the
nature of Tenant's Breach is such that more than 30 days are
reasonably required for its cure, then it shall not be deemed to
be a Breach of this Lease by Tenant if Tenant commences such cure
within said 30 day period and thereafter diligently prosecutes
such cure to completion.
(c) The occurrence of any of the following events:
(i) the making by Tenant of any general arrangement or assignment
for the benefit of creditors; (ii) Tenant's becoming a "debtor''
as defined in 11 U.S.C. 101 or any successor statute thereto
(unless, in the case of a petition filed against Tenant, the same
is dismissed within 120 days); (iii) the appointment of a trustee
or receiver to take possession of substantially all of Tenant's
assets located at the Premises or of Tenant's interest in this
Lease, where possession is not restored to Tenant within 120
days; or (iv) the attachment, execution or other judicial seizure
of substantially all of Tenant's assets located at the Premises
or of Tenant's interest in this Lease, where such seizure is not
discharged within 120 days provided, however, that in the event
that any provision of this Subsection 12.1(c) is contrary to any
Applicable Law, such provision shall be of no force or effect and
shall not affect the validity of the remaining provisions of this
Lease.
12.2. Remedies. In the event of a Breach of this
--------
Lease by Tenant, as defined in Section 12.1, with or without
further notice or demand, and without limiting Landlord in the
exercise of any right or remedy which Landlord may have by reason
of such Breach, Landlord may:
(a) Terminate Tenant's right to possession of the
Premises, in which case this Lease shall terminate and Tenant
shall immediately surrender possession of the Premises to
Landlord. In such event, Landlord shall be entitled to recover
from Tenant: (i) the worth at the time of the award of the
unpaid Base Rent which had been earned at the time of
termination; (ii) the worth at the time of award of the amount by
which the unpaid Base Rent which would have been earned after
termination exceeds the rental value of the Premises for the
remainder of the scheduled Lease Term as of the date of
termination; and (iii) any other amount necessary to compensate
Landlord for all the detriment proximately caused by Tenant's
failure to perform its obligations under this Lease or which in
the ordinary course of things would be likely to result
therefrom, including the cost of recovering possession of the
Premises, expenses of reletting and reasonable attorneys' fees.
The worth at the time of award of the amount referred to in
provision (ii) of the prior sentence shall be computed by
discounting such amount at the discount rate of Chase Bank at the
time of award plus 1%. Efforts by Landlord to mitigate damages
caused by Tenant's Breach of this Lease shall not waive
Landlord's right to recover damages under this Section. If
termination of this Lease is obtained through the remedy of
unlawful detainer, Landlord shall have the right to recover in
such proceeding the unpaid rent and damages as are recoverable
therein, or Landlord may reserve therein the right to recover all
or any part thereof in a separate suit for such rent and/or
damages.
(b) Pursue any other remedy now or hereafter
available to Landlord under the laws or judicial decisions of the
State of New York.
(c) The expiration or termination of this Lease
and/or the termination of Tenant's right to possession shall not
relieve either Party from liability under any indemnity
provisions of this Lease as to matters occurring or accruing
during the Lease Term.
12.3. Late Charges. Tenant hereby acknowledges that
------------
late payment by Tenant to Landlord of rent and other sums due
hereunder will cause Landlord to incur costs not contemplated by
this Lease, the exact amount of which will be extremely difficult
to ascertain. Such costs include, but are not limited to,
processing and accounting charges and late charges which may be
imposed upon Landlord by the terms of any ground lease, mortgage
or trust deed covering the Premises. Accordingly, if more than
twice in any 12-month period during the Lease Term any monthly
installment of rent due from Tenant shall not be received by
Landlord or Landlord's designee within 10 days after such amount
shall be due, then, following written notice by Landlord, Tenant
shall pay to Landlord a late charge equal to 5% of such overdue
amount. The Parties hereby agree that such late charge
represents a fair and reasonable estimate of the costs Landlord
will incur by reason of late payment by Tenant. Acceptance of
such late charge by Landlord shall in no event constitute a
waiver of Tenant's Breach with respect to such overdue amount,
nor prevent Landlord from exercising any of the other rights and
remedies granted hereunder.
