Exhibit 10.1
AGREEMENT OF LEASE
KAMPNER REALTY, LLC
as Landlord
- and -
FIVE STAR PRODUCTS, INC.
as Tenant
Premises: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
AGREEMENT OF LEASE
AGREEMENT OF LEASE (this "Lease"), dated as of April 5, 2007, between
KAMPNER REALTY, LLC, a New York limited liability company having a place of
business at ▇▇ ▇▇. ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, hereinafter
referred to as "Landlord", and FIVE STAR PRODUCTS, INC., a Delaware corporation,
having its office at ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
hereinafter referred to as "Tenant".
PRELIMINARY STATEMENT
WHEREAS, Landlord is the owner in fee simple of the land designated as
Tax Block 2945 and ▇▇▇ ▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ of Kings, as more
particularly described on Exhibit A attached hereto and made a part hereof (the
"Land"), and the buildings and improvements thereon, containing approximately
40,000 square feet and known as ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, (the "Building") (the Land and the Building together referred to herein
as the "Premises");
WHEREAS, Tenant desires to lease the Premises, including all fixtures,
equipment and other personalty owned by Landlord and located in, on or about the
Premises, in accordance with, and subject to, the provisions of this Lease;
WHEREAS, Right-way Dealer Warehouse, Inc. ("Rightway") is the sole
tenant of the Premises pursuant to a prior lease agreement between Landlord and
Rightway; and
WHEREAS, Tenant desires to purchase certain assets of Rightway and to
conduct business in the Premises pursuant to that certain asset purchase
agreement between Tenant and Rightway, dated as of March 13, 2007 (the "Asset
Purchase Agreement");
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants and agreements hereinafter contained, Landlord and Tenant
hereby agree as follows:
DEFINITIONS
For all purposes of this Lease and all agreements supplemental thereto
or modifying this Lease, the following terms shall have the meanings herein
specified:
"Additional Rent" shall mean all sums payable by Tenant to Landlord
pursuant to the various Articles herein in which said term is used and any other
charges, other than Base Rent, as the same shall become due and payable
hereunder.
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly Controlling, Controlled by or under common Control with
such Person.
"Affiliated Parties" and "Affiliated Party" shall have the meaning
given to such terms in Section 10.1(i)(a).
"Alterations" shall have the meaning given to such term in Section 9.1.
"Base Rent" shall mean the fixed rental payable pursuant to Section
1.3.
"Building Systems" shall mean the Building's elevators, if any;
mechanical and interior and exterior electrical systems (including, without
limitation, heating, ventilation and cooling systems); plumbing systems; fire
protection, life safety and sprinkler systems; and all utility lines associated
therewith.
"Business Days" shall mean all days, excluding Saturdays, Sundays and
all days observed, without duplication, by either the State of New York, or the
Federal Government as holidays.
"Capital Repairs" shall mean: (i) all maintenance, repair, and
replacement of all or any portion of the Structural Elements and (ii) all repair
and replacements to any portion of the Premises, to the extent the same may be
capitalized in accordance with generally accepted accounting principles,
including, but not limited to, replacements to the Building Systems and/or the
repaving and/or replacement of the parking areas.
"Commencement Date" shall mean the date on which the closing of the
transactions contemplated by the Asset Purchase Agreement shall have occurred
("Closing" or "Closing Date"), but subject to (i) Landlord's delivery to Tenant
of possession of, and keys to, the Premises on the Closing Date in its "AS IS"
condition, broom clean given the nature of the ongoing "Cash and Carry" business
being conducted therein (but with all furniture, equipment and other personalty
of Rightway and of the Landlord remaining therein and thereon) free of any
tenancies, including without limitation, the tenancy of Rightway, or other
rights to use, possess, or occupy the Premises, but subject to the requirements
of Section 2.2, and (ii) the prior approval of the United States Bankruptcy
Court of the District of Massachusetts ("Court Approval") to the Asset Purchase
Agreement and to this Lease if legally required.
"Control" with respect to any partnership, corporation, limited
liability company, trust, governmental body or other entity, shall mean either
(i) ownership or voting control, directly or indirectly, of 50% or more of the
voting stock, partnership interests or other beneficial ownership interests of
the entity in question or (ii) the legal right to control the actions of an
entity (e.g., general partner of a limited partnership, a managing member of a
limited liability company, or the contractual right to control the management
and actions of an entity). An entity "Controlled" by one or more Persons means
an entity over which such Person(s) have Control. The Persons "Controlling" an
entity are the Persons in Control or having Control of such entity.
"Default Interest Rate" shall mean two (2) percentage points over the
per annum prime or base rate announced from time to time by Citibank, N.A. or
its successor.
"Environmental Law" means any and all federal, state and local laws,
statutes, regulations, ordinances, rules or regulations, now or hereafter in
effect, pertaining to hazardous substances at, on, under, or about the Premises.
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"Excusable Delay" shall mean those situations beyond either party's
reasonable control, including by way of example and not limitation, a delay
caused by governmental action or lack thereof, shortages or unavailability of
materials and/or supplies, labor disputes, strikes, fire or other casualty, acts
of God; and of declared or undeclared war, public disorder, riot or civil
commotion.
"Execution Date" shall mean the date on which this Lease is fully
executed and delivered by and to Landlord and Tenant.
"Fair Market Value" shall mean the fair market value of the Premises as
of the date of this Lease as determined by an independent appraiser mutually
selected by Landlord and Tenant, as if the Premises was vacant space and without
taking into consideration the value or existence of this Lease. For purposes of
Article 33, "Fair Market Value" shall mean the Fair Market Value as increased
annually at a rate of three percent (3%), which increase shall be effective as
of each anniversary of the Commencement Date. The parties shall agree upon a
mutually acceptable independent appraiser within ten (10) days after the
execution and delivery of this Lease by and to the Landlord and Tenant. If
Landlord and Tenant cannot so agree, then each party shall retain an independent
appraiser to determine the Fair Market Value of the Premises in accordance
herewith. If the difference between the Fair Market Value determined by each
party's independent appraiser is less than or equal to ten percent (10%), then
the average of the two determinations shall be the Fair Market Value, unless a
mutually agreed upon value is reached. If the difference between the Fair Market
Value determined by each party's appraiser is greater than ten percent (10%),
then the parties' appraisers shall mutually select a third appraiser who shall
determine the Fair Market Value of the Premises in accordance herewith, and such
third appraisal shall be binding on Landlord and Tenant. The parties agree that
all appraisal(s) upon which the Fair Market Value is based shall be completed by
each party, and a true and complete copy thereof shall be delivered by and to
each party, within thirty (30) days after the Execution Date. A copy of all
appraisal reports obtained pursuant to this paragraph shall be annexed hereto in
full as Exhibit B.
"GAAP" shall mean generally accepted accounting principles.
"Governmental Authority" shall mean any governmental instrumentality,
authority or body (including, without limitation, the township, county, state or
federal governments, any agency, subdivision or department of any of the
foregoing or any other quasi-governmental agency, or any fire insurance rating
organization) that has lawful jurisdiction over the Premises or the use or
operation thereof.
"Hazardous Substances" shall mean any substance, chemical, waste or
material that is regulated by any federal, state or local Governmental Authority
because of its toxicity, infectiousness, radioactivity, explosiveness,
ignitability, corrosiveness or reactivity, including, without limitation, ,
asbestos, polychlorinated biphenyls, flammable explosives, oil, petroleum or any
refined petroleum product or any pollutants, black mold or lead paint.
"Improvements" shall mean all improvements, exclusive of the Building,
on the Land.
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"Landlord Parties" shall mean Landlord's agents, servants, employees,
contractors, invitees and licensees (but expressly excluding Tenant and Tenant
Visitors).
"Landlord Personalty" shall mean all furniture, fixtures and equipment
owned by Landlord which are now existing or contained in, on or about the
Premises, including without limitation, those items specified on Schedule 1
hereto.
"Laws" shall mean all present and future laws, rules, orders,
ordinances, regulations, statutes, requirements, codes and executive orders,
extraordinary and ordinary, of (i) all Governmental Authorities, including the
Americans With Disabilities Act, 42 U.S.C. ss. 12101 (et seq.), New York City
Local Law 58 of 1987, and any law of like import, and all rules, regulations and
government orders with respect thereto, and any of the foregoing relating to
Hazardous Materials, environmental matters, public health and safety matters,
(ii) any applicable fire rating bureau or other body exercising similar
functions, affecting the Premises or the maintenance, use or occupation thereof,
or any street, avenue or sidewalk comprising a part of or in front thereof or
any vault in or under the same and (iii) all requirements of all insurance
bodies affecting the Premises.
"Lease" or "this Lease" consists of this Agreement of Lease and all
exhibits and schedules attached hereto and made a part hereof.
"Net Sales" shall mean the annual net sales of the Tenant as determined
by the Tenant and based upon the Tenant's certified financial statements
prepared by the Tenant's certified public accountant in accordance with GAAP.
"Operating Expenses" shall mean without duplication, all costs and
expenses of Landlord that are reasonable and directly attributable to the
operation, servicing, maintenance and management of the Building during the term
of the Lease and any renewal term determined in accordance with GAAP, but
specifically excluding (i) any costs associated with the operation or business
of Landlord or the Landlord's ownership of the Land and Building, including
without limitation, any mortgage interest, mortgage taxes and financing costs,
general overhead and administrative costs, and tax return preparation, (ii)
costs of leasing or attempting to lease all or any portion of the Premises;
(iii) costs of judgments, settlements or arbitration awards against Landlord or
the Building; (iv) costs to remedy violations of law arising from Landlord's
negligence; (v) all soft and hard costs associated with the Landlord's
construction or renovation of the Building where such construction or renovation
is not Tenant's obligation hereunder, (vi) costs associated with the removal,
replacement, enclosure or other treatment of asbestos, freon, lead paint, PCB's
or other hazardous substances or toxic materials not brought onto the Premises
by Tenant, (vii) amounts reimbursed Landlord from insurance, guaranties or
warranties, (viii) insurance costs of Landlord, and (ix) costs incurred in
connection with Landlord's title or other property interests.
"Permitted Alterations" shall have the meaning given to such term in
Section 9.1.
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"Person" shall mean any natural person, corporation, partnership
(general or limited), limited liability company, trust, association, joint
venture, governmental body or agency or other entity.
"Premises" shall mean the Building, the Land, and all other
improvements existing on the Land as of the date of this Lease, collectively.
"Structural Elements" shall mean all elements of the roof (including
roof joists, structure, and membrane) of the Building, the exterior (including
gutters, flashings, and downspouts) of the Building, and to all elements of the
exterior windows, footings, foundation, floor slabs, permanent exterior walls,
support columns, and joists of the Building.
"Tax Appeal" shall have the meaning set forth in Section 5.4 hereof.
"Tax" or "Taxes" shall mean all real estate taxes, governmental
impositions and special assessments levied against the Premises, giving effect
to any exemptions, abatements or reductions in Taxes for which the Premises is
or may in the future be eligible. Notwithstanding the foregoing, (i) in the
event that any real estate taxes and/or assessments against the Premises may be
paid in two or more installments, Landlord shall pay the same over the longest
period permitted, and Taxes shall include only those installments required to be
paid during the Term and (ii) Taxes shall not include (x) any federal, state or
local income, revenue or excise taxes imposed on Landlord or any inheritance,
estate, succession, gift, capital stock, franchise, excise, realty transfer or
excess profit taxes (unless, and only to the extent, imposed in lieu of Taxes),
(y) any Taxes that are attributable to any land or improvements on such land to
the extent that such land is not included in the definition of the Land, as set
forth above, and (z) any omitted or additional Taxes assessed during the Term
but relating to a period prior to the Commencement Date or after the Termination
Date. In addition, the amount of such tax deemed to be included in the term
"Taxes" herein shall be determined as if the Building and the Land were the only
assets of Landlord and as if the rent paid hereunder were the only income of
Landlord. Landlord represents that no tax appeals with respect to the Premises
are pending or shall be pending as of the Commencement Date and that there are
no "PILOT" agreements that affect the Premises.
"Tenant Personalty" shall have the meaning given to such term in
Section 1.2(b).
"Tenant's Visitors" shall mean persons invited by Tenant into the
Building as guests or doing lawful business with Tenant including, without
limitation, Tenant's agents, servants, employees, contractors, invitees and
licensees.
"Term" shall mean the time period commencing on the Commencement Date
and terminating on the Termination Date.
"Termination Date" shall mean the day immediately preceding the fifth
(5th) anniversary of the Commencement Date or, if the Commencement Date occurs
other than on the first day of a calendar month, the last day of the calendar
month in which the fifth (5th) anniversary of the Commencement Date occurs. If
the original term is extended pursuant to the provisions of this Lease, the
Termination Date shall mean the last day of any such extended term.
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ARTICLE 1 DEMISE OF PREMISES; TERM; RENT; ADDITIONAL RENT
1.1. (a) Landlord, for and in consideration of the covenants
hereinafter contained and made on the part of Tenant, hereby leases to Tenant
for the Term, and Tenant hereby hires from Landlord for the Term, the Premises
and all Landlord Personalty, subject to the terms and conditions of this Lease.
(b) Landlord shall deliver possession of, and the keys to, the
Premises on the Closing Date. In the event Tenant receives Court Approval and
the Closing has occurred, but Landlord fails to deliver possession of, and keys
to, the Premises in the condition required by the terms of this Lease on the
Closing Date, then Landlord shall be in default of this Lease. In such event,
Tenant shall have the right to seek monetary damages and equitable relief,
including but not limited to, specific performance, it being agreed between the
parties that Landlord's default would cause Tenant immediate and irreparable
damage and that monetary damages would not be an adequate remedy for such
breach. Notwithstanding the foregoing sentence, in the event Landlord is in
default of this Lease for its failure to deliver possession of, and the keys to,
the Premises on the Closing Date, then Tenant's obligations under this Lease
shall be extended one additional day beyond such the Closing Date for each day
that Landlord's delivery of possession of, and the keys to, the Premises is
delayed beyond the Closing Date through the date that Landlord delivers to
Tenant possession of, and keys to, the Premises in the condition required
hereby. In the event that all of the conditions to the Commencement Date
specified in this Paragraph and in the definition of "Commencement Date" have
not been satisfied within sixty (60) days after the full execution and delivery
of this Lease by and to the parties, then Tenant shall have the right to
terminate this Lease at any time thereafter (but prior to the satisfaction of
the foregoing conditions), upon written notice to Landlord. In the event that
the Closing does not occur on or before April 13, 2007, this lease may be
terminated upon written notice by Tenant to Landlord, in which event neither
party shall have any liabilities or obligations to the other.
1.2. (a) Tenant shall have the right, at no additional charge, to use
all of the parking areas serving the Building. Tenant shall have full access to
the Building and the Premises at all times, and if access to a public road is
via private roads or
streets, Tenant shall have the continuous right to unimpeded use of such roads
and streets for ingress and egress to the Building and the Premises.
(b) Landlord hereby agrees not to remove, transfer, alter, affect or
make any claim to or file any lien against any of the furniture, fixtures,
equipment or other personal possessions, alterations or improvements, of or
belonging to Rightway which are now existing at, on or about the Premises,
including but limited to those items specified on Schedule 2 hereto ("Tenant
Personalty"), it being understood between the parties that all such Tenant
Personalty is being acquired by Tenant from Rightway for Tenant's use. Landlord
makes no representations or warranties as to the physical condition or title to
the Personalty; provided that Landlord hereby represents that it has not,
removed, transferred, altered, affected or made any claim to or filed any lien
against any Tenant Personalty and has not caused any other Person to remove,
transfer, alter, affect or make any claim to Tenant Personalty prior to and
including the Commencement Date.
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1.3.
(i) Tenant hereby covenants and agrees to pay the following to
Landlord, from and after the Commencement Date and during the Term, to the
address set forth above or such other place as Landlord may from time to time
designate, without any offset, counterclaim, abatement or deduction whatsoever
except as expressly provided herein: (y) the Base Rent specified in Section
1.3(ii) in monthly installments on the first day of each month during the Term,
in advance, without notice or demand, and (z) the Taxes as herein provided, and
all other sums payable by Tenant hereunder constituting Additional Rent;
provided that Tenant shall have the right to receive Tax statements directly
from any taxing authorities and to pay such Taxes directly to such taxing
authorities.