13. CONDEMNATION.
13.1. Permanent Taking. If the Premises or any
----------------
portion thereof are taken under the power of eminent domain or
sold under the threat of the exercise of said power (all of which
are herein called "condemnation"), this Lease shall terminate
as to the part so taken as of the date the condemning authority
takes title or possession, whichever first occurs. If (i) more
than 10% of the floor area of the Building; (ii) more than 25% of
the land area not occupied by any building; or (iii) a portion of
the Land which materially blocks access to the Building,
materially interferes with Tenant's business operations, Tenant
may, at Tenant's option, to be exercised in writing within 30
days after Landlord shall have given Tenant written notice of
such taking and of Tenant's option to terminate hereunder (or in
the absence of such notice, within 60 days after the condemning
authority shall have taken possession) terminate this Lease as of
the date the condemning authority takes such possession. If this
Lease is terminated pursuant to this Article, then all rent shall
be paid up to the date that possession is taken by the condemning
authority, and Landlord shall make an equitable reimbursement of
any amounts paid by Tenant and not yet earned. If Tenant does
not terminate this Lease in accordance with the foregoing, this
Lease shall remain in full force and effect as to the portion of
the Premises remaining, except that the Base Rent shall be
reduced based upon the remaining total rentable floor area of the
Building. Any award for the taking of all or any part of the
Premises under the power of eminent domain or any payment made
under threat of the exercise of such power shall be the property
of Landlord, whether such award shall be made as compensation for
diminution in value of the leasehold or for the taking of the
fee, or as severance damages provided, however, that Tenant shall
be entitled to any compensation awarded for the value of the loss
of Tenant's leasehold hereunder, Tenant's relocation expenses
and/or loss of Tenant Owned Alterations or Utility Installations
or Tenant's personal property or trade fixtures. In the event
that this Lease is not terminated by reason of such condemnation,
Landlord shall, at its sole cost and expense, repair any damage
to the Premises caused by such condemnation, except to the extent
that Tenant has been reimbursed therefor by the condemning
authority.
13.2 Temporary Taking. If the whole or any part of
----------------
the Premises is taken for any public or quasi-public use under
any statute or by right of eminent domain for temporary use or
occupancy, this Lease shall not terminate by reason thereof and
Tenant shall continue to pay Base Rent and other charges due
hereunder, except to the extent by which the Base Rent exceeds
the amount of the award. In the event of any such temporary
taking, Tenant shall be entitled to receive the entire amount of
the award made for the taking unless the period of temporary use
or occupancy shall extend beyond the expiration of the Lease
Term, in which case the award shall be apportioned between
Landlord and Tenant as of the date of expiration of the Lease
Term. If the temporary taking is for a term in excess of 180
days, then the taking shall be treated as a permanent taking and
be governed by Section 13.1.
14. BROKERS.
Tenant and Landlord each represent and warrant to the other
that it has had no dealings with any person, firm, broker or
finder (other than the Brokers, if any, named in Section 1.7) in
connection with the negotiation of this Lease and/or the
consummation of the transaction contemplated hereby, and that no
broker or other person, firm or entity other than said named
Brokers is entitled to any commission or finder's fee in
connection with said transaction. Tenant and Landlord do each
hereby agree to indemnify, protect, defend and hold the other
harmless from and against liability for compensation or charges
which may be claimed by any such unnamed broker, finder or other
similar party by reason of any dealings or actions of the
indemnifying Party, including any costs, expenses and attorneys'
fees reasonably incurred with respect thereto. The Brokers shall
be compensated for their services rendered in connection with
this Lease in accordance with the terms of a separate written
agreement or agreements. No Broker shall be a third party
beneficiary under this Lease for any purpose or have any rights
or remedies with respect hereto.
15. SECURITY DEPOSIT
Tenant has deposited One Hundred Fifty-two Thousand Two
Hundred Fifty and 00/100 dollars ($152,250.00) with Landlord as
security for Tenant's payment of rent and performance of its
other obligations under this lease, and any renewals or
extensions of this Lease. The amount of the security deposit
represents six months rent at the Base Rent for the first lease
year. In each subsequent lease year Tenant shall add to the
security deposit so that the then current security deposit equals
six months rent at the then current Base Rent. If Tenant
defaults in its payment of rent or performance of its other
obligations under this Lease, Landlord may use all or part of the
security deposit for the payment of rent or any other amount in
default, or for the payment of any other amount which Landlord
may spend or become obligated to spend by reason of Tenant's
default, or for the payment to Landlord of any other loss or
damage which Landlord may suffer by reason of Tenant's default.