(ii) If the Commencement Date shall fall on a day other than
the first day of a calendar month, the Base Rent and any Additional Rent payable
hereunder shall be apportioned for the number of days remaining in that month
from the Commencement Date through the last day of the calendar month in which
the Commencement Date occurs. Tenant shall pay Base Rent as follows, subject to
any adjustment as provided in Section 1.4, below: Commencing on the Commencement
Date and continuing through and including the currently scheduled Termination
Date, Tenant shall pay annual Base Rent in the amount of Three Hundred
Twenty-five Thousand and 00/100 Dollars ($325,000.00) per annum payable in equal
monthly installments of Twenty-seven Thousand Eighty-three and 33/100 Dollars
($27,083.33).
1.4. Base Rent Adjustment. Notwithstanding the provisions of Section
1.3(ii), above, the Base Rent may be adjusted annually for fiscal years ending
December 31, 2008, December 31, 2009, December 31, 2010, and December 31, 2011
in accordance with the terms of this Section 1.4.
(i) Definitions. For purposes of this Section 1.4, the
following terms shall have the meanings ascribed to them below:
(a) "Fiscal Year" shall mean any fiscal year ending
December 31, 2008, December 31, 2009, December 31,
2010, or December 31, 2011.
(b) "Notional Account" shall mean the notional
account maintained by Tenant pursuant to the terms of
this Section 1.4.
(c) "Sales Shortfall" shall mean the difference
between the Target and the Adjusted Net Sales.
(d) "Target" shall mean Eight Million ($8,000,000)
Dollars in Net Sales.
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(ii) Determination of Base Rent Adjustment.
(a) Within ninety (90) days after the end of a Fiscal Year,
Tenant shall determine the Tenant's Net Sales for such Fiscal Year, and if such
Net Sales for such Fiscal Year equals or exceeds the Target then no adjustment
shall be made to the Base Rent for such Fiscal Year. If the Net Sales for such
Fiscal Year is below the Target, then the Net Sales for such Fiscal Year shall
be increased to the extent of the positive balance in the Notional Account, and
to the extent the Net Sales for such Fiscal Year as adjusted are less than the
Target, an adjustment to the Base Rent shall be calculated. Such adjustment
shall be calculated by dividing the Sales Shortfall by 1,000,000, and then
multiplying the result by fifteen percent (15%) of the Base Rent.
Notwithstanding the foregoing sentence, such adjustment shall not exceed an
amount that would reduce the Base Rent below Two Hundred Thousand ($280,000)
Dollars per annum.
(b) Tenant shall maintain a Notional Account for
purposes of this Section 1.4. At January 1, 2008,
the Notional Account shall have a zero balance. After each Fiscal Year, Tenant
shall credit the Notional Account with any amount of Net Sales for such Fiscal
Year in excess of the Target, and reduce the Notional Account (x) to the extent
Net Sales for such Fiscal Year are less than the Target and (y) by the amount
the Notional Account is reduced to adjust Net Sales for any prior Fiscal Year
but not below zero. Any positive balance in the Notional Account may be used to
address the reduction of Base Rent in any prior Fiscal Year, and any
reimbursement for reduced rent that becomes payable by Tenant to Landlord as a
result of such adjustments shall be paid in accordance with Section 1.4(iii)(b),
below.
(iii) Payment of Adjustments. Within ninety (90) days after
the end of each Fiscal Year, Tenant shall render a statement to Landlord with
Tenant's determination of its Net Sales for such Fiscal Year and Tenant's
calculation of any adjustment to the Base Rent ("Tenant's Statement").
(a) To the extent that any Base Rent is to be reduced
pursuant to this Section 1.4, then the amount of
such reduction shall be paid by Landlord to Tenant within thirty (30) days after
the rendering of Tenant's Statement to Landlord; or if Landlord fails or refuses
to pay such amount to Tenant, in whole or in part, within such thirty (30) day
period, then Tenant may credit any such amount owed to Tenant against subsequent
installments of Base Rent or Additional Rent payable by Tenant to Landlord
hereunder.
(b) To the extent that Landlord is owed any Base
Rent, as adjusted pursuant to this Section 1.4, then
Tenant, at Tenant's option, shall either pay such amount to Landlord within
thirty (30) days after rendering Tenant's Statement to Landlord reflecting such
amount, or shall add such amount to the Base Rent for the following fiscal year
and shall pay the same in twelve (12) equal monthly installments during such
fiscal year.
1.5 Landlord shall have all the rights and remedies for the collection
of Additional Rent as are available to Landlord for the collection of the Base
Rent.
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ARTICLE 2 CONDITION OF PREMISES
2.1. Except as expressly provided herein (including, but not limited
to, Landlord's representations and warranties set forth in this Lease), Tenant
accepts the Premises on an "AS-IS" basis without representation or warranty by
Landlord. Landlord shall deliver the Premises to Tenant in broom clean condition
given the nature of the ongoing "Cash and Carry" business therein (but with all
furniture, equipment and other personalty of Rightway and of Landlord remaining
therein and thereon) free of any tenancies, including without limitation, the
tenancy of Rightway, or any other rights to use, possess, or occupy the
Premises, but subject to the requirements of Section 2.2.
2.2. Landlord represents and warrants that, as of the Commencement
Date, (i) the Building Systems (including, but not limited to, the sprinkler
systems) are in good working order, (ii) all utilities, including but not
limited to electricity, and hot and cold water, are available at the Premises,
(iii) the Premises is in compliance with all Laws; and (iv) there are no
Hazardous Substances at, on, or under the Premises except as to any inventory
and other equipment utilized by Rightway in the normal course of Rightway's
"Cash and Carry" business, none of which is in violation of any Environmental
Laws. In the event that any of the foregoing representations of Landlord are
determined to be inaccurate, false or fraudulent, Landlord shall, within thirty
(30) days after receipt of written notice from Tenant, take all such actions as
are necessary to make such representations true and accurate, including all
actions necessary to bring the Premises into compliance with all current Laws,
at Landlord's sole cost and expense, and, with respect to any Hazardous
Substances, to remediate and remove all such Hazardous Substances from the
Premises, at Landlord's sole cost and expense; and Landlord shall indemnify,
defend, and hold Tenant harmless with respect to any claims, liabilities,
damages, and expenses (including, but not limited to, reasonable attorneys' fees
and costs) incurred by Tenant as a result of or arising out of such inaccuracy
or failure of landlord to cure or remedy the same. Landlord's obligation
hereunder shall survive the expiration or sooner termination of this Lease.
ARTICLE 3 USE
3.1. The Premises shall be used by Tenant and by any permitted assignee
or subtenant for warehousing, and/or for the wholesale and/or distribution of
goods and any related uses, with offices appurtenant thereto(the foregoing,
collectively, "Permitted Use"). Landlord represents to Tenant that the Premises
are properly zoned to permit the Permitted Use and that a certificate of
occupancy exists to permit such uses.
ARTICLE 4 COMPLIANCE WITH LAWS
4.1. Except as expressly provided herein, Tenant, at its sole expense,
shall comply with all rules, orders, laws, regulations and requirements of any
Governmental Authority, Board of Fire Underwriters or any other similar body
exercising functions similar to those of any of the foregoing which shall impose
any violation, order or duty upon Tenant with respect to the Premises during the
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Term. Notwithstanding the foregoing, Tenant shall be entitled to contest the
applicability of any Laws, at its sole cost and expense, and shall not be
required to make any changes until the issue is finally determined.
4.2 Tenant shall comply with, and Tenant's rights and obligations under
this Lease and Tenant's use of the Premises shall be subject and subordinate to
all easements, covenants, conditions, and restrictions of record now affecting
the Premises; provided that Landlord covenants that there are not currently any
such easements, covenants, conditions or restrictions affecting the Premises,
except for mortgages of record. Tenant also shall comply with, and Tenant's
rights and obligations under the Lease and Tenant's use of the Premises also
shall be subject and subordinate to, all recorded easements, covenants,
conditions, and restrictions hereafter affecting the Premises so long as (i)
such easements, covenants, conditions and restrictions were reasonably approved
in writing by Tenant in advance, or were imposed by law and are in a form
approved by Tenant, which approval shall not be unreasonably withheld or delayed
and (ii) in any event, do not result in any increase in Tenant's obligations, or
Base Rent or Additional Rent or in any decrease in Tenant's rights herein.
ARTICLE 5 TAXES
5.1. This is a net lease, it being the intention of the parties hereto
that the Base Rent to be received by Landlord shall be absolutely net of all
costs and expenses (except as otherwise expressly provided in this Lease).
5.2. From and after the Commencement Date but subject to the conditions
herein set forth, Tenant covenants and agrees to pay, as Additional Rent, all
Taxes that are, during the Term, assessed, levied, or imposed upon the Premises;
provided, however, that if, by law, any such imposition is payable, or may, at
the option of the taxpayer, be paid, in installments (whether or not interest
shall accrue on the unpaid balance of such imposition), Tenant may pay the same,
together with any accrued interest on the unpaid balance of such imposition in
installments as the same respectively become due. In addition, any Tax relating
to a fiscal period of the taxing authority, a part of which period is included
within the Term of this Lease and a part of which is included in a period of
time after the expiration or sooner termination of this Lease shall be adjusted
as between Landlord and Tenant as of the termination of the Term of this Lease.
With respect to any imposition for public improvements or benefits which, by law
is payable, or at the option of the taxpayer may be paid, in installments,
Landlord shall pay the installments thereof which become due and payable
subsequent to the termination of this Lease, and Tenant shall pay those
installments, which become due and payable during the Term of this Lease.
5.3. Upon written request from Landlord, Tenant shall furnish a copy of
official receipts of the appropriate taxing authority, or other proof reasonably
satisfactory to Landlord, evidencing the payment of the Taxes.
5.4. Landlord acknowledges that Tenant shall have the exclusive right,
but not the obligation, in Tenant's name, to (a) apply for and receive the
benefit of any abatement, exemption or reduction of any Taxes, and (b) prosecute
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a tax appeal for the Premises (a "Tax Appeal"). During the pendency of such Tax
Appeal, Tenant shall pay the Taxes as required hereunder in the amount so
billed. Tenant shall have any right to settle or compromise any Tax Appeal with
the consent of Landlord, which consent shall not be unreasonably withheld,
conditioned, or delayed. If Tenant commences a Tax Appeal pursuant to this
Section 5.4, Tenant shall give Landlord prior written notice of its intention to
file such Tax Appeal and shall pursue such contest in good faith and with due
diligence. With respect to any Tax Appeal or any application by Tenant for any
Tax abatement, exemption or reduction, Landlord shall, at Tenant's expense,
cooperate in the filing of any forms related thereto and/or in the institution
and prosecution of any such proceedings initiated by Tenant and shall provide
such information concerning the Premises as Tenant shall reasonably request for
use in connection with any such proceeding. Upon receipt of written request from
Landlord, Tenant shall provide Landlord with copies of all filings relating to
any Tax Appeal that Tenant shall commence and prosecute and shall keep Landlord
timely informed of the status of such Tax Appeal, and of any Tax exemption,
abatement or other reduction sought by Tenant.
ARTICLE 6 INTENTIONALLY OMITTED
ARTICLE 7 LANDLORD'S RIGHT OF ENTRY
7.1. Landlord and Landlord's agents and representatives shall have the
right, when accompanied by a representative of Tenant, to enter the Premises at
all reasonable hours and upon reasonable notice, as more particularly
hereinafter described, for the following purposes: (i) performing maintenance,
repairs, or alterations to the Premises but only in the event of default by
Tenant under the terms of this Lease; (ii) showing the Premises to prospective
new tenants during the last twelve (12) months of the Term; (iii) showing the
Premises during the Term to any mortgagees or prospective purchasers of the
Premises; or (iv) curing any default by Tenant in performing its obligations
under this Lease beyond any applicable notice and grace period. All non-emergent
work within the Premises shall be performed in accordance with a schedule and
plan approved by Tenant, which approval shall not be unreasonably withheld,
delayed or conditioned, but in no event shall Landlord be prohibited or
unreasonably restricted from performing such work on a timely and commercially
reasonable basis.
7.2. Landlord may enter upon the Premises at any time in case of
emergency upon prior verbal notice if possible and with the accompaniment by a
representative of Tenant to the extent Tenant makes such representative
immediately available. Landlord shall advise Tenant of the date, time and nature
of all such entries promptly following cessation of the emergency.
7.3. In connection with any entry by Landlord pursuant to this Article
7, Landlord shall use all reasonable efforts to minimize the disruption of
Tenant's use of the Premises and all work performed by or on behalf of Landlord
in or on the Premises pursuant to this Article 7 shall be performed with as
little inconvenience to Tenant's business as is reasonably possible. Tenant
shall have the right, in its sole discretion, to designate a representative to
accompany Landlord, or any third parties, while they are on the Premises.
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ARTICLE 8 MAINTENANCE BY TENANT;
OPERATING EXPENSES AND CAPITAL REPAIRS
8.1. Maintenance; Operating Expenses. During the Term hereof and any
renewal term, Tenant shall, at Tenant's sole cost and expense, maintain the
Premises in at least as good condition and repair as the same were delivered to
Tenant as of the Commencement Date, reasonable wear and tear permitted. The
foregoing shall include routine maintenance and repairs of the Building Systems
and maintenance of the parking areas, including sweeping and snow plowing. In
connection with the foregoing, Tenant shall also bear the cost of all Operating
Expenses.
8.2. Capital Repairs & Expenses. During the Term hereof, and any
renewal term, Tenant shall perform, at Tenant's sole cost and expense, all
Capital Repairs that Tenant deems necessary in Tenant's sole but reasonable
judgment. All such Capital Repairs shall be performed by or on behalf of Tenant
in a good and workmanlike manner and in compliance with all Laws. Tenant shall
provide Landlord with at least ten (10) days' written notice of all projects
involving Capital Repairs, together with a copy of any drawings and designs.
Landlord shall promptly cooperate with Tenant in the submission of any
applications for permits, approvals or certificates where Landlord's signature
or other information is required by such Governmental Authority. All permits,
approvals and certificates required by all Governmental Authorities in
connection therewith shall be timely obtained by Tenant at Tenant's expense and
submitted to Landlord.
8.3 Utilities. Commencing on the Commencement Date, Tenant shall
directly contract for, and shall pay directly to the appropriate supplier, the
cost of all utilities and related services supplied to the Premises (including,
without limitation, water, sewer, gas and electricity).
ARTICLE 9 ALTERATIONS
9.1. Tenant shall be permitted to make any alterations, improvements,
additions or physical changes in or about the Premises ("Alterations") that do
not materially and adversely affect either the Structural Elements of the
Building or any Building System ("Permitted Alteration"). Except for Permitted
Alterations, Tenant agrees not to make or allow to be made any Alterations
without first obtaining the written consent of Landlord in each instance, which
consent shall not be unreasonably withheld, conditioned or delayed (and, in any
event, shall not be conditioned on the payment to Landlord of any fees or
charges due to Landlord's review). Notwithstanding the foregoing, in the event
Landlord fails to notify Tenant within ten (10) Business Days of Landlord's
receipt of Tenant's notice of its proposed Alterations (together with all
documentation required to be submitted to Landlord hereunder) of Landlord's
consent or denial of consent to the proposed Alterations, Landlord shall be
deemed to have consented to such proposed Alterations. Tenant shall be required
to provide Landlord notice of any Permitted Alterations (other than Permitted
Alterations that are decorative or cosmetic in nature or do not require the
issuance of a building permit) accompanied by plans and specifications for such
Alteration prior to Tenant commencing such Alterations. Any and all Alterations
to the Premises that remain at the Premises upon the expiration or sooner
termination of this Lease shall become the property of Landlord upon the
expiration or sooner termination of this Lease, except for trade fixtures,
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movable equipment, furniture, or personal property owned by Tenant (including,
but not limited to, the Tenant Personalty), and prior to such termination Tenant
shall have the right to remove any such Alterations at any time during the Term
of this Lease subject to the provisions of this Article 9, provided that Tenant
shall be responsible for repairing any damage to the Building resulting from the
removal of such Alterations.
9.2. All permits, approvals and certificates required by all
Governmental Authorities shall be timely obtained by Tenant at Tenant's expense
and submitted to Landlord (Landlord shall execute any application reasonably
required by Tenant therefor provided that such execution shall be without
expense to Landlord and further provided that Landlord's execution is required
by such Governmental Authority). Notwithstanding Landlord's approval of plans
and specifications for any Alteration, all Alterations shall be performed in
full compliance with all applicable Laws.
ARTICLE 10 ASSIGNMENT AND SUBLETTING
10.1.
(i) Provided Tenant is not then in default of this Lease
beyond any applicable notice and grace period, Tenant shall have the right to
assign this Lease or sublease all or a portion of the Premises to any Person,
subject to the express provisions of this Article 10.
(a) Assignment to Affiliated Parties. Five Star
Products, Inc. and any Person who becomes a tenant or
subtenant pursuant to the terms of this Section 10.1(b) shall be referred to
herein collectively as the "Affiliated Parties" and individually as an
"Affiliated Party". Neither a merger, consolidation, or corporate restructuring
involving Five Star Products, Inc., National Patent Development Corporation or
any of their respective Affiliates, nor the transfer of any current, or issuance
of any new, shares of stock of any of them, shall be deemed to be an
unauthorized assignment of this Lease. Five Star Products, Inc. and any of its
Affiliates who becomes a tenant hereunder shall have the right to assign this
Lease or sublease all or any part of the Premises to any of their respective
Affiliates, consistent with the Permitted Uses specified herein.
(b) Sale or Transfer of Business. The Affiliated
Parties shall have the right to assign this Lease to
any Person upon fifteen (15) days' prior notice to Landlord in each of the
following circumstances:
(1) Where an assignment of this Lease is in
conjunction with, and to the same Person as, the sale or transfer of the "Cash
and Carry" business being operated by any of the Affiliated Parties at the
Premises; and/or
(2) Where an assignment of this Lease is in
conjunction with the sale or transfer, by any means, of a substantial portion of
the business or portfolio holdings or of any shares of stock of any of the
Affiliated Parties.
(c) Any assignment of this Lease or sublease of the
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Premises pursuant to the terms of Subsections (a) and (b), above, shall be
referred to herein as a "Permitted Assignment or Sublease".
(d) Notice. Tenant shall give Landlord fifteen (15)
days' prior written notice of any Permitted
Assignment or Sublease, including the effective date of the proposed assignment
or sublease. Any assignment or sublease as permitted under this Article 10 shall
be subject to the requirement that such assignee or sublessee shall use and
occupy the Premises solely for the Permitted Uses and for no other purposes.
(e) Notwithstanding anything in this Lease to the
contrary, any assignment of the Lease carries with it the option to purchase the
Premises pursuant to the terms of Article 33 hereof.
(ii) Successor Tenants. The parties acknowledge and agree that
the rights given to the Affiliated Parties under the terms of Section 10.1(i)
hereof are specific to the Affiliated Parties only. Accordingly, notwithstanding
anything to the contrary in Section 10.1(i), any successor tenant of any of the
Affiliated Parties that is not itself an Affiliated Party (a) shall not have the
right to further assign this Lease except as permitted under the terms of
Section 10.1(iii), hereof, and (b) shall deposit with Landlord the sum of
$81,250, which is equal to three month's Base Rent, as security for such
successor tenant's performance of its obligations hereunder.
(iii) In the event that Tenant desires to assign this Lease to
any Person not in connection with a Permitted Assignment, then such assignment
shall require the prior written consent of Landlord, which consent shall not be
unreasonably withheld, delayed or conditioned. If Tenant requests Landlord's
consent to the assignment of this Lease, Tenant shall submit in writing to
Landlord the following material relating to the proposed assignee:
(a) the name and address,
(b) the terms and conditions of the proposed
assignment or subletting,
(c) the nature and character of the business to be
conducted in the Premises,
(d) an executed copy of the assignment or sublease,
and
(e) any banking, financial or other records of the
proposed assignee or subtenant reasonably requested
by Landlord.
(iv) Landlord shall have the option, exercisable by written
notice to Tenant within fifteen (15) days after receipt of Tenant's written
request pursuant to Subsection (iii), above, to terminate Tenant's Lease on the
effective date of the proposed assignment, and Landlord shall execute and
deliver an instrument releasing and discharging the Tenant from all obligations
and liabilities under this Lease accruing after the effective date of such
proposed assignment. Thereafter, Tenant shall vacate and surrender possession of
the entire Premises in accordance with the Lease on or before said effective
date.
(v) If Landlord does not exercise its option to recapture the
Premises as specified in Subsection (iii), above, then within such twenty (20)
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day period, Landlord shall not unreasonably withhold Landlord's consent to the
proposed assignment, provided that Tenant consummates such assignment: (a) in a
manner substantially consistent with the information Tenant gave Landlord under
Subsection (iii) hereof; and (b) within ninety (90) days after Tenant requested
Landlord's approval. By Landlord's failure to recapture the Premises or to
respond in writing to Tenant's request within such twenty (20) day period as
required hereunder, Landlord shall be deemed to have consented to Tenant's
proposed assignment of the Lease.
(vi) If Tenant's interest in this Lease is assigned or if the
Premises or any part thereof are sublet to, or occupied by, or used by, anyone
other than Tenant, whether or not in violation of this Article 10, Landlord may,
after default by Tenant, accept from any assignee, sublessee or anyone who
validly claims a right to the interest of Tenant under this Lease, or who
occupies any part(s) or the whole of the Premises, the payment of Base Rent and
Additional Rent or any portion thereof and/or the performance of any of the
other obligations of Tenant under this Lease, but such acceptance shall not be
deemed to be a waiver by Landlord of the breach by Tenant of the provisions of
this Article 10, nor a recognition by Landlord that any such assignee,
sublessee, claimant or occupant has succeeded to the rights of Tenant hereunder,
nor a release by Landlord of Tenant from further performance by Tenant of the
covenants on Tenant's part to be performed under this Lease; provided, however,
that the net amount of Base Rent and Additional Rent collected from any such
assignee, sublessee, claimant or occupant shall be applied by Landlord to the
Base Rent and Additional Rent to be paid hereunder. In addition, Landlord agrees
that Landlord's waiver of claims and Landlord's insurance company's waiver of
subrogation as contained in this Lease for the benefit of Tenant shall also
inure to the benefit of such subtenant.
10.2. Tenant shall not assign this Lease or sublet all or any portion
of the Premises to any governmental or quasi-governmental entity or to a party
with diplomatic immunity or otherwise not amenable to service of process in New
York. Prior to advising the leasing market of its desire to sublease any portion
of the Premises or assign this Lease, Tenant shall notify Landlord of such
desire.
10.3. Tenant shall cause to be executed by its assignee an agreement to
perform faithfully and to assume and be bound by all of the terms, covenants,
conditions, provisions and agreements of this Lease. Any sublease executed by
Tenant shall expressly provide that it is subject to all of the terms and
conditions of this Lease, that the subtenant shall not violate any of such terms
or conditions and at the option of Landlord, in the event of the termination of
this Lease, the subtenant will attorn to Landlord. An executed counterpart of
each sublease or assignment and assumption of performance by the assignee shall
be delivered to Landlord within five (5) days prior to the commencement of
occupancy set forth in such assignment or sublease.
10.4. In no event shall any assignment or subletting release or relieve
Tenant from its obligations fully to observe or perform all of the terms,
covenants and conditions of this Lease on its part to be observed or performed
and the fact that Landlord may consent to any assignment or subletting shall not
be construed as constituting such a release of Tenant. Tenant and each assignee
shall be and remain fully liable for the observance of all of the covenants and
provisions of this Lease, including, but not limited to, the payment of Base
Rent, Additional Rent, and other charges due hereunder through the entire Term
of this Lease, as the same may be renewed, extended, or modified. However,
15
Tenant's continued liability subsequent to an assignment of this Lease shall not
be increased by any amendment or modification to this Lease entered into by such
assignee and Landlord after the date of such assignment to the extent that any
such amendment or modification of this Lease increases the liability of Tenant
and/or increases the monetary obligations of Tenant hereunder, unless such
increase in liability or monetary obligations is pursuant to any rights, option
or other terms of this Lease as set forth as of the date immediately prior to
the date of such assignment, provided that no modification, amendment of the
Lease or any increase or reduction in the liabilities under the Lease shall
release or discharge the liability of Tenant under this Lease.
ARTICLE 11 SURRENDER
11.1 Upon the Termination Date, or prior expiration of the Term of this
Lease, Tenant shall peaceably and quietly quit and surrender to Landlord the
Premises, broom clean, in as good condition as existed on the Commencement Date,
except for normal wear and tear and damage by fire or other casualty, free and
clear of tenants and occupants and subject to the provisions of Article 9.
ARTICLE 12 HOLDING OVER
12.1 If Tenant holds over possession of the Premises beyond the
Termination Date or prior expiration of the Term, then Tenant shall be deemed to
be a tenant from month to month under all of the same terms and conditions of
this Lease, except as to the Base Rent and the duration of the Term. Tenant
agrees that the charge for use and occupancy of the Premises so long as Tenant
holds over shall be a liquidated sum equal to 150% (pro rated on a daily basis)
of the Base Rent and 100% of the Additional Rent required to be paid by Tenant
during the calendar year preceding the Termination Date or earlier expiration of
the Term for the period extending beyond the Termination Date or prior
expiration of the Term; provided that Tenant's Base Rent shall remain 100% of
the Base Rent in the event that and for so long as Tenant and Landlord are in
good faith negotiations for the renewal or extension of this Lease. Either party
may terminate such tenancy by giving to the other at least thirty (30) days
prior written notice of its intent to terminate. Notwithstanding anything to the
contrary contained herein, Tenant shall have no liability for any consequential
damages or other damages resulting from any holdover (such as damages arising in
connection with any reletting by Landlord which cannot proceed by reason of the
holding over by Tenant) suffered either by Landlord or by any party claiming
through Landlord in connection with this Lease. The provisions of this Article
shall survive the Termination Date or earlier expiration of the Term.
ARTICLE 13 INTENTIONALLY OMITTED
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ARTICLE 14 QUIET ENJOYMENT
14.1. Landlord covenants and agrees that, upon the performance by
Tenant of all of the covenants, agreements and provisions hereof on Tenant's
part to be kept and performed, Tenant shall have, hold and enjoy the Premises,
subject to the terms of this Lease. The foregoing covenant is and shall be, in
addition to and not in derogation of Tenant's implied right to quiet enjoyment.
ARTICLE 15 DEFAULT
15.1 If during the Term any one or more of the following acts or
occurrences shall occur, it shall constitute an Event of Default hereunder:
(i) Tenant shall fail to pay any Base Rent, Additional Rent or
other sum of money due hereunder when such sum is due and such failure shall
continue for a period of ten (10) Business Days after Tenant's receipt of
written notice from Landlord of Tenant's failure to pay same when due; or
(ii) Tenant shall fail to comply with any provision of this
Lease or any other agreement between Landlord and Tenant not requiring the
payment of money, and such failure shall continue for a period of thirty (30)
days after written notice of such default is given to Tenant, provided however,
that if such default is capable of being cured within a reasonable period, but
cannot be cured within such thirty (30) day period, then Tenant shall have such
period of time longer than thirty (30) days as is reasonably required to cure
such default with all due diligence.
ARTICLE 16 LANDLORD'S RIGHTS UPON TENANT'S DEFAULT
16.1. If any Event of Default occurs, Landlord may, notwithstanding the
fact that Landlord may have other remedies hereunder or at law or in equity, by
written notice to Tenant, designate a date, not less than ten (10) days after
the giving of such notice, on which this Lease shall terminate; and thereupon,
unless the Event of Default is fully and unconditionally cured by Tenant prior
to such date, the Term of this Lease and the estate hereby granted shall expire
and terminate on such date with the same force and effect as if the date
specified in such notice were the Termination Date and all rights of Tenant
hereunder shall expire and terminate but Tenant shall remain liable as provided
in this Lease, and Landlord shall have the right to remove all persons, goods,
fixtures and chattels from the Premises, by reasonable force or otherwise but
all in accordance with applicable Laws, without liability or damages to Tenant.
16.2. If this Lease is terminated as provided in Section 16.1, or as
permitted by law, Tenant shall peaceably quit and surrender the Premises to
Landlord, and except as set forth in Section 10.7 of this Lease, Landlord may,
without further notice, enter upon, re-enter, possess and repossess the same by
summary proceedings, ejectment or other legal proceeding, and again have,
17
repossess and enjoy the same as if this Lease had not been made, and in any such
event neither Tenant nor any person claiming through or under Tenant shall be
entitled to possession or to remain in possession of the Premises, and Landlord
at its option shall forthwith, notwithstanding any other provision of this
Lease, be entitled to recover from Tenant as and for damages either:
(i) the excess, if any, of (1) all Base Rent and Additional
Rent (conclusively presuming the Additional Rent to be the same as was payable
for the calendar year immediately preceding such termination) reserved hereunder
for the unexpired portion of the Term over (2) the aggregate fair rental value
of the Premises at the time of termination for such unexpired portion of the
Term in each case, discounted at the Prime Rate to the then present worth; or
(ii) amounts equal to the Base Rent and Additional Rent which
would have been payable by Tenant from time to time had this Lease not so
terminated, or had Landlord not so re-entered the Premises, payable on the dates
that such payments would have otherwise been payable following such termination
and until the Termination Date; provided, however, that if Landlord shall relet
the Premises during said period, Landlord shall credit Tenant with the net rent
received by Landlord from such reletting, such net rents to be determined by
first deducting an amortized basis (over the term of the new lease) from the
gross rents as and when received by Landlord from such reletting, the actual and
necessary expenses incurred or paid by Landlord in terminating this Lease or in
re-entering the Premises and in securing possession thereof, as well as the
reasonable expenses of reletting, including altering and preparing the Premises
for new tenants, brokers' commissions, attorney's fees, and all other expenses
properly chargeable against the Premises and the rental therefrom, it being
understood that any such reletting may be for a period shorter or longer than
the remaining term of this Lease, but in no event shall Tenant be entitled to
receive any excess of such net rents over the sums payable by Tenant to Landlord
hereunder, nor shall Tenant be entitled in any suit for the collection of
damages pursuant to this Subsection to a credit in respect of any net rents from
a reletting, except to the extent that such net rents are actually received by
Landlord. If the Premises or any part thereof should be relet in combination
with other space or otherwise, then proper apportionment on a square foot basis
(for equivalent space) shall be made of the rent received from such reletting
and of the expenses of reletting. Suit or suits for the recovery of such
damages, or any installments of such damages, may be brought by Landlord from
time to time at its election, and nothing contained herein shall be deemed to
require Landlord to postpone suit until the date when the term of this Lease
would have expired if it had not been so terminated under the provisions of
Section 16.1, or under any provision of law, or had Landlord not re-entered the
Premises.
16.3. Nothing herein contained shall be construed to limit or preclude
recovery by Landlord against Tenant of any sums or damages to which, in addition
to the damages particularly provided above, Landlord may lawfully be entitled by
reason of any Event of Default hereunder on the part of Tenant. Nothing
contained herein shall limit or prejudice the right of Landlord, in any
bankruptcy or reorganization or insolvency proceedings, to prove for and obtain
as damages by reason of such termination or by reason of disaffirmance of this
Lease by Tenant, an amount equal to the maximum allowed by any bankruptcy or
reorganization or insolvency proceedings, or to prove for and obtain as damages
by reason of such termination, an amount equal to the maximum allowed by any
statute or rule of law whether such amount is equal to or less than any of the
sums referred to in Section 16.2.