If Landlord so uses any portion of the security deposit, Tenant
will restore the security deposit to the required amount within
five (5) days after written demand from Landlord so that Landlord
shall, at all times, have a security deposit equal to six (6)
months rent at the Base Rent. Landlord will not be required to
keep the security deposit separate from its general funds, and
Tenant will not be entitled to interest on the security deposit.
The security deposit will not be a limitation on Landlord's
damages or other rights under this lease, or a payment of
liquidated damages, or an advance payment of the rent. If Tenant
pays the rent and performs all of its other obligations under
this Lease, Landlord will return the unused portion of the
security deposit to Tenant within sixty (60) days after the end
of the term; however, if Landlord has evidence that the security
deposit has been assigned to an assignee of the Lease, Landlord
will return the security deposit to the assignee. Landlord may
deliver the security deposit to the purchaser of the premises and
be discharged from further liability with respect to it.
At Tenant's election, in lieu of a cash security deposit as
described above, Tenant, simultaneously with the execution of
this Lease, shall deliver to Landlord an irrevocable standby
letter of credit (the "Letter of Credit") in such form and
content satisfactory to Landlord. The Letter of Credit shall be
in the initial sum of $194,750.00 and issued by a commercial bank
or trust company satisfactory to Landlord. The Letter of Credit
shall expire not earlier than twelve (12) months after the date
of delivery thereof to Landlord, and shall provide that same
shall be automatically renewed for successive twelve (12) month
periods through a date which is not earlier than thirty (30) days
after the expiration of this Lease, or any renewal or extension
thereof, unless notice of non-renewal has been given by the
issuing bank to Landlord and Landlord's attorney by registered or
certified mail, return receipt requested, not less than thirty
(30) days prior to the expiration of the current period. If the
issuing bank does not renew the Letter of Credit, and if Tenant
does not deliver a substitute Letter of Credit at least thirty
(30) days prior to the expiration of the current period, then, in
addition to its rights granted under this provision, the Landlord
shall have the right to draw upon the existing Letter of Credit,
in which case the funds received by Landlord shall be considered
the security deposit as provided above. At the time of renewal
of the Letter of Credit, the amount of the Letter of Credit shall
be increased in accordance with the increase in rent for that
period, as set forth above.
16. TENANT ESTOPPEL.
Within no more than ten (10) days after written request by
Landlord, Tenant will execute, acknowledge, and deliver to
landlord a certificate stating:
(a) that this Lease is unmodified and in full force
and effect, or, if the Lease is modified, the way in which
it is modified accompanied by a copy of the modification
agreement;
(b) the date to which rental and other sums payable
under this Lease have been paid;
(c) that no notice has been received by Tenant of any
default which has not been cured, or, if the default has not
been cured, what Tenant intends to do in order to effect the
cure, and when it will do so;
(d) that Tenant has accepted and occupied the
Premises;
(e) that Tenant has no claim or offset against
Landlord, or, if it does, stating the date of the assignment
and assignee (if known to Tenant); and
(f) other matters as may be reasonably requested by
Landlord.
Any certificate may be relied upon by any prospective
purchaser of the Premises and any prospective mortgagee or
beneficiary under any deed of trust or mortgage encumbering the
Premises. If Landlord submits a completed certificate to Tenant,
and if Tenant fails to object to its contents within fifteen (15)
days after its receipt of the completed certificate, the matters
stated in the certificate will conclusively be deemed to be
correct, and Tenant shall pay to Landlord, in addition to all
Rent and Additional Rent due hereunder, the sum of $150.00 per
day for each day after the fifteen (15) day period that Tenant
fails to provide a completed certificate. If the completed
certificate is not delivered within twenty (20) days of request
form Landlord, such failure shall be an event of default
hereunder.
17. LANDLORD'S LIABILITY.
The term "Landlord" as used herein shall mean the owner or
owners at the time in question of the fee title to the Premises,
or, if this is a sublease, of the Tenant's interest in the master
lease. In the event of a transfer of Landlord's title or
interest in the Premises or in this Lease, Landlord shall deliver
to the transferee or assignee (in cash or by credit) any unused
or unearned funds of Tenant, if any, held by Landlord at the time
of such transfer or assignment, and the transferee or assignee
shall be deemed to have assumed the obligations of Landlord
hereunder effective as of the date of the transfer. The
transferor shall remain obligated under this Lease for the period
during which such entity owned the Premises.