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16.4 If Tenant shall default in the keeping, observance or performance
of any covenant, agreement, term, provision or condition herein contained beyond
any applicable notice and grace period, Landlord, without thereby waiving such
default, may perform the same for the account and at the expense of Tenant (a)
immediately or at any time thereafter and upon advance verbal notice if possible
in the case of emergency or in case such default will result in (i) a violation
of any law, rule or regulation of any Governmental Authority or any insurance
policy maintained by Landlord, or (ii) the imposition of any lien, charge or
encumbrance against all or any portion of the Premises, and (b) in any other
case if such default continues for a period of fifteen (15) days after the date
of the giving by Landlord to Tenant of a notice of Landlord's intention to
perform the same, Subject to Section 37.16, all reasonable costs and expenses
incurred by Landlord (plus interest thereon at the Default Interest Rate, until
repaid by Tenant) in connection with any such performance by it for the account
of Tenant and also all costs and expenses, including reasonable counsel fees and
disbursements incurred by Landlord in any action or proceeding brought by
Landlord to enforce any obligation of Tenant and/or right of Landlord under this
Lease or right of Landlord in or to the Premises, shall be paid by Tenant to
Landlord, as Additional Rent, within thirty (30) days following written demand
therefor.
16.5. No right or remedy conferred upon or reserved to Landlord or to
Tenant shall be exclusive of any other right or remedy, and any right and remedy
shall be cumulative and in addition to every other right or remedy given
hereunder or now or hereafter existing at law. The failure of Landlord or Tenant
to insist at any time upon the strict performance of any covenant or agreement
or to exercise any right, power or remedy contained in this Lease shall not be
construed as a waiver or relinquishment thereof for the future. A receipt by
Landlord of any installment of Base Rent or Additional Rent with knowledge of
the breach of any covenant or agreement contained in this Lease shall not be
deemed a waiver of such breach, and shall not be deemed to have been waived
unless expressed in writing and signed by Landlord. Landlord shall be entitled
to accept less than the full amount due on account of Base Rent and Additional
Rent without thereby waiving the right to collect the balance due. Landlord and
Tenant shall each be entitled, to the extent permitted by applicable law, to
injunctive relief in case of the violation, or attempted or threatened
violation, of any covenant, agreement, condition or provision of this Lease or
to a decree compelling performance or any covenant, agreement, condition or
provision of this Lease.
16.6. Landlord agrees that it shall use commercially reasonable efforts
to mitigate its damages.
ARTICLE 17 SUBORDINATION AND ESTOPPELS
17.1. Landlord represents that, as of the date hereof, Landlord holds
fee simple title to the Premises and that there are no mortgages or ground
leases encumbering the same, except as specified on Schedule 3 hereto.
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17.2 Subordination, Non-Disturbance And Attornment Agreement
(i) SNDA; Landlord's Default Under Mortgage. Within sixty (60)
days after the full execution and delivery of this Lease by and to each of the
parties, Landlord shall obtain and deliver to Tenant an executed subordination,
non-disturbance and attornment agreement in a form reasonably acceptable to
Tenant ("SNDA") from each mortgagee and ground lessor identified on Schedule 3,
hereto. Notwithstanding anything herein to the contrary, this Lease and all
rights of Tenant hereunder shall be subject and subordinate at all times to
those mortgages and ground leases that now encumber the Premises and are
identified on Schedule 3 hereto subject to, and only in the event of, Tenant's
prior receipt of an SNDA executed by each such mortgagee. In the event that
Landlord shall fail to perform any of its obligations under any mortgage, ground
lease or other instrument now or in the future encumbering the Premises and such
failure shall continue beyond any cure period provided for in such instrument,
then Tenant shall have the right (but not the obligation) to perform or endeavor
to perform Landlord's obligation, at Tenant's expense; and, within thirty (30)
days after receipt of a written demand from Tenant, Landlord shall reimburse
Tenant for all costs and expenses incurred by Tenant in doing so, or, if
Landlord shall fail or refuse to reimburse Tenant therefor, then Tenant shall be
entitled to offset all such costs and expenses against the Rent or Additional
Rent.
(ii) Notwithstanding the foregoing paragraph and anything
herein to the contrary, but subject to Section 17.5, below, Landlord shall not,
without the prior written consent of the Tenant, which consent shall not be
unreasonably withheld in each instance, (a) voluntarily mortgage, encumber,
transfer, option or permit any liens to encumber, or renew, modify, consolidate,
replace or extend any current mortgages encumbering, the Premises or Landlord
Personalty (the foregoing collectively referred to herein as "Encumbrances"),
other than Tenant's option to purchase the Premises and Landlord Personalty as
provided in Article 33 herein; or (b) otherwise act so as to adversely affect
the state of title to, or marketability of title to, the Premise or Landlord
Personalty. In the event Tenant consents to any future mortgages or to any
renewal, modification, consolidation, replacement or extension of any current
mortgages, Landlord shall obtain from all such mortgagee(s) of Landlord, a
subordination, non-disturbance and attornment agreement in such form as may be
reasonably acceptable to Tenant, which shall specifically provide, among other
things that, in the event of the foreclosure of any such mortgage arising out of
any default thereunder, (x) possession and the rights of Tenant under this Lease
shall not be disturbed so long as Tenant shall not be in default beyond any
applicable notice and grace period pursuant to the terms and conditions of this
Lease, and (c) such mortgagee agrees to be bound by all of the terms and
conditions of this Lease, including Tenant's option to purchase the Premises
pursuant to the terms and conditions of Article 33 hereof.
(iii) Tenant further agrees, subject to the terms of the SNDA
entered into between Tenant and the mortgagee, to attorn to the holder of any
such mortgage following the foreclosure of such mortgage. Notwithstanding any
provision of this Section 17.2 to the contrary, upon notice by Tenant to a
mortgagee, this Lease shall become superior, in whole or in part, to the lien of
any mortgage held on the property by said Mortgagee.
17.3. Tenant shall at any time and from time to time within ten (10)
20
days of receipt of written request therefor, execute, acknowledge and deliver to
Landlord an estoppel certificate, in such form as is reasonably satisfactory to
Landlord, certifying (i) that this Lease is unmodified and in full force and
effect (or, if there have been modifications, that the same is in full force and
effect as modified and stating the modifications), (ii) the dates to which Base
Rent and Additional Rent have been paid in advance, if any, (iii) whether any
options granted to Tenant pursuant to the provisions of this Lease have been
exercised, (iv) whether or not to the actual knowledge of the signer, Landlord
is in default in performance of any of its obligations under this Lease, and if
so, specifying each such default of which Tenant may have knowledge, (v) whether
Tenant has received notice that it is in default in performance of any of its
obligations under this Lease, and if so, specifying each such default, and (vi)
as to any other matters reasonably requested by Landlord, it being intended that
any such certificate delivered pursuant to this Section 17.2 may be relied upon
by a prospective purchaser of Landlord's interest or a mortgagee of Landlord's
interest or assignee of any mortgage under Landlord's interest in the Premises
or any other party which Landlord wishes to receive said estoppel certificate.
17.4. Landlord shall at any time and from time to time within ten (10)
days of receipt of written request therefor, execute, acknowledge and deliver to
Tenant an estoppel certificate, in such form as is reasonably satisfactory to
Tenant, certifying (i) that this Lease is unmodified and in full force and
effect (or, if there have been modifications, that the same is in full force and
effect as modified and stating the modifications), (ii) the dates to which Base
Rent and Additional Rent have been paid in advance, if any, (iii) whether any
options granted to Tenant pursuant to the provisions of this Lease have been
exercised, (iv) whether or not to the actual knowledge of the signer, Tenant is
in default in performance of any of its obligations under this Lease, and if so,
specifying each such default of which Landlord may have knowledge, (v) whether
Landlord has received notice that it is in default in performance of any of its
obligations under this Lease, and if so, specifying each such default, and (vi)
as to any other matters reasonably requested by Tenant, it being intended that
any such certificate delivered pursuant to this Section 17.3 may be relied upon
by a prospective assignee or subtenant of Tenant's interest or any other party
which Tenant wishes to receive said estoppel certificate.
17.5 Notwithstanding anything in this Article 17 to the contrary, upon
the following terms and conditions, Landlord shall have a one-time right (but
not the obligation) to obtain a loan in an aggregate principal sum not to exceed
Five Hundred Twenty-Five Thousand ($525,000) Dollars (the "Loan") and to secure
such Loan with a mortgage on the Premises in the same amount.
(i) The Loan shall be issued by Bank of America or another
reputable commercial lender of like size and assets, and shall not restrict
Seller's right to prepay the Loan in full during the first five (5) years of the
Loan;
(ii) Landlord shall close the Loan within six (6) months after
the execution and delivery of this Lease by and to Landlord and Tenant, and
shall pay all expenses and costs associated with the closing of such Loan;
(iii) Landlord shall not have and/or shall not exercise
21
without Tenant's prior written consent, which shall not be unreasonably
withheld, any option under the Loan to receive additional funds at any
subsequent time whether or not such additional funds are secured by the same
mortgage; and
(iv) The lender shall execute an SNDA containing the terms
required by Section 17.2, above.
ARTICLE 18 DAMAGE BY FIRE OR OTHER CASUALTY
18.1. If the Premises or any part thereof shall be damaged by fire or
other casualty, Tenant shall give prompt written notice thereof to Landlord. In
the event of any fire or other casualty to the Premises, Landlord shall, within
ninety (90) days of such fire or other casualty, provide Tenant with a written
notice (the "Landlord's Notice") specifying the period for the repair or
reconstruction of the Premises, as determined by an independent, reputable
licensed architect or engineer selected by Landlord and approved by Tenant. If
the Building is so damaged that its restoration requires the expenditure of more
than sixty percent (60%) of the replacement cost of the Building (exclusive of
the cost of footings and foundations) immediately prior to such damage, Landlord
may, at its option, terminate this Lease by so notifying Tenant as part of
Landlord's Notice. If Landlord's Notice indicates that such reconstruction of
the Premises shall exceed one hundred twenty (120) days and Landlord has not
elected to terminate this Lease as part of Landlord's Notice, Tenant shall have
the right, to be exercised within fifteen (15) days after receipt of Landlord's
Notice, to elect, by notice to Landlord, to cancel this Lease (hereinafter
called "Tenant's Cancellation Notice"). In the event that Tenant has not
delivered either Tenant's Cancellation Notice within the applicable time frame,
or Landlord indicates in Landlord's Notice that the Premises can be restored
within one hundred eighty (180) days, Landlord shall commence and proceed with
reasonable diligence to restore the Premises damaged or destroyed to
substantially the same condition which existed prior to such fire or other
casualty, including, but not limited to, the restoration of those areas of the
Premises necessary to provide Tenant with access to the Building; however,
Tenant reserves the right, using the applicable insurance proceeds, to restore
the Alterations. If Landlord indicates in Landlord's Notice that the Premises
can be restored within one hundred twenty (120) and the Premises are not
restored within said one hundred twenty (120) day period (not subject to
extension for any reason, including Excusable Delays), or if Landlord in
Landlord's Notice indicates that it will take a period longer than one hundred
twenty (120) days (not subject to extension for any reason, including Excusable
Delays) to restore the Premises to the condition required herein, then this
Lease and the Term hereof may, at the election of Tenant, be terminated by
notice in writing from Tenant to Landlord, provided Tenant serves such notice on
Landlord within fifteen (15) days after expiration of the one hundred twenty
(120) day period or such longer period, if applicable, which notice shall be
effective thirty (30) days after the giving of such notice if the Premises have
not been restored by that date. Notwithstanding the foregoing, Landlord shall
have the right to terminate this Lease at the time of Landlord's Notice, if the
casualty occurs during the last two (2) years of the Term and the period for
restoration of the Premises as so determined exceeds one hundred twenty (120)
days and Tenant does not exercise its next available renewal option (if any)
22
within thirty (30) days after Landlord's Notice. If the Lease is terminated by
either Landlord or Tenant as above permitted, Landlord and Tenant thereafter
shall have no further obligation or claim, one to the other, except with respect
to those items that survive the termination of this Lease. The Base Rent and
Additional Rent for the portion of the Premises that are unfit for the conduct
of Tenant's business shall ▇▇▇▇▇ from the date of such casualty until the date
that such portion of the Premises is restored (including such period not to
exceed three (3) months beyond the completion of Landlord's restoration
obligations set forth herein, as is reasonably necessary for Tenant, using
diligent efforts, to substantially complete the restoration of any Alterations
which Tenant elects to restore hereunder for the Premises to be tenantable for
the Permitted Use). Landlord's restoration obligations shall exclude any
personalty, equipment and trade fixtures of Tenant or any Alterations that are
not insured against under Section 26.1(b) of this Lease. In addition, Landlord's
obligation to restore the Premises within the time frames set forth in this
Article shall mean that (i) Landlord's restoration of the damaged portion of the
Premises as described above has been substantially completed, except for details
of construction, decoration and mechanical adjustments which are minor in
character, the non-completion of which will not unreasonably interfere with
Tenant's use and enjoyment of the Premises; (ii) all of the Building Systems,
including, but not limited to, sanitary, electrical, heating, air conditioning,
mechanical and other systems and the elevators, are completed and in good order
and operating condition except for mechanical adjustments which are minor in
character; and (iii) (a) Landlord shall have obtained a certificate of approval
or temporary or permanent certificate of occupancy for the Premises or (b) all
requirements to obtain a certificate of approval or temporary or permanent
certificate of occupancy for the Premises, other than the completion of those
items that are required to be restored by Tenant therein, shall have been
satisfied. Landlord shall use reasonable efforts to complete any of the
aforesaid details of construction, decoration and mechanical adjustments which
are minor in character within thirty (30) days thereafter, or such additional
period as may be reasonable required for the completion thereof using diligent
efforts.
18.2. Notwithstanding any of the foregoing provisions to the contrary,
Landlord's obligation to repair the damage and restore and rebuild the Premises
pursuant to this Article to substantially the same condition in which same
existed immediately prior to the casualty shall be conditioned on such
restoration being then lawfully permitted and Landlord being granted all
necessary approvals from the Governmental Authorities. In the event that any
applicable Laws do not permit, or the inability of Landlord to receive all
necessary approvals despite its due diligence prevent, the restoration to be to
substantially the same condition, then Landlord and Tenant shall use
commercially reasonable efforts to arrive at a mutually agreeable restoration
plan.
ARTICLE 19 MUTUAL WAIVER OF SUBROGATION
19.1. Tenant shall secure, to the extent available, an appropriate
clause, or an endorsement upon any policy of insurance in force, covering the
Premises or any personal property, fixtures and equipment located therein or
thereon, including, without limitation, property and business interruption
policies in force, pursuant to which the insurance companies waive subrogation
or permit the insured, prior to any loss, to agree with a third party to waive
any claim it might have against said third party for loss or damage to its
property. The waiver of subrogation or permission for waiver of any claim
23
hereinbefore referred to shall extend to the agents of each party. In the event
Tenant shall be unable at any time to obtain one of the provisions referred to
above in any of its insurance policies, Tenant shall promptly notify the
Landlord.
19.2. Subject to the foregoing provisions of this Article 19, and
insofar as may be permitted by the terms of the insurance policies carried by
it, and notwithstanding any provision of this Lease to the contrary, each party
hereby releases the other and its partners, agents and employees (and in the
case of Tenant, all other persons and entities occupying or using the Premises
in accordance with the terms of this Lease) with respect to any claim (including
a claim for negligence) which it might otherwise have against the other party
for loss, damages or destruction with respect to its property by fire or other
casualty (including rental value or business interruption, as the case may be)
occurring during the Term to the extent that such loss, damage or destruction is
covered by such insurance policies.
ARTICLE 20 CONDEMNATION
20.1. If the whole or substantially the whole of the Premises should be
taken for any public or quasi-public use, by right of eminent domain or
otherwise, then this Lease shall terminate as of the date when physical
possession of the Premises is taken by the condemning authority. If ten percent
(10%) or more of the rentable area of the Building or fifteen percent (15%) or
more of Tenant's parking spaces (unless alternative parking spaces in comparable
locations can be provided) is thus taken, Tenant may terminate this Lease by
giving written notice thereof to Landlord in which event this Lease shall
terminate as of the date when physical possession of such portion of the
Premises is taken by the condemning authority. If this Lease is not so
terminated upon any such taking or sale, the Base Rent payable hereunder shall
be equitably adjusted by multiplying the annual Base Rent then in effect by a
fraction, the numerator of which is the number of square feet of rentable area
of the Premises after the taking and the denominator of which is the number of
square feet of rentable area in the Premises prior to such taking, and Landlord
shall, to the extent Landlord reasonably deems feasible, restore the Premises to
substantially their former condition, but such work shall not exceed the scope
of the work in originally constructing the Building, and in no event shall
Landlord be required to expend more than the amount of any award received by
Landlord to the cost of the restoration of the Premises under this Article 20.
All amounts awarded upon a taking of any part or all of the Premises shall
belong to Landlord or the holder of any mortgage affecting the Premises, and
Tenant shall not be entitled to and expressly waives all claim to any such
compensation including, without limitation, any claim for the value of the
unexpired portion of this Lease.
20.2. Tenant may make an independent claim in such proceedings for its
personalty, trade fixtures and moving expenses; provided, however, that any such
claim shall in no way affect any portion of any award which the Landlord or the
holder of any mortgage affecting the Premises shall be entitled to receive.
20.3. If the temporary (i.e., a period not to exceed eighteen (18)
months) use or occupancy of all or any part of the Premises shall be condemned
or taken for any public or quasi-public use or purpose during the Term, this
24
Lease and the Term shall be and remain unaffected by such condemnation or taking
(including Tenant's obligations for the payment of Base Rent and Additional
Rent) and Tenant shall continue to be responsible for all of its obligations
hereunder (except to the extent prevented from so doing by reason of such
condemnation or taking). In such event, however, Tenant shall be entitled to
appear, claim, prove and receive the entire award, unless the period of
temporary use or occupancy extends beyond the Termination Date and Tenant has no
further renewal options or the time to exercise such options shall have expired,
in which event Landlord shall be entitled to appear, claim, prove and receive
that portion of the award attributable to the restoration of the Premises, and
the balance of such award shall be apportioned between Landlord and Tenant as of
the Termination Date. If Tenant does not exercise its next renewal option,
Tenant shall refund to Landlord a portion of the award based on the ratio of the
period covered by the award for which this Lease was not in effect to the entire
period covered by the award. At the termination of such temporary use or
occupancy prior to the Termination Date, Tenant, at its own expense, shall
restore the Premises as nearly as possible to their condition prior to the
condemnation or taking.
ARTICLE 21 INTENTIONALLY OMITTED
ARTICLE 22 NOTICES
22.1. Any notice, consent, request or other communication
(collectively "Notices") given pursuant to this Lease must, unless otherwise
provided herein, be in writing addressed to the party to be notified, and may,
unless otherwise in this Lease expressly provided, be given or be served (a) by
certified or registered mail, with return receipt requested, deposited in the
United States mail, or (b) by overnight express mail or by reliable overnight
courier with confirmation of delivery or rejection or (c) by delivery of the
same in person (as evidenced by a signed receipt), in each instance addressed to
the party to be notified, which addresses shall be as follows:
To Landlord: Kampner Realty, LLC
▇▇ ▇▇. ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
With a copy to:
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇; (▇▇▇) ▇▇▇-▇▇▇▇ (fax)
25
To Tenant: Five Star Products, Inc.
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇
With a copy to:
▇▇▇ ▇▇▇▇▇▇ LLP
▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
All notices shall be effective upon receipt, and if such delivery is rejected,
such rejection of delivery shall be considered receipt. Either party may at any
time change its address for notices hereunder by delivering or mailing, as
aforesaid, to the other party a notice stating the change and setting forth the
changed address. Notice from a party's legal counsel may be sent on behalf of
such party.
ARTICLE 23 NO WAIVER
23.1. No waiver by Landlord or Tenant of any breach by the other of any
of the terms, covenants, agreements or conditions of this Lease shall be
effective unless such waiver is contained in a writing subscribed by the waiving
party and no such waiver shall be deemed to constitute a waiver of any
succeeding breach thereof, or a waiver of any breach of any of the other terms,
covenants, agreements and conditions herein contained, except as otherwise
expressly provided herein.
23.2. The receipt by Landlord of the Base Rent and Additional Rent with
knowledge of the breach of any covenant of this Lease shall not be deemed a
waiver of such breach. No payment by Tenant or receipt by Landlord of a lesser
amount than the monthly Base Rent or a lesser amount of the Additional Rent then
due shall be deemed to be other than a payment on account of the earliest
stipulated amount then due, nor shall any endorsement or statement on any check
or payment as Base 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 Base Rent or Additional Rent or pursue any
other remedy provided in this Lease.
ARTICLE 24 INTENTIONALLY OMITTED
ARTICLE 24 - INTENTIONALLY OMITTED
ARTICLE 25 INDEMNIFICATION; LIMITATIONS
25.1. Subject to the waiver set forth in Article 19, Tenant hereby
indemnifies and holds Landlord harmless from all claims, liabilities, losses,
fines, penalties, damages, costs and expenses (including reasonable attorneys'
26
fees and other costs of litigation) suffered or incurred by Landlord as a result
of (and to the extent caused by) the negligence or willful acts of Tenant or
Tenant's Visitors.
25.2. Subject to the waiver set forth in Article 19, Landlord hereby
indemnifies and holds Tenant harmless from all claims, liabilities, losses,
fines, penalties, damages, costs and expenses (including reasonable attorneys'
fees and other costs of litigation), suffered or incurred by Tenant or anyone
claiming through Tenant as a result of (and to the extent caused by) the
negligence or willful acts of Landlord or Landlord's agents, servants or
employees.
25.3. The indemnification obligations of Landlord and Tenant pursuant
to this Article 25 shall exclude consequential damages including, but not
limited to, business loss or interruption suffered by the party asserting the
claim.
25.4. The indemnities and limitations set forth in this Article
25 shall survive the expiration or termination of this
Lease.
ARTICLE 26 INSURANCE
26.1. Tenant, at its own expense, shall maintain with reputable and
independent insurers permitted to do business in the State of New York and rated
in Best's Insurance Guide, or any successor thereto (or if there be none, an
organization having a national reputation) as having a Best's Rating of "A-" or,
if such ratings are not then in effect, the equivalent thereof or such other
financial rating as Landlord may at any time consider appropriate, the following
insurance:
(a) Commercial general liability against claims for bodily
injury, personal injury, death or property damage occurring on, in or about the
Premises or as a result of ownership of facilities located on the Premises in
amounts not less than $2,000,000.00 combined single limit for Bodily Injury
including death, Personal Injury and Property Damage liability per
occurrence/aggregate per location. The above per occurrence/aggregate per
location limits may be satisfied with any combination of primary and umbrella or
excess liability policies totaling the amount of required insurance.
(b) A special causes of loss, broad form "all risk" property
insurance for full replacement value of the Building (exclusive of footings and
foundations), all Improvements, all improvements existing as of the date of this
Lease and all Alterations, in addition to Tenant's personal property, trade
fixtures (but excluding any manufacturing equipment), and furniture. This policy
shall expressly provide that any losses thereunder shall be adjusted with
Landlord and Tenant. Any loss thereunder shall be made payable to Tenant, in
trust for Landlord, (except that if in accordance with the requirements of the
mortgagee of Landlord most senior in lien a depositary has been appointed to
receive such funds, then to such depositary), and Tenant, as their respective
interests may appear; and
(c) Upon no less than sixty (60) days' notice, such other
insurance and in such amounts as may from time to time be reasonably required by
27
any fee mortgagee holding a first mortgage on the Property against other
insurable hazards which at the time are commonly insured against in the case of
premises similarly situated.
26.2. The liability policy of insurance required to be maintained by
Tenant pursuant to Section 26.1(a) shall name Landlord, Landlord's managing
agent, and any mortgagee of Landlord (provided Tenant receives notice of all
applicable names and addresses) as additional insureds. The casualty policy of
insurance required to be procured by Tenant pursuant to Section 26.1(b) shall
name as insureds Landlord, and if required, any fee mortgagee or other designee
of Landlord, as their respective interests may appear provided, however, that
rent insurance shall be carried solely in favor of Landlord. The foregoing
insurance shall provide for the benefit of such holder or holders, that thirty
(30) days' prior written notice of suspension, cancellation, termination,
modification, non renewal or lapse or material change of coverage shall be given
to all insured parties and that such insurance shall be given to all insured
parties.
26.3. Prior to the Commencement Date, Tenant shall deliver to Landlord
certificates of the insurers evidencing all the insurance that is required to be
maintained hereunder by Tenant indicating that the requirements set forth herein
have been complied with and, prior to the expiration of any then current
insurance, certificates evidencing the renewal of such insurance.
ARTICLE 27 CONSTRUCTION LIENS
27.1. If, because of any act or omission of Tenant, any construction or
other lien, charge or order for the payment of money or otherwise shall be filed
against the Premises (whether or not such lien, charge or order is valid or
enforceable as such), Tenant, at Tenant's expense, shall cause it to be canceled
or discharged of record by bonding or otherwise within thirty (30) days after
notice to Tenant of such filing, and Tenant shall, in any event, indemnify and
save Landlord harmless against and shall pay all costs, expense, losses, fines
and penalties, including, without limitation, reasonable attorney's fees,
related thereto or resulting therefrom but excluding consequential damages
including, but not limited to, business loss or interruption.
ARTICLE 28 DEFINITION OF LANDLORD
28.1. The term "Landlord" as used in this Lease means only the owner
for the time being of the Premises. In the event of any transfer of title to the
Premises, the transferring Landlord shall be and hereby is entirely freed and
relieved of, and the transferee Landlord shall be and hereby is bound to assume
and perform, all covenants and obligations of Landlord hereunder, except for
liabilities that arose prior to such transfer and this Lease shall be deemed and
construed as a covenant running with the land without further agreement between
the parties or their successors in interest.
ARTICLE 29 DEFINITION OF TENANT
29.1. The term "Tenant" as used in this Lease includes Tenant, its
successors and permitted assigns and any person or entity claiming by, through
28
or under Tenant. Any obligation of or restriction on Tenant imposed by this
Lease shall apply equally to any subtenant or other occupant of the Premises or
any portion thereof.
ARTICLE 30 PERSONAL LIABILITY
30.1. Anything in this Lease to the contrary notwithstanding, the
liability of Landlord to Tenant in the performance by Landlord of its
obligations under this Lease and for any default by Landlord hereunder shall be
limited to the interest of Landlord in the Premises, and/or the proceeds from
the Premises and Tenant agrees to look solely to Landlord's interest in the
Premises, and/or the proceeds from the Premises for the recovery of any judgment
from Landlord, it being intended that neither Landlord nor Landlord's agents,
shareholders, officers, directors, partners, principals (disclosed or
non-disclosed) or Affiliates shall be personally liable for any judgment or
deficiency.
30.2. Anything in this Lease to the contrary notwithstanding, Landlord
shall look solely to Tenant and Tenant's assets (and any guarantor or other
entity liable hereunder by way of assignment or otherwise) for the recovery of
any judgment obtained against Tenant in connection with this Lease, it being
intended that Tenant's shareholders, officers, directors, partners, principals
(disclosed or non-disclosed) or Affiliates (except to the extent that any such
Affiliates become assignees or subtenants hereof) and any shareholders,
officers, directors, partners, or principals (disclosed or non-disclosed) of any
such Affiliates shall not be personally liable for any judgment or deficiency.
ARTICLE 31 COMPLIANCE WITH ENVIRONMENTAL LAWS
31.1 Subject to the provisions of Section 2.2 above, Tenant agrees to
comply with all Environmental Laws, and that no Hazardous Substances will be
received, handled, generated, manufactured, produced, processed, treated,
stored, released, placed, spilled, discharged, disposed of, or disbursed at, or
otherwise caused to become situated at, on, under or about the Premises other
than in compliance with Environmental Laws.
31.2. Tenant shall hold Landlord harmless from and indemnify same
against, and shall reimburse the same with respect to, any and all liabilities,
reasonable costs and expenses incurred by, imposed upon or asserted against
Landlord by reason of or in connection with any default by Tenant, beyond any
applicable notice and cure period, of the terms of this Article 31 during the
term of this Lease Agreement.
ARTICLE 32 RENEWAL OPTIONS
32.1. Tenant may, at its option, extend the original Term for two (2)
successive periods of five (5) years each. In the event that Tenant desires to
renew this Lease, it shall give notice in writing to Landlord of its intention
to renew the Lease at least six (6) months prior to the Termination Date and at
least six (6) months prior to the expiration of the first renewal term, as the
29
case may be. All of the terms and conditions of this Lease shall remain in
effect during each of the renewal terms, except that the annual Base Rent
payable during each of the renewal terms shall be as follows: (i) Four Hundred
Fifty Thousand Dollars ($450,000) per annum during the first renewal term and
(ii) Five Hundred Thousand Dollars ($500,000) per annum during the second
renewal term.
ARTICLE 33 OPTION TO PURCHASE
33.1 Landlord hereby grants to the Affiliated Parties (as defined in
Section 10.1(i)(a) hereof) and any successor tenant under Paragraph 10.1, ,
(collectively, the "Purchase Option Parties" and individually, a "Purchase
Option Party") an option to purchase the Premises and Landlord Personalty at a
purchase price equal to the Fair Market Value as of the date of such Purchase
Option Party' Notice of Election (hereinafter defined). The Purchase Option
Parties shall have the exclusive right, but not the obligation, to exercise this
option at any time during the first five (5) years of the Term. In the event
that a Purchase Option Party desires to exercise said option, such Purchase
Option Party shall provide written notice to Landlord of its election ("Notice
of Election") at least six (6) months before the fifth (5th) anniversary of the
Commencement Date. The Notice of Election shall be deemed effective for all
purposes on the date that such Purchase Option Party sends the Notice of
Election (e.g., upon deposit with the United States Postal Service if sent by
mail, or with an overnight carrier if sent by overnight mail, etc., as permitted
under Article 22 herein).
33.2 If any Purchase Option Party elects to exercise such option by
providing Landlord with a Notice of Election, then, within thirty (30) days
after the Notice of Election has been given, such Purchase Option Party and
Landlord shall execute and deliver to each other a contract of sale,
substantially in the form annexed hereto as Exhibit C ("Contract of Sale"), and
within forty-five (45) days thereafter or as otherwise agreed to in the fully
executed Contract of Sale, Landlord shall sell and transfer the Premises and all
Landlord Personalty to such Purchase Option Party upon substantially the same
terms and conditions specified in the Contract of Sale.
33.3 The rights of the Purchase Option Parties under this Article 33
shall run with the land and shall be binding upon all successors and assigns of
Landlord. Time is OF THE ESSENCE with respect to all of Landlord's obligations
under this Article 33.
ARTICLE 34 MISCELLANEOUS
34.1. Entire Agreement. This Lease contains the entire agreement
between the parties, and any attempt hereafter made to change, modify, waive,
discharge or effect an abandonment of it in whole or in part shall be void and
ineffective unless in writing and signed by the party against whom enforcement
of the change, modifications, waiver, discharge or abandonment is sought.
34.2. Jury Trial Waiver. To the extent permitted by law, Landlord and
30
Tenant do hereby waive trial by jury in any action, proceeding or counterclaim
brought by either of the parties hereto against the other on any matter
whatsoever arising out of or in any connection with this Lease, the relationship
of Landlord and Tenant, Tenant's use or occupancy of the Premises, and/or any
claim, injury or damage, or any emergency or statutory remedy.
34.3. Broker. Tenant and Landlord warrant and represent to each other
that it has not dealt with any real estate broker or sales representative in
connection with this Lease. Tenant and Landlord agree to indemnify, defend and
hold harmless the other from and against all threatened or asserted claims,
liabilities, costs or damages (including, without limitation, reasonable
attorney's fees and disbursements) which may be asserted against or incurred by
the indemnified party as a result of a breach of this warranty and
representation. Subject to the full execution and delivery of this Lease,
Landlord shall be responsible for the payment of a commission to Broker,
pursuant to and subject to the terms and conditions of a separate agreement
between Landlord and Broker. This representation shall survive the expiration or
sooner termination of this Lease.
34.4. Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such a manner as to be effective and valid under
applicable law. However, if any provision of this Agreement shall be prohibited
by or invalid under such law, it shall be deemed modified to conform to the
minimum requirements of such law or, if for any reason it is not deemed so
modified, it shall be prohibited or invalid only to the extent of such
prohibition or invalidity without the remainder thereof or any other such
provision being prohibited or invalid.
34.5. Interpretation.
(i) 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.
(ii) Words of any gender used in this Lease shall be held to
include any other gender, and words in the singular number shall be held to
include the plural, when the sense requires.