18. SEVERABILITY.
The invalidity of any provision of this Lease, as determined
by a court of competent jurisdiction, shall in no way affect the
validity of any other provision hereof.
19. INTEREST ON PAST-DUE OBLIGATIONS.
Any monetary payment due to one Party from the other
hereunder, other than late charges, not received within 30 days
following the date on which it was due, shall bear interest from
the 31st day after it was due at the rate of 12% per annum, but
not exceeding the maximum rate allowed by law, in addition to the
late charge provided for in Section 12.3.
20. TIME OF ESSENCE.
Time is of the essence with respect to the performance of
all obligations to be performed or observed by the Parties under
this Lease.
21. RENT DEFINED.
All monetary obligations of Tenant to Landlord under the
terms of this Lease are deemed to be Rent.
22. NO PRIOR OR OTHER AGREEMENTS.
This Lease contains all agreements between the Landlord and
Tenant with respect to any matter mentioned herein, and no other
prior or contemporaneous agreement or understanding shall be
effective.
23. NOTICES.
23.1 All notices required or permitted by this Lease
shall be in writing and may be delivered in person (by hand or by
messenger or courier service) or may be sent by certified or
registered mail or by overnight courier or mail service that
guarantees next-day delivery and provides a receipt, with postage
prepaid, and shall be deemed sufficiently given if served in a
manner specified in this Article 23. The following are the
address(es) of the Parties for delivery or mailing of notice
purposes:
If to Tenant: Touchstone Applied Science Associates, Inc.
4 Hardscrabble Heights
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President
with a copy to: Rider, Weiner, ▇▇▇▇▇▇▇ & Calhelha
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
If to Landlord: Nominee Company
c/o ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ & ▇'▇▇▇▇▇▇ Real Estate Services, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
with a copy to: ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ Wise & ▇▇▇▇▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Either Party may, by written notice to the other, specify a
different address for notice purposes. A copy of all notices
required or permitted to be given to Landlord hereunder shall be
concurrently transmitted to such party or parties at such
addresses as Landlord may from time to time hereafter designate
by written notice to Tenant.
23.2 Any notice sent by registered or certified mail,
return receipt requested, shall be deemed given on the date of
delivery shown on the receipt card or if no delivery date is
shown, the postmark thereon. Notice delivered by overnight
courier that guarantees next day delivery and provides a receipt
shall be deemed given 24 hours after delivery of the same to the
service or courier. If notice is received on a Sunday or legal
holiday, it shall be deemed received on the next business day.
24. WAIVERS.
No waiver by Landlord of the Breach of any term, covenant or
condition hereof by Tenant shall be deemed a waiver of any other
term, covenant or condition hereof, or of any subsequent Breach
by Tenant of the same or of any other term, covenant or condition
hereof.
25. RECORDING.
Tenant's recordation of this lease or any memorandum or
short form of it will be void and a Breach under this Lease
entitling Landlord to immediately terminate this Lease.
26. CUMULATIVE REMEDIES.
No remedy or election hereunder shall be deemed exclusive
but shall, wherever possible, be cumulative with all other
remedies at law or in equity.
27. BINDING EFFECT; CHOICE OF LAW.
This Lease shall be binding upon the parties, their personal
representatives, successors and assigns and be governed by the
laws of the State of New York. Any litigation between the
Parties hereto concerning this Lease shall be initiated in
Westchester or ▇▇▇▇▇▇ County, State of New York.
28. SUBORDINATION
(a) General. This Lease and Tenant's rights under
-------
this Lease are subject and subordinate to any ground lease or
underlying lease, mortgage, deed of trust, or other lien
encumbrance or indenture, together with any renewals, extensions,
modifications, consolidations, and replacements of them, which
now or at any subsequent time affect the premises, any interest
of Landlord in the Premises, or Landlord's interest in this Lease
and the estate created by this Lease (except to the extent that
any such instrument expressly provides that this Lease is
superior to it). This provision will be self-operative and no
further instrument of subordination will be required in order to
effect it. Nevertheless, Tenant will execute, acknowledge and
deliver to Landlord, at any time and from time to time, upon
demand by Landlord, any documents as may be requested by
Landlord, any ground landlord or underlying lessor, or any
mortgagee, or any holder of a deed of trust or other instrument
described in this paragraph, to confirm or effect the
subordination. If Tenant fails or refuses to execute,
acknowledge, and deliver any such document within fifteen (15)
days after written demand, Tenant shall pay to Landlord, in
addition to the Rent and Additional Rent due hereunder, the sum
of $150.00 per day for each day after the fifteen (15) day period
that Tenant fails to provide the requested document. If the
requested document is not delivered within twenty (20) days of
request form Landlord, such failure shall be an event of default
hereunder.