(iii) This Lease shall not be strictly construed either
against Landlord or Tenant, regardless of whether any provision thereof has been
drafted by Landlord or Tenant (or their respective attorneys).
(iv) The headings and captions contained in this Lease are
inserted for convenience of reference only, and are not to be deemed part of or
to be used in construing this Lease.
(v) The covenants and agreements herein contained shall,
subject to the provisions of this Lease, bind and inure to the benefit of
Landlord, its successors and assigns, and Tenant, its successors and permitted
assigns except as otherwise provided herein.
(vi) This Lease has been executed and delivered in the State
of New York and shall be construed in accordance with the laws of the State of
New York.
31
34.6. Force Majeure. Except as expressly provided herein, whenever a
period of time is herein prescribed for the taking of any action by either
party, which action does not involve the payment of money or other monetary
obligations, such period of time in which said party is obligated to perform
shall be extended by any delays due to Excusable Delay.
34.7. INTENTIONALLY OMITTED.
34.8. Tenant's Authority. Tenant represents and warrants to Landlord
that: (a) Tenant is a corporation, duly organized, validly existing and in good
standing under the laws of Delaware, and has the power to own its property and
assets and carry on its business in New York; (b) the execution of this Lease
has been duly authorized and upon its full execution, this Lease constitutes the
binding obligation of Tenant; and (c) the leasing of the Premises will not
conflict with or result in a breach of any agreement to which Tenant is a party
or by which it may be bound, or violate any Laws.
34.9. Landlord's Authority. (a) Landlord is a limited liability
company, duly organized, validly existing and in good standing under the laws of
New York, and has the power to own its property and assets and carry on its
business in New York; (b) the execution of this Lease has been duly authorized
and upon its full execution, this Lease constitutes the binding obligation of
Landlord; and (c) the leasing of the Premises will not conflict with or result
in a breach of any agreement to which Landlord is a party or by which it may be
bound, or violate any Laws.
34.10. Cost of Litigation. Should it be necessary for Landlord or
Tenant, because of a breach of the other of its obligations under this Lease, to
commence any action or proceeding to enforce such party's rights and remedies as
permitted herein, it is agreed that the prevailing party shall be entitled to
recover its reasonable attorneys' fees from the non-prevailing party.
34.11. Joint Draft of Agreement. For contract law purposes, this Lease
shall be deemed to have been drafted jointly by both parties. No party shall be
deemed to be the drafter of this Agreement and the terms of this Agreement shall
not be construed as against one party or another.
34.12 Governing Law. This Lease and each of the agreements and
instruments executed and delivered pursuant thereto will be construed and
enforced in accordance with the laws of the State of New York without regard to
its conflicts of laws principles.
34.13 Counterparts/Facsimile Signature. This Lease may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all of which shall constitute one and the same document. Landlord
and Tenant agree that the delivery of an executed copy of this Lease by
facsimile shall be legal and binding and shall have the same force and effect as
if an original executed copy of this Lease had been delivered
[SIGNATURE PAGE FOLLOWS.]
32
IN WITNESS WHEREOF, the parties hereto have executed this Lease on the
date first above written.
LANDLORD:
KAMPNER REALTY, LLC
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title Managing Member
TENANT:
FIVE STAR PRODUCTS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
33
EXHIBIT C
TABLE OF CONTENTS
PRELIMINARY STATEMENT..........................................................................................1
---------------------
DEFINITIONS....................................................................................................1
-----------
ARTICLE 1 - DEMISE OF PREMISES; TERM; RENT; ADDITIONAL RENT....................................................6
ARTICLE 2 - CONDITION OF PREMISES..............................................................................9
ARTICLE 3 - USE................................................................................................9
ARTICLE 4 - COMPLIANCE WITH LAWS...............................................................................9
ARTICLE 5 - TAXES.............................................................................................10
ARTICLE 6 - INTENTIONALLY OMITTED.............................................................................11
ARTICLE 7 - LANDLORD'S RIGHT OF ENTRY.........................................................................11
ARTICLE 8 - MAINTENANCE BY TENANT; OPERATING EXPENSES AND CAPITAL REPAIRS.....................................12
ARTICLE 9 - ALTERATIONS.......................................................................................12
ARTICLE 10 - ASSIGNMENT AND SUBLETTING........................................................................13
ARTICLE 11 - SURRENDER........................................................................................16
ARTICLE 12 - HOLDING OVER.....................................................................................16
ARTICLE 13 -INTENTIONALLY OMITTED.............................................................................16
ARTICLE 14 - QUIET ENJOYMENT..................................................................................17
ARTICLE 15 - DEFAULT..........................................................................................17
ARTICLE 16 - LANDLORD'S RIGHTS UPON TENANT'S DEFAULT..........................................................17
ARTICLE 17 - SUBORDINATION AND ESTOPPELS......................................................................19
ARTICLE 18 - DAMAGE BY FIRE OR OTHER CASUALTY.................................................................22
ARTICLE 19 - MUTUAL WAIVER OF SUBROGATION.....................................................................23
ARTICLE 20 - CONDEMNATION.....................................................................................24
ARTICLE 21 - INTENTIONALLY OMITTED............................................................................25
ARTICLE 22 - NOTICES..........................................................................................25
ARTICLE 23 - NO WAIVER........................................................................................26
ARTICLE 24 - INTENTIONALLY OMITTED............................................................................26
ARTICLE 25 - INDEMNIFICATION; LIMITATIONS.....................................................................26
ARTICLE 26 - INSURANCE........................................................................................27
ARTICLE 27 - CONSTRUCTION LIENS...............................................................................28
ARTICLE 28 - DEFINITION OF LANDLORD...........................................................................28
ARTICLE 29 - DEFINITION OF TENANT.............................................................................28
ARTICLE 30 - PERSONAL LIABILITY...............................................................................29
ARTICLE 31 - COMPLIANCE WITH ENVIRONMENTAL LAWS...............................................................29
ARTICLE 32 - RENEWAL OPTIONS..................................................................................29
ARTICLE 33 - OPTION TO PURCHASE...............................................................................30
ARTICLE 34 - MISCELLANEOUS....................................................................................30
Exhibit A.........Legal Description of the Land
Exhibit B.........Independent Appraiser(s)' Appraisal Report(s)
Exhibit C.........Contract of Sale
Schedule 1........Landlord Personalty
Schedule 2........Tenant Personalty
Schedule 3........Mortgages and Ground Leases
34
Exhibit A
Legal Description of the Land
35
Exhibit B
Independent Appraiser(s)' Appraisal Report(s)
36
Exhibit C
Contract of Sale
37
Schedule 1
Landlord Personalty
38
Schedule 2
Tenant Personalty
All items specified on Exhibit 1.1(a)(i) of the Asset Purchase Agreement between
Five Star Products, Inc. ("Five Star") and Right-Way Dealer Warehouse, Inc.
("Rightway"), dated as of March 13, 2007, and any other assets transferred from
Rightway to Five Star pursuant to such Asset Purchase Agreement, which shall
become the property of Five Star pursuant to the terms of such Asset Purchase
Agreement but subject to the closing of the transactions contemplated thereby.
39
Schedule 3
Mortgages and Ground Leases
40
Contract of Sale
between
KAMPNER REALTY, LLC ("Seller")
and
FIVE STAR PRODUCTS, INC. ("Purchaser")
dated ________________
Premises:
.........Street Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
.........City or Town: Brooklyn, New York
.........County: Kings
.........State: New York
41
Table of Contents
Section 1..................................................................Sale of Premises and Acceptable Title
...............................................................................................................1
Section 2.Purchase Price, Acceptable Funds, Existing Mortgages, Purchase Money Mortgage, Escrow of Downpayment and
Foreign Persons......................................................................................2
Section 3............................................................................................The Closing
................................................................................................................4
Section 4...............................................................Representations and Warranties of Seller
................................................................................................................4
Section 5...........................................Acknowledgments, Representations and Warranties of Purchaser
................................................................................................................6
Section 6......................................................................Seller's Obligations as to Leases
................................................................................................................6
Section 7..........................................................................Responsibility for Violations
................................................................................................................7
Section 8....................................................................Destruction, Damage or Condemnation
................................................................................................................7
Section 9....................................................................................Covenants of Seller
................................................................................................................7
Section 10..........................................................................Seller's Closing Obligations
................................................................................................................8
Section 11.......................................................................Purchaser's Closing Obligations
...............................................................................................................10
Section 12........................................................................................Apportionments
...............................................................................................................10
Section 13......................Objections to Title, Failure of Seller or Purchaser to Perform and Vendee's Lien
...............................................................................................................11
Section 14................................................................................................Broker
...............................................................................................................12
Section 15...............................................................................................Notices
..............................................................................................................12
Section 16...............Limitations on Survival of Representations, Warranties, Covenants and other Obligations
..............................................................................................................13
Section 17..................................................................................Due Diligence Period
..............................................................................................................13
Section 18..............................................................................Miscellaneous Provisions
..............................................................................................................14
Contract of Sale--Office, Commercial and Multi-Family Residential Premises
CONTRACT ("Contract") dated as of ________________ between KAMPNER
REALTY, LLC ("Seller") and FIVE STAR PRODUCTS, INC. ("Purchaser") (or its
permitted assignee).
WHEREAS, Seller and Purchaser have entered into a lease agreement
between them for the lease of the land and building located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, dated as of March 15, 2007 (the "Lease"); and
WHEREAS, pursuant to Article 33 of the Lease, the Purchase Option
Parties (as defined in the Lease) have the right to purchase the Premises upon
the terms and conditions contained therein.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants and agreements hereinafter contained, Seller and Purchaser
hereby covenant and agree as follows:
Sale of Premises and Acceptable Title
Seller shall sell to Purchaser, and Purchaser shall purchase
from Seller, at the price and upon the terms and conditions set forth
in this contract: (a) the parcel of land more particularly described
in Schedule A attached hereto, have a Tax Block and ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇. ("▇▇▇▇"); (b) all buildings and improvements now
or hereafter situated on the Land (collectively, "Building"); (c) all
right, title and interest of Seller, if any, in and to the land lying
in the bed of any street or highway in front of or adjoining the Land
to the center line thereof and to any unpaid award for any taking by
condemnation or any damage to the Land by reason of a change of grade
of any street or highway; (d) the appurtenances and all the estate and
rights of Seller in and to the Land and Building; and (e) all right,
title and interest of Seller, if any, in and to the fixtures,
equipment and other personal property attached or appurtenant to the
Building or used in connection with the management, maintenance or
operation of the Land and Building, and all guarantees, licenses,
approvals, certificates, permits and warranties, if any in the
possession of Seller relating to the Land and Building (all of the
foregoing hereafter collectively referred to as the "Premises"). For
purposes of this contract, "appurtenances" shall include all right,
title and interest of Seller in and to (i) the leases for space in the
Building, and all guarantees thereof, and any leases permitted to be
entered into by Seller between the date of this contract and the
Closing (as hereinafter defined); (ii) the Service Contracts (as
hereinafter defined); (iii) plans, specifications, architectural and
engineering drawings, prints, surveys, soil and substrata studies
relating to the Land and the Building in Seller's possession; (iv) all
operating manuals and books, data and records regarding the Land and
the Building and its component systems in Seller's possession; (v) all
licenses, permits, certificates of occupancy and other approvals
issued by any state, federal or local authority relating to the use,
maintenance or operation of the Land and the Building to the extent
that they may be transferred or assigned; (vi) all warranties or
guaranties, if any, applicable to the Building, to the extent such
warranties or guaranties are assignable; and (vii) all tradenames,
trademarks, servicemarks, logos, copyrights and good will relating to
or used in connection with the operation of the Land and the Building.
The Premises are located at or known as ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
At the Closing (as hereinafter defined), Seller shall convey
and Purchaser shall accept fee simple title to the Premises in
42
accordance with the terms of this contract, subject only to: (a) the
matters set forth in Schedule B attached hereto (collectively,
"Permitted Exceptions"); and (b) such other matters as (i) any title
insurer licensed to do business by the State of New York shall be
willing, without special premium, to omit as exceptions to coverage or
to except with insurance against collection out of or enforcement
against the Premises and (ii) shall be accepted by any lender which
has committed in writing to provide mortgage financing to Purchaser
for the purchase of the Premises ("Purchaser's Institutional Lender").
Seller and Purchaser hereby specifically agree that the
Premises shall be conveyed free and clear of all liens, mortgages, and
encumbrances of any nature whatsoever except for the Permitted
Exceptions.
Purchase Price, Acceptable Funds, Existing Mortgages, Purchase Money Mortgage,
Escrow of Downpayment and Foreign Persons
The purchase price ("Purchase Price") to be paid by
Purchaser to Seller for the Premises shall be [$_______________],
which is the Fair Market Value of the Premises, as previously agreed
to between the parties pursuant to the terms of the Lease.
All monies payable under this contract, unless otherwise
specified in this contract, shall be paid at the Closing by (a)
certified or bank checks of Purchaser drawn on any bank or trust
company having a banking office in the City of New York or (b)
official bank checks drawn by any banking institution, payable to the
order of Seller, except that uncertified checks of Purchaser payable
to the order of Seller up to the amount of the greater of [$5,000] and
one-half of one percent (.5%) of the Purchase Price shall be
acceptable for sums payable to Seller at the Closing, or (c) with
respect to the portion of the Purchase Price payable at the Closing,
at Seller's election, by wire transfer of immediately available funds
to an account designated by Seller not less than three business days
prior to the Closing.
Intentionally omitted
Intentionally omitted.
a) If any sums paid on account of the Purchase Price prior to
the Closing (collectively, "Downpayment") are paid by check or checks
drawn to the order of and delivered to Seller's attorney or another
escrow agent ("Escrowee"), the Escrowee shall hold the proceeds
thereof in escrow in a special bank account (or as otherwise agreed in
writing by Seller, Purchaser and Escrowee) until the Closing or sooner
termination of this contract and shall pay over or apply such proceeds
in accordance with the terms of this section. Escrowee need not hold
such proceeds in an interest-bearing account, but if any interest is
earned thereon, such interest shall be paid to the same party entitled
to the escrowed proceeds, and the party receiving such interest shall
pay any income taxes thereon. The tax identification numbers of the
parties shall be furnished to Escrowee upon request. At the Closing,
such proceeds and the interest thereon, if any, shall be paid by
Escrowee to Seller. If for any reason the Closing does not occur and
either party makes a written demand upon Escrowee for payment of such
amount, Escrow shall give written notice to the other party of such
demand. If Escrowee does not receive a written objection from the
other party to the proposed payment within 10 business days after the
giving of such notice, Escrowee is hereby authorized to make such
payment. If Escrowee does receive such written objection within such
10 day period or if for any other reason Escrowee in good faith shall
elect not to make such payment, Escrowee shall continue to hold such
amount until otherwise directed by written instructions from the
parties to this contract or a final judgment of a court. However,
Escrow shall have the right at any time to deposit the escrowed
proceeds and interest thereon, if any, with the clerk of the Supreme
Court of the county in which the Land is located. Escrowee shall give
written notice of such deposit to Seller and Purchaser. Upon such
deposit Escrowee shall be relieved and discharged of all further
obligations and responsibilities hereunder.
43
The parties acknowledge that Escrowee is acting
solely as a stakeholder at their request and for their convenience,
that Escrowee shall not be deemed to be the agent of either of the
parties, and that Escrowee shall not be liable to either of the parties
for any act or omission on its part unless taken or suffered in bad
faith, in willful disregard of this contract or involving gross
negligence. Seller and Purchaser shall jointly and severally indemnify
and hold Escrowee harmless from and against all costs, claims and
expenses, including reasonable attorneys' fees, incurred in connection
with the performance of Escrowee's duties hereunder, except with
respect to actions or omissions taken or suffered by Escrowee in bad
faith, in willful disregard of this contract or involving gross
negligence on the part of Escrowee.
Escrowee has acknowledged agreement to these
provisions by signing in the place indicated on the signature page of
this contract.
If Escrowee is Purchaser's attorney, Escrowee or any
member of its firm shall be permitted to act as counsel for Purchaser
in any dispute as to the disbursement of the Downpayment or any other
dispute between the parties whether or not Escrowee is in possession of
the Downpayment and continues to act as Escrowee.