(b) Attornment. If any holder of any mortgage,
----------
indenture, deed of trust, or other similar instrument described
in subparagraph (a) succeeds to Landlord's interest in the
Premises, Tenant will pay to it all rents subsequently payable
under this Lease. Tenant will, upon request of anyone so
succeeding to the interest of Landlord, automatically become the
Tenant of, and attorn to, the successor in interest without
change in this Lease. The successor in interest will not be bound
by (1) any payment of rent for more than one month in advance,
(2) any amendment or modification of this Lease made without its
written consent, (3) any claim against Landlord arising prior to
the date on which the successor succeeded to Landlord's interest,
or (4) any claim or offset of rent against the Landlord. Upon
request by the successor in interest and without cost to landlord
or the successor in interest, Tenant will execute, acknowledge,
and deliver an instrument or instruments confirming the
attornment. The instrument of attornment will also provide that
the successor in interest will not disturb Tenant in its use of
the premises in accordance with this lease. If Tenant fails or
refuses to execute, acknowledge, and deliver the instrument
within fifteen (15) days after written demand, the successor in
interest will be entitled receive form Tenant the sum of $150.00
per day for each day after the fifteen (15) day period that
Tenant fails to provide the requested instrument. If the
requested instrument is not delivered within twenty (20) days of
request, such failure shall be an event of default hereunder.
29. ATTORNEYS' FEES.
If any Party brings an action or proceeding to enforce the
terms hereof or declare rights hereunder, the Prevailing Party
(as hereafter defined) in any such proceeding, action or appeal
thereon, shall be entitled to reasonable attorneys' fees. Such
fees may be awarded in the same suit or recovered in a separate
suit, whether or not such action or proceeding is pursued to
decision or judgment. The term "Prevailing Party" shall
include, without limitation, a Party who substantially obtains or
defeats the relief sought, as the case may be, whether by
compromise, settlement, judgment or the abandonment by the other
Party of its claim or defense. The attorneys' fees awarded shall
not be computed in accordance with any court fee schedule, but
shall be such as to fully reimburse all attorneys' fees
reasonably incurred.
30. LANDLORD'S ACCESS.
Landlord shall have the right to enter the Premises at any
time in the case of an emergency upon such notice as may be
reasonable under the circumstances, (but notice shall not be
required if the nature of the emergency would make notice
unreasonable), and otherwise at reasonable times upon reasonable
notice, for the purpose of performing its obligations hereunder.
31. SIGNS.
Tenant may install such signs as are reasonably required to
advertise Tenant's business, subject to Applicable Law. The
installation of any sign on the Premises by or for Tenant shall
be subject to the provisions of Article 6 (Maintenance; Repairs;
Utility Installations; Trade Fixtures And Alterations). The
existing signs at the Premise are acceptable to Landlord and may
remain on the Premises provided such existing signs do not
currently violate and municipal code, ordinance or regulation.
32. TERMINATION; MERGER.
Unless specifically stated otherwise in writing by Landlord,
the voluntary or other surrender of this Lease by Tenant, the
mutual termination or cancellation hereof, or a termination
hereof by Landlord for Breach by Tenant, shall automatically
terminate any sublease or lesser estate in the Premises.
However, Landlord shall, in the event of any such surrender,
termination or cancellation, have the option to continue any one
or all of any existing sub-tenancies. Landlord's failure within
10 days following any such event to make a written election to
the contrary by written notice to the holder of any such lesser
interest shall constitute Landlord's election to have such event
constitute the termination of such interest.
33. QUIET POSSESSION.
Upon payment by Tenant of the rent for the Premises and the
observance and performance of all of the covenants, conditions
and provisions on Tenant's part to be observed and performed
under this Lease, Tenant shall have quiet possession of the
Premises for the entire Lease Term.