Escrowee may act or refrain from acting in respect of
any matter referred to in this ss.2.05 in full reliance upon and with
the advice of counsel which may be selected by it (including any member
of its firm) and shall be fully protected in so acting or refraining
from action upon the advice of such counsel.
In the event that Seller is a "foreign person", as defined
in Internal Revenue Code Section 1445 and regulations issued
thereunder (collectively, the "Code Withholding Section"), or in the
event that Seller fails to deliver the certification of non-foreign
status required under ss.10.12(c), or in the event that Purchaser is
not entitled under the Code Withholding Section to rely on such
certification, Purchaser shall deduct and withhold from the Purchase
Price a sum equal to ten percent (10%) thereof and shall at Closing
remit the withheld amount with Forms 8288 and 8288A or any successors
thereto) to the Internal Revenue Service; and if the cash balance of
the Purchase Price payable to Seller at the Closing after deduction of
net adjustments, apportionments and credits (if any) to be made or
allowed in favor of Seller at the Closing as herein provided is less
than ten percent (10%) of the Purchase Price, Seller shall immediately
remit such difference to Purchaser for the purposes consistent with
this Section 2.03.
FINANCING CONTINGENCY. This Contract is subject to the
ability of the Purchaser, at his its expense, within forty-five (45)
days of the execution of this contract, to obtain a financing
commitment from a commercial lender in the sum of [$___________]
payable over a period of not less than 30 years, with the interest to
be at the rate prevailing at the time of Closing. Said financing shall
be either fixed or adjustable in interest rate. Should Purchaser fail
to obtain a firm financing commitment within the allotted time, then
Purchaser, on due written notice to Seller, may extend the period to
obtain financing by an additional fifteen (15) days or may cancel this
contract. If Purchaser is unable to obtain a firm financing commitment
pursuant hereto and elects to cancel this Contract, Purchaser shall
provide Seller with written notice of cancellation together with a
copy of the rejection or declination letter from a lending
institution. Upon receipt of such notice of cancellation, the Seller
shall promptly return all monies paid hereunder to the Purchaser and
this contract shall then be rendered null and void and of no further
force and effect.
44
The Closing
Except as otherwise provided in this contract, the closing
of title pursuant to this contract ("Closing") shall take place on or
about forty-five (45) days after the execution and delivery of this
Contract by and to Seller and Purchaser [TIME BEING OF THE ESSENCE as
to Seller], provided that if such forty-fifth (45th) date is a
Saturday, Sunday or legal holiday, the Closing shall take place on the
next business day (the date of the Closing being herein referred to as
"Closing Date"). The Closing shall take place at ______a.m./pm at the
offices of Purchaser's attorneys or at the office of Purchaser's
lender's attorney, provided that such offices are within the County of
New York or Kings.
Representations and Warranties of Seller
Seller represents and warrants to Purchaser as follows:
Unless otherwise provided in this contract, Seller is the
sole owner, in fee simple, of the Premises and has the full right,
power and authority to sell, convey and transfer the same in
accordance with the terms of this Contract. The Premises is not
encumbered by any tenancies except for the Lease between Seller and
Purchaser.
If the Premises are encumbered by an Existing Mortgage(s),
no written notice has been received from the Mortgagee(s) asserting
that a default or breach exists thereunder which remains uncured and
no such notice shall have been received and remain uncured on the
Closing Date. If copies of documents constituting the Existing
Mortgage(s) and note(s) secured thereby have been exhibited to and
initialed by Purchaser or its representative, such copies are true
copies of the originals and the Existing Mortgage(s) and note(s)
secured thereby have not been modified or amended except as shown in
such documents.
There are no leases affecting the Premises except for the
Lease, and any permitted subleases or assignments thereof.
Neither the Premises nor any part thereof is subject to the
New York City Rent Stabilization Law.
Neither the Premises nor any part thereof is subject to the
New York City Emergency Rent and Rehabilitation Law.
If an insurance schedule is attached hereto, such schedule
lists all insurance policies presently affording coverage with respect
to the Premises, and the information contained therein is accurate as
of the date set forth therein or, if no date is set forth therein, as
of the date hereof.
Intentionally omitted.
If a schedule of service, maintenance, supply and management
contracts ("Service Contracts") is attached hereto, such schedule
lists all such contracts affecting the Premises, and the information
set forth therein is accurate as of the date set forth therein or, if
no date is set forth therein, as of the date hereof.
If a copy of a certificate of occupancy for the Premises has
been exhibited to and initialed by Purchaser or its representative,
such copy is a true copy of the original and such certificate has not
been amended, but Seller makes no representation as to compliance with
any such certificate.
The assessed valuation and real estate taxes set forth in
Schedule C, if any, are the assessed valuation of the Premises and the
45
taxes paid or payable with respect thereto for the fiscal year
indicated in such schedule. Except as otherwise set forth in Schedule
C, there are no tax abatements or exemptions affecting the Premises.
Intentionally omitted.
Seller has no actual knowledge that any incinerator, boiler
or other burning equipment on the Premises is being operated in
violation of applicable law. If copies of a certificate or
certificates of operation therefor have been exhibited to and
initialed by Purchaser or its representative, such copies are true
copies of the originals.
Except as otherwise set forth in Schedule C, Seller has no
actual knowledge of any assessment payable in annual installments, or
any part thereof, which has become a lien on the Premises.
Seller is not a "foreign person" as defined in the Code
Withholding Section (FIRPTA).
Seller is a New York limited liability company that has been
duly organized and is validly and presently existing in good standing
under the laws of the state of its formation.
Seller has taken all necessary action to authorize the
execution, delivery and performance of this contract and has the power
and authority to execute, deliver and perform this contract and
consummate the transaction contemplated hereby. Assuming due
authorization, execution and delivery by each other party hereto, this
contract and all obligations of Seller hereunder are the legal, valid
and binding obligations of Seller, enforceable in accordance with the
terms of this contract, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization or other similar laws affecting
the enforcement of creditors' rights generally and by general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
The execution and delivery of this contract and the
performance of its obligations hereunder by Seller will not conflict
with any provision of any law or regulation to which Seller is subject
or any agreement or instrument to which Seller is a party or by which
it is bound or any order or decree applicable to Seller or result in
the creation or imposition of any lien on any of Seller's assets or
property which would materially and adversely affect the ability of
Seller to carry out the terms of this contract. Seller has obtained
any consent, approval, authorization or order of any court or
governmental agency or body required for the execution, delivery or
performance by Seller of this contract.
There are no pending proceedings or appeals to correct or
reduce the assessed valuation of the Premises, and to Seller's
knowledge, there is no litigation pending or threatened against Seller
relating to the Premises that would reasonably be expected to
materially adversely affect the Premises or Seller's ability to
perform pursuant to the terms of this Agreement
To Seller's knowledge, there is no pending or threatened
condemnation of all or any material part of the Premises. Seller shall
give Purchaser written notice of any such proceeding or action of
which it becomes aware.
Seller has not granted to any person or entity any right of
first refusal or option to acquire the Premises or any part thereof or
any interest therein, except for the option to purchase granted to
Purchaser pursuant to the terms of the Lease.
For purposes of this Section, the phrase to Seller's
knowledge" shall mean the actual knowledge of________________
without any special investigation.
46
The representations and warranties made by Seller in this
contract shall be deemed restated and shall be true and accurate on
the Closing Date.
Acknowledgments, Representations and Warranties of Purchaser
Purchaser acknowledges that:
Purchaser has inspected the Premises, is fully familiar with
the physical condition and state of repair thereof, and, subject to
the provisions of ss.7.01, ss.8.01, and ss.9.04, shall accept the
Premises "as is" and in their present condition, subject to reasonable
use, wear, tear and natural deterioration between now and the Closing
Date, without any reduction in the Purchase Price for any change in
such condition by reason thereof subsequent to the date of this
contract.
Before entering into this contract, Purchaser has made such
examination of the Premises, the operation, income and expenses
thereof and all other matters affecting or relating to this
transaction as Purchaser deemed necessary. In entering into this
contract, Purchaser has not been induced by and has not relied upon
any representations, warranties or statements, whether express or
implied, made by Seller or any agent, employee or other representative
of Seller or by any broker or any other person representing or
purporting to represent Seller, which are not expressly set forth in
this contract, whether or not any such representations, warranties or
statements were made in writing or orally.
Purchaser represents and warrants to Seller that:
The funds comprising the Purchase Price to be delivered to
Seller in accordance with this contract are not derived from any
illegal activity.
Purchaser has taken all necessary action to authorize the
execution, delivery and performance of this contract and has the power
and authority to execute, deliver and perform this contract and the
transaction contemplated hereby. Assuming due authorization, execution
and delivery by each other party hereto, this contract and all
obligations of Purchaser hereunder are the legal, valid and binding
obligations of Purchaser, enforceable in accordance with the terms of
this contract, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization or other similar laws affecting
the enforcement of creditors' rights generally and by general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
The execution and delivery of this contract and the
performance of its obligations hereunder by Purchaser will not
conflict with any provision of any law or regulation to which
Purchaser is subject or any agreement or instrument to which Purchaser
is a party or by which it is bound or any order or decree applicable
to Purchaser or result in the creation or imposition of any lien on
any of Purchaser's assets or property which would materially and
adversely affect the ability of Purchaser to carry out the terms of
this contract. Purchaser has obtained any consent, approval,
authorization or order of any court or governmental agency or body
required for the execution, delivery or performance by Purchaser of
this contract.
Seller's Obligations as to Leases
Seller hereby represents and warrants that there are no
leases for space in, on or under the Premises except for the Lease.
47
Responsibility for Violations
Except as provided in ss.7.02 and ss.7.03, all notes or
notices of violations of law or governmental ordinances, orders or
requirements which were noted or issued prior to the date of this
contract by any governmental department, agency or bureau having
jurisdiction as to conditions affecting the Premises and all liens
which have attached to the Premises prior to the Closing pursuant to
the Administrative Code of the City of New York, if applicable, shall
be removed or complied with by Seller. If such removal or compliance
has not been completed prior to the Closing, Seller shall pay to
Purchaser at the Closing the reasonably estimated unpaid cost to
effect or complete such removal or compliance, and Purchaser shall be
required to accept title to the Premises subject thereto, except that
Purchaser shall not be required to accept such title and may terminate
this contract as provided in ss.13.02 if (a) Purchaser's Institutional
Lender reasonably refuses to provide financing by reason thereof or
(b) the Building is a multiple dwelling and either (i) such violation
is rent impairing and causes rent to be unrecoverable under Section
302-a of the Multiple Dwelling Law or (ii) a proceeding has been
validly commenced by tenants and is pending with respect to such
violation for a judgment directing deposit and use of rents under
Article 7-A of the Real Property Actions and Proceedings Law. All such
notes or notices of violations noted or issued on or after the date of
this contract shall be the sole responsibility of Purchaser.
Intentionally omitted.
Regardless of whether a violation has been noted or issued
prior to the date of this contract, Seller's failure to remove or
fully comply with any violations which a tenant is required to remove
or comply with pursuant to the terms of its lease by reason of such
tenant's use or occupancy shall not be an objection to title.
Purchaser shall accept the Premises subject to all such violations
without any liability of Seller with respect thereto or any abatement
of or credit against the Purchase Price, except that if Purchaser's
Institutional Lender reasonably refuses to provide financing by reason
of a violation described above, Purchaser shall not be required to
accept the Premises subject thereto and Purchaser shall have the right
to terminate this contract in the manner provided in ss.13.02.
If required, Seller, upon written request by Purchaser,
shall promptly furnish to Purchaser written authorizations to make any
necessary searches for the purposes of determining whether notes or
notices of violations have been noted or issued with respect to the
Premises or liens have attached thereto.
Destruction, Damage or Condemnation
The provisions of Section 5-1311 of the General Obligations
Law shall apply to the sale and purchase provided for in this
contract.
Covenants of Seller
Seller covenants that between the date of this contract and the
Closing:
The Existing Mortgage(s) shall not be amended or
supplemented. Seller shall pay or make, as and when due and payable,
all payments of principal and interest and all deposits required to be
paid or made under the Existing Mortgage(s).
Seller shall not modify or amend any Service Contract or
enter into any new service contract unless the same is terminable
without penalty by the then owner of the Premises upon not more than
30 days' notice.
Except for contracts that will not be binding upon
Purchaser, Seller will not enter into any contracts relating to the
Premises without Purchaser's consent.
48
If an insurance schedule is attached hereto, Seller shall
maintain in full force and effect until the Closing the insurance
policies described in such schedule or renewals thereof for no more
than one year of those expiring before the Closing.
No fixtures, equipment or personal property included in this
sale shall be removed from the Premises unless the same are replaced
with similar items of at least equal quality prior to the Closing.
Seller shall not withdraw, settle or otherwise compromise
any protest or reduction proceeding affecting real estate taxes
assessed against the Premises for any fiscal period in which the
Closing is to occur or any subsequent fiscal period without the prior
written consent of Purchaser, which consent shall not be unreasonably
withheld. Real estate tax refunds and credits received after the
Closing Date which are attributable to the fiscal tax year during
which the Closing Date occurs shall be apportioned between Seller and
Purchaser, after deducting the expenses of collection thereof, which
obligation shall survive the Closing.
Seller shall allow Purchaser or Purchaser's representatives
access to the Premises, and to other documents required to be
delivered under this contract upon reasonable prior notice at
reasonable times.
Seller will not voluntarily mortgage, encumber, transfer,
option or otherwise act so as to adversely affect the state of title
to, or marketability of title to, the Premises as required to be
conveyed pursuant to the provisions of Section 1.02 hereof. Except for
contracts that will not be binding upon Purchaser, Seller will not
enter into any contracts relating to the Premises without Purchaser's
consent.
Seller's Closing Obligations
At the Closing, Seller shall deliver the following to Purchaser:
A statutory form of Bargain And Sale Deed With Covenant
Against Grantor's Acts, containing the covenant required by Section 13
of the Lien Law, and properly executed in proper form for recording so
as to convey the title required by this contract together with a ▇▇▇▇
of sale for all personal property and equipment included in the sale,
which personal property and equipment is valued at $1.00 for the
purposes of this Contract.
Intentionally omitted.
A schedule of all security deposits, if any.
Intentionally Omitted.
All Service Contracts initialed by Purchaser and all others
in Seller's possession which are in effect on the Closing Date and
which are assignable by Seller.
An assignment to Purchaser, without recourse or warranty, of
all of the interest of Seller in those Service Contracts, insurance
policies, certificates, permits and other documents to be delivered to
Purchaser at the Closing which are then in effect and are assignable
by Seller.
Evidence in documentary form that any then existing
mortgages and encumbrances on the Premises which are not Permitted
Exceptions have been paid and discharged in full as of the Closing
Date.
An assignment of all Seller's right, title and interest in
escrow deposits for real estate taxes, insurance premiums and other
amounts, if any, then held by the Mortgagee(s).
49
All original insurance policies with respect to which
premiums are to be apportioned or, if unobtainable, true copies or
certificates thereof.
To the extent they are then in Seller's possession and not
posted at the Premises, certificates, licenses, permits,
authorizations and approvals issued for or with respect to the
Premises by governmental and quasi-governmental authorities having
jurisdiction.
Such affidavits and other documentary evidence as
Purchaser's title company shall reasonably require in order for such
title company to omit from its title insurance policy all exceptions
for judgments, bankruptcies or other returns against persons or
entities whose names are the same as or similar to Seller's name, and
to issue its owner's policy of title insurance to Purchaser subject
only to the Permitted Exceptions and such other instruments as are
reasonably required by the title insurance company and are customarily
furnished in connection with the closing of title.
(a) Checks to the order of the appropriate officers in
payment of all applicable real property transfer taxes and copies of
any required tax returns therefor executed by Seller, which checks
shall be certified or official bank checks if required by the taxing
authority, unless Seller elects to have Purchaser pay any of such
taxes and credit Purchaser with the amount thereof, and (b) a
certification of non-foreign status, in form required by the Code
Withholding Section, signed under penalty of perjury. Seller
understands that such certification will be retained by Purchaser and
will be made available to the Internal Revenue Service on request.