34. CONSENTS.
Except as otherwise provided herein, wherever in this Lease
the consent of a party to this Lease is required to an act by or
for the other party, such consent shall not be unreasonably
withheld or delayed. Landlord's consent to any act, assignment
of this Lease or subletting of the Premises by Tenant shall not
constitute an acknowledgment that no Breach by Tenant of this
Lease exists, nor shall such consent be deemed a waiver of any
then existing Breach, except as may be otherwise specifically
stated in writing by Landlord at the time of such consent.
35. AUTHORITY.
If either party hereto is a corporation, trust limited
liability company or general or limited partnership, each
individual executing this Lease on behalf of such entity
represents and warrants that he or she is duly authorized to
execute and deliver this Lease on its behalf. If either party is
a corporation, trust or partnership, such party shall, within 30
days after request by the other party, deliver to such party
evidence of such authority.
36. CONFLICT.
Any conflict between the printed provisions of this Lease
and the typewritten or handwritten provisions shall be controlled
by the typewritten or handwritten provisions.
37. OFFER.
Preparation of this Lease by either party and submission of
same to the other party shall not be deemed an offer to lease.
This Lease is not intended to be binding until executed by all
parties hereto.
38. AMENDMENTS.
This Lease may be modified only in writing, signed by the
parties in interest at the time of the modification or amendment.
39. HOLDOVER.
In the event that Tenant shall hold over at the expiration
or other termination of the Lease Term set forth in this Lease,
or any renewal term, then this Lease shall continue as a
month-to-month lease subject to termination by either Landlord
upon 10 days' prior written notice to the other, which notice may
be given prior to the expiration of the Lease Term. Such
month-to-month tenancy shall be subject to all of the terms and
conditions of this Lease, including the Base Rent, in effect
during the final month of this Lease Term. However, following 10
days' prior written notice to Tenant, Tenant shall be liable for
Base Rent during the holdover period in an amount equal to 125%
of the Base Rent provided for in this Lease during the last month
of the Lease Term, together with all other Additional Rent and
other charges provided for in the Lease. Tenant acknowledges
that the rental value of the Premises in the future is difficult
to estimate and that the increased amount of Base Rent set forth
in this Section is a reasonable estimate by the parties of the
future rental value of the Premises upon expiration or
termination of the Lease Term or renewal term set forth in this
Lease.
40. MULTIPLE PARTIES.
Except as otherwise expressly provided herein, if more than
one person or entity is named herein as either Landlord or
Tenant, the obligations of such multiple Parties shall be the
joint and several responsibility of all persons or entities named
herein as such Landlord or Tenant.
[SIGNATURES ON NEXT PAGE]
WHEREFORE, the parties hereto have executed this Lease as of
the date first written above.
LANDLORD
26 ▇▇▇▇▇▇, LLC
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title:
TENANT
TOUCHSTONE APPLIED SCIENCE ASSOCIATES, INC.
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
ACKNOWLEDGEMENTS
STATE OF NEW YORK )
) ss.:
COUNTY OF WESTCHESTER )
On the __ day of January, 2003, before me, the
undersigned, a Notary Public in and for said State, personally
appeared ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ personally known to me or proved to me
on the basis of satisfactory evidence to be the individual whose
name is subscribed to the within instrument and he acknowledged
to me that he executed the same in his capacity, and that by his
signature on the instrument, the individual, or the person upon
behalf of which the individual acted, executed the instrument.
_____________________________
Notary Public
STATE OF NEW YORK )
) ss.:
COUNTY OF WESTCHESTER )
On the __ day of January, 2003, before me, the
undersigned, a Notary Public in and for said State, personally
appeared ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ personally known to me or proved to me
on the basis of satisfactory evidence to be the individual whose
name is subscribed to the within instrument and he acknowledged
to me that he executed the same in his capacity, and that by his
signature on the instrument, the individual, or the person upon
behalf of which the individual acted, executed the instrument.
______________________________
Notary Public
EXHIBIT A
THE LAND
EXHIBIT B
GUARANTY
____________________________________________________________________________
AGREEMENT OF LEASE
BETWEEN
TOUCHSTONE APPLIED SCIENCE ASSOCIATES, INC., as Tenant
and
26 ▇▇▇▇▇▇, LLC, as Landlord
DATED: MARCH 30, 2003
____________________________________________________________________________
Prepared By:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.,