To the extent they are then in Seller's possession, copies
of current painting and payroll records. Seller shall make all other
Building and tenant files and records available to Purchaser for
copying, which obligation shall survive the Closing.
Intentionally omitted.
Intentionally omitted.
If Seller is a corporation and if required by Section 909 of
the Business Corporation Law, a resolution of Seller's board of
directors authorizing the sale and delivery of the deed and a
certificate executed by the secretary or assistant secretary of Seller
certifying as to the adoption of such resolution and setting forth
facts showing that the transfer complies with the requirements of such
law. If Seller is a limited liability company, a consent signed by the
members of Seller authorizing the sale and delivery of the deed. The
deed referred to in ss.10.01 shall also contain a recital sufficient
to establish compliance with such law.
Possession of the Premises in the condition required by this
contract and keys therefor.
A blanket assignment, without recourse or representation, of
all Seller's right, title and interest, if any, to all contractors',
suppliers', materialmen's and builders' guarantees and warranties of
workmanship and/or materials in force and effect with respect to the
Premises on the Closing Date and a true and complete copy of each
thereof.
Intentionally omitted.
A certificate of Seller confirming that the warranties and
representations of Seller set forth in this contract are true and
complete on and as of the Closing Date (the statements made in such
certificate shall be subject to the same limitations on survival as
are applicable to Seller's representations and warranties under ss.4).
An affidavit pursuant to Section 1445 of the Foreign
Investment in Real Property Tax Act of 1980 (FIRPTA).
50
Any other documents required by this contract to be
delivered by Seller.
Purchaser's Closing Obligations
At the Closing, Purchaser shall:
Deliver to Seller checks or wire transfer of immediately
available federal funds to Seller, in payment of the portion of the
Purchase Price payable at the Closing, as adjusted for apportionments
under Section 12, plus the amount of escrow deposits, if any, assigned
pursuant to ss.10.08.
Intentionally omitted.
Intentionally omitted.
Cause the deed to be recorded, duly complete all required
real property transfer tax returns and cause all such returns and
checks in payment of such taxes to be delivered to the appropriate
officers promptly after the Closing.
Intentionally omitted.
Deliver to Seller a certificate confirming that the
warranties and representations of Purchaser set forth in this contract
are true and complete as of the Closing Date.
Deliver any other documents required by this contract to be
delivered by Purchaser.
Apportionments
The following apportionments shall be made between the
parties at the Closing as of the close of business on the day prior to
the Closing Date:
prepaid rents and Additional Rents (as defined in ss.12.03)
and revenues, if any, from telephone booths, vending machines and other
income-producing agreements;
intentionally omitted;
real estate taxes, water charges and sewer rents, if any, on
the basis of the fiscal period for which assessed, except that if there is a
water meter on the Premise, apportionment at the Closing shall be based on the
last available reading, subject to adjustment after the Closing when the next
reading is available;
wages, vacation pay, pension and welfare benefits and other
fringe benefits of all persons employed at the Premises, whose employment was
not terminated at or prior to the Closing;
value of fuel stored on the Premises, at the price then
charged by Seller's supplier, including any taxes;
charges under transferable Service Contracts or permitted
renewals or replacements thereof;
permitted administrative charges, if any, on tenants' security
deposits;
51
dues to rent stabilization associations, if any;
insurance premiums on transferable insurance policies listed
on a schedule hereto or permitted renewals thereof;
intentionally omitted; and
any other items listed in Schedule C.
If the Closing shall occur before a new tax rate is fixed, the
apportionment of taxes at the Closing shall be upon the basis of the old tax
rate for the preceding period applied to latest assessed valuation. Promptly
after the new tax rate is fixed, the apportionment of taxes shall be recomputed.
An discrepancy resulting from such recomputation and any errors or omissions in
computing apportionments at Closing shall be promptly corrected, which
obligations shall survive the Closing.
Intentionally omitted.
Intentionally omitted.
Objections to Title, Failure of Seller or Purchaser to Perform and Vendee's Lien
Purchaser shall promptly order an examination of title and
shall cause a copy of the title report to be forwarded to Seller's
attorney upon receipt. Seller shall be entitled to a reasonable
adjournment or adjournments of the Closing for up to 30 days or until
the expiration date of any written commitment of Purchaser's
Institutional Lender delivered to Purchaser prior to the scheduled
date of Closing, whichever occurs first [TIME BEING OF THE ESSENCE] to
remove any defects in or objections to title noted in such title
report and any other defects or objections which may be disclosed on
or prior to the Closing Date.
If Seller shall be unable to convey title to the Premises at
the Closing in accordance with the provisions of this contract or if
Purchaser shall have any other grounds under this contract for
refusing to consummate the purchase provided for herein, Purchaser,
nevertheless, may elect to accept such title as Seller may be able to
convey with a credit against the monies payable at the Closing equal
to the reasonably estimated cost to cure the same, but without any
other credit or liability on the part of Seller. If Purchaser shall
not so elect, Purchaser may terminate this contract and the sole
liability of Seller shall be to refund the Downpayment, if any, to
Purchaser and to reimburse Purchaser for the net cost of title
examination, but not to exceed the net amount charged by Purchaser's
title company therefor without issuance of a policy, and the net cost
of updating the existing survey of the Premises or the net cost of a
new survey of the Premises if there was no existing survey or the
existing survey was not capable of being updated and a new survey was
required by Purchaser's Institutional Lender. Upon such refund and
reimbursement, this contract shall be null and void and the parties
hereto shall be relieved of all further obligations and liability
other than any arising under Section 14.
Any unpaid taxes, assessments, water charges and sewer
rents, together with the interest and penalties thereon to a date not
less than two days following the Closing Date, and any other liens and
encumbrances which Seller is obligated to pay and discharge or which
are against corporations, estates or other persons in the chain of
title, including any mortgages on the Premises, together with the cost
of recording or filing any instruments necessary to discharge such
liens and encumbrances of record, may be paid out of the proceeds of
the monies payable at the Closing if Seller delivers to Purchaser on
the Closing Date official bills for such taxes, assessments, water
charges, sewer rents, interest and penalties and instruments in
recordable form sufficient to discharge any other liens and
52
encumbrances of record. Upon request made a reasonable time before the
Closing, Purchaser shall provide at the Closing separate checks for
the foregoing payable to the order of the holder of any such lien,
charge or encumbrance and otherwise complying with ss.2.02. If
Purchaser's title insurance company is willing to insure both
Purchaser and Purchaser's Institutional Lender, if any, that such
charges, liens and encumbrances will not be collected out of or
enforced against the Premises, then, unless Purchaser's Institutional
Lender reasonably refuses to accept such insurance in lieu of actual
payment and discharge, Seller shall have the right, in lieu of payment
and discharge to deposit with the title insurance company such funds
or assurances or to pay such special or additional premiums as the
title insurance company may require in order to so insure. In such
case the charges, liens and encumbrances with respect to which the
title insurance company has agreed so to insure shall not be
considered objections to title.
If Purchaser shall default in the performance of its
obligation under this contract to purchase the Premises, the sole
remedy of Seller shall be to retain the Downpayment, if any, as
liquidated damages for all loss, damage and expense suffered by
Seller, including without limitation the loss of its bargain.
Purchaser shall have a vendee's lien against the Premises
for the amount of the Downpayment, but such lien shall not continue
after default by Purchaser under this contract.
Broker
The parties acknowledge that this contract was brought about
by direct negotiation between Seller and Purchaser and that neither
Seller nor Purchaser knows of any broker entitled to a commission in
connection with this transaction. Seller and Purchaser shall indemnify
and defend each other against any costs, claims or expenses, including
attorneys' fees, arising out of the breach on their respective parts
of any representations, warranties or agreements contained in this
paragraph. The representations and obligations under this paragraph
shall survive the Closing or, if the Closing does not occur, the
termination of this contract.
Notices
All notices under this contract shall be in writing and
shall be delivered personally (as evidenced by a signed receipt) or
shall be sent by prepaid registered or certified mail, with return
receipt requested, or by prepaid overnight courier with receipt
acknowledged, addressed as follows, or as Seller or Purchaser shall
otherwise have given notice as herein provided:
To Seller: Kampner Realty, LLC
▇▇ ▇▇. ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇
With a copy to:
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇; (▇▇▇) ▇▇▇-▇▇▇▇ (fax)
To Purchaser: Five Star Products, Inc.
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
53
With a copy to:
▇▇▇ ▇▇▇▇▇▇ LLP
▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
All notices shall be effective upon receipt, and if such delivery is rejected,
such rejection of delivery shall be considered receipt. Either party may at any
time change its address for notices hereunder by delivering or mailing, as
aforesaid, to the other party a notice stating the change and setting forth the
changed address. Notice from a party's legal counsel may be sent on behalf of
such party.
Limitations on Survival of Representations, Warranties, Covenants and other
Obligations
Except as otherwise provided in this contract, no
representations, warranties, covenants or other obligations of Seller
set forth in this contract shall survive the Closing, and no action
based thereon shall be commenced after the Closing. The
representations, warranties, covenants and other obligations of Seller
set forth in ss.4.03, ss.6.01 and ss.6.02 shall survive until the date
which is six months after the Closing Date), and no action based
thereon shall be commenced after the Limitation Date.
The delivery of the deed by Seller, and the acceptance
thereof by Purchaser, shall be deemed the full performance and
discharge of every obligation on the part of Seller to be performed
hereunder, except those obligations of Seller which are expressly
stated in this contract to survive the Closing.
Due Diligence Period
During the period (the "Due Diligence Period") commencing on
the date hereof and ending at 5:00 P.M. Eastern Standard Time on the
30th day following the date hereof, Purchaser shall have the right to
have the Premises inspected during reasonable hours, after reasonable
notice to Seller, and to obtain the following inspection reports with
respect to the Premises, at Purchaser's sole cost and expense:
An inspection and report (the "Environmental Report") from a
licensed environmental inspection laboratory or a licensed engineer
(the "Inspection Company") with respect to the presence or absence of
hazardous or toxic substances or conditions at the Premises including,
54
without limitation, asbestos, polychlorinated biphenyls, petroleum
products and those hazardous substances defined in the Comprehensive
Environmental Response, Compensation, and Liability Act, 42 U.S.C. ss.
9601 et seq. and all amendments thereto, including, without limitation,
the Superfund Amendments and Reauthorization Act, 42 U.S.C. ss. 9601 et
seq., and the rules and regulations promulgated thereunder; New York
State Environmental Liability Review Act, New York Environmental
Conservation Law (ECL) ss.ss.8-0101 et seq.; and the New York State
Water Pollution Control Act, ECL ▇▇.▇▇. 17-0101 et seq., (collectively,
"Hazardous Substances") , on the Premises; and
An inspection and report (the "Engineering Report") from a
licensed engineer and other appropriate professionals (collectively,
the "Engineer") with respect to the structural and physical condition
of the Premises, all mechanical systems and utilities servicing the
Premises, curtain walls, roofs, ▇▇▇▇▇, septic and drainage systems, and
compliance with the Americans with Disabilities Act (collectively,
"Building Conditions").
Purchaser shall cause copies of the Environmental Report and
Engineering Report (collectively, the "Reports") to be delivered to
Seller prior to the expiration of the Due Diligence Period. Purchaser
may elect to cancel this contract, by written notice (the "Termination
Notice") to Seller delivered on or before the last day of the Due
Diligence Period, if (i) the Environmental Report states that there
are Hazardous Substances on the Premises or (ii) the Engineering
Report states that there are defects in the Building Conditions (a
"Defective Condition") and, in the best professional judgment of the
Engineer, such Defective Condition(s) will cost in excess of [$50,000]
to correct.
During the Due Diligence Period, Seller agrees to cooperate
in all reasonable respects with Purchaser and agrees to make available
to Purchaser and its agents all of the books, files and records
relating to the Premises which are in the possession or under the
control of Seller.
Purchaser hereby indemnifies and agrees to defend and hold
Seller harmless from all loss, cost (including, without limitation,
reasonable attorneys' fees), claim or damage caused by the inspection
of the Premises by Purchaser, its agents, consultants or
representatives.
In the event Purchaser shall (i) fail to have the Premises
inspected prior to the expiration of the Due Diligence Period, (ii)
fail to deliver a copy of the Reports to Seller prior to the
expiration of the Due Diligence Period or (iii) fail to give the
Termination Notice prior to the expiration of the Due Diligence
Period, Purchaser shall be deemed to have waived the right to cancel
this contract as provided in ss.17.02.
Miscellaneous Provisions
No permitted assignment of Purchaser's rights under this
contract shall be effective against Seller unless and until an
executed counterpart of the instrument of assignment shall have been
delivered to Seller and Seller shall have been furnished with the name
and address of the assignee. The term "Purchaser" shall be deemed to
include the assignee under any such effective assignment.
This contract embodies and constitutes the entire
understanding between the parties with respect to the transaction
contemplated herein, and all prior agreements, understandings,
representations and statements, oral or written, are merged into this
contract. Neither this contract nor any provision hereof may be
waived, modified, amended, discharged or terminated except by an
instrument signed by the party against whom the enforcement of such
waiver, modification, amendment, discharge or termination is sought,
and then only to the extent set forth in such instrument.
This contract shall be governed by, and construed in
accordance with, the law of the State of New York.
The captions in this contract are inserted for convenience
of reference only and in no way define, describe or limit the scope or
intent of this contract or any of the provisions hereof.
This contract shall be binding upon and shall inure to the
benefit of the parties hereto and their respective heirs or successors
and permitted assigns.
This contract shall not be binding or effective until
properly executed and delivered by Seller and Purchaser.
55
As used in this contract, the masculine shall include the
feminine and neuter, the singular shall include the plural and the
plural shall include the singular, as the context may require.
If the provisions of any schedule or rider to this contract
are inconsistent with the provisions of this contract, the provisions
of such schedule or rider shall prevail. Set forth in Schedule D is a
list of any and all schedules and riders which are attached hereto but
which are not listed in the Table of Contents.
IN WITNESS WHEREOF, the parties hereto have executed this contract as
of the date first above written.
Seller:
KAMPNER REALTY, LLC
By:________________________________
Name:
Title:
Purchaser:
FIVE STAR PRODUCTS, INC.
By:_____________________________
Name:
Title:
Receipt by Escrowee
The undersigned Escrowee hereby acknowledges receipt of $_____________, by check
subject to collection, to be held in escrow pursuant to ss. 2.05.
--------------------------
56
Schedule A
DESCRIPTION OF PREMISES
(to be attached separately and to include tax map designation)
57
Schedule B
PERMITTED EXCEPTIONS
1. Zoning regulations and ordinances which are not violated by the
existing structures or present use thereof and which do not render title
uninsurable, and which will not be violated by continuing the same use and same
said structures. In the event that any of the foregoing are violated, same shall
not be deemed an objection to title provided a title company will insure that
said structures may remain in their present location undisturbed, as long as the
same shall stand.
2. Intentionally omitted.
3. Intentionally omitted.
4. The lease between Seller and Purchaser, dated as of March 15, 2007,
and any permitted sublease or assignment thereof.
5. Unpaid installments of real estate taxes or assessments that
are a lien but are not due and payable on or before the Closing Date.
6. Intentionally omitted.
7. (a) Rights, if any, of utility or cable companies to lay, maintain,
install and repair pipes, lines, poles, conduits, cable boxes and related
equipment on, over and under the Premises, provided that none of such rights
imposes any monetary obligation on the owner of the Premises.
(b) Encroachments of ▇▇▇▇▇▇, areas, cellar steps, trim
cornices, lintels, window ▇▇▇▇▇, awnings, canopies, ledges, fences, ▇▇▇▇▇▇,
coping and retaining walls projecting from the Premises over any street or
highway or over any adjoining property and encroachments of similar elements
projecting from adjoining property over the Premises, all of which are shown on
the survey obtained by Purchaser pursuant hereto.
(c) Intentionally omitted.
(d) Any state of facts that an accurate survey would disclose,
provided that such facts do not render title unmarketable.
8. Any other covenants, easements, agreements, restrictions,
reservations, grants and consents of record as of the date hereof that are shown
on the title commitment obtained by Purchaser.
58
Schedule C
ASSESSED VALUATION AND TAXES
59
Schedule D
LIST OF SCHEDULES AND RIDER
60